Document:

Exhibit
10.1

 

RIGHTS AGREEMENT

 

by and between

 

VITA FOOD PRODUCTS,
INC.

 

and

 

AMERICAN STOCK
TRANSFER AND TRUST COMPANY,

 

as Rights Agent

 

November 10, 2005

 

 

TABLE OF CONTENTS

 

	
  SECTION 1.

  	
  CERTAIN DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  APPOINTMENT OF RIGHTS AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  ISSUE OF RIGHTS CERTIFICATES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  FORM OF RIGHTS CERTIFICATES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  COUNTERSIGNATURE AND REGISTRATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  TRANSFER, SPLIT UP, COMBINATION AND
  EXCHANGE OF RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
  CERTIFICATES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  EXERCISE OF RIGHTS; PURCHASE PRICE;
  EXPIRATION DATE OF RIGHTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  CANCELLATION AND DESTRUCTION OF RIGHTS
  CERTIFICATES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  RESERVATION AND AVAILABILITY OF CAPITAL
  STOCK

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  PREFERRED STOCK RECORD DATE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  ADJUSTMENT OF PURCHASE PRICE, NUMBER AND
  KIND OF SHARES OR NUMBER OF RIGHTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
  NUMBER OF SHARES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  CONSOLIDATION, MERGER OR SALE OR TRANSFER
  OF ASSETS OR EARNING POWER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  FRACTIONAL RIGHTS AND FRACTIONAL SHARES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 15.

  	
  RIGHTS OF ACTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 16.

  	
  AGREEMENT OF RIGHTS HOLDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 17.

  	
  RIGHTS CERTIFICATE HOLDER NOT DEEMED A
  STOCKHOLDER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 18.

  	
  CONCERNING THE RIGHTS AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 19.

  	
  MERGER OR CONSOLIDATION OR CHANGE OF NAME
  OF RIGHTS AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 20.

  	
  DUTIES OF RIGHTS AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 21.

  	
  CHANGE OF RIGHTS AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 22.

  	
  ISSUANCE OF NEW RIGHTS CERTIFICATES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 23.

  	
  REDEMPTION AND TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 24.

  	
  NOTICE OF CERTAIN EVENTS

  	
   

  

 

i

 

	
  SECTION 25.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 26.

  	
  SUPPLEMENTS AND AMENDMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 27.

  	
  SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 28.

  	
  DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 29.

  	
  BENEFITS OF THIS AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 30.

  	
  SEVERABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 31.

  	
  GOVERNING LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 32.

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 33.

  	
  DESCRIPTIVE HEADINGS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 34.

  	
  EXCHANGE

  	
   

  

 

ii

 

RIGHTS AGREEMENT

 

RIGHTS
AGREEMENT, dated as of November 10, 2005(this “Agreement”),
between Vita Food Products, Inc., a Nevada corporation (the “Company”), and American Stock Transfer and Trust Company, a
New York Trust Company (the “Rights Agent”).

 

WHEREAS,
effective the date hereof (the “Rights Dividend
Declaration Date”), the Board of Directors of the Company authorized
and declared a distribution of one Right (each, a “Right”)
for each share of Common Stock, par value $ 0.01 per share, of the Company (the
“Company Common Stock”) outstanding at
the Close of Business (as defined below) on November 25, 2005 (the “Record Date”), and has authorized the issuance of one Right
(as such number may hereinafter be adjusted pursuant hereto) for each share of
Company Common Stock issued between the Record Date (whether originally issued
or delivered from the Company’s treasury) and, except as otherwise provided in Section 22,
the Distribution Date, each Right initially representing the right to purchase
upon the terms and subject to the conditions hereinafter set forth one Unit (as
defined below) of Series A Preferred Stock (as defined below);

 

WHEREAS, the
Company desires to set forth certain terms and conditions governing the Rights;
and

 

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

 

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

 

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

 

(a)                                  “Acquiring Person” shall mean any Person who or which, alone
or together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the shares of Company Common Stock then
outstanding, but shall not include (i) the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity, (ii) Stephen D. Rubin or any of his Affiliates or
Associates, but only to the extent that he and his Affiliates and Associates
individually or in the aggregate are the Beneficial Owners of less than 32% of
the outstanding Company Common Stock, (iii) Clark L. Feldman or any of his
Affiliates or Associates, but only to the extent that he and his Affiliates and
Associates individually or in the aggregate are the Beneficial Owners of less
than 17% of the outstanding Company Common Stock or (iv) any such Person
who has become and is such a Beneficial Owner solely because (A) of a
change in the aggregate number of shares of the Company Common Stock since the
last date on which such Person acquired Beneficial Ownership of any shares of
the Company Common Stock or (B) it acquired such Beneficial Ownership in
the good faith belief that such acquisition would not (1) cause such
Beneficial Ownership to be equal to or exceed 15% (or with respect to Persons
identified in either clause (ii) or (iii) of this Section 1(a),
the percentage referenced in such clause) of the shares of the Company Common
Stock then outstanding and such Person relied in good faith in computing the
percentage of its Beneficial 

 

 

Ownership on publicly filed reports or
documents of the Company that are inaccurate or out-of-date or (2) otherwise
cause a Distribution Date or the adjustment provided for in Section 11(a)(ii) to
occur.  Notwithstanding clause (B) of
the prior sentence, if any Person that is not an Acquiring Person due to such
clause (B) does not reduce its percentage of Beneficial Ownership of the
Company Common Stock to less than 15% (or with respect to Persons identified in
either clause (ii) or (iii) of this Section 1(a), the percentage
referenced in such clause) by the Close of Business on the fifth Business Day
after notice from the Company (the date on which such notice is first mailed or
sent being the first day) that such person’s Beneficial Ownership of the
Company Common Stock is equal to or exceeds 15% (or with respect to Persons
identified in either clause (ii) or (iii) of this Section 1(a),
the percentage referenced in such clause), such Person shall, at the end of
such five Business Day period, become an Acquiring Person (and such clause (B) shall
no longer apply to such Person).  For
purposes of this definition, the determination whether any Person acted in “good faith” shall be conclusively determined by the Board of
Directors of the Company, acting by a vote of those directors of the Company
whose approval would be required to redeem the Rights under Section 23.

 

The percentage
set forth in clause (ii) or (iii) of this Section 1(a) shall
be increased if necessary, for any Company Common Stock or any options to
acquire Company Common Stock issued by the Company to Clark L. Feldman or
Stephen D. Rubin, as applicable.

 

Each spouse or
lineal descendant (including Persons adopted prior to attaining the age of 21
years) who becomes the Beneficial Owner of Company Common Stock which was beneficially
owned by Clark L. Feldman or Stephen D. Rubin shall be entitled to the benefit
of the pro rata portion of the percentage set forth in Section 1(a)(ii) or
1(a)(iii), as applicable, which is attributable to the Company Common Stock so
acquired; provided, however, that the aggregate number of shares of Company
Common Stock beneficially owned by such Person shall not exceed the percentage
state in Section 1(a)(ii) or (iii), as applicable.  Any other such lineal descendant or spouse of
such lineal descendant thereafter acquiring Company Common Stock under the
circumstances described in the immediately preceding sentence shall likewise be
entitled to a pro rata portion of the then applicable percentage.

 

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

 

(c)                                  “Adjustment Spread” has the meaning set forth in Section 34(a)(ii).

 

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

 

(e)                                  “Agreement” has the meaning set forth in the preamble to this
Agreement.

 

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

 

(i)                                     of
which such Person or any of such Person’s Affiliates or Associates is
considered to be a “beneficial owner”
under Rule 13d-3 of the Exchange 

 

2

 

Act
Regulations as in effect on the date of this Agreement; provided, however,
that a Person shall not be deemed the “Beneficial Owner”
of, or to “beneficially own”, or to have “Beneficial Ownership” of, any securities under this
subparagraph (i) as a result of an agreement, arrangement or understanding
to vote such securities if such agreement, arrangement or understanding (A) arises
solely from a revocable proxy given in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the Exchange Act and the Exchange Act Regulations, and (B) is
not reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report);

 

(ii)                                  that
are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate of such other Person) with which such Person (or any of
such Person’s Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
proviso to subparagraph (i) of this paragraph (f)) or disposing of such
securities; or

 

(iii)                               that
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the satisfaction of
conditions) pursuant to any agreement, arrangement or understanding (whether or
not in writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; or

 

provided,
however, that under this paragraph, a Person shall not be deemed the “Beneficial  Owner” of, or
to “beneficially own”, or to have “Beneficial Ownership” of, (A) securities tendered
pursuant to a tender or exchange offer made in accordance with Exchange Act
Regulations by such Person or any of such Person’s Affiliates or Associates
until such tendered securities are accepted for purchase or exchange, (B) securities
that may be issued upon exercise of Rights at any time prior to the occurrence
of a Triggering Event or (C) securities that may be issued upon exercise
of Rights from and after the occurrence of a Triggering Event, which Rights
were acquired by such Person or any of such Person’s Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(c) or Section 22
or pursuant to Section 11(i) in connection with an adjustment made
with respect to any such Rights.

 

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

 

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

 

(i)                                     “Common Stock” of any Person other than the Company shall
mean the capital stock of such Person with the greatest voting power, or, if
such Person shall have no capital stock, the equity securities or other equity
interest having power to control or direct the management of such Person.

 

3

 

(j)                                     “Company” has the meaning set forth in the preamble to this
Agreement.

 

(k)                                  “Company Common Stock” has the meaning set forth in the
recitals to this Agreement.

 

(l)                                     “Current Value” has the meaning set forth in Section 11(a)(iii).

 

(m)                               “Depositary Agent” has the meaning set forth in Section 7(c).

 

(n)                                 “Distribution Date” has the meaning set forth in Section 3(a).

 

(o)                                 “Equivalent Preferred Stock” has the meaning set forth in Section 11(b).

 

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

 

(q)                                 “Exchange Act Regulations” shall mean the General Rules and
Regulations under the Exchange Act.

 

(r)                                    “Expiration Date” has the meaning set forth in Section 7(a).

 

(s)                                  “Final Expiration Date” has the meaning set forth in Section 7(a).

 

(t)                                    “Person” shall mean any individual, partnership, limited
liability company, firm, corporation, joint venture, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
deemed to be a person under Section 14(d)(2) of the Exchange Act.

 

(u)                                 “Preferred Stock” shall mean the Series A Preferred
Stock, par value $0.01 per share, of the Company, having the voting powers,
designation, preferences and relative, participating, optional or other special
rights and qualifications, limitations and restrictions described in the Certificate
of Designation set forth as Exhibit C hereto.

 

(v)                                 “preferred stock equivalents” has the meaning specified in Section 11(a)(iii).

 

(w)                               “Principal Party” has the meaning set forth in Section 13(b).

 

(x)                                   “Purchase Price” has the meaning set forth in Section 7(b).

 

(y)                                 “Record Date” has the meaning set forth in the recitals to
this Agreement.

 

(z)                                   “Redemption Price” has the meaning set forth in Section 23(a).

 

(aa)                            “Registered Common Stock” has the meaning set forth in Section 13(b)(ii).

 

(bb)                          “Registration Date” has the meaning set forth in Section 9(c).

 

4

 

(cc)                            “Registration Statement” has the meaning set forth in Section 9(c).

 

(dd)                          “Right” has the meaning set forth in the recitals to this
Agreement.

 

(ee)                            “Rights Agent” has the meaning set forth in the preamble to
this Agreement.

 

(ff)                                “Rights Certificates” has the meaning set forth in Section 3(a).

 

(gg)                          “Rights Dividend Declaration Date” has the meaning set forth
in the recitals to this Agreement.

 

(hh)                          “Section 11(a)(ii) Event” has the meaning set forth
in Section 11(a)(ii).

 

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

 

(jj)                                  “Section 13 Event” has the meaning set forth in Section 13(a).

 

(kk)                            “Section 34(a)(i) Exchange Ratio” has the meaning
set forth in Section 34(a)(i).

 

(ll)                                  “Section 34(a)(ii) Exchange Ratio” has the meaning
set forth in Section 34(a)(ii).

 

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

 

(nn)                          “Spread” has the meaning set forth in Section 11(a)(iii).

 

(oo)                          “Stock Acquisition Date” shall mean the first date of public
announcement (including, without limitation, the filing of any report pursuant
to Section 13(d) of the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.

 

(pp)                          “Subsidiary” of any Person shall mean any other Person of
which a majority of the voting securities or equity interests is beneficially
owned, directly or indirectly, by such Person, or which is otherwise controlled
by such Person.

 

(qq)                          “Summary of Rights” has the meaning set forth in Section 3(b).

 

(rr)                                “Trading Day” has the meaning set forth in Section 11(d)(i).

 

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

 

(tt)                                “Unit” has the meaning set forth in Section 7(b).

 

SECTION 2.  Appointment of Rights Agent.  The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions
hereof, and 

 

5

 

the Rights Agent hereby accepts such appointment.  With the consent of the Rights Agent, the
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.

 

SECTION 3.  Issue of Rights Certificates.  (a)  Until the earlier of (i) the
Close of Business on the tenth day after the Stock Acquisition Date and (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 prior to such time as
any Person becomes an Acquiring Person, and of which the Company will give the
Rights Agent prompt written notice) 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 maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity) is
commenced within the meaning of Rule 14d-2 of the Exchange Act Regulations
or any successor rule, if upon consummation thereof such Person would be the
Beneficial Owner of 15% (or with respect to Persons identified in either clause
(ii) or (iii) of Section 1(a), the percentage referenced in such
clause) or more of the shares of Company Common Stock then outstanding (the
earlier of (i) and (ii) above being the “Distribution
Date”), (x) the Rights will be evidenced (subject to the provisions
of paragraph (b) of this Section 3) by the certificates for shares of
Company Common Stock registered in the names of the holders of shares of
Company Common Stock as of and subsequent to the Record Date (which
certificates for shares of Company Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Company Common Stock (including a transfer to the Company).  As soon as practicable after the Distribution
Date, the Rights Agent will send by first-class, insured, postage prepaid mail,
to each record holder of shares of Company 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, one or more rights certificates, in substantially the
form of Exhibit A hereto (the “Rights Certificates”),
evidencing one Right for each share of Company Common Stock so held, subject to
adjustment as provided herein.  In the
event that an adjustment in the number of Rights per share of Company Common
Stock has been made pursuant to Section 11(p), at the time of distribution
of the Rights Certificates, the Company may make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a)) so that Rights
Certificates evidencing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. 
As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.

 

(b)                                 As
promptly as practicable following the Record Date, the Company will send a copy
of a Summary of Rights to Purchase Preferred Stock, in a form that may be
appended to certificates that evidence shares of Company Common Stock, in
substantially the form attached hereto as Exhibit B (the “Summary of Rights”), by first-class, postage prepaid mail,
to each record holder of shares of Company 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.

 

(c)                                  Rights
shall, without any further action, be issued in respect of all shares of
Company Common Stock that are issued (including any shares of Company Common
Stock held in treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. 
Certificates evidencing such shares of Company Common Stock issued after
the Record Date shall bear the following legend:

 

6

 

“This
certificate also evidences and entitles the holder hereof to certain Rights as
set forth in the Rights Agreement, dated as of November 10, 2005 (the “Rights Agreement”), between Vita Food Products, Inc.
(the “Company”) and American Stock Transfer
Corp. (the “Rights Agent”), the terms of which
are hereby incorporated herein by reference and a copy of which is on file at
the office of the Rights Agent designated for such purpose.  Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate.  The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request
therefor.  Under certain circumstances
set forth in the Rights Agreement, Rights 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 certificates evidencing shares of Company Common Stock (whether or not such
certificates include the foregoing legend or have appended to them the Summary
of Rights), until the earlier of the Distribution Date and the Expiration Date,
the Rights associated with the shares of Company Common Stock evidenced by such
certificates shall be evidenced by such certificates alone and registered
holders of the shares of Company Common Stock shall also be the registered
holders of the associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the shares of
Company Common Stock evidenced by such certificates.

 

SECTION 4.  Form of Rights
Certificates.  (a) 
The Rights Certificates (and the forms of election to purchase, assignment and
certificate to be printed on the reverse thereof) shall each be substantially
in the form set forth in Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or any rule or regulation thereunder or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed or to conform to usage.  Subject
to the provisions of Section 11 and Section 22, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase such number of Units
of Preferred Stock as shall be set forth therein at the price set forth
therein, but the amount and type of securities, cash or other assets that may
be acquired upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.

 

(b)                                 Any
Rights Certificate issued pursuant hereto that evidences 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) that becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and that receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate 

 

7

 

or Affiliate) or to any Person with whom such
Acquiring Person (or such Associate or Affiliate) has any continuing agreement,
arrangement or understanding regarding either the transferred Rights, shares of
Company Common Stock or the Company or (B) a transfer that a majority of
the Company’s Board of Directors has determined to be part of a plan,
arrangement or understanding that has as a primary purpose or effect the
avoidance of Section 7(e), shall, upon the written direction of a majority
of the Company’s Board of Directors, contain (to the extent feasible) the
following legend:

 

“The Rights
evidenced 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 evidenced hereby may become null and void in the circumstances specified
in Section 7(e) of the Rights Agreement.”

 

SECTION 5.  Countersignature and
Registration.  (a) 
Rights Certificates shall be executed on behalf of the Company by its Chairman
of the Board, the Vice Chairman, the President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries.  The signature
of any one or more of these officers on the Rights Certificates may be manual
or facsimile.  Rights Certificates
bearing the manual or facsimile signatures of the individuals who were at any
time the proper officers of the Company shall bind the Company, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the countersignature of such Rights Certificates or did not hold such offices
at the date of such Rights Certificates. 
No Rights Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose unless there appears on such Rights
Certificate a countersignature duly executed by the Rights Agent by manual
signature of an authorized signatory, and such countersignature upon any Rights
Certificate shall be conclusive evidence, and the only evidence, that such
Rights Certificate has been duly countersigned as required hereunder.

 

(b)                                 Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at its
office designated for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder.  Such books shall show the
name and address of each holder of the Rights Certificates, the number of
Rights evidenced on its face by each Rights Certificate and the date of each
Rights Certificate.

 

SECTION 6.  Transfer, Split Up,
Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates. 
(a)  Subject to the provisions of Sections 4(b), 7(e) and 14,
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 Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase
a like number of Units of Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder to purchase.  Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the 

 

8

 

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 executed the certificate set forth 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) of the Rights evidenced by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request;
whereupon the Rights Agent shall, subject to the provisions of Sections 4(b), 7(e) and
14, 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)                                 If
a Rights Certificate shall be mutilated, destroyed, lost or stolen, upon
request by the registered holder of the Rights evidenced thereby and upon payment
to the Company and the Rights Agent of all reasonable expenses incident
thereto, there shall be issued, in exchange for and upon cancellation of the
mutilated Rights Certificate, or in substitution for the lost, stolen or
destroyed Rights Certificate, a new Rights Certificate, in substantially the
form of the prior Rights Certificate, of like tenor and evidencing the
equivalent number of Rights, but, in the case of loss, theft or destruction,
only upon receipt of evidence satisfactory to the Company and the Rights Agent
of such loss, theft or destruction of such Rights Certificate and, if requested
by the Company or the Rights Agent, indemnity also satisfactory to it.

 

SECTION 7.  Exercise of Rights; Purchase
Price; Expiration Date of Rights.  (a) Prior to the earlier of (i) the
Close of Business on the tenth anniversary hereof (the “Final
Expiration Date”) and (ii) the time at which the Rights are
redeemed as provided in Section 23 (the earlier of (i) and (ii) being
the “Expiration Date”), the registered
holder of any Rights Certificate may, subject to the provisions of Sections 7(e) and
9(c), exercise the Rights evidenced thereby in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the aggregate Purchase Price for the
number of Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) for which such
surrendered Rights are then exercisable.

 

(b)                                 The
purchase price for each one one-thousandth of a share (each such one
one-thousandth of a share being a “Unit”) of
Preferred Stock upon exercise of Rights shall be Thirteen Dollars ($13.00),
subject to adjustment from time to time as provided in Sections 11 and 13(a) (such
purchase price, as so adjusted, being the “Purchase Price”),
and shall be payable in accordance with paragraph (c) below.

 

(c)                                  As
promptly as practicable following the occurrence of the Distribution Date, the
Company shall deposit with a corporation in good standing organized under the
laws of the United States or any state of the United States, that is authorized
under such laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority (such
institution being the “Depositary Agent”),
certificates evidencing the shares of Preferred Stock that may be acquired upon
exercise of the Rights and shall cause such 

 

9

 

Depositary Agent to enter into an agreement
pursuant to which the Depositary Agent shall issue receipts evidencing
interests in the shares of Preferred Stock so deposited.  Upon receipt of a Rights Certificate
evidencing exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price for the Units of Preferred Stock (or,
following a Triggering Event, other securities, cash or other assets, as the
case may be) to be purchased thereby as set forth below and an amount equal to
any applicable transfer tax or evidence satisfactory to the Company of payment
of such tax, the Rights Agent shall, subject to Section 20(k), thereupon
promptly (i) requisition from the Depositary Agent depositary receipts or
certificates evidencing such number of Units of Preferred Stock as are to be
purchased and the Company will direct the Depositary Agent to comply with such
request, (ii) requisition from the Company the amount of cash, if any, to
be paid in lieu of fractional shares in accordance with Section 14, (iii) after
receipt of such depositary receipts or certificates, 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) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate.  In the event that the Company is obligated to
issue Company Common Stock, other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a), the Company will make
all arrangements necessary so that such Company Common Stock, other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.  Subject to Section 34,
the payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii))
may be made in cash or by certified or bank check payable to the order of the
Company, or by wire transfer of immediately available funds to the account of
the Company (provided that notice of such wire transfer shall be given by the
holder of the related Right to the Rights Agent).

 

(d)                                 In
case the registered holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, a new Rights Certificate evidencing the
Rights remaining unexercised shall be issued by the Rights Agent and 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, subject
to the provisions of Section 14.

 

(e)                                  Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of any 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) that
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) that becomes
a transferee prior to or concurrently with the Acquiring Person becoming such
and that receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or such
Associate or Affiliate) or to any Person with whom such Acquiring Person (or
such Associate or Affiliate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights, shares of Company Common Stock
or the Company or (B) a transfer that a majority of the Company’s Board of
Directors has determined to be part of a plan, arrangement or understanding
that has as a primary purpose or effect the avoidance of this Section 7(e),
shall be null and void without any further action, and no holder of such Rights
shall have any rights whatsoever with respect to such 

 

10

 

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) are complied with, but shall have no liability to any
holder of Rights or any other Person as a result of the Company’s failure to
make any determination under this Section 7(e) or Section 4(b) with
respect to an Acquiring Person or its Affiliates, Associates or transferees.

 

(f)                                    Notwithstanding
anything in this Agreement or any Rights Certificate 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 by such registered holder, unless such registered holder shall have (i) completed
and executed the certificate following 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) of the Rights evidenced by such
Rights Certificate or Affiliates or Associates thereof as the Company shall
reasonably request.

 

SECTION 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 any of its agents, be delivered to the Rights Agent for cancellation
or in cancelled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Rights Certificates shall be issued in lieu thereof,
except as expressly permitted by this Agreement.  The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Rights Certificates acquired by the Company otherwise than upon the
exercise thereof.  The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.

 

SECTION 9.  Reservation and Availability
of Capital Stock.  (a) 
The Company shall at all times prior to the Expiration Date cause to be
reserved and kept available, out of its authorized and unissued shares of Preferred
Stock, the number of shares of Preferred Stock that, as provided in this
Agreement, will be sufficient to permit the exercise in full of all outstanding
Rights.  Upon the occurrence of any
events resulting in an increase in the aggregate number of shares of Preferred
Stock (or other equity securities of the Company) issuable upon exercise of all
outstanding Rights above the number then reserved, the Company shall make
appropriate increases in the number of shares so reserved.

 

(b)                                 If
the shares of Preferred Stock to be issued and delivered upon the exercise of
the Rights may be listed on any national securities exchange, the Company shall
during the period from the Distribution Date through the Expiration Date use
its best efforts to cause all securities 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 (i) as soon as practicable following
the occurrence of a Section 11(a)(ii) Event and a determination by
the Company in accordance with Section 11(a)(iii) of the
consideration to be delivered by the Company upon exercise of the Rights or, if
so required by law, as soon as practicable following the Distribution Date
(such date being the “Registration Date”),
to file a registration statement on an appropriate form under the 

 

11

 

Securities Act with respect to the securities
that may be acquired upon exercise of the Rights (the “Registration
Statement”), (ii) to cause the Registration Statement to become
effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement and (B) the Expiration Date and (iv) to
take as soon as practicable following the Registration Date such action as may be
required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or “blue sky”
laws.  If the Registration Statement does
not become effective prior to the Close of Business on the 45th Business Day
following the occurrence of a Section 11(a)(ii) Event, the Company
shall, unless otherwise determined by a majority of the Company’s Board of
Directors, on the 46th Business Day following the occurrence of such Section 11(a)(ii) Event,
be obligated to exercise the option described in Section 34.

 

(d)                                 The
Company shall take such action as may be necessary to ensure that all shares of
Preferred Stock (and, following the occurrence of a Triggering Event, any other
securities that may be delivered upon exercise of Rights) shall be, at the time
of delivery of the certificates or depositary receipts for such securities,
duly and validly authorized and issued and fully paid and non-assessable.

 

(e)                                  The
Company shall pay any documentary, stamp or transfer tax imposed in connection
with the issuance or delivery of the Rights Certificates or upon the exercise
of Rights; provided, however, that the Company shall not be
required to pay any such tax imposed in connection with the issuance or
delivery of Units of Preferred Stock, or any certificates or depositary
receipts for such Units of Preferred Stock (or, following the occurrence of a
Triggering Event, any other securities, cash or assets, as the case may be) to
any Person other than the registered holder of the Rights Certificates
evidencing the Rights surrendered for exercise. 
The Company shall not be required to issue or deliver any certificates
or depositary receipts for Units of Preferred Stock (or, following the occurrence
of a Triggering Event, any other securities, cash or assets, as the case may
be) to, or in a name other than that of, the registered holder of the Rights
Certificate upon the exercise of any Rights evidenced thereby 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.

 

SECTION 10.  Preferred Stock Record Date.  Each Person in whose name any certificate or
depositary receipt for Units of Preferred Stock (or, following the occurrence
of a Triggering Event, other securities) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
other securities) evidenced thereby on, and such certificate or depositary
receipt shall be dated, the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the Preferred Stock
(or, following the occurrence of a Triggering Event, other securities) transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such securities on, and such certificate or depositary receipt
shall be dated, the next succeeding Business Day on which the Preferred Stock
(or, following the 

 

12

 

occurrence of a Triggering Event, other securities) transfer books of
the Company are open; and further  provided, however, that
if delivery of Units of Preferred Stock is delayed as a result of a failure to
register such Units of Preferred Stock pursuant to Section 9(c), such
Persons shall be deemed to have become the record holders of such Units of
Preferred Stock only when such Units first become deliverable.  Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be entitled to any rights
of a stockholder of the Company with respect to securities for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.

 

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

 

(a)                                  (i) 
In the event the Company shall at any time after the date of this Agreement (A) declare
a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide
the outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of Preferred Stock or capital stock, as the case may be, issuable on such date
upon exercise of the Rights, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate number and
kind of shares of Preferred Stock or capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such date, such holder
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification.  If an event occurs that would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii),
the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).

 

(ii)                                  In
the event:

 

(A)                              any
Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any
time after the date of this Agreement, directly or indirectly, shall (1) merge
into the Company or otherwise combine with the Company and the Company shall be
the continuing or surviving corporation of such merger or combination and
Company Common Stock shall remain outstanding and unchanged, (2) in one
transaction or a series of transactions, transfer any assets to the Company or
to any of its Subsidiaries in exchange (in whole or in part) for shares of
Company Common Stock, for other equity securities of the 

 

13

 

Company or any such Subsidiary, or for
securities exercisable for or convertible into shares of equity securities of
the Company or any of its Subsidiaries (whether Company Common Stock or
otherwise) or otherwise obtain from the Company or any of its Subsidiaries,
with or without consideration, any additional shares of such equity securities
or securities exercisable for or convertible into such equity securities (other
than pursuant to a pro rata distribution to all holders of Company Common
Stock), (3) sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of its Subsidiaries or any
employee benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity,
assets (including securities) on terms and conditions less favorable to the
Company or such Subsidiary or plan than those that could have been obtained in
arm’s-length negotiations with an unaffiliated third party, other than pursuant
to a transaction set forth in Section 13(a), (4) sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of,
in one transaction or a series of transactions, to, from or with the Company or
any of the Company’s Subsidiaries or any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity (other than transactions, if any,
consistent with those engaged in, as of the date hereof, by the Company and
such Acquiring Person or such Associate or Affiliate), assets (including
securities) having an aggregate fair market value of more than $3,000,000,
other than pursuant to a transaction set forth in Section 13(a), (5) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of, in one transaction or a series of transactions, to, from or with
the Company or any of its Subsidiaries or any employee benefit plan maintained
by the Company or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity, any material trademark or
material service mark, other than pursuant to a transaction set forth in Section 13(a),
(6) receive, or any designee, agent or representative of such Acquiring
Person or any Affiliate or Associate of such Acquiring Person shall receive,
any compensation from the Company or any of its Subsidiaries other than
compensation for full-time employment as a regular employee at rates in
accordance with the Company’s (or its Subsidiaries’) past practices, or (7) receive
the benefit, directly or indirectly (except proportionately as a holder of
Company Common Stock or as required by law or governmental regulation), of any
loans, advances, guarantees, pledges or other financial assistance or any tax
credits or other tax advantage provided by the 

 

14

 

Company or any of its Subsidiaries or any
employee benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity; or

 

(B)                                any
Person shall become an Acquiring Person, unless the event causing such Person
to become an Acquiring Person is a transaction set forth in Section 13(a);
or

 

(C)                                during
such time as there is an Acquiring Person, there shall be any reclassification
of securities (including any reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the Company with any of its Subsidiaries
or any other transaction or series of transactions involving the Company or any
of its Subsidiaries, other than a transaction or transactions to which the
provisions of Section 13(a) apply (whether or not with or into or
otherwise involving an Acquiring Person), which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity securities of the Company or any of
its Subsidiaries that is directly or indirectly beneficially owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring Person;

 

then,
subject to the cure provisions contained in the definition of Acquiring Person,
upon the date of the occurrence of an event described in Section 11(a)(ii)(A),
(B) or (C) (a “Section 11(a)(ii) Event”),
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e)) shall thereafter have the right to
receive, upon exercise thereof at the then-current Purchase Price in accordance
with the terms of this Agreement, in lieu of the number of Units of Preferred
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, such number of Units of
Preferred Stock as shall equal the result obtained by (x) multiplying the
then-current Purchase Price by the then number of Units of Preferred Stock for
which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event
(such product thereafter being, for all purposes of this Agreement other than Section 13,
the “Purchase Price”), and (y) dividing that
product by 50% of the then-current market price (determined pursuant to Section 11(d))
per Unit of Preferred Stock on the date of such first occurrence (such Units of
Preferred Stock being the “Adjustment Shares”).

 

(iii)                               In
the event that the number of shares of Preferred Stock that are authorized by
the Company’s Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not sufficient
to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, by the vote of
a majority of the Company’s Board of Directors, shall: (A) determine the
excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the “Current Value”)
over (2) the Purchase Price (such excess being the “Spread”),
and (B) with respect to each Right, make adequate provision to substitute
for such Adjustment Shares, upon payment of the applicable 

 

15

 

Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Company
Common Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock (such other shares
being “preferred stock equivalents”)), (4) debt
securities of the Company, (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 a majority of the Company’s Board of
Directors, after receiving advice from a nationally recognized investment
banking firm; provided, however, that if the Company shall not
have made adequate provision to deliver value pursuant to clause (B) above
within thirty days following the later of (x) the first occurrence of a Section 11(a)(ii) Event
and (y) the date on which the Company’s right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as the “Section 11(a)(iii) Trigger
Date”), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, Units of Preferred Stock (to the extent available) and then, if
necessary, cash, which Units of Preferred Stock and/or cash shall have an
aggregate value equal to the Spread.  To
the extent that the Company determines that some action need be taken pursuant
to the first sentence of this Section 11(a)(iii), the Company shall
provide, subject to Section 7(e), that such action shall apply uniformly
to all outstanding Rights.  For purposes
of this Section 11(a)(iii), the value of a Unit of Preferred Stock shall
be the current market price (as determined pursuant to Section 11(d)) per
Unit of Preferred Stock on the Section 11(a)(iii) Trigger Date and
the value of any preferred stock equivalent shall be deemed to have the same
value as the Preferred Stock on such date.

 

(b)                                 In
case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them to subscribe for or
purchase (for a period expiring within forty-five calendar days after such
record date) shares of Preferred Stock (or shares having substantially the same
rights, privileges and preferences as shares of Preferred Stock (“Equivalent Preferred Stock”)) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred
Stock or per share of Equivalent Preferred Stock (or having a conversion price
per share, if a security convertible into Preferred Stock or Equivalent
Preferred Stock) less than the current market price (as determined pursuant to Section 11(d))
per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the sum of the number of shares of Preferred Stock
outstanding on such record date plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of Preferred
Stock and/or Equivalent Preferred Stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which shall be
the number of shares of Preferred Stock outstanding on such record date plus
the number of additional shares of Preferred Stock and/or Equivalent Preferred
Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible).  In case such subscription price may be paid
by delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by a
majority of 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. 
Shares 

 

16

 

of Preferred Stock owned by or held for the account of the Company or
any Subsidiary 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 or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price that would then be in effect if such record date had
not been fixed.

 

(c)                                  In
case the Company shall fix a record date for a distribution to all holders of
shares of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in shares of Preferred Stock, but including any
dividend payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock on such
record date less the fair market value (as determined in good faith by a
majority of 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 holder of the Rights) of
the cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants distributable in respect of a share of
Preferred Stock and the denominator of which shall be such current market price
(as determined pursuant to Section 11(d)) per share of Preferred
Stock.  Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price that would have been in effect if such record date had not been
fixed.

 

(d)                                 (i)                                     For
the purpose of any computation hereunder, the “current
market price” per share of Company Common Stock or Common Stock on
any date shall be deemed to be the average of the daily closing prices per
share of such shares for the ten consecutive Trading Days immediately prior to
such date; provided, however, that if prior to the expiration of
such requisite ten Trading Day period the issuer announces either (A) a
dividend or distribution on such shares payable in such shares or securities
convertible into such shares (other than the Rights) or (B) any
subdivision, combination or reclassification of such shares, then, following
the ex-dividend date for such dividend or the record date for such subdivision,
as the case may be, the “current market price”
shall be properly adjusted to take into account such event.  The closing price for each day shall be, if
the shares are listed and admitted to trading on a national securities exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which such shares are listed or admitted to trading or, if such shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by The Nasdaq Stock Market
Consolidated Quotations Service or such other system then in use, or, if on any
such date such shares are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in such shares selected by a majority of the Company’s Board of
Directors.  If, on any such date no
market maker is making a market in such shares, the fair value of such shares
on such date as determined in good faith by a majority of the Company’s Board
of Directors shall be used.  If 

 

17

 

such shares are not publicly held or not so
listed or traded, “current market price”
per share shall mean the fair value per share as determined in good faith by a
majority of the Company’s Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.  The term “Trading Day” shall mean, if such shares are listed or
admitted to trading on any national securities exchange, a day on which the principal
national securities exchange on which such shares are listed or admitted to
trading is open for the transaction of business or, if such shares are not so
listed or admitted, a Business Day.

 

(ii)                                  For
the purpose of any computation hereunder, the “current
market  price” per
share of Preferred Stock shall be determined in the same manner as set forth
above for Company Common Stock in clause (i) of this Section 11 (d) (other
than the fourth sentence thereof).  If
the current market price per share of Preferred Stock cannot be determined in
the manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this Section 11(d),
the “current market price” per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as
such amount may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to Company Common Stock
occurring after the date of this Agreement) multiplied by the current market
price per share of Company Common Stock. 
If neither Company Common Stock nor Preferred Stock is publicly held or
so listed or traded, “current market price”
per share of the Preferred Stock shall mean the fair value per share as determined
in good faith by a majority of 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.  For all purposes of this Agreement, the “current  market price”
of a Unit of Preferred Stock shall be equal to the “current
market price” of one share of Preferred Stock divided by 1,000.

 

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

 

(f)                                    If,
as a result of an adjustment made pursuant to Section 11(a)(ii) or
13(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any Right and the
Purchase 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 Stock contained in Sections 11(a), (b), (c), (d), (e),
(g), (h), (i), (j), (k), (1) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 with respect to the Preferred Stock shall apply on like terms to
any such other shares.

 

18

 

(g)                                 All
Rights originally issued by the Company subsequent to any adjustment made to
the Purchase Price hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of Units of Preferred Stock (or other
securities or amount of cash or combination thereof) that may be acquired from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.

 

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

 

(i)                                     The
Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in lieu of any adjustment in the number of
Units of Preferred Stock that may be acquired upon the exercise of a
Right.  Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the
number of Units of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. 
Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
hundred-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price.  The Company shall make a public announcement
of its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made.  This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least ten days later than the
date of such public announcement.  If
Rights Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to Section 14,
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 to be so
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
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.

 

(j)                                     Irrespective
of any adjustment or change in the Purchase Price or the number of Units of
Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the Purchase
Price per Unit 

 

19

 

and the number of Units of Preferred Stock
that were expressed in the Initial Rights Certificates issued hereunder without
prejudice to any such adjustment or change.

 

(k)                                  Before
taking any action that would cause an adjustment reducing the Purchase Price
below the then-par value of the number of Units of Preferred Stock issuable
upon exercise of the Rights, the Company shall take any corporate action that
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue such fully paid and non-assessable number of Units of
Preferred Stock at such adjusted Purchase Price.

 

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

 

(m)                               Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent
that in their good faith judgment a majority of the Company’s Board of
Directors shall determine to be advisable in order that any (i) consolidation
or subdivision of the Preferred Stock, (ii) issuance wholly for cash or
any shares of Preferred Stock at less than the current market price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities that by their terms
are convertible into or exchangeable for shares of Preferred 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
Stock, shall not be taxable to such holders or shall reduce the taxes payable
by such holders.

 

(n)                                 The
Company shall not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o)), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(o)), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)), if
(x) at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding
or agreements in effect that would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale,
the Person that constitutes, or would constitute, the “Principal
Party” for purposes of Section 13(a) shall have
distributed or otherwise transferred to its stockholders or other Persons
holding an equity interest in such Person Rights previously owned by such
Person or any of its Affiliates 

 

20

 

and Associates; provided, however,
that this Section 11(n) shall not affect the ability of any Subsidiary of
the Company to consolidate with, merge with or into, or sell or transfer assets
or earning power to, any other Subsidiary of the Company.

 

(o)                                 After
the Distribution Date, the Company shall not, except as permitted by Section 23
or Section 26, take (or permit any Subsidiary to take) any action, if at
the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.

 

(p)                                 Anything
in this Agreement to the contrary notwithstanding, in the event that the
Company shall at any time after the Rights Dividend Declaration Date and prior
to the Distribution Date (i) declare a dividend on the outstanding shares
of Company Common Stock payable in shares of Company Common Stock, (ii) subdivide
the outstanding shares of Company Common Stock, (iii) combine the
outstanding shares of Company Common Stock into a smaller number of shares, or (iv) issue
any shares of its capital stock in a reclassification of Company Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), the
number of Rights associated with each share of Company Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted, so that the number of Rights
thereafter associated with each share of Company Common Stock following any
such event shall equal the result obtained by multiplying the number of Rights
associated with each share of Company Common Stock immediately prior to such
event by a fraction the numerator of which shall be the total number of shares
of Company Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of
Company Common Stock outstanding immediately following the occurrence of such
event.

 

SECTION 12.  Certificate of Adjusted
Purchase Price or Number of Shares.  Whenever an adjustment is made as provided in
Section 11 or Section 13, the Company shall (a) promptly prepare
a certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent,
and with each transfer agent for the Preferred Stock and the Company Common
Stock, a copy of such certificate, and (c) mail a brief summary thereof to
each holder of a Rights Certificate (or, if prior to the Distribution Date, to
each holder of a certificate evidencing shares of Company Common Stock) in
accordance with Section 25.  The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.

 

SECTION 13.  Consolidation, Merger or
Sale or Transfer of Assets or Earning Power.  (a)  In the event that, following the
Stock Acquisition Date, directly or indirectly, either (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)),
and the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the Company
in a transaction that complies with Section 11(o)) shall consolidate with,
or merge with or into, the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in connection with
such consolidation or merger, all or part of the outstanding shares of Company 

 

21

 

Common Stock shall be converted into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) to any Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o)), in one or more transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries, taken as a whole (any such event described in
clause (x), (y) or (z) being a “Section 13 Event”),
then, and in each such case, proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e), shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price, such number of validly authorized and issued, fully paid and
non-assessable shares of Common Stock of the Principal Party, which shares
shall not be subject to any liens, encumbrances, rights of first refusal,
transfer restrictions or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number
of Units of Preferred Stock for which a Right is exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such Units for which a Right would be exercisable
hereunder but for the occurrence of such Section 11(a)(ii) Event by
the Purchase Price that would be in effect hereunder but for such first
occurrence) and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be the “Purchase
Price” for all purposes of this Agreement) by 50% of the current
market price (determined pursuant to Section 11(d)) per share of the
Common Stock of such Principal Party on the date of consummation of such Section 13
Event; (ii) 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; (iii) the term “Company” shall, for all purposes of this Agreement,
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to ensure
that the provisions of this Agreement shall thereafter be applicable to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) shall be of no
further effect following the first occurrence of any Section 13 Event.

 

(b)                                 “Principal Party” shall mean:

 

(i)                                     in
the case of any transaction described in clause (x) or (y) of the first
sentence of Section 13(a), (A) the Person that is the issuer of any
securities into which shares of Company Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
of Common Stock that has the highest aggregate current market price (determined
pursuant to Section 1l(d)) and (B) if no securities are so issued,
the Person that is the other party to such merger or consolidation, or, if
there is more than one such Person, the Person the Common Stock of which has
the highest aggregate current market price (determined pursuant to Section 11(d));
and

 

(ii)                                  in
the case of any transaction described in clause (z) of the first sentence of Section 13(a),
the Person that is the party receiving the largest portion of the assets or
earning power transferred pursuant to such transaction or transactions, or, if 

 

22

 

each Person
that is a party to such transaction or transactions receives the same portion
of the assets or earning power transferred pursuant to such transaction or
transactions or if the Person receiving the largest portion of the assets or
earning power cannot be determined, whichever Person the Common Stock of which
has the highest aggregate current market price (determined pursuant to Section 11(d));
provided, however, that in any such case, (1) if the Common
Stock of such Person is not at such time and has not been continuously over the
preceding twelve-month period registered under Section 12 of the Exchange
Act (“Registered Common Stock”), or such
Person is not a corporation, and such Person is a direct or indirect Subsidiary
of another Person that has Registered Common Stock outstanding, “Principal Party” shall refer to such other Person; (2) if
the Common Stock of such Person is not Registered Common Stock or such Person
is not a corporation, and such Person is a direct or indirect Subsidiary of
another Person but is not a direct or indirect Subsidiary of another Person
that has Registered Common Stock outstanding, “Principal
Party” shall refer to the ultimate parent entity of such
first-mentioned Person; (3) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and one or more of
such other Persons has Registered Common Stock outstanding, “Principal Party” shall refer to whichever of such other
Persons is the issuer of the Registered Common Stock having the highest
aggregate current market price (determined pursuant to Section 11(d)); and
(4) if the Common Stock of such Person is not Registered Common Stock or
such Person is not a corporation, and such Person is directly or indirectly controlled
by more than one Person, and none of such other Persons have Registered Common
Stock outstanding, “Principal Party” shall refer to whichever ultimate parent entity is
the corporation having the greatest stockholders’ equity or, if no such ultimate
parent entity is a corporation, shall refer to whichever ultimate parent entity
is the entity having the greatest net assets.

 

(c)                                  The
Company shall not consummate any such consolidation, merger, sale or transfer
unless the Principal Party shall have a sufficient number of authorized shares
of its 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 Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that the Principal Party will:

 

(i)                                     (A) file
on an appropriate form, as soon as practicable following the execution of such
agreement, a registration statement under the Securities Act with respect to
the Common Stock that may be acquired upon exercise of the Rights, (B) cause
such registration statement to remain effective (and to include a prospectus
complying with the requirements of the Securities Act) until the Expiration
Date, and (C) as soon as practicable following the execution of such
agreement take such action as may be required to ensure that any acquisition of
such Common Stock upon the exercise of the Rights complies with any applicable
state securities or “blue sky” laws;
and

 

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

 

23

 

(d)                                 In
case the Principal Party that is to be a party to a transaction referred to in
this Section 13 has a provision in any of its authorized securities or in
its Certificate of Incorporation or By-laws or other instrument governing its
corporate affairs, which provision would have the effect of (i) causing
such Principal Party to issue, in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then current market price
per share (determined pursuant to Section 11(d)) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than
such then current market price (other than to holders of Rights pursuant to
this Section 13) or (ii) providing for any special payment, tax or
similar provisions in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of this Section 13, then, in
such event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been cancelled, 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
provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. 
In the event that a Section 13 Event shall occur at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights that have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a).

 

SECTION 14.  Fractional Rights and
Fractional Shares.  (a) 
The Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates that evidence fractional Rights.  In lieu of such fractional Rights, there
shall be paid to the Persons to which such fractional Rights would otherwise be
issuable, an amount in cash equal to such fraction of the market value of a
whole Right.  For purposes of this Section 14(a),
the market value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable.  The
closing price of the Rights for any day shall be, if the Rights are listed or
admitted to trading on a national securities exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by The Nasdaq Stock Market Consolidated
Quotations Service or such other system then in use or, if on any such date the
Rights are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Rights selected by a majority of the Company’s Board of Directors.  If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by a majority of the Company’s Board of Directors
shall be used and such determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.

 

(b)                                 The
Company shall not be required to issue fractions of shares of Preferred Stock
(other than fractions that are integral multiples of one one-thousandth of a
share of Preferred Stock) upon exercise of the Rights or to distribute
certificates that evidence such 

 

24

 

fractional shares of Preferred Stock (other
than fractions that are integral multiples of one one-thousandth of a share of
Preferred Stock).  In lieu of such
fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share, the Company may 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 then current market price of a
share of Preferred Stock on the day of exercise, determined in accordance with Section 11(d).

 

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

 

SECTION 15.  Rights of Action.  All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to Section 18,
are vested in the respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered holders of certificates
evidencing shares of Company Common Stock); and any registered holder of a
Rights Certificate (or, prior to the Distribution Date, of a certificate
evidencing shares of Company Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of a certificate evidencing shares of Company Common Stock),
may, on such registered holder’s own behalf and for such registered holder’s
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company or any other Person to enforce, or otherwise act
in respect of, such registered holder’s 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 shall be entitled to
specific performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any Person
subject to this Agreement.

 

SECTION 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 Company 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 office 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 duly
executed;

 

(c)                                  subject
to Section 6(a) and Section 7(f), the Company and the Rights
Agent may deem and treat the Person in whose name a Rights Certificate (or,
prior to the Distribution Date, the associated Company 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 Company Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes 

 

25

 

whatsoever, and neither the Company nor the
Rights Agent, subject to the last sentence of Section 7(e), shall be
affected by any notice to the contrary; and

 

(d)                                 notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights
Agent shall have any liability to any holder of a Right or any other Person as
a result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other order,
decree, judgment or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, that the Company must use its
best efforts to have any such order, decree, judgment or ruling lifted or
otherwise overturned as promptly as practicable.

 

SECTION 17.  Rights Certificate Holder
Not Deemed a Stockholder. 
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
shares of Preferred Stock or any other securities of the Company that may at
any time be issuable on the exercise of the Rights evidenced 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
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or, except as provided in Section 24,
to receive notice of meetings or other actions affecting stockholders, or to
receive dividends or subscription rights, or otherwise.

 

SECTION 18.  Concerning the Rights Agent.  (a) The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses,
including reasonable fees and disbursements of its counsel, incurred in
connection with the execution and administration of this Agreement and the
exercise and performance of its duties hereunder.  The Company shall indemnify the Rights Agent
for, and 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 hereunder.

 

(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 or depositary receipt for Preferred Stock or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to have been
signed, executed and, where necessary, verified or acknowledged by the proper
Person or Persons.

 

SECTION 19.  Merger or Consolidation or
Change of Name of Rights Agent. 
(a)  Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any 

 

26

 

corporation succeeding to the corporate trust or shareholder services
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any document or any further act on the part of any of the parties
hereto; provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21.  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 a 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 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.

 

(b)                                 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.

 

SECTION 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 opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.

 

(b)                                 Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the determination of “current 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 specified herein) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board, the Vice Chairman, the President, any Vice President, the
Treasurer, any Assistant Treasurer, 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 only for its own negligence, bad faith
or willful misconduct.

 

27

 

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

 

(e)                                  The Rights Agent
shall not have any responsibility for the validity of this Agreement or the
execution and delivery hereof (except the due execution and delivery hereof by
the Rights Agent) or for 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 failure by the Company to satisfy conditions
contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of Section 11
or Section 13 or for the manner, method or amount of any such adjustment
or the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after receipt by the Rights Agent of the certificate describing
any such adjustment contemplated by Section 12); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or any other
securities to be issued pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Preferred Stock or any other securities will, when
so issued, be validly authorized and issued, fully paid and non-assessable.

 

(f)                                    The Company shall
perform, execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further acts, instruments and assurances as
may reasonably be required by the Rights Agent for the performance by the
Rights Agent of its duties under this Agreement.

 

(g)                                 The Rights Agent is
hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of the Board, the Vice
Chairman, the President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer 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 to be taken
by it in good faith in accordance with instructions of any such officer.  Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this 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 Business Days after the
date any such officer of the Company actually receives such application, unless
any such officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or omitted.

 

(h)                                 The Rights Agent and
any stockholder, director, officer or employee of the Rights Agent may buy,
sell or deal in any of the Rights or other securities of the Company or become
peculiarly 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 

 

28

 

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 Person.

 

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

 

(j)                                     No provision of
this Agreement shall require the Rights Agent to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties or in the exercise of its rights hereunder if the Rights Agent shall
have 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, not signed 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.  If such certificate has been completed and
signed and shows a negative response to clauses 1 and 2 of such certificate,
unless previously instructed otherwise in writing by the Company (which
instructions may impose on the Rights Agent additional ministerial
responsibilities, but no discretionary responsibilities), the Rights Agent may
assume without further inquiry that the Rights Certificate is not owned by a
person described in Section 4(b) or Section 7(e) and shall
not be charged with any knowledge to the contrary.

 

SECTION 21.  Change of Rights Agent.  The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon
thirty days’ prior notice in writing mailed to the Company, and to each
transfer agent of the Preferred Stock and the Company Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates (or
certificates for the Company Common Stock prior to the Distribution Date) by
first-class mail.  The Company may remove
the Rights Agent or any successor Rights Agent upon thirty days’ prior notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Preferred Stock and the Company
Common Stock, by registered or certified mail, and to the holders of the Rights
Certificates (or certificates for the Company Common Stock prior to the
Distribution Date) 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 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate or, prior to the Distribution Date, the holder of a
certificate for the Company Common Stock (who shall, with such notice, submit such
holder’s Rights Certificate or certificate for Company Common Stock, as the
case may be, for inspection by the Company), then any registered holder of any
Rights Certificate or, prior to the Distribution Date, the holder of a
certificate for the Company Common Stock may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent.  Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized
and doing business under the laws of the United States or any state of the
United 

 

29

 

States in good standing, shall be authorized to do business as a
banking institution in the State of Nevada, shall be authorized under such laws
to exercise corporate trust or stock transfer powers, shall be subject to
supervision or examination by federal or state authorities and shall have at
the time of its appointment as Rights Agent a combined capital and surplus of
at least $100,000,000 or (b) an Affiliate of a corporation described in
clause (a).  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 Stock and the Company Common Stock, and mail a notice
thereof in writing to the registered holders of the Rights Certificates (or
certificates for the Company Common Stock prior to the Distribution Date).  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.

 

SECTION 22.  Issuance of New Rights Certificates.  Notwithstanding any of the provisions of this
Agreement or 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 a
majority of the Company’s Board of Directors to reflect any adjustment or
change made in accordance with the provisions of this Agreement in the Purchase
Price or the number or kind or class of shares or other securities or property
that may be acquired upon exercise of the Rights.  In addition, in connection with the issuance
or sale of shares of Company Common Stock following the Distribution Date and
prior to the Expiration Date, the Company (a) shall, with respect to
shares of Company 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 securities hereinafter issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by a majority of the
Company’s Board of Directors, issue Rights Certificates evidencing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Rights Certificate would be issued
and (ii) no such Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.

 

SECTION 23.  Redemption and Termination.  (a)  Subject to Section 28, the
Company may, at its option, by action of a majority of the Company’s Board of
Directors, at any time prior to the earlier of (i) the Close of Business
on the tenth day following the Stock Acquisition Date or (ii) the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being the “Redemption Price”), and the Company may, at its option, by
action of a majority of the Company’s Board of Directors, pay the Redemption
Price either in shares of Company Common Stock (based on the current market price,
determined in accordance with Section 11(d), of the shares of Company
Common Stock at the time of redemption) or cash.  

 

30

 

Subject to the foregoing, the redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.

 

(b)                                 Immediately upon the
action of a majority of the Company’s Board of Directors ordering the
redemption of the Rights, evidence of which shall be 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 for each Right so held.  Promptly after the action of a majority of
the Company’s 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 each holder’s last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for Company Common Stock. 
Any notice that 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.

 

SECTION 24.  Notice of Certain Events.  (a)  In case the Company shall propose,
at any time after the Distribution Date, (i) to pay any dividend payable
in stock of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular quarterly
cash dividend out of earnings or retained earnings of the Company), (ii) to
offer to the holders of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of the Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock), (iv) to
effect any consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)),
or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o)) or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate (or, prior to the
Distribution Date, to each holder of certificates for Company Common Stock), to
the extent feasible and in accordance with Section 25, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least 20 days prior to the record date
for determining holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock, whichever shall be the
earlier; provided, however, that no such notice shall be required
pursuant to this Section 24 if any Subsidiary of the Company effects a
consolidation or merger with or into, or effects a sale or other transfer of
assets or earning power to, any other Subsidiary of the Company.

 

31

 

(b)                                 In case any of the
events set forth in Section 11(a)(ii) shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each holder
of a Rights Certificate, to the extent feasible and in accordance with Section 25,
a notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii).

 

SECTION 25.  Notices.  All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing and mailed
or sent or delivered (including by facsimile or electronic mail transmission,
if confirmed with a copy delivered by an overnight receipted delivery service),
if to the Company, at its address at:

 

Vita Food
Products, Inc.

2222 West Lake Street

Chicago, Illinois 60612

Attention:  President

Telecopy No.:  312-738-3215

Email:  srubin@vitafoodproducts.com

 

with a copy
to:

 

McDermott,
Will & Emery LLP

227 West Monroe Street

Chicago, Illinois 60606-5096

Attention:  Robert A. Schreck, Jr.

Telecopy No.:  312-984-7700

Email:  rschreck@mwe.com

 

and if to the
Rights Agent, at its address at:

 

American Stock
Transfer Corp.

59 Maiden Lane, Plaza Level

New York, New York  

10038  

Attention:  Office of the General Counsel

Telecopy No.: 719-921-8116

Email: info@amstock.com

 

Notices or
demands authorized or required by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates evidencing shares
of Company Common Stock) 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 Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Company
Common Stock.

 

SECTION 26.  Supplements and Amendments.  Prior to the Distribution Date and subject to
the penultimate sentence of this Section 26, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement without the 

 

32

 

approval of any holders of certificates evidencing shares of Company
Common Stock.  For the avoidance of
doubt, the Company expressly retains the right to amend this Agreement to
accommodate or permit the issuance of securities by the Company, including
Company Common Stock or securities convertible into Company Common Stock and
the amendment to the definition of Acquiring Person hereunder in connection
with the issuance and sale of such securities. 
From and after the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement without the approval
of any holders of Rights Certificates in order (a) to cure any ambiguity, (b) to
correct or supplement any provision contained herein that may be defective or
inconsistent with any other provisions herein, (c) to shorten or lengthen
any time period hereunder, or (d) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, however, that this Agreement may not
be supplemented or amended to lengthen, pursuant to clause (c) of this
sentence, (i) subject to Section 30, a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable
or (ii) 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.  Upon the delivery
of a certificate from an appropriate officer of the Company or, so long as any
Person is an Acquiring Person hereunder, from the majority of the Company’s
Board of Directors, that states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, 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 Company Common
Stock.

 

SECTION 27.  Successors.  All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

 

SECTION 28.  Determinations and Actions by the Board of
Directors, Etc. 
(a) For all purposes of this Agreement, any calculation of the
number of shares of Company Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Company 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 Exchange Act Regulations as in effect on the date hereof.  Except as otherwise specifically provided
herein, the Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power (i) to
interpret the provisions of this Agreement and (ii) to 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 this Agreement).  All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that 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 and all other parties,
and (y) not subject the Board of Directors of the Company or any member thereof
to any liability to the holders of the Rights.

 

33

 

(b)                                 It is understood that
the TIDE Committee (as described below) of the Board of Directors shall review
and evaluate this Agreement in order to consider whether the maintenance of
this Agreement continues to be in the best interests of the Company, its
stockholders and other relevant constituencies of the Company at least once
every three years, or sooner than that if any Person shall have made a proposal
to the Company or its stockholders, or taken any other action that, if
effective, could cause such Person to become an Acquiring Person hereunder, if
a majority of the members of the TIDE Committee shall deem such review and
evaluation appropriate after giving due regard to all relevant
circumstances.  Following each such
review, the TIDE Committee shall communicate its conclusions to the full Board
of Directors, including any recommendation in light thereof as to whether this
Agreement should be modified or the Rights should be redeemed.  The TIDE Committee shall be comprised of
members of the Board of Directors who are not officers, employees or Affiliates
of the Company and shall be the Nominating, Governance and Review Committee of
the Board of Directors (or any successor committee) as long as the members of
such committee meet such requirements.

 

(c)                                  The TIDE Committee
and the Board of Directors, when considering whether this Agreement should be
modified or the Rights should be redeemed, shall have the power to set their
own agenda and to retain at the expense of the Company their choice of legal
counsel, investment bankers and other advisors. 
The TIDE Committee and the Board of Directors, when considering whether
this Agreement should be modified or the Rights should be redeemed, shall have
the authority to review all information of the Company and to consider any and
all factors they deem relevant to an evaluation of whether this Agreement
should be modified or the Rights should be redeemed.

 

SECTION 29.  Benefits of this Agreement.  Nothing in this Agreement shall be construed
to give to any Person, other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of shares of Company Common Stock) any legal or
equitable right, remedy or claim under this Agreement.  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, registered
holders of shares of Company Common Stock).

 

SECTION 30.  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 a
majority of the Company’s Board of Directors determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement and the Rights shall not then be
redeemable, the right of redemption set forth in Section 23 shall be
reinstated and shall not expire until the Close of Business on the tenth
Business Day following the date of such determination by a majority of the
Company’s Board of Directors.

 

34

 

SECTION 31.  Governing Law.  This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of Nevada.

 

SECTION 32.  Counterparts.  This Agreement and any amendment hereto may
be executed (including by facsimile) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original, but all of which taken together shall
constitute one and the same instrument.

 

SECTION 33.  Descriptive Headings.  The headings contained in this Agreement are
for descriptive purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

SECTION 34.  Exchange.  (a)(i)  The Company may, at its option,
at any time after any person becomes an Acquiring Person, upon resolution
adopted by a majority of the Company’s Board of Directors, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become null and void pursuant to Section 7(e)) for Units of
Preferred Stock at an exchange ratio of one Unit of Preferred 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 “Section 34(a)(i) Exchange
Ratio”).  Notwithstanding the
foregoing, the Company may not effect the exchange described in this Section 34(a)(i) at
any time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan maintained by the Company or any of its Subsidiaries,
or any trustee or fiduciary with respect to such plan acting in such capacity),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Company Common Stock then
outstanding.

 

(ii)                                  The
Company may, at its option, at any time after any person becomes an Acquiring
Person, upon resolution adopted by a majority of the Company’s Board of
Directors, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become null and void pursuant to Section 7(e))
for Units of Preferred Stock at an exchange ratio specified in the following
sentence, as appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof.  Subject to such adjustment, each Right may be
exchanged for that number of Units of Preferred Stock obtained by dividing the
Adjustment Spread by the then-current market price (determined pursuant to Section 11(d))
per Unit of Preferred Stock on the earlier of (i) the date on which any
Person becomes an Acquiring Person and (ii) the date on which a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity) is commenced within the meaning of Rule 14d-2 of the
Exchange Act Regulations or any successor rule, if upon consummation thereof
such Person would be the Beneficial Owner of 15% or more of the shares of
Company Common Stock then outstanding (such exchange ratio being the “Section 34(a)(ii) Exchange Ratio”).  The “Adjustment Spread”
shall equal (x) the aggregate market price on the date of such event of the
number of Adjustment Shares determined pursuant to Section 11(a)(ii),
minus (y) the Purchase Price.

 

35

 

(b)                                 Immediately upon the
action of a majority of the Company’s Board of Directors ordering the exchange
of any Rights pursuant to Section 34(a) 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 Units of Preferred Stock equal to the number of such
Rights held by such holder multiplied by the Section 34(a)(i) Exchange
Ratio or Section 34(a)(ii) Exchange Ratio, as the case may be.  The Company shall promptly 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 promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent.  Any notice that is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice.  Each such notice of
exchange shall state the method by which the exchange of Units of Preferred
Stock for Rights will be effected and, in the event of any partial exchange,
the number of Rights that will be exchanged. 
Any partial exchange shall be effected pro rata based on the number of
Rights (other than Rights that have become null and void pursuant to Section 7(e))
held by each holder of Rights.

 

(c)                                  In the event that the
number of shares of Preferred Stock that 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
any exchange of Rights as contemplated in accordance with this Section 34,
the Company shall take all such action as may be necessary to authorize
additional shares of Preferred Stock for issuance upon exchange of the Rights
or make adequate provision to substitute (1) cash, (2) Company Common
Stock or other equity securities of the Company, (3) debt securities of
the Company, (4) other assets or (5) any combination of the
foregoing, having an aggregate value equal to the Adjustment Spread, where such
aggregate value has been determined by a majority of the Company’s Board of
Directors.

 

(d)                                 The Company shall not
be required to issue fractions of Units of Preferred Stock or to distribute
certificates that evidence fractional Units. 
In lieu of fractional Units, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exchanged as herein
provided an amount in cash equal to the same fraction of the current market
price (determined pursuant to Section 11(d)) of one Unit of Preferred
Stock.

 

36

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed on
their behalf as of the date first above written.

 

	
   

  	
  VITA FOOD PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Stephen D.
  Rubin,

  
	
   

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
  AMERICAN STOCK TRANSFER AND

  TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						

 

37

 

EXHIBIT A

 

[FORM OF
RIGHTS CERTIFICATE]

 

	
  Certificate No.

  	
   

  	
  Rights

  

 

NOT
EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT
REFERRED TO BELOW).  THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT.  UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES OF ACQUIRING PERSONS (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. 
[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 REFERRED TO BELOW). 
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.]*

 

RIGHTS CERTIFICATE

 

VITA FOOD PRODUCTS, INC.

 

This certifies
that                               ,
or registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the registered holder thereof, subject to
the terms and conditions of the Rights Agreement dated as of November 10,
2005 (the “Rights Agreement”) (terms defined therein are used herein
with the same meaning unless otherwise defined herein) between Vita Food
Products, Inc., a Nevada corporation (the “Company”), and American
Stock Transfer and Trust Company, as Rights Agent (which term shall include any
successor Rights Agent under the Rights Agreement), to purchase from the
Company at any time after the Distribution Date and prior to the Expiration Date
at the office of the Rights Agent, one one-thousandth of a fully paid and
non-assessable share of Series A Preferred Stock, par value $0.01 per
share (the “Preferred Stock”), of the Company at the Purchase Price
initially of Thirteen Dollars and No Cents ($13.00) per one one-thousandth
share (each such one one-thousandth of a share being a “Unit”) of
Preferred Stock, upon presentation and surrender of this Rights Certificate
with the Election to Purchase and related certificate duly executed.  The number of Rights evidenced by this Rights
Certificate (and the number of Units that may be purchased upon exercise
thereof) set forth above, and the Purchase Price per Unit set forth above,
shall be subject to adjustment in certain events as provided in the Rights
Agreement.

 

Upon the
occurrence of a Section 11(a)(ii) Event or Section 13 Event, if
the Rights evidenced by this Rights Certificate are beneficially owned by an
Acquiring Person or an 

 

* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.

 

 

Affiliate or
Associate of any such Acquiring Person or, under certain circumstances
described in the Rights Agreement, a transferee of any such Acquiring Person,
Associate or Affiliate, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.

 

In certain
circumstances described in the Rights Agreement, the Rights evidenced hereby
may entitle the registered holder thereof to purchase capital stock of an
entity other than the Company or to receive common stock, cash or other assets,
all as provided in the Rights Agreement.

 

This Rights
Certificate is subject to all of the terms and conditions of the Rights
Agreement, which terms and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Rights Certificates. 
Copies of the Rights Agreement are on file at the principal office of
the Company and are available from the Company upon written request.

 

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

 

Subject to the
provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company under certain circumstances at its option at a
redemption price of $0.01 per Right, payable at the Company’s option in cash or
in common stock of the Company, subject to adjustment in certain events as
provided in the Rights Agreement.

 

No fractional
shares of Preferred Stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions that are integral multiples of
one one-thousandth of a share of Preferred Stock), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.

 

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

 

2

 

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

 

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

 

Dated as of                  ,
20    .

 

	
  ATTEST: 

  	
  VITA FOOD
  PRODUCTS, INC. 

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By:  

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Countersigned:

  	
   

  
	
   

  	
   

  
	
  AMERICAN
  STOCK TRANSFER AND TRUST 

  COMPANY, as Rights Agent 

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  

 

3

 

[Form of Reverse Side of Rights
Certificate]

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder if

such holder desires to transfer the

Rights Certificate.)

 

FOR VALUE
RECEIVED,                                                                       
hereby sells, assigns and transfers unto                                                                                                                         
(Please print name and address of transferee)                                                                                               
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint                                                 ,
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.

 

Dated:                      
    , 20    

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

Signature
Guaranteed:

 

 

CERTIFICATE

 

The
undersigned hereby certifies by checking the appropriate boxes that:

 

(1)                                  this
Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined pursuant to
the Rights Agreement); and

 

(2)                                  after
due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did
not acquire the Rights evidenced by this Rights Certificate from any Person who
is, was or subsequently became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.

 

Dated:                      
    , 200    

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

Signature
Guaranteed:

 

NOTICE

 

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

 

In the event
the certification set forth above is not completed, the Company will deem the
beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and, in the case of an Assignment, will affix a legend to that
effect on any Rights Certificates issued in exchange for this Rights
Certificate.

 

 

FORM OF ELECTION TO PURCHASE

 

(To be executed if the registered holder

desires to exercise Rights represented

by the Rights Certificate.)

 

To:  VITA FOOD PRODUCTS, INC.

 

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

 

	
   

  	
   

  
	
  (Please print name and address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

Please insert
social security

or other identifying number:

 

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

 

	
   

  	
   

  
	
  (Please print name and address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

Please insert
social security

or other identifying number:

 

Dated:                      
    , 20    

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

Signature
Guaranteed:

 

 

CERTIFICATE

 

The
undersigned hereby certifies by checking the appropriate boxes that:

 

(1)                                  this
Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined pursuant to
the Rights Agreement); and

 

(2)                                  after
due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did
not acquire the Rights evidenced by this Rights Certificate from any Person who
is, was or subsequently became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.

 

Dated:                      
    , 20    

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

Signature
Guaranteed:

 

NOTICE

 

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

 

In the event
the certification set forth above is not completed, the Company will deem the
beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and, in the case of an Assignment, will affix a legend to that
effect on any Rights Certificates issued in exchange for this Rights
Certificate.

 

 

EXHIBIT B

 

[FORM OF
SUMMARY OF RIGHTS]

 

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED STOCK

 

The Board of
Directors of Vita Food Products, Inc. (the “Company”) has declared
a distribution of one Right for each outstanding share of Common Stock, par
value $0.01 per share (the “Company Common Stock”), to stockholders of
record at the close of business on November 25, 2005 (the “Record Date”)
and for each share of Company Common Stock issued (including shares distributed
from Treasury) by the Company thereafter and prior to the Distribution
Date.  Each Right entitles the registered
holder, subject to the terms of the Rights Agreement (as defined below), to
purchase from the Company one one-thousandth of a share (a “Unit”) of Series A
Preferred Stock, par value $0.01 per share (the “Preferred Stock”), at a
Purchase Price of $13.00 per Unit, subject to adjustment.  The Purchase Price is payable in cash or by
certified or bank check payable to the order of the Company or by wire transfer
to the account of the Company (provided a notice of such wire transfer is given
by the holder of the related Right to the Rights Agent).  The description and terms of the Rights are set
forth in a Rights Agreement between the Company and American Stock Transfer and
Trust Company, as Rights Agent (the “Rights Agreement”).

 

Copies of the
Rights Agreement and the Certificate of Designation for the Preferred Stock
have been filed with the Securities and Exchange Commission as exhibits to a
Current Report on Form 8-K, dated November 14, 2005.  Copies of the Rights Agreement and the
Certificate of Designation are available free of charge from the Company.  This summary description of the Rights and
the Preferred Stock does not purport to be complete and is qualified in its
entirety by reference to all of the provisions of the Rights Agreement and the
Certificate of Designation, including the definitions therein of certain terms,
which Rights Agreement and Certificate of Designation are incorporated herein
by reference.

 

The Rights Agreement

 

Initially, the
Rights will attach to all certificates representing shares of outstanding
Company Common Stock, and no separate Rights Certificates will be
distributed.  The Rights will separate from
the Company Common Stock and the “Distribution Date” will occur upon the
earlier of (i) 10 days following a public announcement (the date of such
announcement being the “Stock Acquisition Date”) that a person or group
of affiliated or associated persons (other than the Company, any subsidiary of
the Company or any employee benefit plan of the Company or such subsidiary) (an
“Acquiring Person”) has acquired, obtained the right to acquire, or
otherwise obtained beneficial ownership of 15% or more of the then outstanding
shares of Company Common Stock,  provided
that the term “Acquiring Person” shall not include Stephen D. Rubin or any of
his affiliates or associates, but only to the extent that Mr. Rubin and
his affiliates and associates individually or in the aggregate beneficially own
less than 32% of the outstanding common stock of the Company or Clark L.
Feldman or any of his affiliates and associates but only to the extent that Mr. Feldman
and his affiliates and associates individually or in the aggregate beneficially
own less than 17% of the outstanding 

 

 

common stock of the Company, and (ii) 10 business days (or such
later date as may be determined by action of the Board of Directors prior to
such time as any person becomes an Acquiring Person) following the commencement
of a tender offer or exchange offer by any person other than the Company that
would result in a person or group beneficially owning 15% (or with respect to Messrs. Feldman
and Rubin and their respective affiliates and associates such greater
percentage as indicated above in the definition of Acquiring Person) or more of
the then outstanding shares of Company Common Stock.  Until the Distribution Date, (i) the
Rights will be evidenced by Company Common Stock certificates and will be transferred
with and only with such Company Common Stock certificates, (ii) new
Company Common Stock certificates issued after the Record Date (also including
shares distributed from Treasury) will contain a notation incorporating the
Rights Agreement by reference and (iii) the surrender for transfer of any
certificates representing outstanding Company Common Stock will also constitute
the transfer of the Rights associated with the Company Common Stock represented
by such certificates.

 

The Rights are
not exercisable until the Distribution Date and will expire at the close of
business on the tenth anniversary of the Rights Agreement unless earlier
redeemed by the Company as described below.

 

As soon as
practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of Company Common Stock as of the close of business on the
Distribution Date and, thereafter, the separate Rights Certificates alone will
represent the Rights.

 

In the event
that (i) the Company is the surviving corporation in a merger or
combination with an Acquiring Person and shares of Company Common Stock shall
remain outstanding, (ii) a Person becomes an Acquiring Person, (iii) an
Acquiring Person engages in one or more “self-dealing” transactions as set
forth in the Rights Agreement, or (iv) during such time as there is an
Acquiring Person, an event occurs that results in such Acquiring Person’s
ownership interest being increased by more than 1% (e.g., by means of a
recapitalization) (each such event being a “Section 11(a)(ii) Event”)
then, in each such case, each holder of a Right will thereafter have the right
to receive, upon exercise, Units of Preferred Stock (or, in certain
circumstances, Company Common Stock, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the
Right.  The exercise price is the
Purchase Price multiplied by the number of Units of Preferred Stock issuable
upon exercise of a Right prior to the events described in this paragraph.  Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person or any affiliate or
associate of any Acquiring Person will be null and void.

 

In the event
that, at any time following the Stock Acquisition Date, (i) the Company is
acquired in a merger (other than a merger described in the preceding paragraph)
or other business combination transaction and the Company is not the surviving
corporation, (ii) any Person consolidates or merges with the Company and
all or part of the Company Common Stock is converted or exchanged for
securities, cash or property of any other Person or (iii) 50% or more of
the Company’s assets or earning power is sold or transferred, then each holder
of a Right (except Rights which previously have been voided as described above)
shall thereafter have the right to receive, upon exercise, common stock of the
ultimate parent of the Acquiring Person having a value equal to two times the
exercise price of the Right.

 

 

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

 

With certain
exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price.  The Company is not required to issue fractional
Units.  In lieu thereof, an adjustment in
cash may be made based on the market price of the Preferred Stock prior to the
date of exercise.

 

At any time
prior to the earlier of (i) ten business days following the Stock
Acquisition Date or (ii) the Final Expiration Date, a majority of the
Company’s Board of Directors may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (subject to adjustment in certain events) (the “Redemption
Price”), payable, at the election of such majority of the Company’s Board
of Directors, in cash or shares of Company Common Stock.  Immediately upon the action of a majority of
the Company’s Board of Directors ordering the redemption of the Rights, the
Rights will terminate and the only remaining right of the holders of Rights
will be to receive the Redemption Price.

 

The Board of
Directors, at its option, may exchange each Right for (i) one Unit of
Preferred Stock or (ii) such number of Units of Preferred Stock as will
equal (x) the difference between the aggregate market price of the number of
Units of Preferred Stock to be received upon a Section 11(a)(ii) Event
and the purchase price set forth in the Rights Agreement, divided by (y) the
market price per Unit of Preferred Stock upon a Section 11(a)(ii) Event.

 

At least once
every three years during the term of the Rights Agreement, or sooner than that
if any Person shall have made a proposal to the Company or its stockholders, or
taken any other action that, if effective, could cause such Person to become an
Acquiring Person under the Rights Agreement, a committee comprised of persons
that are not officers, employees or Affiliates of the Company, and which shall
initially be the Nominating, Governance and Review Committee of the Board of
Directors (the “TIDE Committee”), will review the Rights Agreement to determine
whether the Rights Agreement continues to be in the best interests of the
Company, its stockholders and other relevant constituencies of the
Company.  Following each such review, the
TIDE Committee will report its conclusions to the full Board of Directors of
the Company, including any recommendation in light thereof as to whether the
Rights Agreement should be modified or the Rights should be redeemed.

 

Until a Right
is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to receive
dividends.  While the distribution of the
Rights will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Units of Preferred Stock (or other
consideration).

 

 

Any of the
provisions of the Rights Agreement may be amended without the approval of the holders
of Company Common Stock at any time prior to the Distribution Date.  After the Distribution Date, the provisions
of the Rights Agreement may be amended in order to cure any ambiguity, defect
or inconsistency, to make changes that do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.

 

Description of Preferred Stock

 

The Units of
Preferred Stock that may be acquired upon exercise of the Rights will be
nonredeemable and subordinate to any other shares of preferred stock that may
be issued by the Company.

 

Each Unit of
Preferred Stock will have a minimum preferential quarterly dividend of $.01 per
Unit when, as and if declared by the Board of Directors or any higher per share
dividend declared on the Company Common Stock.

 

In the event
of liquidation, the holder of a Unit of Preferred Stock will receive a
preferred liquidation payment equal to the greater of $.01 per Unit and the per
share amount paid in respect of a share of Company Common Stock.

 

Each Unit of
Preferred Stock will have one vote, voting together with the Company Common
Stock.  The holders of Units of Preferred
Stock, voting as a separate class, shall be entitled to elect two directors if
dividends on the Preferred Stock are in arrears for six fiscal quarters.

 

In the event
of any merger, consolidation or other transaction in which shares of Company
Common Stock are exchanged, each Unit of Preferred Stock will be entitled to
receive the per share amount paid in respect of each share of Company Common
Stock.

 

The rights of
holders of the Preferred Stock to dividends, liquidation and voting, and in the
event of mergers and consolidations, are protected by customary antidilution
provisions.

 

Because of the
nature of the Preferred Stock’s dividend, liquidation and voting rights, the
economic value of one Unit of Preferred Stock that may be acquired upon the
exercise of each Right is expected to approximate the economic value of one
share of Company Common Stock.

 

 

EXHIBIT C

 

[FORM OF
CERTIFICATE OF DESIGNATION FOR PREFERRED STOCK]

 

CERTIFICATE OF DESIGNATION

OF THE VOTING POWERS, DESIGNATION,

PREFERENCES AND RELATIVE, PARTICIPATING,

OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,

LIMITATIONS AND RESTRICTIONS OF THE

SERIES A PREFERRED STOCK

 

Pursuant to Section 78.390 of the

General Corporation Law of

the State of Nevada

 

I, Stephen D.
Rubin, President and Chief Executive Officer of VITA FOOD PRODUCTS, INC., a
corporation organized and existing under the General Corporation Law of the
State of Nevada (the “Corporation”), DO HEREBY CERTIFY:

 

That, pursuant
to authority conferred upon the Board of Directors of the Corporation by its
Articles of Incorporation (the “Articles”), and, pursuant to the
provisions of Section 78.390 of the General Corporation Law of the State
of Nevada, said Board of Directors, at a duly called meeting, at which a quorum
was present and acted throughout, adopted the following resolutions, which
resolutions remain in full force and effect on the date hereof, creating a
series of shares of Preferred Stock having a par value of $0.01 per share,
designated as Series A Preferred Stock (the “Series A Preferred
Stock”), out of the class of 1,000,000 shares of preferred stock, par value
of $0.01 per share (the “Preferred Stock”):

 

RESOLVED, that
pursuant to the authority vested in the Board of Directors in accordance with
the provisions of the Articles, the Board of Directors does hereby create,
authorize and provide for the issuance of the Series A Preferred Stock
having the voting powers, designation, relative, participating, optional and
other special rights, preferences, and qualifications, limitations and
restrictions thereof that are set forth as follows:

 

Section 1.   Designation and Amount.  The shares of such series shall be designated
as “Series A Preferred Stock” and the number of shares constituting such
series shall be 4,000.

 

Section 2.   Dividends and Distributions.  (A)  Subject to the prior and superior
rights of the holders of any shares of any other series of Preferred Stock or
any other shares of preferred stock of the Corporation ranking prior and
superior to the shares of Series A Preferred Stock with respect to
dividends, each holder of one one-thousandth (1/1,000) of a share (a “Unit”)
of Series A Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for that
purpose, (i) quarterly dividends payable 

 

 

in cash on the last day of March, June, September and
December in each year (each such date being a “Quarterly Dividend Payment
Date”), commencing on the first Quarterly Dividend Payment Date after the
first issuance of such Unit of Series A Preferred Stock, in an amount per
Unit (rounded to the nearest cent) equal to the greater of (a) $.01 or (b) subject
to the provision for adjustment hereinafter set forth, the aggregate per share
amount of all cash dividends declared on shares of 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 a Unit of Series A
Preferred Stock, and (ii) subject to the provision for adjustment
hereinafter set forth, quarterly distributions (payable in kind) on each
Quarterly Dividend Payment Date in an amount per Unit equal to the aggregate
per share amount 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 shares of
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 a Unit of Series A Preferred Stock.  In the event that the Corporation shall at
any time after November 25, 2005 (the “Rights Declaration Date”) (i) declare
any dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock or (iii) combine
outstanding shares of Common Stock into a smaller number of shares, then in
each such case the amount to which the holder of a Unit of Series A
Preferred Stock was entitled immediately prior to such event pursuant to the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.

 

(B)                                The Corporation shall
declare a dividend or distribution on Units of Series A Preferred Stock as
provided in paragraph (A) above immediately after it declares a dividend
or distribution on the shares of Common Stock (other than a dividend payable in
shares of Common Stock); provided, however, that, in the event no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $.01 per Unit on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.

 

(C)                                Dividends shall begin
to accrue and shall be cumulative on each outstanding Unit of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the
date of issuance of such Unit of Series A Preferred Stock, unless the date
of issuance of such Unit is prior to the record date for the first Quarterly
Dividend Payment Date, in which case, dividends on such Unit shall begin to
accrue from the date of issuance of such Unit, or unless the date of issuance
is a Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of Units of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date.  Accrued but unpaid dividends shall not bear
interest.  Dividends paid on Units of Series A
Preferred Stock in an amount less than the aggregate amount of all such
dividends at the time accrued and payable on such Units shall be allocated pro
rata on a Unit-by-Unit basis among all Units of Series A Preferred Stock
at the time outstanding.  The Board of
Directors may fix a 

 

 

record date for the determination of holders
of Units 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 3.   Voting Rights.  The holders of Units of Series A
Preferred Stock shall have the following voting rights:

 

(A)                              Subject to the provision
for adjustment hereinafter set forth, each Unit of Series A Preferred
Stock shall entitle the holder thereof to one vote on all matters submitted to
a vote of the stockholders of the Corporation. 
In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide outstanding shares
of Common Stock or (iii) combine the outstanding shares of Common Stock
into a smaller number of shares, then in each such case the number of votes per
Unit to which holders of Units of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which shall be the number of shares of Common Stock
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.

 

(B)                                Except as otherwise
provided herein or by law, the holders of Units 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 stockholders of the Corporation.

 

(C)                                (i)  If, at any
time, dividends on any Units of Series A Preferred Stock shall be in
arrears in an amount equal to six quarterly dividends thereon, then during the
period (a “default period”) from the occurrence of such event until such
time as all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all Units of Series A
Preferred Stock then outstanding shall have been declared and paid or set apart
for payment, all holders of Units of Series A Preferred Stock, voting
separately as a class, shall have the right to elect two Directors.

 

(ii)                                  During any default
period, such voting rights of the holders of Units of Series A Preferred
Stock may be exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting
of stockholders, and thereafter at annual meetings of stockholders, provided
that neither such voting rights nor any right of the holders of Units of Series A
Preferred Stock to increase, in certain cases, the authorized number of
Directors may be exercised at any meeting unless one-third of the outstanding
Units of Preferred Stock shall be present at such meeting in person or by
proxy.  The absence of a quorum of the
holders of Common Stock shall not affect the exercise by the holders of Units
of Series A Preferred Stock of such rights.  At any meeting at which the holders of Units
of Series A Preferred Stock shall exercise such voting rights initially
during an existing default period, they shall have the right, voting separately
as a class, to elect Directors to fill up to two vacancies in the Board of
Directors, if any such vacancies may then exist, or, if such right is exercised
at an annual meeting, to elect two Directors. 
If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Series A Preferred Stock
shall have the right to make such increase in the number of Directors as shall
be necessary to permit the election by them of the required number.  After the holders of Units of Series A 

 

 

Preferred Stock shall have exercised their
right to elect Directors during any default period, the number of Directors
shall not be increased or decreased except as approved by a vote of the holders
of Units of Series A Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to the Series A Preferred
Stock.

 

(iii)                               Unless the holders of Series A
Preferred Stock shall, during an existing default period, have previously
exercised their right to elect Directors, the Board of Directors may order, or
any stockholder or stockholders owning in the aggregate not less than 25% of
the total number of the Units of Series A Preferred Stock outstanding may
request, the calling of a special meeting of the holders of Units of Series A
Preferred Stock, which meeting shall thereupon be called by the Secretary of
the Corporation.  Notice of such meeting
and of any annual meeting at which holders of Units of Series A Preferred
Stock are entitled to vote pursuant to this paragraph (C)(iii) shall be
given to each holder of record of Units of Series A Preferred Stock by
mailing a copy of such notice to him at his last address as the same appears on
the books of the Corporation.  Such
meeting shall be called for a time not earlier than 20 days and not later than
60 days after such order or request, or, in default of the calling of such
meeting within 60 days after such order or request, such meeting may be called
on similar notice by any stockholder or stockholders owning in the aggregate
not less than 25% of the total number of outstanding Units of Series A
Preferred Stock.  Notwithstanding the
provisions of this paragraph (C)(iii), no such special meeting shall be called
during the 60 days immediately preceding the date fixed for the next annual
meeting of the stockholders.

 

(iv)                              During any default
period, the holders of shares of Common Stock and Units of Series A
Preferred Stock, and other classes or series of stock of the Corporation, if
applicable, shall continue to be entitled to elect all the Directors until
holders of the Units of Series A Preferred Stock shall have exercised
their right to elect two Directors voting as a separate class, after the
exercise of which right (x) the Directors so elected by the holders of Units of
Series A Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as provided
in paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected by the holders of the
class of capital stock that elected the Director whose office shall have become
vacant.  References in this paragraph (C) to
Directors elected by the holders of a particular class of capital stock shall
include Directors elected by such Directors to fill vacancies as provided in
clause (y) of the foregoing sentence.

 

(v)                                 Immediately upon the
expiration of a default period, (x) the right of the holders of Units of Series A
Preferred Stock as a separate class to elect Directors shall cease,
(y) the term of any Directors elected by the holders of Units of Series A
Preferred Stock as a separate class shall terminate, and (z) the number of
Directors shall be such number as may be provided for in the Articles or
by-laws irrespective of any increase made pursuant to the provisions of
paragraph (C)(ii) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in the Articles
or by-laws).  Any vacancies in the Board
of Directors effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining Directors.

 

 

(vi)                              The provisions of this
paragraph (C) shall govern the election of Directors by holders of Units
of Preferred Stock during any default period notwithstanding any provisions of
the Articles to the contrary.

 

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

 

Section 4.   Certain Restrictions.  (A)  Whenever quarterly dividends or
other dividends or distributions payable on Units of Series A Preferred
Stock as provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on
outstanding Units of Series A Preferred Stock shall have been paid in
full, the Corporation shall not:

 

(i)                                     declare or pay
dividends on, make any other distributions on, or redeem or purchase or
otherwise acquire for consideration, any shares of junior stock;

 

(ii)                                  declare or pay
dividends on or make any other distributions on any shares of parity stock,
except dividends paid ratably on Units of Series A Preferred Stock and
shares of all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of such Units and all such
shares are then entitled;

 

(iii)                               redeem or purchase or
otherwise acquire for consideration shares of any parity stock; provided,
however, that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of any
junior stock; or

 

(iv)                              purchase or otherwise
acquire for consideration any Units of Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such Units.

 

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

 

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

 

Section 6.   Liquidation, Dissolution or Winding Up.  (A)  Upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (i) to the holders of shares of junior stock unless the
holders of Units of Series A Preferred Stock shall have received, subject
to adjustment as hereinafter provided in paragraph (B), the greater of either (a) $.01
per Unit plus an amount equal to accrued and unpaid dividends and 

 

 

distributions thereon, whether or not earned
or declared, to the date of such payment, or (b) the amount equal to the
aggregate per share amount to be distributed to holders of shares of Common
Stock, or (ii) to the holders of shares of parity stock, unless
simultaneously therewith distributions are made ratably on Units of Series A
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of Units of Series A Preferred Stock
are entitled under clause (i)(a) of this sentence and to which the holders
of shares of such parity stock are entitled, in each case upon such
liquidation, dissolution or winding up.

 

(B)                                In the event the
Corporation shall, at any time after the Rights Declaration Date, (i) declare
any dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding shares of Common Stock into a smaller number of shares, then in
each such case the aggregate amount to which holders of Units of Series A
Preferred Stock were entitled immediately prior to such event pursuant to
clause (i)(b) of paragraph (A) of this Section 6 shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.

 

Section 7.   Consolidation, Merger, etc.  In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or converted into other stock or securities,
cash and/or any other property, then in any such case Units of Series A
Preferred Stock shall at the same time be similarly exchanged for or converted
into an amount per Unit (subject to the provision for adjustment hereinafter
set forth) equal to 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 converted or exchanged.  In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide
outstanding shares of Common Stock, or (iii) combine outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the immediately preceding sentence with respect to the exchange or
conversion of Units of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.

 

Section 8.   Redemption.  The Units of Series A Preferred Stock
shall not be redeemable.

 

Section 9.   Ranking.  The Units of Series A Preferred Stock
shall rank junior to all other series of the Preferred Stock and to any other
class of preferred stock that hereafter may be issued by the Corporation as to
the payment of dividends and the distribution of assets, unless the terms of
any such series or class shall provide otherwise.

 

Section 10.   Amendment.  Prior to the issuance of any Series A
Preferred Stock, the Articles may be amended by the Board of Directors of the
Corporation.  After the issuance of any Series A
Preferred Stock, the Articles, including, without limitation, this resolution,
shall not 

 

 

hereafter be amended, either directly or
indirectly, or through merger or consolidation with any other corporation or
corporations in any manner that would alter or change the powers, preferences
or special rights of the Series A Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority or more of
the outstanding Units of Series A Preferred Stock, voting separately as a
class.

 

Section 11.   Fractional Shares.  The Series A Preferred Stock may be
issued in Units or other fractions of a share, which Units or fractions 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.

 

Section 12.   Certain Definitions.  As used herein with respect to the Series A
Preferred Stock, the following terms shall have the following meanings:

 

(A)                              The term “Common Stock”
shall mean the class of stock designated as the common stock, par value $0.01
per share, of the Corporation at the date hereof or any other class of stock
resulting from successive changes or reclassification of such common stock.

 

(B)                                The term “junior
stock” (i) as used in Section 4, shall mean the Common Stock and
any other class or series of capital stock of the Corporation hereafter
authorized or issued over which the Series A Preferred Stock has
preference or priority as to the payment of dividends and (ii) as used in Section 6,
shall mean the Common Stock and any other class or series of capital stock of
the Corporation over which the Series A Preferred Stock has preference or
priority in the distribution of assets upon any liquidation, dissolution or
winding up of the Corporation.

 

(C)                                The term “parity
stock” (i) as used in Section 4, shall mean any class or series
of stock of the Corporation hereafter authorized or issued ranking pari  passu
with the Series A Preferred Stock as to the payment of dividends and (ii) as
used in Section 6, shall mean any class or series of capital stock
hereafter authorized or issued ranking pari  passu with the Series A
Preferred Stock in the distribution of assets on any liquidation, dissolution
or winding up of the Corporation.

 

 

IN WITNESS
WHEREOF, Vita Food Products, Inc. has caused this Certificate to be signed
by its Chairman and Chief Executive Officer and attested by its Secretary as of
this 10th day of November, 2005.

 

	
   

  	
  VITA FOOD PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Stephen D.
  Rubin

  
	
   

  	
   

  	
  Chairman and
  Chief Executive Officer

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SecretaryExhibit 10.48

 

October 3, 2005

 

$350,000,000 Interim Facility

Letter Agreement

 

	
  EXCO Resources, Inc.

  12377 Merit Drive

  Suite 1700

  Dallas, Texas 75251

  
	
  Attention:  

  	
  Douglas H. Miller

  Chairman and Chief Executive Officer

  

 

Ladies and Gentlemen:

 

Reference is made to (i) the Commitment
Letter, dated as of September 29, 2005 (including the attached Term
Sheets, the “Commitment Letter”),
among EXCO Holdings Inc., EXCO Resources, Inc. (“EXCO”), J.P. Morgan Securities Inc.,
JPMorgan Chase Bank, N.A., Bear, Stearns & Co. Inc. and Bear
Stearns Corporate Lending Inc. and (ii) the Credit Agreement, dated
as of October 3, 2005 (the “Credit
Agreement”), among EXCO Holdings II Inc. (to be merged with and
into Exco Holdings Inc. on the date thereof) (“Holdings”), the Lenders party thereto and JPMorgan Chase
Bank, N.A., as Administrative Agent. Capitalized terms used herein and defined
in the Commitment Letter or the Credit Agreement, as applicable, are so used as so defined.

 

The Commitment Letter provides that (i) EXCO
shall be obligated to issue Exchange Notes on or after the Initial Loan
Maturity Date in exchange for the Initial Loans, (ii) such Exchange Notes
shall be guaranteed by all material domestic subsidiaries of EXCO (the “Subsidiary Guarantors”) and (iii) any
Initial Loans outstanding after the Initial Loan Maturity Date shall also be
guaranteed by EXCO and the Subsidiary Guarantors.

 

The Lenders have agreed that EXCO and the
Subsidiary Guarantors shall not be required to execute and deliver, on the
Interim Facility Closing Date, the Indenture, the Exchange Notes or guarantees
in respect thereof or of the Initial Loans, to be held in escrow pending the
effectiveness thereof. In consideration for such agreement, (i) EXCO
hereby agrees to redeem all of the Senior Notes no later than the Initial Loan
Maturity Date and (ii) on the date of such redemption (or, if later, the
Initial Loan Maturity Date), EXCO and the subsidiaries of EXCO party hereto
(collectively, the “EXCO Entities”)
hereby agree, subject to no other conditions, to execute and deliver to the
Administrative Agent a Guarantee substantially in the form attached hereto as Exhibit A,
it being agreed by the parties hereto that this Letter Agreement does not
constitute a Guarantee as such term is defined in the Indenture. The EXCO
Entities acknowledge that the execution and delivery of this Letter Agreement
is a condition precedent to the making of the Initial Loans to Holdings and
that, accordingly, the Lenders have relied on the agreements of the EXCO
Entities in this Letter Agreement as an inducement to the making of the Initial
Loans.

 

This Letter Agreement shall not be assignable
by any EXCO Entity without the prior written consent of the Administrative
Agent (and any purported assignment without such consent shall be null and
void). This Letter Agreement may not be amended or waived except by an
instrument in writing signed by each EXCO Entity and each of the Lenders. This
Letter Agreement may be executed in any number of counterparts, each of which
shall be an original, and all of which, when taken together, shall constitute
one agreement. Delivery of an executed signature page of this Letter
Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. This Letter Agreement shall be governed
by, and construed and interpreted in accordance with, the laws of the State of
New York.

 

[Remainder of page intentionally left blank.]

 

 

If the foregoing correctly sets forth our
agreement, please indicate your acceptance of the terms hereof by returning to
the Administrative Agent an executed counterpart hereof.

 

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXCO RESOURCES, INC.

  a Texas corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ J. DOUGLAS RAMSEY, PH.D.

  
	
   

  	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  
	
   

  	
   

  	
  Title:

  	
  Vice President & Chief Financial
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ROJO PIPELINE, INC.,

  a Texas corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ J. DOUGLAS RAMSEY, PH.D.

  
	
   

  	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXCO INVESTMENT I, LLC,

  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ J. DOUGLAS RAMSEY, PH.D.

  
	
   

  	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  
	
   

  	
   

  	
  Title:

  	
  Vice President & Chief Financial
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXCO INVESTMENT II, LLC,

  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ J. DOUGLAS RAMSEY, PH.D.

  
	
   

  	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  
	
   

  	
   

  	
  Title:

  	
  Vice President & Chief Financial
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXCO OPERATING, LP,

  a Delaware limited partnership by EXCO INVESTMENT II, LLC, its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ J. DOUGLAS RAMSEY, PH.D.

  
	
   

  	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  
	
   

  	
   

  	
  Title:

  	
  Vice President & Chief Financial
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NORTH COAST ENERGY, INC.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ J. DOUGLAS RAMSEY, PH.D.

  
	
   

  	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NORTH COAST ENERGY EASTERN, INC.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ J. DOUGLAS RAMSEY, PH.D.

  
	
   

  	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PINESTONE RESOURCES, LLC,

  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ J. DOUGLAS RAMSEY, PH.D.

  
	
   

  	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  
	
   

  	
   

  	
  Title:

  	
  Vice President & Chief Financial
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JPMORGAN CHASE BANK, N.A., as
  Administrative Agent

  
	
   

  
	
  By: 

  	
  /s/ WM. MARK CRANMER

  	
   

  	
   

  
	
  Name: 

  	
  Wm. Mark Cranmer

  	
   

  	
   

  
	
  Title: 

  	
  Vice President

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