Document:

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT (“Agreement”) is made and entered into
this 3rd day of August, 2006, by and between Scott P. Mitchell (the “Executive”)
and Think Partnership Inc., a Nevada corporation (the “Company”).

WHEREAS, the Company desires to employ the Executive
and the Executive desires to accept such employment;

NOW, THEREFORE, in consideration of the promises,
mutual covenants and agreements contained herein, the Company and the Executive
do hereby agree as follows:

1.   Employment and Duties.   On
the terms and subject to the conditions set forth in this Agreement, the
Company agrees to employ the Executive as the President and Chief Executive
Officer of the Company to perform such duties and responsibilities as are
consistent with such positions.

2.   Performance.   The
Executive accepts the employment described in Section 1 above, and
agrees to faithfully and diligently perform the duties and responsibilities
described therein. The Executive shall devote time and attention to matters of
the Company such that the Executive’s services to the Company constitute his
primary business activity. The Company acknowledges that the Executive may (i)
engage in charitable and community affairs (including serving on the board of
directors or similar management body of any charitable or community
organization), (ii) serve on the board of directors of or act as a consultant
to other companies which are not engaged in a business that directly competes
with the Company Business (as defined in Section 18 below), and (iii)
make personal investments in public and private companies; provided, however,
that Executive shall not have beneficial ownership (A) in excess of 10% in any
public entity, (B) in any private entity which directly competes with the
business of the Company, unless such investment is approved by the
disinterested members of the Company’s board of directors.

3.   Term.   The
term of employment under this Agreement shall commence on the date of this
Agreement (the “Commencement Date”) and shall continue for a period of five (5)
years thereafter (the “Employment Period”); provided, however, that on the
fourth anniversary of the Commencement Date the Employment Period shall be
automatically extended for an additional year, and on every anniversary date
after the fourth anniversary date the Employment Period shall be automatically
extended an additional year, unless at least sixty (60) days before such
anniversary, either the Executive or the Company, as the case may be, notifies
the other of its desire not to further extend the Employment Period; and
provided, further, that the Employment Period shall terminate upon the earliest
to occur of the events described in Section 14 hereunder. For purposes
of this Agreement, “Balance of the Term” shall mean the period beginning on the
date of termination and ending on the date that the Employment Period would
have ended pursuant to this Section 3 due to lapse of time (assuming no
further extensions of the Employment Period beyond those already approved as of
the date of termination), without regard to Section 14.

 

4.   Salary.   For
all the services to be rendered by the Executive hereunder, the Company agrees
to pay, during the Employment Period, a base salary (“Salary”) at an initial
rate of four hundred and eighty five thousand Dollars ($485,000.00) per
Contract Year, payable in the manner and frequency in which the Company’s
payroll is customarily handled. In addition, Executive shall receive an
additional $10,000 per Contract Year in compensation to be allocated and paid
by the Company at the direction of Executive for a car allowance, additional
insurance or other benefits. For purposes of this Agreement, “Contract Year”
shall mean a one-year period commencing on the Commencement Date or on any
anniversary of the Commencement Date. The Company may increase the Executive’s
Salary at any time, or from time to time, during the Employment Period,
provided, however, that the Company may not at any time reduce the Salary from
its then-current level. During the term of this Agreement, the combined Salary
and Annual Cash Bonus (as hereinafter defined) paid to Executive during any
Contract Year shall be higher than the combined Salary and Annual Cash Bonus
paid to any other employee of the Company. Executive shall, in any event,
receive as combined Salary and Annual Cash Bonus no less than 90% of the
combined Salary and Annual Cash Bonus paid to the Chief Executive Officer
during each year of this Agreement [not sure I get this last sentence. I
thought you are the CEO, I would delete it].

5.   Incentive Compensation.   In
addition to the Executive’s Salary, the Executive shall be eligible to
participate in and receive awards under any other stock-based plans of the
Company pursuant to Section 12 below (“Incentive Compensation”).

6.   Cash Bonus Compensation.   The
Executive shall be entitled to the following bonus compensation:

(a)   Annual Cash Bonusl.   At
the end of each fiscal year of the Company, the Executive shall be entitled to
an annual cash bonus determined by the Board of Directors (the “Annual Cash
Bonus”). In the event the Executive’s employment is terminated during a
Contract Year, the Executive shall be entitled to an annual cash bonus
pro-rated based on the number of days he was an employee of the Company during
the Contract Year prior to the date of termination. The Company shall pay the
Annual Cash Bonus to the Executive no later than thirty (30) days after the
completion of the audit for such fiscal year or, in the event the Employment
Period is terminated during the Contract Year, thirty (30) days after the date
the Employment Period is terminated, unless this Agreement provides a different
payment schedule for the Annual Cash Bonus to be paid in the event of
termination.

(b)   Additional Bonus.   The
Executive shall be eligible to receive additional cash bonuses pursuant to Section
10 below.

7.   Vacation.   The
Executive shall be entitled to take vacations with pay, in a reasonable amount
during each year of service under this Agreement, to be taken during the year
at such time or times deemed reasonable by the Executive. Unused vacation time
shall not be accumulated from one year to the next..Unused vacation time shall
not be accumulated from one year to the next.

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8.   Sick Leave.   In
accordance with the policies and rules governing the sick leave of senior
management, the Executive shall be allowed paid sick leave during each year of
service under this Agreement. Unused sick leave shall not be accumulated from
one year to the next.

9.   Disability Benefit.   If
at any time during the Employment Period the Executive is unable to perform fully
his duties hereunder for a period of six (6) consecutive months by reason of
illness, accident, or other physical or mental disability (as confirmed by
competent medical evidence) and such condition may reasonably be expected to be
permanent (“Total Disability”), the Executive shall be entitled to receive
within thirty (30) days of the date of determination of the Total Disability
(i) any accrued but unpaid Salary, Annual Cash Bonus (determined in accordance
with Section 6(a)), and prorated vacation, and any other amounts accrued
but unpaid as of the date of termination. In addition, the Executive shall
receive the Salary for an additional six (6) months following determination of
the Total Disability, payable at the regular monthly intervals then in effect.
If any dispute regarding the existence of the Executive’s Total Disability
arises, each party shall appoint a physician and such physicians shall jointly
appoint a third physician, the decision of any two (2) of such physicians
regarding the existence of Total Disability shall be binding upon the parties.

10.   Death Benefit.   In
the event of the death of the Executive during the Employment Period, the
Company shall pay within thirty (30) days of the date of death any accrued but
unpaid Salary, Annual Cash Bonus (determined in accordance with Section 6(a))
and prorated vacation, and any other amounts accrued but unpaid as of the date
of termination. In addition, the Executive shall receive the Salary for an
additional six (6) months following the date of termination, payable at the
regular monthly intervals then in effect. The benefits payable under this Section
10 shall be paid to the person or persons designated by the Executive on
the form provided by the Company or, in the absence of such a designation, as
follows: (i) to the Executive’s spouse if she survives him; (ii) if the
Executive’s spouse fails to survive the Executive, then in equal shares to the
Executive’s children who survive him; or (iii) if neither Executive’s spouse
nor any child survives the Executive, then all to the Executive’s estate.

11.   This section intentionally left blank.

12.   Other Compensation, Benefits and Perquisites.   The
Executive’s Salary shall be as described in Section 4 above; his Annual
Cash Bonus shall be as described in Section 6(a) above; his vacation
shall be as described in Section 7 above; and his sick leave, disability
benefit, death benefit shall be as described in Sections 8, 9, and 10
above, respectively. In addition to the aforesaid types of compensation,
benefits and perquisites and additional compensation set forth in Section 4,
the Executive shall be entitled to participate in all other types of
compensation, benefits and perquisites then available to executive management
as approved by the Board of Directors, such as, but not limited to: cash
bonuses in addition to guaranteed cash bonuses; stock option plans; 401(k)
plans; welfare plans; business travel policies; medical insurance; dental
insurance; dues, fees and costs (including travel) associated with membership
and participation in professional, educational and other clubs and
organizations, and attendance at professional, educational and other programs,
presentations, workshops, seminars and conventions.

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13.   Business Expense Reimbursement.   Executive
is authorized to incur reasonable expenses in carrying out his duties and
responsibilities under this Agreement, including, without limitation, expenses
for travel, entertainment and similar items related to such duties and
responsibilities (“Business Expenses”). The Company shall provide the Executive
with a Company corporate credit card to be used by Executive to cover Business
Expenses and the Company agrees to pay the monthly credit card bills. The
Company will reimburse Executive for all such out-of-pocket Business Expenses
incurred by the Executive upon presentation by Executive, from time to time, of
accounts of such expenditures (appropriately itemized and approved consistent
with the Company’s policy).

14.   Termination.

(a)   Unilateral Termination.   The
Employment Period may be terminated by the Executive at any time by written
notice of termination given to the other party at least ninety (90) days in
advance of the termination date stated in such notice.

(b)   Termination for Just Cause.   The
Company shall have the option to terminate the Employment Period, effective
upon written notice of such termination to the Executive, for Just Cause as
determined by the Executive Committee. For purposes of this Agreement, the term
“Just Cause” shall mean the occurrence of any one or more of the following
events:

(i)     The
willful and continued failure by the Executive to substantially perform his
duties with the Company (other than any such failure resulting from termination
by Total Disability, retirement or death) after a demand for substantial
performance is delivered to the Executive that specifically identifies the
manner in which the Company believes that the Executive has not substantially
performed his duties, and the Executive fails to resume substantial performance
of his duties on a continuous basis within fourteen (14) days of receiving such
demand; provided, that if such breach is not capable of being cured within a 14
day period, Executive will have a reasonable additional period to cure such
breach but only if Executive promptly commences and continues good faith
efforts to cure such breach;

(ii)    The
Executive’s engaging in conduct which is demonstrably and materially injurious
to the Company, monetarily or otherwise, and willful disloyalty or deliberate
dishonesty or the commission by Executive of an act of fraud or embezzlement
against the Company; or

(iii)   The
Executive’s conviction of a felony or a misdemeanor, other than traffic related
or similar minor misdemeanors, either in connection with the performance of
Executive’s obligations to the Company or which otherwise materially and
adversely affects Executive’s ability to perform such obligations.

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For purposes of this subsection (b), an act, or
failure to act, on the Executive’s part, shall not be deemed “willful” unless
done, or omitted to be done, by the Executive not in good faith and without a
reasonable belief that his action or omission was in the best interest of the
Company.

(c)   Termination Upon Death.   The
Employment Period shall automatically terminate upon the death of the
Executive, without further action by the Company.

(d)   Termination Upon Disability.   The
Employment Period shall terminate thirty (30) days after the Company notifies
the Executive of a determination of Total Disability (as defined above) of the
Executive, provided the Executive does not dispute such determination as
provided in Section 9 hereof, in which case the date of termination for
Total Disability shall be the date the Executive is determined to have a Total
Disability pursuant to Section 9 hereof.

(i)   Termination for Good Reason.   The
Executive shall have the right to resign for Good Reason (as defined below).
For purposes of this Agreement, “Good Reason” shall mean (i) any material
breach by the Company of its obligations hereunder which is not cured within
fourteen (14) days of written notice from the Executive to the Company
describing such breach, provided that if such breach is not capable of being
cured within such 14 day period, the Company will have a reasonable additional
period to cure such breach but only if the Company promptly commences and
continues good faith efforts to cure such breach, or (ii) any transfer of the
Executive’s principal work location to a location outside of Clearwater,
Florida without the Executive’s prior written consent.

15.   Surrender of Properties.   Upon
termination of the Executive’s employment with the Company, regardless of the
reason therefore, the Executive shall promptly surrender to the Company all
property provided him by the Company for use in relation to his employment and,
in addition, the Executive shall surrender to the Company any and all sales
materials, lists of customers and prospective customers, price lists, files,
records, models, or other materials and information of or pertaining to the
Company or its customers or prospective customers or the products, business,
and operations of the Company.

16.   Headquarters.   The
Company acknowledges that the Executive shall be based in Clearwater, Florida
during the Employment Period.

17.   Severance Pay.   Notwithstanding
any other provision of this Agreement, if the Employment Period is terminated
by the Executive for Good Reason, or if the Company causes the non-renewal of
the Employment Period pursuant to Section 3 herein, the Company shall
pay the Executive (i) any accrued but unpaid Salary, prorated Annual Cash Bonus
(determined in accordance with Section 6(a)) and prorated vacation, and
any other amounts accrued but unpaid as of the date of termination, and
(ii) a lump-sum severance payment equal to the unpaid Salary of the
Balance of the Term at the then-current level. In addition, (i) the Company
shall continue all medical, dental and life insurance benefits at no cost to
the Executive for the greater of (A) twelve (12) months, commencing on the date
of termination of the 

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Employment Period, or (B) the Balance of the Term (the
provision by the Company of any such group health benefits shall not be
considered continuation coverage pursuant to Section 4980B of the Internal
Revenue Code of 1986, as amended (the “Code”), and such continuation coverage
shall commence on the date that benefits provided hereunder cease), except if
Executive begins new employment or service for another person or entity that
offers comparable health insurance, such benefits shall immediately cease and
(ii) the ownership of all restricted stock and options granted to the Executive
by the Company under this Agreement or any other agreement shall vest to the
extent provided for in the applicable stock option or other agreement governing
the issuance thereof. Other than as provided herein, if the Employment Period
is terminated by the Executive pursuant to Section 14(a) or by the
Company as provided in Section 14(b) of this Agreement, or if the
Executive causes the non-renewal of the Employment Period pursuant to Section
3 herein, the Company shall pay to the Executive in a lump sum payment any
accrued but unpaid Salary, prorated Annual Cash Bonus (determined in accordance
with Section 6(a)) and prorated vacation, and any other amounts accrued
but unpaid as of the date of termination. Any severance payable pursuant to
this Section 17 shall be paid to the Executive in one lump sum within
ten (10) days after termination of the Employment Period.

18.   Restrictive Covenants.   In
addition to any other obligation of the Executive under any other agreement
with the Company, in order to assure that the Company will realize the benefits
of this Agreement and in consideration of the employment set forth in this
Agreement, the Executive agrees that he shall not during the Employment Period
and for a period of six (6) months (the “Restricted Period”) from the
termination of the Employment Period:

(a)    Directly
or indirectly, alone or as a partner, joint venturer, member, officer,
director, employee, consultant, agent, independent contractor, stockholder or
in any other capacity of any company or business, engage in any business
activity in any state in the United States or in any other country in which the
Company (i) is qualified to do business on the date of termination of the
Employment Period, or (ii) has planned (pursuant to a plan approved by the
Board of Directors) to be qualified to do business, which is directly or
indirectly in competition with the Company Business; provided, however, that,
the beneficial ownership of less than 5% of the shares of stock of any
corporation having a class of equity securities actively traded on a national
securities exchange or over-the-counter market shall not be deemed, in and of
itself, to violate the prohibitions of this Section;

(b)    Directly
or indirectly (i) induce any person which is a customer of the Company or any
subsidiary or affiliate of the Company on the date of the termination of the
Employment Period to patronize any business directly or indirectly in
competition with the Company Business; (ii) canvass, solicit or accept from any
person that is a customer of the Company or any subsidiary or affiliate of the
Company on the date of the termination of the Employment Period, any such
competitive business, or (iii) request or advise any person that is a customer
of the Company Business on the date of the termination of the Employment Period
to withdraw, curtail, or cancel any such customer’s business with the Company
or any affiliate or subsidiary of the Company;

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(c)    Directly
or indirectly employ, or knowingly permit any company or business directly or
indirectly controlled by him, to employ, any person who was employed by the
Company or any subsidiary or affiliate of the Company on the date of the
termination of the Employment Period or within six (6) months prior to the date
of termination of the Employment Period, or in any manner seek to induce any
such person to leave his or her employment;

(d)    For
purposes of this Agreement, “Company Business” shall mean providing online
advertising services and certain related consumer services which includes
search engine marketing, affiliate marketing, online lead generation, online
dating, and online education..

(e)    The
Executive agrees and acknowledges that the restrictions contained in this Section
18 are reasonable in scope and duration and are necessary to protect the Company
after the Commencement Date. If any provision of this Section 18 as
applied to any party or to any circumstance is adjudged by a court to be
invalid or unenforceable, the same will in no way affect any other circumstance
or the validity or enforceability of this Agreement. If any such provision, or
any part thereof, is held to be unenforceable because of the duration of such
provision or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration and/or area of
such provision, and/or to delete specific words or phrases, and in its reduced
form, such provision shall then be enforceable and shall be enforced. The
parties agree and acknowledge that the breach of this Section will cause irreparable
damage to the Company and upon breach of any provision of this Section, the
Company shall be entitled to injunctive relief, specific performance or other
equitable relief; provided, however, that this shall in no way limit any other
remedies which the Company may have (including, without limitation, the right
to seek monetary damages).

19.   Confidentiality of Information Duty of
Non-Disclosure.   The Executive
acknowledges and agrees that his employment by the Company under this agreement
necessarily involves his understanding of and access to certain trade secrets
and confidential information pertaining to the Company Business. Accordingly,
the Executive agrees that after the date of this Agreement at all times,
whether during or after the termination of the Employment Period, he will not,
directly or indirectly, without the prior written consent of the Company,
disclose to or use for the benefit of any person, corporation or other entity,
or for himself any and all files, trade secrets or other confidential
information concerning the internal affairs of the Company or its subsidiaries
or affiliates, including, but not limited to, information pertaining to its
clients, services, products, earnings, finances, operations, methods or other
activities; provided, however, that the foregoing shall not apply to
information which is of public record or is generally known, disclosed or
available to the general public or the industry generally. Further, the
Executive agrees that he shall not, directly or indirectly, remove or retain,
without the express prior written consent of the Company, and upon termination
of this Agreement for any reason shall return to the Company, any figures,
calculations, letters, papers, records, computer disks, computer print-outs,
customer lists, price lists, other lists, contracts, business plans, forms,
manuals, other documents, instruments, drawings, designs, programs, brochures,
sales literature, or any copies or reproductions thereof, or any information or
instruments derived therefrom, or any other similar information of any type or
description, however such information might be obtained or 

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recorded, arising out of or in any way relating to the
business of the Company or obtained as a result of his employment by the
Company. The Executive acknowledges that all of the foregoing are proprietary
information, and are the exclusive property of the Company.

20.   Enforcement.

(a)    Upon
presentation of a claim or claims (collectively, “Claims”) arising out of or
relating to this Agreement, or the breach hereof, by an aggrieved party, the
other party shall have sixty (60) days in which to make such inquiries of the aggrieved
party and conduct such investigations as it believes reasonably necessary to
determine the validity of the Claims. At the end of such period of
investigation, the complained of party shall either pay the amount of the
Claims or the arbitration proceeding described immediately below shall be
invoked.

(b)    In the
event that the Claims are not settled by the procedure set forth immediately
above, the Claims shall be submitted to arbitration conducted in accordance
with the Commercial Arbitration Rules (“Rules”) of the American Arbitration
Association (“AAA”) except as amplified or otherwise varied hereby.

(c)    The
parties shall submit the dispute to the Atlanta regional office of the AAA and
the site of the arbitration shall be Pinellas County, Florida.

(d)    The
arbitration shall be conducted by a single arbitrator. The parties shall
appoint the single arbitrator to arbitrate the dispute within ten (10) business
days of the submission of the dispute. In the absence of agreement as to the
identity of the single arbitrator to arbitrate the dispute within such time,
the AAA is authorized to appoint an arbitrator in accordance with the Rules,
except that the arbitrator shall have as his principal place of business the
Tampa/St.Petersburg/Clearwater metropolitan area.

(e)    The single
arbitrator selected by the AAA shall be an attorney, accountant or other
professional licensed to practice by the State of Florida.

(f)     Notwithstanding
anything in the Rules to the contrary, the arbitration award shall be made in
accordance with the following procedure. Each party shall, at the commencement
of the arbitration hearing, submit an initial statement of the amount each
party proposes be selected by the arbitrator as the arbitration award (“Settlement
Amount”). During the course of the arbitration, each party may vary its
proposed Settlement Amount. At the end of the arbitration hearing, each party
shall submit to the arbitrator its final Settlement Amount (“Final Settlement
Amount”), and the arbitrator shall be required to select either one or the
other Final Settlement Amounts as the arbitration award without discretion to
select any other amount as the award. The arbitration award shall be paid
within ten (10) business days after the award has been made, together with
interest from the date of award at the rate of six percent (6%). Judgment upon
the award may be entered in any federal or state court having jurisdiction over
the parties and shall be final and binding.

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21.   Costs of Enforcement.   The
losing party in any action to enforce the terms of this Agreement shall
reimburse the other for reasonable attorneys’ fees and costs incurred by the
other in connection with any claim brought.

22.   No Duty to Mitigate or Offset.   The
Executive shall not be required to mitigate or offset the amount of any
payments that the Executive may receive from the Company as a result of the
termination of the Employment Period. The amounts payable hereunder by the
Company as a result of the termination of the Employment Period shall be
considered liquidated damages and shall not be reduced by any amounts that the
Executive earns through other employment or otherwise, except that the Company’s
obligation to continue medical, dental and life insurance benefits pursuant to Section
17 herein, shall be reduced by the amount of any such benefits provided to
the Executive by any other employer.

23.   Indemnification.   The
Company will indemnify Executive in accordance with that certain
Indemnification Agreement, of even date herewith, by and between the Company
and Executive.

24.   Directors and Officers Insurance.   The
Executive shall be entitled to the protection of any insurance policies the
Company or any of its affiliates from time to time maintains for the benefit of
its senior executive officers and directors (or substantially similar policies)
respecting liabilities, costs, charges, and expenses of any type whatsoever
incurred or sustained by the Executive in connection with any action, suit or
proceeding to which the Executive may be made a party or may be threatened to
be made a party by reason of the Executive’s being or having been a director,
officer, employee or agent of the Company or serving or having served at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise.

25.   General Provisions.

(a)   Notice.   Any
notice or demand required or permitted hereunder shall be made in writing (i)
either by actual delivery of the notice or demand into the hands of the party
thereunder entitled, or (ii) by the mailing of the notice or demand in the
United States mail, certified or registered mail, return receipt requested, all
postage prepaid and addressed to the party to whom the notice or demand is to
be given at the party’s respective address set forth below, or such other
address as the parties may from time to time designate by written notice as
herein provided.

As addressed to
the Company:

Think Partnership Inc.

Attention: Chief Executive Officer

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With a copy to:

Shefsky & Froelich Ltd.

111 East Wacker Drive

Suite 2800

Chicago, Illinois 60601

Attention: Michael J. Choate

As addressed to
the Executive:

Scott P. Mitchell

3844 Wellington Parkway

Palm Harbor, FL 34685

With a copy to:

Law Offices of Nicholas Taldone

2536 Countyside Blvd.

Clearwater, FL 33763

Attention: Nicholas Taldone

The notice or demand shall be deemed to be received in
case (i) on the date of its actual receipt by the party entitled thereto and in
case (ii) on the date of its mailing.

(b)   Amendment and Waiver.   No
amendment or modification of this Agreement shall be valid or binding upon the
Company unless made in writing and signed by an officer of the Company (not
including Executive) duly authorized by the Board of Directors (excluding the
vote of Executive) or upon the Executive unless made in writing and signed by
him. The waiver by either party hereto of the breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach by such party.

(c)   Entire Agreement.   This
Agreement constitutes the entire Agreement between the parties with respect to
the Executive’s duties and compensation as an executive of the Company and
shall supersede any and all prior agreements or understandings between the parties
hereto; there are no representations, warranties, agreements or commitments
between the parties hereto with respect to his employment except as set forth
herein.

(d)   Governing Law.   This
Agreement shall be governed by and construed in accordance with the internal
laws (and not the law of conflicts) of the State of Florida.

(e)   Severability.   If
any provision of this Agreement shall, for any reason, be held unenforceable by
a court of competent jurisdiction, such provision shall be severed from this
Agreement unless, as a result of such severance, the Agreement fails to reflect
the basic intent of the parties. If the Agreement continues to reflect the
basic intent of the parties, then the invalidity of such specific provision
shall not affect the 

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enforceability of any other provision herein, and the
remaining provisions shall remain in full force and effect.

(f)   Assignment.   The
Executive may not under any circumstances delegate any of his rights and
obligations hereunder without first obtaining the prior written consent of the
Company. The Company shall cause this Agreement and all of the Company’s rights
and obligations hereunder to be assigned and expressly assumed by any successor
to all or substantially all of the business and/or assets of the Company,
whether direct or indirect, by purchase, merger, consolidation or otherwise,
including upon a Change in Control (as defined in Section 14(e));
provided, however, that any such assignment shall not relieve the Company of
its obligations hereunder to the extent that an assignee does not fulfill such
obligations.

(g)   Heirs.   This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If the Executive should die while
any amount would still be payable to him hereunder if he had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the Executive’s devisee, legatee or other
designees or, if there is no such designee, to the Executive’s estate.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

	
  

  	
  THINK PARTNERSHIP INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jody Brown

  
	
   

  	
   

  	
  Jody Brown, Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  /s/ Scott P. Mitchell

  
	
   

  	
  Scott P. MitchellExhibit
4.1

ABOVENET, INC.

and

AMERICAN STOCK TRANSFER
& TRUST COMPANY

as Rights Agent

RIGHTS AGREEMENT

Dated as of August 3, 2006

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  PAGE

  
	
  SECTION 1.

  	
   

  	
  Certain Definitions.

  	
   

  	
  1

  
	
  SECTION 2.

  	
   

  	
  Appointment Of Rights Agent.

  	
   

  	
  5

  
	
  SECTION 3.

  	
   

  	
  Issue Of Right Certificates.

  	
   

  	
  5

  
	
  SECTION 4.

  	
   

  	
  Form Of Right Certificates.

  	
   

  	
  6

  
	
  SECTION 5.

  	
   

  	
  Countersignature And Registration.

  	
   

  	
  7

  
	
  SECTION 6. 

  	
   

  	
  Transfer, Split Up, Combination And Exchange Of Right
  Certificates; Mutilated, Destroyed, Lost Or Stolen Right Certificates.

  	
   

  	
  7

  
	
  SECTION 7.

  	
   

  	
  Exercise Of Rights; Purchase Price; Expiration Date
  Of Rights.

  	
   

  	
  8

  
	
  SECTION 8.

  	
   

  	
  Cancellation And Destruction Of Right Certificates.

  	
   

  	
  10

  
	
  SECTION 9.

  	
   

  	
  Availability Of Preferred Shares.

  	
   

  	
  10

  
	
  SECTION 10.

  	
   

  	
  Preferred Shares Record Date.

  	
   

  	
  11

  
	
  SECTION 11. 

  	
   

  	
  Adjustment Of Purchase Price, Number Of Shares Or Number
  Of Rights.

  	
   

  	
  11

  
	
  SECTION 12.

  	
   

  	
  Certificate Of Adjusted Purchase Price Or Number Of
  Shares.

  	
   

  	
  18

  
	
  SECTION 13. 

  	
   

  	
  Consolidation, Merger Or Sale Or Transfer Of Assets
  Or Earning Power.

  	
   

  	
  18

  
	
  SECTION 14.

  	
   

  	
  Fractional Rights And Fractional Shares.

  	
   

  	
  21

  
	
  SECTION 15.

  	
   

  	
  Rights Of Action.

  	
   

  	
  22

  
	
  SECTION 16.

  	
   

  	
  Agreement Of Right Holders.

  	
   

  	
  23

  
	
  SECTION 17.

  	
   

  	
  Right Certificate Holder Not Deemed A Stockholder.

  	
   

  	
  23

  
	
  SECTION 18.

  	
   

  	
  Concerning The Rights Agent.

  	
   

  	
  23

  
	
  SECTION 19.

  	
   

  	
  Merger Or Consolidation Or Change Of Name Of Rights
  Agent.

  	
   

  	
  24

  
	
  SECTION 20.

  	
   

  	
  Duties Of Rights Agent.

  	
   

  	
  24

  
	
  SECTION 21.

  	
   

  	
  Change Of Rights Agent.

  	
   

  	
  26

  
	
  SECTION 22.

  	
   

  	
  Issuance Of New Right Certificates.

  	
   

  	
  27

  
	
  SECTION 23.

  	
   

  	
  Redemption.

  	
   

  	
  28

  
	
  SECTION 24.

  	
   

  	
  Exchange.

  	
   

  	
  29

  
	
  SECTION 25.

  	
   

  	
  Notice Of Certain Events.

  	
   

  	
  30

  
	
  SECTION 26.

  	
   

  	
  Notices.

  	
   

  	
  31

  
	
  SECTION 27.

  	
   

  	
  Supplements And Amendments.

  	
   

  	
  32

  

 

 i
 

 

 

	
  SECTION 28.

  	
   

  	
  Determination And Actions By The Board Of Directors,
  Etc.

  	
   

  	
  32

  
	
  SECTION 29.

  	
   

  	
  Successors.

  	
   

  	
  33

  
	
  SECTION 30.

  	
   

  	
  Benefits Of This Agreement.

  	
   

  	
  33

  
	
  SECTION 31.

  	
   

  	
  Severability.

  	
   

  	
  33

  
	
  SECTION 32.

  	
   

  	
  Governing Law.

  	
   

  	
  33

  
	
  SECTION 33.

  	
   

  	
  Counterparts.

  	
   

  	
  33

  
	
  SECTION 34.

  	
   

  	
  Descriptive Headings.

  	
   

  	
  33

  

 

	
  Exhibits

  
	
  Exhibit A: Form of Certificate of Designation.

  
	
  Exhibit B: Form of Right Certificate.

  
	
  Exhibit C: Form of Summary of Rights to Purchase
  Preferred Shares.

  

 

 ii

RIGHTS AGREEMENT

THIS RIGHTS AGREEMENT (“Agreement”), dated
as of August 3, 2006, between ABOVENET, INC., a Delaware corporation (the “Company”),
and AMERICAN STOCK TRANSFER & TRUST COMPANY (“Rights Agent”).

The Company’s board of
directors (the “Board of Directors”) has authorized and declared a dividend of
one preferred share purchase right (a “Right”) for each Common Share (as such
term is hereinafter defined) issued and outstanding at the close of business on
August 7, 2006 (the “Record Date”), each Right representing the right to
purchase one one-hundredth of a Preferred Share (as such term is hereinafter
defined), upon the terms and subject to the conditions herein set forth, and
has further authorized and directed the issuance of one Right with respect to
each Common Share that shall become issued and outstanding between the Record
Date and the earliest to occur of the Distribution Date, the Redemption Date
and the Final Expiration Date (as such terms are hereinafter defined); provided, however, that Rights may be
issued with respect to Common Shares that shall become issued and outstanding
after the Distribution Date and prior to the earlier of the Redemption Date and
the Final Expiration Date in accordance with the provisions of Section 22
hereof.

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

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

(a)           “Acquiring Person”
shall mean any Person (as such term is hereinafter defined) who or that,
together with all Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the Common Shares then outstanding.  Notwithstanding the foregoing, (A) the term
Acquiring Person shall not include (i) the Company, (ii) any Subsidiary (as
such term is hereinafter defined) of the Company, (iii) any employee benefit or
compensation plan of the Company or any Subsidiary of the Company, (iv) any
entity holding Common Shares for or pursuant to the terms of any such employee
benefit or compensation plan of the Company or any Subsidiary of the Company or
(v) any Person, together with all Affiliates and Associates of such Person, who
is the Beneficial Owner of 15% or more of the Common Shares outstanding as of
the date of this Agreement until such time after the date of this Agreement
that such Person, together with all Affiliates and Associates of such Person,
shall become the Beneficial Owner of any additional Common Shares (other than
by means of a dividend made by the Company on the Common Shares outstanding or
pursuant to a split, subdivision or other reclassification of the Common Shares
undertaken by the Company or as a result of (x) the distribution of Common
Shares or other Company securities (or the exercise thereof) in connection with
the Second Amended Plan of Reorganization, dated July 1, 2003, of Metromedia
Fiber Network, Inc., et al., as the same may be amended and supplemented (the “Bankruptcy
Plan of Reorganization”), or (y) the granting to a member of the Board of
Directors of Common Shares or options to purchase

 

Common Shares or the vesting of Common Shares or
options to purchase Common Shares held by a member of the Board of Directors
(which options and/or Common Shares have been contributed by the member of the
Board of Directors to such Person or the member of the Board of Directors is,
or is an Affiliate or Associate of, such Person) ) and shall then beneficially
own more than 15% of the Common Shares issued and outstanding and (B) no Person
shall become an “Acquiring Person” either (i) as the result of an acquisition
of Common Shares by the Company which, by reducing the number of Common Shares
issued and outstanding, increases the proportionate number of Common Shares
beneficially owned by such Person to 15% or more of the Common Shares then
outstanding; provided, however,
that if a Person shall become the Beneficial Owner of 15% or more of the Common
Shares then outstanding by reason of share purchases by the Company and shall,
following written notice from, or public disclosure by the Company of such
share purchases by the Company, become the Beneficial Owner of any additional
Common Shares without the prior consent of the Company and shall then
Beneficially Own more than 15% of the Common Shares then outstanding, then such
Person shall be deemed to be an “Acquiring Person,” or (ii) as the result of
the acquisition of Common Shares directly from the Company whether as a result
of (x) the distribution of Common
Shares or other Company securities (or the exercise thereof) in connection with
the  Bankruptcy Plan of Reorganization or
(y) the granting to a member of
the Board of Directors of Common Shares or options to purchase Common Shares
and/or the vesting of Common Shares or options to purchase Common Shares held
by a member of the Board of Directors (which options and/or Common Shares have
been contributed by the Director to such Person or the Director is, or is an
Affiliate or Associate of, such Person) 
or (z) otherwise; provided, however,
that if a Person shall become the Beneficial Owner of 15% or more of the Common
Shares then outstanding by reason of share purchases or issuances directly from
the Company and shall, after that date, become Beneficial Owner of any
additional Common Shares without the prior written consent of the Company and
shall then Beneficially Own more than 15% of the Common Shares then outstanding,
then such Person shall be deemed to be an “Acquiring Person” or (iii) if the
Board of Directors determines in good faith that a Person who would otherwise
be an “Acquiring Person,” as defined pursuant to the foregoing provisions of
this Section 1(a), has become such inadvertently, and such Person divests,
as promptly as practicable (as determined in good faith by the Board of
Directors), following receipt of written notice from the Company of such event,
of Beneficial Ownership of a sufficient number of Common Shares so that such
Person would no longer be an Acquiring Person, as defined pursuant to the
foregoing provisions of this Section 1(a), then such Person shall not be deemed
to be an “Acquiring Person” for any purposes of this Agreement; provided, however, that if such Person
shall again become the Beneficial Owner of 15% or more of the Common Shares
then outstanding, such Person shall be deemed an “Acquiring Person,” subject to
the exceptions set forth in this Section 1(a).

(b)           “Affiliate”
and “Associate” shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), as in effect on the date of this Agreement; provided,
however, that the limited partners of a limited partnership shall
not be deemed to be Associates of such limited partnership solely by virtue of
their limited partnership interests.

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

 2
 

 

(i)            that such
Person or any of such Person’s Affiliates or Associates is deemed to
beneficially own, within the meaning of Rule 13d-3 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this Agreement;

(ii)           that such
Person or any of such Person’s Affiliates or Associates has (A) the right to
acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person’s Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially own,
any security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or

(iii)         that are
beneficially owned, directly or indirectly, by any other Person with which such
Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding, voting (except
to the extent contemplated by the proviso to Section 1(c)(ii)(B) hereof)
or disposing of any securities of the Company; provided,
however, an agreement, arrangement or understanding for purposes of
this Section 1(c)(iii) shall not be deemed to include actions, including
any agreement, arrangement or understanding, or statements by any member of the
Board of Directors on the date of this Agreement, any subsequent directors of
the Company (the “Successor Directors”) who have been nominated by a majority
of directors who are directors as of the date of this Agreement or who are
Successor Directors, or by any Person of whom such a director is an Affiliate
or Associate, provided, however that this exception shall not apply to a
particular Person or Persons if and to the extent that such Person or Persons,
after the date of this Agreement, acquires Beneficial Ownership of more than an
additional 5% of the then outstanding Common Shares of the Company unless (A)
the shares are acquired directly from the Company or as part of an employee
benefit or compensation plan of the Company or a subsidiary of the Company or
(B) the Person establishes to the satisfaction of the directors of the Company
that it is acting on its own behalf and not in concert with any other Person
and will not, upon completion of any purchases, be the Beneficial Owner of 15%
or more of the outstanding Common Shares.

Notwithstanding anything
in this definition of Beneficial Ownership to the contrary, the phrase, “then
outstanding,” when used with reference to a Person’s Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued
and outstanding together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to own beneficially
hereunder.

 3
 

 

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

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

(f)            “Common Shares”
shall mean the shares of common stock, par value $0.01 per share, of the
Company; provided, however, that, “Common Shares,”
when used in this Agreement in connection with a specific reference to any
Person other than the Company, shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or Persons that ultimately
control such first-mentioned Person.

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

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

(i)            “Interested Stockholder”
shall mean any Acquiring Person or any Affiliate or Associate of an Acquiring
Person or any other Person in which any such Acquiring Person, Affiliate or
Associate has an interest, or any other Person acting directly or indirectly on
behalf of or in concert with any such Acquiring Person, Affiliate or Associate.

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

(k)           “Preferred Shares”
shall mean shares of Series A Junior Participating Preferred Stock, par value
$0.01 per share, of the Company having the designations and the powers,
preferences and rights, and the qualifications, limitations and restrictions
set forth in the Form of Certificate of Designation attached to this Agreement
as Exhibit A.

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

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

(n)           “Shares Acquisition Date”
shall mean the first date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such provided, however that, if such
Person is determined not to have become an Acquiring Person pursuant to
Section l(a)(B)(iii) hereof, then no Shares Acquisition Date shall be
deemed to have occurred.

(o)           “Subsidiary”
of any Person shall mean any corporation or other entity of which a majority of
the voting power of the voting equity securities or equity interest is owned,
directly or indirectly, by such Person.

(p)           “Transaction”
shall mean any merger, consolidation or sale of assets described in
Section 13(a) hereof or any acquisition of Common Shares which would
result in a Person becoming an Acquiring Person or a Principal Party (as such
term is hereinafter defined).

 4
 

 

(q)           “Transaction Person”
with respect to a Transaction shall mean (i) any Person who (x) is or will
become an Acquiring Person or a Principal Party (as such term is hereinafter
defined) if the Transaction were to be consummated and (y) directly or
indirectly proposed or nominated a director of the Company which director is in
office at the time of consideration of the Transaction, or (ii) an Affiliate or
Associate of such a Person.

SECTION 2.         APPOINTMENT OF RIGHTS AGENT.  The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.  The Company may from time to time appoint
such co-Rights Agents as it may deem necessary or desirable.

SECTION 3.         ISSUE OF RIGHT CERTIFICATES.

(a)           Until the
earlier of the Close of Business on (i) the Shares Acquisition Date or (ii) the
tenth Business Day (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) after the date of the commencement (determined in accordance with Rule
14d-2 under the Exchange Act) by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such plan)
to commence, a tender or exchange offer (which intention to commence remains in
effect for five Business Days after such announcement), the consummation of
which would result in any Person becoming an Acquiring Person (including any
such date that is after the date of this Agreement and prior to the issuance of
the Rights, the earlier of such dates being herein referred to as the “Distribution
Date”), (x) the Rights will be evidenced by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates, and
(y) the Rights (and the right to receive Right Certificates therefor) will be
transferable only in connection with the transfer of Common Shares.  As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Distribution Date,
at the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a “Right
Certificate”), evidencing one Right for each Common Share so held, subject to
the adjustment provisions of Section 11 of this Agreement.  As of the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.

(b)           On the
Record Date, or as soon as practicable thereafter, the Company will send
(directly or through the Rights Agent or its transfer agent) a copy of a
Summary of Rights to Purchase Preferred Shares, in substantially the form of
Exhibit C hereto (the “Summary of Rights”), by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the
Company.  With respect to certificates
for Common Shares outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates registered in the

 5
 

 

names of the holders thereof.  Until the Distribution Date (or the earlier
of the Redemption Date and the Final Expiration Date), the surrender for
transfer of any certificate for Common Shares outstanding on the Record Date
shall also constitute the transfer of the Rights associated with the Common Shares
represented thereby.

(c)           Certificates
for Common Shares that become outstanding after the Record Date but prior to
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:

This certificate also
evidences and entitles the holder hereof to certain rights as set forth in a
Rights Agreement between AboveNet, Inc. 
(the “Company”) and American Stock Transfer & Trust Company, as Rights
Agent (the “Rights Agent”), dated as of August 3, 2006, as amended from time to
time (the “Rights Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of the Company.  Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate.  The Company will mail to
the holder of this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. 
As described in the Rights Agreement, Rights issued to any Person who
becomes an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement) and certain related persons, whether currently held by or
on behalf of such Person or by any subsequent holder, shall become null and
void.

With respect to such
certificates containing the foregoing legend, until the Distribution Date (or,
if earlier, the earlier of the Redemption Date or the Final Expiration Date),
the Rights associated with the Common Shares represented by such certificates
shall be evidenced by such certificates alone, and the surrender for transfer
of any such certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.  In the event that the Company purchases or
acquires any Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares shall be deemed canceled
and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares that are no longer outstanding.  Notwithstanding this Section 3(c), the
omission of a legend shall not affect the enforceability of any part of this
Agreement or the rights of any holder of the Rights.

SECTION 4.         FORM OF RIGHT CERTIFICATES.

(a)           The Right
Certificates (and the form of election to purchase Preferred Shares, the form
of assignment and the form of certification to be printed on the reverse
thereof) shall be substantially the same as Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or quotation
system on which the Rights may from time to time be listed, or to conform to
usage.  Subject to the provisions of
Sections 7, 11 and 22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-hundredths of a Preferred Share as
shall be set forth therein at the Purchase Price (as

 6
 

 

defined in Section 7(b)), but the number of such
one one-hundredths of a Preferred Share and the Purchase Price shall be subject
to adjustment as provided herein.

(b)           Any Right
Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights that are null and void pursuant to the second paragraph of
Section 11(a)(ii) hereof and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:

The Rights represented by
this Right Certificate are or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement).  Accordingly, this Right Certificate and the
Rights represented hereby are null and void.

The provisions of
Section 11(a)(ii) hereof shall be operative whether or not the foregoing
legend is contained on any such Right Certificate.

SECTION 5.         COUNTERSIGNATURE AND REGISTRATION.  The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its Chief Executive
Officer, its President, its Chief Financial Officer, or any of its Vice
Presidents, either manually or by facsimile signature, may have affixed thereto
the Company’s seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature.  The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. 
In case any officer of the Company who shall have signed any of the
Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as
though the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.

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

SECTION 6.         TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.  Subject to the provisions of
Section 11(a)(ii), Section 14 and Section 24 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a

 7
 

 

Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase.  Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent designated for such
purpose.  Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificate until the registered
holder shal1 have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.  Thereupon the
Rights Agent shall, subject to Section 11(a)(ii), Section 14 and
Section 24 hereof, countersign and deliver to the person entitled thereto
a Right Certificate or Right 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
Right Certificates.

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

Notwithstanding any other
provisions hereof, the Company and the Rights Agent may amend this Agreement to
provide for uncertificated Rights in addition to or in place of Rights
evidenced by Rights Certificates.

SECTION 7.         EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.

(a)           The
registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase 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 Purchase Price for each one one- hundredth of a
Preferred Share (or such other number of shares or other securities) as to
which the Rights are exercised, at or prior to the earliest of (i) the Close of
Business on August 7, 2009 (the “Final Expiration Date”), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the “Redemption
Date”), or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.

(b)           The purchase
price for each one one-hundredth of a Preferred Share pursuant to the exercise
of a Right shall initially be $100.00 (the “Purchase Price”) and shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America in
accordance with Section 7(c)) below.

 8
 

 

(c)           Upon receipt
of a Right Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the Purchase
Price for the shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof by certified check, cashier’s check, bank
draft or money order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any transfer agent for the
Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company, in its sole discretion,
shall have elected to deposit the Preferred Shares issuable upon exercise of
the Rights hereunder into a depository, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate.  In the event that the Company is obligated to
issue securities of the Company other than Preferred Shares (including Common
Shares) of the Company pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities are available for
distribution by the Rights Agent, if and when appropriate.

In addition, in the case
of an exercise of the Rights by a holder pursuant to Section 11(a)(ii)
hereof, the Rights Agent shall return such Right Certificate to the registered
holder thereof after imprinting, stamping or otherwise indicating thereon that
the rights represented by such Right Certificate no longer include the rights
provided by Section 11(a)(ii) hereof, and, if fewer than all the Rights
represented by such Right Certificate were so exercised, the Rights Agent shall
indicate on the Right Certificate the number of Rights represented thereby that
continue to include the rights provided by Section 11(a)(ii) hereof.

(d)           In case the
registered holder of any Right Certificate shall exercise fewer than all the
Rights evidenced thereby (other than a partial exercise of rights pursuant to
Section 11 (a)(ii) as described in Section 7(c) hereof), a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of Section 14
hereof.

(e)           The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held in
its treasury, the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights in accordance with this
Section 7.

(f)            Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and
signed the certification following the form of

 9
 

 

election to purchase set forth on the reverse side of
the Rights Certificate surrendered for such exercise, (ii) tendered the
Purchase Price (and an amount equal to any applicable transfer tax required to
be paid by the holder of such Right Certificate in accordance with
Section 9) to the Company in the manner set forth in Section 7(c),
and (iii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.

SECTION 8.         CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.  All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if delivered or surrendered to
the Rights Agent, shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any of the provisions
of this Agreement.  The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.  The Rights Agent shall deliver all canceled
Right Certificates to the Company approximately one and one-half years after
the cancellation date, or shall, at the written request of the Company, destroy
such canceled Right Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.

SECTION 9.         AVAILABILITY OF PREFERRED SHARES.  The Company covenants and agrees that so long
as the Preferred Shares (and, after the time a person becomes an Acquiring
Person, Common Shares or any other securities) issuable upon the exercise of
the Rights may be listed on any national securities exchange or quotation
system, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange or quotation system upon official notice of issuance
upon such exercise.

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

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

 10

 

As soon as practicable after the Distribution Date,
the Company shall use its best efforts to:

(i)            prepare and
file a registration statement under the Securities Act of 1933, as amended (the
“Act”), with respect to the securities purchasable upon exercise of the Rights
on an appropriate form, will use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing and will
use its best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act) until the
Final Expiration Date; and

(ii)           use its best
efforts to qualify or register the Rights and the securities purchasable upon
exercise of the Rights under the blue sky laws of such jurisdictions as may be
necessary or appropriate.

SECTION 10.       PREFERRED SHARES RECORD DATE.  Each person in whose name any certificate for
Preferred Shares or other securities is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Shares or other securities represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered with the forms of election and
certification duly executed 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 Shares or other securities transfer books of the
Company are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares or other securities
transfer books of the Company are open. 
Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate, as such, shall not be entitled to any rights of a holder of
Preferred Shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.

SECTION 11.       ADJUSTMENT OF PURCHASE PRICE, NUMBER OF
SHARES OR NUMBER OF RIGHTS. 
The Purchase Price, the number of Preferred Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.

(a)

(i)            In the
event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred Shares
(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 capital stock issuable on such date, shall be

 11
 

 

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

(ii)           Subject to
Section 24 hereof and the provisions of the next paragraph of this
Section 11(a)(ii), in the event any Person shall become an Acquiring
Person, each holder of a Right shall, for a period of 60 days after the later
of such time any Person becomes an Acquiring Person or the effective date of an
appropriate registration statement filed under the Act pursuant to
Section 9 hereof (provided, however that, if at any time prior to the
expiration or termination of the Rights there shall be a temporary restraining
order, a preliminary injunction, an injunction, or temporary suspension by the
Board of Directors, or similar obstacle to exercise of the Rights (the “Injunction”)
that prevents exercise of the Rights, a new 60-day period shall commence on the
date the Injunction is removed), have a right to receive, upon exercise thereof
at a price equal to the then current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right is then exercisable,
in accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price of the Common
Shares (determined pursuant to Section 11(d) hereof) on the date such
Person became an Acquiring Person; provided, however, that if the transaction
that would otherwise give rise to the foregoing adjustment is also subject to
the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant to
this Section 11(a)(ii).  In the
event that any Person shall become an Acquiring Person and the Rights shall
then be outstanding, the Company shall not take any action that would eliminate
or diminish the benefits intended to be afforded by the Rights.

Notwithstanding anything
in this Agreement to the contrary, from and after the time any Person becomes
an Acquiring Person, any Rights beneficially owned by (i) such Acquiring Person
or an Associate or Affiliate of such Acquiring Person, (ii) a transferee of
such Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person became such, or (iii) a transferee of
such Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person’s becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Directors has determined is part of
a plan, arrangement or understanding that has as a primary purpose or effect
the avoidance of this Section 11(a)(ii), shall become null and void without
any further

 12
 

 

action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise.  The Company
shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii)
and Section 4(b) hereof are complied with, but shall have no liability to
any holder of Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.  No Right
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be canceled.

(iii)         In lieu of
issuing Common Shares in accordance with Section 11(a)(ii) hereof, the
Company may, if a majority of the Board of Directors then in office determines
that such action is necessary or appropriate and not contrary to the interests
of holders of Rights, elect to (and, in the event that the Board of Directors
has not exercised the exchange right contained in Section 24(c) hereof and
there are not sufficient treasury shares and authorized but unissued Common
Shares to permit the exercise in full of the Rights in accordance with Section
11(a)(ii), the Company shall) take all such action as may be necessary to
authorize, issue or pay, upon the exercise of the Rights, cash (including by
way of a reduction of the Purchase Price), property, Common Shares, other
securities or any combination thereof having an aggregate value equal to the
value of the Common Shares that otherwise would have been issuable pursuant to
Section 11(a)(ii) hereof, that aggregate value shall be determined by a
nationally recognized investment banking firm selected by a majority of the
Board of Directors then in office.  For
purposes of the preceding sentence, the value of the Common Shares shall be
determined pursuant to Section 11(d) hereof.  Any such election by the Board of Directors
must be made within 60 days following the date on which the event described in
Section 11(a)(ii) hereof shall have occurred.  Following the occurrence of the event
described in Section 11(a)(ii) hereof, a majority of the Board of Directors
then in office may suspend the exercisability of the Rights for a period of up
to 60 days following the date on which the event described in
Section 11(a)(ii) hereof shall have occurred to the extent that such
directors have not determined whether to exercise their rights of election
under this Section 11(a)(iii).  In
the event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended.

(b)           In case the
Company shall fix a record date for the issuance of rights, options or warrants
to all holders of Preferred Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or purchase Preferred
Shares (or shares having the same designations and the powers, preferences and
rights, and the qualifications, limitations and restrictions as the Preferred
Shares (“equivalent preferred shares”)) or securities convertible into
Preferred Shares or equivalent preferred shares at a price per Preferred Share
or equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred Shares (as such
term is hereinafter defined) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on such
record date plus the number of Preferred Shares

 13
 

 

that the aggregate offering price of the total number
of Preferred Shares and/or equivalent preferred shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right.  In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors, whose determination shall be described in a statement filed with
the Rights Agent.  Preferred Shares owned
by or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. 
Such adjustment shall be made successively whenever such a record date
is fixed; and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price 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 the making of a distribution to all holders
of the Preferred Shares (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets (other than a
regular quarterly cash dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Shares (as such term is
hereinafter defined) on such record date, less the fair market value (as
determined in good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company to be issued upon exercise of one
Right.  Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.

(d)

(i)            For the
purpose of any computation hereunder, the “current per share market price” of
any security (a “Security” for the purpose of this Section 11(d)(i)) on
any date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per
share market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution
on such Security payable in shares of such Security or securities convertible
into such shares, or (B) any subdivision, combination or reclassification of
such

 14
 

 

Security or securities convertible into such shares,
or (C) any subdivision, combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security.  The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or as reported on the Nasdaq National
Market or, if the Security is not listed or admitted to trading on any national
securities exchange or reported on the Nasdaq National Market, 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 National Association of
Securities Dealers, Inc.  Automated
Quotations System (“Nasdaq”) or such other system then in use, or, if on any
such date the Security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Security selected by the Board of Directors or, if on
any such date no professional market maker is making a market in the Security,
the price as determined in good faith by the Board of Directors.  The term “Trading Day” shall mean a day on
which the principal national securities exchange on which the Security is
listed or admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national securities
exchange, a Business Day.

(ii)           For the
purpose of any computation hereunder, the “current per share market price” of
the Preferred Shares shall be determined in accordance with the method set
forth in Section 11(d)(i) hereof. 
If the Preferred Shares are not publicly traded, the “current per share
market price” of the Preferred Shares shall be conclusively deemed to be the
current per share market price of the Common Shares as determined pursuant to
Section 11 (d)(i) hereof (appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof)
multiplied by one hundred.  If neither
the Common Shares nor the Preferred Shares are publicly held or so listed or
traded, “current per share market price” shall mean the fair value per share as
determined in good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent.

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

 15
 

 

(f)            If as a
result of an adjustment made pursuant to Section 11(a) hereof, the holder
of any Right thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than Preferred Shares, thereafter the
number of such other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred
Shares contained in Sections 11(a) through 11(c) hereof, inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares.

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

(h)           Unless the
Company shall have exercised its election as provided in Section 11(i)
hereof, upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and Section 11(c) hereof, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-hundredths of a Preferred Share (calculated to the nearest
one one- millionth of a Preferred Share) obtained by (i) multiplying (x) the
number of one one-hundredths of a Preferred Share 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 substitution for any adjustment in the number
of one one- hundredths of a Preferred Share purchasable upon the exercise of a
Right.  Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment.  Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-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 Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. 
If Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment.  Right Certificates
so to be distributed shall be issued,

 16
 

 

executed and countersigned in the manner provided for
herein and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.

(j)            Irrespective
of any adjustment or change in the Purchase Price or the number of one
one-hundredths of a Preferred Share issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of one one-hundredths of a Preferred
Share that was expressed in the initial Right Certificates issued hereunder.

(k)           Before
taking any action that would cause an adjustment reducing the Purchase Price
below one one-hundredth of the then par value, if any, of the Preferred Shares
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 fully paid and non-assessable Preferred
Shares 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 issuing to the holder
of any Right exercised after such record date of the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder’s
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.

(m)          The Company
covenants and agrees that, after the Distribution Date, it will not, except as
permitted by Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to, or if at the time
such action is taken it is reasonably foreseeable that the effect of such
action is to, materially diminish or eliminate the benefits intended to be
afforded by the Rights.  Any such action
taken by the Company during any period after any Person becomes an Acquiring Person
but prior to the Distribution Date shall be null and void unless such action
could be taken under this Section 11(m) from and after the Distribution
Date.

(n)           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 it in its sole discretion shall determine to be advisable in order that
any consolidation or subdivision of the Preferred Shares, issuance wholly for
cash of any Preferred Shares at less than the current market price, issuance
wholly for cash of Preferred Shares or securities that by their terms are
convertible into or exchangeable for Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the Company to
holders of its Preferred Shares shall not be taxable to such stockholders.

(o)           In the event
that at any time after the date of this Agreement and prior to the Distribution
Date, the Company shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a subdivision, combination or
consolidation of the

 17
 

 

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

(p)           The exercise
of Rights under Section 11(a)(ii) hereof shall only result in the loss of
rights under Section 11(a)(ii) hereof to the extent so exercised and shall
not otherwise affect the rights represented by the Rights under this Agreement,
including the rights represented by Section 13 hereof.

SECTION 12.       CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. 
Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with
Section 25 hereof.  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
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 Shares Acquisition Date or, if a Transaction is proposed, the
Distribution Date, directly or indirectly (x) the Company shall consolidate
with, or merge with and into, any Interested Stockholder, or if in such merger
or consolidation all holders of Common Stock are not treated alike, any other
Person, (y) any Interested Stockholder, or if in such merger or consolidation
all holders of Common Stock are not treated alike, any other Person shall
consolidate with the Company, or merge with and into the Company, and the
Company shall be the continuing or surviving corporation of such merger (other
than, in the case of either transaction described in (x) or (y), a merger or
consolidation that would result in all of the voting power represented by the
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
securities of the surviving entity) all of the voting power represented by the
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation and the holders of such securities not
having changed as a result of such merger or consolidation), or (z) the Company
shall sell, mortgage or otherwise transfer (or one or more of its subsidiaries
shall sell, mortgage or otherwise transfer), in one or more transactions,
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its

 18
 

 

subsidiaries (taken as a whole) to any Interested
Stockholder or Stockholders, or if in such transaction all holders of Common
Stock are not treated alike, any other Person, (other than the Company or any
Subsidiary of the Company in one or more transactions each of which
individually and the aggregate does not violate Section 13(d) hereof)
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right, subject to Section 11(a)(ii) hereof, shall have the
right to receive, upon the exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of freely
tradeable Common Shares of the Principal Party (as such term is hereinafter
defined), free and clear of liens, rights of call or first refusal,
encumbrances or other adverse claims, as shall be equal to the result obtained
by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to
Section 11(a)(ii) hereof) and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term “Company” shall thereafter
be deemed to refer to such Principal Party, it being specifically intended that
the provisions of Section 11 hereof shall apply to such Principal Party;
and (iv) such Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common Shares in
accordance with Section 9 hereof) in connection with such consummation as
may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.

(b)           “Principal Party”
shall mean:

(i)            in the case
of any transaction described in clause (x) or (y) of Section 13(a) hereof,
the Person that is the issuer of any securities into which Common Shares are
converted in such merger or consolidation, and if no securities are so issued,
the Person that is the other party to the merger or consolidation (or, if
applicable, the Company, if it is the surviving corporation); and

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

provided,
however, that in any case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary or Affiliate of another Person the
Common Shares of which are and have been so registered, “Principal Party” shall
refer to such other Person; (2) if such Person is a Subsidiary, directly or
indirectly, or Affiliate of more than one Person, the Common Shares of two or
more of which are and have been so registered, “Principal Party” shall refer to
whichever of such Persons is the issuer of the Common Shares having the
greatest aggregate market value; and (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned,

 19
 

 

directly or indirectly,
by the same Person, the rules set forth in (1) and (2) above shall apply to
each of the chains of ownership having an interest in such joint venture as if
such party were a “Subsidiary” of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations set forth in
this Section 13 in the same ratio as their direct or indirect interests in
such Person bear to the total of such interests.

(c)           The Company
shall not consummate any such consolidation, merger, sale or transfer unless
the Principal Party shall have a sufficient number of authorized Common Shares
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 each Principal Party and each other Person who may
become a Principal Party as a result of such consolidation, merger, sale or
transfer shall have (i) executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in Sections 13(a)
and (b) and (ii) prepared, filed and had declared and remain effective a
registration statement under the Act on the appropriate form with respect to
the Rights and the securities exercisable upon exercise of the Rights and
further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets mentioned in
Section 13(a), the Principal Party at its own expense will:

(i)            cause the
registration statement under the Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Final Expiration Date;

(ii)           use its best
efforts to qualify or register the Rights and the securities purchasable upon
exercise of the Rights under the blue sky laws of such jurisdictions as may be
necessary or appropriate;

(iii)         list the
Rights and the securities purchasable upon exercise of the Rights on each
national securities exchange on which the Common Shares were listed prior to
the consummation of such consolidation, merger, sale or transfer of assets or
on the Nasdaq National Market if the Common Shares were listed on the Nasdaq
National Market or, if the Common Shares were not listed on a national
securities exchange or the Nasdaq National Market prior to the consummation of
such consolidation, merger, sale or transfer of assets, on a national
securities exchange or the Nasdaq National Market; and

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

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

(d)           After the
Distribution Date, the Company covenants and agrees that it shall not (i)
consolidate with, (ii) merge with or into, or (iii) sell or transfer to, 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 other Person (other than a Subsidiary of the Company in a transaction that
does not violate Section 11(m) hereof), if (x) at the time of or after

 20

 

such consolidation, merger or sale there are any
charter or bylaw provisions or any rights, warrants or other instruments or
securities outstanding, agreements in effect or any other action taken that
would diminish or otherwise eliminate the benefits intended to be afforded by
the Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the stockholders of the Person who constitutes,
or would constitute, the “Principal Party” for purposes of Section 13(a)
hereof shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates. 
The Company shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this Section 13(d).

SECTION 14.       FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

(a)           The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates that evidence fractional Rights. 
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. 
For the purposes of this Section 14(a), the current market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable.  The closing price
for any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or as reported on the Nasdaq National Market or,
if the Rights are not listed or admitted to trading on any national securities
exchange or reported on the Nasdaq National Market, 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 Nasdaq 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 the 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 the Board of Directors shall be used.

(b)           The Company
shall not be required to issue fractions of Preferred Shares (other than
fractions that are integral multiples of one one-hundredth of a Preferred
Share) upon exercise of the Rights or to distribute certificates that evidence
fractional Preferred Shares (other than fractions that are integral multiples
of one one-hundredth of a Preferred Share). 
Fractions of Preferred Shares in integral multiples of one one-hundredth
of a Preferred Share may, at the election of the Company, be evidenced by depositary
receipts; provided, however, that holders of such
depositary receipts shall have all of the designations and the powers,
preferences and rights, and the qualifications, limitations and restrictions to
which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. 
In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
as

 21
 

 

herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share.  For the purposes of this Section 14(b),
the current market value of a Preferred Share shall be the current per share
market price of the Preferred Shares (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of such exercise (or, if not publicly traded, in accordance with
Section 11 (d)(ii) hereof).

(c)           Following
the occurrence of one of the transactions or events specified in
Section 11 hereof giving rise to the right to receive Common Shares,
capital stock equivalents (other than Preferred Shares) or other securities
upon the exercise of a Right, the Company shall not be required to issue
fractions of Common Shares or units of such Common Shares, capital stock
equivalents or other securities upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares, capital stock equivalents
or other securities.  In lieu of
fractional Common Shares, capital stock equivalents or other securities, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one Common Share or unit of such
Common Shares, capital stock equivalents or other securities.  For purposes of this Section 14(c), the
current market value shall be the current per share market price (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of such exercise and, if such capital stock equivalent is not
traded, each such capital stock equivalent shall have the value of one
one-hundredth of a Preferred Share.

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

SECTION 15.       RIGHTS OF ACTION.  All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Sections 18 and 20 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares) and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Shares), may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement.  Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.  Holders of Rights shall be entitled to
recover the reasonable costs and expenses, including attorneys fees, incurred
by them in any action to enforce the provisions of this Agreement.

SECTION 16.       AGREEMENT OF RIGHT HOLDERS.  Every holder of a Right, by accepting the
same, consents and agrees with the Company and the Rights Agent and with every
other holder of a Right that:

 22
 

 

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

(b)           after the
Distribution Date, the Right Certificates are transferable (subject to the
provisions of this Agreement) only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and

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

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

SECTION 18.       CONCERNING THE RIGHTS AGENT.  The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder.  The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.  The indemnity
provided herein shall survive the expiration of the Rights and the termination
of this Agreement.

The Rights Agent shall be
protected and shall incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set

 23
 

 

forth in Section 20 hereof.  In no case will the Rights Agent be liable
for special, indirect, incidental or consequential or consequential loss or
damage at any kind whatsoever (including but not limited to lost profits), even
if the Rights Agent has been advised of such loss or damage.

SECTION 19.       MERGER OR CONSOLIDATION OR CHANGE OF NAME
OF RIGHTS AGENT.  Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the shareholder
services or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof.  In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the
Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.

In case at any time the
name of the Rights Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.

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

(a)           The Rights Agent
may consult with legal counsel of its choice (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 be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President, the
Treasurer or the Secretary of the Company and delivered to the Rights Agent;
and such

 24
 

 

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

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

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

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

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

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

 25
 

 

any such action, the Rights Agent has received written
instructions in response to such application specifying the action to be taken
or omitted.

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

(i)            The Rights
Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys or agents or for any
loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.

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

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

SECTION 21.       CHANGE OF RIGHTS AGENT.  The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
days’ notice in writing mailed to the Company and to each transfer agent for
the Common Shares or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail.  The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days’ notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent for the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail.  If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. 
If the Company shall fail to make such appointment within a period of 30
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent.  Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be either (a) a corporation, business
trust or limited liability company organized and doing business under the laws
of the United States or of any other state of the United States that is
authorized under such laws to exercise

 26
 

 

corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and that
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million or (b) a direct or indirect wholly owned
Subsidiary of such an entity or its wholly-owning parent.  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 for the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. 
Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

SECTION 22.       ISSUANCE OF NEW RIGHT CERTIFICATES.  Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement.  In addition, in
connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the earlier of the Redemption Date and the Final
Expiration Date, the Company (a) shall with respect to Common Shares so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement in existence prior to the Distribution Date, or upon the exercise,
conversion or exchange of securities, notes or debentures issued by the Company
and in existence prior to the Distribution Date, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however,
that (i) the Company shall not be obligated to issue any such Right
Certificates if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right Certificate
would be issued, and (ii) no Right Certificate shall be issued if, and to the
extent that the appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.

SECTION 23.       REDEMPTION.

(a)           The Rights
may be redeemed by action of the Board of Directors pursuant to
Section 23(b) hereof and shall not be redeemed in any other manner.

(b)

(i)            The Board
of Directors may, at its option, at any time prior to the earlier of (A) such
time as any Person becomes an Acquiring Person, or (B) 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, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as

 27
 

 

the “Redemption Price”), and the Company may, at its
option, pay the Redemption Price in Common Shares (based on the “current
per-share market price,” as such term is defined in Section 11(d) hereof,
of the Common Shares at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors.  The redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and subject to such
conditions as the Board of Directors in its sole discretion may establish.  Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable pursuant to
Section 11(a)(ii) hereof prior to the expiration or termination of the
Company’ s right of redemption under this Section 23(b)(i).

(ii)           In addition,
the Board of Directors may, at its option, at any time after the time a Person
becomes an Acquiring Person and after the expiration of any period during which
the holder of Rights may exercise the rights under Section 11(a)(ii)
hereof but prior to any event described in clause (x), (y) or (z) of the first
sentence of Section 13 hereof, redeem all but not less than all of the
then outstanding Rights at the Redemption Price (x) in connection with any
merger, consolidation or sale or other transfer (in one transaction or in a
series of related transactions) of assets or earning power aggregating 50% or
more of the assets or earning power of the Company and its subsidiaries (taken
as a whole) in which all holders of Common Shares are treated alike and not
involving (other than as a holder of Common Shares being treated like all other
such holders) an Interested Stockholder or a Transaction Person or (y)(A) if
and for so long as the Acquiring Person is not thereafter the Beneficial Owner
of 15% or more of the then outstanding Common Shares, and (B) at the time of
redemption no other Persons are Acquiring Persons.

(c)           Immediately
upon the action of the Board of Directors ordering the redemption of the Rights
pursuant to Section 23(b) hereof, and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price.  The Company shall
promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption.  Within 10 days after such action of the Board
of Directors ordering the redemption of the Rights pursuant to
Section 23(b) hereof, the Company shall mail a notice of redemption to all
the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares, provided, however, that failure to give,
or any defect in, any such notice shall not affect the validity of such
redemption.  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.  Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection
with the purchase of Common Shares prior to the Distribution Date.

(d)           The Company
may, at its option, discharge all of its obligations with respect to any redemption
of the Rights by (i) issuing a press release announcing the manner of
redemption of the Rights and (ii) mailing payment of the Redemption Price to
the registered holders of the Rights at their last addresses as they appear on
the registry books of the Rights Agent or, prior to

 28
 

 

the Distribution Date, on the registry books of the
transfer agent for the Common Shares, and upon such action, all outstanding
Right Certificates shall be null and void without any further action by the
Company.

SECTION 24.       EXCHANGE.

(a)           The Board of
Directors may, at its option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the provisions
of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the “Exchange Ratio”).  Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding
Common Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Shares then outstanding.

(b)           Immediately
upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to Section 24(a) hereof 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
Common Shares equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio.  The Company shall
promptly give public notice of any such exchange; 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; provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange.  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 will state the method by which the exchange of the
Common Shares 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 void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.

(c)           In lieu of
issuing Common Shares in accordance with Section 24(a) hereof, the Company
may, if a majority of the Board of Directors then in office determines that
such action is necessary or appropriate and not contrary to the interests of
the holders of Rights, elect to (and, in the event that there are not
sufficient treasury shares and authorized but unissued Common Shares to permit
any exchange of the Rights in accordance with Section 24(a) hereof, the
Company shall) take all such action as may be necessary to authorize, issue or
pay, upon the exchange of the Rights, cash, property, Common Shares, other
securities or any combination thereof having an aggregate value equal to the
value of the Common

 29
 

 

Shares that otherwise would have been issuable
pursuant to Section 24(a) hereof, which aggregate value shall be
determined by a nationally recognized investment banking firm selected by a
majority of the Board of Directors then in office.  For purposes of the preceding sentence, the
value of the Common Shares shall be determined pursuant to Section 11(d) hereof.  Any election pursuant to this
Section 24(c) by the Board of Directors must be made by resolution within
60 days following the date on which the event described in
Section 11(a)(ii) hereof shall have occurred.  Following the occurrence of the event described
in Section 11(a)(ii) hereof, a majority of the Board of Directors then in
office may suspend the exercisability of the Rights for a period of up to 60
days following the date on which the event described in Section 11(a)(ii)
hereof shall have occurred to the extent that such directors have not
determined whether to exercise their rights of exchange under this
Section 24(c).  In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.

(d)           The Company
shall not be required to issue fractions of Common Shares or to distribute
certificates that evidence fractional Common Shares.  In lieu of such fractional Common Shares, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a
whole Common Share.  For the purposes of
this Section 24(d), the current market value of a whole Common Share shall
be the closing price of a Common Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately after
the date of the first public announcement by the Company that an exchange is to
be effected pursuant to this Section 24.

SECTION 25.       NOTICE OF CERTAIN EVENTS.

(a)           In case the
Company shall propose (i) to pay any dividend payable in stock of any class to
the holders of its Preferred Shares or to make any other distribution to the
holders of its Preferred Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preferred Shares rights or warrants to
subscribe for or to purchase any additional Preferred Shares or shares of stock
of any class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), (iv) to effect
any consolidation or merger into or with, 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 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole), to any
other Person, (v) to effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall give to each holder
of a Right Certificate, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for the purpose of
such stock dividend, or 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 Common Shares and/or the Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or the Preferred
Shares, whichever shall be the earlier.

 30

 

(b)           In case the
event set forth in Section 11(a)(ii) hereof shall occur, then the Company
shall as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.

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

AboveNet, Inc.

360 Hamilton Avenue

White Plains, NY 10601

Attention: 
General Counsel

with a copy (which shall not constitute notice) to:

Kronish Lieb Weiner &
Hellman LLP

1114 Avenue of the
Americas

New York, NY 10036

Attention:  Scott L. Kaufman, Esq.

Telecopy:  (212)
479-6275

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

American Stock Transfer
& Trust Company

6201 15th Avenue

Brooklyn, NY 11219

Attention: 
General Counsel

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

SECTION 27.       SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of the Rights.  From and after the Distribution Date, the
Company and the Rights Agent shall, if the Company so directs, from time to
time supplement or amend any provision of this Agreement without the approval
of any holders of Right Certificates in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein that may be defective or
inconsistent with any other provisions

 31
 

 

herein, or (iii) change any other provisions with
respect to the Rights that the Company may deem necessary or desirable; provided, however, that no such supplement
or amendment shall be made that would adversely affect the interests of the
holders of Rights (other than the interests of an Acquiring Person or its
Affiliates or Associates).  Any
supplement or amendment adopted during any period after any Person has become
an Acquiring Person but prior to the Distribution Date shall become null and
void unless such supplement or amendment could have been adopted by the Company
from and after the Distribution Date.  Any
such supplement or amendment shall be evidenced by a writing signed by the
Company and the Rights Agent.  Upon
delivery of a certificate from an appropriate officer of the Company that states
that the proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment
unless the Rights Agent shall have determined in good faith that such
supplement or amendment would adversely affect its interest under this
Agreement.  Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares.

SECTION 28.       DETERMINATION AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC.  For
all purposes of this Agreement, any calculation of the number
of Common Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares or any
other securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement.  The Board of Directors shall
have the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board, or the Company, or as
may be necessary or advisable in the administration of this Agreement,
including without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement).  All such actions, calculations,
interpretations and determinations that are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the Rights Agent and the
holders of the Rights, and (y) not subject the Board to any liability to the
holders of the Rights.

SECTION 29.       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 30.       BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).

SECTION 31.       SEVERABILITY.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

 32
 

 

SECTION 32.       GOVERNING LAW.  This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.

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

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

[Signature
Page Follows]

 33
 

 

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

	
  Attest:

  	
  AboveNet, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert Sokota

  	
   

  	
  By:

  	
  /s/ William G.
  LaPerch

  	
   

  
	
  Name: Robert
  Sokota

  	
  Name: William G. LaPerch

  
	
  Title: Senior
  Vice President and General

  	
  Title: President and Chief Executive Officer

  
	
  Counsel

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
  American Stock Transfer & Trust

  Company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Joseph Wolf

  	
   

  	
  By:

  	
  /s/ Herbert
  Lemmer

  	
   

  
	
  Name: Joseph
  Wolf

  	
  Name: Herbert Lemmer

  
	
  Title: Vice
  President

  	
  Title: General Counsel

  

 

 34

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