7
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. The Company must promptly notify the Rights Agent in writing and request
the transfer agent to provide a shareholders list. As soon as practicable after
the Rights Agent receives such written notice and shareholders list, the Rights
Agent will send, by first-class, insured, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Separation Date, at
the address of such holder shown on the records of the Company, one or more
Right Certificates, in substantially the form of Exhibit B hereto, evidencing
one Right for each Common Share so held. In the event that an adjustment in the
number of Rights per Common Share has been made pursuant to Section 11(p)
hereof, at the time of distribution of the Right Certificates, the Company shall
make the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Right Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any fractional Rights. As
of and after the Separation Date, the Rights will be evidenced solely by such
Right Certificates.
(b) As soon as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Series A Preferred Stock, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Separation Date, the Rights will be
evidenced by such certificates registered in the names of the holders thereof,
together with a copy of the Summary of Rights attached thereto, and the
registered holders of the Common Shares shall also be the registered holders of
the associated Rights. Until the earliest of the Separation Date, 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 issued after the Record Date but
prior to the earliest of the Separation Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES
THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET
FORTH IN A RIGHTS AGREEMENT BETWEEN PFSWEB,
INC. AND CHASEMELLON SHAREHOLDERS SERVICES,
L.L.C. DATED AS OF