Exhibit 4.1


 


RIGHTS AGREEMENT


 


dated as of February 15, 2016


 


between


 


ENERGY XXI LTD,


 


as the Company


 


and


 


CONTINENTAL STOCK TRANSFER & TRUST
COMPANY,


 


as Rights Agent


 




     


     

    

 


TABLE OF CONTENTS


 


	 	 	Page
	Section 1.	Certain Definitions.	1
	Section 2.	Appointment of Rights Agent.	10
	Section 3.	Issue of Rights Certificates.	11
	Section 4.	Form of Rights Certificate.	13
	Section 5.	Countersignature and Registration.	14
	Section 6.	Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.	15
	Section 7.	Exercise of Rights; Exercise Price; Expiration Date of Rights.	16
	Section 8.	Cancellation and Destruction of Rights Certificates.	18
	Section 9.	Reservation and Availability of Shares.	18
	Section 10.	Preferred Shares Record Date.	20
	Section 11.	Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights.	20
	Section 12.	Certificate of Adjusted Exercise Price or Number of Shares.	27
	Section 13.	Consolidation, Merger or Sale or Transfer of Assets or Earning Power.	27
	Section 14.	Fractional Rights; Fractional Shares; Waiver.	31
	Section 15.	Rights of Action.	32
	Section 16.	Agreement of Rights Holders.	32
	Section 17.	Rights Certificate Holder Not Deemed a Shareholder.	33
	Section 18.	Duties of Rights Agent.	34
	Section 19.	Concerning the Rights Agent.	36
	Section 20.	Merger or Consolidation or Change of Name of Rights Agent.	38
	Section 21.	Change of Rights Agent.	39
	Section 22.	Issuance of New Rights Certificates.	39
	Section 23.	Redemption.	40
	Section 24.	Exchange.	40
	Section 25.	Process to Seek Exemption.	42
	Section 26.	Notice of Certain Events.	43
	Section 27.	Notices.	44
	Section 28.	Supplements and Amendments.	45
	Section 29.	Successors.	46
	Section 30.	Determinations and Actions by the Board.	46


 




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	Section 31.	Benefits of this Agreement.	46
	Section 32.	Tax Compliance and Withholding.	47
	Section 33.	Severability.	47
	Section 34.	Governing Law.	47
	Section 35.	Counterparts.	48
	Section 36.	Interpretation.	48
	Section 37.	Force Majeure.	48


 


	Exhibit A	Certificate of Designations
	 	 
	Exhibit B	Summary of Rights
	 	 
	Exhibit C	Form of Rights Certificate


 




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RIGHTS AGREEMENT


 


RIGHTS AGREEMENT, dated
as of February 15, 2016, (this “Agreement”), by and between Energy XXI Ltd, a Bermuda exempted company
(the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation, as rights
agent (the “Rights Agent”).


 


WHEREAS, (a) the Company
and certain of its Subsidiaries (as defined below) have certain net operating losses and certain other tax attributes (collectively,
“NOLs”) for United States federal income tax purposes, (b) the Company desires to avoid an “ownership
change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”),
and thereby preserve the Company’s ability to utilize such NOLs, and (c) in furtherance of such objective, the Company desires
to enter into this Agreement;


 


WHEREAS, on February
15, 2016, the board of directors of the Company (the “Board”) adopted resolutions that created a series
of preferred shares designated as “Series C Junior Participating Preferred Shares” and authorized and declared a dividend
of one preferred share purchase right (a “Right”) for each Common Share outstanding at the Close of Business
on the Record Date, each Right initially representing the right to purchase one one-thousandth (subject to adjustment) of one Preferred
Share, upon the terms and subject to the conditions herein set forth, and further authorized and directed the issuance of one Right
(subject to adjustment) with respect to each Common Share that will become issued and outstanding between the Record Date and the
earlier of the Distribution Date and the Expiration Date; provided, however, that Rights may be issued with respect
to Common Shares that will become issued and outstanding after the Distribution Date and prior to the Expiration Date in accordance
with Section 22 hereof.


 


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


 


Section
1. Certain Definitions.


 


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


 


(a)            “Acquiring
Person” shall mean any Person which, together with all of its Related Persons, is the Beneficial Owner of the Specified
Percentage of the Common Shares then issued and outstanding, but shall exclude (i) the Excluded Persons, (ii) any Exempt Persons
and (iii) any Grandfathered Persons.


 


Notwithstanding anything
in Agreement to the contrary, no Person shall become an “Acquiring Person”:


 


(i)          as
the result of an acquisition of Common Shares by the Company which, by reducing the number of Common Shares issued and outstanding,
increases the percentage of the Common Shares Beneficially Owned by such Person, together with all of its Related Persons, to the
Specified Percentage of the Common Shares then issued and outstanding; provided, however, that if a Person, together with
all of its Related Persons, becomes the Beneficial Owner of the Specified Percentage of the Common Shares then issued and outstanding
by reason of share acquisitions by the Company and, after such share acquisitions by the Company, becomes the Beneficial Owner
of any additional Common Shares (other than pursuant to a dividend or distribution paid or made by the Company on the issued and
outstanding Common Shares or pursuant to a split or subdivision of the outstanding Common Shares), then such Person shall be deemed
to be an “Acquiring Person” unless, upon becoming the Beneficial Owner of such additional Common Shares, such Person,
together with all of its Related Persons, does not Beneficially Own the Specified Percentage of the Common Shares then issued and
outstanding;


 






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(ii)         if
(A) the Board determines that such Person has become an “Acquiring Person” inadvertently (including, without limitation,
because (1) such Person was unaware that it Beneficially Owned the Specified Percentage of the then issued and outstanding
Common Shares; or (2) such Person was aware of the extent of its Beneficial Ownership of Common Shares but had no actual knowledge
of the consequences of such Beneficial Ownership under this Agreement); and (B) such Person divests as promptly as practicable
(as determined by the Board) a sufficient number of Common Shares so that such Person would no longer Beneficially Own the Specified
Percentage;


 


(iii)        solely
as a result of any unilateral grant of any security by the Company, or through the exercise of any options, warrants, rights or
similar interests (including restricted shares) granted by the Company to its directors, officers and employees unless and until,
subject to Section 1(a)(ii), such Person, together with all of its Related Persons, thereafter becomes the Beneficial Owner of
any additional Common Shares (unless upon becoming the Beneficial Owner of additional Common Shares, such Person, together with
all of its Related Persons, does not Beneficially Own the Specified Percentage of the Common Shares then issued and outstanding),
except as a result of (A) a dividend or distribution paid or made by the Company on the issued and outstanding Common Shares
or a split or subdivision of the issued and outstanding Common Shares; or (B) the unilateral grant of a security by the Company,
or through the exercise of any options, warrants, rights or similar interest (including restricted shares) granted by the Company
to its directors, officers and employees;


 


(iv)        by
means of share purchases or issuances (including debt to equity exchanges) directly from the Company in any such transaction approved
by the Board; provided however, that if a Person shall become the Beneficial Owner of the Specified Percentage of the Common
Shares then issued and outstanding by reason of share purchases or issuances directly from the Company (including debt to equity
exchanges) in a transaction approved by the Board and shall, after that date, become the Beneficial Owner of any additional Common
Shares without the prior written consent of the Company and shall then Beneficially Own the Specified Percentage of the Common
Shares then issued and outstanding; or


 


(v)         if
such Person is a bona fide swaps dealer who Beneficially Owns the Specified Percentage of the Common Shares as a result of its
actions in the ordinary course of its business that the Board determines, in its sole discretion, were taken without the intent
or effect of evading or assisting any other Person to evade the purposes and intent of this Agreement, or otherwise seeking to
control or influence the management or policies of the Company.


 






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(b)           A
person shall be deemed to be “Acting in Concert” with another Person if such Person knowingly acts pursuant
to an express agreement, arrangement or understanding in concert or in parallel with such other Person, or towards a common goal
with such other Person, relating to (i) acquiring, holding, voting or disposing of voting securities of the Company or (ii) changing
or influencing the control of the Company or in connection with or as a participant in any transaction having that purpose or effect
where at least one additional factor supports a determination by the Board that such Persons intended to act in concert or in parallel,
which such additional factors may include, without limitation, exchanging information, attending meetings, conducting discussions
or making or soliciting invitations to act in concert or in parallel.  In addition, a Person who is Acting in Concert with
another Person shall be deemed to be Acting in Concert with any third Person who is Acting in Concert with such other Person.


 


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


 


(d)           “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the Exchange
Act Regulations, as in effect on the date of this Agreement, and, to the extent not included within the foregoing, shall also include
with respect to any Person, any other Person whose Common Shares would be deemed to be constructively owned by such first Person,
owned by a “single entity” with respect to such first Person as defined in Section 1.382-3(a)(1) of the Treasury Regulations,
or otherwise aggregated with shares owned by such first Person, pursuant to the provisions of Section 382 of the Code and the Treasury
Regulations promulgated thereunder.


 


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


 


(f)            A
Person is the “Beneficial Owner” (and “Beneficially Owns” and has “Beneficial
Ownership”) of any securities (that are as such “Beneficially Owned”):


 


(i)          that
such Person or any of such Person’s Affiliates or Associates Beneficially Owns, directly or indirectly, as determined pursuant
to Rule 13d-3 of the Exchange Act Regulations as in effect on the date of this Agreement, including pursuant to any agreement,
arrangement, or understanding (whether or not in writing), but only if the effect of such agreement, arrangement or understanding
is to treat such Persons as an “entity” under Section 1.382-3(a)(1) of the Treasury Regulations;


 


(ii)         that
such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has (A) the right to acquire (whether
such right is exercisable immediately or only after the passage of time or satisfaction of other conditions) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange rights (other than
the Rights), rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the
“Beneficial Owner” of (1) securities (including rights, options or warrants) that are convertible or exchangeable
into or exercisable for Common Shares until such time as such securities are converted or exchanged into or exercised for Common
Shares except to the extent the acquisition or transfer of such rights, options or warrants would be treated as exercised on the
date of its acquisition or transfer under Section 1.382-4(d) of the Treasury Regulations; or (2) securities tendered pursuant to
a tender or exchange offer made in accordance with the Exchange Act Regulations by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (B) the right to vote or
dispose of, pursuant to any agreement, arrangement, or understanding (whether or not in writing), but only if the effect of such
agreement, arrangement or understanding is to treat such Persons as an “entity” under Section 1.382-3(a)(1) of the
Treasury Regulations;


 






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(iii)        that
are Beneficially Owned, directly or indirectly, by any other Person (or any Affiliate or Associate of such Person) with which such
Person (or any of such Person’s Affiliates or Associates) is Acting in Concert or has any agreement, arrangement, or understanding
(whether or not in writing), for the purpose of acquiring, holding, voting or disposing of any such securities, but only if the
effect of such agreement, arrangement or understanding is to treat such Persons as an “entity” under Section 1.382-3(a)(1)
of the Treasury Regulations; or


 


(iv)        which
are Beneficially Owned, directly or indirectly, by a Counterparty (or any of such Counterparty’s Affiliates or Associates)
under any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract)
to which such Person or any of such Person’s Affiliates or Associates is a Receiving Party; provided, however,
that the number of Common Shares that a Person is deemed to Beneficially Own pursuant to this clause (iv) in connection with a
particular Derivatives Contract shall not exceed the number of Notional Common Shares with respect to such Derivatives Contract;
provided, further, that the number of securities Beneficially Owned by each Counterparty (including its Affiliates
and Associates) under a Derivatives Contract shall for purposes of this clause (iv) include all securities that are Beneficially
Owned, directly or indirectly, by any other Counterparty (or any of such other Counterparty’s Affiliates or Associates) under
any Derivatives Contract to which such first Counterparty (or any of such first Counterparty’s Affiliates or Associates)
is a Receiving Party, with this proviso being applied to successive Counterparties as appropriate.


 


Notwithstanding anything
in this definition of “Beneficial Ownership” to the contrary, (x) no Person engaged in business as an underwriter
of securities shall be the “Beneficial Owner” of any securities acquired through such Person’s participation
in good faith in a firm commitment underwriting until the expiration of forty (40) days after the date of such acquisition; and
(y) no Person shall be deemed the “Beneficial Owner” of any security as a result of an agreement, arrangement
or understanding to vote such security that would otherwise render such Person the Beneficial Owner of such security if such agreement,
arrangement or understanding is not also then reportable on Schedule 13D and arises solely from a revocable proxy or consent given
to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions
of the Exchange Act Regulations.


 


Notwithstanding anything
in this definition of “Beneficial Ownership” to the contrary, to the extent not within the foregoing provisions, a
Person shall be deemed the Beneficial Owner of, and shall be deemed to Beneficially Own or have Beneficial Ownership of, securities
which such Person would be deemed to constructively own or which otherwise would be aggregated with shares owned by such Person
pursuant to Section 382 of the Code, or any successor provision or replacement provision and the Treasury Regulations thereunder.


 


(g)          
“Board” shall have the meaning set forth in the Preamble hereof.


 






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(h)           “Book
Entry” shall mean an uncertificated book entry in the account system of the transfer agent for the Common Shares.


 


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


 


(j)             “Certificate
of Designations” shall mean the Certificate of Designations of the Preferred Shares of the Company adopted contemporaneously
with the approval of this Agreement and attached hereto as Exhibit A.


 


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


 


(l)             “Closing
Price” shall mean in respect of any security for any day shall mean the last sale price, regular way, reported at
or prior to 4:00 P.M. Eastern time or, in case no such sale takes place on such day, the average of the bid and asked prices, regular
way, reported at or prior to 4:00 P.M. Eastern time, in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on NASDAQ or the NYSE or, if the security is not listed or admitted
to trading on NASDAQ or the NYSE, 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 reported at or prior to 4:00 P.M.
Eastern time or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported
by any system then in use reported as of 4:00 P.M. Eastern time or, if not so quoted, the average of the closing bid and asked
price furnished by a professional market maker making a market in the security selected by the Board.


 


(m)          “Code”
shall have the meaning set forth in the recitals to this Agreement.


 


(n)          “Common
Shares”, each a “Common Share”, shall mean (i) when used with reference to the Company,
the Common Shares, par value $0.005 per share, of the Company; and (ii) when used with reference to any Person other than
the Company, the class or series of shares or equity interest with the greatest aggregate voting power (in relation to any other
classes or series of shares or equity interest) in the election of directors or power to control or direct the management of such
other Person or if such other Person is a Subsidiary of another Person, the Person who ultimately controls such first mentioned
Person.


 


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


 


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


 


(q)           “Counterparty”
shall have the meaning set forth in Section 1(u) hereof.


 






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(r)            “Current
Market Price” of any security on any date shall mean the average of the daily closing prices per share of such security
for the thirty (30) consecutive Trading Days immediately prior to, but not including, such date; provided, however,
that in the event that the “Current Market Price” of such security is determined during a 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 (other than the Rights); or (ii) any subdivision, combination or reclassification of such security,
and prior to the expiration of the requisite 30 Trading Day period after the ex-dividend date for such dividend or distribution
or the record date for such subdivision, combination or reclassification, then, in each such case, the “Current Market Price”
shall be appropriately adjusted to take into account ex-dividend trading. If on any such date no market maker is making a market
in such security or such security is not publicly held or not listed or traded, the “Current Market Price” shall mean
the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.


 


Except as provided in
this paragraph, the “Current Market Price” of the Preferred Shares shall be determined in accordance with the method
set forth above. If the Preferred Shares are not publicly traded, the “Current Market Price” of the Preferred Shares
shall be conclusively deemed to be the Current Market Price of the Common Shares of the Company as determined pursuant to the paragraph
above (appropriately adjusted to reflect any shares split, stock dividend or similar transaction occurring after the date hereof),
multiplied by one hundred. If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, the
“Current Market Price” of the Preferred Shares shall mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive and binding on
the Rights Agent and the holders of the Rights. For all purposes of this Agreement, the “Current Market Price” of one
one-thousandth of a Preferred Share shall be equal to the “Current Market Price”
of one Preferred Share divided by 1,000.


 


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


 


(t)            “Derivatives
Contract” shall mean a contract between two parties (the “Receiving Party” and the “Counterparty”)
that is designed to produce economic benefits and risks to the Receiving Party that correspond substantially to the ownership by
the Receiving Party of a number of Common Shares specified or referenced in such contract (the number corresponding to such economic
benefits and risks, the “Notional Common Shares”), regardless of whether obligations under such contract
are required or permitted to be settled through the delivery of cash, Common Shares or other property, without regard to any short
position under the same or any other Derivatives Contract. For the avoidance of doubt, interests in broad-based index options,
broad-based index futures and broad-based publicly traded market baskets of shares approved for trading by the appropriate federal
governmental authority shall not be deemed “Derivatives Contracts.”


 


(u)           “Distribution
Date” shall mean the earlier of (i) the Close of Business on the tenth Business Day after the Share Acquisition
Date (or, if the tenth Business Day after the Share Acquisition Date occurs before the Record Date, the Close of Business on the
Record Date) and (ii) the Close of Business on the tenth Business Day (or, if such tenth Business Day occurs before the Record
Date, the Close of Business on the Record Date), or such later date as may be determined by the Board prior to such time any Person
becomes an Acquiring Person, after the date of the commencement by any Person (other than any Excluded Person) of, or of the first
public announcement of the intention of any Person (other than any Excluded Person) to commence, a tender or exchange offer the
consummation of which would result in such Person becoming the Beneficial Owner of the Specified Percentage of the issued and outstanding
Common Shares.


 






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


 


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


 


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


 


(y)           “Exchange
Act Regulations” shall mean the General Rules and Regulations under the Exchange Act.


 


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


 


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


 


(bb)         “Excess
Shares” shall have the meaning set forth in Section 11(a)(ii) hereof.


 


(cc)          “Exempt
Person” shall mean any Person determined by the Board to be an “Exempt Person” in accordance with the
requirements set forth in Section 25 hereof for so long as such Person complies with any limitations or conditions required by
the Board in making such determination.


 


(dd)       
“Excluded Person” shall mean (i) the Company or any of its Subsidiaries; (ii) any officers,
directors and employees or any of its Subsidiaries solely in respect of such Person’s status or authority as such (including,
without limitation, any fiduciary capacity); or (iii) any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity or trustee holding (or acting in a fiduciary capacity in respect of) shares in the capital 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.


 


(ee)         “Exemption
Request” shall have the meaning set forth in Section 25(a) hereof.


 


(ff)           “Exercise
Price” shall have the meaning set forth in Section 4(a), 11(a)(ii) and 13(a) hereof.


 


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


 


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


 


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


 






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(jj)           “Flip-In
Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof.


 


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


 


(ll)           “Grandfathered
Person” shall mean any Person which, together with all of its Related Persons, is, as of the date of this Agreement,
the Beneficial Owner of the Specified Percentage of the Common Shares then issued and outstanding. A Person ceases to be a “Grandfathered
Person” if and when (i) such Person becomes the Beneficial Owner of less than 4.9% of the Common Shares then issued
and outstanding; or (ii) such Person increases its Beneficial Ownership of Common Shares to an amount equal to or greater
than the greater of (A) 4.9% of the Common Shares then issued and outstanding and (B) the sum of (1) the lowest
Beneficial Ownership of such Person as a percentage of the Common Shares outstanding as of any time from and after the public announcement
of this Agreement (other than as a result of an acquisition of Common Shares by the Company) plus (2) one Common Share
then issued and outstanding.


 


(mm)         “Independent
Directors” shall mean those members of the Board who meet the criteria for independent directors of the NASDAQ
corporate governance rules and any other applicable laws, rules and regulations regarding independence in effect from time to time.


 


(nn)         “NASDAQ”
shall mean The NASDAQ Stock Market.


 


(oo)         “NOLs”
shall have the meaning set forth in the recitals of this Agreement.


 


(pp)         “Notional
Common Shares” shall have the meaning set forth in Section 1(u) hereof.


 


(qq)         “NYSE”
shall mean the New York Stock Exchange.


 


(rr)           “Person”
shall mean any individual, firm, corporation, partnership (general or limited), limited liability company, limited liability partnership,
association, unincorporated organization, trust or other legal entity, or group of persons making a “coordinated acquisition”
of Common Shares or otherwise treated as an “entity” within the meaning of Section 1.382-3(a)(1) of the Treasury Regulations
or otherwise, including (i) any syndicate or group deemed to be a Person under Section 13(d)(3) of the Exchange Act and Rule
13d-5(b) thereunder; and (ii) any successor (by merger or otherwise) of any such firm, corporation, partnership (general or limited),
limited liability company, limited liability partnership, association, unincorporated organization, trust, or other group or entity.


 


(ss)         “Preferred
Shares”, each a “Preferred Share”, shall mean the Series C Junior Participating Preferred
Shares, par value $0.01 per share, of the Company, having the voting rights, powers, designations,
preferences and relative, participating, optional or other special rights and qualifications, limitations and restrictions set
forth in the Certificate of Designations.


 


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


 






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(uu)         “Receiving
Party” shall have the meaning set forth in Section 1(u) hereof.


 


(vv)         “Record
Date” shall mean the Close of Business on February 26, 2016.


 


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


 


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


 


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


 


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


 


(aaa)        “Requesting
Person” shall have the meaning set forth in Section 25(a) hereof.


 


(bbb)       “Rights”
shall have the meaning set forth in the Preamble hereof.


 


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


 


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


 


(eee)        “Schedule
13D” shall mean a statement on Schedule 13D pursuant to Rule 13d-1(a), 13d-1(e), 13d-1(f) or 13d-1(g) of the General
Rules and Regulations under the Exchange Act as in effect at the time of the public announcement of the declaration of the Rights
dividend with respect to the Common Shares Beneficially Owned by the Person filing such statement.


 


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


 


(ggg)       “Specified
Percentage” shall mean 4.9% or more.


 


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


 


(iii)           “Share
Acquisition Date” shall mean the first date of public announcement (including, without limitation, the filing of
any report pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that a Person has become an Acquiring
Person, or such other date, as determined by the Board, on which a Person has become an Acquiring Person.


 


(jjj)           “Shareholder
Approval” shall mean the approval or ratification by the shareholders of the Company of this Agreement (or
such Agreement as then in effect or as contemplated to be in effect following such Shareholder Approval) as demonstrated by the
votes cast in favor of any such approval or ratification proposal submitted to a shareholder vote by the Company exceeding the
votes cast against such proposal at a duly held meeting of shareholders of the Company.


 


(kkk)        “Subsidiary”
shall mean, with reference to any Person, any other Person of which (i) a majority of the voting power of the voting securities
or equity interests is Beneficially Owned, directly or indirectly, by such first-mentioned Person or otherwise controlled by such
first-mentioned Person; or (ii) an amount of voting securities or equity interests sufficient to elect at least a majority
of the directors or equivalent governing body of such other Person is Beneficially Owned, directly or indirectly, by such first-mentioned
Person, or otherwise controlled by such first-mentioned Person.


 






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


 


(mmm)     “Summary
of Rights” shall have the meaning set forth in Section 3(a) hereof.


 


(nnn)       “Tax
Benefits” shall mean the net operating loss carryovers, capital loss carryovers, general business credit carryovers,
alternative minimum tax credit carryovers and foreign tax credit carryovers, as well as any loss or deduction attributable to a
“net unrealized built-in loss” within the meaning of Section 382 of the Code and the Treasury Regulations promulgated
thereunder, of the Company or any of its Subsidiaries.


 


(ooo)       “Trading
Day” shall mean, in respect to any security, (i) if such security is listed or admitted to trading on any national
securities exchange, a day on which the principal national securities exchange on which such security is listed or admitted to
trading is open for the transaction of business; and (ii) if such security is not so listed or admitted, a Business Day.


 


(ppp)       “Treasury
Regulations” shall mean the U.S. Treasury Regulations promulgated under the Code, as may be amended from time to
time.


 


(qqq)       “Triggering
Event” shall mean any Flip-In Event or any Flip-Over Event.


 


(rrr)          “Trust”
shall have the meaning set forth in Section 24(d) hereof.


 


(sss)       “Trust
Agreement” shall have the meaning set forth in Section 24(d) hereof.


 


Section
2. Appointment of Rights Agent.


 


The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date be the holders of Common Shares) and in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable (the term Rights Agent herein to refer collectively to the Rights Agent together with any such co-Rights
Agent); provided that the Company shall notify the Rights Agent in writing two Business Days prior to such appointment. In the
event the Company appoints one or more co-Rights Agents, the respective duties of the Rights Agent and any co-Rights Agents under
the provisions of this Agreement shall be as the Company reasonably determines, and the Company shall notify, in writing, the Rights
Agent and any co-Rights Agents of such duties. 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 Agents.


 






    	- 10 -



     

    

 


Section
3. Issue of Rights Certificates.


 


(a)            On
the Record Date, or as soon as practicable thereafter, the Company will send (directly or, at the expense of the Company, through
the Rights Agent or its transfer agent if the Rights Agent or transfer agent is directed by the Company and provided with all necessary
information and documents) a copy of a Summary of Rights to Purchase Preferred Shares, in substantially the form attached hereto
as Exhibit B and which may be appended to certificates that represent Common Shares (the “Summary of Rights”),
to each record holder of Common Shares as of the Close of Business on the Record Date (other than any Acquiring Person or any Associate
or Affiliate of any Acquiring Person), at the address of such holder shown on the records of the Company or transfer agent or register
of members for the Common Shares. With respect to certificates representing Common Shares (or Book Entry Common Shares) outstanding
as of the Record Date, until the Distribution Date, the Rights shall be evidenced by such Common Shares registered in the names
of the holders thereof together with the Summary of Rights, and not by separate Rights Certificates. With respect to Book Entry
Common Shares outstanding as of the Record Date, until the Distribution Date, the Rights shall be evidenced by the balances indicated
in the Book Entry account system of the transfer agent for the Common Shares together with the Summary of Rights. Until the earlier
of the Distribution Date and the Expiration Date, the transfer of any Common Shares outstanding on the Record Date (whether represented
by certificates or evidenced by the balances indicated in the Book Entry account system of the transfer agent for the Common Shares,
and, in either case, regardless of whether a copy of the Summary of Rights is submitted with the surrender or request for transfer),
shall also constitute the transfer of the Rights associated with such Common Shares.


 


(b)           Rights
shall be issued, without any further action, in respect of all Common Shares that become outstanding (whether originally issued
or delivered from the Company’s treasury) after the Record Date but prior to the earlier of the Distribution Date and the
Expiration Date; provided, however, that Rights also shall be issued to the extent provided in Section 21 hereof.
Confirmation and account statements sent to holders of Common Shares for Book Entry form or, in the case of certificated shares,
certificates, representing such Common Shares, issued after the Record Date shall bear a legend substantially in the following
form:


 


“[This certificate] [These
shares] also evidence[s] and entitle[s] the holder hereof to certain Rights as set forth in a Rights Agreement between Energy XXI
Ltd, a Bermuda exempted company (the “Company”), and Continental Stock Transfer & Trust Company, a New York
corporation, as rights agent (the “Rights Agent”) dated as of February 15, 2016, as the same may be amended
from time to time (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices of the Company and the registered office of the Company in Bermuda.
Under certain circumstances, as set forth in the Rights Agreement, such Rights shall be evidenced by separate certificates and
will no longer be evidenced by [this certificate] [these shares]. The Company will mail to the holder of [this certificate] [these
shares] a copy of the Rights Agreement as in effect on the date of mailing without charge after receipt of a written request therefor.


 






    	- 11 -



     

    

 


Under certain circumstances,
as set forth in the Rights Agreement, Rights that are Beneficially Owned by any Person who is, was or becomes an Acquiring Person
or any Related Person thereof (as such capitalized terms are defined in the Rights Agreement), or specified transferees of such
Acquiring Person (or Related Person thereof) may become null and void and will no longer be transferable.”


 


With respect to all
certificates representing Common Shares containing the foregoing legend, until the earliest of the Distribution Date and the Expiration
Date, the Rights associated with the Common Shares represented by such certificates shall be evidenced by such certificates alone
and registered holders of Common Shares shall also be the registered holders of the associated Rights, and the transfer of any
such certificate shall also constitute the transfer of the Rights associated with the Common Shares represented by such certificates.


 


With respect to Common
Shares in Book Entry form for which there has been sent a confirmation or account statement containing the foregoing legend, until
the earliest of the Distribution Date and the Expiration Date, the Rights associated with the Common Shares shall be evidenced
by such Common Shares alone and registered holders of Common Shares shall also be the registered holders of the associated Rights,
and the transfer of any such Common Shares shall also constitute the transfer of the Rights associated with such Common Shares.


 


Notwithstanding this
paragraph (b), the omission of the legend or the failure to send, deliver or provide the registered owner of Common Shares a copy
of the Summary of Rights shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights.


 


In the event that the
Company purchases or otherwise acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be cancelled and retired so that the Company is not entitled to exercise any Rights associated
with the Common Shares that are no longer outstanding.


 


(c)           Until
the Distribution Date, the Rights shall be transferable only in connection with the transfer of the underlying Common Shares (including
a transfer to the Company).


 


(d)           As
soon as practicable after the Distribution Date, the Company will prepare and execute, and the Rights Agent will countersign and
the Company will send or cause to be sent (and the Rights Agent will, if so requested and provided with all necessary information
and documents, at the expense of the Company, send) by first-class, insured, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date (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, one or more rights certificates, in substantially the
form of Exhibit C hereto (the “Rights Certificate”), evidencing one Right for each Common Share
so held, subject to adjustment as provided herein. In the event that an adjustment in the number of Rights per Common Share has
been made pursuant to Section 11 hereof, at the time of distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the
Rights shall be evidenced solely by such Rights Certificates, and the Rights Certificates and the Rights shall be transferable
separately from the transfer of Common Shares. The Company shall promptly notify the Rights Agent in writing upon the occurrence
of the Distribution Date and, if such notification is given orally, the Company shall confirm the same in writing on or prior to
the Business Day next following. Until such written notice is received by the Rights Agent, the Rights Agent may presume conclusively
without independent verification thereof for all purposes that the Distribution Date has not occurred.


 






    	- 12 -



     

    

 


Section
4. Form of Rights Certificate.


 


(a)           The
Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall be substantially
in the form set forth in Exhibit C hereto and may have such changes or marks of identification or designation and such legends,
summaries, or endorsements printed thereon as the Company may deem appropriate (but which do not affect the rights, duties, liabilities
or responsibilities of the Rights Agent), and as are not inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or any rule or regulation thereunder or with any applicable rule or regulation of any stock exchange
upon which the Rights may from time to time be listed or the Financial Industry Regulatory Authority, or to conform to customary
usage. Subject to the provisions of this Agreement, the Rights Certificates, whenever distributed, shall be dated as of the Distribution
Date and on their face shall entitle the holders thereof to purchase such number of one one-thousandths of a Preferred Share as
shall be set forth therein at the price set forth therein (such price, the “Exercise Price”), but the
amount and type of securities, cash, or other assets that may be acquired upon the exercise of each Right and the Exercise Price
thereof shall be subject to adjustment as provided herein.


 


(b)           Any
Rights Certificate issued pursuant hereto that represents Rights Beneficially Owned by (i) an Acquiring Person or any Related
Person of an Acquiring Person; (ii) a transferee of an Acquiring Person (or of any such Related Person) that becomes a transferee
after the Acquiring Person becomes an Acquiring Person; or (iii) a transferee of an Acquiring Person (or of any such Related
Person) that becomes a transferee prior to or concurrently with the Acquiring Person becoming an Acquiring Person and that receives
such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person (or any such Related
Person) to holders of equity interests in such Acquiring Person (or any such Related Person) or to any Person with whom such Acquiring
Person (or any such Related Person) has any continuing written or oral plan, agreement, arrangement, or understanding regarding
the transferred Rights, Common Shares, or the Company; or (B) a transfer that the Board has determined in good faith to be
part of a plan, agreement, arrangement, or understanding that has as a primary purpose or effect the avoidance of Section 7(e)
hereof (and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this sentence), shall contain upon the direction of the Board a legend substantially
in the following form:


 


“The Rights represented by
this Rights Certificate are or were Beneficially Owned by a Person who was or became an Acquiring Person or a Related Person of
an Acquiring Person (as such terms are defined in the Rights Agreement dated as of February 15, 2016 by and between Energy XXI
Ltd and Continental Stock Transfer & Trust Company (the “Rights Agreement”)). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of the Rights Agreement.”


 






    	- 13 -



     

    

 


The Company shall give
written notice to the Rights Agent promptly after it becomes aware of the existence and identity of any Acquiring Person or any
Related Person thereof. Until such notice is received by the Rights Agent, the Rights Agent may presume conclusively without independent
verification thereof for all purposes that no Person has become an Acquiring Person or a Related Person of an Acquiring Person.
The Company shall instruct the Rights Agent in writing of the Rights which should be so legended.


 


Section
5. Countersignature and Registration.


 


(a)            The
Rights Certificates shall be executed on behalf of the Company by its Chief Executive Officer and President, Chief Financial Officer,
Chief Operating Officer, Secretary, Treasurer, any Vice-President, any Assistant Secretary or any other officer of the Company,
shall have affixed thereto the Company’s corporate seal (or a facsimile thereof), and shall be attested by the Company’s
Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Rights Certificates may be manual
or by facsimile or other customary shall mean of electronic transmission (e.g., “pdf”). Rights Certificates bearing
the manual or facsimile signatures of the individuals who were at the time of execution the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the countersigning
of such Rights Certificates by the Rights Agent or did not hold such offices at the date of such Rights Certificates. No Rights
Certificate shall be entitled to any benefit under this Agreement or shall be valid for any purpose unless there appears on such
Rights Certificate a countersignature duly executed by the Rights Agent by manual or facsimile or other customary shall mean of
electronic transmission (e.g., “pdf”) of an authorized officer, and such countersignature upon any Rights Certificate
shall be conclusive evidence, and the only evidence, that such Rights Certificate has been duly countersigned as required hereunder.


 


(b)           Following
the Distribution Date, and receipt by the Rights Agent of written notice to that effect and all other relevant and necessary information
referred to in Section 3(d) hereof, the Rights Agent shall keep or cause to be kept, at its office designated for such purpose,
books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its face by each Rights Certificate and the date of each
Rights Certificate.


 






    	- 14 -



     

    

 


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


 


(a)           Subject
to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time after the Close of Business on the Distribution Date and at
or prior to the Close of Business on the Expiration Date, any Rights Certificate (other than Rights Certificates representing Rights
that have become null and void pursuant to Section 7(e) hereof, that have been redeemed pursuant to Section 23 hereof, or that
have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Rights Certificate,
entitling the registered holder to purchase a like number of one one-thousandths of a Preferred Share (or following a Triggering
Event, Common Shares, other securities, cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate
shall make such request in writing delivered to the Rights Agent, and shall surrender, together with any required form of assignment
duly executed and properly completed, the Rights Certificates to be transferred, split up, combined or exchanged at the office
of the Rights Agent designated for such purpose. The Rights Certificates are transferable only on the books and records 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 Rights Certificate until the registered holder has properly completed and executed the certificate set
forth in the form of assignment on the reverse side of such Rights Certificate and has provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights represented by such Rights Certificate or Related Person
thereof as the Company or the Rights Agent requests, whereupon the Rights Agent shall, subject to the provisions of Sections 4(b),
7(e) and 14 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment by the holder of the Rights of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates.
If and to the extent the Company does require payment of any such taxes or governmental charges, the Company shall give the Rights
Agent prompt written notice thereof and the Rights Agent shall not deliver any Rights Certificate unless and until it is satisfied
that all such payments have been made, and the Rights Agent shall forward any such sum collected by it to the Company or to such
Persons as the Company specifies by written notice. The Rights Agent shall have no duty or obligation to take any action with respect
to a Rights holder under any Section of this Agreement which requires the payment by such Rights holder of applicable taxes and/or
governmental charges unless and until it is satisfied that all such taxes and/or governmental charges have been paid.


 


(b)           If
a Rights Certificate is mutilated, lost, stolen or destroyed, upon written request by the registered holder of the Rights represented
thereby and upon payment to the Company and the Rights Agent of all reasonable expenses incident thereto, there shall be issued,
in exchange for and upon cancellation of the mutilated Rights Certificate, or in substitution for the lost, stolen or destroyed
Rights Certificate, a new Rights Certificate, in substantially the form of the prior Rights Certificate, of like tenor and representing
the equivalent number of Rights, but, in the case of loss, theft, or destruction, only upon receipt of evidence satisfactory to
the Company and the Rights Agent of such loss, theft or destruction of such Rights Certificate and such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or Related Persons thereof as the Company or the Rights Agent
requests, and, if requested by the Company or the Rights Agent, indemnity also satisfactory to it.


 


(c)           Notwithstanding
any other provision hereof, the Company and the Rights Agent may amend this Agreement to provide for uncertificated Rights in addition
to or in lieu of Rights evidenced by Right Certificates, to the extent permitted by applicable law.


 






    	- 15 -



     

    

 


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


 


(a)           Subject
to Section 7(e) hereof, the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, in the restrictions on exercisability set forth in Sections 9(c), 11(a)(iii) and
23(a) hereof) in whole or in part at any time after the Distribution Date upon surrender of the Rights Certificate, with the form
of election to purchase and the certificate on the reverse side thereof properly completed and duly executed, to the Rights Agent
at the office of the Rights Agent designated for such purpose, together with payment of the Exercise Price for each one one-thousandth
of a Preferred Share (or Common Share, other securities, cash or other assets, as the case may be) as to which the Rights are exercised
prior to the earliest of (i) the Close of Business on February 15, 2019 or such later date as may be established by
the Board prior to the expiration of the Rights as long as the extension is submitted to the shareholders of the Company for ratification
at the next annual meeting of shareholders succeeding such extension (the “Final Expiration Date”);
(ii) the time at which the Rights are redeemed pursuant to Section 23 hereof (the “Redemption Date”);
(iii) the time at which the Rights are exchanged pursuant to Section 24 hereof (the “Exchange Date”);
(iv) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described
in Section 13(f) at which time the Rights are terminated; (v) if Shareholder Approval has not been obtained on or prior
to the Close of Business on February 15, 2017 (the “Early Expiration Date”); (vi) the Close of Business
on the effective date of the repeal of Section 382 of the Code if the Board determines that this Agreement is no longer necessary
or desirable for the preservation of Tax Benefits; and (vii) the Close of Business on the first day of a taxable year of the Company
to which the Board determines that no Tax Benefits are available to be carried forward (the earliest of (i) – (vii) being
herein referred to as the “Expiration Date”).


 


(b)           Each
Right shall entitle the registered holder thereof to purchase one one-thousandth of a Preferred Share. The Exercise Price for each
one one-thousandth of a Preferred Share pursuant to the exercise of a Right shall be
initially $2.82, and shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and payable
in lawful money of the United States in accordance with paragraph (c) of this Section 7.


 


(c)           Upon
receipt of a Rights Certificate representing exercisable Rights, with the form of election to purchase and the certificate properly
completed and duly executed, accompanied by payment, with respect to each Right so exercised, of the Exercise Price per one one-thousandth
of a Preferred Share (or Common Share, other securities, cash or other assets, as the case may be) to be purchased and
an amount equal to any applicable tax or governmental charge, then the Rights Agent shall, subject to Section 18(j) hereof, promptly
(i) (A) requisition from any transfer agent of the Preferred Shares certificates representing such number of one one-thousandths
of a Preferred Share (or fractions of shares that are integral multiples of one one-thousandth
of a Preferred Share) as are to be purchased and the Company shall direct its transfer agent to comply with all such
requests; or (B) if the Company has elected to deposit the total number of Preferred Shares issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of
one one-thousandths of a Preferred Share as are to be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary agent), and the Company shall direct the depositary
to comply with all such requests; (ii) if necessary to comply with this Agreement, requisition from the Company the amount
of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof; (iii) after receipt
of such certificates or such depositary receipts, cause the same to be delivered to or upon the order of the registered holder
of such Rights Certificate, registered in such name or names as may be designated by such holder; and (iv) if necessary to
comply with this Agreement, after receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of
such Rights Certificate. In the event that the Company is obligated to issue Common Shares or other securities of the Company,
pay cash and/or distribute other assets pursuant to Section 11(a) hereof, the Company shall make all arrangements necessary so
that such Common Shares, other securities, cash and/or other assets are available for distribution by the Rights Agent, if and
when necessary to comply with this Agreement, and until so received, the Rights Agent shall have no duties or obligations with
respect to such securities, cash and/or other assets. The payment of the Exercise Price (as such amount may be reduced pursuant
to Section 11(a)(iii) hereof) may be made in cash or by certified or bank check or money order payable to the order of the Company
(in immediately available or next day funds).


 






    	- 16 -



     

    

 


(d)           In
the event a registered holder of any Rights Certificate exercises less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, such holder,
registered in such name or names as designated by such holder, subject to the provisions of Sections 6 and 14 hereof.


 


(e)           Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence of a Flip-In Event, any Rights Beneficially Owned
by (i) an Acquiring Person or a Related Person of an Acquiring Person; (ii) a transferee of an Acquiring Person (or of
any such Related Person) who becomes a transferee after the Acquiring Person becomes such; or (iii) a transferee of an Acquiring
Person (or of any such Related Person) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such
and who receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person
(or any such Related Person) to holders of equity interests in such Acquiring Person (or any such Related Person) or to any Person
with whom the Acquiring Person (or any such Related Person) has any continuing written or oral plan, agreement, arrangement or
understanding regarding the transferred Rights, Common Shares or the Company; or (B) a transfer that the Board has determined
in good faith to be part of a plan, agreement, arrangement or understanding that has as a primary purpose or effect the avoidance
of this Section 7(e), shall be null and void without any further action, and any holder of such Rights thereafter shall have no
rights or preferences whatsoever with respect to such Rights, whether under any provision of this Agreement, the Rights Certificates
or otherwise (including, without limitation, rights and preferences pursuant to Sections 7, 11, 13, 23 and 24 hereof). The Company
shall use commercially reasonable efforts to ensure compliance with the provisions of this Section 7(e) and Section 4(b) hereof,
but neither the Company nor the Rights Agent have any liability to any holder of Rights or any other Person as a result of the
Company’s failure to make any determination with respect to an Acquiring Person or its Related Persons or transferees hereunder.


 






    	- 17 -



     

    

 





(f)          Notwithstanding
anything in this Agreement or any Rights Certificate to the contrary, neither the Rights Agent nor the Company shall be obligated
to take any action with respect to a registered holder upon the occurrence of any purported transfer or exercise as set forth in
this Section 7 by such registered holder unless such registered holder has (i) properly completed and duly executed the certificate
following the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise,
and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Related Persons thereof as the Company reasonably requests.


 


Section
8.  Cancellation and Destruction of Rights Certificates.


 


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


 


Section
9.  Reservation and Availability of Capital Shares.


 


(a)          The
Company shall cause to be reserved and kept available out of its authorized and unissued Preferred Shares (and following the occurrence
of a Triggering Event, out of its authorized and unissued Common Shares and/or other securities or out of its authorized and issued
shares held in its treasury), a number of Preferred Shares (and, following the occurrence of a Triggering Event, Common Shares
and/or other securities) that, as provided in this Agreement, including Section 11(a)(iii) hereof, shall be sufficient to permit
the exercise in full of all outstanding Rights. Upon the occurrence of any events resulting in an increase in the aggregate number
of Preferred Shares (or Common Share and/or other equity securities of the Company) issuable upon exercise of all outstanding Rights
above the number then reserved, the Company shall make appropriate increases in the number of shares so reserved.


 


(b)          As
long as the Preferred Shares (and following the occurrence of a Triggering Event, Common Shares and/or other securities) issuable
upon the exercise of the Rights may be listed or admitted to trading on any national securities exchange, the Company shall use
its commercially reasonable 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 such exchange upon official notice of issuance upon such exercise.


 




    	- 18 -



     

    

  


(c)          If
the Company is required to file a registration statement pursuant to the Securities Act with respect to the securities purchasable
upon exercise of the Rights, the Company shall use its commercially reasonable efforts to (i) file, as soon as practicable
following the earliest date after the first occurrence of a Flip-In Event on which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with this Agreement, or as soon as is required by law following the
Distribution Date, as the case may be, such registration statement; (ii) cause such registration statement to become effective
as soon as practicable after such filing; and (iii) cause such registration statement to remain effective (and to include
a prospectus at all times complying with the requirements of the Securities Act) until the earlier of (A) the date as of which
the Rights are no longer exercisable for the securities covered by such registration statement, and (B) the Expiration Date.
The Company shall also take such action as may be appropriate under, or to ensure compliance with, the securities or “blue
sky” laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend,
with written notice thereof to the Rights Agent, for a period of time not to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. 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, in each case with simultaneous written notice to the Rights Agent. In addition, if the Company shall determine
that a registration statement is required following the Distribution Date, the Company may temporarily suspend the exercisability
of the Rights until such time as a registration statement has been declared effective. Notwithstanding any provision of this Agreement
to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted under applicable law, or an effective registration statement
is required and shall not have been declared effective or has been suspended.


 


(d)          The
Company shall take such action as may be necessary to ensure that each one one-thousandths of a Preferred Share (and, following
the occurrence of a Triggering Event, Common Shares and/or other securities that may be delivered upon exercise of Rights) shall
be, at the time of delivery of the certificates or depositary receipts for such securities (subject to payment of the Exercise
Price and compliance with all other applicable provisions of this Rights Agreement, the Company’s Memorandum of Association
and the Company’s Bye-laws), duly and validly authorized and issued, fully paid and non-assessable.


 


(e)          The
Company shall pay when due and payable any and all documentary, stamp or transfer tax, or other tax or governmental charge, that
is payable in respect of the issuance and delivery of the Rights Certificates or the issuance and delivery of any certificates
or depository receipts or entries in the Book Entry account system of the transfer agent for the Preferred Shares for a number
of one one-thousandths of a Preferred Share (or Common Share and/or other equity securities of the Company that may be delivered
upon exercise of the Rights) upon the exercise of Rights; provided, however, the Company shall not be required
to pay any such tax or governmental charge that may be payable in connection with the issuance or delivery of any certificates
or depositary receipts or entries in the Book Entry account system of the transfer agent for the Preferred Shares for a number
of one one-thousandths of a Preferred Share (or Common Share and/or other equity securities of the Company as the case may be)
to any Person other than the registered holder of the Rights Certificates evidencing the Rights surrendered for exercise. The Company
shall not be required to issue or deliver any certificates or depositary receipts or entries in the Book Entry account system of
the transfer agent for the Preferred Shares (or Common Share and/or other equity securities of the Company as the case may be)
to, or in a name other than that of, the registered holder upon the exercise of any Rights until any such tax or governmental charge
has been paid (any such tax or governmental charge being payable by the holder of such Rights Certificate at the time of surrender)
or until it has been established to the Company’s or Rights Agent’s satisfaction that no such tax or governmental charge
is due.


 




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Section
10.  Preferred Shares Record Date.


 


Each Person in whose
name any certificate or entry in the Book Entry account system of the transfer agent for the Preferred Shares for a number of one
one-thousandths of a Preferred Share (or Common Share and/or other securities, as the case may be) is issued upon the exercise
of Rights shall be for all purposes the holder of record of such fractional Preferred Shares (or Common Share and/or other securities,
as the case may be) represented thereby on, and such certificate or entry shall be dated the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Exercise Price (and any applicable transfer taxes and governmental
charges) was made; provided, however, that if the date of such surrender and payment is a date upon which the applicable
transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such securities (fractional
or otherwise) on, and such certificate or entry shall be dated, the next succeeding Business Day on which the applicable transfer
books of the Company are open; provided, further, that if delivery of a number of one one-thousandths of a Preferred
Share is delayed pursuant to Section 9(c) hereof, such Persons shall be deemed to have become the record holders of such number
of one one-thousandths of a Preferred Share only when such Preferred Shares first become deliverable. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a shareholder of the Company
with respect to the securities for which the Rights are exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings
of the Company, except as provided herein.


 


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


 


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


 


(a)          (i) In
the event the Company at any time after the date hereof (A) declares a dividend on the Preferred Shares payable
in Preferred Shares; (B) subdivides the issued and outstanding Preferred Shares; (C) combines the issued and outstanding
Preferred Shares into a smaller number of shares; or (D) issues any shares in its share capital in a reclassification of Preferred
Shares (including any such reclassification in connection with a consolidation, amalgamation or merger in which the Company is
the continuing or surviving corporation), except as otherwise provided in this Section 11(a), then the Exercise 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 (or fractions thereof) of Preferred Shares or share capital, as the case may be, issuable on such date
upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time becomes
entitled to receive, upon payment of the Exercise Price then in effect, the aggregate number and kind of Preferred Shares (or fractions
thereof) or share capital, as the case may be, which, if such Right had been exercised immediately prior to such date, 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 may the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares (or fractions thereof) in the capital of the Company issuable upon exercise of one Right.
If an event occurs that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.


 




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(ii)         Subject
to Section 23 and Section 24 hereof, in the event that any Person (other than any Excluded Person), alone or together with its
Related Persons, becomes an Acquiring Person (the first occurrence of such event, the “Flip-In Event”),
unless the event causing such Person to become an Acquiring Person is a transaction set forth in Section 13(a) hereof, then proper
provision shall be made so that promptly following the Redemption Period, each holder of a Right (except as provided below and
in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof and payment of an amount equal to the
then current Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of
a Preferred Share, a number of Common Shares equal to the result obtained by (A) multiplying the then current Exercise Price
by the then number of one one-thousandths of a Preferred Share for which a Right was or would have been exercisable immediately
prior to the first occurrence of a Flip-In Event, whether or not such Right was then exercisable; and (B) dividing that product
(which, following such first occurrence, shall be referred to as the “Exercise Price” for each Right
and for all purposes of this Agreement except to the extent set forth in Section 13 hereof) by 50% of the Current Market Price
of Common Shares on the date of such first occurrence (such number of shares, the “Adjustment Shares”);
provided, however, that in connection with any exercise effected pursuant to this Section 11(a)(ii), no holder of Rights shall
be entitled to receive Common Shares (or other shares of in the capital of the Company) that would result in such holder, together
with such holder’s Affiliates and Associates, becoming the Beneficial Owner of the Specified Percentage of the then issued
and outstanding Common Shares. If a holder would, but for the immediately preceding sentence, be entitled to receive a number of
shares that would otherwise result in such holder, together with such holder’s Affiliates and Associates, becoming the Beneficial
Owner of the Specified Percentage of the then issued and outstanding Common Shares (such shares, the “Excess Shares”),
then in lieu of receiving such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder
will only be entitled to receive an amount in cash or, at the election of the Company, a note or other evidence of indebtedness
maturing within nine months with a principal amount, equal to the current per share Current Market Price of a Common Share at the
Close of Business on the Trading Day following the date of exercise multiplied by the number of Excess Shares that would otherwise
have been issuable to such holder. The Company shall provide the Rights Agent with written notice of the identity of any such Acquiring
Person, Related Person or the nominee or transferee of any of the foregoing, and the Rights Agent may rely on such notice in carrying
out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person,
Related Person or the nominee or transferee of any of the foregoing, unless and until it has received such notice.


 




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(iii)        In
the event that the authorized share capital not outstanding, or reserved for issuance for purposes other than upon exercise of
the Rights, is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing clause (ii), the Board
shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company is a
party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the
“Current Value”) over (2) the Exercise Price (such excess being the “Spread”),
and (B) with respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for some or all
of the Adjustment Shares, upon exercise of a Right and payment of the applicable Exercise Price, (1) cash; (2) a reduction
in the Exercise Price; (3) shares or fractions of a Preferred Share or other equity securities of the Company (including,
without limitation, Preferred Shares, or units of such shares, which the Board has determined to have the same value as Common
Shares) (such shares of equity securities being herein called “Common Shares Equivalents”); (4) debt
securities of the Company; (5) other assets; or (6) any combination of the foregoing, in each case having an aggregate
value equal to the Current Value, as determined by the Board based upon the advice of a financial advisor selected by the Board;
provided, however, if the Company has not made adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first occurrence of a Flip-In Event; and (y) the date on which the Redemption
Period expires (the later of (x) and (y) being referred to herein as the “Flip-In Trigger Date”), then
the Company shall deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, Common
Shares (to the extent available), and then, if necessary such number or fractions of Preferred Shares (to the extent available)
and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread.


 


If, upon the occurrence
of a Flip-In Event, the Board determines in good faith that it is likely that sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights, then if the Board so elects, the thirty-day period set forth above may be extended
to the extent necessary, but not more than ninety (90) days after the Flip-In Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares (such period, as it may be extended, the “Substitution
Period”). To the extent that action is to be taken pursuant to the preceding provisions of this Section 11(a)(iii),
the Company (aa) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding
Rights; and (bb) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to
seek an authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to the second
sentence of this Section 11(a)(iii) and to determine the value thereof. In the event of any such suspension, the Company shall
issue a public announcement (with prompt written notice thereof to the Rights Agent) stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement (with prompt written notice thereof to the Rights Agent) at such
time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be
the Current Market Price of the Common Shares on the Flip-In Trigger Date and the value of any Common Share Equivalents shall have
the same value as the Common Shares on such date. The Board may establish procedures to allocate the right to receive Common Shares
upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).


 




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(b)          In
case the Company fixes a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within forty-five (45) days after such record date) to subscribe for or purchase Preferred Shares (or
shares having the same rights, privileges and preferences as the Preferred Shares (“Equivalent Preferred Shares”))
or securities convertible into Preferred Shares or Equivalent Preferred Shares at a price per Preferred Share or per share of Equivalent
Preferred Shares (or having a conversion price per share, if a security convertible into Preferred Shares or Equivalent Preferred
Shares) less than the Current Market Price of the Preferred Shares on such record date, the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Preferred Shares or Equivalent Preferred Shares issued and outstanding on such record
date, plus the number of Preferred Shares or Equivalent Preferred Shares which the aggregate offering price of the total number
of Preferred Shares and/or Equivalent Preferred Shares so to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price, and the denominator of which shall be the number of Preferred
Shares or Equivalent Preferred Shares issued and outstanding on such record date, plus the number of additional Preferred Shares
and/or Equivalent Preferred Shares to be offered for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event may the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares in the capital of the Company issuable upon exercise of
one Right. In case such subscription price may be paid by delivery of consideration all or part of which may be in a form other
than cash, the value of such consideration shall be determined 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. Preferred Shares or Equivalent
Preferred Shares owned by or held for the account of the Company or any Subsidiary will not be deemed outstanding for the purpose
of such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such
rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price that would then be
in effect if such record date had not been fixed.


 


(c)          In
case the Company fixes a record date for a distribution to all holders of Preferred Shares (including any such distribution made
in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), evidences of indebtedness,
cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than
a dividend payable in Preferred Shares, but including any dividend payable in shares other than Preferred Shares), or subscription
rights, options or warrants (excluding those referred to in Section 11(b) hereof), then, in each case, the Exercise Price to be
in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the Current Market Price of the Preferred Shares on such record date minus
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 and conclusive for all purposes on the Rights Agent and the holders of the Rights) of the
portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants distributable
in respect of a Preferred Share, and the denominator of which shall be the Current Market Price of the Preferred Shares on such
record date; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares in the capital of the Company issuable upon exercise of one Right. Such adjustments
shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Exercise
Price shall be adjusted to be the Exercise Price that would have been in effect if such record date had not been fixed.


 




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(d)          Notwithstanding
anything herein to the contrary, no adjustment in the Exercise Price is required unless such adjustment would require an increase
or decrease of at least one percent (1%) in the Exercise Price; provided, however, that any adjustments that by reason
of this Section 11(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of a Common Share or
other share or one-millionth of a Preferred Share, as the case may be. Notwithstanding the first sentence of this Section 11(d),
no adjustment required by this Section 11 may be made after the earlier of (i) three years from the date of the transaction
that requires such adjustment and (ii) the Expiration Date.


 


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


 


(f)          All
Rights originally issued by the Company subsequent to any adjustment made to the Exercise Price hereunder will evidence the right
to purchase, at the adjusted Exercise Price, the number of one one-thousandths of a Preferred Share (or other securities or amount
of cash or combination thereof) that may be acquired from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.


 


(g)          Unless
the Company has exercised its election pursuant to Section 11(h), upon each adjustment of the Exercise Price as a result of the
calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment will
thereafter evidence the right to purchase, at the adjusted Exercise Price, a number of one one-thousandths of a Preferred Share
(calculated to the nearest one-millionth of a share) obtained by (i) multiplying (A) the number of one one-thousandths
of a share covered by a Right immediately prior to this adjustment by (B) the Exercise Price in effect immediately prior to
such adjustment of the Exercise Price; and (ii) dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment of the Exercise Price.


 


(h)          The
Company may elect, on or after the date of any adjustment of the Exercise Price, to adjust the number of Rights, in lieu
of any adjustment in the number of one one-thousandths of a Preferred Share that may be acquired upon the exercise of a Right.
Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of one one-thousandths
of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to
such adjustment of the number of Rights shall become a number of Rights (calculated to the nearest one ten-thousandth of a Right)
obtained by dividing the Exercise Price in effect immediately prior to adjustment of the Exercise Price by the Exercise Price in
effect immediately after adjustment of the Exercise 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. Such record date may be the date on which the Exercise Price is
adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least ten (10) days later than the
date of such public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant
to this Section 11(h), the Company shall, as promptly as practicable, at the option of the Company, either (A) cause to be
distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section
14 hereof, the additional Rights to which such holders are entitled as a result of such adjustment, or (B) cause to be
distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights
to which such holders become entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed
and delivered by the Company, and countersigned and delivered by the Rights Agent, in the manner provided for herein (and may bear,
at the option of the Company, the adjusted Exercise Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.


 




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


 


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


 


(k)          In
any case in which this Section 11 requires that an adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt written notice thereof to the Rights Agent) until the occurrence of
such event the issuance to the holder of any Right exercised after such record date of that number of one one-thousandths of a
Preferred Share and shares or securities of the Company, if any, issuable upon such exercise over and above the number of one one-thousandths
of a Preferred Share and shares of other shares or securities of the Company, if any, issuable upon such exercise on the basis
of the Exercise 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 (fractional
or otherwise) or securities upon the occurrence of the event requiring such adjustment.


 


(l)          Notwithstanding
anything in this Section 11 to the contrary, prior to the Distribution Date, the Company is entitled to make such reductions in
the Exercise Price, in addition to those adjustments expressly required by this Section 11, to the extent that the Board determines
that any (i) consolidation or subdivision of the Preferred Shares; (ii) issuance wholly for cash of any Preferred Shares
at less than the Current Market Price; (iii) issuance wholly for cash of Preferred Shares or securities that by their terms
are convertible into or exchangeable for Preferred Shares; (iv) stock dividends; or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred Shares is taxable to such holders
or reduces the taxes payable by such holders.


 




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(m)          The
Company may not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a direct or indirect,
wholly-owned Subsidiary of the Company in a transaction that complies with Section 11(n) hereof); (ii) amalgamate or merge
with or into any other Person (other than a direct or indirect, wholly-owned Subsidiary of the Company in a transaction that complies
with Section 11(n) hereof); or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction,
or a series of transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its direct or indirect,
wholly-owned Subsidiaries in one or more transactions, each of which complies with Section 11(n) hereof), if (A) at the time
of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding
or agreements in effect that would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights;
or (B) prior to, simultaneously with or immediately after such consolidation, merger or sale, the shareholders or other Persons
holding an equity interest in such Person that constitutes, or would constitute, the “Principal Party” for purposes
of Section 13(a) hereof shall have received a distribution of, or otherwise have transferred to them, the Rights previously owned
by such Person or any of its Related Persons; provided, however, this Section 11(m) shall not affect the ability
of any Subsidiary of the Company to consolidate with, merge with or into, or sell or transfer assets or earning power to, any other
Subsidiary of the Company.


 


(n)          After
the earlier of the Distribution Date and the Share Acquisition Date and as long as any Rights are outstanding (other than Rights
that have become null and void pursuant to Section 7(e) hereof), the Company may not, except as permitted by Sections 23, 24, and
27 hereof, take (or permit any Subsidiary of the Company to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.


 


(o)          Notwithstanding
anything in this Agreement to the contrary, in the event that the Company, at any time after the date hereof and prior to the Distribution
Date, (i) declares a dividend on the outstanding Common Shares payable in Common Shares; (ii) subdivides any outstanding
Common Shares; (iii) combines any of the outstanding Common Shares into a smaller number of shares; or (iv) issues any
shares in its capital in a reclassification of the Common Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation), then the number of Rights associated with each Common
Share then issued and outstanding or issued or delivered thereafter but prior to the Distribution Date shall be proportionately
adjusted so that the number of Rights thereafter associated with each Common Share following any such event equals the result obtained
by multiplying the number of Rights associated with each Common Share immediately prior to such event by a fraction the numerator
of which shall be the total number of Common Shares outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of Common Shares outstanding immediately following the occurrence of such event. The adjustments
provided for in this Section 11(o) shall be made successively whenever such a dividend is declared or paid or such a subdivision,
combination, or reclassification is effected. If an event occurs that would require an adjustment under Section 11(a)(ii) hereof
and this Section 11(o), the adjustments provided for in this Section 11(o) shall be in addition and prior to any adjustment required
pursuant to Section 11(a)(ii) hereof.


 




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


 


Whenever an adjustment
is made or any event affecting the Rights or their exercisability (including without limitation an event that causes Rights to
become null and void) occurs as provided in Section 11 or Section 13 hereof, 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, computations and
methodology accounting for such adjustment; (b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Shares and the Common Shares, a copy of such certificate; and (c) mail a brief summary thereof to each holder of
a Rights Certificate (or, if prior to the Distribution Date, each registered holder of Common Shares) in accordance with Section
27 hereof. Notwithstanding the foregoing sentence, the failure of the Company to make such certification or give such notice shall
not affect the validity of or the force or effect of the requirement for such adjustment. Any adjustment to be made pursuant to
Section 11 or Section 13 hereof shall be effective as of the date of the event giving rise to such adjustment. The Rights
Agent shall be entitled to rely on any such certificate and on any adjustment or statement therein contained and shall have no
duty or liability with respect thereto, 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.


 


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


 


(a)          At
any time after a Person has become an Acquiring Person, in the event that, directly or indirectly,


 


(x) the Company consolidates
with, amalgamates with or merges with and into, any other Person (other than a direct or indirect, wholly-owned Subsidiary of the
Company in a transaction that complies with Section 11(n) hereof), and the Company is not the continuing or surviving entity of
such consolidation or merger;


 


(y) any Person (other than
a direct or indirect, wholly-owned Subsidiary of the Company in a transaction that complies with Section 11(n) hereof) consolidates
with, amalgamates with or merges with or into, the Company, and the Company is the continuing or surviving entity of such consolidation,
amalgamation or merger and, in connection with such consolidation, amalgamation or merger, all or part of the outstanding Common
Shares is converted into or exchanged for shares or other securities of any other Person (or the Company) or cash or any other
property; or


 




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(z) the Company sells or
otherwise transfers (or one or more of its Subsidiaries sells or otherwise transfers) to any Person or Persons (other than the
Company or any of its direct or indirect, wholly-owned Subsidiaries in one or more transactions, each of which complies with Section
11(n) hereof), 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;


 


(any such event described in (x), (y),
or (z), a “Flip-Over Event”), then, in each such case, proper provision shall be made so that:



 


(i)          each
holder of a Right, except as provided in Section 7(e) hereof, upon the expiration of the Redemption Period, will have the right
to receive, upon the exercise of the Right at the then current Exercise Price in accordance with the terms of this Agreement, and
in lieu of a number of one one-thousandth Preferred Shares, a number of validly authorized
and issued, fully paid, non-assessable and freely tradable Common Shares of the Principal Party, free of any liens, encumbrances,
rights of first refusal, transfer restrictions or other adverse claims, equal to the result obtained by:


 


(A)         multiplying
such then current Exercise Price by the number of one one-thousandths of a Preferred Share for which such Right is exercisable
immediately prior to the first occurrence of a Flip-Over Event (or, if a Flip-In Event has occurred prior to the first occurrence
of a Flip-Over Event, multiplying the number of one one-thousandths of a Preferred Share for which a Right would be exercisable
hereunder but for the first occurrence of such Flip-In Event by the Exercise Price that would be in effect hereunder but for such
first occurrence), and


 


(B)         dividing
that product (which, following the first occurrence of a Flip-Over Event, shall be the “Exercise Price”
for each Right and for all purposes of this Agreement) by 50% of the then Current Market Price of the Common Shares of such Principal
Party on the date of consummation of such Flip-Over Event (or the fair market value on such date of other securities or property
of the Principal Party, as provided for herein);


 


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


 


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


 


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


 


(v)         the
provisions of Section 11(a)(ii) hereof shall be of no further effect following the first occurrence of any Flip-Over Event, and
the Rights that have not theretofore been exercised shall thereafter become exercisable in the manner described in this Section
13.


 




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(b)          “Principal
Party” shall mean


 


(i)          in
the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a) hereof, (A) the Person (including
the Company as successor thereto or as the surviving entity) that is the issuer of any securities or other equity interests into
which Common Shares are converted in such merger, amalgamation or consolidation, or, if there is more than one such issuer, the
issuer of Common Shares that has the highest aggregate Current Market Price; and (B) if no securities or other equity interests
are so issued, (1) the Person that is the other constituent party to such merger, if such Person survives the merger, or, if there
is more than one such Person, the Person, the Common Shares of which has the highest aggregate Current Market Price or (2) 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 (3) the Person resulting from the amalgamation or consolidation; and


 


(ii)         in
the case of any transaction described in clause (z) of the first sentence of Section 13(a) hereof, the Person that is the party
receiving the largest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the same portion of the assets or earning power transferred
pursuant to such transaction or transactions or if the Person receiving the largest portion of the assets or earning power cannot
be determined, whichever Person that has received assets or earning power pursuant to such transaction or transactions, the Common
Shares of which has the highest aggregate Current Market Price; provided, however, that in any such case: (1) if
the Common Shares of such Person is not at such time and has not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which is and has been so registered, “Principal Party” will refer to such other Person; (2) if the Common
Shares of such Person is not and has not been so registered and such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Shares of two or more of which are and have been so registered, “Principal Party” will refer
to whichever of such Persons is the issuer of the Common Shares having the highest aggregate market value; and (3) if the
Common Shares of such Person is not and has not been so registered and such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in (1)
and (2) above will apply to each of the chains of ownership having an interest in such joint venture as if such party were a Subsidiary
of both or all of such joint venturers, and the Principal Parties in each such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect interests in such Person bear to the total of such interests.


 


(c)          The
Company may not consummate any Flip-Over Event unless the Principal Party has a sufficient number of its Common Shares that have
not been issued (or reserved for issuance) or that are held in its treasury to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such Principal Party have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further providing that,
as soon as practicable after the date of any such Flip-Over Event, the Principal Party, at its own expense, shall:


 




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(i)          if
the Principal Party is required to file a registration statement pursuant to the Securities Act with respect to the Rights and
the securities purchasable upon exercise of the Rights, (A) prepare and file such registration statement; (B) use its
best efforts to cause such registration statement to become effective as soon as practicable after such filing and remain effective
(and to include a prospectus at all times complying with the requirements of the Securities Act) until the Expiration Date; and
(C) take such action as may be required to ensure that any acquisition of such securities that may be acquired upon exercise
of the Rights complies with any applicable state security or “blue sky” laws as soon as practicable following the execution
of such agreement;


 


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


 


(iii)        use
its best efforts to obtain any and all necessary regulatory approvals as may be required with respect to the securities that may
be acquired upon exercise of the Rights; and


 


(iv)        use
its best efforts, if such Common Shares of the Principal Party are listed or admitted to trading on NASDAQ, the NYSE or on another
national securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities that may be
acquired upon exercise of the Rights on NASDAQ, the NYSE or on such securities exchange, or if the securities of the Principal
Party that may be acquired upon exercise of the Rights are not listed or admitted to trading on NASDAQ, the NYSE or a national
securities exchange, to cause the Rights and the securities that may be acquired upon exercise of the Rights to be authorized for
quotation on any other system then in use; and


 


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


 


(d)          In
case the Principal Party that is to be a party to a transaction referred to in this Section 13 has at the time of such transaction,
or immediately following such transaction has a provision in any of its authorized securities or in its certificate or articles
of incorporation or by-laws or other instrument governing its affairs, or any other agreements or arrangements, which provision
would have the effect of (i) causing such Principal Party to issue, in connection with, or as a consequence of, the consummation
of a transaction referred to in this Section 13, Common Shares of such Principal Party at less than the then Current Market Price
or securities exercisable for, or convertible into, Common Shares of such Principal Party at less than such then Current Market
Price (other than to holders of Rights pursuant to this Section 13); (ii) providing for any special payment, tax or similar
provisions in connection with the issuance of the Common Shares of such Principal Party pursuant to the provisions of this Section
13; or (iii) otherwise eliminating or substantially diminishing the benefits intended to be afforded by the Rights in connection
with, or as a consequence of, the consummation of a transaction referred to in this Section 13, then, in each such case, the Company
may not consummate any such transaction unless prior thereto the Company and such Principal Party have executed and delivered to
the Rights Agent a supplemental agreement providing that the provision in question of such Principal Party has been cancelled,
waived or amended, or that the authorized securities have been redeemed, so that the applicable provision will have no effect in
connection with, or as a consequence of, the consummation of such transaction.


 




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(e)          The
provisions of this Section 13 shall apply similarly to successive mergers or consolidations or sales or other transfers. In the
event that a Flip-Over Event occurs after the occurrence of a Flip-In Event, the Rights that have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a) hereof.


 


(f)          Notwithstanding
anything contained herein to the contrary, in the event of any merger or other acquisition transaction 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(a).


 


Section
14.  Fractional Rights; Fractional Shares; Waiver.


 


(a)          The
Company is not required to issue fractions of Rights except prior to the Distribution Date as provided in Section 11(o) hereof,
or to distribute Rights Certificates that evidence fractional Rights. In lieu of such fractional Rights, the Company shall pay
to the Persons to which such fractional Rights would otherwise be issuable an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value of a whole Right is the Closing Price of the Rights
for the Trading Day immediately prior to the date that such fractional Rights would have been otherwise issuable.


 


(b)          The
Company is not required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-thousandth
of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred
Shares (other than fractions which are integral multiples of one one-thousandth of
a Preferred Share). In lieu of fractional Preferred Shares that are not integral multiples of one one-thousandth
of a Preferred Share, the Company may pay to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the current market value of one one-thousandth
of a Preferred Share. For purposes of this Section 14(b), the current market value of one one-thousandth
of a Preferred Share is one one-thousandth of the Closing Price of a Preferred Share
for the Trading Day immediately prior to the date of such exercise.


 


(c)          Following
the occurrence of one of the events specified in Section 11 hereof giving rise to the right to receive Common Shares, Common Share
Equivalents or other securities upon the exercise of a Right, the Company will not be required to issue fractions of Common Shares,
Common Share Equivalents or other securities upon exercise of the Rights or to distribute certificates which evidence fractional
Common Shares, Common Share Equivalents or other securities. In lieu of fractional Common Shares, Common Share Equivalents or other
securities, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market value of one Common Share, Common Share Equivalents
or other securities. For purposes of this Section 14(c), the current market value of one Common Share is the Closing Price of one
Common Share for the Trading Day immediately prior to the date of such exercise.


 




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


 


(e)          Whenever
a payment for fractional Rights or fractional shares is to be made by the Rights Agent under 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 may rely upon such a certificate and
has no duty with respect to, and will 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 has received such a certificate and sufficient monies.


 


Section
15.  Rights of Action.


 


All rights of action
in respect of this Agreement, other than the rights of action vested in the Rights Agent hereunder, are vested in the respective
registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of shares of the Common
Shares); and any registered holder of a Rights Certificate (or, prior to the Distribution Date, any registered holder of Common
Shares), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution
Date, any registered holder of Common Shares), may, in such holder’s own behalf and for such holder’s own benefit,
enforce, and may institute and maintain any suit, action or proceeding against the Company or any other Person to enforce, or otherwise
act in respect of, such holder’s right to exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement
by the Company and shall be entitled to specific performance of the obligations hereunder, and injunctive relief against actual
or threatened violations by the Company of the obligations hereunder of any Person (including, without limitation, the Company)
subject to this Agreement.


 


Section
16.  Agreement of Rights Holders.


 


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


 


(a)          prior
to the Distribution Date, the Rights shall be evidenced by the balances indicated in the Book Entry account system of the transfer
agent for the Common Shares registered in the names of the holders of Common Shares (which Common Shares shall also be deemed to
represent certificates for Rights) or, in the case of certificated shares, the certificates for the Common Shares registered in
the names of the holders of the Common Shares (which certificates for Common Shares also constitute certificates for Rights) and
each Right is transferable only in connection with the transfer of the Common Shares;


 




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


 


(c)          subject
to Section 6(a) and Section 7(e) hereof, the Company and the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated balance indicated in the Book Entry account system of the transfer
agent for the Common Shares, or in the case of certificated shares, by the associated Common Shares certificate) is registered
as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated balance indicated in the Book Entry account system of the transfer agent for the Common Shares,
or in the case of certificated shares, by the associated Common Shares certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the last sentence of Section
7(e) hereof, shall be affected by any notice to the contrary; and


 


(d)          notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent has any liability to any holder of a Right
or any 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 (whether interlocutory
or final) issued by a court of competent jurisdiction or by a governmental, regulatory, self-regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting
or otherwise restraining performance of such obligation; provided, however, the Company shall use its commercially
reasonable efforts to have any such injunction, order, decree, judgment or ruling lifted or otherwise overturned as promptly as
practicable.


 


Section
17.  Rights Certificate Holder Not Deemed a Shareholder.


 


No holder, as such,
of any Rights Certificate is entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Shares
or any other securities of the Company that may at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate,
as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or, except as provided
in Section 26 hereof, to receive notice of meetings or other actions affecting shareholders, or to receive dividends or subscription
rights, or otherwise, until the Right evidenced by such Rights Certificate have been exercised in accordance with the provisions
hereof.


 




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Section
18.  Duties of Rights Agent.


 


The Rights Agent undertakes
to perform its duties and obligations imposed by this Agreement 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 Shares, by their
acceptance thereof, shall be bound:


 


(a)          The
Rights Agent may consult with legal counsel selected by it (who may be legal counsel for the Rights Agent or the Company or an
employee 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 will have no liability for or in respect of, any action taken, suffered or omitted to
be taken by it in the absence of bad faith in accordance with such advice or opinion.


 


(b)          Whenever
in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter
(including the identity of any Acquiring Person and the determination of Current Market Price) 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 the
Chairman of the Board, Chief Executive Officer and President, Chief Financial Officer, Chief Operating Officer, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent;
and such certificate 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, in the absence of bad faith, under the
provisions of this Agreement in reliance upon such certificate.


 


(c)          The
Rights Agent shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith, or willful
misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment). Anything to the
contrary notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect, consequential or incidental
loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of
the likelihood of such loss or damage. 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.


 


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


 


(e)          The
Rights Agent shall not have any liability for nor be under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution and delivery hereof by the Rights Agent) or for the validity or execution
of any Rights Certificate (except its countersignature thereon); nor will it be liable or 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 Rights Certificate; nor
will it be liable or responsible for any change in the exercisability of the Rights (including, but not limited to, the Rights
becoming null and void pursuant to Section 7(e) hereof) or any change or adjustment in the terms of the Rights including, but not
limited, to any adjustment required under the provisions of Sections 11, 13, 23 or 24 hereof or for the manner, method or amount
of any such change or adjustment or the ascertaining of the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates after receipt by the Rights Agent of the certificate
describing any such adjustment contemplated by Section 12 hereof, upon which the Rights Agent may rely); nor will it by any act
hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of the Common Shares,
the Preferred Shares or any other securities to be issued pursuant to this Agreement or any Rights Certificate or as to whether
any Common Shares, Preferred Shares or any other securities will, when so issued, be validly authorized and issued, fully paid
and non-assessable.


 




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


 


(g)          The
Rights Agent is hereby authorized and directed to accept verbal or written instructions with respect to the performance of its
duties hereunder and certificates delivered pursuant to any provision hereof from the Chairman of the Board, the Chief Executive
Officer, and President, the Chief Financial Officer, the Chief Operating Officer, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and such advice or instruction shall be full authorization and protection to the Rights Agent and the
Rights Agent shall have no duty to independently verify the accuracy or completeness of such instructions and shall incur no liability
for or in respect of any action taken or suffered or omitted to be taken by it by it, in the absence of bad faith, in accordance
with advice or instructions of any such officer or for any delay in acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent 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 be fully authorized and protected in relying upon the
most recent verbal or written instructions received from any such officer, and shall not be liable for any action taken, suffered
or omitted to be taken by the Rights Agent in the absence of bad faith in accordance with a proposal included in any such application
on or after the date specified in such application (which date shall not be less than five (5) Business Days after the date any
officer of the Company actually receives such application unless any such officer shall have consented in writing to an earlier
date) unless, prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be taken, suffered or omitted.


 


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


 




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(i)          The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
(through its directors, officers and employees) or by or through its attorneys or agents, and the Rights Agent shall not be liable
for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company, any holder
of Rights or any other Person resulting from any such act, default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct in the selection and continued employment thereof.


 


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


 


(k)          If,
with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, either (i) the certificate attached
to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, or (ii) 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.


 


Section
19.  Concerning the Rights Agent.


 


(a)          The
Company agrees to pay to the Rights Agent on demand compensation as agreed in writing between the Company and the Rights Agent
for all services rendered by it hereunder and from time to time, on demand of the Rights Agent, to reimburse the Rights Agent for
all of its reasonable and documented expenses incurred in the preparation, delivery, amendment, administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent,
its employees, officers or directors for, and to hold it harmless against, any loss, liability, damage, demand, judgment, fine,
penalty, claim, settlement, cost or expense (including the reasonable fees and expenses of legal counsel), for any action taken,
suffered or omitted to be taken by the Rights Agent pursuant to this Agreement or in connection with the acceptance, administration,
exercise and performance of its duties under this Agreement, including the reasonable and documented costs and expenses of defending
against any claim of liability arising therefrom, directly or indirectly, or enforcing its rights hereunder; provided that the
Company shall not be required to indemnify the Rights Agent, its employees, officers or directors for any such loss, liability,
damage, demand, judgment, fine, penalty, claim, settlement cost or expense to the extent caused by the Right Agent’s gross
negligence, bad faith or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment).


 




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(b)          The
Rights Agent shall be authorized and protected and shall incur no liability for or in respect of any action taken, suffered or
omitted 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 Rights Certificate or Book Entry for Common Shares or other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate,
statements or other paper or document believed by it to be genuine and to be signed, executed and shall not be obligated to verify
the accuracy or completeness of such instrument, power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statements or other paper or document and, where necessary, guaranteed, verified or acknowledged, by the proper Person
or Persons, or otherwise upon the advice of counsel as set forth in Section 20 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.


 


(c)          Notwithstanding
anything in this Agreement to the contrary, in no case shall the Company be liable with respect to any action, proceeding, suit
or claim against the Rights Agent unless the Rights Agent shall have notified the Company in accordance with Section 27 hereof
of the assertion of such action, proceeding, suit or claim against the Rights Agent, promptly after the Rights Agent shall have
notice of such assertion of an action, proceeding, suit or claim or have been served with the summons or other first legal process
giving information as to the nature and basis of the action, proceeding, suit or claim; provided that the failure to provide such
notice promptly shall not affect the rights of the Rights Agent hereunder except to the extent that such failure actually prejudices
the Company. The Company shall be entitled to participate at its own expense in the defense of any such action, proceeding, suit
or claim, and, if the Company so elects, the Company shall assume the defense of any such action, proceeding, suit or claim. In
the event that the Company assumes such defense, the Company shall not thereafter be liable for the fees and expenses of any counsel
retained by the Rights Agent, so long as the Company shall retain counsel satisfactory to the Rights Agent, in the exercise of
its reasonable judgment, to defend such action, proceeding, suit or claim, and provided that the Rights Agent does not have defenses
that are adverse to or different from any defenses of the Company. The Rights Agent agrees not to settle any litigation in connection
with any action, proceeding, suit or claim with respect to which it may seek indemnification from the Company without the prior
written consent of the Company, which shall not be unreasonably withheld.


 


(d)          The
provisions of this Section 19 and Section 21 below shall survive the termination of this Agreement, the resignation, replacement
or removal of the Rights Agent and the exercise, termination and the expiration of the Rights. Notwithstanding anything in this
Agreement to the contrary, in no event shall the Rights Agent be liable for special, punitive, incidental, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of
the likelihood of such loss or damage and regardless of the form of the action; and the Company agrees to indemnify the Rights
Agent and to hold it harmless to the fullest extent permitted by law against any loss, liability or expense incurred as a result
of claims for special, punitive, incidental, indirect or consequential loss or damages of any kind whatsoever provided in each
case that such claims are not based on the gross negligence, bad faith or willful misconduct of the Rights Agent (each as determined
by a final judgment of a court of competent jurisdiction). Any liability of the Rights Agent under this Agreement shall be limited
to the amount of annual fees paid by the Company to the Rights Agent.


 




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


 


(a)          Any
Person into which the Rights Agent or any successor Rights Agent is amalgamated or merged or with which the Rights Agent or any
successor Rights Agent is consolidated, or any Person resulting from any merger, amalgamation or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any Person succeeding to the corporate trust, share 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; but only if such
Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. 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 Rights Certificates have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates have not been countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.


 


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


 




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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 at least thirty (30) days’
notice in writing to the Company, and to each transfer agent of the Preferred Shares and the Common Shares, by registered or certified
mail, in which case the Company will give or cause to be given written notice to the registered holders of the Rights Certificates
by first-class mail. The Company may remove (with or without cause) the Rights Agent or any successor Rights Agent upon at least
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 Shares and Preferred Shares, by registered or certified mail, and, if such removal occurs after the
Distribution Date, to the holders of the Rights Certificates by first-class mail. If the Rights Agent resigns or is removed or
otherwise becomes incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company fails to make
such appointment within a period of thirty (30) days after giving notice of such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (such
holder shall, with such notice, submit its Rights Certificate for inspection by the Company), then the incumbent Rights Agent or
any registered holder of any Rights 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 organized and doing
business under the laws of the United States or any State thereof, in good standing, which is authorized under such laws to exercise
corporate trust, share transfer or shareholder services powers and which at the time of its appointment as Rights Agent has, or
with its parent has, a combined capital and surplus of at least $50,000,000 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 under this Agreement 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 in each case at the sole expense of the Company. Not later
than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and the Preferred Shares, and, if such appointment occurs after the Distribution Date,
mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any notice provided for
in this Section 21, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.


 


Section
22. Issuance of New Rights Certificates.


 


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


 




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Section
23. Redemption.


 


(a)          The
Board may, within its sole discretion, at any time before any Person becomes an Acquiring Person (the “Redemption Period”)
cause the Company to redeem all, but not less than all, of the then outstanding Rights at a redemption price of $0.001 per Right,
as such amount may be appropriately adjusted to reflect any share split, reverse share split, stock dividend or similar transaction
occurring after the date hereof (such redemption price, as adjusted, the “Redemption Price”). Notwithstanding
anything contained in this Agreement to the contrary, the Rights will not be exercisable after the first occurrence of a Flip-In
Event or Flip-Over Event until such time as the Company’s right of redemption hereunder has expired. The redemption of the
Rights by the Board pursuant to this paragraph (a) may be made effective at such time, on such basis and with such conditions as
the Board may establish, in its sole discretion. The Company may, at its option, pay the Redemption Price in cash, Common Shares
based on the Current Market Price or any other form of consideration deemed appropriate by the Board.


 


(b)          Immediately
upon the action of the Board ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23 (or 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 held. The Company shall promptly give (i) written notice to the Rights Agent of any such redemption;
and (ii) public notice of any such redemption; provided, however, that the failure to give, or any defect in,
any such notice will not affect the validity of such redemption. Within ten (10) days after such action of the Board ordering the
redemption of the Rights, the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Shares. Any notice that is mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption
Price shall be made. Neither the Company nor any of its Related Persons may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section 23 or in Section 24 hereof, or other than in connection
with the purchase of Common Shares or the conversion of Common Shares in accordance with the applicable provisions of the Memorandum
of Association and/or the Bye-laws prior to the Distribution Date.


 


Section
24. Exchange.


 


(a)          The
Board may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then issued and
outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of
Section 7(e) hereof) for Common Shares at an exchange ratio of two Common Shares per each outstanding Right, as appropriately adjusted
to reflect any share split, reverse share split, stock dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board
is not empowered to effect such exchange at any time after any Acquiring Person, together with all of its Related Persons, becomes
the Beneficial Owner of 50% or more of the Common Shares then issued and outstanding. The exchange of the Rights by the Board may
be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. From
and after the occurrence of a Flip-Over Event, any Rights that theretofore have not been exchanged pursuant to this Section 24(a)
will thereafter be exercisable only in accordance with Section 13 hereof and may not be exchanged pursuant to this Section 24(a).


 




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(b)          Immediately
upon the action of the Board ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further
action or notice, the right to exercise such Rights will terminate and the only right thereafter of a holder of such Rights shall
be to receive a number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio;
provided, however, that in connection with any exchange effected pursuant to this Section 24(b), no holder of Rights shall be entitled
to receive Common Shares (or other shares in the capital of the Company) that would result in such holder, together with such holder’s
Affiliates and Associates, becoming the Beneficial Owner of the Specified Percentage of the then issued and outstanding Common
Shares. If a holder would, but for the immediately preceding sentence, be entitled to receive Excess Shares, in lieu of receiving
such Excess Shares and to the extent permitted by law or orders applicable to the Company, such holder will only be entitled to
receive an amount in cash or, at the election of the Company, a note or other evidence of indebtedness maturing within nine months
with a principal amount, equal to the current per share Current Market Price of a Common Share at the Close of Business on the
Trading Day following the date the Board effects the forgoing exchange multiplied by the number of Excess Shares that would otherwise
have been issuable to such holder. 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. The Company shall promptly give (i) written notice
to the Rights Agent of any such exchange; and (ii) public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice will 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 that is mailed in the manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights shall be effected
and, in the event of any partial exchange, the number of Rights that shall be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights that have become null and void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.


 


(c)          The
Company may at its option substitute, and, in the event that there shall not be sufficient Common Shares issued but not outstanding
or authorized but unissued permit an exchange of Rights for Common Shares as contemplated in accordance with this Section 24, the
Company shall substitute to the extent of such insufficiency, for each Common Share that would otherwise be issuable upon exchange
of a Right, a number of Preferred Shares or fraction thereof (or Equivalent Preferred Shares, as such term is defined in Section
11(b)) such that the Current Market Price of one Preferred Share (or Equivalent Preferred Share) multiplied by such number or fraction
is equal to the Current Market Price of one Common Share as of the date of such exchange.


 




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(d)          Upon
declaring an exchange pursuant to this Section 24, or as promptly as reasonably practicable thereafter, the Company may implement
such procedures as it deems appropriate, in its sole discretion, for the purpose of ensuring that the Common Shares (or such other
consideration) issuable upon an exchange pursuant to this Section 24 is not received by holders of Rights that have become null
and void pursuant to Section 7(e) hereof. Before effecting an exchange pursuant to this Section 24, 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 the Company shall issue to the trust created by the
Trust Agreement (the “Trust”) all or a portion (as designated by the Board) of the Common Shares and
other securities, if any, distributable pursuant to the Exchange, and all shareholders entitled to distribution of such shares
or other securities (and any dividends or distributions made thereon after the date on which such shares or other securities are
deposited in the Trust) shall be entitled to receive a distribution of such shares or other securities (and any dividends or distributions
made thereon after the date on which such shares or other securities are deposited in the Trust) only from the Trust and solely
upon compliance with all relevant terms and provisions of the Trust Agreement. Prior to effecting an exchange and registering Common
Shares (or other such securities) in any Person’s name, including any nominee or transferee of a Person, the Company may
require (or cause the trustee of the Trust to require), as a condition thereof, that any holder of Rights provide evidence, including,
without limitation, the identity of the Beneficial Owners thereof and their Related Persons (or former Beneficial Owners thereof
and their Related Persons) as the Company reasonably requests in order to determine if such Rights are null and void. If any Person
fails to comply with such request, the Company shall be entitled conclusively to deem the Rights formerly held by such Person to
be null and void pursuant to Section 7(e) hereof and not transferable or exercisable or exchangeable in connection herewith. Any
Common Shares or other securities issued at the direction of the Board in connection herewith shall be validly issued, fully paid
and nonassessable Common Shares or of such other securities (as the case may be), and the Company shall be deemed to have received
as consideration for such issuance a benefit having a value that is at least equal to the aggregate par value of the shares so
issued.


 


Section
25. Process to Seek Exemption


 


(a)          Any
Person who desires to effect any acquisition of Common Shares that might, if consummated, result in such Person Beneficially Owning
the Specified Percentage of the then-outstanding Common Shares (or, in the case of a Grandfathered Person, additional Common Shares)
(a “Requesting Person”) may request that the Board grant an exemption with respect to such acquisition
under this Agreement so that such Person would be deemed to be an “Exempt Person” for purposes of this Agreement (an
“Exemption Request”). An Exemption Request shall be in proper form and shall be delivered by registered
mail, return receipt requested, to the Secretary of the Company at the principal executive office of the Company. The Exemption
Request shall be deemed made upon receipt by the Secretary of the Company. To be in proper form, an Exemption Request shall set
forth (i) the name and address of the Requesting Person, (ii) the number and percentage of Common Shares then Beneficially Owned
by the Requesting Person, together with all Affiliates and Associates of the Requesting Person, and (iii) a reasonably detailed
description of the transaction or transactions by which the Requesting Person would propose to acquire Beneficial Ownership of
Common Shares aggregating the Specified Percentage of the then issued and outstanding Common Shares and the maximum number and
percentage of Common Shares that the Requesting Person proposes to acquire. The Board shall endeavor to respond to an Exemption
Request within twenty (20) Business Days after receipt of such Exemption Request; provided, that the failure of the Board
to make a determination within such period shall be deemed to constitute the denial by the Board of the Exemption Request. The
Requesting Person shall respond promptly to reasonable and appropriate requests for additional information from the Company or
the Board and its advisors to assist the Board in making its determination. The Board shall only grant an exemption in response
to an Exemption Request if it receives, at the Board’s request, a report from the Company’s advisors to the effect
that the acquisition of Beneficial Ownership of Common Shares by the Requesting Person does not create a significant risk of material
adverse tax consequences to the Company or the Board otherwise determines in its sole discretion that the exemption is in the best
interests of the Company. Any exemption granted hereunder may be granted in whole or in part, and may be subject to limitations
or conditions (including a requirement that the Requesting Person agree that it will not acquire Beneficial Ownership of Common
Shares in excess of the maximum number and percentage of shares approved by the Board), in each case as and to the extent the Board
shall determine necessary or desirable to provide for the protection of the Company’s NOLs. Any Exemption Request may be
submitted on a confidential basis and, except to the extent required by applicable law, the Company shall maintain the confidentiality
of such Exemption Request and determination of the Board with respect thereto, unless the information contained in the Exemption
Request or the determination of the Board with respect thereto otherwise becomes publicly available. The Exemption Request shall
be considered and evaluated by the Independent Directors who are also independent of the Requesting Person and disinterested with
respect to the Exemption Request, and the action of a majority of such Independent Directors shall be deemed to be the determination
of the Board for purposes of such Exemption Request.


 




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Section
26. Notice of Certain Events.


 


(a)          In
case the Company proposes, at any time after the earlier of the Distribution Date or the Share Acquisition Date, (i) to pay
any dividend payable in shares of any class or series to the holders of Preferred Shares or to make any other distribution to the
holders of Preferred Shares (other than a regular quarterly cash dividend out of earnings or retained earnings of the Company);
(ii) to offer to the holders of Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of any class or any other securities, rights or options; (iii) to effect any reclassification of Preferred
Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares); (iv) to effect a consolidation,
amalgamation or merger into or with any other Person (other than a Subsidiary of the Company in a transaction which complies with
Section 11(n) hereof) or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(n) hereof); or (v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each registered holder of a Rights Certificate, to the extent feasible, and
to the Rights Agent in accordance with Section 27 hereof, a written 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 Preferred Shares if any such date is to be fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least ten (10) days prior to the record date for determining holders of the Preferred Shares for purposes
of such action and, in the case of any such other action, at least 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 Preferred Shares, whichever is earlier; provided, however,
that no such action shall be taken pursuant to this Section 26(a) that will or would conflict with any provision of the Memorandum
of Association and/or the Bye-laws; provided, further, that no such notice is required pursuant to this Section 26
if any Subsidiary of the Company effects a consolidation, amalgamation or merger with or into, or effects a sale or other transfer
of assets or earning power to, any other Subsidiary of the Company.


 




    	- 43 -



     

    

 


(b)          In
case any Flip-In Event occurs, (i) the Company shall, as soon as practicable thereafter, give to each registered holder of
a Rights Certificate, to the extent feasible, and to the Rights Agent in accordance with Section 27 hereof, a written notice of
the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under
Section 11(a)(ii) hereof; and (ii) all references in paragraph (a) of this Section 26 to Preferred Shares shall be deemed
thereafter to refer to Common Shares and/or, if appropriate, to any other securities that may be acquired upon exercise of a Right.


 


(c)          In
case any Flip-Over Event occurs, then the Company shall, as soon as practicable thereafter, give to each registered holder of a
Rights Certificate, to the extent feasible, and to the Rights Agent in accordance with Section 27 hereof, a written notice of the
occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under
Section 13(a) hereof.


 


Section
27. Notices.


 


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


 


If to the Company,
at its address at:


 


Energy XXI Ltd


1021 Main Street,
Suite 2626

Houston, Texas 77002


Attention: Bo C. Boyd
& Hugh A. Menown


 


with a copy to:


 


Vinson & Elkins LLP

1001 Fannin Street, Suite 2500

Houston, Texas 77002

Attention: T. Mark Kelly and Kai H. Liekefett


 


Appleby (Bermuda) Limited


Canon’s Court


22 Victoria Street


PO Box HM 1179


Hamilton HM EX


 




    	- 44 -



     

    

 


Bermuda


Attention: Tammy L. Richardson-Augustus


 


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


 


Continental Stock Transfer &
Trust Company


17 Battery Place


New York, New York 10004


Attention: Margaret Villani &
Steven Vacante


 


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


 


Section
28. Supplements and Amendments.


 


Except as otherwise
provided in this Section 28, the Company, by action of the Board, may from time to time and in its sole and absolute discretion,
and the Rights Agent shall if the Company so directs, supplement or amend this Agreement in any respect without the approval of
any holders of Rights, including, without limitation, in order to (a) cure any ambiguity; (b) correct or supplement any
provision contained herein that may be defective or inconsistent with any other provisions herein; (c) shorten or lengthen
any time period hereunder; (d) otherwise change, amend, or supplement any provisions hereunder in any manner that the Company
may deem necessary or desirable; provided, however, that from and after any Person becomes an Acquiring Person,
this Agreement may not be supplemented or amended in any manner that would (a) adversely affect the interests of the holders of
Rights (other than Rights that have become null and void pursuant to Section 7(e) hereof) as such or (b) cause this Agreement to
become amendable other than in accordance with this Section 28. Without limiting the foregoing, the Company, by action of the Board,
may at any time before any Person becomes an Acquiring Person amend this Agreement to make the provisions of this Agreement
inapplicable to a particular transaction by which a Person might otherwise become an Acquiring Person or to otherwise alter the
terms and conditions of this Agreement as they may apply with respect to any such transaction. Upon the delivery of a certificate
from an appropriate officer of the Company that states that the proposed supplement or amendment is in compliance with the terms
of this Section 28, the Rights Agent shall execute such supplement or amendment; provided, however, that any supplement
or amendment that does not amend Sections 1818, 19, 20, 21, or this Section 28 in a manner adverse to the Rights Agent shall become
effective immediately upon execution by the Company, whether or not also executed by the Rights Agent. The Company shall provide
within three (3) Business Days of the adoption of an amendment to the Agreement written notification of such amendment to the Rights
Agent.


 




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Notwithstanding anything
contained in this Agreement to the contrary, the Rights Agent may enter into any supplement or amendment that affects the Rights
Agent’s own rights, duties, obligations or immunities under this Agreement.


 


Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of Common Shares.


 


Section
29. 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
30. Determinations and Actions by the Board.


 


(a)          For
all purposes of this Agreement, any calculation of the number of Common Shares or any other class of shares issued and outstanding
at any particular time, including for purposes of determining the particular percentage of such outstanding Common Shares of which
any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act or Section 382 of the Code and the Treasury Regulations promulgated thereunder, as applicable.
Except as otherwise specifically provided herein, the Board has the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Board or to the Company hereunder, or as may be necessary or
advisable in the administration of this Agreement, including, without limitation, the right and power (a) to interpret the
provisions of this Agreement, and (b) to 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 in accordance with Section 23 hereof,
to exchange or not exchange the rights in accordance with Section 24 hereof, to amend or not amend this Agreement in accordance
with Section 28 hereof). All such actions, calculations, interpretations and determinations (including, for purposes of clause
(ii) below, all omissions with respect to the foregoing) that are done or made by the Board shall be (i) be final, conclusive,
and binding on the Company, the Rights Agent, the holders of the Rights and all other parties; and (ii) not subject the Board
or any member thereof to any liability to the holders of the Rights.


 


Section
31. Benefits of this Agreement.


 


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


 




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Section
32. Tax Compliance and Withholding.


 


(a)          The
Rights Agent, on its own behalf and on behalf of the Company, will comply with all applicable certification, information reporting
and withholding (including “backup” withholding) requirements imposed by applicable tax laws, regulations or administrative
practice with respect to (i) any payments made hereunder and (ii) the issuance, delivery, holding, transfer, redemption or exercise
of Rights, Common Shares or Preferred Shares hereunder. Such compliance shall include, without limitation, the preparation and
timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority
or its designated agent. The Rights Agent shall maintain all appropriate records documenting compliance with such requirements,
and shall make such records available, on written request, to the Company or its authorized representative within a reasonable
period of time after receipt of such request.


 


(b)          In
the event that the Company, the Rights Agent or their agents determine that they are obligated to withhold or deduct any tax or
other governmental charge under any applicable law on actual or deemed payments or distributions hereunder to a holder of the Rights,
Common Shares or other cash, securities or other property, the Company, the Rights Agent or their agents shall be entitled to (i)
deduct and withhold such amount by withholding a portion or all of the cash, securities or other property otherwise deliverable
or by otherwise using any property (including, without limitation, Rights, Preferred Shares, Common Shares or cash) that is owned
by such holder, or (ii) in lieu of such withholding, require any holder to make a payment to the Company, the Rights Agent or their
agents, in each case in such amounts as they deem necessary to meet their withholding obligations, and in the case of (i) above,
shall also be entitled to sell all or a portion of such withheld securities or other property by public or private sale in such
amounts and in such manner as they deem necessary and practicable to pay such taxes and governmental charges.


 


Section
33. 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 will remain in full force and
effect and will in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything
in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in good faith judgment that severing the invalid language from this Agreement
would materially and adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and will not expire until the Close of Business on the tenth (10th) Business Day following the date
of such determination by the Board.


 


Section
34. Governing Law.


 


This Agreement, each
Right, and each Rights Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of New York
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.


 




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Section
35. Counterparts.


 


This Agreement may
be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument. Delivery of an
executed signature page of Agreement by facsimile or other customary shall mean of electronic transmission (e.g., “PDF”)
shall be effective as delivery of a manually executed counterpart hereof.


 


Section
36. Interpretation.


 


The headings contained
in this Agreement are for descriptive purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
For purposes of this Agreement, whenever a specific provision of the Code or a specific Treasury Regulation is referenced, such
reference shall also apply to any successor or replacement provision or Treasury Regulation, as applicable.


 


Section
37. Force Majeure.


 


Notwithstanding anything
to the contrary contained herein, the Rights Agent will not have any liability for not performing, or a delay in the performance
of, any act, duty, obligation or responsibility by reason of any occurrence beyond the reasonable control of the Rights Agent (including,
without limitation, any act or provision of any present or future law or regulation or governmental authority, any act of God,
war, civil or military disobedience or disorder, riot, rebellion, terrorism, insurrection, fire, earthquake, storm, flood, strike,
work stoppage, interruptions or malfunctions of computer facilities, loss of data due to power failures or mechanical difficulties
with information, labor dispute, accident or failure or malfunction of any utilities, communication or computer (software or hardware)
services or similar occurrence).


 


[Signature Page To Follow On Next Page]


 




    	- 48 -



     

    

 


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


 


	 	ENERGY XXI LTD,
	 	as Company
	 	 	 
	 	By:	/s/ John D. Schiller, Jr.
	 	Name:	John D. Schiller, Jr.
	 	Title:	President and Chief Executive Officer
	 	 	 
	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
	 	as Rights Agent
	 	 	 
	 	By:	/s/ Margaret Villani
	 	Name:	Margaret Villani
	 	Title:	Vice President and Director of Account
	 	 	Administration


 


[Signature Page to Rights
Agreement]


 




     


     

    

 


Exhibit A

CERTIFICATE OF DESIGNATIONS


OF


SERIES C JUNIOR PARTICIPATING PREFERRED
SHARES


OF


ENERGY XXI LTD


 


ENERGY XXI LTD, a
Bermuda exempted company (the “Company”), certifies that pursuant to the authority contained in Bye-Law 5 of
its Bye-Laws, the Board of Directors of the Company (the “Board”), by resolution adopted by unanimous written
consent, on February 15, 2016, duly approved and adopted the following resolution, which resolution remains in full force and effect
on the date hereof:


 


RESOLVED, that a series of preferred
shares, par value $0.01 per share, of the Company be, and hereby are, created, and that the designation and number of shares thereof
and the voting and other powers, preferences, and relative, participating, optional or other rights of the shares of such series
and the qualifications, limitations and restrictions thereof are as set forth below and in the Memorandum of Association of the
Company (“Memorandum of Association”) and the Bye-laws of the Company (“Bye-laws”):


 


Series C Junior
Participating Preferred Shares


 


(1) Designation
and Amount. The shares of such series shall be designated as “Series C Junior Participating Preferred Shares” (the
“Series C Preferred Shares”) and the number of shares constituting the Series C Preferred Shares shall be 150,000.
Subject to the Company’s Bye-laws, such number of shares may be increased or decreased by resolution of the Board; provided,
that no decrease shall reduce the number of Series C Preferred Shares to a number less than the number of shares then issued and
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 Company convertible into Series C Preferred Shares.


 


(2) Dividends
and Distributions.


 


(a) Subject
to the rights of the holders of any shares of any series of Preferred Shares (or any similar shares) ranking prior and superior
to the Series C Preferred Shares with respect to dividends, the holders of shares of Series C Preferred Shares, in preference to
the holders of common shares, par value $0.005 per share (the “Common Shares”), of the Company, and of any other
junior shares, shall be entitled to receive, when, as and if declared by the Board out of funds legally available for the purpose
and in accordance with the Companies Act 1981 of Bermuda, the Bye-laws, the Memorandum of Association or otherwise, 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 Series C Preferred Shares (or fraction thereof), in an amount per share (rounded to the nearest cent) equal to the
greater of (1) $1.00 or (2) 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 Common Shares or a subdivision of the outstanding Common Shares (by reclassification
or otherwise), declared on the Common Shares 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 C Preferred Shares.
In the event the Company shall at any time declare or pay any dividend on the Common Shares payable in Common Shares, or effect
a subdivision or combination or consolidation of the outstanding Common Shares (by reclassification or otherwise than by payment
of a dividend in Common Shares) into a greater or lesser number of Common Shares, then in each such case the amount to which holders
of Series C Preferred Shares were entitled immediately prior to such event under clause (2) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is the number of Common Shares outstanding immediately
after such event and the denominator of which is the number of Common Shares that were outstanding immediately prior to such event.


 




    	 	- A-1 -	 



     

    

 


(b) The
Company shall declare a dividend distribution on the Series C Preferred Shares as provided in paragraph (a) of this subsection
immediately after it declares a dividend or distribution on the Common Shares (other than a dividend payable in Common Shares);
provided, that in the event no dividend or distribution shall have been declared on the Common Shares 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 C Preferred Shares shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.


 


(c) Dividends
shall begin to accrue and be cumulative on issued and outstanding Series C Preferred Shares 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 Series C Preferred Shares 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 on the Series C Preferred Shares shall only be paid if and when they are permitted to be paid under the terms
of each of the Company’s 7.25% Convertible Perpetual Preferred Shares and 5.625% Convertible Perpetual Preferred Shares.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the Series C Preferred Shares 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 issued and outstanding. The Board may fix a record date for the determination of holders of Series
C Preferred Shares 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.


 


(3) Voting Rights.
The holders of Series C Preferred Shares shall have the following voting rights:


 




    	 	- A-2 -	 



     

    

 


(a) Subject
to the provision for adjustment hereinafter set forth, each share of Series C Preferred Shares shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the shareholders of the Company. In the event the Company shall at any time
declare or pay any dividend on the Common Shares payable in Common Shares, or effect a subdivision or combination or consolidation
of the outstanding Common Shares (by reclassification or otherwise than by payment of a dividend in Common Shares) into a greater
or lesser number of Common Shares, then in each such case the number of votes per share to which holders of Series C Preferred
Shares 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 Common Shares outstanding immediately after such event and the denominator of which is the number of
Common Shares 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 Shares or any similar shares,
or by law, the holders of Series C Preferred Shares and the holders of Common Shares and any other shares in the capital of the
Company having general voting rights shall vote together as one class on all matters submitted to a vote of shareholders of the
Company.


 


(c) Except
as set forth herein, or as otherwise provided by law, holders of Series C Preferred Shares 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 Shares as set forth
herein) for taking any corporate action.


 


(4) Certain Restrictions.


 


(a) Whenever
quarterly dividends or other dividends or distributions payable on the Series C Preferred Shares as provided in Section (2) are
in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on Series C Preferred
Shares issued and outstanding shall have been paid in full, the Company shall not:


 


(1) declare
or pay dividends, or make any other distributions, on any shares ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series C Preferred Shares;


 


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


 




    	 	- A-3 -	 



     

    

 


(3) redeem
or purchase or otherwise acquire for consideration shares ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series C Preferred Shares other than (A) such redemptions or purchases that may be deemed to occur upon the
exercise of share options, warrants or similar rights or grant, vesting or lapse of restrictions on the grant of any other performance
shares, restricted shares, restricted share units or other equity awards to the extent that such shares represent all or a portion
of (x) the exercise or purchase price of such options, warrants or similar rights or other equity awards and (y) the amount of
withholding taxes owed by the recipient of such award in respect of such grant, exercise, vesting or lapse of restrictions; (B)
the repurchase, redemption, or other acquisition or retirement for value of any such shares from employees, former employees, directors,
former directors, consultants or former consultants of the Company or their respective estate, spouse, former spouse or family
member, pursuant to the terms of the agreements pursuant to which such shares were acquired, provided that the Company may at any
time redeem, purchase or otherwise acquire shares of any such junior shares in exchange for shares of the Company ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to the Series C Preferred Shares; or


 


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


 


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


 


(5) Reacquired Shares.
Any Series C Preferred Shares purchased or otherwise acquired by the Company in any manner whatsoever shall be cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued Preferred Shares and
may be reissued as part of a new series of Preferred Shares subject to the conditions and restrictions on issuance set forth herein,
in the Memorandum of Association and/or the Bye-laws, or in any other certificate of designation creating a series of Preferred
Shares or any similar shares or as otherwise required by law.


 


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


 




    	 	- A-4 -	 



     

    

 


(7) Consolidation,
Merger, Etc. In case the Company shall enter into any consolidation, amalgamation, merger, combination or other transaction
in which the Common Shares are exchanged for or changed into other shares or securities, cash and/or any other property, then in
any such case each Series C Preferred Share 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 shares, securities,
cash and/or any other property (payable in kind), as the case may be, into which or for which each Common Share is changed or exchanged.
In the event the Company shall at any time declare or pay any dividend on the Common Shares payable in Common Shares, or effect
a subdivision or combination or consolidation of the outstanding Common Shares (by reclassification or otherwise than by payment
of a dividend in Common Shares) into a greater or lesser number of Common Shares, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of Series C Preferred Shares shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of Common Shares outstanding immediately after such event and the denominator
of which is the number of Common Shares that were outstanding immediately prior to such event.


 


(8) No Redemption.
The Series C Preferred Shares shall not be redeemable.


 


(9) Rank. The
Series C Preferred Shares shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series
of any other class of the Company’s Preferred Shares (including, for the avoidance of doubt, junior to any outstanding shares
of the Company’s 7.25% Convertible Perpetual Preferred Stock and 5.625% Convertible Perpetual Preferred Stock), and shall
rank senior to the Common Shares as to such matters.


 


(10) Amendment.
The Memorandum of Association and the Bye-laws of the Company shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series C Preferred Shares so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series C Preferred Shares, voting together as a single
class.


 


(11) Fractional
Shares. The Series C Preferred Shares may be issued in fractions of a share, which fractions 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 C Preferred Shares.


 




    	 	- A-5 -	 



     

    

 


Exhibit B

SUMMARY OF RIGHTS

TO PURCHASE SERIES C JUNIOR PARTICIPATING PREFERRED SHARES


 


Introduction


 


The Board of Directors
(the “Board”) of Energy XXI Ltd, a Bermuda exempted company (the “Company”), declared a dividend
of one preferred share purchase right (a “Right”) for each outstanding Common Share, par value $0.005 per
share, of the Company (the “Common Shares”). The dividend is payable on February 26, 2016 (the “Record
Date”) to the shareholders of record on that date. Each Right entitles the registered holder to purchase from the Company
one one-thousandth of a Series C Junior Participating Preferred Share, par value $0.01
per share, of the Company (the “Preferred Share” together “Preferred Shares”) at a price
of $2.82 per one one-thousandth of a Preferred Share (the “Purchase Price”),
subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement dated as of February 15, 2016,
as the same may be amended from time to time (the “Rights Agreement”), between the Company and Continental Stock
Transfer & Trust Company, as Rights Agent (the “Rights Agent”).


 


Until the earlier to
occur of (i) the close of business on the tenth business day after a public announcement that a person or group of affiliated
or associated persons (with certain exceptions, an “Acquiring Person”) has acquired beneficial ownership of
4.9% or more of the outstanding Common Shares and (ii)  the close of business on the tenth business day after the commencement
by any person of, or of the first public announcement of the intention of any Person to commence, a tender or exchange offer the
consummation of which would result in such Person becoming the Beneficial Owner of 4.9% or more of the outstanding Common Shares
(the earlier of such dates being called the “Distribution Date”), the Rights will be evidenced, with respect
to any of the Common Share certificates (or book entry shares) outstanding as of the Record Date, by such Common Share certificate
(or book entry shares) together with this Summary of Rights.


 


The Rights Agreement
provides that, until the Distribution Date (or earlier expiration or redemption of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier expiration or redemption of the Rights), new Common
Share certificates issued after the Record Date upon transfer or new issuances of Common Shares will contain a legend incorporating
the Rights Agreement by reference, and notice of such legend will be furnished to holders of book entry shares. Until the Distribution
Date (or earlier expiration or redemption of the Rights), the surrender for transfer of any certificates for Common Shares (or
book entry Common Shares) outstanding as of the Record Date, even without such legend or a copy of this Summary of Rights, will
also constitute the transfer of the Rights associated with the Common Shares represented by such certificate or registered in book
entry form. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“Rights
Certificates”) will be mailed to holders of record of the Common Shares as of the Close of Business on the Distribution
Date and such separate Right Certificates alone will evidence the Rights.


 




    	 	- B-1 -	 



     

    

 


The Rights are not
exercisable until the Distribution Date. The Rights will expire prior to the earliest of (i) February 15, 2019 or
such later date as may be established by the Board prior to the expiration of the Rights as long as the extension is submitted
to the shareholders of the Company for ratification at the next annual meeting of shareholders succeeding such extension (the “Final
Expiration Date”), (ii) the time at which the Rights are redeemed or exchanged by the Company, in each case as described
below, (iii) upon the occurrence of certain transactions, (iv) if shareholder approval has not been obtained on or prior to February
15, 2017, (v) the Close of Business on the effective date of the repeal of Section 382 of the Internal Revenue Code of 1986, as
amended, if the Board determines that this Agreement is no longer necessary or desirable for the preservation of Tax Benefits (as
defined in the Rights Agreement), and (vi) the Close of Business on the first day of a taxable year of the Company to which the
Board determines that no Tax Benefits are available to be carried forward.


 


The Purchase Price
payable, and the number of Preferred Shares or other securities or property issuable, upon exercise of the Rights is 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 Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights or warrants to subscribe for
or purchase Preferred Shares at a price, or securities convertible into Preferred Shares with a conversion price, less than the
then-current market price of the Preferred Shares or (iii) upon the distribution to holders of the Preferred Shares of evidences
of indebtedness or assets (excluding regular periodic cash dividends or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).


 


The number of outstanding
Rights is subject to adjustment in the event of a stock dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case, prior to the Distribution Date.


 


Preferred Shares purchasable
upon exercise of the Rights will not be redeemable. Each Preferred Share will be entitled, when, as and if declared, to a minimum
preferential quarterly dividend payment of the greater of (a) $1.00 per share, and (b) an amount equal to 1,000 times the dividend
declared per Common Share. In the event of liquidation, dissolution or winding up of the Company, the holders of the Preferred
Shares will be entitled to a minimum preferential payment of the greater of (i) $1,000.00 per share (plus any accrued but unpaid
dividends), and (ii) an amount equal to 1,000 times the payment made per Common Share. Each Preferred Share will have 1,000 votes,
voting together with the Common Shares. Finally, in the event of any merger, consolidation or other transaction in which outstanding
Common Shares are converted or exchanged, each Preferred Share will be entitled to receive 1,000 times the amount received per
Common Share. These rights are protected by customary anti-dilution provisions.


 


Because of the nature
of the Preferred Shares’ dividend, liquidation and voting rights, the value of the one one-thousandth
interest in a Preferred Share purchasable upon exercise of each Right should approximate the value of one Common Share.


 


In the event that any
person or group of affiliated or associated persons becomes an Acquiring Person, each holder of a Right, other than Rights beneficially
owned by the Acquiring Person, affiliates and associates of the Acquiring Person and certain transferees thereof (which will thereupon
become null and void), will thereafter have the right to receive upon exercise of a Right that number of Common Shares having a
market value of two times the exercise price of the Right.


 




    	 	- B-2 -	 



     

    

 


In the event that,
after a person or group has become an Acquiring Person, the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, proper provisions will be made so that each holder of a Right
(other than Rights beneficially owned by an Acquiring Person, affiliates and associates of the Acquiring Person and certain transferees
thereof which will have become null and void) will thereafter have the right to receive upon the exercise of a Right that number
of Common Shares of the person with whom the Company has engaged in the foregoing transaction (or its parent) that at the time
of such transaction have a market value of two times the exercise price of the Right.


 


At any time after any
person or group becomes an Acquiring Person and prior to the earlier of one of the events described in the previous paragraph or
the acquisition by such Acquiring Person of 50% or more of the outstanding Common Shares, the Board may exchange the Rights (other
than Rights owned by such Acquiring Person and certain transferees thereof which will have become null and void), in whole or in
part, for Common Shares or Preferred Shares (or a series of the Company’s preferred shares having equivalent rights, preferences
and privileges), at an exchange ratio of two Common Shares, or a fractional Preferred Share (or other preferred shares) equivalent
in value thereto, per Right.


 


With certain exceptions,
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 Preferred Shares or Common Shares will be issued (other than fractions of Preferred Shares which
are integral multiples of one one-thousandth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts), and in lieu thereof an adjustment in cash will be made based on
the current market price of the Preferred Shares or the Common Shares.


 


At any time prior to
the time an Acquiring Person becomes such, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per
Right (the “Redemption Price”) payable, at the option of the Company, in cash, Common Shares or such other form
of consideration as the Board shall determine. The redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board 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.


 


For so long as the
Rights are then redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement in any manner.
After the Rights are no longer redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement
in any manner that does not adversely affect the interests of holders of the Rights (other than holders of Rights owned by or transferred
to any person who is or becomes an Acquiring Person or affiliates and associates of an Acquiring Person and certain transferees
thereof).


 




    	 	- B-3 -	 



     

    

 


Until a Right is exercised
or exchanged, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends.


 


A copy of the Rights
Agreement has been filed with the Securities and Exchange Commission as an exhibit to a Registration Statement on Form 8-A dated
February 16, 2016. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, as the same may be
amended from time to time, which is hereby incorporated herein by reference.


 




    	 	- B-4 -	 



     

    

 


Exhibit C

FORM OF RIGHTS CERTIFICATE


 


	Certificate No. R-________	________ Rights


 


NOT EXERCISABLE AFTER
FEBRUARY 15, 2019 OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF ANY SUCH PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE
VOID, AS LONG AS HELD BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE
EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE.


 


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


 





 






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


 




    	 	C-1	 



     


    

  


Rights Certificate


 


This certifies that
_________________, or its registered assigns, is the registered holder of the number of Rights set forth above, each of which entitles
the holder thereof, subject to the terms, provisions and conditions of the Rights Agreement dated as of February 15, 2016, as amended
from time to time (the “Rights Agreement”), between Energy XXI Ltd, a Bermuda exempted company (the “Company”),
and Continental Stock Transfer & Trust Company, as 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 City time, on February 15, 2019, at the
office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one one-thousandth
of a fully paid, non-assessable share of Series C Junior Participating Preferred Share, par value $0.01 per share
(the “Preferred Share”, together the “Preferred Shares”), of the Company, at
a purchase price of $2.82 per one one-thousandth Preferred Share (the “Exercise
Price”), upon presentation and surrender of this Rights Certificate with the Election to Purchase and related Certificate
duly executed. The number of Rights evidenced by this Rights Certificate (and the number of shares that may be purchased upon exercise
thereof) set forth above, and the Exercise Price per share as set forth above, are the number and Exercise Price as of February
15, 2016, based on the Preferred Shares as constituted at such date, and are subject to modification and adjustment upon the happening
of certain events as provided in the Rights Agreement. Capitalized terms used and not defined herein shall have the meanings specified
in the Rights Agreement.


 


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


 


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


 


As provided in the
Rights Agreement, the Exercise Price and the number and kind of Preferred Shares or other securities which may be acquired upon
the exercise of the Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.


 


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


 




    	 	C-2	 



     


    




 


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


 


Subject to the provisions
of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company under certain circumstances at
its option at a redemption price of $0.001 per Right at any time prior to the earlier of the Close of Business on (i) the Share
Acquisition Date and (ii) the Final Expiration Date.


 


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


 


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


 


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


 


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




 




    	 	C-3	 



     


    

  


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


 


Dated as of _____________, ______.


 


	 	ENERGY XXI LTD
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 


 


Countersigned:


 


Dated as of _____________, ______.


 


Continental Stock Transfer & Trust Company,


as Rights Agent


 


	By:	 	 
	 	Authorized Signatory	 


 




    	 	C-4	 



     


    

  


[Form of Reverse Side of Rights
Certificate]


 


FORM OF ASSIGNMENT


 


(To be executed by the registered holder
if


such holder desires to transfer the


Rights Certificate.)


 


FOR VALUE RECEIVED
                                                                                    hereby sells, assigns and transfers unto


 





	 







(Please print name and address of transferee)


 





	 







 


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


 


Dated _____________, ______.


 


	 	 
	 	Signature


Signature Guaranteed:


 




    	 	C-5	 



     


    




 


Certificate


 


The undersigned hereby
certifies by checking the appropriate boxes that:


 


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


 


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


 


Dated _____________, ______.


 


	 	 
	 	Signature


Signature Guaranteed:


 




    	 	C-6	 



     


    




 


NOTICE


 


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


 


Signatures must be
guaranteed by a participant in a Medallion Signature Guarantee Program at a level acceptable to the Rights Agent.


 


In the event the certification
set forth above is not completed, the Company will deem the beneficial owner of the Rights evidenced by this Rights Certificate
to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the case of an Assignment,
will affix a legend to that effect on any Rights Certificates issued in exchange for this Rights Certificate.


 




    	 	C-7	 



     


    

  


FORM OF ELECTION TO PURCHASE


 


(To be executed if the registered holder


desires to exercise Rights represented


by the Rights Certificate.)


 


To:______________________


 


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


 





	 







(Please print name and address)


 


 


 



 


	Please insert social security
	or other identifying number:	 


 


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


 





	 







(Please print name and address)


 


 


 



 


	Please insert social security
	or other identifying number:	 


 


Dated _____________, ______.


 


	 	 
	 	Signature


Signature Guaranteed:


 




    	 	C-8	 



     


    




 


Certificate


 


The undersigned hereby
certifies by checking the appropriate boxes that:


 


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


 


(2)       after due inquiry
and to the best knowledge of the undersigned, the undersigned

[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of any such Person.


 


Dated _____________, ______.


 


	 	 
	 	Signature


Signature Guaranteed:


 




    	 	C-9	 



     

    




 


NOTICE


 


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


 


Signatures must be
guaranteed by a participant in a Medallion Signature Guarantee Program at a level acceptable to the Rights Agent.


 


In the event the certification
set forth above is not completed, the Company will deem the beneficial owner of the Rights evidenced by this Rights Certificate
to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the case of an Assignment,
will affix a legend to that effect on any Rights Certificates issued in exchange for this Rights Certificate.


 




    	 	C-10