Document:

exv4w2

 

Exhibit 4.2

UT GROUP, LLC

888 SEVENTH AVENUE, SUITE 1600

NEW YORK, NY 10106

April 11, 2006

Youbet.com, Inc.

5901 DeSoto Avenue

Woodland Hills, CA 91367

Gentlemen:

     Reference is hereby made to that certain Stockholders Rights Agreement (the
“Agreement”), dated February 10, 2006, by and between Youbet.com, Inc. (“Youbet”)
and UT Group, LLC (“Holder”). All capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Agreement.

     Youbet has requested that Holder waive the requirement under Section 2(a) of the Agreement
that Youbet shall file with the Commission the Registration Statement within sixty (60) days after
the Closing for a period of ten (10) days. By its execution hereof, Holder hereby agrees to waive
the requirement under Section 2(a) of the Agreement that the Corporation shall file with the
Commission the Registration Statement within sixty (60) days after the Closing for a period of ten
(10) days from the date of this letter. Except as expressly set forth herein, the Agreement shall
remain in full force and effect without any modification, waiver or amendment thereto. For the
avoidance of doubt, the Required Effective Date shall continue to be June 9, 2006.

	 	 	 	 	 
	 	Very truly yours,

UT GROUP, LLC

 	 
	 	By:  	/s/ Robert E. Michalik
 	 
	 	 	Name:  	Robert E. Michalik 	 
	 	 	Its:  Vice President 	 
	 

Accepted and Agreed:

YOUBET.COM, INC.

	 	 	 	 	 
	By:

	 	/s/ Charles F. Champion	 	 
	 

	 	 

Name: Charles F. Champion
	 	 
	 

	 	Its: Chief Executive Officerexv4w1

 

Exhibit 4.1

SUNRISE SENIOR LIVING, INC.

and

AMERICAN STOCK TRANSFER & TRUST COMPANY,

as Rights Agent

RIGHTS AGREEMENT

dated as of April 24, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 1.

	 	Certain Definitions
	 	 	1	 
	Section 2.

	 	Appointment of Rights Agent
	 	 	6	 
	Section 3.

	 	Issue of Rights Certificates
	 	 	7	 
	Section 4.

	 	Form of Rights Certificates
	 	 	9	 
	Section 5.

	 	Countersignature and Registration
	 	 	10	 
	Section 6.

	 	Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates
	 	 	10	 
	Section 7.

	 	Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	11	 
	Section 8.

	 	Cancellation of Rights Certificates
	 	 	14	 
	Section 9.

	 	Reservation and Availability of Capital Stock
	 	 	14	 
	Section 10.

	 	Preferred Stock Record Date
	 	 	16	 
	Section 11.

	 	Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights
	 	 	16	 
	Section 12.

	 	Certificate of Adjusted Purchase Price or Number
of Shares
	 	 	25	 
	Section 13.

	 	Consolidation, Merger or Sale or Transfer of Assets
or Earning Power
	 	 	26	 
	Section 14.

	 	Fractional Rights and Fractional Shares
	 	 	30	 
	Section 15.

	 	Rights of Action
	 	 	32	 
	Section 16.

	 	Agreement of Rights Holders
	 	 	32	 
	Section 17.

	 	Rights Certificate Holder Not Deemed a Stockholder
	 	 	33	 
	Section 18.

	 	Duties of Rights Agent
	 	 	33	 
	Section 19.

	 	Compensation and Indemnification of the Rights Agent
	 	 	36	 
	Section 20.

	 	Merger or Consolidation or Change of Name of Rights Agent
	 	 	37	 
	Section 21.

	 	Change of Rights Agent
	 	 	38	 
	Section 22.

	 	Issuance of New Rights Certificates
	 	 	39	 
	Section 23.

	 	Redemption
	 	 	39	 
	Section 24.

	 	Exchange
	 	 	40	 
	Section 25.

	 	Notice of Certain Events
	 	 	41	 
	Section 26.

	 	Notices
	 	 	42	 
	Section 27.

	 	Supplements and Amendments
	 	 	43	 
	Section 28.

	 	Successors
	 	 	44	 
	Section 29.

	 	Determinations and Actions by the
Board, Etc.
	 	 	44	 
	Section 30.

	 	Benefits of this Agreement
	 	 	44	 
	Section 31.

	 	Severability
	 	 	45	 
	Section 32.

	 	Governing Law
	 	 	45	 
	Section 33.

	 	Counterparts
	 	 	45	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 34.

	 	Descriptive Headings
	 	 	45	 

EXHIBITS

	 	 	 
	 
	Exhibit A

	 	Form of Certificate of Designation, Preferences and Rights
	Exhibit B

	 	Summary of Rights
	Exhibit C

	 	Form of Rights Certificate

 

 

RIGHTS AGREEMENT

          RIGHTS AGREEMENT, dated as of April 24, 2006 (the “Agreement”), between SUNRISE SENIOR
LIVING, INC., a Delaware corporation (the “Company”), and AMERICAN STOCK TRANSFER & TRUST
COMPANY, as rights agent (the “Rights Agent”);

          WHEREAS, on April 17, 2006 (the “Rights Dividend Declaration Date”), the Board of
Directors of the Company authorized and declared a dividend of one preferred share purchase right
(a “Right”) for each share of common stock of the Company outstanding at the close of
business on the Record Date (as hereinafter defined), each Right representing the right to purchase
one one-thousandth of one share of Preferred Stock (as hereinafter defined), upon the terms and
subject to the conditions herein set forth, and further authorized and directed the issuance of one
Right (subject to adjustment as provided herein) with respect to each share of common stock of the
Company that shall become outstanding between the Record Date and the earlier of the Distribution
Date and the Expiration Date (as such terms are hereinafter defined); provided, however, that
Rights may be issued with respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance with Section 22 hereof;

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

     Section 1. Certain Definitions.

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

     (a) “Acquiring Person” shall mean any Person which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 20% or more of
the shares of Common Stock of the Company then outstanding, but shall not include (i) the
Company, (ii) any Subsidiary of the Company, or (iii) any employee benefit plan of the
Company or any Subsidiary of the Company, or any Person holding shares of Common Stock for
or pursuant to the terms of any such plan to the extent, and only to the extent, of such
shares of Common Stock so held. Notwithstanding anything in this definition of “Acquiring
Person” to the contrary:

     (i) no Person shall become an “Acquiring Person” as the result of an
acquisition of shares of Common Stock by the Company which, by reducing the number
of shares of Common Stock outstanding,

 

 

increases the proportionate number of shares of Common Stock beneficially owned by such Person to 20% or more of the shares of Common Stock
of the Company then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 20% or more of the shares of Common Stock of
the Company then outstanding by reason of share acquisitions by the Company and
shall, after such share acquisitions by the Company, become the Beneficial Owner of
any additional shares of Common Stock of the Company (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding Common Stock
or pursuant to a split or subdivision of the outstanding Common Stock), then such
Person shall be deemed to be an “Acquiring Person” if such Person is then the
Beneficial Owner of 20% or more of the Common Stock then outstanding;

     (ii) if the Board determines in good faith that a Person who would otherwise be
an “Acquiring Person,” as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently (including, without limitation, because
(A) such Person was unaware that it beneficially owned a percentage of Common Stock
that would otherwise cause such Person to be an “Acquiring Person” or (B) such
Person was aware of the extent of its Beneficial Ownership of Common Stock but had
no actual knowledge of the consequences of such Beneficial Ownership under this
Agreement), and such Person divests as promptly as practicable (as determined in
good faith by the Board) a sufficient number of shares of Common Stock so that such
Person would no longer be an “Acquiring Person,” as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed an
“Acquiring Person” for any purposes of this Agreement unless and until such Person
shall again become an “Acquiring Person”; and

     (iii) if, as of the date hereof or prior to the first public announcement of
the adoption of this Agreement, any Person is or becomes the Beneficial Owner of 20%
or more of the shares of Common Stock outstanding, such Person shall not be deemed
to be or to become an “Acquiring Person” unless and until such time as such Person
shall, after the first public announcement of the adoption of this Agreement, become
the Beneficial Owner of additional shares of Common Stock (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding Common Stock
or pursuant to a split or subdivision of the outstanding Common Stock), unless upon
becoming the Beneficial Owner of such additional shares of Common Stock, such Person
is not then the Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding.

 

 

     (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 Exchange
Act as in effect on the date of this Agreement.

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

     (i) which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, other 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,” (A) 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, (B) securities issuable upon exercise of Rights
at any time prior to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of a Triggering Event
which Rights were acquired by such Person or any of such Person’s Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22
hereof (the “Original Rights”) or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any Original Rights;

     (ii) which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has “beneficial
ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the “Beneficial Owner” of, or to
“beneficially own,” any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and Regulations
under the Exchange Act and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor report); or

 

 

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

provided, however, that nothing in this paragraph (c) shall cause a Person
engaged in business as an underwriter of securities to be the “Beneficial Owner” of, or to
“beneficially own,” any securities acquired through such Person’s participation in good
faith in a firm commitment underwriting until the expiration of forty days after the date of
such acquisition; provided further, however, that no Person who is an
officer, director or employee of the Company or any Subsidiary of the Company shall be
deemed, solely by reason of such Person’s status or authority as such, to be the “Beneficial
Owner” of, or to “beneficially own,” any securities that are “beneficially owned” (as
defined in this paragraph (c)), including, without limitation, in a fiduciary capacity, by
the Company or any Subsidiary of the Company, or by any other such officer, director or
employee of the Company or any Subsidiary of the Company.

     (d) “Board” shall mean the Board of Directors of the Company.

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

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

     (g) “Common Stock” when used with reference to the Company shall mean the
shares of Common Stock, par value $0.01 per share, of the Company. “Common Stock” when used
with reference to any Person other than the Company shall mean the class of capital stock
with the greatest aggregate voting power, or the class of equity securities or other equity
interests having power to control or direct the management of such Person.

     (h) “Company” shall mean Sunrise Senior Living, Inc., a Delaware corporation.

 

 

     (i) “Distribution Date” shall mean the earlier of (i) the Close of Business on
the tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the Close of Business on the Record Date),
or (ii) the Close of Business on the tenth Business Day (or, if such tenth Business Day occurs before the Record Date, the Close of
Business on the Record Date), or such specified or unspecified later date on or after the
Record Date as may be determined by action of the Board prior to such time as any Person
becomes an Acquiring Person, after the date of the commencement by any Person (other than
the Company, any Subsidiary of the Company or any employee benefit plan of the Company or of
any Subsidiary of the Company or any Person holding shares of Common Stock 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 any of the Persons referred to in the preceding parenthetical) to
commence, a tender or exchange offer the consummation of which would result in such Person
becoming the beneficial owner of 20% or more of the outstanding shares of Common Stock.

     (j) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended,
as in effect on the date of this Agreement.

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

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

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

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

     (o) “Preferred Stock” shall mean shares of Series D Junior Participating
Preferred Stock, par value $0.01 per share, of the Company, having the rights, powers and
preferences set forth in the form of Certificate of Designation, Preferences and Rights
attached hereto as Exhibit A.

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

     (q) “Purchase Price” shall have the meaning set forth in Section 4(a) and
Section 11(a)(ii) hereof.

 

 

     (r) “Record Date” shall mean the Close of Business on April 24, 2006.

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

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

     (u)
“Rights Agent” shall mean American Stock Transfer & Trust Company and any
successor thereto pursuant to this Agreement.

     (v) “Rights Certificate” shall have the meaning set forth in Section 3(d)
hereof.

     (w) “Rights Dividend Declaration Date” shall have the meaning set forth in the
recitals hereof.

     (x) “Section 11(a)(ii) Event” shall mean any event described in Section
11(a)(ii) hereof.

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

     (z) “Securities Act” shall mean the Securities Act of 1933, as amended, as in
effect on the date of this Agreement.

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

     (bb) “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 interests is
owned, directly or indirectly, by such Person, or is otherwise controlled by such Person.

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

     Section 2. Appointment of Rights Agent.

          The Company hereby appoints the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3 hereof,

 

 

shall, prior to the Distribution Date, also be the holders of Common Stock) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.

     Section 3. Issue of Rights Certificates.

          (a) As promptly as practicable following the Record Date, the Company shall send or deliver a
copy of a Summary of Rights to Purchase Preferred Stock, in substantially the form attached hereto
as Exhibit B (the “Summary of Rights”), to each record holder of Common Stock as of
the Close of Business on the Record Date (other than any Acquiring Person or any Associate or
Affiliate of any Acquiring Person) at the address of such holder shown on the records of the
Company. With respect to certificates for shares of Common Stock outstanding as of the Record
Date, until the Distribution Date, the Rights shall be evidenced by such certificates for the
Common Stock and the registered holders of the Common Stock shall also be the registered holders of
the associated Rights. Until the Distribution Date (or the earlier Expiration Date or Final
Expiration Date), the transfer of any certificate representing shares of Common Stock in respect of
which Rights have been issued shall also constitute the transfer of the Rights associated with the
shares of Common Stock represented thereby.

          (b) Rights shall be issued in respect of all shares of Common Stock issued (whether originally
issued or from the Company’s treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date; provided, however, Rights shall also be
issued to the extent provided in Section 22 hereof in respect of all shares of Common Stock which
are issued (whether originally issued or from the Company’s treasury) after the Distribution Date
and prior to the Expiration Date. Certificates representing such shares of Common Stock shall also
be deemed to be certificates for Rights, and shall bear the following legend (in addition to any
other legends that may be required):

This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Sunrise Senior Living, Inc.
(the “Company”) and American Stock Transfer & Trust Company (the “Rights
Agent”) dated as of April 24, 2006 as the same may be 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 shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. The Company shall mail to
the holder of this certificate a copy of the Rights Agreement as in

 

 

effect on the date of mailing without charge after receipt of a written request therefor.

Under certain circumstances set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null and void.

With respect to such certificates containing the foregoing legend, until the earlier of the
Distribution Date and the Expiration Date, the Rights associated with the Common Stock represented
by such certificates shall be evidenced by such certificates alone and registered holders of Common
Stock shall also be the registered holders of the associated Rights, and the transfer of any such
certificate shall also constitute the transfer of the Rights associated with the Common Stock
represented thereby. Notwithstanding this paragraph (b), the omission of the foregoing legend
shall not affect the enforceability of any part of this Agreement or the rights of any holder of
the Rights.

          (c) Until the Distribution Date, (i) the Rights shall be evidenced (subject to the provisions
of paragraph (a) of this Section 3) by the certificates for Common Stock registered in the names of
the holders thereof (which certificates for Common Stock shall also be deemed to be Rights
Certificates) and not by separate Rights Certificates, and (ii) the Rights shall be transferable
only in connection with the transfer of the underlying shares of Common Stock (including a transfer
to the Company).

          (d) As soon as practicable after the Distribution Date, the Company shall prepare and execute,
the Rights Agent shall countersign and the Company shall send or cause to be sent (and the Rights
Agent shall, if requested, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, a rights certificate, in substantially the form of
Exhibit C hereto (the “Rights Certificate”), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in
the number of Rights per share of Common Stock has been made pursuant to Section 11 hereof, at the
time of distribution of the Rights Certificates, the Company shall make necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights shall be evidenced solely by
such Rights Certificates.

 

 

     Section 4. Form of Rights Certificates.

          (a) The Rights Certificates (and the forms of election to purchase and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit C 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 on which the Rights may
from time to time be listed, or to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever issued, shall be dated as of the Record Date,
shall show the date of countersignature, and on their face shall entitle the holders thereof to
purchase such number of one one-thousandths of a share of Preferred Stock as shall be set forth
therein at the price set forth therein (such exercise price per one one-thousandth of a share, the
“Purchase Price”), but the amount and type of securities purchasable upon exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as provided herein.

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

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

 

 

          The Company shall instruct the Rights Agent in writing of the Rights which should be so
legended and shall supply the Rights Agent with such legended Rights Certificates.

     Section 5. Countersignature and Registration.

          (a) The Rights Certificates shall be executed on behalf of the Company by its Chief Executive
Officer, President, Chief Financial Officer, Vice President or General Counsel and by its Secretary
or Assistant Secretary either manually or by facsimile signature. The Rights Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of
the Company to sign such Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.

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

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

          (a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time
after the Close of Business on the Distribution Date and at or prior to the Close of Business on
the Expiration Date, any Rights Certificate or Certificates may be transferred, split up, combined
or exchanged for another Rights Certificate or Certificates, entitling the registered holder to
purchase a like number of one one-thousandths of a share of Preferred Stock (or following a
Triggering Event, Common Stock, other securities, cash, or other assets, as the case may be) as the
Rights Certificate or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any

 

 

registered holder desiring to transfer, split up, combine or exchange any Rights Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have
properly completed and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Certificates, as the case may be, as so requested. The Company may require payment
by the holder of Rights of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of Rights Certificates.

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

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

          (a) Subject to Section 7(e) hereof, the registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein including, without
limitation, in the restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and
Section 23(a) hereof) in whole or in part at any time after the Distribution Date upon surrender of
the Rights Certificate, with the form of election to purchase and the certificate on the reverse
side thereof duly and properly 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-thousandth of a share of Preferred Stock (or other securities, cash or other assets, as the
case may be) as to which the Rights are exercised, at or prior to the earliest of (i) the Close of
Business on April 24, 2016 (the “Final Expiration Date”), (ii) the time at which the Rights
are redeemed (the “Redemption Date”) as provided in Section 23 hereof or (iii) the time at
which the Rights are exchanged (the “Exchange Date”) as

 

 

provided in Section 24 hereof (the earliest of (i), (ii) and (iii) being herein referred to as the “Expiration Date”).

          (b) Each Right shall entitle the registered holder thereof to purchase one one-thousandth of
a share of Preferred Stock. The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $170, and shall be subject
to adjustment from time to time as provided in Section 11 and Section 13 hereof and shall be
payable in lawful money of the United States of America in accordance with paragraph (c) of this Section 7.

          (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase and the certificate duly and properly executed, accompanied by payment, with
respect to each Right so exercised, of the Purchase Price per one one-thousandth of a share of
Preferred Stock (or Common Stock, other securities, cash or other assets, as the case may be) to be
purchased and an amount equal to any applicable transfer tax or governmental charge in cash, or by
certified check or cashier’s check payable to the order of the Company, the Rights Agent shall,
subject to Section 18(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of
the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent)
certificates for the total number of one one-thousandths of a share of Preferred Stock to be
purchased, and the Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of one one-thousandths of a
share of Preferred Stock as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited by the transfer agent with the
depositary agent), and the Company shall direct the depositary to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names as may be designated
by such holder, and (iv) after receipt thereof, promptly deliver such cash, if any, to or upon the
order of the registered holder of such Rights Certificate. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company shall make all arrangements
necessary so that such securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.

 

 

          (d) In case the registered holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of,
the registered holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.

          (e) Notwithstanding anything in this Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a
transfer which a majority of the authorized number of members of the Board has determined is part
of an agreement, arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further action, and no
holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and of Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights 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. The Rights Agent shall endeavor to comply with the provisions
hereof to the extent it has received instructions from the Company concerning such matters.

          (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) properly completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request.

 

 

     Section 8. Cancellation of Rights Certificates.

          All Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered
to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any
other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company.

     Section 9. Reservation and Availability of Capital Stock.

          (a) The Company shall cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock (and following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, shares of Common Stock and/or other securities) that, as provided
in this Agreement, including Section 11(a)(iii) hereof, shall be sufficient to permit the exercise
in full of all outstanding Rights.

          (b) In the event the shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable upon the exercise of Rights become listed on
any national securities exchange or (for so long as it is not a national securities exchange) the
NASDAQ Stock Market, 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 (for so long as it is not a national securities exchange) the NASDAQ Stock Market upon official
notice of issuance upon such exercise.

          (c) The Company shall use its best efforts to (i) file, as soon as practicable following the
earliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration to
be delivered by the Company upon exercise of the Rights has been determined in accordance with this
Agreement, or as soon as is required by law following the Distribution Date, as the case may be, a
registration statement under the Securities Act with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the Expiration

 

 

Date. The Company shall also take such action as may be appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various
states in connection with the exercisability of the Rights. The Company may temporarily suspend,
for a period of time not to exceed 90 days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. In addition, if the Company shall
determine that a registration statement is required following the Distribution Date, the Company
may temporarily suspend the exercisability of the Rights until such time as a registration
statement has been declared effective. Upon any suspension of exercisability of Rights referred to
in this Section 9(c), the Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect, in each case with simultaneous written notice to the Rights
Agent. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable and shall be null
and void so long as held by a holder in any jurisdiction where the requisite qualification to the
issuance to such holder, or the exercise by such holder, of the Rights in such jurisdiction shall
not have been obtained or be obtainable, or the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared effective. The Rights
Agent may assume that any Right exercised is permitted to be exercised under applicable law and
shall have no liability for acting in reliance upon such assumption.

          (d) The Company shall take all such action as may be necessary to ensure that all one
one-thousandths of a share of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates +-for such shares (subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and non-assessable.

          (e) The Company shall pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or delivery of the Rights Certificates
or of any certificates for a number of one one-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax or charge which may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of
certificates for a number of one one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that of the registered holder of
the Rights Certificate evidencing Rights surrendered for exercise or to issue or deliver any
certificates for a number of one one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that of the registered holder
upon the exercise of any Rights until any such tax or charge shall

 

 

have been paid (any such tax or charge being payable by the holder of such Rights Certificate at the time of surrender) or until it
has been established to the Company’s satisfaction that no such tax or charge is due.

     Section 10. Preferred Stock Record Date.

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

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

          The Purchase Price, the number and kind of shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

          (a) (i) In the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of
shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise provided in this Section
11(a) and in Section 7(e) hereof, the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred

 

 

Stock or the number and kind of shares of capital stock issuable on such date, as the case may be, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive, upon payment of the aggregate
adjusted Purchase Price then in effect necessary to exercise a Right in full, the aggregate number
and kind of shares of Preferred Stock or the number and kind of shares of capital stock, as the
case may be, which, if such Right had been exercised immediately prior to such date and at a time
when the transfer books of the Company for the Preferred Stock (or other capital stock, as the case
may be) 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 which would require an adjustment under both this
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 23 and Section 24 hereof, in the event that any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person organized, appointed or established by the Company for or
pursuant to the terms of any such plan), alone or together with its Affiliates and Associates,
shall become an Acquiring Person, unless the event causing such Person to become an Acquiring
Person is a transaction set forth in Section 13(a) hereof, proper provision shall be made so that
promptly following the Redemption Period (as defined in Section 23(a) hereof), each holder of a
Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof and payment of an amount equal to the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share
of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number of one
one-thousandths of a share of Preferred Stock for which a Right was or would have been exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, whether or not such Right
was then exercisable, and (y) dividing that product (which, following such first occurrence, shall
thereafter be referred to as the “Purchase Price” for each Right and for all purposes of
this Agreement except to the extent set forth in Section 13 hereof) by 50% of the current market
price per share of Common Stock (determined pursuant to Section 11(d) hereof) on the date of such
first occurrence (such number of shares, the “Adjustment Shares”).

          (iii) The Company at its option may substitute for a share of Common Stock issuable upon the
exercise of Rights in accordance with the foregoing subparagraph (ii) such number or fractions of
shares of Preferred Stock

 

 

having an aggregate market value equal to the current per share market price of one share of Common Stock. In the event that the number of shares of Common Stock which
is authorized by the Company’s Amended and Restated Certificate of Incorporation but not
outstanding, or reserved for issuance for purposes other than upon exercise of the Rights, is not
sufficient to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Board shall, to the extent permitted by applicable law and by any agreements
or instruments then in effect to which the Company is a party, (A) determine the excess of (x) the
value of the Adjustment Shares issuable upon the exercise of a Right (the “Current Value”)
over (y) the Purchase Price (such excess, the “Spread”), and (B) with respect to each Right
(subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the
Adjustment Shares, upon exercise of a Right and payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of Preferred Stock which the Board has deemed to have the same value as shares of Common Stock) (such shares of equity securities being
herein called “common stock equivalents”), (4) debt securities of the Company, (5) other
assets or (6) any combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board based upon the advice of an
investment banking firm selected by the Board; provided, however, if the Company
shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days
following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Company’s right of redemption pursuant to Section 23(a) hereof expires (the later of (x)
and (y) being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the extent available), and then, if
necessary such number of fractions of shares of Preferred Stock (to the extent available) and then,
if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread.

          If, upon the occurrence of a Section 11(a)(ii) Event, the Board shall determine in good faith
that it is likely that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, then if the Board so elects, the 30 day period set
forth above may be extended to the extent necessary, but not more than 90 days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such period, as it may be extended, the “Substitution
Period”). To the extent that action is to be taken pursuant to the preceding provisions of
this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to

 

 

decide the appropriate form of distribution to be made pursuant to the first sentence of this Section 11(a)(iii) and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the
Common Stock shall be the current market price (as determined pursuant to Section 11(d) hereof) per
share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any “common stock
equivalent” shall be deemed to have the same value as the Common Stock on such date. The Board
may, but shall not be required to, establish procedures to allocate the right to receive shares of
Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section
11(a)(iii).

          (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same rights, privileges and preferences as the
shares of Preferred Stock (“equivalent preferred stock”)) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share
of equivalent preferred stock (or having a conversion price per share, if a security convertible
into Preferred Stock or equivalent preferred stock) less than the current per share market price of
the Preferred Stock (as determined pursuant to Section 11(d) hereof) on such record date, the
Purchase Price to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock or equivalent preferred stock outstanding on
such record date, plus the number of shares of Preferred Stock or equivalent preferred stock which
the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent
preferred stock so to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock or equivalent preferred stock outstanding on
such record date, plus the number of additional shares of Preferred Stock and/or equivalent
preferred stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); 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, whose determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. Shares of Preferred Stock or equivalent preferred stock
owned by or held for the account of the Company shall not be deemed outstanding for the purpose of
any such computation.

 

 

Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if such record date had
not been fixed.

          (c) In case the Company shall fix a record date for a distribution to all holders of Preferred
Stock (including any such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular quarterly cash dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock), or 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 current per share market price of the Preferred Stock
(as determined pursuant to Section 11(d) hereof) on such record date, less the fair market value
(as determined in good faith by the Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock, and the denominator of which shall be such current per
share market price of the Preferred Stock; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company issuable upon exercise of one Right. Such
adjustment 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 under this Agreement, the “current per share
market price” of the Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to, but not including, such date; provided,
however, that in the event that the current per share market price of the Common Stock is
determined during a period following the announcement by the issuer of such Common Stock of (i) a
dividend or distribution on such Common Stock payable in shares of such Common Stock or securities
convertible into such Common Stock (other than the Rights), or (ii) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day
period, as set forth above, 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

 

 

take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common
Stock 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 shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System (“NASDAQ”) or such other system then
in use, or, if on any such date the shares of Common Stock 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 shares of Common Stock selected by the Board.

          If on any such date no market maker is making a market in the Common Stock, the fair value of
such shares on such date as determined in good faith by the Board shall be used. The term “Trading
Day” shall mean a day on which the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the transaction of business, or, if the
shares of Common Stock are not listed or admitted to trading on any national securities exchange,
the term “Trading Day” shall mean a Monday, a Tuesday, a Wednesday, a Thursday or a Friday
on which banking or trust institutions in the State of New York are not authorized or obligated by
law or executive order to close. If the Common Stock is not publicly held or not listed or traded,
“current market price” shall mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.

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

 

 

held or so listed or traded, the “current per share market price” of the Preferred Stock shall mean the fair value per share as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the “current market price” of one one-thousandth of
a share of Preferred Stock shall be equal to the “current per share market price” of one share of
Preferred Stock divided by 1,000.

          (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at least one percent
(1%) in such 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 ten-thousandth of a share of Common Stock or other share or one-millionth of a share
of Preferred Stock, as the case may be. Notwithstanding the first sentence of this Section 11(e),
an adjustment required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii) the Expiration Date.

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

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

          (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and
(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-thousandths of a share of Preferred Stock (calculated to the nearest one-millionth of a share)
obtained by (i) multiplying (x) the number of one one-thousandths of a

 

 

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 lieu of any adjustment in the number of one one-thousandths of a
share of Preferred Stock issuable 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-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest 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
Rights Certificates have been issued, shall be at least ten days later than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Rights Certificates held by such holders prior to the date of adjustment,
and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date specified in the public
announcement.

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

 

 

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

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

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

          (n) The Company shall not, at any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof) or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger or sale there are any rights,
warrants

 

 

or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or
(y) prior to, simultaneously with or immediately after such consolidation, merger or sale, the
stockholders of 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.

          (o) Except as permitted by Section 23, Section 24 or Section 27 hereof, the Company shall not
take (or permit any Subsidiary to take) after the Distribution Date any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.

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

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

          Whenever an adjustment is made as provided in Section 11 or Section 13 hereof, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a brief statement of
the facts and computations accounting for such adjustment, (b) promptly file with the Rights Agent
and with each transfer agent for the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail or deliver a brief summary thereof to each holder of a Rights Certificate
(or, if prior to the Distribution Date, to each holder of a certificate representing shares of
Common Stock) 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) Subject to Section 23 hereof, in the event that, following the Stock Acquisition Date,
directly or indirectly,

     (x) the Company shall consolidate with, or merge with and into, any other
Person (other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof),

     (y) any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or merge with or into,
the Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or of the Company) or
cash or any other property, or

     (z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons (other than the Company and/or any of its Subsidiaries in one
or more transactions each of which complies with Section 11(o) hereof),

then, and in each such case, proper provision shall be made so that:

     (i) each holder of a Right, except as provided in Section 7(e) hereof, shall,
upon the expiration of the Redemption Period (as defined in Section 23(a) hereof),
thereafter have the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, non-assessable and freely tradable shares
of Common Stock of the Principal Party (as hereinafter defined), not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by

     (1) multiplying the then current Purchase Price by the number of one
one-thousandths of a share of Preferred Stock for

 

 

which a Right was
exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence
of a Section 13 Event, multiplying the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and

     (2) dividing that product (which product, following the first occurrence
of a Section 13 Event, shall be referred to as the “Purchase Price”
for each Right and for all purposes of this Agreement) by 50% of the current
market price per share of the shares of Common Stock of such Principal Party
on the date of consummation of such Section 13 Event (or the fair market value
on such date of other securities or property of the Principal Party, as
provided for herein);

     (ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement;

     (iii) the term “Company” shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first occurrence of a
Section 13 Event;

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

     (v) the provisions of Section 11(a)(ii) hereof shall be of no effect following
the first occurrence of any Section 13 Event.

          (b) “Principal Party” shall mean

     (i) in the case of any transaction described in clause (x) or (y) of the first
sentence of Section 13(a) hereof, (A) the Person (including the Company as successor
thereto or as the surviving corporation) that is the issuer of any securities into
which shares of Common Stock of the

 

 

Company are converted in the merger or
consolidation so described, or, if there is more than one such issuer, the issuer of
Common Stock that has the highest aggregate current market price (as determined
pursuant to Section 11(d) hereof) and (B) if no securities or other equity interests
are so issued, the Person (including the Company as successor thereto or as the
surviving corporation) that is the other constituent party to such merger or
consolidation, or, if there is more than one such Person, the Person that is a
constituent party to such merger or consolidation, the Common Stock of which has the
highest aggregate current market price (as determined pursuant to Section 11(d)
hereof); and

     (ii) in the case of any transaction described in clause (z) of the first
sentence of Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such transaction
or transactions receives the same portion of the assets or earning power transferred
pursuant to such transaction or transactions or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever of such
Persons is the issuer of Common Stock having the highest aggregate current market
price (as determined pursuant to Section 11(d) hereof);

provided, however, that in any such case: (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary
of another Person the Common Stock of which is and has been so registered, “Principal Party” shall
refer to such other Person; (2) if the Common Stock of such Person is not and has not
been so registered and such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks 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 Stock having the
greatest aggregate market value; and (3) if the Common Stock of such Person is not and has not been
so registered and such Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in
(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 Section 13 Event unless the Principal Party shall
have a sufficient number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance with this Section
13 and unless prior thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a)
and (b) of this Section 13 and further providing that, as soon as practicable after the date of any
such Section 13 Event, the Principal Party shall:

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

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

     (iii) use its best efforts to obtain any necessary regulatory approvals in
respect of the securities purchasable upon exercise of outstanding Rights; and

     (iv) use its best efforts, if such Common Stock of the Principal Party shall
be listed or admitted to trading on the New York Stock Exchange or on another
national securities exchange or (for so long as it is not a national securities
exchange) on the NASDAQ
Stock Market, to list or admit to trading (or continue the listing of) the Rights
and the securities purchasable upon exercise of the Rights on the New York Stock
Exchange or on such securities exchange or (for so long as it is not a national
securities exchange) on the NASDAQ Stock Market, or if the securities of the
Principal Party purchasable upon exercise of the Rights shall not be listed or
admitted to trading on the New York Stock Exchange or a national securities exchange
or (for so long as it is not a national securities exchange) on the NASDAQ Stock
Market, to cause the Rights and the securities purchasable upon exercise of the
Rights to be reported by such other system then in use.

          (d) In case the Principal Party that is to be a party to a transaction referred to in this
Section 13 has at the time of such transaction, or immediately following such transaction shall
have, a provision in any of its authorized securities

 

 

or in its certificate or articles of
incorporation or by-laws or other instrument governing its affairs, or any other agreements or
arrangements, which provision would have the effect of (i) causing such Principal Party to issue,
in connection with, or as a consequence of, the consummation of a transaction referred to in this
Section 13, shares of Common Stock of such Principal Party at less than the then current market
price per share (as determined pursuant to Section 11(d) hereof) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less than such then current market price
(other than to holders of Rights pursuant to this Section 13), (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of this Section 13 or (iii) otherwise eliminating or
substantially diminishing the benefits intended to be afforded by the Rights in connection with, or
as a consequence of, the consummation of a transaction referred to in this Section 13, then, in
such event, the Company shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such Principal Party shall have been
cancelled, waived or amended, or that the authorized securities shall be redeemed, so that the
applicable provision shall have no effect in connection with, or as a consequence of, the
consummation of such transaction.

          (e) The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at
any time after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in Section 13(a) hereof.

     Section 14. Fractional Rights and Fractional Shares.

          (a) The Company shall not be required to issue fractions of Rights except prior to the
Distribution Date as provided in Section 11(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the current market value of
the 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, or, in case no such sale takes place on such day, the average of the high bid
and low asked prices, in either case as reported by 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 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. 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 shall be used. In the event the Rights are listed or admitted to trading on a national
securities exchange, 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 high bid and low asked prices,
regular way, in either case as reported in the principal consolidated transaction reporting system
with respect to the national securities exchange on which the Rights are listed or admitted to
trading.

          (b) The Company shall not be required to issue fractions of shares of Preferred Stock (other
than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share
of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one one-thousandth of a
share of Preferred Stock. For purposes of this Section 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one one-thousandth of the closing price of a
share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of such
exercise.

          (c) Following the occurrence of one of the events specified in Section 11 hereof giving rise
to the right to receive Common Stock, common stock equivalents or other securities upon the
exercise of a Right, the Company shall not be required to issue fractions of shares of Common
Stock, common stock equivalents or other securities upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock, common stock equivalents or other
securities. In lieu of fractional shares of Common Stock, common stock equivalents or other
securities, the Company may pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same fraction of the current
market value of one share of Common Stock, common stock equivalents or other securities. For
purposes of this Section 14(c), the current market value of one share of Common Stock shall be the
closing price of one share of Common Stock (as determined pursuant to Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of such exercise.

 

 

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

     Section 15. Rights of Action.

          All rights of action in respect of this Agreement, except the rights of action vested in the
Rights Agent pursuant to Section 18 and Section 19 hereof, are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), 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 Rights Certificate in the manner provided in such Rights Certificate
and in this Agreement. Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations of, the
obligations hereunder of any Person subject to this Agreement.

     Section 16. Agreement of Rights Holders.

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

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

          (b) after the Distribution Date, the Rights Certificates shall be transferable only on the
registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for
such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate form of assignment and the certificate contained therein duly completed and executed;

          (c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem
and treat the Person in whose name the Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Rights

 

 

Certificates
or the associated Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the
last sentence of Section 7(e) hereof, shall be affected by any notice to the contrary; and

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

     Section 17. Rights Certificate Holder Not Deemed a Stockholder.

          No holder, as such, of any Rights Certificate shall be entitled to vote, to receive dividends
or to be deemed for any purpose the holder of the Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights represented thereby, nor
shall
anything contained herein or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a 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 Rights
Certificate shall have been exercised in accordance with the provisions hereof.

     Section 18. Duties of Rights Agent.

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

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

 

 

          (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter (including, without limitation, the identity of
any Acquiring Person and the determination of “current market price”) be proved or established by
the Company prior to taking or suffering or omitting to take any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed
to be conclusively proved and established by a certificate signed by any person believed by the
Rights Agent to be any one of the Chief Executive Officer, President, Chief Financial Officer, Vice
President or General Counsel of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent, and the Rights Agent shall incur no liability, for
or in respect of any action taken, omitted or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.

          (c) The Rights Agent shall be liable hereunder only for its own negligence, bad faith or
willful misconduct.

          (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights Certificates (except as to 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 is serving as an administrative agent and shall not be under any
responsibility in respect of the validity of any provision of this Agreement or the execution and
delivery of this Agreement (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void pursuant to Section 7(e)
hereof) or any adjustment required under any of the provisions hereof or responsible for the
manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after the Rights Agent’s actual receipt of notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or shares of Preferred Stock to be
issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Common
Stock or shares of Preferred Stock will, when so issued, be validly authorized and issued, fully
paid and non-assessable, nor shall the Rights Agent be responsible for the legality of the terms
hereof in its capacity as an administrative agent.

 

 

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

          (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any person believed by the Rights Agent to be any one
of the Chief Executive Officer, President, Chief Financial Officer, Vice President or General
Counsel 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, omitted to be taken or suffered to be
taken 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, suffered or omitted by the Rights Agent under this Agreement and the
date on or after which such action shall be taken or suffered or such omission shall be effective.
The Rights Agent shall not be liable for any action taken or suffered by, or omission of, the
Rights
Agent in accordance with a proposal included in any such application on or after the date specified
in such application (which date shall not be less than five Business Days after the date any
officer of the Company actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received written instruction in
response to such application specifying the action to be taken, suffered or omitted.

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

 

 

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

          (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of election to purchase, as
the case may be, has either not been properly completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.

          (l) The Rights Agent undertakes only the express duties and obligations imposed on it by this
Agreement and no implied duties or obligations shall be read into this Agreement against the Rights
Agent.

          (m) In addition to the foregoing, the Rights Agent shall be protected and shall incur no
liability for, or in respect of, any action taken or omitted by it in connection with its
administration of this Agreement if such acts or omissions are in reliance upon (i) the proper
execution of the certification concerning beneficial ownership appended to the form of assignment
and the form of election to purchase attached to the Rights Certificate unless the Rights Agent
shall have actual knowledge that, as executed, such certification is untrue, or (ii) the
non-execution of such certification including, without limitation, any refusal to honor any
otherwise permissible assignment or election by reason of such non-execution.

          (n) The Company agrees to give the Rights Agent prompt written notice of any event or
ownership which would prohibit the exercise or transfer of the Rights Certificates.

     Section 19. Compensation and Indemnification of the Rights Agent.

          (a) The Company agrees to pay to the Rights Agent such compensation as shall be agreed in
writing between the Company and the Rights Agent for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and
expenses 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, its officers, employees, agents and directors for, and to hold each of them harmless
against, any loss, liability or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for any action taken, suffered or omitted by the Rights
Agent or such other indemnified party in connection with the acceptance and administration of this
Agreement and

 

 

the exercise of its duties hereunder, including, but not limited to, the costs and
expenses of defending against any claim (whether asserted by the Company, a holder of Rights, or
any other Person) of liability in the premises. The indemnity provided for hereunder shall survive
the expiration of the Rights and the termination of this Agreement.

          (b) The Rights Agent shall be authorized and protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its administration of
this Agreement or the exercise of its duties hereunder in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine and to be signed and
executed by the proper person or persons.

     Section 20. Merger or Consolidation or Change of Name of Rights Agent.

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

          (b) In case at any time the name of the Rights Agent shall be changed and at any such time any
of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name or in

 

 

its changed
name; and in all such cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.

     Section 21. Change of Rights Agent.

          The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days’ notice in writing mailed to the Company. The Company
may remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and the Preferred Stock by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the
Rights
Agent. If the Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by the Company), then
the Rights Agent or the registered holder of any Rights Certificate may, at the expense of the
Company, 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 (i) a
Person organized and doing business under the laws of the United States or the State of Delaware or
New York (or of any other state of the United States so long as such Person is authorized to do
business in the State of Delaware or New York), in good standing, having an office in the State of
Delaware or New York which is authorized under such laws to exercise corporate trust power and is
subject to supervision or examination by federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and surplus of at least $50 million or (ii) an
affiliate of such a Person. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and mail a notice
thereof in writing to the registered holders of the Rights Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.

 

 

     Section 22. Issuance of New Rights Certificates.

          Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be
approved by the Board to reflect any adjustment or change in the Purchase Price per share and the
number or kind of class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution Date (other than
upon exercise of a Right) and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board, issue
Rights Certificates representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the Person to whom such
Rights Certificates would be issued, and (ii) no such Rights Certificates shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.

     Section 23. Redemption.

          (a) The Board may, at its option, at any time during the period commencing on the date first
set forth above and ending on the earlier of (i) the Close of Business on the tenth day following
the Stock Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to the
Record Date, the Close of Business on the tenth day following the Record Date), or (ii) the Close
of Business on the Final Expiration Date (the “Redemption Period”), cause the Company to
redeem all but not less than all the then outstanding Rights at a redemption price of $.005 per
Right, as such amount may be appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”); provided, however, that, if the
Board authorizes redemption of the Rights on or after the time a Person becomes an Acquiring
Person, then such authorization shall require the concurrence of two-thirds of the authorized
number of members of the Board. Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii)
Event or a Section 13 Event until such time as the Company’s right of redemption hereunder has
expired. The redemption of the Rights by the Board pursuant to this paragraph (a) may be made
effective at such time, on such basis and with such conditions as the Board in its sole discretion
may establish. The Company may, at

 

 

its option, pay the Redemption Price in cash, shares of Common
Stock (based on the current market price of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board.

          (b) Immediately upon the action of the Board ordering the redemption of the Rights, evidence
of which shall have been filed with the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights shall terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. Promptly after the action of the Board
ordering the redemption of the Rights, the Company shall give notice of such redemption to the
Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock; provided, however, that
the failure to give, or any defect in, any such notice shall not affect the validity of such
redemption. Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.

     Section 24. Exchange.

          (a) The Board 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 null and void pursuant to the provisions of Section 7(e) hereof) for shares of
Common Stock at an exchange ratio of one share of Common Stock per each outstanding Right, as
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 shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Stock for
or pursuant to the terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Stock then outstanding. The
exchange of the Rights by the Board may be made effective at such time, on such basis and with such
conditions as the Board in its sole discretion may establish.

          (b) Immediately upon the action of the Board ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the number of such Rights held
by such holder

 

 

multiplied by the Exchange Ratio. The Company shall promptly give public notice of
any such exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange shall state the method by which the exchange of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights that will be exchanged.
Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.

          (c) In any exchange pursuant to this Section 24, the Company, at its option, may substitute
common stock equivalents (as defined in Section 11(a)(iii) hereof) for shares of Common Stock
exchangeable for Rights, at the initial rate of one common stock equivalent for each share of
Common Stock, as appropriately adjusted to reflect adjustments in dividend, liquidation and voting
rights of common stock equivalents pursuant to the terms thereof, so that each common stock
equivalent delivered in lieu of each share of Common Stock shall have essentially the same
dividend, liquidation and voting rights as one share of Common Stock.

          (d) In the event that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of the Rights.

          (e) The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock. In lieu of such
fractional shares, the Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of Common Stock. For the purposes of
this paragraph (e), the current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second and the following sentences
of Section 11(d) hereof) for the Trading Day immediately prior to the date of exchange pursuant to
this Section 24.

     Section 25. Notice of Certain Events.

          (a) In case the Company shall propose, at any time after the Distribution Date, (i) to pay any
dividend payable in capital stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of

 

 

Preferred Stock (other than a regular quarterly cash dividend out of earnings or retained earnings)
or (ii) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of capital stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding Preferred Stock), or
(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 more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person, or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii)
above at least 20 days prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action and, in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of participation therein by the
holders of the shares of Preferred Stock, whichever shall be the earlier.

          (b) In case any Section 11(a)(ii) Event shall occur, then, in any such case, (i) the Company
shall as soon as practicable thereafter give to each holder of a Rights Certificate and to the
Rights Agent, to the extent feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the paragraph (a) of
this Section 25 to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.

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

Sunrise Senior Living, Inc.

7902 Westpark Drive

McLean, Virginia 22102

Attention: General Counsel

 

 

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

American Stock Transfer & Trust Company

59 Maiden Lane

New York, N.Y. 10038

Attention: Corporate Trust

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

     Section 27. Supplements and Amendments.

          Except as provided in the penultimate sentence of this Section 27, at any time prior to the
time at which any Person becomes an Acquiring Person, the Company may in its sole and absolute
discretion, and the Rights Agent shall if the Company so directs, supplement or amend any provision
of this Agreement in any respect without the approval of any holders of the Rights. At any time
following the time at which any Person becomes an Acquiring Person, except as provided in the
penultimate sentence of this Section 27, the Company may, and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of any holders of
Rights; provided, however, that no such supplement or amendment may (a) adversely
affect the interests of the holders of Rights as such (other than an Acquiring Person or any
Affiliate or Associate of an Acquiring Person), (b) cause this Agreement again to become amendable
other than in accordance with this sentence or (c) cause the Rights again to become redeemable at
such time as the Rights are not then redeemable. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which changes the Redemption
Price. Upon the delivery of a certificate from an appropriate officer of the Company which states
that the supplement or amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment; provided, however, that any
supplement or amendment that does not amend Sections 18, 19, 20 or 21 hereof or this Section 27 in
a manner adverse to the Rights Agent shall become effective immediately upon execution by the
Company, whether or not also executed by the Rights Agent.

 

 

     Section 28. Successors.

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

     Section 29. Determinations and Actions by the Board, Etc.

          For all purposes of this Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board (with, where specifically provided for herein, the
concurrence of two-thirds of the authorized number of members of the Board) shall have the
exclusive power and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board (with, where specifically provided for herein, the concurrence of
two-thirds of the authorized number of members of the Board) or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement (including without
limitation a determination to redeem or not redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations which are done or made by the Board
(with, where specifically provided for herein, the concurrence of two-thirds of the authorized
number of members of the Board) in good faith, shall be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other Persons.

     Section 30. Benefits of this Agreement.

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

 

 

     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.

     Section 32. Governing Law.

          This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be
a contract made under the internal laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State; provided,
however, that the rights and obligations of the Rights Agent shall be governed by and
construed in accordance with the internal laws of the State of Delaware.

     Section 33. Counterparts.

          This Agreement may be executed in any number of counterparts. It shall not be necessary that
the signature of or on behalf of each party appears on each counterpart, but it shall be sufficient
that the signature of or on behalf of each party appears on one or more of the counterparts. All
counterparts shall collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of counterparts containing the
respective signatures of or on behalf of all of the parties.

     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.

 

 

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

	 	 	 	 	 	 	 	 	 
	 	 	SUNRISE SENIOR LIVING, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	/s/ Paul J. Klaassen	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Paul J. Klaassen	 	 
	 

	 	 	 	Title:
	 	Chairman and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Rights Agent	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ DeVonna Mosley	 	 
	 	 	 	 	   	 	 
	 

	 	 	 	Name:	 	DeVonna Mosley	 	 
	 

	 	 	 	Title:	 	Assistant Vice President	 	 

 

 

Exhibit A

CERTIFICATE OF DESIGNATION, PREFERENCES AND

RIGHTS OF

SERIES D JUNIOR PARTICIPATING PREFERRED STOCK

OF

SUNRISE SENIOR LIVING, INC.

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware

          I, Paul J. Klaassen, Chairman of the Board of Directors and Chief Executive Officer of Sunrise
Senior Living, Inc., a corporation organized and existing under the General Corporation Law of the
State of Delaware (the “Corporation”), in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:

          That pursuant to the authority conferred upon the Board of Directors of the Corporation (the
“Board”) by the Restated Certificate of
Incorporation, as amended, of the Corporation (the “Certificate
of Incorporation”), the Board on April 17,
2006 adopted the following resolution creating a series of 90,000 shares of Preferred Stock
designated as Series D Junior Participating Preferred Stock:

          RESOLVED, that pursuant to the authority granted to and vested in the Board in accordance with
the provisions of its Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount thereof and the voting
rights or powers, preferences and relative, participating, optional and other special rights of the
shares of such series, and the qualifications, limitations or restrictions thereof are as follows:

          Section 1. Designation and Amount. The shares of such series, par value $0.01 per
share, shall be designated as “Series D Junior Participating Preferred Stock” and the number of
shares constituting such series shall be 90,000. Such number of shares may be increased or
decreased by resolution of the Board; provided, that no decrease shall reduce the number of shares
of Series D Junior Participating Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any
outstanding

 

 

securities issued by the Corporation convertible into Series D Junior Participating Preferred
Stock.

          Section 2. Dividends and Distributions.

          (A) Subject to the prior and superior rights of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the shares of Series D Junior Participating Preferred
Stock with respect to dividends, the holders of shares of Series D Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board out of funds legally
available for the purpose, quarterly dividends payable in cash or in kind as provided herein on the
1st day of February, May, August and November, in each year (each such date being referred to
herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend
Payment Date after first issuance of a share or fraction of a share of Series D Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $10.00 or (b) subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of voting common stock, par value $0.01 per share, of the Corporation (the
“Common Stock”), or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date
since the first issuance of any share or fraction of a share of Series D Junior Participating
Preferred Stock. If any Quarterly Dividend Payment Date is not a Business Day, then the dividend
which would otherwise have been payable on such Quarterly Dividend Payment Date may be paid on the
next succeeding Business Day with the same force and effect as if paid on such Quarterly Dividend
Payment Date, and no interest or additional dividends or other sums shall accrue on the amount so
payable from such Quarterly Dividend Payment Date to such next succeeding Business Day. In the
event at any time after April 17, 2006 (the “Rights Declaration Date”), the Corporation
shall (i) declare or pay any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of shares of Series D Junior
Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

          (B) The Board shall declare a dividend or distribution on the Series D Junior Participating
Preferred Stock as provided in paragraph (A) above

 

 

immediately after it declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share on the
Series D Junior Participating Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.

          (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series D Junior
Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series D Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date set for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series D Junior Participating Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which event such dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares
of Series D Junior Participating Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board may fix a record
date for the determination of holders of shares of Series D Junior Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon, which record date shall
be no more than 60 days prior to the date fixed for the payment thereof.

          Section 3. Certain Restrictions.

          (A) Whenever dividends or distributions payable on the Series D Junior Participating Preferred
Stock as provided in Section 2 are in arrears, thereafter and until such dividends and
distributions, whether or not declared, on shares of Series D Junior Participating Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:

               (i) declare or pay dividends on, or make any other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series D Junior Participating Preferred Stock;
or

               (ii) declare or pay dividends on, or make any other distributions on, any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with
the Series D Junior Participating

 

 

Preferred Stock, except dividends paid ratably on the Series D Junior Participating Preferred Stock
and all such parity stock on which dividends are payable in proportion to the total amounts to
which the holders of all such shares are then entitled; or

               (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series D
Junior Participating Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series D Junior Participating Preferred Stock; or

               (iv) redeem or purchase or otherwise acquire for consideration any shares of Series D Junior
Participating Preferred Stock, or any shares of stock ranking on a parity with the Series D Junior
Participating Preferred Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board) to all holders of such shares upon such terms as the
Board, after consideration of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.

          (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation
could purchase or otherwise acquire such shares at such time and in such manner under paragraph (A)
of this Section 3.

          Section 4. Liquidation, Dissolution or Winding Up.

          (A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series D Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of Series D Junior
Participating Preferred Stock shall have received $170,000 per share, plus any unpaid dividends and
distributions payable thereon, whether or not declared, to the date of such payment (the
“Series D Liquidation Preference”). Following the payment of the full amount of the Series
D Liquidation Preference, no additional distributions shall be made to the holders of Series D
Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the “Common Adjustment”) equal to the quotient
obtained by dividing (i) the Series D Liquidation Preference by (ii) 1,000 (as appropriately
adjusted as set forth in subparagraph (C) below to reflect such events as stock splits, stock
dividends and

 

 

recapitalizations with respect to the Common Stock) (such number in clause (ii) immediately above
being referred to as the “Adjustment Number”). Following the payment of the full amount of
the Series D Liquidation Preference and the Common Adjustment in respect of all outstanding shares
of Series D Junior Participating Preferred Stock and Common Stock, respectively, holders of Series
D Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in the ratio of the
Adjustment Number to one (1) with respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.

          (B) In the event that there are not sufficient assets available to permit payment in full of
the Series D Liquidation Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series D Junior Participating Preferred
Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares
in proportion to their respective liquidation preferences. In the event that there are not
sufficient assets available to permit payment in full of the Common Adjustment, then such remaining
assets shall be distributed ratably to the holders of Common Stock.

          (C) In the event the Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding immediately prior to such
event.

          Section 5. No Redemption. The Series D Junior Participating Preferred Stock shall not
be redeemable.

          Section 6. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case the shares of Series D Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller

 

 

number of shares, then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series D Junior Participating Preferred Stock shall
be adjusted by multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such event.

          Section 7. Voting Rights. The holders of shares of Series D Junior Participating
Preferred Stock shall have the following voting rights:

          (A) Subject to the provision for adjustment hereinafter set forth, each share of Series D
Junior Participating Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Series D Junior Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

          (B) Except as otherwise provided by law, the holders of shares of Series D Junior
Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation.

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

          Section 8. Ranking. Notwithstanding anything contained herein to the contrary, the
Series D Junior Participating Preferred Stock shall rank junior to all other series of the
Corporation’s Preferred Stock as to voting rights, the payment of dividends and the distribution of
assets in liquidation, unless the terms of any such series shall provide otherwise.

          Section 9. Reacquired Shares. Any shares of Series D Junior Participating Preferred
Stock purchased or otherwise acquired by the Corporation

 

 

in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board, subject to the conditions and restrictions on issuance set forth herein.

          Section 10. Amendment. At any time when any shares of Series D Junior Participating
Preferred Stock are outstanding, the Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series D Junior Participating Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least a majority of the
outstanding shares of Series D Junior Participating Preferred Stock, voting separately as a class.

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

*****

 

 

          IN WITNESS WHEREOF, I have executed and subscribed this Certificate and do affirm the
foregoing as true under the penalties of perjury this
______ day of April, 2006.

	 	 	 	 	 	 	 
	 	 	SUNRISE SENIOR LIVING, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Chairman of the Board of Directors	 	 
	 

	 	 	 	and Chief Executive Officer	 	 

 

 

Exhibit B

SUMMARY OF RIGHTS TO PURCHASE

SERIES D JUNIOR PARTICIPATING PREFERRED STOCK

          The Board of Directors of Sunrise Senior Living, Inc., a Delaware Corporation (the “Company”),
has declared a dividend distribution of one right (“Right”) for each outstanding share of Common
Stock, par value $.01 per share (“Common Stock”) of the Company. The distribution is payable to
stockholders of record on April 24, 2006. Each Right, when exercisable, entitles the registered
holder to purchase from the Company one one-thousandth of a share of Series D Junior Participating
Preferred Stock (“Preferred Stock”) at a price of $170 per one one-thousandth share (the “Purchase
Price”), subject to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the “Rights Agreement”) between the Company and
American Stock Transfer & Trust
Company, as Rights Agent (the “Rights Agent”).

          Initially, the Rights will be attached to all certificates representing shares of Common Stock
then outstanding, and no separate certificates evidencing the Rights will be distributed. The
Rights will separate from the Common Stock and a distribution of Rights Certificates (as defined
below) will occur upon the earlier to occur of (i) 10 days following a public announcement that a
person or group of affiliated or associated persons (an “Acquiring Person”) has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more of the outstanding shares of
Common Stock (the “Stock Acquisition Date”) or (ii) 10 business days (or such later date as the
Board of Directors of the Company may determine) following the commencement of, or the first public
announcement of the intention to commence, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person of 20% or more of the outstanding shares
of Common Stock (the earlier of such dates being called the “Distribution Date”).

          Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates, and will be transferred with and only with the Common Stock certificates, (ii) new
Common Stock certificates issued after April 24, 2006 upon transfer or new issuance of the Common
Stock will contain a notation incorporating the Rights Agreement by reference, and (iii) the
surrender for transfer of any certificates for Common Stock outstanding will also constitute the
transfer of the Rights associated with the Common Stock represented by such certificate.

 

 

          The Rights are not exercisable until the Distribution Date and will expire at the close of
business on April 24, 2016, unless earlier redeemed or exchanged by the Company as described below.

          As soon as practicable following the Distribution Date, separate certificates evidencing the
Rights (“Rights Certificates”) will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone
will evidence the Rights. Except as otherwise determined by the Board of Directors of the Company,
only shares of Common Stock issued prior to the Distribution Date will be issued with Rights.

          In the event that a Person becomes the beneficial owner of 20% or more of the then outstanding
shares of Common Stock, each holder of a Right will, after the end of a redemption period referred
to below, have the right to exercise the Right by purchasing, for an amount equal to the Purchase
Price, Common Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times such amount. Notwithstanding any of the foregoing,
following the occurrence of the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void. However, Rights are not exercisable following the occurrence of the
events set forth above until such time as the Rights are no longer redeemable by the Company as set
forth below.

          For example, at a Purchase Price of $170 per Right, each Right not owned by an Acquiring
Person (or by certain related parties) following an event set forth in the preceding paragraph
would entitle its holder to purchase $340 worth of Common Stock (or other consideration, as noted
above) for $170.

          In the event that, at any time following the Stock Acquisition Date, (i) the Company is
acquired in a merger or other business combination transaction, or (ii) 50% or more of the
Company’s assets or earning power is sold or transferred, each holder of a Right (except Rights
which previously have been voided as set forth above) shall, after the expiration of the redemption
period referred to below, have the right to receive, upon exercise, common stock of the acquiring
company having a value equal to two times the Purchase Price of the Right (e.g., common
stock of the acquiring company having a value of $340 for the $170 Purchase Price).

          At any time after a person or group of affiliated or associated persons becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of the outstanding
Common Stock, the Board of Directors of the Company may exchange the Rights (other than Rights
owned by such person or group which have become void), in whole or in part, at an exchange ratio of
one

 

 

share of Common Stock per each outstanding Right or, in certain circumstances, other equity
securities of the Company which are deemed by the Board of Directors of the Company to have the
same value as shares of Common Stock, subject to adjustment.

       In general, the Board of Directors of the Company, may cause the Company to redeem the Rights
in whole, but not in part, at any time during the period commencing on April 24, 2006 and ending on
the tenth day following the Stock Acquisition Date (the “Redemption Period”) at a price of $.005
per Right (payable in cash, Common Stock or other consideration deemed appropriate by the Board of
Directors of the Company). Under the certain circumstances set forth in the Rights Agreement, the
decision to redeem the Rights will require the concurrence of two-thirds of Directors.
Immediately upon the action of the Board of Directors of the Company ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights will be to receive
the $.005 redemption price.

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

***

       A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Current Report on Form 8-K. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement.

 

 

Exhibit C

[Form of Rights Certificate]

			
	 	 	 
	Certificate No. R-          
	 	           Rights

NOT EXERCISABLE AFTER April 24, 2016 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.005
PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF ANY
SUCH PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE,
AND SHALL BE VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE
QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE
RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.] */

 

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

 

 

Rights Certificate

 

          This certifies that                                          , or its registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement, dated as of April 24, 2006, as the same may be amended from
time to time (the “Rights Agreement”), between Sunrise Senior Living, Inc., a Delaware corporation
(the “Company”), and American Stock Transfer & Trust Company as Rights Agent (the “Rights
Agent”), to purchase from the Company at any time prior to April 24, 2016 at the office or offices
of the Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, non-assessable share of Series D Junior Participating Preferred
Stock, par value $.01 per share (the “Preferred Stock”) of the Company, at a purchase price of $___
per one one-thousandth share (the “Purchase Price”), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above,
are the number and Purchase Price as of ______, based on the Preferred Stock as constituted at
such date, and are subject to adjustment upon the happening of certain events as provided in the
Rights Agreement. Capitalized terms used and not defined herein shall have the meanings specified
in the Rights Agreement.

          From and after the occurrence of an event described in Section 11(a)(ii) of the Rights
Agreement, the Rights evidenced by this Rights Certificate beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a person who, concurrently
with or after such transfer, became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person shall become null and void and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii) Event.

          The Rights evidenced by this Rights Certificate shall not be exercisable, and shall be void so
long as held, by a holder in any jurisdiction where the requisite qualification to the issuance to
such holder, or the exercise by such holder, of the Rights in such jurisdiction shall not have been
obtained or be obtainable.

          As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of
Preferred Stock or other securities, which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are

 

 

subject to modification and adjustment upon the happening of certain events, including Triggering
Events (as such term is defined in the Rights Agreement).

          This Rights Certificate is subject to all of the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of
rights include the temporary suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written request to the
Rights Agent.

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

          Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at its option at a redemption price of $.005 per Right at any time
prior to the earlier of the close of business on (i) the tenth day following the Stock Acquisition
Date, and (ii) the Final Expiration Date (as defined in the Rights Agreement). Under certain
circumstances set forth in the Rights Agreement, the decision to redeem shall require the
concurrence of two-thirds of the Directors.

          At any time after a person becomes an Acquiring Person and prior to the acquisition by such
person of 50% or more of the outstanding Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such Acquiring Person which have become void), in
whole or in part, at an exchange ratio of one share of Common Stock per each outstanding Right or,
in certain circumstances, other equity securities of the Company which are deemed by the Company’s
Board of Directors to have the same value as shares of Common Stock, subject to adjustment.

          No fractional shares of Preferred Stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of one one-thousandth of
a share of Preferred Stock, which may, at the

 

 

election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.

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

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

 

 

     WITNESS the facsimile signature of the proper officers of the Company.

Dated as of                                         ,                     

	 	 	 	 	 	 	 
	 	 	SUNRISE SENIOR LIVING, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	Countersigned:	 	 
	 
	 	 	 	 
	Dated as of                                         ,                     	 	 
	 
	 	 	 	 
	 	,	 
	 	 	 
	as rights agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory	 	 

 

 

[Form of Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if

such holder desires to transfer the

Rights Certificate.)

	 	 	 	 	 
	FOR VALUE RECEIVED
	 	 	 	 
	 	 	 
	hereby sells, assigns and transfers unto	 	 
	 

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

Dated:                                         ,                     

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature
	 	 

Signature Guaranteed:

 

 

Certificate

          The undersigned hereby certifies by checking the appropriate boxes that:

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

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	,	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 	 

Signature
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Signature Guaranteed:	 	 	 	 	 	 	 	 	 	 	 	 

 

 

NOTICE

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

 

 

FORM OF ELECTION TO PURCHASE

(To be executed if the registered holder

desires to exercise Rights represented

by the Rights Certificate.)

To:                        

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

 

(Please print name and address)

 

Please insert social security

or other identifying number:                                         

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

 

(Please print name and address)

 

Please insert social security

or other identifying number:                                         

 

Dated:                      ,      

	 	 	 
	 

	 	 
	 

	 	Signature
	 
	 	 
	Signature Guaranteed:
	 	 

 

 

Certificate

          The undersigned hereby certifies by checking the appropriate boxes that:

          (1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not being exercised by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such
Person (as such terms are defined in the Rights Agreement);

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	,	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 	 

Signature
	 	 
	Signature Guaranteed:
	 	 	 	 	 	 	 	 	 	 	 	 

 

NOTICE

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]