Document:

Exhibit 4.2

 

SHAREHOLDERS RIGHTS AGREEMENT

 

This Shareholders Rights Agreement (this “Rights
Agreement”) is made and entered into as of July   , 2005, by
and between Genco Shipping & Trading Limited, a Marshall Islands
corporation (the “Company”), and Merrill Investor Services LLC as Rights
Agent (the “Rights Agent”).

 

WHEREAS, the Board of Directors of the Company (the “Board”)
has (a) authorized and declared a dividend of one right (the “Right”)
for each share of the Company’s common stock, par value $.01 per share (the “Common
Stock”) held of record as of the Close of Business (as hereinafter defined) on            ,
2005 (the “Record Date”) and (b) has further authorized the issuance of
one Right in respect of each share of Common Stock that shall become
outstanding (i) at any time between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date (as such
terms are hereinafter defined) or (ii) upon the exercise or conversion, prior
to the earlier of the Redemption Date or the Final Expiration Date, of any
option or other security exercisable for or convertible into shares of Common
Stock, which option or other such security is outstanding on the Distribution
Date; and

 

WHEREAS, each Right represents the right of the holder
thereof to purchase one one-thousandth of a share of Series A Preferred Stock
(as such number may hereafter be adjusted pursuant to the provisions hereof),
upon the terms and subject to the conditions set forth herein, having the
rights, preferences and privileges set forth in the Certificate of Designations
of Series A Preferred Stock, attached hereto as Exhibit A.

 

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

 

1.                                       Certain Definitions.

 

“Acquiring Person” shall mean any Person, other
than Oaktree Capital Management, LLC and its related entities, Peter C.
Georgiopoulos, or any Person who acquires Common Stock through a Permitted
Offer, who or which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, but shall not include the Company, any Subsidiary of
the Company or any employee benefit 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. 
Notwithstanding the foregoing, no Person shall be deemed to be an
Acquiring Person as the result of an acquisition of shares of Common Stock by
the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the shares of Common Stock of the Company then outstanding; provided,
however, that a Person who (i) becomes the Beneficial Owner of 15% or
more of the shares of Common Stock of the Company then outstanding by reason of
share purchases by the Company and (ii) then after such share purchases by the
Company, becomes the Beneficial Owner of any additional shares of Common Stock
of the Company (other than pursuant to a dividend or distribution paid or made
by the Company on the outstanding shares of Common Stock in shares of Common
Stock or pursuant to a split or subdivision of the

 

 

outstanding shares of Common Stock), such Person shall
be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner
of such additional shares of Common Stock of the Company such Person does not
beneficially own 15% or more of the shares of Common Stock of the Company then
outstanding.  Notwithstanding the
foregoing, (i) if the Company’s Board of Directors determines in good faith
that a Person who would otherwise be an “Acquiring Person,” as defined herein,
has become such inadvertently (including, without limitation, because (A) such
Person was unaware that it beneficially owned a percentage of the shares of
Common Stock that would otherwise cause such Person to be an “Acquiring Person,”
as defined herein, or (B) such Person was aware of the extent of the shares of
Common Stock it beneficially owned but had no actual knowledge of the
consequences of such beneficial ownership under this Agreement) and without any
intention of changing or influencing control of the Company, and if such Person
divested or 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 herein, then such Person shall not be deemed to be or to have become an
“Acquiring Person” for any purposes of this Agreement; and (ii) if, as of the
date hereof, any Person is the Beneficial Owner of 15% or more of the shares of
Common Stock outstanding, such Person shall not be or become an “Acquiring
Person,” as defined herein, unless and until such time as such Person shall
become the Beneficial Owner of additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding shares of Common Stock in shares of Common Stock or pursuant to a
split or subdivision of the outstanding shares of Common Stock), unless, upon
becoming the Beneficial Owner of such additional shares of Common Stock, such
Person is not then the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding.

 

“Adjustment fraction” shall have the meaning
set forth in Section 11(a)(i) hereof.

 

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

 

A Person shall be deemed the “Beneficial Owner”
of and shall be deemed to “Beneficially Own” any securities:

 

(i)                                     which
such Person or any of such Person’s Affiliates or Associates beneficially owns,
directly or indirectly, for purposes of Section 13(d) of the Exchange Act and
Rule 13d-3 thereunder (or any comparable or successor law or regulation);

 

(ii)                                  which
such Person or any of such Person’s Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed pursuant to this subsection (ii)(A) to be the
Beneficial Owner of, or to

 

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beneficially own, (1)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (2) securities
which a Person or any of such Person’s Affiliates or Associates may be deemed
to have the right to acquire pursuant to any merger or other acquisition
agreement between the Company and such Person (or one or more of its Affiliates
or Associates) if such agreement has been approved by the Board of Directors of
the Company prior to there being an Acquiring Person; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security under this subsection (ii)(B) if the agreement, arrangement
or understanding to vote such security (1) arises solely from a revocable proxy
or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report); or

 

(iii)                               which
are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person or any of such Person’s
Affiliates or Associates has any agreement, arrangement or understanding,
whether or not in writing (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding, voting (except
to the extent contemplated by the proviso to subsection (ii)(B) above) or
disposing of any securities of the Company; provided, however,
that in no case shall an officer or director of the Company be deemed (x) the
Beneficial Owner of any securities beneficially owned by another officer or
director of the Company solely by reason of actions undertaken by such persons
in their capacity as officers or directors of the Company or (y) the Beneficial
Owner of securities held of record by the trustee of any employee benefit plan
of the Company or any Subsidiary of the Company for the benefit of any employee
of the Company or any Subsidiary of the Company, other than the officer or
director, by reason of any influence that such officer or director may have over
the voting of the securities held in the plan.

 

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

 

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

 

“Common Stock” shall have the meaning set forth
in the preamble.  Common Stock when used
with reference to any Person other than the Company shall mean the capital
stock (or 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.

 

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

 

“Company” shall have the meaning set forth in
the preamble, subject to the terms of Section 13(a)(iii)(C) hereof.

 

“Current Per Share Market Price” of any
security (a “Security” for purposes of this definition), for all computations
other than those made pursuant to Section 11(a)(iii) hereof, shall mean the
average of the daily closing prices per share of such Security for the thirty
(30) consecutive Trading Days immediately prior to such date, and for purposes
of computations made pursuant to Section 11(a)(iii) hereof, the Current Per
Share Market Price of any Security on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the ten (10)
consecutive Trading Days immediately prior to 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 (i) a dividend or distribution on such Security payable in shares
of such Security or securities convertible into such shares or (ii) any
subdivision, combination or reclassification of such Security, and prior to the
expiration of the applicable thirty (30) Trading Day or ten (10) Trading Day
period, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the Current Per Share Market Price shall be appropriately
adjusted to reflect the current market price per share equivalent of such
Security.  The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last sale price or, if such last sale price is not reported, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such date
the Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors of the Company.  If on any such date no market maker is making
a market in the Security, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company shall be
used.  If the Preferred Shares are not
publicly traded, the Current Per Share Market Price of the Preferred Shares
shall be conclusively

 

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deemed to be the Current Per Share Market Price of the
shares of Common Stock as determined pursuant to this definition, as
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof, multiplied by 1000.  If the Security is not publicly held or so
listed or traded, Current Per Share Market Price shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.

 

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

 

“Distribution Date” shall mean the earlier of
(i) the Close of Business on the tenth day after the Shares Acquisition Date
(or, if the tenth day after the Shares Acquisition Date occurs before the
Record Date, the Close of Business on the Record Date) or (ii) the Close of
Business on the tenth Business Day (or such later date as may be determined by
action of the Company’s Board of Directors) after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if, assuming the successful consummation
thereof, such Person would be an Acquiring Person.

 

“Equivalent Shares” shall mean Preferred Shares
and any other class or series of capital stock of the Company which is entitled
to the same rights, privileges and preferences as the Preferred Shares.

 

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

 

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

 

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

 

“Expiration Date” shall mean the earliest to
occur of: (i) the Close of Business on the Final Expiration Date, (ii) the
Redemption Date, or (iii) the time at which the Board of Directors orders the
exchange of the Rights as provided in Section 24 hereof.

 

“Final Expiration Date” shall mean February 21, 2015.

 

“Nasdaq” shall mean the National Association of
Securities Dealers, Inc. Automated Quotations System.

 

“Permitted Offer” shall mean a tender or
exchange offer for all the outstanding shares of Common Stock at a price and on
terms that a majority of the members of the board of directors who are
independent from the acquiring person or the person making the offer determines
to be fair to and otherwise in the best interest of the Company and its shareholders.

 

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

 

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“Post-event Transferee” shall have the meaning
set forth in Section 7(e) hereof.

 

“Preferred Shares” shall mean shares of Series
A Preferred Stock, $0.01 par value, of the Company.

 

“Pre-event Transferee” shall have the meaning
set forth in Section 7(e) hereof.

 

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

 

“Record Date” shall have the meaning set forth
in the recitals at the beginning of this Rights Agreement.

 

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

 

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

 

“Rights Agent” shall mean Computershare Trust
Company, Inc., or its successor or replacement as provided in Sections 19 and
21 hereof.

 

“Rights Certificate” shall mean a certificate
substantially in the form attached hereto as Exhibit B.

 

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

 

“Section 13 Event” shall mean any event
described in clause (i), (ii) or (iii) of Section 13(a) hereof.

 

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

 

“Shares 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) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such; provided that, if such Person is determined not to have become
an Acquiring Person as defined herein, then no Shares Acquisition Date shall be
deemed to have occurred.

 

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

 

“Subsidiary” of any Person shall mean any
corporation or other entity of which an amount of voting securities sufficient
to elect a majority of the directors or Persons having similar authority of
such corporation or other entity is beneficially owned, directly or indirectly,
by such Person, or any corporation or other entity otherwise controlled by such
Person.

 

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

 

“Summary of Rights” shall mean a summary of
this Agreement substantially in the form attached hereto as Exhibit C.

 

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

 

“Trading Day” shall mean a day on which the
principal national securities exchange on which a referenced security is listed
or admitted to trading is open for the transaction of business or, if a
referenced security is not listed or admitted to trading on any national
securities exchange, a Business Day.

 

A “Triggering Event” shall be deemed to have
occurred upon any Person, becoming an Acquiring Person.

 

2.                                       Appointment of Rights Agent.  The
Company hereby appoints the Rights Agent to act as agent for the Company and
the holders of the Rights (who, in accordance with Section 3 hereof, shall
prior to the Distribution Date also be the holders of the shares of Common
Stock) 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.

 

3.                                       Issuance of Rights Certificates.

 

(a)                                  Until
the Distribution Date, (i) the Rights will be evidenced (subject to the
provisions of Sections 3(b) and 3(c) hereof) by the certificates for shares of
Common Stock registered in the names of the holders thereof (which certificates
shall also be deemed to be Rights Certificates) and not by separate Rights
Certificates and (ii) the right to receive Rights Certificates will be transferable
only in connection with the transfer of shares of Common Stock.  Until the earlier of the Distribution Date or
the Expiration Date, the surrender for transfer of certificates for shares of
Common Stock shall also constitute the surrender for transfer of the Rights
associated with the shares of Common Stock represented thereby.  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, send) by first-class, postage-prepaid mail, to each record holder of
shares of Common Stock as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Rights
Certificate evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. 
In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11 hereof, then at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights.  As of the Distribution Date, the Rights will
be evidenced solely by such Rights Certificates and may be transferred by the
transfer of the Rights Certificates as permitted hereby, separately and apart
from any transfer of shares of Common Stock, and the holders of such Rights
Certificates as listed in the records of the Company or any transfer agent or
registrar for the Rights shall be the record holders thereof.

 

(b)                                 On
the Record Date or as soon as practicable thereafter, the Company will send a
copy of the Summary of Rights by first-class, postage-prepaid mail, to each
record holder of shares of Common Stock as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company’s
transfer agent and registrar.  With
respect to

 

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certificates for
shares of 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 shares
of 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 shares of Common Stock represented thereby.

 

(c)                                  Unless
the Board of Directors by resolution adopted at or before the time of the
issuance of any shares of Common Stock specifies to the contrary, Rights shall
be issued in respect of all shares of Common Stock that are issued after the
Record Date but prior to the earlier of the Distribution Date or the Expiration
Date or, in certain circumstances provided in Section 22 hereof, after the
Distribution Date.  Certificates
representing such shares of Common Stock shall also be deemed to be
certificates for Rights, and shall bear the following legend:

 

THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE
HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH IN A SHAREHOLDER RIGHTS AGREEMENT
BETWEEN GENCO SHIPPING & TRADING LIMITED AND MELLON INVESTOR SERVICES LLC,
AS THE RIGHTS AGENT, DATED AS OF JULY    , 2005 (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 GENCO SHIPPING
& TRADING LIMITED 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. 
GENCO SHIPPING & TRADING LIMITED 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 SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY,
ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BECOME NULL AND VOID.

 

With respect to such
certificates containing the foregoing legend, until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the Rights associated with the
shares of Common Stock represented by such certificates shall be evidenced by
such certificates alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the shares of
Common Stock represented thereby.

 

(d)                                 In
the event that the Company purchases or acquires any shares of Common Stock
after the Record Date but prior to the Distribution Date, any Rights associated
with such shares of Common Stock shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
shares of Common Stock which are no longer outstanding.

 

4.                                       Form of Rights Certificates.

 

(a)                                  The
Rights Certificates (and the forms of election to purchase shares of Common
Stock and of assignment to be printed on the reverse thereof) shall be
substantially in the form of Exhibit B hereto and may have such marks of
identification or designation and such

 

8

 

legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or a national
market system, on which the Rights may from time to time be listed or included,
or to conform to usage.  Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date (or in the case of
Rights issued with respect to shares of Common Stock issued by the Company
after the Record Date, as of the date of issuance of such shares of Common Stock)
and on their face shall entitle the holders thereof to purchase such number of
one- thousandths of a Preferred Share as shall be set forth therein at the
price set forth therein (such exercise price per one one-thousandth of a
Preferred Share being hereinafter referred to as the “Exercise Price”
and the aggregate Exercise Price of all Preferred Shares issuable upon exercise
of one Right being hereinafter referred to as the “Total Exercise Price”),
but the number and type of securities purchasable upon the exercise of each
Right and the Exercise Price shall be subject to adjustment as provided herein.

 

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

 

THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT).  ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT

 

5.                                       Countersignature and Registration.

 

(a)                                  The
Rights Certificates shall be executed on behalf of the Company by its Chairman
of the Board, its Chief Executive Officer, its Chief Financial Officer, its
President or any Vice President, either manually or by facsimile signature, and
by the Secretary or an Assistant Secretary of the Company, either manually or
by facsimile signature, and shall have affixed thereto the Company’s seal (if
any) or a facsimile thereof.  The Rights
Certificates shall be manually countersigned by the Rights

 

9

 

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 Rights Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates on behalf of the Company had not ceased to be such officer of the
Company; and any Rights Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Rights Certificate,
shall be a proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Rights Agreement any such person
was not such an officer.

 

(b)                                 Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at its
office designated for such purposes, books for registration and transfer of the
Rights Certificates issued hereunder. 
Such books shall show the names and addresses of the respective holders
of the Rights Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates and the date of each of the Rights Certificates.

 

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

 

(a)                                  Subject
to the provisions of Sections 7(e), 14 and 24 hereof, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Rights Certificate or Rights Certificates may
be transferred, split up, combined or exchanged for another Rights Certificate
or Rights Certificates, entitling the registered holder to purchase a like
number of one-thousandths of a Preferred Share (or, following a Triggering
Event, other securities, cash or other assets, as the case may be) as the
Rights Certificate or Rights Certificates surrendered then entitled such holder
to purchase.  Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Rights Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose.  Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. 
Thereupon the Rights Agent shall, subject to Sections 7(e), 14 and 24
hereof, countersign and deliver to the person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested.  The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.

 

(b)                                 Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
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 Rights Certificate
if mutilated, the Company will make and deliver a new Rights Certificate of
like tenor to the Rights Agent for delivery to the registered holder in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.

 

10

 

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

 

(a)                                  Subject
to Sections 7(e), 23(b) and 24(b) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
and prior to the Close of Business on the Expiration Date by surrender of the
Rights Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Exercise Price for
each one-thousandth of a Preferred Share (or, following a Triggering Event,
other securities, cash or other assets as the case may be) as to which the
Rights are exercised.

 

(b)                                 The
Exercise Price for each one-thousandth of a Preferred Share issuable pursuant
to the exercise of a Right shall initially be Twenty-Five Dollars ($25), 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) below.

 

(c)                                  Upon
receipt of a Rights Certificate representing exercisable Rights, with the form
of election to purchase duly executed, accompanied by payment of the Exercise
Price for the number of one-thousandths of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) to
be purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of such Rights Certificate in accordance with Section 9(e)
hereof, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Shares
(or make available, if the Rights Agent is the transfer agent for the Preferred
Shares) a certificate or certificates for the number of one-thousandths of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests or
(B) if the Company shall have elected to deposit the total number of
one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one-thousandths of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) as are to be purchased (in which case
certificates for the Preferred Shares (or, following a Triggering Event, other
securities, cash or other assets as the case may be) represented by such
receipts shall be deposited by the transfer agent with the depositary agent)
and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder and (iv) when appropriate, after receipt thereof, deliver such
cash to or upon the order of the registered holder of such Rights
Certificate.  The payment of the Exercise
Price (as such amount may be reduced (including to zero) pursuant to Section
11(a)(iii) hereof) and an amount equal to any applicable transfer tax required
to be paid by the holder of such Rights Certificate in accordance with Section
9(e) hereof, may be made in cash or by certified bank check, cashier’s check or
bank draft payable to the order of the Company. 
In the event that the Company is obligated to issue securities of the
Company other than Preferred Shares, pay cash and/or distribute other property

 

11

 

pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.

 

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

 

(e)                                  Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of a Triggering Event, any Rights beneficially owned by (i) an Acquiring Person
or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such (a “Post-Event Transferee”),
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Company’s Board of
Directors has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(e) (a “Pre-Event
Transferee”) or (iv) any subsequent transferee receiving transferred Rights
from a Post-Event Transferee or a Pre-Event Transferee, either directly or
through one or more intermediate transferees, shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise.  The Company
shall use all reasonable efforts to ensure that the provisions of this Section
7(e) and Section 4(b) hereof are complied with, but shall have no liability to
any holder of Rights Certificates or to any other Person as a result of its
failure to make any determinations with respect to an Acquiring Person or any
of such Acquiring Person’s Affiliates, Associates or transferees hereunder.

 

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

 

8.                                       Cancellation and Destruction of Rights
Certificates.  All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or 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 Rights Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Agreement.  The Company shall deliver to
the Rights Agent for

 

12

 

cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Rights Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof.  The
Rights Agent shall deliver all canceled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.

 

9.                                       Reservation and Availability of Preferred Shares.

 

(a)                                  The
Company covenants and agrees that it will use its best efforts to cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
not reserved for another purpose (and, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of Common Stock and/or other
securities), the number of Preferred Shares (and, following the occurrence of
the Triggering Event, Common Stock and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding Rights.

 

(b)                                 If
the Company shall hereafter list any of its Preferred Shares on a national
securities exchange, then so long as the Preferred Shares (and, following the
occurrence of a Triggering Event, shares of Common Stock and/or other
securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (but only to the extent that
it is reasonably likely that the Rights will be exercised), all shares reserved
for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.

 

(c)                                  The
Company shall use its best efforts to (i) file, as soon as practicable
following the earliest date after the first occurrence of a Triggering Event in
which the consideration to be delivered by the Company upon exercise of the
Rights is described in Section 11(a)(ii) or Section 11(a)(iii) hereof, or as
soon as is required by law following the Distribution Date, as the case may be,
a registration statement under the Securities Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the date of expiration of the
Rights.  The Company may temporarily
suspend, for a period not to exceed ninety (90) days after the date set forth
in clause (i) of the first sentence of this Section 9(c), the exercisability of
the Rights in order to prepare and file such registration statement and permit
it to become effective.  Upon any such
suspension, the Company shall issue a public announcement and notify the Rights
Agent that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement and notification to the Rights Agent at such time
as the suspension is no longer in effect. 
The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities or “blue sky” laws of the various
states in connection with the exercisability of the Rights.  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, or an exemption therefrom shall be available, and until a
registration statement has been declared effective.

 

13

 

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

 

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

 

10.                                 Record Date.  Each Person in whose name any
certificate for a number of one-thousandths of a Preferred Share (or other
securities of the Company) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of Preferred Shares (or
other securities of the Company) represented thereon, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Total Exercise Price with
respect to which the Rights have been exercised (and any applicable transfer
taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the transfer books of the Company
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 transfer books of the Company are open.  Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be entitled to any rights
of a holder of Preferred Shares (or other securities of the Company) for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.

 

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

 

(a)                                  (i)
Notwithstanding anything in this Agreement to the contrary, in the event the
Company shall at any time after the date of this Agreement (A) declare a
dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares (by
reverse stock split or otherwise) into a smaller number of Preferred Shares, or
(D) issue any shares of its capital stock in a reclassification of the
Preferred Shares

 

14

 

(including any
such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such event,
except as otherwise provided in this Section 11 and Section 7(e) hereof: (1)
the Exercise Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or reclassification
shall be adjusted so that the Exercise Price thereafter shall equal the result
obtained by dividing the Exercise Price in effect immediately prior to such
time by a fraction (the “Adjustment Fraction”), the numerator of which
shall be the total number of Preferred Shares (or shares of capital stock
issued in such reclassification of the Preferred Shares) outstanding
immediately following such time and the denominator of which shall be the total
number of Preferred Shares outstanding immediately prior to such time; 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 such Right; and (2) the
number of one-thousandths of a Preferred Share (or share of such other capital
stock) issuable upon the exercise of each Right shall equal the number of
one-thousandths of a Preferred Share (or share of such other capital stock) as
was issuable upon exercise of a Right immediately prior to the occurrence of
the event described in clauses (A)-(D) of this Section 11(a)(i), multiplied by
the Adjustment Fraction; provided, however, that, no such
adjustment shall be made pursuant to this Section 11(a)(i) to the extent that
there shall have simultaneously occurred an event described in clause (A), (B),
(C) or (D) of Section 11(n) with a proportionate adjustment being made
thereunder.  Each share of Common Stock
that shall become outstanding after an adjustment has been made pursuant to
this Section 11(a)(i) shall have associated with it the number of Rights,
exercisable at the Exercise Price and for the number of one-thousandths of a
Preferred Share (or shares of such other capital stock) as one share of Common
Stock has associated with it immediately following the adjustment made pursuant
to this Section 11(a)(i).

 

(ii) Subject to Section 24 of this Agreement, in the
event a Triggering Event shall have occurred, then promptly following such
Triggering Event each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive for each Right, upon
exercise thereof in accordance with the terms of this Agreement and payment of
the Exercise Price in effect immediately prior to the occurrence of the
Triggering Event, in lieu of a number of one-thousandths of a Preferred Share,
such number of shares of Common Stock of the Company as shall equal the result
obtained by multiplying the Exercise Price in effect immediately prior to the
occurrence of the Triggering Event by the number of one-thousandths of a
Preferred Share for which a Right was exercisable (or would have been
exercisable if the Distribution Date had occurred) immediately prior to the
first occurrence of a Triggering Event, and dividing that product by 50% of the
Current Per Share Market Price for shares of Common Stock on the date of
occurrence of the Triggering Event; provided, however, that the
Exercise Price and the number of shares of Common Stock of the Company so
receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(e) hereof to reflect any events
occurring in respect of

 

15

 

the shares of Common Stock of the Company after the
occurrence of the Triggering Event.

 

(iii) In lieu of issuing shares of Common Stock in
accordance with Section 11(a)(ii) hereof, the Company may, if the Company’s
Board of Directors determines that such action is necessary or appropriate and
not contrary to the interest of holders of Rights and, in the event that the
number of shares of Common Stock which are authorized by the Company’s
Certificate of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to permit
the exercise in full of the Rights, or if any necessary regulatory approval for
such issuance has not been obtained by the Company, the Company shall: (A)
determine the excess of (1) the value of the shares of Common Stock issuable
upon the exercise of a Right (the “Current Value”) over (2) the Exercise
Price (such excess, the “Spread”) and (B) with respect to each Right,
make adequate provision to substitute for such shares of Common Stock, upon
exercise of the Rights, (1) cash, (2) a reduction in the Exercise Price, (3)
other equity securities of the Company (including, without limitation, shares
or units of shares of any series of preferred stock which the Company’s Board
of Directors has deemed to have the same value as Common Stock (such shares or
units of shares of preferred stock are herein called “Common Stock
Equivalents”)), except to the extent that the Company has not obtained any
necessary Shareholder or regulatory approval for such issuance, (4) debt
securities of the Company, except to the extent that the Company has not
obtained any necessary Shareholder or regulatory approval for such issuance,
(5) other assets or (6) any combination of the foregoing, having an aggregate
value equal to the Current Value, where such aggregate value has been
determined by the Company’s Board of Directors based upon the advice of a
nationally recognized investment banking firm selected by the Company’s Board
of Directors; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first occurrence of a
Triggering Event and (y) the date on which the Company’s right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as the “Section 11(a)(ii) Trigger Date”), then the Company shall
be obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Exercise Price, Common Stock (to the extent
available), except to the extent that the Company has not obtained any
necessary Shareholder or regulatory approval for such issuance, and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread.  If the Company’s Board of
Directors shall determine in good faith that it is likely that sufficient
additional Common Stock could be authorized for issuance upon exercise in full
of the Rights or that any necessary regulatory approval for such issuance will
be obtained, 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 Shareholder approval
for the authorization of such additional shares or take action to obtain such
regulatory approval (such period, as it may be extended, the “Substitution
Period”).  To the extent that the
Company determines

 

16

 

that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares, to take any action to obtain any required
regulatory approval and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value thereof.  In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect.  For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the Current Per Share Market Price of the
Common Stock on the Section 11(a)(ii) Trigger Date and the value of any Common
Stock Equivalent shall be deemed to have the same value as the Common Stock on
such date.

 

(b)                                 In
case the Company shall, at any time after the date of this Agreement, fix a
record date for the issuance of rights, options or warrants to all holders of
Preferred Shares entitling such holders (for a period expiring within
forty-five (45) calendar days after such record date) to subscribe for or
purchase Preferred Shares or Equivalent Shares or securities convertible into
Preferred Shares or Equivalent Shares at a price per share (or having a
conversion price per share, if a security convertible into Preferred Shares or
Equivalent Shares) less than the then Current Per Share Market Price of the
Preferred Shares or Equivalent Shares on such record date, then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of
Preferred Shares and Equivalent Shares (if any) outstanding on such record
date, plus the number of Preferred Shares or Equivalent Shares, as the case may
be, which the aggregate offering price of the total number of Preferred Shares
or Equivalent Shares, as the case may be, to be offered or issued (and/or the
aggregate initial conversion price of the convertible securities to be offered
or issued) would purchase at such current market price, and the denominator of
which shall be the number of Preferred Shares and Equivalent Shares (if any)
outstanding on such record date, plus the number of additional Preferred Shares
or Equivalent Shares, as the case may be, 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 Company’s Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights.  Preferred Shares and Equivalent 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 Exercise Price shall be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.

 

17

 

(c)                                  In
case the Company shall, at any time after the date of this Agreement, fix a
record date for the making of a distribution to all holders of the Preferred
Shares or of any class or series of Equivalent Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend, if any,
or a dividend payable in Preferred Shares) or subscription rights, options or
warrants (excluding those referred to in Section 11(b)), then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Current Per
Share Market Price of a Preferred Share or an Equivalent Share on such record
date, less the fair market value per Preferred Share or Equivalent 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) of
the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to a
Preferred Share or Equivalent Share, as the case may be, and the denominator of
which shall be such Current Per Share Market Price of a Preferred Share or
Equivalent Share on such record date; 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. 
Such adjustments shall be made successively whenever such a record date
is fixed, and in the event that such distribution is not so made, the Exercise
Price shall be adjusted to be the Exercise Price which would have been in
effect if such record date had not been fixed.

 

(d)                                 Notwithstanding
anything to the contrary, no adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Exercise Price; provided, however, that any adjustments which
by reason of this Section 11(d) 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 ten-thousandth of a share of
Common Stock or other share or one hundred-thousandth of a Preferred Share, as
the case may be.  Notwithstanding the
first sentence of this Section 11(d), any adjustment required by this Section
11 shall be made no later than the earlier of (i) three (3) years from the date
of the transaction which requires such adjustment or (ii) the Expiration Date.

 

(e)                                  If
as a result of an adjustment made pursuant to Section 11(a) or 13(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock other than Preferred Shares, thereafter the number
of such other shares so receivable upon exercise of any Right and, if required,
the Exercise Price thereof, shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Shares contained in Sections 11(a), 11(b), 11(c),
11(d), 11(g), 11(h), 11(i), 11(j), 11(k) and 11(l), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply
on like terms to any such other shares.

 

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

 

18

 

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

 

(h)                                 The
Company may elect on or after the date of any adjustment of the Exercise Price
as a result of the calculations made in Section 11(b) or (c) to adjust the
number of Rights, in substitution for any adjustment in the number of Preferred
Shares purchasable upon the exercise of a Right.  Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. 
Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
hundred-thousandth) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the Exercise Price in
effect immediately after adjustment of the Exercise Price.  The Company shall make a public announcement
of its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made.  This record date may be the date
on which the Exercise Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least ten (10) days later
than the date of the public announcement. 
If Rights Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(h), the Company shall, as promptly
as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights 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 Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment.  Rights
Certificates so to be distributed shall be issued, executed and countersigned
in the manner provided for herein (and may bear, at the option of the Company,
the adjusted Exercise Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in the
public announcement.

 

(i)                                     Irrespective
of any adjustment or change in the Exercise Price or the number of Preferred
Shares issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Exercise Price per one
one-thousandth of a Preferred Share and the number of one-thousandths of a
Preferred Share which were expressed in the initial Rights Certificates issued
hereunder.

 

(j)                                     Before
taking any action that would cause an adjustment reducing the Exercise Price
below the par or stated value, if any, of the number of one-thousandths of a
Preferred Share issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may

 

19

 

validly and
legally issue as fully paid and nonassessable shares such number of
one-thousandths of a Preferred Share at such adjusted Exercise Price.

 

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

 

(l)                                     Notwithstanding
anything in this Section 11 to the contrary, prior to the Distribution Date,
the Company shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Shares or
Common Stock, (ii) issuance wholly for cash of any Preferred Shares or Common
Stock at less than the current market price, (iii) issuance wholly for cash of
Preferred Shares or Common Stock or securities which by their terms are
convertible into or exchangeable for Preferred or Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Shares or
Common Stock shall not be taxable to such Shareholders.

 

(m)                               The
Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Sections 23, 24 or 27 hereof, take (or permit to be
taken) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.

 

(n)                                 In
the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Common Stock payable in shares of Common Stock, (B)
subdivide the outstanding shares of Common Stock, (C) combine the outstanding
Common Stock (by reverse stock split or otherwise) into a smaller number of
shares of Common Stock, or (D) issue any shares of its capital stock in a
reclassification of the shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such event,
except as otherwise provided in this Section 11(a) and Section 7(e) hereof: (1)
each share of Common Stock (or shares of capital stock issued in such
reclassification of the Common Stock) outstanding immediately following such
time shall have associated with it the number of Rights as were associated with
one share of Common Stock immediately prior to the occurrence of the event
described in clauses (A)-(D) above; (2) the Exercise Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that the
Exercise Price thereafter shall equal the result obtained by multiplying the
Exercise Price in effect immediately prior to such time by a fraction, the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the event described in clauses (A)-(D) above,
and the denominator of which

 

20

 

shall be the total
number of shares of Common Stock outstanding immediately after such event; 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 such Right; and (3) the
number of one-thousandths of a Preferred Share (or shares of such other capital
stock) issuable upon the exercise of each Right outstanding after such event
shall equal the number of one- thousandths of a Preferred Share (or shares of
such other capital stock) as were issuable with respect to one Right
immediately prior to such event.  Each
share of Common Stock that shall become outstanding after an adjustment has
been made pursuant to this Section 11(n) shall have associated with it the
number of Rights, exercisable at the Exercise Price and for the number of
one-thousandths of a Preferred Share (or shares of such other capital stock) as
one share of Common Stock has associated with it immediately following the
adjustment made pursuant to this Section 11(n). 
If an event occurs which would require an adjustment under both this
Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(n) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.

 

12.                                 Certificate of Adjusted Exercise Price or Number
of Shares.  Whenever an adjustment is made as provided in
Sections 11 and 13 hereof, the Company shall promptly (a) prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting for
such adjustment, (b) file with the Rights Agent and with each transfer agent
for the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate in accordance with
Section 26 hereof.  Notwithstanding the
foregoing sentence, the failure of the Company to make such certification or
give such notice shall not affect the validity of such adjustment or the force
or effect of the requirement for such adjustment.  The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment contained therein and
shall not be deemed to have knowledge of such adjustment unless and until it
shall have received such certificate.

 

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

 

(a)                                  In
the event that, following a Triggering Event, directly or indirectly:

 

(i) the Company shall
consolidate with, or merge with and into, any other Person (other than a
wholly-owned Subsidiary of the Company in a transaction the principal purpose
of which is to change the state of incorporation of the Company and which
complies with Section 11(m) hereof);

 

(ii) any Person shall
consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such merger, all or part of the shares of
Common Stock shall be changed into or exchanged for stock or other securities
of any other person (or the Company); 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 or Persons

 

21

 

(other than the Company
or one or more of its wholly owned Subsidiaries in one or more transactions,
each of which individually (and together) complies with Section 11(m) hereof),

 

then, concurrent with and
in each such case:

 

(a)                                  each
holder of a Right (except as provided in Section 7(e) hereof) shall thereafter
have the right to receive, upon the exercise thereof, at a price equal to the
Total Exercise Price applicable immediately prior to the occurrence of the
Section 13 Event in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, nonassessable and freely tradeable
shares of Common Stock of the Principal Party (as hereinafter defined), free of
any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by dividing such Total Exercise Price by
50% of the Current Per Share Market Price of the shares of Common Stock of such
Principal Party on the date of consummation of such Section 13 Event, provided,
however, that the Exercise Price 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(e)
hereof;

 

(b)                                 such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, 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, it
being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section
13 Event;

 

(d)                                 such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to ensure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and

 

22

 

(e)                                  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 Total Exercise 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 shares of Common Stock of the Principal Party receivable
upon the exercise of such 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.

 

(f)                                    For
purposes hereof, the “earning power” of the Company and its Subsidiaries shall
be determined in good faith by the Company’s Board of Directors on the basis of
the operating earnings of each business operated by the Company and its
Subsidiaries during the three fiscal years preceding the date of such
determination (or, in the case of any business not operated by the Company or
any Subsidiary during three full fiscal years preceding such date, during the
period such business was operated by the Company or any Subsidiary).

 

(b)                                 For
purposes of this Agreement, the term “Principal Party” shall mean:

 

(i) in the case of any
transaction described in clause (i) or (ii) 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 clause (iii) of Section13(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 more than one
Person that is a party to such transaction or transactions receives the same
portion of the assets or earning power so transferred and each such portion
would,

 

23

 

were it not for the other
equal portions, constitute the greatest 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 shares 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 shares of Common Stock of
such Person are not at such time or have 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
shares of Common Stock of which are and have 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 which are
and have been so registered, the term “Principal Party” shall refer to
whichever of such Persons is the issuer of shares 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.

 

(c)                                  The
Company shall not consummate any Section 13 Event unless the Principal Party
shall have a sufficient number of authorized shares of Common Stock that have
not been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the Company
and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Agreement in accordance with
Sections 13(a) and 13(b) hereof, that all rights of first refusal or preemptive
rights in respect of the issuance of shares of Common Stock of such Principal Party
upon exercise of outstanding Rights have been waived, that there are no rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights and that such transaction shall not result in a default by such
Principal Party under this Agreement, and further providing that, as soon as
practicable after the date of such Section 13 Event, such Principal Party will:

 

(i) prepare and file a
registration statement under the Securities Act with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate form,
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;

 

24

 

(ii) use its best efforts
to list (or continue the listing of) the Rights and the securities purchasable
upon exercise of the Rights on a national securities exchange or to meet the
eligibility requirements for quotation on Nasdaq and list (or continue the
listing of) the Rights and the securities purchasable upon exercise of the
Rights on Nasdaq; and

 

(iii) deliver to holders
of the Rights historical financial statements for such Principal Party which
comply in all respects with the requirements for registration on Form F-1 (or
any successor form) under the Exchange Act.

 

In the event that at any
time after the occurrence of a Triggering Event some or all of the Rights shall
not have been exercised at the time of a transaction described in this Section
13, the Rights which have not theretofore been exercised shall thereafter be
exercisable in the manner described in Section 13(a) (without taking into
account any prior adjustment required by Section 11(a)(ii)).

 

(d)                                 In
case the “Principal Party” for purposes of Section 13(b) hereof has provision
in any of its authorized securities or in its certificate of incorporation or
by-laws or other instrument governing its corporate affairs, which provision
would have the effect of (i) causing such Principal Party to issue (other than
to holders of Rights pursuant to Section 13 hereof), in connection with, or as
a consequence of, the consummation of a Section 13 Event, shares of Common
Stock or Equivalent Shares of such Principal Party at less than the then
Current Per Share Market Price thereof or securities exercisable for, or
convertible into, shares of Common Stock or Equivalent Shares of such Principal
Party at less than such then Current Per Share Market Price, or (ii) providing
for any special payment, tax or similar provision in connection with the
issuance of the shares of Common Stock of such Principal Party pursuant to the
provisions of Section 13 hereof, 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.

 

(e)                                  The
Company covenants and agrees that it shall not, at any time after the
Distribution Date, effect or permit to occur any Section 13 Event, if (i) at
the time or immediately after such Section 13 Event 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 Section 13 Event, the Shareholders 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.

 

(f)                                    The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.

 

25

 

14.                                 Fractional
Rights and Fractional Shares.

 

(a)                                  The
Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates which evidence fractional Rights.  In lieu of such fractional Rights, there
shall be paid to the registered holders of the Rights Certificates with regard
to which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of 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, as determined pursuant to this
Agreement.

 

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

 

(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 Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of a share of Common Stock.  For purposes of this Section 14(c), the
current market value of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the terms hereof) for the
Trading Day immediately prior to the date of such exercise.

 

(d)                                 The
holder of a Right by the acceptance of the Right expressly waives his or her
right to receive any fractional Rights or any fractional shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share) upon exercise of a Right.

 

15.                                 Rights
of Action.  All rights of action in
respect of this Agreement, excepting the rights of action given to the Rights
Agent under Section 18 hereof, are vested in the respective registered holders
of the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the shares of Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the shares of Common
Stock), without the consent of the Rights

 

26

 

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

 

16.                                 Agreement
of Rights 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 shares of Common Stock;

 

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

 

(c)                                  subject
to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent may deem and
treat the person in whose name the Rights 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 Rights 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 shall be affected by any notice to the contrary.

 

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

 

27

 

18.                                 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 administration and execution of this Agreement and the exercise
and performance of its duties hereunder. 
The Company also agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.  In no event will the Rights Agent be liable
for special, indirect, incidental or consequential loss or damage of any kind
whatsoever, even if the Rights Agent has been advised of the possibility of
such loss or damage.

 

(b)                                 The
Rights Agent shall be protected and shall incur no liability for, or in respect
of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for the Preferred Shares or shares of 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 reasonably 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.

 

19.                                 Merger
or Consolidation or Change of Name of Rights Agent.  Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust 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, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof.  In
case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Rights 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 Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.  In
case at any time the name of the Rights Agent shall be changed and at such time
any of the Rights Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior name and
deliver Rights Certificates so countersigned; and in case at that time any of
the Rights Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed
name; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.

 

28

 

20.                                 Duties
of Rights Agent.  The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:

 

(a)                                  The
Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the written advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such written advice
or opinion.

 

(b)                                 Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the determination of
Current Per Share Market Price) be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one of
the Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in reliance
upon such certificate.

 

(c)                                  The
Rights Agent shall be liable hereunder to the Company and any other Person only
for its own negligence, bad faith or willful misconduct.

 

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

 

(e)                                  The
Rights Agent shall not be under any responsibility in respect of the validity
of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights 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 Rights Certificate; nor shall
it be responsible for any change in the exercisability of the Rights or any
adjustment in the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Rights Certificates after
receipt by the Rights Agent of a certificate furnished pursuant to Section 12
describing such change or adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any Preferred Shares will, when issued,
be validly authorized and issued, fully paid and nonassessable.

 

(f)                                    The
Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and

 

29

 

other acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.

 

(g)                                 The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one of the Chairman
of the Board, the Chief Executive Officer, the President, any Vice President,
the Chief Financial Officer, the Secretary or any Assistant Secretary of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered by
it in good faith in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions.  Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective.  The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five (5) Business Days after the
date any officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.

 

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

 

(i)                                     The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its
attorneys or agents, 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 resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.

 

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

 

(k)                                  If,
with respect to any Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has either not been completed
or indicates an affirmative response to clause 1 and/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.

 

30

 

21.                                 Change
of Rights Agent.  The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days’ written notice mailed to the Company and
to each transfer agent of the Preferred Shares and the Common Stock by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail.  The Company may remove
the Rights Agent or any successor Rights Agent upon thirty (30) days’ written
notice, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Preferred Shares and the Common Stock by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail.  If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent.  If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after receiving written notice of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his or her Rights Certificate
for inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent.  Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the
United States or of any state of the United States, in good standing, which is
authorized under such laws to exercise corporate trust or Shareholder services
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 $100 million.  After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose.  Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Preferred Shares and
the Common Stock, and mail a written notice thereof to the registered holders
of the Rights 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.

 

22.                                 Issuance
of New Rights Certificates. 
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Exercise Price and the number or kind
or class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement.  In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement or upon the exercise,
conversion or exchange of other securities of the Company outstanding at the
date hereof or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that

 

31

 

(i) no such Rights Certificate shall be issued and this sentence shall
be null and void ab initio if, and to the extent that, such issuance or this
sentence would create a significant risk of or result in material adverse tax
consequences to the Company or the Person to whom such Rights Certificate would
be issued or would create a significant risk of or result in such options’ or
employee plans’ or arrangements’ failing to qualify for otherwise available
special tax treatment 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.

 

23.                                 Redemption.

 

(a)                                  The
Company may, at its option and with the approval of the Board of Directors, at
any time prior to the Close of Business on the earlier of (i) the Shares
Acquisition Date and (ii) the Final Expiration Date, redeem all but not less
than all the then outstanding Rights at a redemption price of $0.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being herein
referred to as the “Redemption Price”) and the Company may, at its
option, pay the Redemption Price either in shares of Common Stock (based on the
Current Per Share Market Price thereof at the time of redemption) or cash.  Such redemption of the Rights by the Company
may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish.  The date on which the Board of Directors elects
to make the redemption effective shall be referred to as the “Redemption
Date”.

 

(b)                                 Immediately
upon the action of the Board of Directors of the Company ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent, 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; provided, however, that the failure to
give or any defect in, any such notice shall not affect the validity of such
redemption.  Within ten (10) days after
the action of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock.  Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. 
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. 
Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other than
that specifically set forth in this Section 23 or in Section 24 hereof, and other
than in connection with the purchase of shares of Common Stock prior to the
Distribution Date.

 

24.                                 Exchange.

 

(a)                                  Subject
to applicable laws, rules and regulations, and subject to subsection 24(c)
below, the Company may, at its option, by action of the Board of Directors, at
any time after the occurrence of a Triggering Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e) hereof)
for shares of Common Stock at an exchange ratio of one share

 

32

 

of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the “Exchange Ratio”).  Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding
Common Stock for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock then outstanding.

 

(b)                                 Immediately
upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to subsection 24(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 give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. 
The Company shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent.  Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice.  Each
such notice of exchange will state the method by which the exchange of the
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 void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.

 

(c)                                  In
the event that there shall not be sufficient shares of Common Stock issued but
not outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with Section 24(a), the Company shall either take
such action as may be necessary to authorize additional shares of Common Stock
for issuance upon exchange of the Rights or alternatively, at the option of a
majority of the Board of Directors, with respect to each Right (i) pay cash in
an amount equal to the Current Value (as hereinafter defined), in lieu of
issuing shares of Common Stock in exchange therefor, or (ii) issue debt or
equity securities or a combination thereof, having a value equal to the Current
Value, in lieu of issuing shares of Common Stock in exchange for each such
Right, where the value of such securities shall be determined by a nationally
recognized investment banking firm selected by majority vote of the Board of
Directors, or (iii) deliver any combination of cash, property, shares of Common
Stock and/or other securities having a value equal to the Current Value in
exchange for each Right.  For purposes of
this Section 24(c) only, the Current Value shall mean the product of the
Current Per Share Market Price of shares of Common Stock on the date of the
occurrence of the event described above in subparagraph (a), multiplied by the
number of shares of Common Stock for which the Right otherwise would be
exchangeable if there were sufficient shares available.  To the extent that the Company determines
that some action need be taken pursuant to clauses (i), (ii) or (iii) of this
Section 24(c), the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following
the date on which the event described in Section 24(a) shall have occurred, in
order to seek any authorization of additional shares of Common Stock and/or to
decide the appropriate form of distribution to be made pursuant to the above
provision and to determine the value thereof. 
In the event of any

 

33

 

such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended.

 

(d)                                 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.  In lieu of such fractional shares
of Common Stock, there shall be paid to the registered holders of the Rights
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 pursuant
to the terms hereof).

 

(e)                                  The
Company may, at its option, by majority vote of the Board of Directors, at any
time before any Person has become an Acquiring Person, exchange all or part of
the then outstanding Rights for rights of substantially equivalent value, as
determined reasonably and with good faith by the Board of Directors, based upon
the advice of one or more nationally recognized investment banking firms.

 

(f)                                    Immediately
upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to subsection 24(e) 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 rights in exchange therefor as has been determined by the Board of
Directors in accordance with subsection 24(e) above.  The Company shall give public notice of any
such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange.  The Company shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the transfer agent for the shares of Common
Stock of the Company.  Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.  Each
such notice of exchange will state the method by which the exchange of the
Rights will be effected.

 

25.                                 Notice
of Certain Events.

 

(a)                                  In
case the Company shall propose to effect or permit to occur any Triggering
Event or Section 13 Event, the Company shall give notice thereof to each holder
of Rights in accordance with Section 26 hereof at least twenty (20) days prior
to occurrence of such Triggering Event or such Section 13 Event.

 

(b)                                 In
case any Triggering Event or Section 13 Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each holder
of a Rights Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Sections 11(a)(ii) and 13 hereof.

 

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

 

34

 

Genco Shipping & Trading Limited

35 West 56th Street

New York, New York 10019

Attention: Robert Gerald Buchanan or John C.
Wobensmith

 

with a copy to:

 

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Attention: Renée Eubanks

 

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 Rights Certificate to or
on the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Company) as follows:

 

Mellon Investor Services LLC

 

Attn:

 

with a copy to:

 

Mellon Investor Services LLC

Overpeck Centre

85 Challenge Road

Ridgefield Park, NJ 07660

Attention: Legal Department

Tel:                            201-373-7198

Fax:                           201-373-7166

 

Notices or demands
authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Rights Certificate 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.

 

27.                                 Supplements
and Amendments.  Prior to the
occurrence of a Distribution Date, the Company may supplement or amend this
Agreement in any respect without the approval of any holders of Rights and the
Rights Agent shall, if the Company so directs, execute such supplement or
amendment.  From and after the occurrence
of a Distribution Date, the Company and the Rights Agent may from time to time
supplement or amend this Agreement without the approval of any holders of
Rights in order to (i) cure any ambiguity, (ii) correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) shorten or lengthen any time period hereunder or
(iv) to change or supplement the provisions hereunder in any manner that the
Company may deem necessary or desirable and that shall not adversely affect the
interests of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, this Agreement may
not be

 

35

 

supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).  Upon the delivery of a certificate from an
appropriate officer of the Company that 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. 
Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of shares of
Common Stock.

 

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.

 

29.                                 Determinations
and Actions by the Board of Directors, etc. 
For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. 
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or 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 a determination to redeem or
not redeem the Rights or to amend the Agreement).  All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by
the Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights Certificates and all other
parties and (y) not subject the Board to any liability to the holders of the
Rights.

 

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

 

31.                                 Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or restriction
is held by such court or authority to be invalid, void or unenforceable and the
Board of Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated

 

36

 

and shall not expire until the Close of Business on the tenth day
following the date of such determination by the Board of Directors.

 

32.                                 Governing
Law.  This Agreement and each Right
and each Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of New York and for all purposes shall be governed by and
construed in accordance with the laws of such jurisdiction applicable to
contracts to be made and performed entirely within such jurisdiction.

 

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.

 

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.

 

37

 

IN
WITNESS WHEREOF, the parties have executed this Shareholder Rights Agreement as
of the date first written above.

 

	
   

  	
  GENCO SHIPPING & TRADING LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Robert Gerald Buchanan

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: John C. Wobensmith

  
	
   

  	
   

  	
  Title: Secretary

  

 

38

 

Exhibit A

 

CERTIFICATE OF
DESIGNATIONS OF RIGHTS, PREFERENCES AND PRIVILEGES OF SERIES A PREFERRED STOCK
OF GENCO SHIPPING & TRADING LIMITED

 

The undersigned, Robert
Gerald Buchanan and John C. Wobensmith do hereby certify:

 

1.                                       That
they are the duly elected and acting President and Secretary, respectively, of
Genco Shipping & Trading Limited, a Marshall Islands corporation (the “Company”).

 

2.                                       That
pursuant to the authority conferred by the Company’s Amended and Restated Articles
of Incorporation, the Company’s Board of Directors on July 6, 2005 adopted the
following resolution designating and prescribing the relative rights,
preferences and limitations of the Company’s Series A Preferred Stock:

 

RESOLVED, that pursuant
to the authority vested in the Board of Directors (the “Board”) of the
Company by the Articles of Incorporation, the Board does hereby establish a
series of preferred stock, par value $0.01 per share, and the designation and
certain powers, preferences and other special rights of the shares of such
series, and certain qualifications, limitations and restrictions thereon, are
hereby fixed as follows:

 

Section 1.                                            Designation
and Amount.  The shares of such
series shall be designated as “Series A Preferred Stock”.  The Series A Preferred Stock shall have
a par value of $0.01 per share, and the number of shares constituting such
series shall initially be 1,000,000, which number the Board may from time to
time increase or decrease (but not below the number then outstanding).

 

Section 2.                                            Proportional
Adjustment.  In the event the Company
shall at any time after the issuance of any share or shares of Series A
Preferred Stock (i) declare any dividend on the common stock of the Company
par value $0.01 per share (the “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 Company shall simultaneously effect a proportional adjustment to the
number of outstanding shares of Series A Preferred Stock.

 

Section 3.                                            Dividends
and Distributions.

 

(a)                                  Subject
to the prior and superior right of the holders of any shares of any series of
preferred stock ranking prior and superior to the shares of Series A
Preferred Stock with respect to dividends, the holders of shares of Series
A Preferred Stock shall be entitled to receive when, as and if declared by
the Board out of funds legally available for the purpose, [quarterly dividends
payable in cash on the last day of February, May, August and November in each
year

 

39

 

(each such date being referred to herein as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
1,000 times the aggregate per share amount of all cash dividends, and 1,000
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock.

 

(b)                                 The
Company shall declare a dividend or distribution on the Series A 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 on outstanding shares of Series A Preferred Stock from
the Quarterly Dividend Payment Date immediately preceding the date of issue of
such shares of Series A Preferred Stock, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue from such Quarterly
Dividend Payment Date.  Accrued but
unpaid dividends shall not bear interest. 
Dividends paid on the shares of Series A Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding.  The
Board may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.

 

Section 4.                                            Voting
Rights.  The holders of shares of
Series A Preferred Stock shall have the following voting rights:

 

(a)                                  Each
share of Series A Preferred Stock shall entitle the holder thereof to [1,000]
votes on all matters submitted to a vote of the Shareholders of the Company.

 

(b)                                 Except
as otherwise provided herein or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock shall vote together
as one class on all matters submitted to a vote of Shareholders of the Company.

 

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

 

40

 

Section 5.                                            Certain
Restrictions.

 

(a)                                  The
Company shall not declare any dividend on, make any distribution on, or redeem
or purchase or otherwise acquire for consideration any shares of Common Stock
after the first issuance of a share or fraction of a share of Series A
Preferred Stock unless concurrently therewith it shall declare a dividend on the
Series A Preferred Stock as required by Section 3 hereof.

 

(b)                                 Whenever
quarterly dividends or other dividends or distributions payable on the Series A
Preferred Stock as provided in Section 3 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid in full,
the Company shall not (i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; (ii) declare or pay
dividends on, 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 Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled; (iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, provided that the Company may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock of
the Company ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; (iv) purchase or
otherwise acquire for consideration any shares of Series A Preferred Stock, or
any shares of stock ranking on a parity with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing or by publication
(as determined by the Board) to all holders of such shares upon such terms as
the Board, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment among
the respective series or classes.

 

(c)                                  The
Company shall not permit any subsidiary of the Company to purchase or otherwise
acquire for consideration any shares of stock of the Company unless the Company
could, under paragraph (a) of this Section 5, purchase or otherwise acquire
such shares at such time and in such manner.

 

Section 6.                                            Reacquired
Shares.  Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof.  All such shares shall upon
their cancellation become authorized but unissued shares of preferred stock and
may be reissued as part of a new series of preferred stock to be created by
resolution or resolutions of the Board, subject to the conditions and
restrictions on issuance set forth herein and, in the Articles of
Incorporation, as then amended.

 

Section 7.                                            Liquidation,
Dissolution or Winding Up.  Upon any
liquidation, dissolution or winding up of the Company, the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share equal to 1,000 times the aggregate

 

41

 

amount to be distributed per share to holders of shares of Common Stock
plus an amount equal to any accrued and unpaid dividends on such shares of
Series A Preferred Stock.

 

Section 8.                                            Consolidation,
Merger, etc.  In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the shares
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to 1,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged.

 

Section 9.                                            No
Redemption.  The shares of Series A
Preferred Stock shall not be redeemable.

 

Section 10.                                      Ranking.  The Series A Preferred Stock shall rank
junior to all other series of the Company’s preferred stock as to the payment
of dividends and the distribution of assets, unless the terms of any such
series shall provide otherwise.

 

Section 11.                                      Amendment.  The Articles of Incorporation of the Company
shall not be further amended in any manner which would materially alter or
change the powers, preference or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of a
majority of the outstanding shares of Series A Preferred Stock, voting
separately as a class.

 

Section 12.                                      Fractional
Shares.  Series A Preferred Stock may
be issued in fractions of a share which shall entitle the holder, in proportion
to such holder’s fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Preferred Stock.

 

RESOLVED FURTHER, that
the President or any Vice President and the Secretary or any Assistant
Secretary of this Company be, and they hereby are, authorized and directed to
prepare and file a Certificate of Designation of Rights, Preferences and
Privileges in accordance with the foregoing resolution and the provisions of
Marshall Islands law and to take such actions as they may deem necessary or
appropriate to carry out the intent of the foregoing resolution.”

 

REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

 

42

 

We further declare under
penalty of perjury that the matters set forth in the foregoing Certificate of
Designation are true and correct of our own knowledge.

 

Executed in New York, New
York on July     , 2005.

 

	
   

  	
   

  
	
   

  	
  Robert Gerald Buchanan

  
	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  John C. Wobensmith

  
	
   

  	
  Secretary

  

 

43

 

Exhibit B

 

[FORM OF RIGHTS
CERTIFICATE]

 

44

 

Exhibit C

 

SUMMARY OF RIGHTS

 

	
  Distribution and Transfer of Rights:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Distribution Date:

  	
   

  	
  The rights will separate from the common stock and
  become exercisable after (1) a person or group acquires ownership of 15% or
  more of the company’s common stock or (2) the 10th business day (or such
  later date as determined by the company’s board of directors) after a person
  or group announces a tender or exchange offer which would result in that
  person or group holding 15% or more of the company’s common stock.

  
	
   

  	
   

  	
   

  
	
  Preferred Stock Purchaseable Upon Exercise of
  Rights:

  	
   

  	
  On the Distribution Date, each holder of a right
  will be entitled to purchase for $25 (the “Exercise Price”) a fraction
  (1/1000th) of one share of the company’s preferred stock which has similar
  economic terms as one share of common stock.

  
	
   

  	
   

  	
   

  
	
  Flip-in:

  	
   

  	
  If an acquiring person (an “Acquiring Person”)
  acquires more than 15% of the company’s common stock then each holder of a
  right (except that acquiring person) will be entitled to buy at the Exercise
  Price, a number of shares of the company’s common stock which has a market
  value of twice the Exercise Price.

  
	
   

  	
   

  	
   

  
	
  Flip-over:

  	
   

  	
  If after an Acquiring Person acquires more than 15%
  of the company’s common stock, the company merges into another company
  (either as the surviving corporation or as the disappearing entity) or the
  company sells more than 50% of its assets or earning power, then each holder
  of a right (except for those owned by the acquirer) will be entitled to
  purchase at the Exercise Price, a number of shares of common stock of the
  surviving entity which has a then current market value of twice the Exercise
  Price.

  

 

45

 

	
  Exchange Provision:

  	
   

  	
  Any time after the date an Acquiring Person obtains
  more than 15% of the company’s common stock and before that Acquiring Person
  acquires more than 50% of the company’s outstanding common stock, the company
  may exchange each right owned by all other rights holders, in whole or in
  part, for one share of the company’s common stock.

  
	
   

  	
   

  	
   

  
	
  Redemption of Rights:

  	
   

  	
  The company can redeem the rights at any time prior
  to a public announcement that a person has acquired ownership of 15% or more
  of the company’s common stock.

  
	
  Expiration of Rights:

  	
   

  	
  The rights expire on the earliest of (1) February
  21, 2015 or (2) the exchange or redemption of the rights as described above.

  
	
   

  	
   

  	
   

  
	
  Amendment of Terms of Rights:

  	
   

  	
  The terms of the rights and the Shareholder Rights
  Plan may be amended without the consent of the rights holders at any time on
  or prior to the Distribution Date. After the Distribution Date, the terms of
  the rights and the Shareholder Rights Plan may be amended to make changes,
  which do not adversely affect the rights of the rights holders (other than
  the Acquiring Person).

  
	
   

  	
   

  	
   

  
	
  Voting Rights:

  	
   

  	
  The rights will not have any voting rights.

  
	
   

  	
   

  	
   

  
	
  Anti-dilution Provisions:

  	
   

  	
  The rights will have the benefit of certain
  customary anti-dilution protections

  

 

46Exhibit 10.1

 

REGISTRATION RIGHTS AGREEMENT

 

 

by and among

 

 

GENCO SHIPPING & TRADING LIMITED

 

 

and

 

 

FLEET ACQUISITION LLC

 

 

Dated as of July    , 2005

 

1

 

REGISTRATION
RIGHTS AGREEMENT dated as of July    , 2005, by and among
GENCO SHIPPING & TRADING LIMITED, a Marshall Islands company (the “Company”),
and FLEET ACQUISITION LLC, a Marshall Islands Company (the “Stockholder”).

 

In
consideration of the mutual covenants and agreements herein contained and other
good and valid consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:

 

1.                                      Certain
Definitions.

 

In
addition to the terms defined elsewhere in this Agreement, the following terms
shall have the following meanings:

 

1.1                                 “Affiliate”
of any Person means any other Person which directly or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such Person.  The term “control”
(including the terms “controlling,” “controlled by” and “under common control
with”) as used with respect to any Person means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.

 

1.2                                 “Agreement”
means this Registration Rights Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to this Registration Rights Agreement as the same
may be in effect at the time such reference becomes operative.

 

1.3                                 “Common
Stock” means common shares, par value $0.01 per share, of the Company and any
other shares into which such shares are converted pursuant to a
recapitalization or reorganization.

 

1.4                                 “Company”
has the meaning set forth in the introductory paragraph.

 

1.5                                 “Demand
Registration” has the meaning set forth in Section 2(a) hereof.

 

1.6                                 “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

1.7                                 “Governmental
Entity” means any national, federal, state, municipal, local, territorial,
foreign or other government or any department, commission, board, bureau,
agency, regulatory authority or instrumentality thereof, or any court,
judicial, administrative or arbitral body or public or private tribunal.

 

1.8                                 “Holder”
means any holder of record of Registrable Common Shares and any transferees of
at least 50% of such Registrable Common Shares from such Holders.  For purposes of this Agreement, the Company
may deem and treat the registered holder of Registrable Common Shares as the
Holder and absolute owner thereof, and the Company shall not be affected by any
notice to the contrary.

 

1.9                                 “Initiating
Holders” has the meaning set forth in Section 2(a) hereof.

 

1.10                           “Person”
means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, incorporated organization, association,
corporation, institution, public benefit corporation, Governmental Entity or
any other entity.

 

1.11                           “Piggyback
Registration” has the meaning set forth in Section 3(a) hereof.

 

2

 

1.12                           “Prospectus”
means the prospectus or prospectuses included in any Registration Statement, as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Common Shares covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated
by reference in such prospectus or prospectuses.

 

1.13                           “Qualifying
IPO” means the sale in an underwritten initial public offering registered under
the Securities Act of shares of common equity securities of the Company.

 

1.14                           “Registrable
Common Shares” means the Common Shares held by the Stockholders or affiliates
of the Stockholders as of the date of the Qualifying IPO, provided however,
Registrable Common Shares shall not include any securities sold by a Person to
the public either pursuant to a Registration Statement or Rule 144.

 

1.15                           “Registration
Expenses” has the meaning set forth in Section 7(a) hereof.

 

1.16                           “Registration
Statement” means any registration statement of the Company which covers any of
the Registrable Common Shares pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all materials
incorporated by reference in such Registration Statement.

 

1.17                           “SEC”
means the Securities and Exchange Commission.

 

1.18                           “Securities
Act” means the Securities Act of 1933, as amended.

 

1.19                           “Senior
Management” means the Chief Executive Officer, President and/or Chief Financial
Officer of the Company.

 

1.20                           “Stockholders”
has the meaning set forth in the introductory paragraph.

 

1.21                           “Suspension
Notice” has the meaning set forth in Section 6(l) hereof.

 

1.22                           “Underwritten
registration or underwritten offering” means a registration in which securities
of the Company are sold to underwriters for reoffering to the public.

 

1.23                           “Withdrawn
Demand Registration” has the meaning set forth in Section 2(g) hereof.

 

2.                                      Demand
Registrations.

 

(a)                                  Right
to Request Registration.  At any time
commencing 180 days following the closing of a Qualifying IPO, any Holder or
Holders may request registration under the Securities Act (“Initiating
Holders”) of all or part of the Registrable Common Shares (“Demand
Registration”); provided, that each Demand Registration be at least equal
to 10% of the Company’s outstanding common shares immediately following the
closing of such Qualifying IPO.

 

Within
10 days after receipt of any such request for Demand Registration, the Company
shall give written notice of such request to all other Holders of Registrable
Common Shares and shall, subject to the provisions of Section 2(d) hereof,
include in such registration all such Registrable Common Shares with respect to
which the Company has received written requests for inclusion therein within 15
days after the receipt of the Company’s notice.

 

3

 

(b)                                 Number
of Demand Registrations.  Subject to
the provisions of Section 2(a), the Initiating Holders of Registrable
Common Shares shall collectively be entitled to request an aggregate of three (3) Demand
Registrations.  A registration shall not
count as one of the permitted Demand Registrations (i) until it has become
effective, (ii) if the Initiating Holders requesting such registration are
not able to have registered and sold at least 50% of the Registrable Common
Shares requested by such Initiating Holders to be included in such registration
or (iii) in the case of a Demand Registration that would be the last
permitted Demand Registration requested hereunder, if the Initiating Holders
requesting such registration are not able to have registered and sold all of
the Registrable Common Shares requested to be included by such Initiating
Holders in such registration.

 

(c)                                  Priority
on Demand Registrations.  Except as
provided in Section 2(g), the Company shall not include in any Demand
Registration any securities which are not Registrable Common Shares without the
written consent of the Holders of a majority of the Registrable Common Shares
to be included in such registration, or, if such Demand Registration is an
underwritten offering, without the written consent of the managing
underwriters.  If the managing
underwriters of the requested Demand Registration advise the Company in writing
that in their opinion the number of shares of Registrable Common Shares
proposed to be included in any such registration exceeds the number of
securities which can be sold in such offering without having an adverse affect
on such offering, including the price at which such Registrable Common Shares
can be sold, the Company shall include in such registration only the number of
shares of Registrable Common Shares which in the opinion of such managing
underwriters can be sold without having the adverse effect referred to
above.  If the number of shares which can
be sold without having the adverse effect referred to above is less than the
number of shares of Registrable Common Shares proposed to be registered, the amount
of Registrable Common Shares to be so sold shall be allocated pro rata among
the Holders of Registrable Common Shares desiring to participate in such
registration on the basis of the amount of such Registrable Common Shares
initially proposed to be registered by such Holders. If the number of shares
which can be sold exceeds the number of shares of Registrable Common Shares
proposed to be sold, such excess shall be allocated pro rata among the other
holders of securities, if any, desiring to participate in such registration
based on the amount of such securities initially requested to be registered by
such holders or as such holders may otherwise agree.

 

(d)                                 Restrictions
on Demand Registrations.  The Company
shall not be obligated to effect any Demand Registration within three months
after the termination of an offering under a previous Demand Registration or a
previous registration under which the Initiating Holder had piggyback rights
pursuant to Section 4 hereof where the Initiating Holder was permitted to
register and sell 50% of the Registrable Common Shares requested to be included
therein.  The Company may postpone for up
to ninety (90) days the filing or the effectiveness of a Registration Statement
for a Demand Registration if, based on the good faith judgment of the Company’s
board of directors, such postponement or withdrawal is necessary in order to
avoid premature disclosure of a matter the board has determined would not be in
the best interest of the Company to be disclosed at such time; provided, that
in no event shall the Company withdraw a Registration Statement after such
Registration Statement has been declared effective; and provided, further,
however, that in the event described above, the Initiating Holders requesting
such Demand Registration shall be entitled to withdraw such request and, if
such request is withdrawn, such Demand Registration shall not count as one of
the permitted Demand Registrations.  The
Company shall provide written notice to the Initiating Holders requesting such
Demand Registration of (i) any postponement or withdrawal of the filing or
effectiveness of a Registration Statement pursuant to this Section 2(d), (ii) the
Company’s decision to file or seek effectiveness of such Registration Statement
following such withdrawal or postponement and (iii) the effectiveness of
such Registration Statement.  The Company
may defer the filing of a

 

4

 

particular Registration Statement pursuant to this Section 2(d) only
once during any twelve-month period.

 

(e)                                  Selection
of Underwriters.  If any of the
Registrable Common Shares covered by a Demand Registration are to be sold in an
underwritten offering, the Initiating Holders shall have the right to select
the managing underwriter(s) to administer the offering subject to the approval
of the Company, which will not be unreasonably withheld.

 

(f)                                    Effective
Period of Demand Registrations. 
After any Demand Registration filed pursuant to this Agreement has
become effective, the Company shall use its best efforts to keep such Demand
Registration effective for a period equal to 180 days from the date on which
the SEC declares such Demand Registration effective (or if such Demand
Registration is not effective during any period within such 180 days, such 180-day
period shall be extended by the number of days during such period when such
Demand Registration is not effective), or such shorter period which shall
terminate when all of the Registrable Common Shares covered by such Demand
Registration have been sold pursuant to such Demand Registration.  If the Company shall withdraw any Demand
Registration pursuant to Section 2(d) (a “Withdrawn Demand
Registration”), the Initiating Holders of the Registrable Common Shares
remaining unsold and originally covered by such Withdrawn Demand Registration
shall be entitled to a replacement Demand Registration which (subject to the
provisions of this Section 2) the Company shall use its best efforts to
keep effective for a period commencing on the effective date of such Demand
Registration and ending on the earlier to occur of the date (i) which is
180 days from the effective date of such Demand Registration and (ii) on
which all of the Registrable Common Shares covered by such Demand Registration
have been sold.  Such additional Demand
Registration otherwise shall be subject to all of the provisions of this
Agreement.

 

3.                                      Shelf
Registration.

 

(a)                                  (i) At
such time as the Company is able to use Form S-3 under the Securities Act
(or any successor form) for sales of Registrable Common Shares by a Holder, at
the request of Holders of the lesser of (x) 5% of the Registrable Common Shares
(without reduction for Common Shares that cease to be Registrable Common
Shares) and (y) Registrable Common Shares having an aggregate market value of
at least $25 million, the Company shall use its commercially reasonable efforts
to effect, as expeditiously as possible, the registration under the Securities
Act of any number of Registrable Common Shares for which it receives requests
in accordance with Section 3(a) (the “Shelf Registration”).
The Company shall use its commercially reasonable best efforts to cause such
Registration Statement to become effective as promptly as practicable and
maintain the effectiveness of such Registration Statement (subject to the terms
and conditions herein) for a period ending on the earlier of (i) two years
following the date on which such Registration Statement first becomes effective
(but one year if the Company is not able to use Form S-3 under the
Securities Act (or any successor form)), and (ii) the date on which all
Registrable Common Shares covered by such Registration Statement have been sold
and the distribution contemplated thereby has been completed or have become
freely tradeable pursuant to Rule 144 without regard to volume.

 

(b)                                 The
Shelf Registration Statement pursuant to this Section 3 shall to the
extent possible under applicable law, be effected to permit sales on a
continuous basis pursuant to Rule 415 under the Securities Act. Any
takedown under the Shelf Registration pursuant to this Section 3 may or
may not be underwritten; provided that (i) Holders may request any
underwritten takedown only to be effected as a Demand Registration (in which
event, unless such Demand Registration would not require representatives of the
Company to meet with prospective purchasers of the Company’s securities, a
Demand Registration must be available thereunder and the number of Demand
Registrations available shall be reduced by one subject Section 2(b)) or

 

5

 

(ii) Holders may request an unlimited number of underwritten
takedowns to be effected in accordance with the terms of Section 4. The
Company shall be entitled to effect the Shelf Registration on any available
form under the Securities Act.

 

(c)                                  In
the event of a request for a Shelf Registration pursuant to Section 3(a),
the Company shall give written notice of the proposed filing of the
Registration Statement in connection therewith to all Holders of Registrable
Common Shares offering to each such Holder the opportunity to have any or all
of the Registrable Common Shares held by such Holder included in such
registration statement. Each Holder of Registrable Common Shares desiring to
have its Registrable Common Shares registered under this Section 3(c) shall
so advise the Company in writing within 15 days after the date of such notice
from the Company (which request shall set forth the amount of Registrable
Common Shares for which registration is requested), and the Company shall
include in such Registration Statement all such Registrable Common Shares so
requested to be included therein.

 

(d)                                 The
number, percentage, fraction or kind of shares referred to in this Section 4
shall be appropriately adjusted for any stock dividend, stock split, reverse
stock split, combination, recapitalization, reclassification, merger or
consolidation, exchange or distribution in respect of the shares of Common
Stock.

 

(e)                                  (e) The
Company, and any other holder of the Company’s securities who has registration
rights, may include its securities in any Shelf Registration effected pursuant
to this Section 3.

 

4.                                      Piggyback
Registrations.

 

(a)                                  Right
to Piggyback.  If at any time
commencing 180 days following the closing of a Qualifying IPO the Company
proposes to register any of its common equity securities under the Securities
Act (other than a registration statement on Form S-8 or on Form F-4
or any similar successor forms thereto), whether for its own account or for the
account of one or more stockholders of the Company, and the registration form
to be used may be used for any registration of Registrable Common Shares (a “Piggyback
Registration”), the Company shall give prompt written notice (in any event
within 20 days after its receipt of notice of any exercise of other demand
registration rights) to all Holders of its intention to effect such a
registration and, subject to Sections 4(b) and 4(c), shall include in such
registration all Registrable Common Shares with respect to which the Company
has received written requests for inclusion therein within 15 days after the
effectiveness of the Company’s notice. 
The Company may postpone or withdraw the filing or the effectiveness of
a Piggyback Registration at any time in its sole discretion.

 

(b)                                 Priority
on Primary Registrations.  If a
Piggyback Registration is an underwritten primary registration on behalf of the
Company, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
having an adverse effect on such offering, the Company shall include in such
registration (i) first, the securities the Company proposes to sell, (ii) second,
the Registrable Common Shares requested to be included therein by the Holders,
pro rata among the Holders of such Registrable Common Shares on the basis of
the number of shares requested to be registered by such Holders, and (iii) third,
other securities requested to be included in such registration pro rata among
the holders of such securities on the basis of the number of shares requested
to be registered by such holders or as such holders may otherwise agree.

 

6

 

(c)                                  Priority
on Secondary Registrations.  If a
Piggyback Registration is an underwritten secondary registration on behalf of a
holder of the Company’s securities other than Registrable Common Shares, and
the managing underwriters advise the Company in writing that in their opinion
the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering without having an adverse effect
on such offering, the Company shall include in such registration (i) first
the securities requested to be included therein by the holders requesting such
registration and the Registrable Common Shares requested to be included in such
registration, pro rata among the holders of such securities on the basis of the
number of shares requested to be registered by such holders, and (ii) second,
other securities requested to be included in such registration pro rata among
the holders of such securities on the basis of the number of shares requested
to be registered by such holders or as such holders may otherwise agree.

 

(d)                                 Selection
of Underwriters.  If any Piggyback
Registration is an underwritten primary offering, the Company shall have the
right to select the managing underwriter or underwriters to administer any such
offering.

 

(e)                                  Other
Registrations.  If the Company has
previously filed a Registration Statement with respect to Registrable Common
Shares, and if such previous registration has not been withdrawn or abandoned,
the Company shall not be obligated to cause to become effective any other registration
of any of its securities under the Securities Act, whether on its own behalf or
at the request of any holder or holders of such securities, until a period of
at least ninety (90) days has elapsed from the termination of the offering
under the previous registration.

 

5.                                      Holdback
Agreements.

 

The
Company agrees not to effect any sale or distribution of any of its equity
securities during the 10 days prior to and during the 180 days beginning on the
effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten registration or
pursuant to registrations on Form S-8 or F-4 or any successor forms
thereto) unless the underwriters managing the offering otherwise agree to a
shorter period.

 

6.                                      Registration
Procedures.

 

(a)                                  Whenever
the Holders request that any Registrable Common Shares be registered pursuant
to this Agreement, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Common Shares in accordance with
the intended methods of disposition thereof, and pursuant thereto the Company
shall as expeditiously as possible:

 

(i)             prepare
and file with the SEC a Registration Statement with respect to such Registrable
Common Shares and use its best efforts to cause such Registration Statement to
become effective as soon as practicable thereafter; and before filing a
Registration Statement or Prospectus or any amendments or supplements thereto,
furnish to the Holders of Registrable Common Shares covered by such
Registration Statement and the underwriter or underwriters, if any, copies of
all such documents proposed to be filed, including documents incorporated by
reference in the Prospectus and, if requested by such Holders, the exhibits
incorporated by reference, and such Holders shall have the opportunity to
object to any information pertaining to such Holders that is contained therein
and the Company will make the corrections reasonably requested by such Holders
with respect to such information prior to filing any Registration Statement or
amendment thereto or any Prospectus or any supplement thereto;

 

7

 

(ii) prepare
and file with the SEC such amendments and supplements to such Registration
Statement and the Prospectus used in connection therewith as may be necessary
to keep such Registration Statement effective for a period of not less than 180
days, in the case of a Demand Registration or such shorter period as is
necessary to complete the distribution of the securities covered by such
Registration Statement and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;

 

(iii) furnish
to each seller of Registrable Common Shares such number of copies of such
Registration Statement, each amendment and supplement thereto, the Prospectus
included in such Registration Statement (including each preliminary Prospectus)
and such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Common Shares owned by such
seller;

 

(iv) use
its best efforts to register or qualify such Registrable Common Shares under
such other securities or blue sky laws of such jurisdictions as any seller
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Common Shares owned by
such seller (provided, that the Company will not be required to (1) qualify
generally to do business in any jurisdiction where it would not otherwise be required
to qualify but for this subparagraph 6.(a)(iv), (2) subject itself to
taxation in any such jurisdiction, or (3) consent to general service of
process in any such jurisdiction);

 

(v) notify
each seller of such Registrable Common Shares, at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of the
occurrence of any event as a result of which the Prospectus included in such
Registration Statement contains an untrue statement of a material fact or omits
any fact necessary to make the statements therein not misleading, and, at the
request of any such seller, the Company shall prepare a supplement or amendment
to such Prospectus so that, as thereafter delivered to the purchasers of such
Registrable Common Shares, such Prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading;

 

(vi) in
the case of an underwritten offering, enter into such customary agreements (including
underwriting agreements in customary form with customary indemnification
provisions) and take all such other actions as the Holders of a majority of the
Registrable Common Shares being sold or the underwriters reasonably request in
order to expedite or facilitate the disposition of such Registrable Common
Shares (including, without limitation, making members of Senior Management of
the Company available to participate in, and cause them to cooperate with the
underwriters in connection with, “road-show” and other customary marketing
activities (including one-on-one meetings with prospective purchasers of the
Registrable Common Shares)) and cause to be delivered to the underwriters and
the sellers, if any, opinions of counsel to the Company in customary form,
covering such matters as are customarily covered by opinions for an
underwritten public offering as the underwriters may request and addressed to
the underwriters and the sellers;

 

8

 

(vii) make
available, for inspection by any seller of Registrable Common Shares, any
underwriter participating in any disposition pursuant to such Registration
Statement, and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such Registration Statement;

 

(viii) use
its best efforts to cause all such Registrable Common Shares to be listed on
each securities exchange on which securities of the same class issued by the
Company are then listed;

 

(ix) if
requested, cause to be delivered, immediately prior to the effectiveness of the
Registration Statement (and, in the case of an underwritten offering, at the
time of delivery of any Registrable Common Shares sold pursuant thereto),
letters from the Company’s independent certified public accountants addressed
to each selling Holder (unless such selling Holder does not provide to such
accountants the appropriate representation letter required by rules governing
the accounting profession) and each underwriter, if any, stating that such
accountants are independent public accountants within the meaning of the
Securities Act and the applicable rules and regulations adopted by the SEC
thereunder, and otherwise in customary form and covering such financial and
accounting matters as are customarily covered by letters of the independent
certified public accountants delivered in connection with primary or secondary
underwritten public offerings, as the case may be;

 

(x)
make generally available to its stockholders a consolidated earnings statement
(which need not be audited) for the 12 months beginning after the effective
date of a Registration Statement as soon as reasonably practicable after the
end of such period, which earnings statement shall satisfy the requirements of
an earning statement under Section 11(a) of the Securities Act; and

 

(xi)
promptly notify each seller of Registrable Common Shares and the underwriter or
underwriters, if any:

 

(A)       when
the Registration Statement, any pre-effective amendment, the Prospectus or any
Prospectus supplement or post-effective amendment to the Registration Statement
has been filed and, with respect to the Registration Statement or any
post-effective amendment, when the same has become effective;

 

(B)         of
any comments of the SEC or of any written request by the SEC for amendments or
supplements to the Registration Statement or Prospectus;

 

(C)         of
the notification to the Company by the SEC of its initiation of any proceeding
with respect to the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement; and

 

(D)        of
the receipt by the Company of any notification with respect to the suspension
of the qualification of any Registrable Common Shares for sale under the
applicable securities or blue sky laws of any jurisdiction.

 

9

 

(b)                                 The
Company shall ensure that no Registration Statement (including any amendments
or supplements thereto and Prospectuses contained therein) shall contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein not misleading
(except, with respect to any Holder, for an untrue statement or alleged untrue
statement of a material fact or omission or alleged omission of a material fact
made in reliance on and in conformity with written information furnished to the
Company by or on behalf of such Holder specifically for use therein).

 

(c)                                  The
Company shall make available to each Holder whose Registrable Common Shares are
included in a Registration Statement (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company, one copy of each Registration Statement and any amendment thereto,
each preliminary Prospectus and Prospectus and each amendment or supplement
thereto, each letter written by or on behalf of the Company to the SEC or the
staff of the SEC (or other governmental agency or self-regulatory body or other
body having jurisdiction, including any domestic or foreign securities
exchange), and each item of correspondence from the SEC or the staff of the SEC
(or other governmental agency or self-regulatory body or other body having
jurisdiction, including any domestic or foreign securities exchange), in each
case relating to such Registration Statement (other than any portion thereof
which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a preliminary
Prospectus, and all amendments and supplements thereto and such other documents
as such Holder may reasonably request in order to facilitate the disposition of
the Registrable Common Shares owned by such Holder.  The Company will promptly notify each Holder
by facsimile of the effectiveness of each Registration Statement or any
post-effective amendment.  The Company
will promptly respond to any and all comments received from the SEC, with a
view towards causing each Registration Statement or any amendment thereto to be
declared effective by the SEC as soon as practicable and shall file an
acceleration request as soon as practicable following the resolution or
clearance of all SEC comments or, if applicable, following notification by the
SEC that any such Registration Statement or any amendment thereto will not be
subject to review.

 

(d)                                 At
all times after the Company has filed a registration statement with the SEC
pursuant to the requirements of either the Securities Act or the Exchange Act,
the Company shall file all reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted
by the SEC thereunder, and take such further action as any Holders may
reasonably request, all to the extent required to enable such Holders to be
eligible to sell Registrable Common Shares pursuant to Rule 144 (or any
similar rule then in effect).

 

(e)                                  the
Company may require each seller of Registrable Common Shares as to which any
registration is being effected to furnish to the Company any other information
regarding such seller and the distribution of such securities as the Company
may from time to time reasonably request in writing.

 

(f)                                    Each
seller of Registrable Common Shares agrees by having its shares treated as Registrable
Common Shares hereunder that, upon notice of the happening of any event as a
result of which the Prospectus included in such Registration Statement contains
an untrue statement of a material fact or omits any material fact necessary to
make the statements therein not misleading (a “Suspension Notice”), such
seller will forthwith discontinue disposition of Registrable Common Shares for
a reasonable length of time not to exceed 60 days until such seller is advised
in writing by the Company that the use of the Prospectus may be resumed and is
furnished with a supplemented or amended Prospectus as contemplated by Section 6(c) hereof,
and, if so directed by the Company, such seller will deliver to the Company (at
the Company’s expense) all copies, other than permanent file copies then in
such seller’s possession, of the Prospectus covering such Registrable Common
Shares current at the time of receipt of such notice; provided, however, that

 

10

 

such postponement of sales of Registrable Common Shares by the Holders
shall not exceed ninety (90) days in the aggregate in any one year.  If the Company shall give any notice to
suspend the disposition of Registrable Common Shares pursuant to a Prospectus,
the Company shall extend the period of time during which the Company is
required to maintain the Registration Statement effective pursuant to this
Agreement by the number of days during the period from and including the date
of the giving of such notice to and including the date such seller either is
advised by the Company that the use of the Prospectus may be resumed or
receives the copies of the supplemented or amended Prospectus contemplated by Section 6(e).  In any event, the Company shall not be
entitled to deliver more than three (3) Suspension Notices in any one
year.

 

7.                                      Registration
Expenses.

 

(a)                                  All
expenses incident to the Company’s performance of or compliance with this
Agreement, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, listing
application fees, printing expenses, transfer agent’s and registrar’s fees,
cost of distributing Prospectuses in preliminary and final form as well as any
supplements thereto, and fees and disbursements of counsel for the Company and
all independent certified public accountants and other Persons retained by the
Company (all such expenses being herein called “Registration Expenses”)
(but not including any underwriting discounts or commissions attributable to
the sale of Registrable Common Shares or fees and expenses of more than one
counsel representing the Holders of Registrable Common Shares), shall be borne
by the Company.  In addition, the Company
shall pay its internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit or quarterly review, the expense of
any liability insurance and the expenses and fees for listing the securities to
be registered on each securities exchange on which they are to be listed.

 

(b)                                 In
connection with each registration initiated hereunder (whether a Demand
Registration or a Piggyback Registration), the Company shall reimburse the
Holders covered by such registration or sale for the reasonable fees and
disbursements of one law firm chosen by the Holders of a majority of the
Registrable Common Shares included in such registration or sale.

 

(c)                                  The
obligation of the Company to bear the expenses described in Section 7(a) and
to reimburse the Holders for the expenses described in Section 7(b) shall
apply irrespective of whether a registration, once properly demanded, if
applicable, becomes effective, is withdrawn or suspended, is converted to
another form of registration and irrespective of when any of the foregoing
shall occur; provided, however, that Registration Expenses for any Registration
Statement withdrawn solely at the request of a Holder of Registrable Common
Shares (unless withdrawn following postponement of filing by the Company in
accordance with Section 2(d)(i) or (ii)) or any supplements or
amendments to a Registration Statement or Prospectus resulting from a
misstatement furnished to the Company by a Holder shall be borne by such
Holder.

 

8.                                      Best Available Rights Terms.

 

If, at
any time after the execution date of this Agreement, the Company enters into an
agreement with any other Person to grant rights comparable to the rights
granted to Stockholder hereunder, if such rights are more favorable in any
manner than the rights granted to the Stockholder hereunder, the Company agrees
that this Agreement shall be immediately amended to reflect the more favorable
terms specified in the agreement with such other Person.

 

11

 

9.                                      Distribution of Rights upon Dissolution of the Stockholder.

 

At any
time after the execution date of this Agreement, the Stockholder shall cease to
exist for any reason as a legal entity (a “Dissolution”), if prior to such
Dissolution the Stockholder distributed its shares in the Company to its
members or if the Stockholders has otherwise distributed such share to its
members, such members shall have the same rights under this Agreement as
granted to the Stockholder as if such Dissolution had not occurred.

 

10.                               Indemnification.

 

(a)                                  The
Company shall indemnify, to the fullest extent permitted by law, each Holder,
its officers, directors and Affiliates and each Person who controls such Holder
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses arising out of or based upon any untrue or alleged
untrue statement of material fact contained in any Registration Statement,
Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading or
any violation or alleged violation by the Company of the Securities Act, the
Exchange Act or applicable “blue sky” laws, except insofar as the same are made
in reliance and in conformity with information relating to such Holder
furnished in writing to the Company by such Holder expressly for use therein or
caused by such Holder’s failure to deliver to such Holder’s immediate purchaser
a copy of the Registration Statement or Prospectus or any amendments or
supplements thereto (if the same was required by applicable law to be so
delivered).  In connection with an
underwritten offering, the Company shall indemnify such underwriters, their
officers and directors and each Person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Holders.

 

(b)                                 In
connection with any Registration Statement in which a Holder of Registrable
Common Shares is participating, each such Holder shall furnish to the Company
in writing such information and affidavits as the Company reasonably requests
for use in connection with any such Registration Statement or Prospectus and,
shall indemnify, to the fullest extent permitted by law, the Company, its
officers, directors Affiliates, and each Person who controls the Company
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses arising out of or based upon any untrue or alleged
untrue statement of material fact contained in the Registration Statement,
Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that the same are made in reliance and in conformity with
information relating to such Holder furnished in writing to the Company by such
Holder expressly for use therein or caused by such Holder’s failure to deliver
to such Holder’s immediate purchaser a copy of the Registration Statement or
Prospectus or any amendments or supplements thereto (if the same was required
by applicable law to be so delivered) after the Company has furnished such
Holder with a sufficient number of copies of the same; provided, however, that
the obligation to indemnify shall be several, not joint and several, among such
Holders and the liability of each such Holder shall be in proportion to and
limited to the net amount received by such Holder from the sale of Registrable
Common Shares pursuant to such Registration Statement.

 

(c)                                  Any
Person entitled to indemnification hereunder shall (i) give prompt written
notice to the indemnifying party of any claim with respect to which it seeks
indemnification, provided that the failure to notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may have
under this Section 8 except to the extent that it has been

 

12

 

materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to notify
the indemnifying party shall not relieve the indemnifying party from any
liability that it may have to an indemnified party otherwise than under this Section 8
and (ii) unless in such indemnified party’s reasonable judgment a conflict
of interest between such indemnified and indemnifying parties may exist with
respect to such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party.  If such defense is assumed, the indemnifying
party shall not be subject to any liability for any settlement made by the
indemnified party without its consent (but such consent will not be
unreasonably withheld).  An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
shall not be obligated to pay the fees and expenses of more than one counsel
for all parties indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment of any indemnified party there may be
one or more legal or equitable defenses available to such indemnified party
which are in addition to or may conflict with those available to another
indemnified party with respect to such claim. 
Failure to give prompt written notice shall not release the indemnifying
party from its obligations hereunder.

 

(d)                                 The
indemnification provided for under this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of the
indemnified party or any officer, director or controlling Person of such
indemnified party and shall survive the transfer of securities.

 

(e)                                  If
the indemnification provided for in or pursuant to this Section 8 is due
in accordance with the terms hereof, but is held by a court to be unavailable
or unenforceable in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified Person as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions which result
in such losses, claims, damages, liabilities or expenses as well as any other
relevant equitable considerations.  The
relative fault of the indemnifying party on the one hand and of the indemnified
Person on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party, and by such
party’s relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. 
In no event shall the liability of any selling Holder be greater in
amount than the amount of net proceeds received by such Holder upon such sale
or the amount for which such indemnifying party would have been obligated to
pay by way of indemnification if the indemnification provided for under Section 8(a) or
8(b) hereof had been available under the circumstances.

 

11.                               Participation
in Underwritten Registrations.

 

No
Person may participate in any registration hereunder which is underwritten
unless such Person (a) agrees to sell such Person’s securities on the
basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.

 

13

 

12.                               Rule 144.

 

The
Company covenants that it will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and it will take such further action
as any Holder may reasonably request to make available adequate current public
information with respect to the Company meeting the current public information
requirements of Rule 144(c) under the Securities Act, to the extent
required to enable such Holder to sell Registrable Common Shares without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the SEC.  Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.

 

13.                               Miscellaneous.

 

(a)                                  Notices.  All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall be
hand delivered or mailed postage prepaid by registered or certified mail or by
facsimile transmission (with immediate telephone confirmation thereafter),

 

If to
the Company:

 

Genco
Shipping & Trading Limited

35
West 56th Street

New
York, New York 10019

 

with a
copy to:

 

Seward &
Kissel LLP

One
Battery Park Plaza

New
York, New York 10004

Attention:  Gary J. Wolfe, Esq.

Facsimile
No.:  (212) 480-8421

 

If to
the Stockholder:

 

Fleet
Acquistion LLC

35
West 56th Street

New
York, New York 10019

Attention: 
Peter C. Georgiopoulos

 

or if to another Holder,
to the addresses set forth on the counterpart signature pages of this
Agreement signed by such Holders.

 

If to a transferee
Holder, to the address of such Holder set forth in the transfer documentation
provided to the Company or at such other address as such party each may specify
by written notice to the others, and each such notice, request, consent and
other communication shall for all purposes of the Agreement be treated as being
effective or having been given when delivered personally or upon receipt of
facsimile confirmation if transmitted by facsimile, or, if sent by mail, at the
time of its receipt.

 

(b)                                 No
Waivers.  No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or

 

14

 

privilege.  The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

 

(c)                                  Successors
and Assigns.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, it being understood that
subsequent Holders of the Registrable Common Shares are intended third party
beneficiaries of this Agreement.

 

(d)                                 Governing
Law.  The laws of the State of New
York shall govern the enforceability and validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of
the parties, without regard to the principles of conflicts of laws thereof.

 

(e)                                  Jurisdiction.  Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in any federal or state court located in the County and State of New
York, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding in any such court or that any such
suit, action or proceeding which is brought in any such court has been brought
in an inconvenient forum.  Process in any
such suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 10(a) shall
be deemed effective service of process on such party.

 

(f)                                    Waiver
of Jury Trial.  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

(g)                                 Counterparts;
Effectiveness.  This Agreement may be
executed in any number of counterparts (including by facsimile) and by
different parties hereto in separate counterparts, with the same effect as if
all parties had signed the same document. 
All such counterparts shall be deemed an original, shall be construed
together and shall constitute one and the same instrument.  This Agreement shall become effective when
each party hereto shall have received counterparts hereof signed by all of the
other parties hereto.

 

(h)                                 Entire
Agreement.  This Agreement contains
the entire agreement among the parties hereto with respect to the subject
matter hereof and supersedes and replaces all other prior agreements, written
or oral, among the parties hereto with respect to the subject matter hereof.

 

(i)                                     Captions.  The headings and other captions in this
Agreement are for convenience and reference only and shall not be used in
interpreting, construing or enforcing any provision of this Agreement.

 

(j)                                     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
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party.  Upon such a determination, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.

 

15

 

(k)                                  Amendments.  The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given without the prior written consent of the Holders of a majority of the
Registrable Common Shares (as constituted on the date hereof); provided,
however, that without a Holder’s written consent no such amendment,
modification, supplement or waiver shall affect adversely such Holder’s rights
hereunder in a discriminatory manner inconsistent with its adverse effects on
rights of other Holders hereunder (other than as reflected by the different
number of shares held by such Holder); provided, further, that the consent or
agreement of the Company shall be required with regard to any termination,
amendment, modification or supplement of, or waivers or consents to departures
from, the terms hereof, which affect the Company’s obligations hereunder.  This Agreement cannot be changed, modified,
discharged or terminated by oral agreement.

 

(l)                                     Aggregation
of Shares.  All Registrable Common
Shares held by or acquired by any Affiliated Persons will be aggregated
together for the purpose of determining the availability of any rights under
this Agreement.

 

(m)                               Equitable
Relief.  Without limiting the remedies
available, the parties hereto acknowledge that any failure by the Company to
comply with its obligations under this Agreement will result in material
irreparable injury to the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, any Holder shall have the right to
obtain such relief as may be required to specifically enforce the Company’s
obligations under this Agreement.

 

IN
WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by
each of the parties hereto as of the date first written above.

 

 

	
  GENCO
  SHIPPING & TRADING

  LIMITED 

  	
   

  	
  FLEET
  ACQUISITION LLC 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  Name:Peter C.
  Georgiopoulos 

  
	
  Name: Robert
  Gerald Buchanan 

  	
   

  	
  Title: Director

  
	
  Title:President

  	
   

  	
   

  
					

 

16

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