Exhibit 10.1

 

 

 

 

CONCURRENT COMPUTER CORPORATION

 

And

 

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

 

Tax Asset Preservation Plan

 

Dated as of March 1, 2016

 

 

 

 

 

 

TABLE OF CONTENTS

 

      Page         Section 1. Definitions   1 Section 2. Appointment of Rights
Agent   5 Section 3. Issue of Right Certificates   6 Section 4. Form of Right
Certificates   7 Section 5. Countersignature and Registration   8 Section 6.
Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates   8 Section 7. Exercise of Rights;
Purchase Price; Expiration Date of Rights   9 Section 8. Cancellation and
Destruction of Right Certificates   10 Section 9. Availability of Preferred
Shares   11 Section 10. Preferred Shares Record Date   11 Section 11. Adjustment
of Purchase Price, Number of Shares or Number of Rights   11 Section 12.
Certificate of Adjusted Purchase Price or Number of Shares   18 Section 13.
Reserved   19 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   21 Section 18.
Concerning the Rights Agent   21 Section 19. Merger or Consolidation or Change
of Name of Rights Agent   22 Section 20. Duties of Rights Agent   22 Section 21.
Change of Rights Agent   24 Section 22. Issuance of New Right Certificates   25
Section 23. Redemption   25 Section 24. Exchange   26 Section 25. Notice of
Certain Events   28 Section 26. Notices   28 Section 27. Supplements and
Amendments   29 Section 28. Successors   29 Section 29. Benefits of this
Agreement   29 Section 30. Severability   29 Section 31. Governing Law   29
Section 32. Counterparts   29 Section 33. Descriptive Headings   29 Section 34.
Determinations and Actions by the Board of Directors   30 Section 35.
Construction; Interpretation   30

 

Exhibit A — Form of Certificate of Designations

Exhibit B — Form of Right Certificate

Exhibit C — Summary of Rights to Purchase Preferred Shares

 

- i - 

 

 

Tax Asset Preservation Plan (the “Agreement”), dated as of March 1, 2016,
between Concurrent Computer Corporation, a Delaware corporation (the “Company”),
and American Stock Transfer & Trust Company, LLC, as rights agent (the “Rights
Agent”).

 

Recitals

 

A.           The Company has significant net operating losses and certain other
tax attributes for federal and state income tax purposes (collectively, “NOLs”)
which could be substantially limited or lost if the Company experiences an
“ownership change,” as defined in Section 382 of the Internal Revenue Code of
1986, as amended.

 

B.           The Board of Directors of the Company (the “Board of Directors”)
views these NOLs as a valuable asset of the Company, which is likely to inure to
the benefit of the Company and its stockholders, and the Board of Directors
believes it is in the best interest of the Company and its stockholders that the
Company provide for the protection of these NOLs on the terms and conditions set
forth in this Agreement.

 

C.           As a result, the Board of Directors has (i) authorized and declared
a dividend of one preferred share purchase right (a “Right”) for each Common
Share (as defined herein) of the Company outstanding as of the Close of Business
(as defined herein) on March 16, 2016 (the “Record Date”), each Right initially
representing the right to purchase one one-thousandth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions set forth in
this Agreement, and (ii) authorized the issuance of one Right with respect to
each Common Share of the Company (as such number may be adjusted pursuant to the
provisions of this Agreement) 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 defined herein).

 

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

 

Agreement

 

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

 

(a)       “Acquiring Person” shall mean any Person who, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 4.9%
or more of the Common Shares then outstanding; provided, however, that:

 

(i)          the term “Acquiring Person” shall not include an Exempt Person (so
long as such Person remains an Exempt Person);

 

 

 

 

(ii)         no Person who Beneficially Owns, as of the time of the first public
announcement of this Agreement, 4.9% or more of the Common Shares then
outstanding shall become an “Acquiring Person” unless such Person shall, after
such time, increase its Beneficial Ownership of Common Shares then outstanding
(other than as a result of an acquisition by the Company or any of its
Subsidiaries of Common Shares) to an amount equal to or greater than the greater
of (1) 4.9% or (2) the sum of (A) the lowest Beneficial Ownership of such Person
as a percentage of the outstanding Common Shares as of any date on or after the
date of the first public announcement of this Agreement plus (B) 0.001%;

 

(iii)        no Person shall become an “Acquiring Person” as the result of an
acquisition by the Company or any of its Subsidiaries of Common Shares which, by
reducing the number of Common Shares outstanding, increases the proportionate
number of Common Shares Beneficially Owned by such Person to 4.9% or more of the
Common Shares then outstanding; provided, however, that, if (1) a Person shall
become the Beneficial Owner of 4.9% or more of the Common Shares then
outstanding by reason of any purchase by the Company or any of its Subsidiaries
of Common Shares and (2) after such purchases by the Company or any of its
Subsidiaries, such Person becomes the Beneficial Owner of any additional Common
Shares (other than as a result of a stock dividend, rights dividend, stock split
or similar transaction effected by the Company in which all holders of Common
Shares are treated equally), then such Person shall be deemed to be an
“Acquiring Person;”

 

(iv)        if the Board of Directors determines in good faith that a Person who
would otherwise be an “Acquiring Person,” as defined pursuant to this Section
1(a), 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 this Section 1(a), then
such Person shall not be deemed to be an “Acquiring Person” for any purposes of
this Agreement; and

 

(v)         any Person that has become an “Acquiring Person,” as defined
pursuant to this Section 1(a), shall not be treated as an “Acquiring Person” for
any purposes of this Agreement if the Board of Directors, in its sole
discretion, determines that such Person’s acquisition of Beneficial Ownership of
Common Shares does not jeopardize or endanger the Company’s ability to utilize
the NOLs; provided, however, that, if (1) a Person shall become the Beneficial
Owner of 4.9% or more of the Common Shares then outstanding based on a
determination by the Board of Directors pursuant to this Section 1(a)(v) and (2)
after such acquisition, such Person becomes the Beneficial Owner of any
additional Common Shares (other than as a result of a stock dividend, rights
dividend, stock split or similar transaction effected by the Company in which
all holders of Common Shares are treated equally), then such Person shall be
deemed to be an “Acquiring Person.”

 

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

 

(c)       “Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement, and, to the extent
not included within the foregoing, will also include, with respect to any
Person, any other Person whose Common Shares would be deemed constructively
owned by such first Person pursuant to the provisions of Section 382.

 

 2 

 

 

(d)       “Agreement” shall have the meaning set forth in the Preamble.

 

(e)       A Person shall be deemed the “Beneficial Owner” of, and shall be
deemed to “Beneficially Own,” any securities such Person (i) would be deemed to
directly, indirectly or constructively own pursuant to Section 382 or (ii) which
any other Person Beneficially Owns if such Person is a part of the same group of
Persons that, with respect to such security, are treated as one “entity” as
defined under Section 1.382-3(a)(1) of the Treasury Regulations. Notwithstanding
the foregoing, a Person will not be deemed the “Beneficial Owner” of, or to
“Beneficially Own,” any security solely as a result of such Person’s status as a
“clearing agency,” as defined in Section 3(a)(23) of the Exchange Act; provided,
further, that nothing in this Section 1(d) will cause a Person engaged in
business as an underwriter of securities to be the “Beneficial Owner” of, or to
“Beneficially Own,” any securities acquired through such Person’s participation
in good faith in an underwriting syndicate until the expiration of 40 calendar
days after the date of such acquisition, or such later date as the Board of
Directors may determine in any specific case.

 

(f)        “Board of Directors” shall have the meaning set forth in the
Recitals.

 

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

 

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

 

(i)        “Common Share Equivalents” shall have the meaning set forth in
Section 11(a)(iii).

 

(j)        “Common Shares” shall mean shares of common stock, par value $0.01
per share, of the Company.

 

(k)       “Company” shall have the meaning set forth in the Preamble.

 

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

 

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

 

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

 

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

 

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

 

(q)       “Exempt Person” shall mean the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company, or
any Person organized, appointed, established or holding Common Shares for or
pursuant to the terms of any such employee benefit plan.

 

 3 

 

 

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

 

(s)       “NASDAQ” shall mean The NASDAQ Stock Market, LLC, or any successor
exchange thereto.

 

(t)        “NOLs” shall have the meaning set forth in the Recitals.

 

(u)       “Person” shall mean any individual, firm, corporation, partnership,
limited liability company, limited liability partnership, trust or other entity,
or a group of Persons making a “coordinated acquisition” of shares or otherwise
treated as an entity within the meaning of Section 1.382-3(a)(1) of the Treasury
Regulations, and shall include any successor (by merger or otherwise) of such
individual or entity, as well as any group under Rule 13d-5(b)(1) of the
Exchange Act, but shall not include a “public group” (as such term is defined in
Section 1.382-2T(f)(13) of the Treasury Regulations).

 

(v)       “Preferred Shares” shall mean (i) shares of Series B Junior
Participating Preferred Stock, par value $0.01 per share, of the Company having
the rights and preferences set forth in the Form of Certificate of Designations
attached to this Agreement as Exhibit A and (ii) to the extent there are not a
sufficient number of shares of Series B Junior Participating Preferred Stock
authorized to permit the full exercise of the then outstanding Rights, any other
class or series of preferred stock of the Company classified or designated for
such purpose by the Board of Directors containing terms substantially similar to
the terms of the Series B Junior Participating Preferred Stock.

 

(w)      “Purchase Price” shall have the meaning set forth in Section 4.

 

(x)       “Record Date” shall have the meaning set forth in the Recitals.

 

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

 

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

 

(aa)     “Right” shall have the meaning set forth in the Recitals.

 

(bb)    “Right Certificate” shall have the meaning set forth in Section 3(a).

 

(cc)     “Rights Agent” shall have the meaning set forth in the Preamble.

 

(dd)    “Section 382” shall mean Section 382 of the Internal Revenue Code of
1986, as amended, or any successor provision or replacement provision.

 

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

 

(ff)      “Security” shall have the meaning set forth in Section 11(d)(i).

 

 4 

 

 

(gg)    “Stock Acquisition Date” shall mean the earlier of (i) the first public
announcement (which shall include the filing of a report pursuant to Section
13(d) or Section 13(g) of the Exchange Act, or any comparable successor
provisions thereto) by the Company or an Acquiring Person that an Acquiring
Person has become such (or if such announcement occurs before the Record Date,
the Close of Business on the Record Date) and (ii) the public disclosure of
facts by the Company or an Acquiring Person indicating that an Acquiring Person
has become such. To avoid doubt, no Stock Acquisition Date will be deemed to
have occurred with respect to any Person who is determined by the Board of
Directors not to have become an Acquiring Person in accordance with Section
1(a).

 

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

 

(ii)       “Substitution Period” shall have the meaning set forth in Section
11(a)(iii).

 

(jj)       “Summary of Rights” shall have the meaning set forth in Section 3(b).

 

(kk)     “Trading Day” shall have the meaning set forth in Section 11(d).

 

(ll)       “Treasury Regulations” shall mean final, temporary and proposed
income tax regulations promulgated under the Internal Revenue Code of 1986, as
amended, including any amendments thereto.

 

(mm)   “Trust” shall have the meaning set forth in Section 24(e).

 

(nn)    “Trust Agreement” shall have the meaning set forth in Section 24(e).

 

Section 2.          Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who
shall, prior to the Distribution Date, be the holders of the Common Shares) 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. If the Company appoints
one or more co-Rights Agents, the respective duties of the Rights Agent and any
co-Rights Agents shall be as the Company shall determine; provided that the
Rights Agent shall have no duty to supervise, and shall in no event be liable
for the acts or omissions of, any such co-Rights Agent.

 

 5 

 

 

Section 3.          Issue of Right Certificates.

 

(a)       Until the earlier of (i) the Close of Business on the tenth calendar
day after the Stock Acquisition Date and (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by 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 an Exempt Person) of, or the first
public announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming an Acquiring Person (irrespective of whether any securities
are actually purchased pursuant to such offer) (the earlier of such events
described in clauses (i) and (ii) above, the “Distribution Date”), (1) the
Rights will be evidenced (subject to the provisions of Section 3(b)) by the
certificates for Common Shares registered in the names of the holders thereof
or, if the Common Shares are uncertificated, by the balances indicated in the
book-entry account system of the transfer agent for such Common Shares (which
certificates for such Common Shares or such uncertificated Common Shares shall
in each case be deemed also to be, or evidence, certificates for such Rights
other than for purposes of this Section 3 and any provision of this Agreement
referring to the issuance or distribution of Rights Certificates) and in each
case not by separate Right Certificates, and (2) the Rights (and the right to
receive separate Right Certificates) will be transferable only in connection
with, and will automatically be transferred 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 Company’s records, one or more right certificates,
substantially in the form attached as Exhibit B hereto (a “Right Certificate”),
evidencing one Right for each Common Share so held, subject to adjustment as
provided herein. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates and will be transferable separately
from the Common Shares.

 

(b)       On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a summary of rights to purchase Preferred Shares,
substantially in the form attached as Exhibit C hereto (the “Summary of
Rights”), by first-class, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Record Date, at the address of such
holder shown on the Company’s records. With respect to any Common Shares
outstanding as of the Close of Business on the Record Date, until the
Distribution Date (or if earlier, the Redemption Date or the Final Expiration
Date), (i) in the case of certificated Common Shares, (1) the Rights will be
evidenced by such certificates for Common Shares registered in the names of the
holders thereof and (2) 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 constitute the transfer of the Rights associated
with the Common Shares represented thereby and (ii) in the case of
uncertificated Common Shares, (1) the Rights will be represented by the balances
indicated in the book-entry account system of the transfer agent for such Common
Shares and (2) the transfer of any Common Shares in the book-entry account
system of the transfer agent for such Common Shares outstanding on the Record
Date shall also constitute the transfer of the Rights associated with such
Common Shares.

 

(c)       Except as otherwise provided in Section 22, Rights shall be issued in
respect of all Common Shares which become outstanding (including Common Shares
acquired and subsequently re-sold by the Company) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date. All newly issued certificates for Common Shares, or
confirmation and account statements for uncertificated Common Shares held in
book-entry form, shall bear substantially the following legend:

 

 6 

 

 

Each share of common stock, par value $0.01 per share (“Common Stock”), of
Concurrent Computer Corporation entitles the holders thereof to certain Rights
as set forth (and as such term is defined) in the Tax Asset Preservation Plan,
dated as of March 1, 2016, between Concurrent Computer Corporation and American
Stock Transfer & Trust Company, LLC, as it may be amended from time to time (the
“Agreement”). The terms of the Agreement are incorporated herein by reference. A
copy of the Agreement is on file at the principal executive offices of
Concurrent Computer Corporation. Concurrent Computer Corporation will mail to
the holder of the shares to which this [certificate / statement] relates a copy
of the Agreement, as in effect on the date of mailing, without charge, after
receipt by it of a written request therefor. Under certain circumstances, as set
forth in the Agreement, (1) the Rights will be evidenced by separate
certificates and will no longer be evidenced by the shares of Common Stock to
which this [certificate / statement] relates and (2) any Rights issued to, held
by or Beneficially Owned by Acquiring Persons or their Associates or Affiliates
(as each such term is defined in the Agreement) or any subsequent holder of such
Rights will become null and void.

 

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

 

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 in the form attached as Exhibit B
hereto, and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon (a) as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
(b) as may be required to comply with any applicable law or with any applicable
rule or regulation made pursuant thereto or with any applicable rule or
regulation of any stock exchange or trading system or the Financial Industry
Regulatory Authority, or (c) to conform to usage. Subject to the provisions of
Sections 11 and 22, the Right Certificates, whenever distributed, 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 price per one
one-thousandth of a Preferred Share set forth therein (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.

 

 7 

 

 

Section 5.          Countersignature and Registration.

 

(a)       The Right Certificates shall be executed on behalf of the Company by
its Chief Executive Officer, Chief Financial Officer, President, any of its Vice
Presidents (of any designation), its Treasurer or its Secretary, either manually
or by facsimile signature, shall have affixed thereto the Company’s seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned, either manually or by facsimile signature,
by the Rights Agent and shall not be valid for any purpose unless countersigned.
If 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 individual who signed such Right Certificates had not ceased to be such
officer of the Company. Any Right Certificate may be signed on behalf of the
Company by any individual who, at the actual date of the execution of such Right
Certificate, shall be an officer of the Company authorized to sign such Right
Certificate, although at the date of the execution of this Agreement any such
individual was not such an officer.

 

(b)       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, the date of each
of the Right Certificates and the certificate numbers for each of the Right
Certificates.

 

Section 6.          Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14, 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 (other
than any Right Certificate representing Rights that have become null and void
pursuant to Section 11(a)(ii) or that have been exchanged pursuant to Section
24) may be transferred, split up, combined or exchanged for one or more Right
Certificates entitling the registered holder to purchase a like number of one
one-thousandths of a Preferred Share as the Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificate
to be transferred, split up, combined or exchanged at the principal office of
the Rights Agent. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Right Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall request. Thereupon the Rights Agent
shall countersign and deliver to the Person entitled thereto one or more Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or charge that may be imposed in
connection with any transfer, split up, combination or exchange of any Right
Certificate.

 

 8 

 

 

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 execute 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.

 

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

 

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

 

(a)       The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein), in whole or in part, at
any time after the Distribution Date, upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the 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 fifth (5th) Business Day after the filing by the
Company of a Current Report on Form 8-K reporting the results of the 2016 annual
meeting of stockholders of the Company (including any postponement or
adjournment thereof), (ii) the time at which the Board of Directors determines
that the NOLs are fully utilized or no longer available under Section 382 (the
earlier of clauses (i) and (ii), the “Final Expiration Date”), provided,
however, that if any Person shall become an Acquiring Person, then clause (i)
and (ii) above shall be disregarded for all purposes under this Agreement and
the Final Expiration Date shall be March 1, 2026, (iii) the time at which the
Rights are redeemed as provided in Section 23 (the “Redemption Date”), or (iv)
the time at which such Rights are exchanged as provided in Section 24.

 

(b)       The Purchase Price for each one one-thousandth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $30.00, and
shall be subject to adjustment from time to time as provided in Section 11, and
shall be payable in lawful money of the United States of America in accordance
with Section 7(c).

 

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(c)       Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase completed and duly executed, accompanied
by payment of the Purchase Price for the Preferred Shares to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 by cash or by certified
check, cashier’s check or money order payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (1) requisition from any transfer
agent of the Preferred Shares certificates for the number of Preferred Shares to
be purchased, and the Company hereby irrevocably authorizes and directs any such
transfer agent to comply with all such requests, or (2) if the Company has
elected to deposit the total number of Preferred Shares issuable upon exercise
of the Rights with a depositary agent, requisition from the depositary agent
depositary 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 of the Preferred Shares with such depositary agent), and the Company
hereby directs such depositary agent to comply with such request; (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14; (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder; and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate. Notwithstanding
any other provisions hereof, the Company and the Rights Agent may, at any time,
amend this Rights Agreement as the Company shall determine necessary to provide
for uncertificated Preferred Shares or book-entry only depositary receipts in
addition to or in place of Preferred Shares or depositary receipts evidenced by
certificate or physical receipts, respectively.

 

(d)       If 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 such holder’s
duly authorized assigns, subject to the provisions of Section 14.

 

(e)       Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to any purported exercise of any Rights until the
registered holder thereof shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof of such Rights as the Company shall request.

 

Section 8.          Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and, in such case, shall
deliver a certificate of destruction thereof to the Company.

 

 10 

 

 

Section 9.          Availability of Preferred Shares. The Company 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. The Company 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 authorized, validly
issued, fully paid and non-assessable.

 

The Company will use its reasonable best efforts to (i) cause, from and after
such time as the Rights become exercisable, the Rights and all Preferred Shares
to be listed or admitted for trading by the NASDAQ or any other national
securities exchange upon notice of issuance upon such exercise and (ii) if then
necessary to permit the offer and issuance of such Preferred Shares, register
and qualify such Preferred Shares under the Securities Act and any applicable
state securities or “blue sky” laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing, and keep such registration and
qualifications effective until the earlier of the Redemption Date or the Final
Expiration Date.

 

The Company 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 any Preferred Shares upon the exercise of Rights. The
Company shall not, however, be required (a) 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 depositary receipts
for the Preferred Shares in a name other than the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or (b) to issue or to
deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company’s 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 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 and Number of
Rights. The Purchase Price, the number and kind of securities and property
covered by each Right, and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.

 

 11 

 

 

(a)       (i) In the event the Company shall at any time after the date of this
Agreement (1) declare or pay any dividend on the Preferred Shares payable in
Preferred Shares, (2) subdivide or split the outstanding Preferred Shares into a
greater number of Preferred Shares, (3) combine or consolidate the outstanding
Preferred Shares into a smaller number of Preferred Shares or (4) issue any
shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a share exchange,
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, upon payment of the Purchase Price then in
effect, 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, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs which would require an
adjustment under this Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii).

 

(ii)         Subject to Sections 23 and 24, in the event any Person becomes an
Acquiring Person, each holder of a Right (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person) 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 and in lieu of Preferred Shares, such number of Common Shares as shall
equal the result obtained by (1) 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 (2) 50% of the then current per share
market price of the Common Shares (determined pursuant to Section 11(d)) on the
date of the occurrence of such event (such number of Common Shares, the
“Adjustment Shares”). In the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company shall not take any
action which would eliminate or diminish the benefits intended to be afforded by
the Rights.

 

From and after any Person becomes an Acquiring Person, any Rights that are or
were acquired or Beneficially Owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be null and void without any further
action, and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement or otherwise. Neither the
Company nor the Rights Agent shall have liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder. No Right Certificate shall be issued pursuant to
Section 3 that represents Rights Beneficially Owned by an Acquiring Person whose
Rights would be null and void pursuant to this Section 11(a)(ii) 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
null and void pursuant to this Section 11(a)(ii) sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate or with respect to any Common Shares otherwise deemed to be
Beneficially Owned by any of the foregoing; and any Right Certificate delivered
to the Rights Agent for transfer to an Acquiring Person or other Person whose
Rights would be null and void pursuant to this Section 11(a)(ii) shall be
cancelled.

 

 12 

 

 

(iii)        In the event that there shall not be sufficient Common Shares
issued but not outstanding, or authorized but unissued (and not subject to
reservation), to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii) and the Rights shall become so exercisable, the Company shall
take all such action as may be necessary (including, to the extent required by
law, seeking stockholder approval for the authorization of additional shares) to
authorize additional Common Shares for issuance upon exercise in full of the
Rights; provided, however, that if the Company after using its reasonable best
efforts to do so is unable to cause the authorization of a sufficient number of
additional Common Shares within 120 days (the “Substitution Period”), the
Company shall: (A) determine the value of the Adjustment Shares issuable upon
the exercise of a Right (the “Current Value”) and (B) with respect to each Right
(other than those rights which have become null and void pursuant to Section
11(a)(ii)), upon the exercise of such Right and payment of the applicable
Purchase Price, make adequate provision to substitute for the Adjustment Shares
(1) cash, (2) a reduction in the Purchase Price, (3) equity securities other
than Common Shares (including shares, or units of shares, of preferred stock of
the Company which, by virtue of having dividend, voting and liquidation rights
substantially comparable to the class of Common Shares for which a Right is
exercisable are determined by the Board of Directors to have essentially the
same value as the class or series of Common Shares for which a Right is
exercisable (such shares or units of shares of preferred stock are herein called
“Common Share Equivalents”)), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value
which, when added to the value of the Common Shares actually issued upon
exercise of such Right, shall have an aggregate value equal to the Current Value
(less the amount of any reduction in the Purchase Price), where such aggregate
value has been determined by the Board of Directors based upon the advice of a
nationally recognized independent investment banking firm selected by the Board
of Directors; provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within 120 days
following the later of (x) the time when any Person first becomes an Acquiring
Person and (y) the date on which the Company's right of redemption pursuant to
Section 23(a) expires, then 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 for which a Right is exercisable (to the extent available)
and then, if necessary, cash or shares of capital stock of the Company, which
shares and cash have an aggregate value equal to the excess of the Current Value
over the Purchase Price. To the extent that the Company determines that some
action needs to be taken pursuant to the first sentence of this Section
11(a)(iii), the Company (x) shall provide 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 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)(iii), the
value of each Adjustment Share shall be the current per share market price of
the Common Shares (determined pursuant to Section 11(d)) on the date of
occurrence of the time when any Person first becomes an Acquiring Person and the
per share or per unit value of any Common Share Equivalent shall be deemed to
equal the current per share market price of the Common Shares (determined
pursuant to Section 11(d)) on such date.

 

 13 

 

 

(b)       If the Company shall fix a record date for the issuance of rights
(other than the 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 or Equivalent Preferred Shares so to be offered (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 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. If 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 by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and holders of the Rights. Preferred Shares
owned by or held for the account of the Company or any of its Subsidiaries shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and,
in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

 

 14 

 

 

(c)       If 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 share exchange, 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)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price of the
Preferred Shares (as defined in Section 11(d)) on such record date, less the
fair market value (as determined by the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and holders of the Rights) 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 then current per share market price of the Preferred Shares
on such record date; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company to be issued upon exercise of one
Right. Such adjustments shall be made successively whenever such a record date
is fixed; and, in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

 

(d)       (i) For the purpose of any computation hereunder and subject to
Section 11(d)(ii), 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 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 (1) a dividend or distribution on such Security payable in shares of
such Security or Securities convertible into such shares, or (2) any
subdivision, combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, reported at or prior to 4:00 P.M. Eastern time or,
if no such sale takes place on such day, the average of the bid and asked
prices, regular way, reported as of 4:00 P.M. Eastern time, in either case, as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the NASDAQ or, if the Security is
not listed or admitted to trading on the NASDAQ, 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 quoted sale price reported at or
prior to 4:00 P.M. Eastern time or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported as of 4:00
P.M. Eastern time by the National Association of Securities Dealers, Inc.,
Automated Quotations System 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. If on any such date
no market maker is making a market in the Security, the fair value of such
Security on such date will be determined by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
which shall be conclusive and binding for all purposes hereunder. The term
“Trading Day” shall mean a day on which the principal national securities
exchange or national market system 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 or national
market system, a Business Day.

 

 15 

 

 

(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); provided, however, that 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 1,000. 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 by the Board of Directors, whose determination shall be described in
a statement filed with the Rights Agent and which shall be conclusive and
binding for all purposes hereunder.

 

(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 ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
immediately prior to the Redemption Date or the Final Expiration Date.

 

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

 

 16 

 

 

(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 (1) the number of one one-thousandths of a
share covered by a Right immediately prior to this adjustment by (2) 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 or any adjustment to the number of one one-thousandths of a
Preferred Share for which a Right may be exercised, 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 Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14, 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 in
the number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-thousandths
of a Preferred Share which were expressed in the initial Right Certificates
issued hereunder.

 

 17 

 

 

(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.

 

(l)        In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise 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 the Board of Directors, in its sole discretion, shall determine
to be advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to in Section 11(b), hereafter made by the Company
to holders of the 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, (1)
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 (2) 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(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is affected.

 

Section 12.        Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11, the Company shall
promptly (a) prepare a certificate setting forth such adjustment or describing
such event and a brief statement of the facts accounting for such adjustment or
describing such event, (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) if such adjustment occurs at any time after the Distribution Date, mail
a brief summary thereof to each holder of a Right Certificate in accordance with
Section 25. Notwithstanding the foregoing, the failure of the Company to give
such notice shall not affect the validity of or the force or effect of or the
requirement for such adjustment. Any adjustment to be made pursuant to Section
11 shall be effective as of the date of the event giving rise to such
adjustment.

 

 18 

 

 

Section 13.         Reserved.

 

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 way, or, if 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 NASDAQ or, if the Rights are
not listed or admitted to trading on the NASDAQ, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date shall be determined in good faith by the Board of Directors.

 

(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)) for the Trading Day immediately prior to the date
of such exercise.

 

 19 

 

 

(c)       The Company shall not be required to issue fractions of Common Shares
upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Company shall
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Common Share of the Company for which a Right is
exercisable. For the purposes of this Section 14(c), the current market value of
a Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise.

 

(d)       The holder of a Right, by the acceptance of the Right, expressly
waives such holder’s 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, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in such holder’s own behalf and
for such holder’s own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of, such holder’s 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 the Rights Agent
and with every other holder of a Right that:

 

(a)       prior to the Distribution Date, the Rights will not be represented by
a Right Certificate and 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 with the appropriate forms and certificates fully executed; and

 

 20 

 

 

(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) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificate or the associated Common Shares 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 or Right Certificate shall be entitled to vote,
receive dividends or other distributions in respect of, or be deemed for any
purpose to be 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), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.

 

Section 18.         Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder, and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense incurred without gross
negligence, bad faith, willful misconduct or breach of this Agreement 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.

 

 21 

 

 

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 effect a share exchange, be converted or
consolidated, or any Person resulting from any merger, share exchange,
conversion or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any Person succeeding to the stock transfer or
corporate trust powers 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 document or any further act on the part of any of the
parties hereto; provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. If 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, if 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.

 

If 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, if 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 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 Chief Executive Officer,
Chief Financial Officer, President, any of its Vice Presidents (of any
designation), its Treasurer or its Secretary and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

 

(c)       The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct or breach of this Agreement by it or
its attorneys or agents.

 

(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.

 

 22 

 

 

(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 null and void pursuant to Section 11(a)(ii)) or any adjustment
in the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 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 receipt of a
certificate pursuant to Section 12 describing such change or adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Preferred Shares to be issued
pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares will, when issued, be duly authorized, validly issued, fully
paid and non-assessable.

 

(f)       The Company 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 Chief Executive Officer, Chief Financial Officer, President, any of
its Vice Presidents (of any designation), its Treasurer or its Secretary, 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 the instructions of any such officer or for any delay in
acting while waiting for those instructions.

 

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

 

(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.

 

 23 

 

 

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, in the event that the
Rights Agent or one of its Affiliates is not also the transfer agent for the
Company, to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail. In the event the transfer agency relationship in
effect between the Company and the Rights Agent terminates, the Rights Agent
will be deemed to have resigned automatically and be discharged from its duties
under this Agreement as of the effective date of such termination, and the
Company shall be responsible for sending any required notice. The Company may
remove the Rights Agent or any successor Rights Agent (with or without cause)
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 (i) first-class mail or (ii) disclosure in a press release
of the Company or in a periodic report of the Company required to be filed under
the Exchange Act or in any other communication of the Company with its
stockholders. 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. Notwithstanding the foregoing provisions of this Section 21, in no event
shall the resignation or removal of a Rights Agent be effective until a
successor Rights Agent shall have been appointed and have accepted such
appointment. 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 (which holder shall, with
such notice, submit such holder’s Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be either (a) a Person organized and doing business under the laws of the
United States or of the State of Delaware or New York (or of any other state of
the United States so long as such Person is authorized to do business as a
banking institution in such state), in good standing which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (b) an affiliate or direct or indirect wholly-owned
Subsidiary of such Person or its wholly-owning parent. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares, and give
notice thereof to the registered holders of the Right Certificates or, if prior
to the Distribution Date, the holders of record of the Common Shares, by (1)
first-class mail or (2) disclosure in a press release of the Company or in a
periodic report of the Company required to be filed under the Exchange Act or in
any other communication of the Company with its stockholders. 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.

 

 24 

 

 

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

 

Section 23.         Redemption.

 

(a)       The Board of Directors 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 $0.001 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption price,
the “Redemption Price”). 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.

 

(b)       Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to Section 23(a), 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. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24, and other than in connection with the purchase
of Common Shares prior to the Distribution Date.

 

(c)       In connection with any redemption permitted under this Section 23, the
Company may, at its option, discharge all of its obligations with respect to the
Rights by (i) issuing a press release announcing the manner of redemption of the
Rights and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares, and, upon such action, all
outstanding Right Certificates shall be null and void without any further action
of the Company.

 

 25 

 

 

Section 24.         Exchange.

 

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

 

(b)      Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to Section 24(a) 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)) held by each holder of Rights.

 

(c)       In the event that there shall not be sufficient Common 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 take all
such action as may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be necessary to authorize
such additional Common Shares, the Company shall substitute, for each Common
Share that would otherwise be issuable upon exchange of a Right, a number of
Common Shares or shares of preferred stock, notes, debentures or other
securities, or any combination thereof, having an aggregate value equal to the
Rights to be exchanged, which value shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors.

 

(d)       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
Section 24(d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i)) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.

 

 26 

 

 

(e)       Following the action of the Board of Directors ordering the exchange
of any Rights pursuant to this Section 24, the Company may implement such
procedures as it deems appropriate, in its sole discretion, for the purpose of
ensuring that the Common Shares (or such other consideration) issuable upon an
exchange pursuant to this Section 24 are not received by holders of Rights that
have become null and void pursuant to Section 11(a)(ii). Before effecting an
exchange pursuant to this Section 24, the Board of Directors may direct the
Company to enter into a Trust Agreement in such form and with such terms as the
Board of Directors shall then approve (the “Trust Agreement”). If the Board of
Directors so directs, the Company shall enter into the Trust Agreement and shall
issue to the trust created by such agreement (the “Trust”) all or a portion (as
designated by the Board of Directors) of the Common Shares (or other securities)
issuable pursuant to the exchange, and all holders of Rights entitled to receive
such shares or securities pursuant to the exchange shall be entitled to receive
such shares or securities (and any dividends paid or distributions made thereon
after the date on which such shares are deposited in the Trust) only from the
Trust and solely upon compliance with the relevant terms and provisions of the
Trust Agreement. Prior to effecting an exchange and registering Common Shares
(or other such securities) in any Person’s name, including any nominee or
transferee of a Person, the Company may require (or cause the trustee of the
Trust to require), as a condition thereof, that any holder of Rights provide
evidence, including the identity of the Beneficial Owners thereof and their
Affiliates and Associates (or former Beneficial Owners thereof and their
Affiliates and Associates) as the Company shall reasonably request in order to
determine if such Rights are null and void. If any Person shall fail to comply
with such request, the Company shall be entitled conclusively to deem the Rights
formerly held by such Person to be null and void pursuant to Section 11(a)(ii)
and not transferable or exercisable or exchangeable in connection herewith. Any
Common Shares or other securities issued at the direction of the Board of
Directors in connection herewith shall be validly issued, fully paid, and
non-assessable Common Shares or of such other securities (as the case may be),
and the Company shall be deemed to have received as consideration for such
issuance a benefit having a value that is at least equal to the aggregate par
value of the shares so issued.

 

 27 

 

 

Section 25.         Notice of Certain Events.

 

(a)       If the Company shall, at any time after the Distribution Date, propose
(i) to pay any dividend payable in stock of any class to the holders of the
Preferred Shares or to make any other distribution to the holders of the
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of the 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 the
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any share exchange,
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, 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, share exchange, 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 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 or Preferred Shares, whichever shall be the
earlier.

 

(b)       If the event set forth in Section 11(a)(ii) shall occur, then the
Company shall, as soon as practicable thereafter, give to each holder of a Right
Certificate, in accordance with Section 26, 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).

 

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 overnight
delivery service or first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:

 

Concurrent Computer Corporation

4375 River Green Parkway, Suite 100

Duluth, Georgia 30096

Attention: Corporate Secretary

 

Subject to the provisions of Section 21, 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 overnight delivery service or first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:

 

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

Attention: Relationship Manager

 

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

 

 28 

 

 

Section 27.         Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Rights 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, 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 (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon the
delivery of a certificate from any appropriate officer of the Company which
states that a proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment.

 

Section 28.         Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

 

Section 29.         Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the 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 30.         Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

 

Section 31.         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 32.         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. A signature to this Agreement transmitted
electronically shall have the same authority, effect, and enforceability as an
original signature.

 

Section 33.         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.

 

 29 

 

 

Section 34.         Determinations and Actions by the Board of Directors. The
Board of Directors shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted to the
Board of Directors or to the Company or as may be necessary or advisable in the
administration of this Agreement, including the right and power to (a) interpret
the provisions of this Agreement, and (b) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend this Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board of Directors shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board of Directors to any liability to
the holders of the Rights.

 

Section 35.         Construction; Interpretation. The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of names and pronouns shall include the plural and vice versa. The word
“including” and “include” and other words of similar import will be deemed to be
followed by the phrase “without limitation.” The words “herein,” “hereto” and
“hereby,” and other words of similar import refer to this Agreement as a whole
and not to any particular Section or other subdivision of this Agreement.
References to sections, subsections, clauses, subclauses, subparagraphs,
recitals, the preamble and exhibits are references to sections, subsections,
clauses, subclauses, subparagraphs, recital, the preamble and exhibits of this
Agreement. Any reference herein to law or to a law, statute, rule or regulation
of any governmental entity (or any provision thereof) shall include all laws and
such law, statute, rule or regulation promulgated thereunder (or provision
thereof), including any successor thereto, as it may be amended from time to
time.

 

 30 

 

 

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

 

Attest:   CONCURRENT COMPUTER CORPORATION           By: /s/ Judson E. Schmid  
By: /s/ Emory O. Berry Name:   Judson E. Schmid     Name:  Emory O. Berry Title:
Vice President and Corporate Controller     Title:  Chief Financial Officer and
Executive Vice President of Operations           Attest:   AMERICAN STOCK
TRANSFER & TRUST COMPANY, LLC,       as Rights Agent           By: /s/ Donna
Ansbro   By: /s/ Jennifer Donovan Name:   Donna Ansbro     Name:  Jennifer
Donovan Title:   Vice President     Title:  Senior Vice President

 

Signature Page – Tax Asset Preservation Plan

 

 
 

 

Exhibit A

 

FORM

of

CERTIFICATE OF DESIGNATIONS

of

SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

of

CONCURRENT COMPUTER CORPORATION

 

(Pursuant to Title 8, Section 151 of the

Delaware General Corporation Law)

 

 

 

Concurrent Computer Corporation, a corporation organized and existing under the
laws of the State of Delaware (hereinafter called the “Corporation”), hereby
certifies that the following resolution was adopted by the Board of Directors of
the Corporation as required by Title 8, Section 151 of the Delaware General
Corporation Law at a meeting duly called and held on February 27, 2016:

 

RESOLVED, that pursuant to the authority granted to and vested in the Board of
Directors of this Corporation (hereinafter called the “Board of Directors” or
the “Board”) in accordance with the provisions of the Certificate of
Incorporation, the Board of Directors hereby creates a series of Series
Preferred Stock, par value $0.01 per share (the “Preferred Stock”), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:

 

Section 1.   Designation and Amount. The shares of such series shall be
designated as “Series B Junior Participating Preferred Stock” (the “Series B
Preferred Stock”) and the number of shares constituting the Series B Preferred
Stock shall be 14,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided that no decrease shall reduce the
number of shares of Series B Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series B
Preferred Stock.

 

 A-1 

 

 

Section 2.   Dividends and Distributions.

 

(A)         Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and senior to the Series B
Preferred Stock with respect to dividends, the holders of shares of Series B
Preferred Stock, in preference to the holders of Common Stock, par value $0.01
per share (the “Common Stock”), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December in each
year (each such date being referred to herein as a “Quarterly Dividend Payment
Date”), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series B Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00
or (b) subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series B Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

 

(B)         The Corporation shall declare a dividend or distribution on the
Series B Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series B Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.

 

(C)         Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from the Quarterly Dividend Payment Date
immediately preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series B Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series B Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.

 

 A-2 

 

 

Section 3.    Voting Rights. The holders of shares of Series B Preferred Stock
shall have the following voting rights:

 

(A)         Subject to the provision for adjustment hereinafter set forth, each
share of Series B Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

 

(B)         Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series B Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.

 

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

 

Section 4.   Certain Restrictions.

 

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

 

(i)          declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock;

 

(ii)         declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Preferred Stock, except dividends
paid ratably on the Series B Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;

 

 A-3 

 

 

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

 

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

 

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

 

Section 5.   Reacquired Shares. Any shares of Series B Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Certificate
of Incorporation, or in any other Certificate of Designations creating a series
of Preferred Stock or any similar stock or as otherwise required by law.

 

Section 6.   Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock shall have
received $1,000 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series B Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred Stock,
except distributions made ratably on the Series B Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series B Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

 

 A-4 

 

 

Section 7.    Consolidation, Merger, etc. If the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash or any other property, then in any such case each share of Series B
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount of stock, securities, cash or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series B Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

 

Section 8.    No Redemption. The shares of Series B Preferred Stock shall not be
redeemable.

 

Section 9.    Rank. The Series B Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Corporation’s Preferred Stock.

 

Section 10.   Amendment. The Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series B Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series B Preferred Stock, voting
together as a single class.

 

 A-5 

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations
to be executed by the undersigned as of this ___ day of ______________, 20___.

 

  CONCURRENT COMPUTER CORPORATION         By:     Name:     Title:  

 

 A-6 

 

 

Exhibit B

 

Form of Right Certificate

 

Certificate No. R- ______ Rights

 

NOT EXERCISABLE AFTER THE FINAL EXPIRATION DATE (AS DEFINED IN THE AGREEMENT) OR
EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION
AT $0.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT.

 

Right Certificate

 

Concurrent Computer Corporation

 

This certifies that ___________, or registered assigns, is the registered owner
of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Agreement, dated
as of March 1, 2016 (the “Agreement”), between Concurrent Computer Corporation,
a Delaware corporation (the “Company”), and American Stock Transfer & Trust
Company, LLC (the “Rights Agent”), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Agreement) and prior
to the Final Expiration Date (as such term is defined in the Agreement) at the
principal office of the Rights Agent, or at the office of its successor as
Rights Agent, [●] one-thousandth of a fully paid non-assessable share of Series
B Junior Participating Preferred Stock, par value $0.01 per share, of the
Company (the “Preferred Shares”), at a purchase price of $[●] per one
one-thousandth of a Preferred Share (the “Purchase Price”), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right Certificate (and the
number of one one-thousandths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of [●], 2016, based on the Preferred Shares as
constituted at such date. As provided in the Agreement, the Purchase Price and
the number of one one-thousandths of a Preferred Share which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject
to modification and adjustment upon the happening of certain events.

 

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

 

 B-1 

 

 

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

 

Subject to the provisions of the Agreement, the Rights evidenced by this Right
Certificate (i) may be redeemed by the Company at a redemption price of $0.001
per Right or (ii) may be exchanged in whole or in part for Preferred Shares or
shares of the Company’s Common Stock, par value $0.01 per share.

 

No fractional Preferred Shares will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of
one one-thousandth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts), but, in lieu thereof, a cash
payment will be made, as provided in the Agreement.

 

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

 

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

 

 B-2 

 

 

WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal. Dated as of _____________, 20__.

 

Attest:   Concurrent Computer Corporation           By:     By:   Name:    
Name:   Title:     Title:             American Stock Transfer & Trust Company,
LLC,       as Rights Agent                 By:         Name:         Title:    
   

 

 B-3 

 

 

Form of Reverse Side of Right Certificate

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)

 

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

 

Dated:                             Signature         Signature Guaranteed:    

 

Signatures must be guaranteed by a member or participant in the Securities
Transfer Agents Medallion Program, the NASDAQ Medallion Stamp Program, or the
Stock Exchanges Medallion Program.

 

The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Agreement).

 

              Signature  

 

 B-4 

 

 

Form of Reverse Side of Right Certificate – continued

 

FORM OF ELECTION TO PURCHASE

 

(To be executed if holder desires to exercise

Rights represented by the Right Certificate.)

 

To: CONCURRENT COMPUTER CORPORATION

 

The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:

 

Please insert social security or other identifying number

 

_______________________________________________________

 

(Please print name and address)

 

_______________________________________________________

 

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

 

Please insert social security or other identifying number

 

_______________________________________________________

 

(Please print name and address)

 

_______________________________________________________

 

Dated:                   Signature  

 

Signature Guaranteed:

 

Signatures must be guaranteed by a member or participant in the Securities
Transfer Agents Medallion Program, the NASDAQ Stamp Medallion Program, or the
Stock Exchanges Medallion Program.

 

 B-5 

 

 

The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Agreement).

 

        Signature  

 

NOTICE

 

The signature in the Form of Assignment or Form of Election to Purchase, as the
case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

 

In the event the certification set forth above in the Form of Assignment or the
Form of Election to Purchase, as the case may be, is not completed, the Company
and the Rights Agent will deem the Beneficial Owner of the Rights evidenced by
this Right Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Agreement) and such Assignment or Election to
Purchase will not be honored.

 

 B-6 

 

 

Exhibit C

 

SUMMARY OF RIGHTS TO PURCHASE

 

PREFERRED SHARES

 

Introduction

 

On February 27, 2016, the Board of Directors of our Company, Concurrent Computer
Corporation, a Delaware corporation, declared a dividend of one preferred share
purchase right (a “Right”) for each outstanding share of common stock, par value
$0.01 per share. The dividend is payable on March 16, 2016 to the stockholders
of record as of the close of business on March 16, 2016.

 

For those interested in the specific terms of the Rights, which are governed by
the Rights Agreement dated March 1, 2016 and between our Company and American
Stock Transfer & Trust Company, LLC, the Rights Agent, we provide the following
summary description. Please note, however, that this description is only a
summary, and is not complete, and should be read together with the entire Rights
Agreement, which has been filed with the Securities and Exchange Commission as
an exhibit to a Registration Statement on Form 8-A dated March 1, 2016. A copy
of the Rights Agreement is available free of charge from our Company.

 

Our Board has adopted this Rights Agreement to deter acquisitions of our common
stock that would potentially limit our ability to use our net loss carryforwards
and certain other tax attributes, which we refer to collectively as NOLs, to
reduce our potential future federal income tax obligations. Our Company has
experienced, and may continue to experience, substantial operating losses, and
for federal and state income tax purposes, our Company may “carry forward” NOLs
in certain circumstances to offset current and future taxable income, which will
reduce our Company’s federal and state income tax liability. As a result, these
NOLs can be a valuable asset of our Company, which may inure to the benefit of
our Company and its stockholders. However, if our Company experiences an
“ownership change,” as defined in Section 382 of the Internal Revenue Code, our
ability to use the NOLs could be substantially limited, and the timing of the
usage of the NOLs could be substantially delayed, which could adversely affect
the value of our Company’s NOLs. Generally, an ownership change occurs if the
percentage of our Company’s stock owned by one or more “five percent
stockholders” increases by more than fifty percentage points over the lowest
percentage of stock owned by such stockholders at any time during the prior
three-year period. The Rights Agreement has a 4.9% “trigger” threshold which is
intended to act as a deterrent to any person acquiring 4.9% or more of our
Company’s outstanding common stock without the approval of the Board of
Directors of our Company. This would protect our Company’s NOLs because changes
in ownership by persons owning less than 4.9% of our Company’s outstanding
common stock are not included in the calculation of whether our Company has
experienced an “ownership change” under Section 382 of the Internal Revenue
Code. There is no guarantee, however, that the Rights Agreement will prevent the
Company from experiencing an ownership change.

 

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In general terms, the Rights Agreement works by imposing a significant penalty
upon any person or group which acquires 4.9% or more of our outstanding common
stock without the approval of the Board of Directors of our Company.
Stockholders who own 4.9% or more of the outstanding common stock as of the
close of business on March 1, 2016, will not trigger the Rights so long as they
do not increase their ownership of common stock to an amount equal to or greater
than the greater of (i) 4.9% or (ii) the sum of (x) the lowest beneficial
ownership of such person as a percentage of the outstanding common stock as of
any date on or after the March 1, 2016 plus (y) 0.001%. The Rights Agreement
should not interfere with any merger or other business combination approved by
our Board.

 

The Rights. Our Board authorized the issuance of a Right with respect to each
outstanding share of common stock on February 27, 2016. The Rights will
initially trade with, and will be inseparable from, the common stock. The Rights
are evidenced only by certificates representing shares of Common Stock (or, with
respect to uncertificated shares of common stock, by the balances indicated in
the book-entry account system of the Company’s transfer agent). New Rights will
accompany any new shares of common stock we issue after March 16, 2016 until the
Distribution Date described below. In addition, new Rights will accompany any
new shares of Common Stock issued after the Distribution Date upon conversion of
any convertible securities of the Company and the exercise of options to
purchase shares of Common Stock granted by the Company that were outstanding
prior to the Distribution Date.

 

Exercise Price. Each Right will allow its holder to purchase from our Company
one one-thousandth of a share of Series B Junior Participating Preferred Stock
(“Preferred Share”) for $30.00, subject to adjustment (the “Exercise Price”)
once the Rights become exercisable. This portion of a Preferred Share will give
the stockholder approximately the same dividend, voting, and liquidation rights
as would one share of common stock. Prior to exercise, the Right does not give
its holder any dividend, voting, or liquidation rights.

 

Exercisability. The Rights will not be exercisable until 10 days after the
public announcement that a person or group has become an “Acquiring Person” by
obtaining beneficial ownership of 4.9% or more of our outstanding common stock
(or if already the beneficial owner of at least 4.9% of our outstanding common
stock, by acquiring additional shares of our common stock representing 0.001% or
more of the shares of common stock then outstanding). For these purposes,
beneficial ownership is determined based on the number of shares of the
Company’s common stock that a person is deemed to directly, indirectly or
constructively own pursuant to Section 382 of the Internal Revenue Code,
including any shares owned by any other person treated as one entity under
applicable treasury regulations.

 

Prior to the close of business on the tenth day after the earlier of the date
the Rights become exercisable and the date of the commencement or public
announcement of the intent of any person to commence a tender or exchange offer
which would result in such person becoming an Acquiring Person, which tenth day
we refer to as the “Distribution Date,” the Rights will be evidenced only by
certificates representing shares of common stock (or, with respect to
uncertificated shares of common stock, by the balances indicated in the
book-entry account system of the Company’s transfer agent), and will be
transferred with, the common stock, and the registered holders of the common
stock will be deemed to be the registered holders of the Rights. After the
Distribution Date, the rights agent will mail separate certificates evidencing
the Rights to each record holder of common stock as of the close of business on
the Distribution Date, and thereafter the Rights will be evidenced solely by
such certificates and will be transferable separately from the common stock. Any
Rights held by an Acquiring Person or any of its affiliates or associates are
void and may not be transferred or exercised.

 

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Consequences of a Person or Group Becoming an Acquiring Person. If a person or
group of affiliated or associated persons becomes an Acquiring Person, all
holders of Rights except the Acquiring Person or its associates or affiliates
and any of their transferees may, upon exercise of a Right, purchase for the
Exercise Price shares of common stock with a market value of two times the
Exercise Price, based on the market price of the common stock on the date such
person or group of affiliates or associated persons became an Acquiring Person.
If the Company does not have a sufficient number of shares of common stock
available, the Company may under certain circumstances substitute shares of
preferred stock or other securities or property for the common stock into which
the Rights would have otherwise been exercisable.

 

If our Board determines in good faith that a person who would otherwise be an
Acquiring Person, has become such inadvertently, and such person divests as
promptly as practicable a sufficient number of shares of common stock so that
such person would no longer be an Acquiring Person, then such person shall not
be deemed to be an Acquiring Person for any purpose of the Plan. Additionally,
any person that has become an Acquiring Person shall not be treated as an
Acquiring Person for any purpose of the Rights Agreement if our Board, in its
sole discretion, determines that such person’s acquisition of beneficial
ownership of common stock does not jeopardize or endanger the Company’s ability
to utilize its NOLs.

 

Preferred Share Provisions.

 

Each one one-thousandth of a Preferred Share, if issued:

 

•will not be redeemable.

 

•will entitle holders to quarterly dividend payments of $0.001 per one
one-thousandth of a share, or an amount equal to the dividend paid on one share
of common stock, whichever is greater.

 

•will entitle holders upon liquidation either to receive $1.00 per one
one-thousandth of a share or an amount equal to the payment made on one share of
common stock, whichever is greater.

 

•will have the same voting power as one share of common stock.

 

•if shares of our common stock are exchanged via merger, consolidation, or a
similar transaction, will entitle holders to a per share payment equal to the
payment made on one share of common stock.

 

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Expiration. The Rights will expire on the earlier of (i) close of business on
the fifth (5th) business day after the Company files with the Securities and
Exchange Commission a Current Report on Form 8-K reporting the results of the
2016 annual meeting of stockholders of the Company (including any postponement
or adjournment thereof) and (ii) the time at which the Board of Directors
determines that the NOLs are fully utilized or no longer available under Section
382 of the Internal Revenue Code. If, however, any person becomes an Acquiring
Person, the Plan will not expire until March 1, 2026.

 

Redemption. Our Board may redeem the Rights for $0.001 per Right at any time
before any person or group becomes an Acquiring Person. If our Board redeems any
Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only
right of the holders of Rights will be to receive the redemption price of $0.001
per Right. The redemption price will be adjusted if we have a stock split or
stock dividends of our common stock.

 

Exchange. After a person or group becomes an Acquiring Person, but before an
Acquiring Person owns 50% or more of our outstanding common stock, our Board may
extinguish the Rights by exchanging one share of common stock for every two
shares of common stock for which each Right is then exercisable, other than
Rights held by the Acquiring Person.

 

Anti-Dilution Provisions. Our Board may adjust the Exercise Price, the number of
Preferred Shares issuable and the number of outstanding Rights to prevent
dilution that may occur from a stock dividend, a stock split, a reclassification
of the Preferred Shares or common stock. No adjustments to the Exercise Price of
less than 1% will be made unless and until adjustments equal 1% or more in the
aggregate.

 

Amendments. The terms of the Rights Agreement may be amended by our Board
without the consent of the holders of the Rights. After a person or group
becomes an Acquiring Person, our Board may not amend the agreement in a way that
adversely affects holders of the Rights.

 

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