Document:

Exhibit 4.3

 

 

 

Monolithic
System Technology, Inc.

 

and

 

Wells
Fargo Minnesota, N.A.

Rights Agent

 

 

 

 

Rights
Agreement

 

 

 

 

Dated as of October 11, 2000

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  Section
  1.

  	
  Certain Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section
  2.

  	
  Appointment of Rights
  Agent

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section
  3.

  	
  Issue of Right
  Certificates

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section
  4.

  	
  Form of Right Certificates

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section
  5.

  	
  Countersignature and
  Registration

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section
  6.

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

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section
  7.

  	
  Exercise of Rights;
  Purchase Price; Expiration Date of Rights

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section
  8.

  	
  Cancellation and
  Destruction of Right Certificates

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section
  9.

  	
  Availability of Preferred
  Shares

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Preferred Shares Record
  Date

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Adjustment of Purchase
  Price, Number of Shares or Number of Rights

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Certificate of Adjustment

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 13.

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

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Fractional Rights and
  Fractional Shares

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Rights of Action

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Agreement of Right Holders

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 17.

  	
  Right Certificate Holder
  Not Deemed a Stockholder

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Concerning the Rights
  Agent

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  Merger or Consolidation or
  Change of Name of Rights Agent

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  Duties of Rights Agent

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Change of Rights Agent

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Issuance of New Right
  Certificates

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 23.

  	
  Redemption

  	
  24

  

 

i

 

TABLE OF
CONTENTS

(Continued)

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  Section 24.

  	
  Exchange

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  Notice of Certain Events

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  Notices

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 27.

  	
  Supplements and Amendments

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 28.

  	
  Registration of Securities

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 29.

  	
  Determinations and Actions
  by the Board of Directors

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 30.

  	
  Successors

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 31.

  	
  Benefits of this Agreement

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 32.

  	
  Severability

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 33.

  	
  Governing Law

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 34.

  	
  Counterparts

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 35.

  	
  Descriptive Headings

  	
  29

  

 

ii

 

RIGHTS AGREEMENT

Agreement,
dated as of October 11, 2000 between Monolithic System Technology, Inc., a
Delaware corporation (the “Company”),
and Wells Fargo Minnesota, N.A. (the “Rights Agent”).

Pursuant
to this Agreement, the Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a “Right”) for each
Common Share (as hereinafter defined) of the Company outstanding on the
effective date of the Company’s initial public offering (the “Record Date”), each
Right representing the right to purchase one one-thousandth of a Preferred
Share (as hereinafter defined), upon the terms and subject to the conditions
herein set forth, and has further authorized and directed the issuance of one
Right with respect to each Common Share that shall become outstanding between
the Record Date and the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date (as such terms are hereinafter defined).

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

Section 1.                  Certain Definitions

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

(a)   “Acquiring Person” shall mean any Person (as
such term is hereinafter defined) who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15% or in the
case of (i)  a Grandfathered Stockholder
other than a Second Tier Grandfathered Stockholder 25%, or (ii)  a Second Tier Grandfathered Stockholder such
percentage as is beneficially owned by each Grandfathered Stockholder whose
common shares the Second Tiered Grandfathered Stockholder may be deemed to
beneficially own plus 1%, or more of the Common Shares of the Company then
outstanding, but shall not include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan of the Company
(including without limitation the Plans) or of any Subsidiary of the Company,
or of any entity holding Common Shares for or pursuant to the terms of any such
employee benefit plan.  Notwithstanding
the foregoing, (1) no Person shall become an “Acquiring Person” as the
result of an acquisition of Common Shares by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the Common Shares of the
Company then outstanding; provided, however, that if a Person
shall become the Beneficial Owner of 15% or more of the Common Shares of the
Company then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person shall be deemed to be
an “Acquiring Person”; and (2) if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an “Acquiring
Person,” as defined pursuant to the foregoing provisions of this paragraph, has
become such inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an
“Acquiring Person,” as defined pursuant to the foregoing provisions of this
paragraph, then such 

 

Person shall not be deemed
to have become an “Acquiring Person” for any purposes of this Agreement.

(b)   “Affiliate” and “Associate” shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (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 beneficially owns, directly or indirectly;

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

(iii)  which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person’s
Affiliates or Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by the
proviso in Section l(c)(ii)(B)) or disposing of any securities of the Company; provided,
however, that in no case shall an officer or director of the Company be
deemed the Beneficial Owner of securities held of record by the trustee of any
employee benefit plan of the Company (including without limitation the Plans)
or any Subsidiary of the Company for the benefit of any employee of the Company
or any Subsidiary of the Company, other than the officer or director, by reason
of any influence that such officer or director may have over the voting of the
securities held in the plan.

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

2

 

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

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

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

(g)   Reserved

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

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

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

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

(l)    “Final Expiration Date” shall mean October
11, 2010.

(m)  “Grandfathered Stock” shall mean shares held
by (i)(A) West Coast Venture Capital, Ltd. and its Affiliates and Associates
(“West Coast”), (B) DynaTech Capital, LLC and its Affiliates and Associates
(“DynaTech”) and (C) each of the Founders of the Company and their respective
Affiliates and Associates, other than any Person who or which is not such an
Affiliate or Associate on the date of this Agreement and who or which
subsequently acquires direct or indirect control of West Coast, DynaTech or a
Founder without the prior written approval of the board of directors of the
Company (such Person a “Non-grandfathered Stockholder”); and (ii) any Person
not covered by (i), above, except a “Non-grandfathered Stockholder”, who or
which is the Beneficial Owner of Common Shares beneficially owned by West
Coast, DynaTech or a Founder (each such Person a “Second Tier Grandfathered
Stockholder”).  “Founder” shall mean
each of Fu-Chieh Hsu and Wing-Yu Leung, their respective heirs, legatees,
personal representatives, or trusts formed for the benefit of themselves,
and/or their respective spouses and members of their immediate families.

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

(o)   “Person” shall mean any individual, firm,
corporation, partnership, limited partnership, limited liability partnership,
business trust, limited liability company, unincorporated association or other
entity, and shall include any successor (by merger or otherwise) of such
entity.

(p)   “Preferred Shares” shall mean shares of
Series AA Junior Participating Preferred Stock, par value $0.01 per share, of
the Company.

3

 

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

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

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

(t)    “Registered Common Shares” shall have the
meaning set forth in Section 13(d) hereof.

(u)   “Rights Certificate” shall mean a certificate
evidencing a Right in substantially the form of Exhibit B hereto.

(v)   “Shares Acquisition Date” shall mean the
earlier of (i) the public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such or (ii)  the public disclosure of facts by the Company or an Acquiring
Person indicating that an Acquiring Person has become such.

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

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

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

(z)    “Summary of Rights” shall mean the Summary of
Rights to Purchase Preferred Shares in substantially the form of Exhibit C
hereto.

(aa) “Trading Day” shall have the meaning set forth in
Section 11(a)(iv) hereof.

(bb) A “Trigger Event” shall be deemed to have
occurred upon any Person, together with all Affiliates and Associates of such
Person, becoming an Acquiring Person.

Section 2.                  Appointment of Rights Agent

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

Section 3.                  Issue of Right Certificates

(a)   Until the earlier of the close of business on
(i) the tenth day after the Shares Acquisition Date, or (ii) the tenth Business
Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than any of the persons referred to in the
preceding sentence) or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) to commence, a
tender or exchange offer the consummation of which would result 

4

 

in any Person becoming the
Beneficial Owner of Common Shares aggregating 15% or in the case of (i) a
Grandfathered Stockholder other than a Second Tier Grandfathered Stockholder
25%, or (ii) a Second Tier Grandfathered Stockholder such percentage as is
beneficially owned by each Grandfathered Stockholder whose common shares the
Second Tiered Grandfathered Stockholder may be deemed to beneficially own plus
1%, or more of the then outstanding Common Shares (irrespective of whether any
Common Shares are actually purchased pursuant to such offer) (including any
such date which is after the date of this Agreement and prior to the issuance
of the Rights), (the earliest of such dates being herein referred to as the “Distribution Date”),
(x) the Rights will be evidenced (subject to the provisions of Section
3(b) hereof) by the certificates for Common Shares registered in the names of
the holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Shares. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Shares as of the close of business on the Distribution Date,
at the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a “Right
Certificate”), evidencing one Right for each Common Share so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right Certificates.

(b)   On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company.  With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof regardless of whether a copy of the Summary
of Rights is attached thereto.  Until
the Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for Common
Shares outstanding on the Record Date, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.

(c)   Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common Shares referred
to in the last sentence of this paragraph (c)) after the Record Date but prior
to the earliest of the Distribution Date, the Redemption Date or Close of
Business on the Final Expiration Date shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:

This certificate also
evidences and entitles the holder hereof to certain rights as set forth in a
Rights Agreement between Monolithic System
Technology, Inc. and Wells Fargo
Minnesota, N.A. dated as of October 11, 2000 (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 Monolithic
System Technology, Inc.  Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate.  Monolithic System
Technology, Inc. will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request therefor.
Under certain circumstances, as set forth in the Rights Agreement, 

5

 

Rights issued to any Person
who becomes an Acquiring Person (as defined in the Rights Agreement) may become
null and void.

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

Section 4.                  Form of Right Certificates

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

Section 5.                  Countersignature and Registration

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

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

6

 

Section 6.                  Transfer, Split Up, Combination and Exchange of Right Certificates;

Mutilated, Destroyed, Lost or Stolen Right Certificates

Subject
to the provisions of 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
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one
one-thousandths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificate or Right Certificates
to be transferred, split up, combined or exchanged at the principal office of
the Rights Agent.  Thereupon the Rights
Agent shall countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested.  The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.

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

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

(a)   The registered holder of any Right
Certificate may exercise the Rights evidenced thereby (other than a holder
whose Rights have become void pursuant to Section 11(a)(ii) hereof or have been
exchanged, pursuant to Section 24 hereof) in whole or in part at any time after
the Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office of the Rights Agent, together with payment of the
Purchase Price for each one one-thousandth of a Preferred Share as to which the
Rights are exercised, at or prior to the earliest of (i) the Close of Business
on the Final Expiration Date, (ii) the Redemption Date, or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.

(b)   The Purchase Price for each one
one-thousandth of a Preferred Share pursuant to the exercise of a Right shall
initially be $110.00 (the “Purchase Price”) shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c)
below.

(c)   Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the number of one
one-thousandths of a Preferred Share to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by cash, certified check,
cashier’s check or money order payable to the order of the Company, 

7

 

the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares certificates for the number of one one-thousandths of a Preferred Share
to be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) requisition from the depository
agent depository receipts representing such number of one one-thousandths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the
transfer agent with the depository agent) and the Company hereby directs the
depository agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) after receipt
of such certificates or depository receipts, cause the same to be delivered to
or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and (iv)
when appropriate, after receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate.

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

Section 8.                  Cancellation and Destruction of Right Certificates

All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this 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 Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Right Certificates to the Company, or shall, at the
written request of the Company and after any SEC required retention period,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.

Section 9.                  Availability of Preferred Shares

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

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

(c)   The Company further covenants and agrees that
it will pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or delivery of the
Right Certificates or of any Preferred Shares upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates or depository receipts
for the Preferred Shares in a name other than that of, the registered 

8

 

holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depository receipts for Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company’s reasonable satisfaction that
no such tax is due.

Section 10.           Preferred Shares Record Date

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

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

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

(a)   (i)        In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such time
shall be entitled to receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such date
and at a time when the Preferred Shares transfer books of the Company were
open, he 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.

(ii)   Subject to the following paragraph of this
subparagraph (ii) and Section 24 of this Agreement, in the event any Person
shall become an Acquiring Person (other than through an acquisition described
in subparagraph (iii) of this paragraph (a)), each holder (other than an 

9

 

Acquiring Person or any
direct or indirect transferee of an Acquiring Person) of a Right shall
thereafter have a right to receive, upon exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of one one-thousandths
of a Preferred Share for which a Right is then exercisable, in accordance with
the terms of this Agreement, such number of Common Shares (or, in the
discretion of the Board of Directors, one one-thousandths of a Preferred Share)
of the Company (such number of shares being referred to herein as the
“Adjustment Shares”) as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of one one-thousandths of a Preferred
Share for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Company’s Common Shares
(determined pursuant to Section 11(d) hereof) on the date such Person became an
Acquiring Person.

Upon
and after the occurrence of a Trigger Event, any Rights that are or were
acquired or are or were beneficially owned by such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) on or after the earlier of (x)
the date of such event and (y) the Distribution Date shall be void and any
holder of such Rights (including any subsequent transferee) shall thereafter
have no right to exercise such Rights under any provision of this Agreement. No
Right Certificate shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void pursuant
to the preceding sentence or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be canceled.

(iii)  The right to buy Common Shares of the Company
pursuant to subparagraph (ii) of this paragraph (a) shall not arise as a result
of any Person becoming an Acquiring Person through a purchase of Common Shares
pursuant to a tender offer made in the manner prescribed by Section 14(d) of
the Exchange Act and the rules and regulations promulgated thereunder; provided,
however, that such tender offer shall provide for the acquisition of all
of the outstanding Common Shares held by any Person other than such Person and
its Affiliates or Associates at a price and on terms determined by at least a
majority of the members of the Board of Directors who are not officers of the
Company and who are not representatives, nominees, Affiliates or Associates of
an Acquiring Person, after receiving advice from one or more investment or
financial advisers, to be (A) fair to stockholders (taking into account all
factors which such members of the Board deem relevant including, without
limitation, prices which could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value) and (B)
otherwise in the best interests of the Company and its stockholders, employees,
customers and communities in which the Company does business.

(iv)  In the event that there shall not be sufficient
Common Shares authorized by the Company’s Certificate of Incorporation but
unissued to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall: (A) determine the excess of (1)
the value of the Adjustment Shares issuable upon the exercise of a Right (the
“Current Value”), over (2) the Purchase Price (such excess being hereinafter
referred to as the “Spread”), and (B) with respect to each Right, make adequate
provision to substitute for such unavailable Adjustment Shares any one or more
of the following having an aggregate value determined by the Board of Directors
to be equal to Current Value:  (1) cash,
(2) a reduction in the Purchase 

10

 

Price, (3) Common Shares
other equity securities of the Company, including without limitation, Preferred
Shares, (4) debt securities of the Company, (5) other assets; provided, however,
if, within 30 days following the date of the Trigger Event, the Company shall
have not made adequate provision to deliver value pursuant to clause (B) above,
the Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Common Shares (to
the extent such shares are available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely that
sufficient additional Common Shares could be authorized for issuance upon
exercise in full of the Rights, the 30-day period set forth above may be
extended to the extent necessary, but not more than 90 days following the date
of the occurrence of the earliest of the Trigger Events, in order that the
Company may seek stockholder approval for the authorization of such additional
shares (such period, as it may be extended, hereinafter referred to as the
“Substitution Period”). To the extent that the Company determines that action
need be taken pursuant to the first and/or second sentences of this Section
11(a)(iv), the Company (x) shall provide, subject to Section 11(a)(ii) hereof,
that such action shall apply uniformly to all outstanding Rights, and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iv), the value of the Common Shares shall be the
current per share market price (as determined pursuant to Section 11(d) hereof)
per Common Share on the date of the occurrence of the earliest of the Trigger
Events.

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

11

 

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 the making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one Preferred Share and
the denominator of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right.  Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.

(d)   (i)    For the purpose of any computation hereunder, the “current per
share market price” of any security (a “Security” for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of
the Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Security is not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the last
reported trade, as reported by the Nasdaq National Market (“Nasdaq”) or such
other system then in use, or, if on any such date the Security is not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company.  The term “Trading Day” shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day.

12

 

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

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

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

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

(h)   Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-thousandths of a Preferred Share (calculated to the nearest
one ten-millionth of a Preferred 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
substitution for any adjustment in the number of one one-thousandths of a
Preferred Share purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-thousandths of a Preferred Share for which a Right
was exercisable immediately prior to such adjustment. Each 

13

 

Right held of record prior
to such adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one one-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed
to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.

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

(k)   Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-thousandth of the then par
value, if any, of the Preferred Shares 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
fully paid and non-assessable Preferred Shares at such adjusted Purchase Price.

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

(m)  Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any (i) consolidation or subdivision of the
Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at less
than the current market price, (iii) issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into or exchangeable
for Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred
Shares or (v) issuance of 

14

 

rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the Company to
holders of its Preferred Shares shall not be taxable to such stockholders.

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

Section 12.           Certificate of Adjustment

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

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

(a)   If, following the Shares Acquisition Date,
directly or indirectly, (i) the Company shall consolidate with, or merge with
and into, any Interested Stockholder or, if in any merger or consolidation all
holders of Common Shares are not treated alike, any other Person (in each case
regardless of whether the Company is the surviving or disappearing
corporation), (ii) an Interested Stockholder shall acquire all or a majority of
the Common Shares pursuant to a statutory plan of exchange, or (iii) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to one or more Interested
Stockholders or, if all holders of Common Shares are not treated alike in such
transaction, any other Person other than to the Company or one or more of its
wholly-owned Subsidiaries, then, and in each such case, proper provision shall
be made so that (A) each holder of a Right (except those held by an Acquiring
Person or as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-thousandths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common Shares of
the Principal Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
number of one one-thousandths of a Preferred 

15

 

Share for which a Right is
then exercisable and dividing that product by (y) 50% of the then current per
share market price of the Common Shares (determined pursuant to Section 11(d)
hereof) of such Principal Party on the date of consummation of such
consolidation, merger, sale or transfer; (B) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (C) the term “Company” shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 shall apply only to such Principal Party after the
first occurrence of an event described in this Section 13(a); (D) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares thereafter deliverable upon
the exercise of the Rights.

(b)   “Principal Party” shall mean:

(i)    in the case of any transaction described in
clause (i), (ii) or (iii) of Section 13(a), (A) the Person that is the issuer
of any securities into which Common Shares of the Company are converted in such
merger, consolidation or for which they are exchanged in such statutory plan of
exchange, or, if there is more than one such issuer, the issuer of Common
Shares that has the highest aggregate current market price (determined in
accordance with Section 11(d)) and (B) if no securities are so issued, the
Person that is the other party to such merger, consolidation or statutory plan
of exchange, or, if there is more than one such Person, the Person the Common
Shares of which has the highest aggregate current market price (determined in
accordance with Section 11(d)); and

(ii)   in the case of any transaction described in
clause (iv) of Section 13(a), the Person that is the party receiving the
largest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Shares of which has the highest
aggregate current market price (determined in accordance with Section 11(d));

provided, however, that in
any such case, (A) if the Common Shares of such Person are not at such time and
have not been continuously over the preceding twelve-month period registered
under Section 12 of the Exchange Act (“Registered Common Shares”), or such Person
is not a corporation, and such Person is a direct or indirect Subsidiary of
another Person that has Registered Common Shares outstanding, “Principal Party”
shall refer to such other Person; (B) if the Common Shares of such Person are
not Registered Common Shares or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person but is not a direct
or indirect Subsidiary of another Person which has Registered Common Shares
outstanding, “Principal Party” shall refer to the ultimate parent entity of
such first-mentioned Person; (C) if the Common Shares of such Person are not
Registered Common Shares or such Person is not a corporation, and such Person
is directly or indirectly controlled by more than one Person, and one or more
of such other Persons has Registered Common Shares outstanding, “Principal
Party” shall refer to whichever of such other Persons is the issuer of the
Registered Common Shares having the highest aggregate current market price
(determined in accordance with Section 11(d)); and (D) if the Common Shares of
such Person are not Registered Common Shares or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than
one Person, and none of such other Persons have Registered 

16

 

Common Shares outstanding,
“Principal Party” shall refer to whichever ultimate parent entity is the
corporation having the greatest stockholders’ equity or, if no such ultimate
parent entity is a corporation, shall refer to whichever ultimate parent entity
is the entity having the greatest net assets.

(c)   The Company covenants and agrees that it
shall not, at any time after the Distribution Date, (i) consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the Company
in a transaction that complies with Section 11(o)), (ii) permit or cause any
Person to consolidate with the Company, or merge with and into the Company
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(o)), or (iii) sell or otherwise transfer (or permit any Subsidiary
to sell or transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o)), if, at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect that would
substantially diminish or otherwise eliminate the benefits intended to be afforded
by the Rights or, prior to, simultaneously with or immediately after such
consolidation, merger or sale, the stockholders of the Person who constitutes,
or would constitute, the “Principal Party” for purposes of Section 13(a) hereof
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates. 
The Company shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this Section 11(n).

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

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

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

(f)    Notwithstanding anything in this Agreement
to the contrary, this Section 13 shall not be applicable to a transaction
described in Section 13(a)(i), (ii) or (iii) if:  (i) such transaction is consummated with a Person or Persons who
acquired Common Shares pursuant to a tender offer described in Section
11(a)(iii) (or with a wholly-owned Subsidiary of any such Person or Persons),
(ii) the price per Common Share offered in such transaction is not less than
the price per Common Share paid to all holders of Common Shares whose shares
were purchased pursuant to such tender or exchange offer, and (iii) the form of
consideration being offered to the remaining holders of Common Shares pursuant
to such transaction is the same as the form of consideration paid pursuant to
such tender offer.  Upon consummation of
any such transaction contemplated by this Section 13(e), all Rights shall
expire.

17

 

Section 14.           Fractional Rights and Fractional Shares

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

(b)   The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share) upon exercise of the
Rights or to distribute certificates which evidence fractional Preferred Shares
(other than fractions which are integral multiples of one one-thousandth of a
Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it; provided, that such
agreement shall provide that the holders of such depositary receipts shall have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral
multiples of one one-thousandth of a Preferred Share, the Company shall pay to
the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Preferred Share. For the purposes of this
Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.

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

Section 15.           Rights of Action

All
rights of action in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Shares); and any registered holder
of any Right Certificate (or, prior to the Distribution Date, of the Common 

18

 

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

Section 16.           Agreement of Right Holders

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

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

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

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

Section 17.           Right Certificate Holder Not Deemed a Stockholder

No
holder, as such, of any Right Certificate, shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.

Section 18.           Concerning the Rights Agent

The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. 
The Company also agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability, or expense, 

19

 

incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.

The
Rights Agent shall be protected and shall incur no liability for, or in respect
of any action taken, suffered or omitted by it in connection with, its administration
of this Agreement in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.

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

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

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

Section 20.           Duties of Rights Agent

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

(a)   The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to 

20

 

the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.

(b)   Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any
Executive Vice President, or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.

(c)   The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence, bad faith or
willful misconduct.  Anything in this
Agreement to the contrary notwithstanding, in no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including, but not limited to, lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage and regardless
of the form of action.

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

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

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

(g)   The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Executive Vice President, the Secretary or the
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for those
instructions.

21

 

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

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

Section 21.           Change of Rights Agent

The
Rights Agent or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail.  The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a period of 30
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), the
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation (or an affiliate of a corporation) organized and doing business under
the laws of the United States or any state of the United States so long as such
corporation is authorized to do business as a banking institution, is
authorized under such laws to exercise corporate trust or stock transfer
powers, is in good standing, and is subject to supervision or examination by
federal or state authority, and has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $100 million. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice with the predecessor
Rights Agent and each transfer agent of the Common Shares or Preferred Shares,
and mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.

22

 

Section 22.           Issuance of New Right Certificates

Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement.

Section 23.           Redemption

(a)   The Board of Directors of the Company may, at
its option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $0.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the “Redemption
Price”); provided, however, that if, following the occurrence of
a Shares Acquisition Date and following the expiration of the right of
redemption hereunder but prior to any event described in clause (B) of Section
11(a)(ii) or clauses (i), (ii), (iii) or (iv) of Section 13(a) hereof, (i) a
Person who is an Acquiring Person shall have transferred or otherwise disposed
of a number of shares of Common Shares in one transaction or series of
transactions, not directly or indirectly involving the Company or any of its
Subsidiaries, which did not result in the occurrence of an event described in
clause (B) of Section 11(a)(ii) or clauses (i), (ii) or (iii) of Section 13(a)
hereof such that such Person is thereafter a Beneficial Owner of less than 10%
of the outstanding Common Shares, and (ii) there are no other Persons,
immediately following the occurrence of the event described in clause (i), who
are Acquiring Persons, then the right of redemption shall be reinstated and
thereafter be subject to the provisions of this Section 23.  The redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.  The Company may, in its discretion, round up
the redemption price to be paid to any holder of Rights to the nearest whole
cent.

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

Section 24.           Exchange

(a)   The Board of Directors of the Company may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
11(a)(ii) 

23

 

hereof) for Common Shares at
an exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company (including without limitation the Employee Plans) or of any such
Subsidiary, or of any entity holding Common Shares for or pursuant to the terms
of any such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.

(b)   Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
subsection (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
Common Shares equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly give public notice of any
such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the Common
Shares for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. 
Any partial exchange shall be effected pro rata based on the number of
Rights (other than Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.

(c)   In any exchange pursuant to this Section 24,
the Company, at its option, may substitute Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b) hereof) for Common
Shares exchangeable for Rights, at the initial rate of one one-thousandth of a
Preferred Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share.

(d)   In the event that there shall not be
sufficient Common Shares or Preferred Shares 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 use its best efforts to
cause all such action to be taken as may be necessary to authorize additional
Common Shares or Preferred Shares for issuance upon exchange of the Rights.

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

24

 

Section 25.           Notice of Certain Events

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

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

Section 26.           Notices

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

 

Monolithic
System Technology, Inc.

1020 Stewart Drive

Sunnyvale, CA  94085

Attn:  Secretary

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

 

25

 

Wells
Fargo Minnesota, N.A.

161 North Concord Exchange

South St. Paul, MN 55075

 

Attn:  Darren Larson

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

Section 27.           Supplements and Amendments

The
Company may from time to time, and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Right Certificates in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable; provided, however,
that from and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended or supplemented in any manner which would
adversely affect the interests of the holders of Rights (other than an
Acquiring Person and its Affiliates and Associates).  Any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent; provided, however,
that from and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would adversely affect the
interests of the holders of Rights.

Section 28.           Registration of Securities

The
Company may temporarily suspend, for a period of time not to exceed 90 days,
the exercisability of the Rights in order to prepare and file, if deemed
necessary by the Company, such registration statements and other filings under
the Securities Act of 1933, as amended, and the securities or “blue sky” laws
of any state, with respect to any securities purchasable upon the exercise of
the Rights, and to permit the same to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction has been obtained.

Section 29.           Determinations and Actions by the Board of Directors

The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to 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 interpret the provisions of this Agreement, and  make all determinations deemed necessary or
advisable for the administration of this Agreement (including a determination
to redeem or to not redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations which are done or
made by the Board in good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject the Board to any liability to the holders of the Rights.

26

 

Section 30.           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 31.           Benefits of
this Agreement

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

Section 32.           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 33.           Governing Law

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

Section 34.           Counterparts

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

Section 35.           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.

27

 

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

 

	
   

  	
  Monolithic
  System Technology, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/  F. JUDSON MITCHELL

  
	
   

  	
   

  	
  F. Judson Mitchell

  Chief Financial Officer and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  Wells
  Fargo Minnesota, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/  DARREN LARSON

  
	
   

  	
   

  	
  Darren Larson

  Assistant Vice President

  
	
   

  	
   

  	
   

  

 

 

 

 

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Exhibit 4.1    
  

 
 

REGISTRATION RIGHTS AGREEMENT    
  

        REGISTRATION RIGHTS AGREEMENT ("Agreement") dated as of March 24, 2003, between Image
Entertainment, Inc., a California corporation ("Company"), and Image Investors Co., a Delaware corporation
("Investor"). 

        WHEREAS,
pursuant to a Termination and Exchange Agreement dated the same date as this Agreement, Company is issuing and selling shares of its common stock, no par value
("Common Stock") to Investor; 

        WHEREAS,
Company is issuing a Warrant dated the same date as this Agreement ("Warrant") to Investor to purchase additional shares of its
Common Stock; and 

        WHEREAS,
the shares of Common Stock to be sold and issued to Investor pursuant to the Termination and Exchange Agreement and in connection with the exercise of the Warrant (collectively,
the "Shares"), are being issued in a private placement without registration under the Securities Act of 1933, as amended (the
"Act"), in reliance on one or more exemptions from the registration requirements under the Act; 

        NOW
THEREFORE, in consideration of the foregoing recitals and the respective covenants and agreements contained herein, the parties hereto, intending to be legally bound, agree as
follows: 

        1.    Piggyback Registration

                (a)    Unless
a registration statement has already been filed and remains effective with respect to the Shares, each time Company determines to file a
registration statement under the Act (other than on Form S-1 solely covering an employee benefit plan, S-4 or S-8) in connection with the proposed offer and
sale for money of any of its securities, either for its own account or on behalf of any security holder including Investor, Company will give written notice of its determination to Investor. Upon the
written
request of Investor within thirty (30) days after the receipt of the written notice, Company will cause all Shares of Investor to be included in the registration statement, to the extent
necessary to permit the legally permissible sale or other disposition by Investor to be so registered. 

                (b)    If
the registration is for a public offering involving an underwriting, Company will so advise Investor as a part of its written notice. In such event, the
right of Investor to registration pursuant to this Section 1 is conditioned upon Investor's participation in the underwriting and the inclusion
of Investor's Shares in the underwriting to the extent provided herein. Investor will enter into (together with Company and the other shareholders distributing their securities through the
underwriting) an underwriting agreement with the underwriter or underwriters selected by Company for the underwriting, provided that the underwriting agreement is in customary form and is reasonably
acceptable to Investor. 

                (c)    Notwithstanding
any other provision of this Section 1, if the managing underwriter of an
underwritten distribution advises Company and Investor in writing that in its good faith judgment the number of Shares and the other securities requested to be registered exceeds the number of Shares
and other securities which can be sold in the offering, then (i) the number of Shares and other securities so requested to be included in the offering will be reduced to that number of shares
which in the good faith judgment of the managing underwriter can be sold in the offering (except for shares to be issued by Company in an offering initiated by Company, which will have priority over
the Shares), and (ii) the reduced number of shares will be allocated among all participating holders of Common Stock and investor in proportion, as nearly as practicable, to the respective
number of Shares and other securities held by Investor and other holders at the time of filing the registration statement in relation to the total number of shares of Common Stock outstanding on a
fully diluted basis. All Shares and other securities which are excluded from the underwriting by reason of the underwriter's marketing limitation and all other Shares not originally requested to be so
included will not be included in the registration and will be withheld from the market by Investor for a period, not to exceed one hundred eighty 

(180) days, which the managing underwriter reasonably determines is necessary to effect the underwritten public offering. 

        2.    Demand Registration

                (a)    If,
at any time more than one (1) year after the date of this Agreement, Company receives written notice from Investor requesting that Company
file a registration statement under the Act covering the registration of at least fifty percent (50%) of the Shares then owned by Investor, Company will use its best efforts to effect the
registration under the Act of all Shares which investor requests to be registered, to the extent necessary to permit the legally permissible sale or other disposition by Investor to be so registered. 

                (b)    If
Investor intends to distribute the Shares covered by its request by means of an underwriting, it will so advise Company as a part of the request made
pursuant to this Section 2. The underwriter
selected by Investor shall be reasonably acceptable to Company. In such event, the right of Investor to include its Shares in the registration shall be conditioned upon Investor's participation in
such underwriting and the inclusion of the Shares in the underwriting. Company will enter into (together with Investor and the other shareholders distributing their securities through the
underwriting) an underwriting agreement with the underwriter or underwriters selected by Investor for the underwriting, provided that the underwriting agreement is in customary form and is reasonably
acceptable to Company. 

                (c)    Notwithstanding
the foregoing, if Company furnishes to Investor a certificate signed by the President of Company stating that in the good faith judgment of
the Board of Directors of Company, it would be detrimental to Company and its shareholders for the registration statement to be filed and it is therefore essential to defer the filing of the
registration statement, Company will have the right to defer the filing for a period of not more than ninety (90) days after receipt of the request of investor;  provided, however, that Company may not utilize this right more than once in any twelve-month period.
 

                (d)    Company
will not be obligated to prepare, file or to take any action to effect any registration pursuant to this  Section 2: 

                        (i)    Within
one year from the date hereof; 

                        (ii)    After
Company has effected a prior registration pursuant to this Agreement and such registration has been declared or ordered effective; or 

                        (iii)    During
the period starting with the date ninety (90) days prior to Company's good faith estimate of the date of filing of, and ending on a date
one hundred eighty (180) days after the effective date of, a registration subject to Sections 1 or 2 hereof; provided that Company is using
reasonable efforts to cause such registration statement to become effective. 

        3.    Registration Procedures. If and whenever Company is required by the provisions of Section 1
or 2 hereof to effect the registration of Shares under the Act, Company, at its expense, will: 

                (a)    In
accordance with the Act and all applicable rules and regulations, prepare and file with the Securities and Exchange Commission
("SEC") a registration statement with respect to the Shares and use its commercially reasonable efforts to cause the registration statement to become
and remain effective until the Shares covered by such registration statement have been sold, and prepare and file with the SEC such amendments and supplements to the registration statement and the
prospectus contained therein as may be necessary to keep the registration statement effective and the registration statement and prospectus accurate and complete until the Shares covered by such
registration statement have been sold; 

                (b)    If
the offering is to be underwritten in whole or in part, enter into a customary written underwriting agreement in form and substance reasonably
satisfactory to the managing underwriter of the public offering, Investor and Company; 

                (c)    Furnish
to Investor and the underwriters of the Shares being registered such number of copies of the registration statement and each amendment and
supplement thereto, preliminary prospectus, final prospectus and such other documents as the underwriters and Investor may reasonably request in order to facilitate the public offering of the
securities; 

                (d)    Use
its commercially reasonable efforts to register or qualify the securities covered by the registration statement under such state securities or blue sky
laws of such jurisdictions as Investor and the underwriters may reasonably request within ten (10) days prior to the original filing of the registration statement, except that Company will not
for any purpose be required to execute a general consent to service of process or to qualify to do business as a foreign corporation in any jurisdiction where it is not so qualified; 

                (e)    Notify
Investor, promptly after it receives notice thereof, of the date and time when the registration statement and each post-effective
amendment thereto has become effective or a supplement to any prospectus forming a part of such registration statement has been filed; 

                (f)    Notify
Investor of any request by the SEC for the amending or supplementing of the registration statement or prospectus or for additional information; 

                (g)    Prepare
and file with the SEC, upon the request of Investor, any amendments or supplements to the registration statement or prospectus which, in the
reasonable opinion of counsel for Investor, is required under the Act or the rules and regulations of the SEC thereunder in connection with Investor's distribution of the Shares; 

                (h)    Prepare
and file with the SEC, and notify Investor of the filing of, such amendments or supplements to the registration statement or prospectus as may be
necessary to correct any statements or omissions if, at the time when a prospectus relating to the securities is required to be delivered under the Act, any event has occurred as the result of which
the prospectus or any other prospectus as then in effect would include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein not misleading; 

                (i)    In
case Investor or any underwriter for Investor is required to deliver a prospectus at a time when the prospectus then in circulation is not in compliance
with the Act or the rules and regulations of the SEC, prepare upon request such amendments or supplements to such registration statement and such prospectus as may be necessary in order for the
prospectus to comply with the requirements of the Act and such rules and regulations; 

                (j)    Advise
Investor, after it receives notice or obtains knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of the
registration statement or the initiation or threatening of any proceeding for that purpose and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain
its withdrawal if a stop order should be issued; 

                (k)    Not
file any registration statement or prospectus or any amendment or supplement to a registration statement or prospectus to which Investor has, at least
five (5) business days prior to filing, reasonably objected on the grounds that the registration statement or prospectus or amendment or supplement thereto does not comply in all material
respects with the requirements of the Act or the rules and regulations thereunder. The failure of Investor or its counsel to review or object to any registration statement or prospectus or any
amendment or supplement to a registration statement or prospectus will not affect the indemnification rights of Investor or its respective officers, directors, partners, legal counsel, accountants or
controlling persons or any underwriter or any controlling person of such underwriter under Section 5 hereof; 

                (l)    Make
available for inspection upon request by Investor, a managing underwriter of a distribution to be effected pursuant to a registration statement under
this Agreement, and any attorney, accountant or other agent retained by Investor or its underwriter, all pertinent corporate, financial and other documents and records of Company, and cause Company's
officers, directors and employees to supply all information reasonably requested by Investor, underwriter, attorney, accountant or agent in connection with the registration statement; and 

                (m)    At
the request of Investor, furnish to Investor on the effective date of the registration statement or, if the registration includes an underwritten public
offering, at the closing provided for in the underwriting agreement, (i) an opinion dated such date of the counsel representing Company for the purposes of the registration, addressed to the
underwriters, if any, and to investor, covering such matters with respect to the registration statement, the prospectus and each amendment or supplement thereto, proceedings under state and federal
securities laws, other matters relating to Company, the securities being registered and the offer and sale of such securities as are customarily the subject of opinions of issuer's counsel provided to
underwriters in underwritten public offerings, and such opinion of counsel will additionally cover such legal and factual matters with respect to the registration as Investor may reasonably request,
and (ii) letters dated each of such effective date and such closing date, from the independent certified public accountants of Company, addressed to the underwriters, if any, and to Investor,
stating that they are independent certified public accountants within the meaning of the Act and dealing with such matters as the underwriters may request, or, if the offering is not
underwritten, that in the opinion of such accountants the financial statements and other financial data of Company included in the registration statement or the prospectus or any amendment or
supplement thereto comply in all material respects with the applicable accounting requirements of the Act, and additionally covering such other accounting and financial matters, including information
as to the period ending not more than five (5) business days prior to the date of such letter with respect to the registration statement and prospectus, as Investor may reasonably request. 

        4.    Expenses

                (a)    With
respect to each inclusion of Shares in a registration statement pursuant to Section 1 hereof,
and the registration effected pursuant to Section 2 hereof, Company will bear all fees, costs and expenses of and incidental to the registration
and the public offering in connection therewith; provided, however, that Investor will bear its pro rata share of the underwriting discount and commissions. 

                (b)    The
fees, costs and expenses of registration to be borne as provided in Section 4(a), include,
without limitation, all registration, filing and NASD fees, printing expenses, fees and disbursements of counsel and accountants for Company, fees and disbursements of outside counsel for Investor (up
to $50,000) and the underwriter or underwriters of such securities (if Company and/or selling security shareholders are otherwise required to bear such fees and disbursements), and legal fees and
disbursements and other expenses of complying with state securities or blue sky laws of any jurisdictions in which the securities to be offered are to be registered or qualified. 

        5.    Indemnification

                (a)    Company
will indemnify and hold harmless pursuant to the provisions of this Agreement Investor and each of Investor's officers, directors, partners, legal
counsel and accountants, and each person who controls Investor within the meaning of the Act and any underwriter (as defined in the Act) for Investor, and any person who controls such underwriter
within the meaning of the Act, from and against, and to reimburse Investor, its officers, directors, partners, legal counsel, accountants and controlling persons and each underwriter and controlling
person of such underwriter with respect to, any and all claims, actions (actual or threatened), demands, losses, damages, liabilities, costs and expenses to which Investor, its officers, directors,
partners, legal counsel, accountants or controlling persons or any such underwriter or controlling person of such underwriter may become subject under the Act or otherwise, insofar as such claims,
actions, demands, losses, damages, liabilities, costs or expenses arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in light of the circumstances in which they were made; provided, however, that Company will not be liable in any such case to
the extent that any claim, action, demand, loss, damage, liability, cost or expense is caused by an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity
with written information furnished by Investor, such underwriter or such controlling person specifically for use in the preparation thereof. 

                (b)    Investor
will indemnify and hold harmless Company, its officers, directors, legal counsel and accountants, any underwriter and each person who controls
Company or any underwriter within the meaning of the Act, from and against, and agrees to reimburse Company, its officers, directors, legal counsel, accountants and controlling persons, any
underwriter with respect to, any and all claims, actions, demands, losses, damages, liabilities, costs or expenses to which Company, its officers, directors, legal counsel, accountants, such
controlling persons, or any underwriter may become subject under the Act or otherwise, insofar as such claims, actions, demands, losses, damages, liabilities, costs or expenses are caused by any
untrue or alleged untrue statement of any material fact contained in such registration statement, any prospectus contained therein or any amendment or supplement thereto, or are caused by the omission
or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not
misleading, in each case, to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance upon and in conformity
with written information furnished by Investor specifically for use in the preparation thereof. Notwithstanding the foregoing, Investor will not be obligated hereunder to pay more than the net
proceeds realized by it upon its sale of Shares included in such registration statement. 

                (c)    Promptly
after receipt by a party indemnified pursuant to the provisions of this Section 5(a) or (b)
of notice of the commencement of any action involving the subject matter of the foregoing indemnity provisions, the indemnified party will, if a claim therefor is to be made against the indemnifying
party pursuant to the provisions of Section 5(a) or (b), notify the indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 5 and
will not relieve the indemnifying party from liability under this Section 5 unless the indemnifying party is prejudiced by such omission. In case
any action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying parties similarly notified, to assume the defense thereof, with counsel satisfactory to the indemnified party; provided, however, that if
the defendants in any action include both the indemnified party and the indemnifying party and the indemnified party reasonably concludes that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties will have the right to select separate counsel (in which case
the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party or parties). Upon the permitted assumption by the indemnifying party of the
defense of an action, and approval by the indemnified party of counsel, the indemnifying party will not be liable to the indemnified party under Section 5(a) or
(b) for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof (other than reasonable costs of investigation) unless
(i) the indemnified party has employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence, (ii) the
indemnifying party has employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time, (iii) the indemnifying party and its counsel fail
actively and vigorously to pursue the defense of the action or (iv) the indemnifying party authorizes the employment of counsel for the indemnified party at the expense of the indemnifying
party. No indemnifying party will be liable to an indemnified party for any settlement of any action or claim without the consent of the indemnifying party, and no indemnifying party may unreasonably
withhold its consent to any such
settlement. No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to
the indemnified party of a release from all liability with respect to the claim or litigation. 

                (d)    If
the indemnification provided for in Section 5(a) or (b) is held by a court of competent
jurisdiction to be unavailable to a party to be indemnified with respect to any claims, actions, demands, losses, damages, liabilities, costs or expenses referred to therein, then each indemnifying
party under any such section, in lieu of indemnifying the indemnified party thereunder, agrees to contribute to the amount paid or payable by the indemnified party as a result of the claims, actions,
demands, losses, 

damages, liabilities, costs or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in the claims, actions, demands, losses, damages, liabilities, costs or expenses, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party will be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. Notwithstanding the foregoing, the amount Investor will be obligated to contribute pursuant to this section will be
limited to an amount equal to the per share public offering price (less any underwriting discount and commissions) multiplied by the number of Shares sold by Investor pursuant to the registration
statement which gives rise to such obligation to contribute (less the aggregate amount of any damages which Investor has otherwise been required to pay in respect of such claim, action, demand, loss,
damage, liability, cost or expense or any substantially similar claim, action, demand, loss, damage, liability, cost or expense arising from the sale of such Shares). No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be entitled to contribution hereunder from any person who was not guilty of such fraudulent misrepresentation. 

                (e)    In
addition to its other obligations under this Section 5, Company agrees to reimburse any
underwriter and Investor pursuant to this Agreement (and each of the underwriter's and Investor's controlling persons, officers, directors, parties, legal counsel, accountants and underwriters, and
controlling persons of the underwriters) on a monthly basis for all reasonable legal fees and other expenses incurred in connection with investigating or defending any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or omission, or any alleged statement or admission, described in  Section 5(a), notwithstanding the possibility that such
payments might later be held to be improper. To the extent that any payment is ultimately
held to be improper, each person receiving such payment will promptly refund it. 

        6.    Restrictions. Shares will only be treated as registrable securities if and so long as they have not been (a) sold
to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, or (b) sold in a transaction exempt from the registration and prospectus delivery
requirements of the Act under Section 4(1) thereof so that all transfer restrictions and restrictive legends with respect to such Shares are removed upon the consummation of such sale and the
seller and Investor receive an opinion of counsel for Company, in form and content reasonably satisfactory to the seller and buyer and their respective counsel, to the effect that the Shares in the
hands of investor
are freely transferable without restriction or registration under the Act in any public or private transaction. 

        7.    Reporting Requirements. Company will maintain the effectiveness of its registration under Section 12 of the
Securities Exchange Act of 1934, as amended ("Exchange Act") and file timely (whether or not it is then required to do so) such information, documents
and reports as the SEC may require or prescribe under Section 15(d) of the Exchange Act. Company will, forthwith upon request, furnish to Investor (a) a written statement by Company that
it has complied with such reporting requirements, (b) a copy of the most recent annual or quarterly report of Company and (c) such other reports and documents filed by Company with the
SEC as Investor may reasonably request in availing itself of an exemption for the sale of Shares without registration under the Act. Company acknowledges that the purposes of the requirements
contained in this Section 7 are (i) to enable Investor to comply with the current public information requirement contained in
paragraph (c) of Rule 144 under the Act should Investor ever wish to dispose of any of the securities of Company acquired by it without registration under the Act in reliance upon
Rule 144 (or any other similar exemptive provision) and (ii) to qualify Company for the use of registration statements on Form S-3. In addition, Company will take such
other measures and file such other information, documents and reports, as may be required of it hereafter by the SEC as a condition to the availability of Rule 144 (or any similar exemptive 

provision hereafter in effect) and the use of Form S-3 and will use its commercially reasonable efforts to qualify for the use of Form S-3. 

        8.    Information. Investor will furnish Company with such information with respect to Investor and the Shares as Company may
from time to time reasonably request in writing to the extent required by law or by the SEC. 

        9.    Forms. All references in this Agreement to particular forms of registration statements under the Act are intended to
include, and will be deemed to include, references to all successor forms which are intended to replace, or to apply to similar transactions as, the forms herein referenced. 

        10.    Miscellaneous

                (a)    Waivers and Amendments. Neither this Agreement nor any provision hereof may be changed, waived, discharged
or terminated orally or by course of dealing, but only by a statement in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. Specifically,
but without limiting the generality of the foregoing, the failure of one party at any time or times to require performance of any provision hereof by the other party will not affect the right at a
later time to enforce the same. No waiver by any party of the breach of any term or provision contained in this Agreement, in any one or more instances, will be deemed to be, or construed as, a
further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement. 

                (b)    Successors and Assigns. The provisions of this Agreement will inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto. Notwithstanding the foregoing, neither Investor nor Company will assign or delegate any of its rights or obligations under this Agreement. 

                (c)    No Third-Party Beneficiaries. No person or entity not a party to this Agreement will be deemed to be a
third-party beneficiary hereunder or entitled to any rights hereunder. 

                (d)    Interpretation. The words "include,"
"includes," and "including" when used herein will be deemed in each case to be followed by the words
"without limitation." This Agreement has been negotiated by the respective parties hereto and their attorneys and the language hereof will not be construed for or against any party. The words
"hereof," "herein," "herewith,"
"hereby" and "hereunder" and words of similar import will, unless otherwise stated, be construed to
refer to this Agreement as a whole and not to any particular provision of this Agreement. 

                (e)    Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under
present or future laws, then, if possible, such illegal, invalid or unenforceable provision will be modified to such extent as is necessary to comply with such present or future laws and such
modification will not affect any other provision hereof; provided that if such provision may not be so modified, such illegality, invalidity or unenforceability will not affect any other provision,
but this Agreement will be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein. 

                (f)    Descriptive Headings. The descriptive headings used in this Agreement are inserted for convenience of
reference and are not intended to be part of or to affect the meaning or interpretation of this Agreement. 

                (g)    Expenses. Each party will pay all costs and expenses incurred by it in connection with the execution and
delivery of this Agreement and the transactions contemplated hereby, including fees of legal counsel. 

                (h)    Further Assurances. Each party to this Agreement will do and perform or cause to be done and performed all
such further acts and things and will execute and deliver all such agreements, certificates, instruments and documents as the other party hereto may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 

                (i)    Governing Law; Jurisdiction. This Agreement and all acts and transactions pursuant hereto and the rights
and obligations of the parties hereto will be governed by, and construed in accordance with, the internal law of the State of California, without regard to conflicts of laws. 

                (j)    Counterparts. This Agreement may be executed in counterparts, each of which will be an original and all of
which together will constitute one and the same instrument. 

                (k)    Entire Agreement. This Agreement, together with the related written agreements entered into on the same
date, constitutes the entire agreement between the parties. No representations, agreements or promises have been made except as expressly set forth herein. This Agreement supersedes any prior
negotiations, understandings or agreements, whether written or oral, and any contemporaneous oral understandings or agreements. 

        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. 

	

 	
 	
COMPANY:

IMAGE ENTERTAINMENT, INC.
	

 	
 	

 	
 	

 
	

 	
 	

By:	
 	

 Martin W. Greenwald

Its President and Chief Executive Officer
	

 	

 	

 INVESTOR:

IMAGE INVESTORS CO.
	

 	

 	

 	

 	

 
	

 	
 	

By:	
 	

 Stuart Subotnick

Its Executive Vice President

QuickLinks

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}]]