Exhibit 4.1 


 


 


 


 


 


 


 


 


 


 


 


 


 


 



 


LEGACY
EDUCATION ALLIANCE, INC. 


 


and


 


VSTOCK
TRANSFER, LLC


 


as
Rights Agent


 


Rights
Agreement


 


Dated
as of February 16, 2017


 





 



 


 


 


 


 


 


 


 


 


 


 


 






     

     


    

 


RIGHTS
AGREEMENT


 


Rights
Agreement, dated as of February 16, 2017 (this “Agreement”), between Legacy Education Alliance, Inc., a Nevada
corporation (the “Company”), and Vstock Transfer, LLC, a California limited liability company (the “Rights
Agent”).


 


RECITALS


 


WHEREAS,
on February 15, 2017, the Board of Directors (the “Board”) of the Company adopted this Agreement, and has authorized
and declared a dividend of one preferred stock purchase right (a “Right”) for each share of Common Stock (as
defined in Section 1.6) of the Company outstanding at the close of business on March 2, 2017 (the “Record Date”)
and has authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each share
of Common Stock that shall become outstanding between the Record Date and the earliest of the Distribution Date and the Expiration
Date (as such terms are defined in Sections 3.1 and 7.1, respectively), each Right initially representing the right
to purchase one one-thousandth (1/1,000) (subject to adjustment) of a share of Series A Junior Participating Preferred Stock,
par value $0.0001 per share (the “Series A Preferred”), of the Company having the rights, powers and preferences
set forth in the form of Certificate of Designation of Series A Junior Participating Preferred Stock attached hereto as Exhibit
A (as amended from time to time), upon the terms and subject to the conditions hereinafter set forth; provided, however,
that Rights may be issued with respect to Common Stock that shall become outstanding after the Distribution Date and prior
to the Expiration Date in accordance with Section 22.


 


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


 


Section
1. Certain Definitions.


 


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


 


1.1.          “Acquiring Person” shall mean any Person who or which, together with all Related Persons of such Person, shall
be the Beneficial Owner of 20% or more of the Common Stock then outstanding, but shall not include (i) an Exempt Person or (ii)
any Existing Holder, unless and until such time as such Existing Holder shall, after the first public announcement of this Agreement,
become the Beneficial Owner of one or more additional shares of Common Stock (other than pursuant to a dividend or distribution
paid or made by the Company on the outstanding Common Stock in Common Stock or pursuant to a split or subdivision of the outstanding
Common Stock), unless upon acquiring such Beneficial Ownership, such Existing Holder does not Beneficially Own 20% or more of
the Common Stock then outstanding. Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as
the result of an acquisition of Common Stock by the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares Beneficially Owned by such Person to 20% or more of the Common Stock then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 20% or more of the Common Stock then outstanding solely by
reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of
one or more additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on
the outstanding Common Stock in Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), then such
Person shall be deemed to be an “Acquiring Person” unless, upon becoming the Beneficial Owner of such additional Common
Stock, such Person does not Beneficially Own 20% or more of the Common Stock then outstanding. Notwithstanding the foregoing,
if the Board determines in good faith that a Person who would otherwise be an “Acquiring Person,” as defined pursuant
to the foregoing provisions of this Section 1.1, has become such inadvertently (including, without limitation, because
(A) such Person was unaware that it Beneficially Owned a percentage of Common Stock that would otherwise cause such Person to
be an “Acquiring Person” or (B) such Person was aware of the extent of its Beneficial Ownership of Common Stock but
had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and had no intention of changing
or influencing control of the Company, and such Person divests as promptly as practicable (as determined, in good faith, by the
Board) a sufficient number of shares of Common Stock so that such Person would no longer be an Acquiring Person, as defined pursuant
to the foregoing provisions of this Section 1.1, then such Person shall not be deemed to be or have become an “Acquiring
Person” at any time for any purposes of this Agreement. For all purposes of this Agreement, any calculation of the number
of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular percentage
of such outstanding Common Stock of which any Person is the Beneficial Owner, shall include the number of shares of Common Stock
not outstanding at the time of such calculation that such Person is otherwise deemed to Beneficially Own for purposes of this
Agreement. The number of shares of Common Stock not outstanding that such Person is otherwise deemed to Beneficially Own for purposes
of this Agreement shall be deemed to be outstanding for the purpose of computing the percentage of the outstanding number of shares
of Common Stock owned by such Person but shall not be deemed to be outstanding for the purpose of computing the percentage of
outstanding Common Stock owned by any other Person.


 






     

     


    

 


1.2.          “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), as in effect on the date of this Agreement.


 


1.3.          A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially Own”
or have “Beneficial Ownership” of any securities:


 


1.3.1.        
which such Person or any of such Person’s Related Persons, directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (A) voting power, which includes the power to vote, or to direct the voting of,
such security (except that a Person shall not be deemed to be the Beneficial Owner of any security under this clause (A)
if such voting power arises solely from a revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by means of a solicitation statement
filed on Schedule 14A), and/or (B) investment power, which includes the power to dispose, or to direct the disposition of,
such security;


 


1.3.2.        
which such Person or any of such Person’s Related Persons, directly or indirectly, has the Right to Acquire; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, (x) securities tendered pursuant
to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Related Persons, until such tendered
securities are accepted for purchase or exchange, (y) securities which such Person or any of such Person’s Related Persons,
has a Right to Acquire upon the exercise of Rights at any time prior to the time that any Person becomes an Acquiring Person,
or (z) securities issuable upon the exercise of Rights from and after the time that any Person becomes an Acquiring Person if
such Rights were acquired by such Person or any of such Person’s Related Persons prior to the Distribution Date or pursuant
to Section 3.1 or Section 22 (“Original Rights”) or pursuant to Section 11.9
or Section 11.15 with respect to an adjustment to Original Rights;


 


1.3.3.        
which are Beneficially Owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with whom such
Person or any of such Person’s Related Persons, has an agreement, arrangement or understanding to act together for the purpose
of acquiring, holding, voting or disposing of any securities of the Company (except that a Person shall not be deemed to be the
Beneficial Owner of any security under this Section 1.3.3 if such voting power arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, Section
14(a) of the Exchange Act by means of a solicitation statement filed on Schedule 14A);


 


1.3.4.        
which such Person would otherwise be deemed to be the beneficial owner pursuant to Rule 13d-3 under the Exchange Act; or


 


1.3.5.        
No Person shall be deemed to be the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “Beneficially
Own” any securities which such Person or any of such Person’s Related Persons would otherwise be deemed to “Beneficially
Own” pursuant to this Section 1.3 solely as a result of any merger or other acquisition agreement between the Company
and such Person (or one or more of such Person’s Related Persons), or any tender, voting or support agreement entered into
by such Person (or one or more of such Person’s Related Persons) in connection therewith, if, prior to such Person becoming
an Acquiring Person, the Board has approved such merger or other acquisition agreement, or such tender, voting or support agreement.


 






    	 	2	 



     


    

 


No
Person who is an officer, director or employee of an Exempt Person shall be deemed, solely by reason of such Person’s status
or authority as such, to be the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “Beneficially
Own” any securities that are “Beneficially Owned” (as defined in this Section 1.3), including, without
limitation, in a fiduciary capacity, by an Exempt Person or by any other such officer, director or employee of an Exempt Person.


 


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


 


1.5.          “close of business” on any given date shall mean 5:00 p.m., New York time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 p.m., New York time, on the next succeeding Business Day.


 


1.6.          “Common Stock” when used with reference to the Company shall mean the Common Stock, par value $0.0001 per share,
of the Company. “Common Stock” when used with reference to any Person other than the Company shall mean the capital
stock with the greatest voting power, or the equity securities or other equity interest having power to control or direct the
management of, such other Person or, if such Person is a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person, and which has issued and outstanding such capital stock, equity securities or equity interest.


 


1.7.          “Exempt Person” shall mean the Company, any Subsidiary of the Company, in each case including, without limitation,
the officers and members of the board of directors thereof acting in their fiduciary capacities, or any employee benefit plan
of the Company or of any Subsidiary of the Company or any entity or trustee holding shares of capital stock of the Company for
or pursuant to the terms of any such plan, or for the purpose of funding other employee benefits for employees of the Company
or any Subsidiary of the Company.


 


1.8.          “Existing Holder” shall mean any Person who, immediately prior to the first public announcement of the adoption
of this Agreement, is the Beneficial Owner of 20% or more of the Common Stock then outstanding, together with any Affiliates and
Associates of such Person.


 


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


 


1.10.        “Related Person” shall mean, as to any Person, any Affiliates or Associates of such Person.


 


1.11.        “Right to Acquire” shall mean a legal, equitable or contractual right to acquire (whether directly or indirectly
and whether exercisable immediately, or only after the passage of time, compliance with regulatory requirements, fulfillment of
a condition or otherwise), pursuant to any agreement, arrangement or understanding, whether or not in writing (excluding customary
agreements entered into in good faith with and between an underwriter and selling group members in connection with a firm commitment
underwriting registered under the Securities Act of 1933, as amended (the “Securities Act”)), or upon the exercise
of any option, warrant or right, through conversion of a security, pursuant to the power to revoke a trust, discretionary account
or similar arrangement, pursuant to the power to terminate a repurchase or similar so-called “stock borrowing” agreement
or arrangement, or pursuant to the automatic termination of a trust, discretionary account or similar arrangement.


 


1.12.        “Stock Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition,
shall include, without limitation, the filing of a report pursuant to Section 13(d) of the Exchange Act or pursuant to a comparable
successor statute) by  the Company or an Acquiring Person that an Acquiring Person has become such or that discloses information
which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board shall become aware of the existence
of an Acquiring Person.


 


1.13.        “Subsidiary” of any Person shall mean any partnership, joint venture, limited liability company, firm, corporation,
unincorporated association, trust or other entity of which a majority of the voting power of the voting equity securities or equity
interests is owned, of record or beneficially, directly or indirectly, by such Person.


 






    	 	3	 



     


    

 


1.14.        A “Trigger Event” shall be deemed to have occurred upon any Person becoming an Acquiring Person.


 


1.15.        The following terms shall have the meanings defined for such terms in the Sections set forth below:


 


	Term
	 	Section

	 	 
	Acquiring
    Person	 	1.1
	Adjustment
    Shares	 	11.1.2
	Affiliate	 	1.2
	Agreement	 	Preamble
	Associate	 	1.2
	Beneficial
    Owner	 	1.3
	Board	 	Recitals
	Book
    Entry Shares	 	3.1
	Business
    Day	 	1.4
	close
    of business	 	1.5
	Common
    Stock	 	1.6
	common
    stock equivalent	 	11.1.3
	Company	 	Preamble
	current
    per share market price	 	11.4.1
	Current
    Value	 	11.1.3
	Distribution
    Date	 	3.1
	equivalent
    preferred stock	 	11.2
	Exchange
    Act	 	1.2
	Exchange
    Consideration	 	27.1
	Exempt
    Person	 	1.7
	Existing
    Holder	 	1.8
	Expiration
    Date	 	7.1
	Final
    Expiration Date	 	7.1
	NASDAQ	 	9
	Original
    Rights	 	1.3.2
	Person	 	1.9
	Principal
    Party	 	13.2
	Purchase
    Price	 	4
	Receiving
    Party	 	1.3.5
	Record
    Date	 	Recitals
	Redemption
    Date	 	7.1
	Redemption
    Price	 	23.1
	Related
    Person	 	1.10
	Right	 	Recitals
	Right
    Certificate	 	3.1
	Rights
    to Acquire	 	1.11
	Rights
    Agent	 	Preamble
	Securities
    Act	 	1.11
	Security	 	11.4.1
	Series
    A Preferred	 	Recitals
	Spread	 	11.1.3
	Stock
    Acquisition Date	 	1.12
	Subsidiary	 	1.13
	Substitution
    Period	 	11.1.3
	Summary
    of Rights	 	3.2
	Trading
    Day	 	11.4.1
	Trigger
    Event	 	1.14
	Trust	 	27.1
	Trust
    Agreement	 	27.1


 






    	 	4	 



     


    

 


Section
2. Appointment of Rights Agent.


 


The
Company hereby appoints the Rights Agent to act as rights agent for the Company in accordance with the express terms and conditions
hereof (and no implied terms or conditions), 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 upon ten (10) calendar days’ prior written notice
to the Rights Agent. 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. In the event the Company appoints one or more co-rights agents, the respective duties of the Rights
Agent and any co-Rights Agent shall be as the Company shall reasonably determine, provided that such duties and determination
are consistent with the terms and provisions of this Agreement and that contemporaneously with such appointment, if any, the Company
shall notify the Rights Agent in writing thereof.


 


Section
3. Issuance of Right Certificates.


 


3.1.          Rights Evidenced by Stock Certificates. Until the earlier of (i) the close of business on the tenth (10th) Business
Day after the Stock Acquisition Date or (ii) the close of business on the tenth (10th) Business Day after the date
of the commencement of, or 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 (the earlier of (i)
and (ii) being herein referred to as the “Distribution Date”), (x) the Rights (unless earlier expired, redeemed
or terminated) will be evidenced (subject to the provisions of Section 3.2) by the certificates representing the Common
Stock registered in the names of the holders thereof or, in the case of uncertificated shares of Common Stock registered in book
entry form (“Book Entry Shares”), by notation in book entry (which certificates for Common Stock and Book Entry
Shares shall also be deemed to be Right Certificates) and not by separate certificates, and (y) the Rights (and the right to receive
certificates therefor) will be transferable only in connection with the transfer of the underlying shares of Common Stock. The
preceding sentence notwithstanding, prior to the occurrence of a Distribution Date specified as a result of an event described
in clause (ii) (or such later Distribution Date as the Board may select pursuant to this sentence), the Board may postpone, one
or more times, the Distribution Date which would occur as a result of an event described in clause (ii) beyond the date set forth
in such clause (ii); provided, that the Company shall provide prompt written notice of any postponement under this sentence to
the Rights Agent. Nothing herein shall permit such a postponement of a Distribution Date after a Person becomes an Acquiring Person,
except as a result of the operation of the third sentence of Section 1.1. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign and the Company (or, if requested, the Rights Agent,
at the expense of the Company and upon receipt of all relevant and information, including the names and addresses of all relevant
holders if the Rights Agent is not also the transfer agent and registrar of the Common Stock) will send or cause to be sent, by
first-class, postage-prepaid mail, to each record holder of Common Stock as of the close of business on the Distribution Date
(other than any Acquiring Person or any Related Person of an Acquiring Person), at the address of such holder shown on the records
of the Company or the transfer agent or registrar for the Common Stock, one or more certificates for Rights, in substantially
the form of Exhibit B hereto (a “Right Certificate”), evidencing one Right (subject to adjustment as
provided herein) for each share of Common Stock so held. As of and after the Distribution Date, the Rights will be evidenced solely
by such Right Certificates. The Company shall promptly notify the Rights Agent in writing upon the occurrence of the Distribution
Date. Until such notice is received by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the Distribution
Date has not occurred.


 


3.2.          Summary of Rights. On the Record Date or as soon as practicable thereafter, the Company will send or cause to be sent
a copy of a Summary of Rights to Purchase Series A Preferred, in substantially the form attached hereto as Exhibit C (the
“Summary of Rights”), by first-class, postage-prepaid mail, to each record holder of Common Stock as of the
close of business on the Record Date (other than any Acquiring Person or any Related Person of any Acquiring Person) at the address
of such holder shown on the records of the Company or the transfer agent or registrar for the Common Stock. Any failure to send
a copy of the Summary of Rights shall not invalidate the Rights or affect their transfer with the Common Stock. With respect to
certificates representing Common Stock and Book Entry Shares outstanding as of the close of business on the Record Date, until
the Distribution Date (or the earlier Expiration Date), the Rights will be evidenced by such certificates for Common Stock registered
in the names of the holders thereof or Book Entry Shares, as applicable, together with a copy of the Summary of Rights and the
registered holders of the Common Stock shall also be registered holders of the associated Rights. Until the Distribution Date
(or the earlier Expiration Date), the surrender for transfer of any certificate for Common Stock or Book Entry Shares outstanding
at the close of business on the Record Date, with or without a copy of the Summary of Rights, shall also constitute the transfer
of the Rights associated with the Common Stock represented thereby and the Book Entry Shares, as applicable.


 






    	 	5	 



     


    

 


3.3.          New Certificates and Uncertificated Shares After Record Date. Certificates for Common Stock that become outstanding
(whether upon issuance out of authorized but unissued Common Stock, disposition out of treasury or transfer or exchange of outstanding
Common Stock) after the Record Date but prior to the earliest of the Distribution Date or the Expiration Date, or in certain circumstances
provided in Section 22 hereof, after the Distribution Date, shall have impressed, printed, stamped, written or otherwise
affixed onto them a legend in substantially the following form:


 


This
certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between Legacy
Education Alliance, Inc. (the “Company”) and Vstock Transfer, LLC, as Rights Agent (or any successor rights
agent), dated as of February 16, 2017, as the same may be amended or supplemented from time to time (the “Agreement”),
the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices
of the Company. Under certain circumstances, as set forth in the Agreement, such Rights (as defined in the Agreement) may be evidenced
by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate
a copy of the Agreement without charge after receipt of a written request therefor. Under certain circumstances as described
in the Agreement, Rights which are owned by, transferred to or have been owned by Acquiring Persons (as defined in the Agreement)
or any Related Person (as defined in the Agreement) of any Acquiring Person shall become null and void and will no longer be transferable.


 


With
respect to any Book Entry Shares, such legend shall be included in a notice to the record holder of such shares in accordance
with applicable law. Until the Distribution Date (or the earlier Expiration Date), the Rights associated with the Common
Stock represented by such certificates and such Book Entry Shares shall be evidenced solely by such certificates or the Book Entry
Shares alone, and the surrender for transfer of any such certificates or Book Entry Shares, except as otherwise provided herein,
shall also constitute the transfer of the Rights associated with the Common Stock represented thereby. In the event that
the Company purchases or otherwise acquires any Common Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Stock that are no longer outstanding.


 


Notwithstanding
this Section 3.3, neither the omission of the legend required hereby, nor the failure to provide the notice thereof, shall
affect the enforceability of any part of this Agreement or the rights of any holder of the Rights.


 


Section
4. Form of Right Certificates. The Right Certificates (and the forms of election to purchase shares and assignment, including
the certifications therein, to be printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon
as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement (but which do not affect
the rights, duties, liabilities or responsibilities of the Rights Agent), or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or trading system
on which the Rights may from time to time be listed or quoted, or to conform to usage. Subject to the terms and conditions hereof,
the Right Certificates, whenever issued, shall be dated as of the Record Date, and shall show the date of countersignature by
the Rights Agent, and on their face shall entitle the holders thereof to purchase such number of one one-thousandths (1/1,000)
of a share of Series A Preferred as shall be set forth therein at the price per one one-thousandth (1/1,000) of a share of Series
A Preferred set forth therein (the “Purchase Price”), but the number of such one one-thousandths (1/1,000)
of a share of Series A Preferred and the Purchase Price shall be subject to adjustment as provided herein.


 






    	 	6	 



     


    

 


Section
5. Countersignature and Registration. The Right Certificates shall be duly executed on behalf of the Company by the Chief
Executive Officer, the Chief Financial Officer, the General Counsel or any Vice President of the Company and such other officers
of the Company as the Board may designate, either manually or by facsimile signature, and shall have affixed thereto the Company’s
seal or a facsimile thereof which shall be attested by the Secretary or any Assistant Secretary of the Company or by such officers
as the Board may designate, either manually or by facsimile signature. Upon written request by the Company, the Right Certificates
shall be countersigned, either manually or by facsimile signature, by an authorized signatory of the Rights Agent, but it shall
not be necessary for the same signatory to countersign all of the Right Certificates hereunder. No Right Certificate shall be
valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any Person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution
of this Agreement any such Person was not such an officer.


 


Following
the Distribution Date and receipt by the Rights Agent of written notice to that effect and all other relevant information referred
to in this Agreement, the Rights Agent will keep or cause to be kept, at its office or offices designated for such purpose, books
for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates,
the certificate number of each of the Right Certificates and the date of each of the Right Certificates.


 


Section
6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of this Agreement, including but not limited to Section 11.1.2 and 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 Expiration Date, any
Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become null and void pursuant
to Section 11.1.2 or that have been exchanged pursuant to Section 27) may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one
one-thousandths (1/1,000) of a share of Series A Preferred as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights Agent, and shall surrender, together with any required form of assignment
and certificate duly executed and properly completed, the Right Certificate or Right Certificates to be transferred, split up
or combined or exchanged at the office or offices of the Rights Agent designated for such purpose accompanied by a signature guarantee
and such other documentation as the Rights Agent may reasonably request. The Rights Certificates are transferable only on
the registry books 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 or Right Certificates until the registered holder shall
have properly completed and duly executed the certificate contained in the form of assignment on the reverse side of such
Right Certificate or Right Certificates and shall have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) thereof or any Related Person of such registered holder or such Beneficial Owner (or such former
Beneficial Owner), in each case, as the Company or the Rights Agent shall reasonably request. Thereupon, the Rights Agent
shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as
so requested. The Company or the Rights Agent may require payment from the holders of Right Certificates of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with any transfer, split up or combination or exchange
of such Right Certificates. The Rights Agent shall not have any duty or obligation to take any action under any section of
this Agreement that requires the payment of taxes and/or charges unless and until it is satisfied that all such payments have
been made.


 


Subject
to the provisions of Section 11.1.2, at any time after the Distribution Date and prior to the Expiration Date, 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 the identity of the Beneficial Owner (or former Beneficial Owner) thereof or any Related Person thereof
(including a signature guarantee and such other documentation as the Rights Agent may reasonably request) and, in case of loss,
theft or destruction, of indemnity or security satisfactory to them, and, at the Company’s or the Rights Agent’s request,
reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.


 






    	 	7	 



     


    

 


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


 


7.1.          Exercise of Rights. Subject to Section 11.1.2 and except as otherwise provided herein, the registered holder of
any Right Certificate may exercise the Rights evidenced thereby in whole or in part at any time after the Distribution Date upon
surrender of the Right Certificate, with the appropriate form of election to purchase and certification on the reverse side thereof
properly completed and duly executed, to the Rights Agent at the office or offices of the Rights Agent designated for such purpose,
accompanied by a signature guarantee and such other documentation as the Rights Agent may reasonably request, together with payment
of the aggregate Purchase Price for the total number of one one-thousandths (1/1,000) of a share of Series A Preferred (or other
securities, cash or other assets) as to which the Rights are exercised, at or prior to the time (the “Expiration Date”)
that is the earliest of (i) the close of business on February 15, 2019 (the “Final Expiration Date”), (ii)
the time at which the Rights are redeemed as provided in Section 23 (the “Redemption Date”), (iii) the
closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in
Section 13.3 at which time the Rights are deemed terminated, or (iv) the time at which the Rights are exchanged as provided
in Section 27.


 


7.2.          Purchase. The Purchase Price for each one one-thousandth (1/1,000) of a share of Series A Preferred pursuant to the
exercise of a Right shall be initially $2.50, shall be subject to adjustment from time to time as provided in Sections 11,
13 and 26 and shall be payable in lawful money of the United States of America in accordance with Section 7.3.


 


7.3.          Payment Procedures. Except as otherwise provided herein, upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and certification properly completed and duly executed, accompanied by payment of
the aggregate Purchase Price for the total number of one one-thousandths (1/1,000) of a share of Series A Preferred to be purchased
and an amount equal to any applicable tax or charge required to be paid by the holder of such Right Certificate in accordance
with Section 9, in cash or by certified or cashier’s check or money order payable to the order of the Company, the
Rights Agent shall, subject to Section 20.10 hereunder, thereupon (i)(A) requisition from any transfer agent of the shares of
Series A Preferred (or from the Company if there shall be no such transfer agent, or make available, if the Rights Agent is the
transfer agent) certificates for the number of shares of Series A Preferred to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to deposit the total
number of shares of Series A Preferred issuable upon exercise of the Rights hereunder with a depositary agent, requisition from
such depositary agent depositary receipts representing interests in such number of one one-thousandths (1/1,000) of a share of
Series A Preferred as are to be purchased (in which case certificates for the Series A Preferred represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs such depositary agent to comply
with all such requests; (ii) when necessary to comply with this Agreement, requisition from the Company the amount of cash to
be paid in lieu of the issuance of fractional shares in accordance with Section 14 or otherwise in accordance with Section
11.1.3; (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to the registered
holder of such Right Certificate, or upon the order of the registered holder of such Right Certificate, registered in such name
or names as may be designated in writing by such holder and (iv) when necessary to comply with this Agreement, after receipt,
deliver such cash to the registered holder of such Right Certificate, or upon the order of the registered holder of such Right
Certificate, to such other Person as designated in writing by such holder. In the event that the Company is obligated to
issue other securities of the Company, pay cash and/or distribute other property pursuant to Section 11.1.3, the Company
will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when necessary to comply with this Agreement.


 


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


 






    	 	8	 



     


    

 


7.5.          Full Information Concerning Ownership. Notwithstanding anything in this Agreement or any Rights Certificate to the
contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder
of Rights or other securities of the Company, upon the occurrence of any purported transfer or exercise of Rights pursuant to
Section 6 or as set forth in this Section 7 unless the certification contained in the appropriate form of election
to purchase set forth on the reverse side of the Right Certificate surrendered for such exercise shall have been properly completed
and duly executed by the registered holder thereof and the Company shall have been provided with such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof or any Related Person of such registered holder or such
Beneficial Owner (or such former Beneficial Owner), in each case, as the Company or Rights Agent shall reasonably request.


 


Section
8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents (other than the Rights
Agent), be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be
canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions
of this 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. Subject
to applicable law and regulation, the Rights Agent shall maintain in a retrievable database electronic records or physical records
of all cancelled or destroyed Rights Certificates which have been cancelled or destroyed by the Rights Agent. The Rights
Agent shall maintain such electronic records or physical records for the time period required by applicable law and regulation. Upon
written request of the Company (and at the expense of the Company), the Rights Agent shall provide to the Company or its designee
copies of such electronic records or physical records relating to Rights Certificates cancelled or destroyed by the Rights Agent.


 


Section
9. Reservation and Availability of Capital Stock. The Company covenants and agrees that, from and after the Distribution
Date, it will cause to be reserved and kept available out of its authorized and unissued Series A Preferred (and, following the
occurrence of a Trigger Event, out of its authorized and unissued Common Stock or other securities or out of its shares held in
its treasury) the number of shares of Series A Preferred (and, following the occurrence of a Trigger Event, Common Stock and/or
other securities) that will be sufficient to permit the exercise in full of all outstanding Rights.


 


So
long as the Series A Preferred (and, following the occurrence of a Trigger Event, Common Stock and/or other securities) issuable
upon the exercise of Rights may be listed on the NASDAQ Stock Market (“NASDAQ”) or any other national securities exchange
or traded in the over-the-counter market, the Company shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed or admitted to trading on the NASDAQ or such other exchange
or market upon official notice of issuance upon such exercise.


 


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


 


From
and after such time as the Rights become exercisable, the Company shall use its best efforts, if then necessary, to permit the
issuance of Series A Preferred upon the exercise of Rights, to register and qualify such Series A Preferred 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 date as of which the Rights are no longer exercisable for such securities
and the Expiration Date. The Company may temporarily suspend, from time to time for a period of time not to exceed one hundred
twenty (120) days in any particular instance, the exercisability of the Rights in order to prepare and file a registration statement
under the Securities Act and permit it to become effective or in order to prepare and file any supplement or amendment to such
registration statement that the Board determines to be necessary and appropriate under applicable law. Upon any such suspension,
the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in effect. The Company shall notify the Rights Agent
whenever it makes a public announcement pursuant to this Section 9 and give the Rights Agent a copy of such announcement. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite
qualification or exemption in such jurisdiction shall have been obtained and until a registration statement under the Securities
Act (if required) shall have been declared effective.


 






    	 	9	 



     


    

 


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


 


Section
10. Series A Preferred Record Date. Each Person in whose name any certificate for Series A Preferred (or Common Stock and/or
other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Series A Preferred (or Common Stock and/or other securities, as the case may be) represented thereby on,
and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable taxes or charges) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Series A Preferred (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares (fractional
or otherwise) on, and such certificate shall be dated, the next succeeding Business Day on which the Series A Preferred (or Common
Stock and/or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby (or an exchange pursuant to Section 27), the holder of a Right Certificate shall not be entitled
to any rights of a holder of Series A Preferred (or Common Stock or other securities, as the case may be) for which the Rights
shall be exercisable, including, without limitation, the right to vote or to receive dividends or other distributions, and shall
not be entitled to receive any notice of any proceedings of the Company, except as provided herein.


 


Section
11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The Purchase Price, the number of shares of Series
A Preferred or other securities or property purchasable upon exercise of each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.


 


11.1.        Post-Execution Events.


 


11.1.1.     
Corporate Dividends, Reclassifications, Etc. In the event the Company shall, at any time after the date of this Agreement,
(A) declare and pay a dividend on the Series A Preferred payable in Series A Preferred, (B) subdivide the outstanding Series A
Preferred, (C) combine the outstanding Series A Preferred into a smaller number of shares of Series A Preferred or (D) issue any
shares of its capital stock in a reclassification of the Series A Preferred (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided
in this Section 11.1.1, the Purchase Price in effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date
and at a time when the Series A Preferred 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 both Section 11.1.1 and Section 11.1.2, the adjustment provided for in this Section 11.1.1
shall be in addition to, and shall be made prior to, the adjustment required pursuant to, Section 11.1.2.


 






    	 	10	 



     


    

 


11.1.2.     
Acquiring Person Events; Trigger Events. Subject to Section 27, in the event that a Trigger Event occurs, then,
from and after the first occurrence of such event, each holder of a Right, except as provided below, shall thereafter have a right
to receive, upon exercise thereof at a price per Right equal to the then current Purchase Price multiplied by the number of one
one-thousandths (1/1,000) of a share of Series A Preferred for which a Right is then exercisable (without giving effect to this
Section 11.1.2), in accordance with the terms of this Agreement and in lieu of Series A Preferred, such number of shares
of Common Stock as shall equal the result obtained by (x) multiplying the then current Purchase Price by the number of one one-thousandths
(1/1,000) of a share of Series A Preferred for which a Right is then exercisable (without giving effect to this Section 11.1.2)
and (y) dividing that product by 50% of the current per share market price of the Common Stock (determined pursuant to Section
11.4) on the first of the date of the occurrence of, or the date of the first public announcement of, a Trigger Event (the
“Adjustment Shares”); provided that the Purchase Price and the number of Adjustment Shares shall thereafter
be subject to further adjustment as appropriate in accordance with Section 11.6.


 


Notwithstanding
the foregoing, upon and after the occurrence of a Trigger Event, any Rights that are or were acquired or Beneficially Owned by
(1) any Acquiring Person or any Related Person of such Acquiring Person, (2) a transferee of any Acquiring Person (or of any Related
Person of such Acquiring Person) who becomes a transferee after the Acquiring Person becomes such, or (3) a transferee of any
Acquiring Person (or of any Related Person of such Acquiring Person) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has
any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has as a primary purpose or effect avoidance of this Section
11.1.2, and subsequent transferees, shall become null and void without any further action, and any holder (whether or not
such holder is an Acquiring Person or a Related Person of an Acquiring Person) of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement or otherwise. From and after the Trigger Event, no Right Certificate
shall be issued pursuant to Section 3 or Section 6 that represents Rights that are or have become null and void
pursuant to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent that represents Rights that
are or have become null and void pursuant to the provisions of this paragraph shall be canceled.


 


The
Company shall use all reasonable efforts to ensure that the provisions of this Section 11.1.2 are complied with, but shall
have no liability to any holder of Right Certificates or any other Person as a result of its failure to make any determinations
with respect to any Acquiring Person or its Related Persons or transferees hereunder.


 


From
and after the occurrence of an event specified in Section 13.1, any Rights that theretofore have not been exercised pursuant
to this Section 11.1.2 shall thereafter be exercisable only in accordance with Section 13 and not pursuant
to this Section 11.1.2.


 






    	 	11	 



     


    

 


11.1.3.     
Insufficient Shares.  The Company may at its option substitute for Common Stock issuable upon the exercise of Rights
in accordance with the foregoing Section 11.1.2 a number of shares of Series A Preferred or fraction thereof such that
the then current per share market price of one share of Series A Preferred multiplied by such number or fraction is equal to the
then current per share market price of one share of Common Stock. In the event that upon the occurrence of a Trigger Event
there shall not be sufficient Common Stock authorized but unissued, or held by the Company as treasury shares, to permit the exercise
in full of the Rights in accordance with the foregoing Section 11.1.2, the Company shall take all such action as may be
necessary to authorize additional Common Stock for issuance upon exercise of the Rights, provided, however, that if the
Company determines that it is unable to cause the authorization of a sufficient number of additional shares of Common Stock, then,
in the event the Rights become exercisable, the Company, with respect to each Right and to the extent necessary and permitted
by applicable law and any agreements or instruments in effect on the date hereof to which it is a party, shall: (A) determine
the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the “Current Value”),
over (2) the Purchase Price (such excess, the “Spread”) and (B) with respect to each Right (other than Rights
which have become null and void pursuant to Section 11.1.2), make adequate provision to substitute for the Adjustment Shares,
upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Series A Preferred, (4) other
equity securities of the Company (including, without limitation, shares, or fractions of shares, of preferred stock which, by
virtue of having dividend, voting and liquidation rights substantially comparable to those of the Common Stock, the Board has
deemed in good faith to have substantially the same value as the Common Stock) (each such share of preferred stock or fractions
of shares of preferred stock constituting a “common stock equivalent”)), (5) debt securities of the Company,
(6) other assets or (7) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected in good
faith by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following the occurrence of a Trigger Event, then the Company shall be obligated to
deliver, to the extent necessary and permitted by applicable law and any agreements or instruments in effect on the date hereof
to which it is a party, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, Common
Stock (to the extent available) and then, if necessary, such number or fractions of Series A Preferred (to the extent available)
and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. The Company shall provide
the Rights Agent with prompt reasonably detailed written notice of any determination under the previous sentence. If, upon the
occurrence of a Trigger Event, the Board shall determine in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the Rights, then, if the Board so elects, the thirty (30)
day period set forth above may be extended to the extent necessary, but not more than one hundred twenty (120) days following
the occurrence of a Trigger Event, in order that the Company may seek stockholder approval for the authorization of such additional
shares (such thirty (30) day period, as it may be extended, is herein called the “Substitution Period”). To
the extent that the Company determines that some actions need be taken pursuant to the second and/or third sentences of this Section
11.1.3, 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 and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended as well as a public announcement at such time as the suspension is no longer in effect. The
Company shall promptly notify the Rights Agent in writing whenever it temporarily suspends the exercisability of the Rights or
when any such suspension is no longer in effect, and shall give the Rights Agent a copy of any public announcement under this
Section 11.1.3. For purposes of this Section 11.1.3, the value of a share of Common Stock shall be the then
current per share market price (as determined pursuant to Section 11.4) on the date of the occurrence of a Trigger Event
and the value of any “common stock equivalent” shall be deemed to have the same value as the Common Stock on such
date. The Board may, but shall not be required to, establish procedures to allocate the right to receive Common Stock upon the
exercise of the Rights among holders of Rights pursuant to this Section 11.1.3.


 


11.2.        Dilutive Rights Offering. In case the Company shall fix a record date for the issuance of rights, options or warrants
to all holders of Series A Preferred entitling them (for a period expiring within forty-five (45) calendar days after such record
date) to subscribe for or purchase Series A Preferred (or securities having the same rights, privileges and preferences as the
Series A Preferred (“equivalent preferred stock”)) or securities convertible into Series A Preferred or equivalent
preferred stock at a price per share of Series A Preferred or per share of equivalent preferred stock (or having a conversion
or exercise price per share, if a security convertible into or exercisable for Series A Preferred or equivalent preferred stock)
less than the then current per share market price of the Series A Preferred (as determined pursuant to Section 11.4) on
such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Series
A Preferred and shares of equivalent preferred stock outstanding on such record date plus the number of shares of Series A Preferred
and shares of equivalent preferred stock which the aggregate offering price of the total number of shares of Series A Preferred
and/or shares of equivalent preferred stock to be offered (and/or the aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such current per share market price and the denominator of which shall be the number of shares
of Series A Preferred and shares of equivalent preferred stock outstanding on such record date plus the number of additional Series
A Preferred and/or shares of equivalent preferred stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. Series A Preferred and shares of equivalent preferred stock owned by or held for the account of the Company or any
Subsidiary of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that such rights 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.


 






    	 	12	 



     


    

 


11.3.        Distributions. In case the Company shall fix a record date for the making of a distribution to all holders of the
Series A Preferred (including any such distribution made in connection with a consolidation or merger in which the Company is
the continuing or surviving corporation) of evidences of indebtedness, cash, securities or assets (other than a regular periodic
cash dividend at a rate not in excess of 125% of the rate of the last regular periodic cash dividend theretofore paid or, in case
regular periodic cash dividends have not theretofore been paid, at a rate not in excess of 50% of the average net income per share
of the Company for the four quarters ended immediately prior to the payment of such dividend, or a dividend payable in Series
A Preferred (which dividend, for purposes of this Agreement, shall be subject to the provisions of Section 11.1.1(A)))
or convertible securities, or subscription rights or warrants (excluding those referred to in Section 11.2), 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 Series A Preferred
(as determined pursuant to Section 11.4) on such record date, less the fair market value (as determined in good faith by
the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights
Agent) of the portion of the cash, assets, securities or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of Series A Preferred and the denominator of which shall be such current per share
market price of the Series A Preferred (as determined pursuant to Section 11.4); 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 that would then be in effect if such record date had not been fixed.


 


11.4.        Current Per Share Market Value.


 


11.4.1.     
General. For the purpose of any computation hereunder, the “current per share market price” of any security
(a “Security” for the purpose of this Section 11.4.1) on any date shall be deemed to be the average
of the daily closing prices per share of such Security for the thirty (30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to, but not including, such date; provided, however, that in the event that the then current
per share market price of the Security is determined during any period following the announcement by the issuer of such Security
of (i) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares
or (ii) any subdivision, combination or reclassification of such Security, and prior to the expiration of thirty (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 then
current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading
on the 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 price or, if on such date the Security is not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported thereby 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. If on any such date no such market maker is making a market in the Security, the
fair value of the Security on such date as determined in good faith by the Board shall be used. The term “Trading Day”
shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange,
a Business Day. If the Security is not publicly held or not so listed or traded, or if on any such date the Security is not so
quoted and no such market maker is making a market in the Security, “current per share market price” shall mean the
fair value per share as determined in good faith by the Board or, if at the time of such determination there is an Acquiring Person,
by a nationally recognized investment banking firm selected by the Board, which shall have the duty to make such determination
in a reasonable and objective manner, whose determination shall be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.


 






    	 	13	 



     


    

 


11.4.2.     
Series A Preferred. Notwithstanding Section 11.4.1, for the purpose of any computation hereunder, the “current
per share market price” of the Series A Preferred shall be determined in the same manner as set forth above in Section
11.4.1 (other than the last sentence thereof). If the current per share market price of the Series A Preferred cannot
be determined in the manner described in Section 11.4.1, the “current per share market price” of the Series
A Preferred shall be conclusively deemed to be an amount equal to 1,000 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this
Agreement) multiplied by the current per share market price of the Common Stock (as determined pursuant to Section 11.4.1).
If neither the Common Stock nor the Series A Preferred are publicly held or so listed or traded, or if on any such date neither
the Common Stock nor the Series A Preferred are so quoted and no such market maker is making a market in either the Common Stock
or the Series A Preferred, “current per share market price” of the Series A Preferred shall mean the fair value per
share as determined in good faith by the Board, or, if at the time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board, which shall have the duty to make such determination in a reasonable
and objective manner, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. For purposes of this Agreement, the “current per share market price” of one one-thousandth (1/1,000)
of a share of Series A Preferred shall be equal to the “current per share market price” of one share of Series A Preferred
divided by 1,000.


 


11.5.        Insignificant Changes. 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. Any adjustments which by reason of this Section 11.5
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-hundred thousandth of a share of Series A
Preferred or the nearest ten-thousandth of a share of Common Stock or other share or security, as the case may be.


 


11.6.        Shares Other Than Series A Preferred. If as a result of an adjustment made pursuant to Section 11.1, the holder
of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Series
A Preferred, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Series A
Preferred contained in Sections 11.1, 11.2, 11.3, 11.5, 11.8, 11.9 and 11.13, and the provisions of Sections 7,
9, 10, 13 and 14 with respect to the Series A Preferred shall apply on like terms to any such other shares.


 


11.7.        Rights Issued Subsequent to Adjustment. 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
(1/1,000) of a share of Series A Preferred and shares of other capital stock or other securities, assets or cash of the Company,
if any, purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.


 


11.8.        Effect of Adjustments on Existing Rights. Unless the Company shall have exercised its election as provided in Section 11.9,
upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11.2 and 11.3, 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 (1/1,000) of a share of Series A Preferred (calculated to the nearest one-hundred
thousandth of a share of Series A Preferred) obtained by (i) multiplying (x) the number of one one-thousandths (1/1,000) of a
share of Series A Preferred covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.


 






    	 	14	 



     


    

 


11.9.        Adjustment in Number of Rights. The Company may elect on or after the date of any adjustment of the Purchase Price to adjust
the number of Rights, in substitution for any adjustment in the number of one one-thousandths (1/1,000) of a share of Series A
Preferred issuable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one one-thousandths (1/1,000) of a share of Series A Preferred for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement (with prompt written notice thereof to the Rights Agent) 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 ten (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 11.9, the Company may, 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 may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.


 


11.10.      Right Certificates Unchanged. Irrespective of any adjustment or change in the Purchase Price or the number of one one-thousandths
(1/1,000) of a share of Series A Preferred issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the number of one one-thousandths (1/1,000) of a share of Series
A Preferred which were expressed in the initial Right Certificates issued hereunder.


 


11.11.     
Par Value Limitations. Before taking any action that would cause an adjustment reducing the Purchase Price below one one-thousandth
(1/1,000) of the then par value, if any, of the Series A Preferred or other shares of capital stock issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and non-assessable Series A Preferred or other such shares at such adjusted Purchase
Price.


 


11.12.     Deferred Issuance. In any case in which this Section 11 shall require that an adjustment in the Purchase Price be
made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of that number of shares of Series A Preferred and shares
of other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Series A Preferred
and shares of other capital stock or other securities, assets or cash 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.


 


11.13.     Reduction in Purchase Price. Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11,
as and to the extent that it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision
of the Series A Preferred, issuance wholly for cash of any of the Series A Preferred at less than the current market price, issuance
wholly for cash of Series A Preferred or securities which by their terms are convertible into or exchangeable for Series A Preferred,
dividends on Series A Preferred payable in Series A Preferred or issuance of rights, options or warrants referred to hereinabove
in this Section 11, hereafter made by the Company to holders of its Series A Preferred shall not be taxable to such
stockholders.


 






    	 	15	 



     


    

 


11.14.     Company Not to Diminish Benefits of Rights. The Company covenants and agrees that after the earlier of the Stock Acquisition
Date or Distribution Date it will not, except as permitted by Section 23, Section 26 or Section 27, take
(or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action
will substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights.


 


11.15.     Adjustment of Rights Associated with Common Stock. Notwithstanding anything contained in this Agreement to the contrary,
in the event that the Company shall at any time after the date hereof and prior to the Distribution Date (i) declare or pay any
dividend on the outstanding Common Stock payable in shares of Common Stock, (ii) effect a subdivision or consolidation of the
outstanding Common Stock (by reclassification or otherwise than by the payment of dividends payable in shares of Common Stock),
or (iii) combine the outstanding Common Stock into a greater or lesser number of shares of Common Stock, then in any such case,
the number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter but prior
to the Distribution Date or in accordance with Section 22 shall be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock following any such event shall equal the result obtained by multiplying
the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of such
event. The adjustments provided for in this Section 11.15 shall be made successively whenever such a dividend is declared
or paid or such a subdivision, combination or consolidation is effected.


 


Section
12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made or any event affecting the
Rights or their exercisability as provided in Sections 11 or 13, the Company shall (a) promptly prepare a certificate
setting forth such adjustment or describing such event, and a brief, reasonably detailed statement of the facts, computation and
methodology accounting for such adjustment, (b) promptly file with the Rights Agent and with each transfer agent for the Common
Stock or the Series A Preferred a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate
(or if before the Distribution Date, to each holder of a certificate representing shares of Common Stock or Book Entry Shares
in respect thereof) in accordance with Section 25. The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment or statement therein contained and shall have no duty or liability with respect to, and shall not be deemed
to have knowledge of any such adjustment or any such event unless and until it shall have received such certificate.


 






    	 	16	 



     


    

 


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


 


13.1.       Certain Transactions. In the event that, from and after the first occurrence of a Trigger Event, directly or indirectly,
(A) the Company shall consolidate with, or merge with and into, any other Person and the Company shall not be the continuing or
surviving corporation, (B) any Person shall consolidate with the Company, or merge with and into the Company and the Company shall
be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the Common Stock
shall be changed into or exchanged for stock or other securities of the Company or any other Person or cash or any other property,
or (C) the Company shall sell, exchange, mortgage or otherwise transfer (or one or more of its Subsidiaries shall sell, exchange,
mortgage or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company or
one or more wholly-owned Subsidiaries of the Company in one or more transactions each of which complies with Section 11.14),
then, and in each such case, proper provision shall be made so that (i) each holder of a Right (other than Rights which have become
null and void pursuant to Section 11.1.2) shall thereafter have the right to receive, upon the exercise thereof at a price
per Right equal to the then current Purchase Price multiplied by the number of one one-thousandths (1/1,000) of a share of Series
A Preferred for which a Right was exercisable immediately prior to the first occurrence of a Trigger Event (as subsequently adjusted
pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12), in accordance with the terms of this Agreement and
in lieu of Series A Preferred or Common Stock, such number of validly authorized and issued, fully paid, non-assessable and freely
tradable Common Stock of the Principal Party (as such term is hereinafter defined) not subject to any liens, encumbrances, rights
of first refusal or other adverse claims, as shall be equal to the result obtained by (x) multiplying the then current Purchase
Price by the number of one one-thousandths (1/1,000) of a share of Series A Preferred for which a Right was exercisable immediately
prior to the first occurrence of a Trigger Event (as subsequently adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9
and 11.12) and (y) dividing that product by 50% of the then current per share market price of the Common Stock of such
Principal Party (determined pursuant to Section 11.4) on the date of consummation of such consolidation, merger, sale or
transfer; provided that the price per Right so payable and the number of shares of Common Stock of such Principal Party
so receivable upon exercise of a Right shall thereafter be subject to further adjustment as appropriate in accordance with Section 11.6
to reflect any events covered thereby occurring in respect of the Common Stock of such Principal Party after the occurrence
of such consolidation, merger, sale or transfer; (ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all of the obligations and duties of the Company pursuant to this Agreement;
(iii) the term “Company” shall thereafter be deemed to refer to such Principal Party; and (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Common Stock in
accordance with Section 9) in connection with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to its Common Stock thereafter deliverable upon the
exercise of the Rights; provided that, upon the subsequent occurrence of any consolidation, merger, sale or transfer of
assets or other extraordinary transaction in respect of such Principal Party, each holder of a Right shall thereupon be entitled
to receive, upon exercise of a Right and payment of the Purchase Price as provided in this Section 13.1, such cash, shares,
rights, warrants and other property which such holder would have been entitled to receive had such holder, at the time of such
transaction, owned the Common Stock of the Principal Party receivable upon the exercise of a Right pursuant to this Section
13.1, and such Principal Party shall take such steps (including, but not limited to, reservation of shares of stock) as may
be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights,
warrants and other property. The Company shall not consummate any such consolidation, merger, sale or transfer unless prior
thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement confirming
that the requirements of this Section 13.1 and Section 13.2 shall promptly be performed in accordance with their
terms and that such consolidation, merger, sale or transfer of assets shall not result in a default by the Principal Party under
this Agreement as the same shall have been assumed by the Principal Party pursuant to this Section 13.1 and Section
13.2 and providing that, as soon as practicable after executing such agreement pursuant to this Section 13, the Principal
Party, at its own expense, shall:


 


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


 


(2)       use
its best efforts, if the Common Stock of the Principal Party shall be listed or admitted to trading on the NASDAQ or on another
national securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities purchasable
upon exercise of the Rights on the NASDAQ or such securities exchange;


 


(3)       deliver to holders of the Rights historical financial statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the Exchange Act; and


 


(4)       obtain waivers of any rights of first refusal or preemptive rights in respect of the Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.


  






    	 	17	 



     


    

 


In
case the Principal Party has a provision in any of its authorized securities or in its articles or certificate of incorporation
or by-laws or other instrument governing its corporate affairs, which provision would have the effect of (i) causing such Principal
Party to issue (other than to holders of Rights pursuant to this Section 13), in connection with, or as a consequence of,
the consummation of a transaction referred to in this Section 13, Common Stock or common stock equivalents of such Principal
Party at less than the then current market price per share thereof (determined pursuant to Section 11.4) or securities
exercisable for, or convertible into, Common Stock or common stock equivalents of such Principal Party at less than such then
current market price (other than to holders of Rights pursuant to this Section 13), or (ii) providing for any special payment,
taxes, charges or similar provision in connection with the issuance of the Common Stock of such Principal Party pursuant to the
provision of Section 13, then, in such event, the Company hereby agrees with each holder of Rights that it shall not consummate
any such transaction unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in question of such Principal Party shall have been canceled, waived
or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.


 


The
Company covenants and agrees that it shall not, at any time after the Trigger Event, enter into any transaction of the type described
in clauses (A) through (C) of this Section 13.1 if (i) at the time of or immediately after such consolidation, merger,
sale, transfer or other transaction there are any rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (ii) prior
to, simultaneously with or immediately after such consolidation, merger, sale, transfer or other transaction, the stockholders
of the Person who constitutes, or would constitute, the Principal Party for purposes of Section 13.2 shall have received
a distribution of Rights previously owned by such Person or any of its Related Persons or (iii) the form or nature of organization
of the Principal Party would preclude or limit the exercisability of the Rights. The provisions of this Section 13
shall similarly apply to successive transactions of the type described in clauses (A) through (C) of this Section 13.1.


 


13.2.       
Principal Party. “Principal Party” shall mean:


 


(i)       in
the case of any transaction described in clauses (A) or (B) of the first sentence of Section 13.1: (i) the Person that
is the issuer of the securities into which the Common Stock is converted in such merger or consolidation, or, if there is more
than one such issuer, the issuer the Common Stock of which has the greatest aggregate market value of shares outstanding, or (ii)
if no securities are so issued, (x) the Person that is the other party to the merger, if such Person survives said merger, or,
if there is more than one such Person, the Person the Common Stock of which has the greatest aggregate market value of shares
outstanding or (y) if the Person that is the other party to the merger does not survive the merger, the Person that does survive
the merger (including the Company if it survives) or (z) the Person resulting from the consolidation; and


 


(ii)       in
the case of any transaction described in clause (C) of the first sentence in Section 13.1, the Person that is the party
receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if
each Person that is a party to such transaction or transactions receives the same portion of the assets or earning power so transferred
or if the Person receiving the greatest portion of the assets or earning power cannot be determined, whichever of such Persons
is the issuer of Common Stock having the greatest aggregate market value of shares outstanding; provided, however, that
in any such case described in the foregoing clause (i) or (ii) of this Section 13.2, if the shares of Common Stock of such
Person are not at such time or have not been continuously over the preceding twelve (12) month period registered under Section
12 of the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary of another Person the shares of Common Stock
of which are and have been so registered, the term “Principal Party” shall refer to such other Person, or (2) if such
Person is a Subsidiary, directly or indirectly, of more than one Person, the shares of Common Stock of all of which are and have
been so registered, the term “Principal Party” shall refer to whichever of such Persons is the issuer of Common Stock
having the greatest aggregate market value of shares outstanding, or (3) if such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth
in clauses (1) and (2) above shall apply to each of the owners having an interest in the venture as if the Person owned by the
joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in each such case shall bear the
obligations set forth in this Section 13 in the same ratio as its interest in such Person bears to the total of such interests.


 


13.3.        Approved Acquisitions. Notwithstanding anything contained herein to the contrary, upon the consummation of any merger or
other acquisition transaction of the type described in clause (A), (B) or (C) of Section 13.1 involving the Company pursuant
to a merger or other acquisition agreement between the Company and any Person (or one or more of such Person’s Affiliates
or Associates) which agreement has been approved by the Board prior to any Person becoming an Acquiring Person, this Agreement
and the rights of holders of Rights hereunder shall be terminated in accordance with Section 7.1.


 






    	 	18	 



     


    

 


Section
14. Fractional Rights and Fractional Shares.


 


14.1.        Cash in Lieu of Fractional Rights. The Company shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights (except prior to the Distribution Date in accordance with Section 11.15).
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 14.1, the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the 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 the 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. If on any such date no such market maker
is making a market in the Rights, the current market value of the Rights on such date shall be the fair value of the Rights as
determined in good faith by the Board, or, if at the time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board, which shall have the duty to make such determination in a reasonable
and objective manner, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.


 


14.2.        Cash in Lieu of Fractional Shares of Series A Preferred. The Company shall not be required to issue fractions of shares
of Series A Preferred (other than fractions which are integral multiples of one one-thousandth (1/1,000) of a share of Series
A Preferred) upon exercise or exchange of the Rights or to distribute certificates which evidence fractional shares of Series
A Preferred (other than fractions which are integral multiples of one one-thousandth (1/1,000) of a share of Series A Preferred).
Interests in fractions of shares of Series A Preferred in integral multiples of one one-thousandth (1/1,000) of a share of Series
A Preferred 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 Series A
Preferred represented by such depositary receipts. In lieu of fractional shares of Series A Preferred that are not integral multiples
of one one-thousandth (1/1,000) of a share of Series A Preferred, the Company shall pay to the registered holders of Right Certificates
at the time such Rights are exercised or exchanged as herein provided an amount in cash equal to the same fraction of the current
per share market price of one share of Series A Preferred (as determined in accordance with Section 14.1) for the Trading
Day immediately prior to the date of such exercise or exchange.


 


14.3.        Cash in Lieu of Fractional Shares of Common Stock. The Company shall not be required to issue fractions of shares of Common
Stock or to distribute certificates which evidence fractional shares of Common Stock upon the exercise or exchange of Rights. In
lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock (as determined in accordance with Section 14.1) for the Trading
Day immediately prior to the date of such exercise or exchange.


 


14.4.        Waiver of Right to Receive Fractional Rights or Shares. The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon exercise or exchange of a Right, except as permitted
by this Section 14.


 


14.5.        Reliance by Rights Agent. Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent
under any section of this Agreement, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting
forth in reasonable detail the facts related to such payments and the prices and formulas utilized in calculating such payments,
and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments. The Rights
Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed
to have knowledge of, any payment for fractional Rights or fractional shares under any section of this Agreement relating to the
payment of fractional Rights or fractional shares unless and until the Rights Agent shall have received such a certificate and
sufficient monies.


 






    	 	19	 



     


    

 


Section
15. Rights of Action. All rights of action in respect of this Agreement, except the rights of action given to the Rights
Agent under any section of this Agreement, are vested in the respective registered holders of the Right Certificates (and, prior
to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce
this Agreement, and may institute and maintain any suit, action or proceeding against the Company to enforce this Agreement, or
otherwise enforce or act in respect of his right to exercise the Rights evidenced by such Right Certificate (or, prior to the
Distribution Date, such Common Stock) 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 by the Company and shall be entitled to specific performance
of the obligations under, and injunctive relief against actual or threatened violations of, the obligations hereunder of the Company.


 


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 evidenced by a Right Certificate and will be transferable only in connection
with the transfer of the Common Stock;


 


(b)       as
of and after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if
surrendered at the office or offices of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate form of assignment and certificates, properly completed and duly executed, accompanied
by a signature guarantee and such other documentation as the Rights Agent may reasonably request;


 


(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 Stock certificate or Book Entry Share) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the associated Common Stock
certificate or Book Entry Share 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; and


 


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


 


Section
17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the Series A Preferred 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 24), 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.


 






    	 	20	 



     


    

 


Section
18. Concerning the Rights Agent. The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder in accordance with a fee schedule to be mutually agreed upon and, from time to time, on demand of the
Rights Agent, to reimburse the Rights Agent for all of its reasonable expenses and counsel fees and other disbursements incurred
in the preparation, delivery, negotiation, amendment, administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also covenants and agrees to indemnify the Rights Agent for, and to hold it harmless against,
any and all loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including, without limitation,
the reasonable fees and expenses of legal counsel) that may be paid, incurred or suffered by it, or which it may become subject,
without gross negligence, bad faith or willful misconduct on the part of the Rights Agent (which gross negligence, bad faith,
or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction), for any action
taken, suffered, or omitted to be taken by the Rights Agent in connection with the execution, acceptance, administration, exercise
and performance of its duties under this Agreement, including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly, or enforcing its rights hereunder. The provisions provided for under this Section 18
and Section 20 below shall survive the expiration of the Rights and the termination of this Agreement and the
resignation, replacement or removal of the Rights Agent. The costs and expenses incurred in enforcing this right of indemnification
shall be paid by the Company.


 


The
Rights Agent shall be fully authorized and protected and shall incur no liability for or in respect of any action taken, suffered
or omitted to be taken by it in connection with its acceptance and administration of this Agreement and the exercise and performance
of its duties hereunder, in reliance upon any Right Certificate or certificate for Common Stock or for other securities of the
Company (including in the case of uncertificated securities, by notation in book entry accounts reflecting ownership), instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction, 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 21 hereof. The
Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder,
and the Rights Agent shall be fully protected and shall incur no liability for failing to take action in connection therewith,
unless and until it has received such notice in writing.


 


Section
19. Merger or Consolidation or Change of Name of Rights Agent. Any corporation or limited liability company or other entity
into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation
or limited liability company or other entity resulting from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation or limited liability company succeeding to the stock transfer or other shareholder
services business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that
such corporation or limited liability company or other entity would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. The purchase of all or substantially all of the Rights Agent’s assets employed in the
performance of transfer agent activities shall be deemed a merger or consolidation for purposes of this Section 20. In
case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.


 


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


 






    	 	21	 



     


    

 


Section
20. Rights and Duties of Rights Agent. The Rights Agent undertakes to perform only the duties and obligations expressly
set forth in this Agreement and no implied duties or obligations shall be read into this Agreement against the Rights Agent. The
Rights Agent shall perform its duties and obligations hereunder upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates, or, prior to the Distribution Date, Common Stock, by their acceptance thereof, shall be
bound:


 


20.1.        Legal Counsel. The Rights Agent may consult with legal counsel selected by it (who may be legal counsel for the Company
or an employee or legal counsel of the Rights Agent), and the advice or opinion of such counsel shall be full and complete authorization
and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered
or omitted to be taken by it and in accordance with such advice or opinion.


 


20.2.        Certificates as to Facts or Matters. 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, suffering, or
omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed by a person believed by the Rights Agent to be
the Chief Executive Officer, the Chief Financial Officer, the General Counsel or any Vice President of the Company and such other
officers of the Company as the Board may designate and delivered to the Rights Agent; and such certificate shall be full authorization
and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered
or omitted to be taken by it under the provisions of this Agreement in reliance upon such certificate. The Rights Agent shall
have no duty to act without such a certificate as set forth in this Section 20.2.


 


20.3.        Standard of Care. The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct
(which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable judgment of a court of
competent jurisdiction). Notwithstanding anything in this Agreement to the contrary, any liability of the Rights Agent under this
Agreement will be limited to the amount of annual fees paid by the Company to the Rights Agent during the twelve (12) months immediately
preceding the event for which recovery from the Rights Agent is being sought. Anything to the contrary notwithstanding, in no
event will the Rights Agent be liable for special, punitive, indirect, incidental or consequential loss or damages of any kind
whatsoever (including, without limitation, lost profits), even if the Rights Agent has been advised of the likelihood of such
loss or damages, and regardless of the form of action.


 


20.4.        Reliance on Agreement and Right Certificates. 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 (including in the case of Book Entry Shares, by notation
in book entry accounts reflecting ownership), except as to its countersignature thereof, or be required to verify the same, but
all such statements and recitals are and shall be deemed to have been made by the Company only.


 


20.5.        No Responsibility as to Certain Matters. The Rights Agent shall not have any liability for or 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 legality or validity or execution of any Right Certificate (including in the case of Book Entry Shares,
by notation in book entry accounts reflecting ownership), except its countersignature thereof; nor shall it be responsible for
any breach by the Company of any covenant or failure by the Company to satisfy any condition contained in this Agreement or in
any Right Certificate; nor shall it be liable or responsible for modification by or order of any court, tribunal, or governmental
authority in connection with the foregoing, any change in the exercisability of the Rights (including the Rights becoming null
and void pursuant to Section 11.1.2) or any adjustment required under the provisions of Sections 3, 11, 13, 23
or 27 or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after
receipt of a certificate pursuant to Section 12 describing any such adjustment, upon which the Rights Agent may rely);
nor shall it be responsible for any determination by the Board of the current market value of the Rights or Series A Preferred
or Common Stock pursuant to the provisions of Section 14 hereof; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Series A Preferred or other securities to be issued pursuant
to this Agreement or any Right Certificate or as to whether any Series A Preferred or other securities will, when so issued, be
validly authorized and issued, fully paid and non-assessable.


 






    	 	22	 



     


    

 


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


 


20.7.        Authorized Company Officers. The Rights Agent is hereby authorized and directed to accept written instructions with respect
to the performance of its duties hereunder and certificates delivered pursuant to any provision hereof from any person believed
by the Rights Agent to be from any one of the Chief Executive Officer, the Chief Financial Officer, the General Counsel or any
Vice President of the Company and such other officers of the Company as the Board may designate, and to apply to such officers
for advice or instructions in connection with its duties under this Agreement, and such advice or instructions shall provide full
authorization and protection to the Rights Agent and the Rights Agent, and it shall not be liable for any action taken, suffered,
or omitted to be taken by it in accordance with the written advice or instructions of any such officer or for any delay in acting
while waiting for these instructions. The Rights Agent shall be fully authorized and protected in relying upon the most recent
advice or instructions received by any such officer. Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent with
respect to its duties or obligations under this Agreement and the date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action taken, suffered or omitted to be taken by, the
Rights Agent in accordance with a proposal included in any such application on or after the date specified therein (which date
shall not be less than three (3) Business Days after the date any such officer actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior to taking, suffering or omitting to take of any
such action (or the effective date in the case of omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken, suffered, or omitted to be taken.


 


20.8.        Freedom to Trade in Company Securities. The Rights Agent and any stockholder, affiliate, member, director, officer, agent,
representative 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 or any such stockholder, affiliate, director, member, officer, agent, representative or employee from
acting in any other capacity for the Company or for any other Person.


 


20.9.        Reliance on Attorneys and Agents. The Rights Agent may execute and exercise any of the rights or powers hereby vested in
it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, omission, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company,
to the holders of the Rights or any other Person resulting from any such act, omission, default, neglect or misconduct, absent
gross negligence or bad faith in the selection and continued employment thereof (which gross negligence or bad faith must be determined
by a final, non-appealable judgment of a court of competent jurisdiction).


 


20.10.      No Risk of Own Funds. No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise any of its rights
or powers if it believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably
assured to it.


 


20.11.      Incomplete Certificate. If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer,
the certificate contained in the form of assignment or the form of election to purchase set forth on the reverse thereof, as the
case may be, has not been properly completed to certify the holder is not an Acquiring Person (or a Related Person of an Acquiring
Person), or any other actual or suspected irregularity exists, the Rights Agent shall not take any further action with respect
to such requested exercise or transfer without first consulting with the Company; provided, however that Rights Agent shall not
be liable for any delays arising from the duties under this Section 20.11.


 






    	 	23	 



     


    

 


20.12.      Rights Holders List. At any time and from time to time after the Distribution Date, upon the request of the Company, the
Rights Agent shall promptly deliver to the Company a list, as of the most recent practicable date (or as of such earlier date
as may be specified by the Company), of the holders of record of Rights.


 


20.13.      No Interest. The Rights Agent shall have no responsibility to the Company, any holders of Rights or any holders of shares
of Common Stock for interest or earnings on any moneys held by the Rights Agent pursuant to this Agreement.


 


20.14.      No Notice. The Rights Agent shall not be required to take notice or be deemed to have notice of any event or condition
hereunder, including any event or condition that may require action by the Rights Agent, unless the Rights Agent shall be specifically
notified in writing of such event or condition by the Company, and all notices or other instruments required by this Agreement
to be delivered to the Rights Agent must, in order to be effective, be received by the Rights Agent as specified in Section 25
hereof, and in the absence of such notice so delivered, the Rights Agent may conclusively assume no such event or condition
exists.


 


Section
21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days’ notice in writing mailed to the Company 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 Stock and/or Series
A Preferred known to the Rights Agent, as applicable. 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 upon thirty (30) days’ notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and/or
Series A Preferred, as applicable, by registered or certified mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the resigning, removed, or incapacitated Rights Agent shall remit to the Company, or to any successor
Rights Agent designated by the Company, all books, records, funds (other than any funds owed to the Rights Agent or its Affiliates
under this Agreement or under any other agreement or arrangement with the Company or its Affiliates), certificates or other documents
or instruments of any kind then in its possession which were acquired by such resigning, removed or incapacitated Rights Agent
in connection with its services as Rights Agent hereunder (provided that the Rights Agent may keep copies of same in accordance
with applicable law or its document retention policies or conventions), and shall thereafter be discharged from all duties and
obligations hereunder. Following notice of such removal, resignation or incapacity, the Company shall appoint a successor to such
Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Company),
then the incumbent Rights Agent or registered holder of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall
be (a) a Person, other than a natural person, organized and doing business under the laws of the United States, in good standing,
which is authorized under such laws to exercise stock transfer powers and is subject to supervision or examination by federal
or state authority and which has, along with its Affiliates, at the time of its appointment as Rights Agent a combined capital
and surplus of at least $50 million, or (b) an Affiliate of a Person described in clause (a) of this sentence. 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, but such predecessor Rights Agent shall not be required to make any additional expenditure or
assume any additional liability in connection with the foregoing; and, except as the context herein otherwise requires, such successor
Rights Agent shall be deemed to be the “Rights Agent” for all purposes of this Agreement. Not later than the effective
date of any such appointment the Company shall mail notice thereof in writing to the predecessor Rights Agent and each transfer
agent of the Common Stock and/or Series A Preferred, as applicable, and, following the Distribution Date, mail a notice thereof
in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.


 






    	 	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 its
Board 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 Stock following the Distribution Date and prior to the Expiration Date, the Company
shall, with respect to Common Stock so issued or sold pursuant to the exercise of stock options or under any employee plan or
arrangement, granted or awarded, or upon exercise, conversion or exchange of securities heretofore or hereinafter issued by the
Company, in each case existing prior to the Distribution Date, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no such Right Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such Right Certificate would be issued and (ii) no such Right Certificate
shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.


 


Section
23. Redemption.


 


23.1.        Right to Redeem. The Board may, at its option, at any time prior to a Trigger Event, redeem all but not less than all of
the then outstanding Rights at a redemption price of $0.001 per Right, appropriately adjusted to reflect any stock split, stock
dividend, recapitalization or similar transaction occurring after the date hereof (such redemption price being hereinafter referred
to as the “Redemption Price”), and the Company may, at its option, pay the Redemption Price in Common Stock
(based on the “current per share market price,” determined pursuant to Section 11.4, of the Common Stock at
the time of redemption), cash or any other form of consideration deemed appropriate by the Board. The redemption of the Rights
by the Board may be made effective at such time, on such basis and subject to such conditions as the Board in its sole discretion
may establish.


 


23.2.       
Redemption Procedures. Immediately upon the action of the Board ordering the redemption of the Rights (or at such later
time as the Board may establish for the effectiveness of such redemption), 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 for each Right so held. The Company shall promptly give public notice of such redemption (with prompt written
notice of same to the Rights Agent); provided, however, that the failure to give, or any defect in, any such notice shall
not affect the validity of such redemption. The Company shall promptly give, or cause the Rights Agent to give at the Company’s
expense, notice of such redemption to the holders of the then outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption shall state the method by which the payment of the
Redemption Price will be made. The failure to give notice required by this Section 23.2 or any defect therein shall not
affect the validity of the action taken by the Company. 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 27, and other than in connection with the purchase, acquisition or redemption of Common Stock prior to
the Distribution Date.


 






    	 	25	 



     


    

 


Section
24. Notice of Certain Events. In case the Company shall propose at any time after the earlier of the Stock Acquisition
Date and the Distribution Date (a) to pay any dividend payable in stock of any class to the holders of Series A Preferred or to
make any other distribution to the holders of Series A Preferred (other than a regular periodic cash dividend at a rate not in
excess of 125% of the rate of the last regular periodic cash dividend theretofore paid or, in case regular periodic cash dividends
have not theretofore been paid, at a rate not in excess of 50% of the average net income per share of the Company for the four
quarters ended immediately prior to the payment of such dividends, or a stock dividend on, or a subdivision, combination or reclassification
of the Common Stock), or (b) to offer to the holders of Series A Preferred rights or warrants to subscribe for or to purchase
any additional Series A Preferred or shares of stock of any class or any other securities, rights or options, or (c) to effect
any reclassification of its Series A Preferred (other than a reclassification involving only the subdivision of outstanding Series
A Preferred), or (d) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person (other than pursuant to a merger
or other acquisition agreement of the type excluded from the definition of “Beneficial Ownership” in Section 1.3),
or (e) to effect the liquidation, dissolution or winding up of the Company, or (f) to declare or pay any dividend on the Common
Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common Stock (by reclassification
or otherwise than by payment of dividends in Common Stock), then, in each such case, the Company shall give to the Rights Agent
and to each holder of a Right Certificate, in accordance with Section 25, a reasonably detailed notice of such proposed
action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the Series A Preferred and/or Common Stock, if any such date is
to be fixed, and such notice shall be so given in the case of any action covered by clause (a) or (b) above at least ten (10)
days prior to the record date for determining holders of the Series A Preferred for purposes of such action, and in the case of
any such other action, at least ten (10) days prior to the date of the taking of such proposed action or the date of participation
therein by the holders of the Series A Preferred and/or Common Stock, whichever shall be the earlier.


 


In
case any event set forth in Section 11.1.2 or Section 13 shall occur, then, in any such case, (i) the Company shall
as soon as practicable thereafter give to the Rights Agent and to each holder of a Right Certificate, in accordance with Section
25, a notice of the occurrence of such event, which notice shall describe the event and the consequences of the event to holders
of Rights under Section 11.1.2 and Section 13, and (ii) all references in this Section 24 to Series
A Preferred shall be deemed thereafter to refer to Common Stock and/or, if appropriate, other securities.


 


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


 


Legacy
Education Alliance, Inc.


1612
Cape Coral Parkway East


Cape
Coral, FL 33904


Attention: General
Counsel


 


Subject
to the provisions of Section 21 and Section 24, 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 in writing by overnight delivery service or first-class mail, postage prepaid, properly addressed (until another address
is filed in writing with the Company) as follows:


 


Vstock
Transfer, LLC


18
Lafayette Place


Woodmere,
NY 11598


Attention:
Client Services


 


Notices
or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate
(or, prior to the Distribution Date, to the holder of any certificate representing Common Stock or of any Book Entry Shares) shall
be sufficiently given or made if sent by first-class mail, postage prepaid, or overnight delivery service, addressed to such holder
at the address of such holder as shown on the registry books of the Company or the transfer agent or registrar for the Common
Stock; provided that prior to the Distribution Date a filing by the Company with the Securities and Exchange Commission that is
publicly accessible on the EDGAR Company Filing System shall constitute sufficient notice to the holders of securities of the
Company, including the Rights, for purposes of this Agreement and no other notice need be given.


 






    	 	26	 



     


    

 


Section
26. Supplements and Amendments. For so long as the Rights are then redeemable, the Company and the Rights Agent may in
in its sole and absolute discretion, and the Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement in any respect without the approval of any holders of Rights or Common Stock. From and after the time that
the Rights are no longer redeemable, the Company may, and the Rights Agent shall, if the Company so directs, from time to time
supplement or amend this Agreement without the approval of any holders of Rights (i) to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with any other provisions herein or (ii) to make any other
changes or provisions in regard to matters or questions arising hereunder which the Company may deem necessary or desirable, including
but not limited to extending the Final Expiration Date; provided, however, that no such supplement or amendment shall adversely
affect the interests of the holders of Rights as such (other than an Acquiring Person or a Related Person of an Acquiring Person),
and no such supplement or amendment may cause the Rights again to become redeemable or cause this Agreement again to become amendable
as to an Acquiring Person or a Related Person of an Acquiring Person, other than in accordance with this sentence; provided
further, that the right of the Board to extend the Distribution Date shall not require any amendment or supplement hereunder.
Upon the delivery of a certificate from an appropriate officer of the Company and, if requested by the Rights Agent, an opinion
of counsel which states that the proposed supplement or amendment is in compliance with the terms of this Section 26, the
Rights Agent shall execute such supplement or amendment. Notwithstanding anything in this Agreement to the contrary, the
Rights Agent shall not be required to execute any supplement or amendment to this Agreement that it has determined would adversely
affect its own rights, duties, obligations or immunities under this Agreement. No supplement or amendment to this Agreement shall
be effective unless duly executed by the Rights Agent.


 


Section
27. Exchange.


 


27.1.        Exchange of Common Stock for Rights. The Board may, at its option, at any time after the occurrence of a Trigger Event,
exchange Common Stock for 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 11.1.2) by exchanging at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the
date hereof (such amount per Right being hereinafter referred to as the “Exchange Consideration”). Notwithstanding
the foregoing, the Board shall not be empowered to effect such exchange at any time after any Acquiring Person shall have become
the Beneficial Owner of 50% or more of the Common Stock then outstanding. From and after the occurrence of an event specified
in Section 13.1, any Rights that theretofore have not been exchanged pursuant to this Section 27.1 shall thereafter
be exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section 27.1. The
exchange of the Rights by the Board may be made effective at such time, on such basis and with such conditions as the Board in
its sole discretion may establish. Without limiting the foregoing, prior to effecting an exchange pursuant to this Section
27, the Board may direct the Company to enter into a Trust Agreement in such form and with such terms as the Board shall then
approve (the “Trust Agreement”). If the Board so directs, the Company shall enter into the Trust Agreement
and shall issue to the trust created by such agreement (the “Trust”) all of the Common Stock issuable pursuant
to the exchange (or any portion thereof that has not theretofore been issued in connection with the exchange). From and after
the time at which such shares are issued to the Trust, all stockholders then entitled to receive shares pursuant to the exchange
shall be entitled to receive such shares (and any dividends 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. Any Common Stock issued at the direction of the Board in connection herewith shall be validly issued, fully paid and
non-assessable Common Stock or Series A Preferred (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.


 


27.2.        Exchange Procedures. Immediately upon the effectiveness of the action of the Board ordering the exchange for any Rights
pursuant to Section 27.1 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 the Exchange Consideration. The Company
shall promptly give reasonably detailed written notice of any such exchange to the Rights Agent, and shall promptly give public
notice of such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights
at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange shall state the method
by which the exchange of the Common Stock 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 the
Rights that have become null and void pursuant to the provisions of Section 11.1.2) held by each holder of Rights.


 






    	 	27	 



     


    

 


27.3.        Insufficient Shares. The Company may at its option substitute, for each share of Common Stock that would otherwise be issuable
upon exchange of a Right, (i) a number of shares of Series A Preferred or fraction thereof (or equivalent preferred stock, as
such term is defined in Section 11.2), (ii) cash, (iii) other equity securities of the Company or common stock equivalents,
as such term is defined in Section 11.1.3), (iv) debt securities of the Company, (v) other assets or (vi) any combination
of the foregoing, in each case having an aggregate value equal to the current per share market price of one share of Common Stock
(determined pursuant to Section 11.4) as of the date of such exchange. In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but unissued and otherwise available for issuance to permit an
exchange of Rights for Common Stock as contemplated in accordance with this Section 27, the Company shall substitute to
the extent of such insufficiency, for each share of Common Stock that would otherwise be issuable upon exchange of a Right, consideration
of any type described in Section 11.1.3(B)(1)-(7), which consideration shall have an aggregate current per share market
price (determined pursuant to Section 11.4 hereof) equal to the current per share market price of one share of Common
Stock (determined pursuant to Section 11.4 hereof) as of the date of such exchange.


 


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
Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).


 


Section
30. Determination and Actions by the Board or Committee Thereof. The Board, or a duly authorized committee thereof, shall
have the exclusive power and authority to administer this Agreement and to exercise the rights and powers specifically granted
to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including, without limitation, a determination to redeem or not redeem
the Rights or amend this Agreement). In administering this Agreement and exercising the rights and powers specifically granted
to the Board and to the Company hereunder, and in interpreting this Agreement and making any determination hereunder, the Board,
or a duly authorized committee thereof, may consider any and all facts, circumstances or information it deems to be necessary,
useful or appropriate. Without limiting the rights of the Rights Agent under this Agreement, all such actions, calculations, interpretations
and determinations that are done or made by the Board, or a duly authorized committee thereof, in good faith shall be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights, as such, and all other parties to the fullest extent
permitted by applicable law. The Rights Agent is entitled always to assume the Company’s Board of Directors acted in good
faith and shall be fully protected and incur no liability in reliance thereon.


 


Section
31. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however,
that if such excluded provision shall affect the rights, immunities, liabilities, duties or obligations of the Rights Agent, the
Rights Agent shall be entitled to resign immediately upon written notice to the Company.


 


Section
32. Governing Law. This Agreement and each Right and Right Certificate issued hereunder shall be deemed to be a contract
made under the internal laws of the State of Nevada 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; provided, however, that all
provisions regarding the rights, duties, liabilities and obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within the State of
New York.


 






    	 	28	 



     


    

 


Section
33. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A
signature to this Agreement transmitted electronically shall have the same authority, effect and enforceability as an original
signature.


 


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


 


Section
35. Interpretation. Whenever the words “include,” “includes” or “including” are used
in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,”
“herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer
to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, subsection, paragraph
and exhibit references are to the articles, sections, paragraphs and exhibits of this Agreement unless otherwise specified. The
meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term,
and words denoting any gender shall include all genders. Where a word or phrase is defined herein, each of its other grammatical
forms shall have a corresponding meaning.


 


Section
36. Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable
for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts
of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunctions of any utilities, communications,
or computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval
systems, labor difficulties, war or civil unrest.


 


Signature
Page Follows


 






    	 	29	 



     


    

 


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


 


	 	LEGACY
    EDUCATION ALLIANCE, INC.
	 	 	 
	 	By:	 	/s/
    James E. May
	 	 	 	Name:	 	James
    E. May
	 	 	 	Title:	 	Exec.
    VP and Gen. Counsel
	 	 
	 	VSTOCK
    TRANSFER, LLC
	 	 	 
	 	By:	 	/s/
    Young D. Kim
	 	 	 	Name:	 	Young
    D. Kim
	 	 	 	Title:	 	Compliance
    Officer





 


Signature
Page to Rights Agreement


 






     


     


    

 


EXHIBIT
A 


 


FORM
OF


CERTIFICATE
OF DESIGNATION


 


of


 


SERIES
A JUNIOR PARTICIPATING PREFERRED STOCK


 


of


 


LEGACY
EDUCATION ALLIANCE, INC.


 


(Pursuant
to Section 78.1955 of the


Nevada
Revised Statutes)


______________________


  


Legacy
Education Alliance, Inc., a Nevada corporation (hereinafter called the “Corporation”), hereby certifies that
the following resolution has been duly adopted by the Board of Directors of the Corporation (hereinafter called the “Board
of Directors” or the “Board”) at a meeting duly called and held on February 15, 2017.


 


RESOLVED,
that pursuant to the authority granted to and vested in the Board pursuant to Article IV of the Second Amended and Restated Articles
of Incorporation of the Corporation (the “Articles of Incorporation”), there hereby is created, out of the twenty
million (20,000,000) shares of preferred stock, par value $0.0001 per share, of the Corporation authorized by Article IV of the
Articles of Incorporation (“Preferred Stock”), a series of Preferred Stock, which shall have the powers, preferences
and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof as follows:


 


Section
1. Designation and Amount. The shares of such series shall be designated as “Series A Junior Participating Preferred
Stock” (the “Series A Preferred”) and the number of shares constituting the Series A Preferred shall
be 40,000. 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 A Preferred 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 A Preferred.


 


Section
2. Dividends and Distributions.


 


(A)Subject
to the prior and superior rights of the holders of any shares of any class or series of stock of this Corporation ranking prior
and superior to the Series A Preferred with respect to dividends, the holders of shares of Series A Preferred, in preference to
the holders of Common Stock, par value $0.0001 per share (the “Common Stock”), of the Corporation, and of any
other stock ranking junior to the Series A Preferred, 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 A
Preferred, 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 A Preferred. 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, 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 A Preferred 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.


 






    	 	A-1	 



     


    

 


(B)The
Corporation shall declare a dividend or distribution on the Series A Preferred as provided in paragraph (A) of this Section
2 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 A Preferred shall nevertheless be payable (with any such payment being within the discretion of the Board)
on such subsequent Quarterly Dividend Payment Date.


 


(C)Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A Preferred from the Quarterly Dividend Payment Date next
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 A Preferred 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 A Preferred 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 A Preferred entitled to receive payment of a dividend or distribution declared thereon, which record
date shall be not more than sixty (60) days prior to the date fixed for the payment thereof.


 


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


 


(A)Subject
to the provision for adjustment hereinafter set forth, each share of Series A Preferred shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the shareholders 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, 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 A Preferred 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 Designation creating a series of Preferred Stock or any similar stock,
or by law, the holders of shares of Series A Preferred 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 shareholders
of the Corporation.


 


(C)Except
as set forth herein, or as otherwise provided by law, holders of Series A Preferred 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.


 



    	 	A-2	 



     


    

 


(D)If,
at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether
or not consecutive) payable on any share or shares of Series A Preferred are in default, the number of directors constituting
the Board of Directors of the Corporation shall be increased by two. In addition to voting together with the holders of Common
Stock for the election of other directors of the Corporation, the holders of record of the Series A Preferred, voting separately
as a class to the exclusion of the holders of Common Stock, shall be entitled at such meeting of stockholders (and at each subsequent
annual meeting of stockholders), unless all dividends in arrears on the Series A Preferred have been paid or declared and set
apart for payment prior thereto, to vote for the election of two directors of the Corporation, the holders of any Series A Preferred
being entitled to cast a number of votes per share of Series A Preferred as is specified in paragraph (A) of this Section 3. Each
such additional director shall serve until the next annual meeting of stockholders for the election of directors, or until his
successor shall be elected and shall qualify, or until his right to hold such office terminates pursuant to the provisions of
this Section 3(D). Until the default in payments of all dividends which permitted the election of said directors shall
cease to exist, any director who shall have been so elected pursuant to the provisions of this Section 3(D) may be removed
at any time, without cause, only by the affirmative vote of the holders of the shares of Series A Preferred at the time entitled
to cast a majority of the votes entitled to be cast for the election of any such director at a special meeting of such holders
called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when such default
shall cease to exist, the holders of the Series A Preferred shall be divested of the foregoing special voting rights, subject
to revesting in the event of each and every subsequent like default in payments of dividends. Upon the termination of the
foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to said special
voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be reduced by two. The
voting rights granted by this Section 3(D) shall be in addition to any other voting rights granted to the holders of the
Series A Preferred in this Section 3.


 


Section
4. Certain Restrictions.


 


(A)Whenever
quarterly dividends or other dividends or distributions payable on the Series A Preferred 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
A Preferred 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 A Preferred;


 


(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 A Preferred, except dividends paid ratably on the Series A Preferred 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;


 


(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 A Preferred, 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 (both as to dividends
and upon dissolution, liquidation or winding up) to the Series A Preferred; or


 


(iv)redeem
or purchase or otherwise acquire for consideration any shares of Series A Preferred, or any shares of stock ranking on a parity
with the Series A Preferred, 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.


 






    	 	A-3	 



     


    

 


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


 


Section
6. Liquidation, Dissolution or Winding Up.


 


(A)Upon
any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise no distribution shall be made (i) to the
holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred unless, prior thereto, the holders of Series A Preferred shall have received an amount per share (the “Series
A Liquidation Preference”) equal to $5.00 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 A Preferred 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 Common Stock, or (ii) 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 A Preferred, except
distributions made ratably on the Series A Preferred 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, 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 Series A Preferred were entitled immediately prior to such event under the proviso in clause (i) 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 are outstanding
immediately prior to such event.


 


(B)
In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with
the Series A Preferred in respect thereof, then the assets available for such distribution shall be distributed ratably to the
holders of the Series A Preferred and the holders of such parity shares in proportion to their respective liquidation preferences.


 


(C)Neither
the merger or consolidation of the Corporation into or with another corporation nor the merger or consolidation of any other corporation
into or with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning
of this Section 6.


 


Section
7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or
any other property, then in any such case each share of Series A Preferred 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 and/or any other property (payable in kind), as the case may be, into which or for which each share
of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision, 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 A Preferred 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 Series A Preferred shall not be redeemable by the Corporation.


 


Section
9. Rank. The Series A Preferred shall rank, with respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up, junior to all series of any other class of the Corporation’s Preferred Stock, except
to the extent that any such other series specifically provides that it shall rank on a parity with or junior to the Series A Preferred.


 


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


 


Section
11. Fractional Shares. Series A Preferred may be issued in fractions of a share that shall entitle the holder, in proportion
to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series A Preferred.


 


*                    
*                    *


 






    	 	A-4	 



     


    

 


EXHIBIT
B 


 


Form
of Right Certificate


 


	Certificate
    No. R-	 	            
    Rights


 


NOT
EXERCISABLE AFTER FEBRUARY 15, 2019 OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED OR ACQUIRED
PURSUANT TO AN AGREEMENT OF THE TYPE DESCRIBED IN SECTION 13.3 OF THE AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$0.001 PER RIGHT, AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION
11.1.2 OF THE AGREEMENT), RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS DEFINED IN THE AGREEMENT), OR
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS, WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.





 


Right
Certificate


 


LEGACY
EDUCATION ALLIANCE, INC.


 


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 Rights Agreement, dated as of February 16, 2017, as
the same may be amended from time to time (the “Agreement”), between Legacy Education Alliance, Inc., a Nevada
corporation (the “Company”), and Vstock Transfer, LLC, a California limited liability company, as Rights Agent
(or any successor rights agent) (the “Rights Agent”), to purchase from the Company at any time after the Distribution
Date and prior to 5:00 P.M. (New York time) on February 15, 2019, at the offices of the Rights Agent, or its successors as Rights
Agent, designated for such purpose, one one-thousandth (1/1,000) of a fully paid, non-assessable share of Series A Junior Participating
Preferred Stock, par value $0.0001 per share (the “Series A Preferred”), of the Company, at a purchase price
of $2.50 per one one-thousandth (1/1,000) of a share of Series A Preferred, subject to adjustment (the “Purchase Price”),
upon presentation and surrender of this Right Certificate with the Form of Election to Purchase and certification duly competed
and executed, accompanied by such documentation as the Rights Agent may reasonably request. The number of Rights evidenced by
this Right Certificate (and the number of one one-thousandths (1/1,000) of a share of Series A Preferred which may be purchased
upon exercise thereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of February
16, 2017, based on the Series A Preferred as constituted at such date. Capitalized terms used in this Right Certificate without
definition shall have the meanings ascribed to them in the Agreement. As provided in the Agreement, the Purchase Price and the
number of shares of Series A Preferred 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 offices of the Company and
the Rights Agent.


 


This
Right Certificate, with or without other Right Certificates, upon surrender at the offices of the Rights Agent designated for
such purpose, accompanied by such documentation as the Rights Agent may reasonably request, 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 one one-thousandths (1/1,000) of a share of Series A Preferred 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.


 






    	 	B-1	 



     


    

 


Subject
to the provisions of the Agreement, the Board may, at its option, (i) redeem the Rights evidenced by this Right Certificate at
a redemption price of $0.001 per Right or (ii) exchange Common Stock for the Rights evidenced by this Certificate, in whole or
in part.


 


No
fractional Series A Preferred will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions of
Series A Preferred which are integral multiples of one one-thousandth (1/1,000) of a share of Series A Preferred, which may, at
the election of the Company, be evidenced by depository receipts), but in lieu thereof a cash payment will be made, as provided
in the Agreement.


 


No
holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder
of the Series A Preferred 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.


 


If
any term, provision, covenant or restriction of the 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 the Agreement shall
remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that if such excluded
provision shall affect the rights, immunities, liabilities, duties or obligations of the Rights Agent, the Rights Agent shall
be entitled to resign immediately upon written notice to the Company.


 


This
Right Certificate shall not be valid or binding 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:  	 	LEGACY EDUCATION ALLIANCE, INC.
	 	 	 	 	 	 	 
	By		 	By	 
	 	Title:	             	 	 	Title:	     
	 	 	 	 	 	 	 
	Countersigned:  	 	 	 	 
	 	 	 	 	 	 	 
	VSTOCK TRANSFER, LLC 	 	 	 	 
	 	 	 	 	 	 	 
	By	 	 	 	 	 
	 	Authorized Signature	 	 	 	 




 






    	 	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)


 


Rights
evidenced by 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
Medallion Guaranteed:





	 	 
	 	 


 


Signatures
must be guaranteed by an “eligible guarantor institution” as defined in Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended, which is a member of a recognized Medallion Signature Guarantee Program.


 


The
undersigned hereby certifies that:


 


(1)the
Rights evidenced by this Right Certificate are not Beneficially Owned by and are not being assigned to an Acquiring Person or
a Related Person of an Acquiring Person; and


 


(2)after
due inquiry and to the best knowledge of the undersigned, the undersigned did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or a Related Person of an Acquiring Person.


 





	Dated: 	 	 


 


	 	 
	 	Signature


 






    	 	B-4	 



     


    




 


FORM
OF ELECTION TO PURCHASE 


(To
be executed if holder desires to exercise the Right Certificate.)


  


	To:	Legacy Education Alliance, Inc.




 


The
undersigned hereby irrevocably elects to exercise                     
Rights represented by this Right Certificate to purchase the Series A Preferred issuable upon the exercise of such Rights (or
such other securities or property of the Company or of any other Person which may be issuable upon the exercise of the Rights)
and requests that certificates for such stock (or such other securities or property of the Company or of any other Person which
may be issuable upon the exercise of the Rights) be issued in the name of (or to, as the case may be):


 


	 
	(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
Medallion Guaranteed:





	 	 
	 	 




 


Signatures
must be guaranteed by an “eligible guarantor institution” as defined in Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended, which is a member of a recognized Medallion Signature Guarantee Program.


 




The undersigned hereby certifies that:


 


(1)       the
Rights evidenced by this Right Certificate are not Beneficially Owned by and are not being assigned to an Acquiring Person or
a Related Person of an Acquiring Person; and


  


(2)       after
due inquiry and to the best knowledge of the undersigned, the undersigned did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or a Related Person of an Acquiring Person.


 








	Dated: 	 	 


 


	 	 
	 	Signature


 






    	 	B-5	 



     


    

 


NOTICE



 


The
signature in the foregoing Form of Assignment and Form of Election to Purchase 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 Form of Election to Purchase is not completed, the Company
will deem the Beneficial Owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or a Related Person
of an Acquiring Person and such Assignment or Election to Purchase will not be honored.


 






    	 	B-6	 



     


    




 


EXHIBIT
C 


 


As
described in the Rights Agreement, Rights which are held by or have been held by an Acquiring Person or any Related Persons of
an Acquiring Person (as such terms are defined in the Rights Agreement) and certain transferees thereof shall become null and
void and will no longer be transferable.


  


SUMMARY
OF RIGHTS TO PURCHASE


PREFERRED
STOCK


 


On
February 15, 2017 the Board of Directors of Legacy Education Alliance, Inc. (the “Company”) declared a dividend
of one preferred stock purchase right (a “Right”) for each share of Common Stock, par value $0.0001 (the “Common
Stock”), of the Company outstanding at the close of business on March 2, 2017 (the “Record Date”).
As long as the Rights are attached to the Common Stock, the Company will issue one Right (subject to adjustment) with each new
share of Common Stock so that all such shares will have attached Rights. When exercisable, each Right will entitle the registered
holder to purchase from the Company one one-thousandth (1/1,000) of a share of Series A Junior Participating Preferred Stock (the
“Series A Preferred”) of the Company at a price of $2.50 per one one-thousandth (1/1,000) of a share of Series
A Preferred, subject to certain anti-dilution adjustments (the “Purchase Price”). The description and terms
of the Rights are set forth in a Rights Agreement, dated as of February 16, 2017, as the same may be amended from time to time
(the “Agreement”), between the Company and Vstock Transfer, LLC, a California limited liability company, as
Rights Agent (the “Rights Agent”).


 


Until
the earlier to occur of (i) the close of business on the tenth (10th) business day following a public announcement
that a person or group of affiliated or associated persons has acquired, or obtained the right to acquire, beneficial ownership
of 20% or more of the Common Stock (an “Acquiring Person”) or such earlier date as a majority of the Board
shall become aware of the existence of an Acquiring Person or (ii) the close of business on the tenth (10th) business
day (or such later date as may be determined by action of the Board of Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following the commencement or announcement of an intention to make a tender offer
or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 20% or more of the
Common Stock (the earlier of (i) and (ii) being called the “Distribution Date”), the Rights will be evidenced,
with respect to any of the Common Stock certificates outstanding as of the Record Date, by such Common Stock certificates or,
with respect to any uncertificated Common Stock registered in book entry form, by notation in book entry, in either case together
with a copy of this Summary of Rights. The Agreement provides that any person who beneficially owned 20% or more of the Common
Stock immediately prior to the first public announcement of the adoption of the Agreement, together with any affiliates and associates
of that person (each an “Existing Holder”), shall not be deemed to be an “Acquiring Person” for
purposes of the Agreement unless the Existing Holder becomes the beneficial owner of one or more additional shares of Common Stock
(other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock in Common Stock
or pursuant to a split or subdivision of the outstanding Common Stock). However, if upon acquiring beneficial ownership of one
or more additional shares of Common Stock, the Existing Holder does not beneficially own 20% or more of the Common Stock then
outstanding, the Existing Holder shall not be deemed to be an “Acquiring Person” for purposes of the Agreement.


 


The
Agreement provides that until the Distribution Date (or earlier redemption, exchange, termination or expiration of the Rights),
the Rights will be transferred with and only with the Common Stock. Until the Distribution Date (or earlier redemption, exchange,
termination or expiration of the Rights), new Common Stock certificates issued after the close of business on the Record Date
upon transfer or new issuance of the Common Stock will contain a notation incorporating the Agreement by reference, and the Company
will deliver a notice to that effect upon the transfer or new issuance of book entry shares. Until the Distribution Date (or earlier
redemption, exchange, termination or expiration of the Rights), the surrender for transfer of any certificates for Common Stock
or any book entry shares, with or without such notation, notice or a copy of this Summary of Rights, will also constitute the
transfer of the Rights associated with the Common Stock represented by such certificate or the book entry shares. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be
mailed to holders of record of the Common Stock as of the close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.


 






    	 	C-1	 



     


    

 


The
Rights are not exercisable until the Distribution Date. The Rights will expire on February 15, 2019, subject to the Company’s
right to extend such date (the “Final Expiration Date”), unless earlier redeemed or exchanged by the Company
or terminated.


 


Each
share of Series A Preferred purchasable upon exercise of the Rights will be entitled, when, as and if declared, to a minimum preferential
quarterly dividend payment of $1.00 per share or, if greater, an aggregate dividend of 1,000 times the dividend, if any, declared
per share of Common Stock. In the event of liquidation, dissolution or winding up of the Company, the holders of the Series A
Preferred will be entitled to a minimum preferential liquidation payment of $5.00 per share (plus any accrued but unpaid dividends),
provided that such holders of the Series A Preferred will be entitled to an aggregate payment of 1,000 times the payment made
per share of Common Stock. Each share of Series A Preferred will have 1,000 votes and will vote together with the Common Stock.
Finally, in the event of any merger, consolidation or other transaction in which shares of Common Stock are exchanged, each share
of Series A Preferred will be entitled to receive 1,000 times the amount received per share of Common Stock. Series A Preferred
will not be redeemable. These rights are protected by customary anti-dilution provisions. Because of the nature of the Series
A Preferred’s dividend, liquidation and voting rights, the value of one one-thousandth (1/1,000) of a share of Series A
Preferred purchasable upon exercise of each Right should approximate the value of one share of Common Stock.


 


The
Purchase Price payable, and the number of shares of Series A Preferred or other securities or property issuable, upon exercise
of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of the Series A Preferred, (ii) upon the grant to holders of the Series A Preferred of certain
rights or warrants to subscribe for or purchase Series A Preferred or convertible securities at less than the current market price
of the Series A Preferred or (iii) upon the distribution to holders of the Series A Preferred of evidences of indebtedness, cash,
securities or assets (excluding regular periodic cash dividends at a rate not in excess of 125% of the rate of the last regular
periodic cash dividend theretofore paid or, in case regular periodic cash dividends have not theretofore been paid, at a rate
not in excess of 50% of the average net income per share of the Company for the four quarters ended immediately prior to the payment
of such dividend, or dividends payable in Series A Preferred (which dividends will be subject to the adjustment described in clause
(i) above)) or of subscription rights or warrants (other than those referred to above).


 


In
the event that a Person becomes an Acquiring Person or if the Company were the surviving corporation in a merger with an Acquiring
Person or any affiliate or associate of an Acquiring Person and shares of the Common Stock were not changed or exchanged, each
holder of a Right, other than Rights that are or were acquired or beneficially owned by the Acquiring Person (which Rights will
thereafter be null and void), will thereafter have the right to receive upon exercise that number of shares of Common Stock having
a market value of two times the then current Purchase Price of the Right. In the event that, after a Person has become an
Acquiring Person, the Company were acquired in a merger or other business combination transaction or more than 50% of its assets
or earning power were sold, proper provision shall be made so that each holder of a Right shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price of the Right, that number of shares of common stock of the acquiring
company which at the time of such transaction would have a market value of two times the then current Purchase Price of the Right.


 


At
any time after a Person becomes an Acquiring Person and prior to the earlier of one of the events described in the last sentence
of the previous paragraph or the acquisition by such Acquiring Person of 50% or more of the then outstanding Common Stock, the
Board of Directors may cause the Company to exchange the Rights (other than Rights owned by an Acquiring Person which will have
become null and void), in whole or in part, for shares of Common Stock at an exchange rate of one share of Common Stock per Right
(subject to adjustment).


 


No
adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional Series A Preferred or Common Stock will be issued (other than fractions of Series A Preferred which
are integral multiples of one one-thousandth (1/1,000) of a share of Series A Preferred, which may, at the election of the Company,
be evidenced by depository receipts), and in lieu thereof, a payment in cash will be made based on the market price of the Series
A Preferred or Common Stock on the last trading date prior to the date of exercise.


 


The
Rights may be redeemed in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”) by
the Board of Directors at any time prior to the time that an Acquiring Person has become such. The redemption of the Rights
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. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.


 


Until
a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company beyond those as an existing
stockholder, including, without limitation, the right to vote or to receive dividends.


 


Any
of the provisions of the Agreement may be amended by the Board of Directors, or a duly authorized committee thereof, for so long
as the Rights are then redeemable, and after the Rights are no longer redeemable, the Company may amend or supplement the Agreement
in any manner that does not adversely affect the interests of the holders of the Rights (other than an Acquiring Person or any
affiliate or associate of an Acquiring Person).


 


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


 


 


 C-2