exv4w2









Exhibit 4.2




AMENDED & RESTATED STOCKHOLDERS RIGHTS AGREEMENT




          This amended and restated Stockholders Rights Agreement (this “Rights Agreement”) is
made and entered into as of June 3, 2011, by and between Ocean Rig UDW Inc., a Marshall Islands
corporation (the “Company”), and American Stock Transfer & Trust Company, LLC as Rights
Agent (the “Rights Agent.




          WHEREAS, the Board of Directors of the Company (the “Board”) has (a) authorized and
declared a dividend of one right (the “Right”) for each share of the Company’s common stock, par
value U.S. $.01 per share which may include one or more classes of common stock outstanding from
time to time (the “Common Stock”) held of record as of the Close of Business (as
hereinafter defined) on May 23, 2011 (the “Record Date”) and (b) has further authorized the
issuance of one Right in respect of each share of Common Stock that shall become outstanding (i) at
any time between the Record Date and the earliest of the Distribution Date, the Redemption Date or
the Final Expiration Date (as such terms are hereinafter defined) or (ii) upon the exercise or
conversion, prior to the earlier of the Redemption Date or the Final Expiration Date, of any option
or other security exercisable for or convertible into shares of Common Stock, which option or other
such security is outstanding on the Distribution Date; and




          WHEREAS, each Right represents the right of the holder thereof to purchase one one-thousandth
of a share of Series A Participating Preferred Stock (as such number may hereafter be adjusted
pursuant to the provisions hereof), upon the terms and subject to the conditions set forth herein,
having the rights, preferences and privileges set forth in the Certificate of Designations of
Series A Participating Preferred Stock, attached hereto as Exhibit A.




          WHEREAS, the parties hereto entered into that certain Stockholders Rights Agreement, dated May
20, 2011, and desire to amend and restate such agreement on the terms and conditions provided
herein.




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




     1. Certain Definitions.



          “Acquiring Person” shall mean any Person who or which, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, but shall not include the Company, any Subsidiary of the Company or any
employee benefit plan of the Company or of any Subsidiary of the Company, or any entity holding
shares of Common Stock for or pursuant to the terms of any such plan, or DryShips Inc..
Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring Person as the result of
an acquisition of shares of Common Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by such Person to 15%
or more of the shares of Common Stock of the Company then outstanding; provided,
however, that a Person who (i) becomes the Beneficial Owner of 15% or more of the shares of
Common Stock of the Company then outstanding by reason of share purchases by the Company and (ii)
then after such share purchases by the







 









 







Company, becomes the Beneficial Owner of any additional shares of Common Stock of the Company
(other than pursuant to a dividend or distribution paid or made by the Company on the outstanding
shares of Common Stock in shares of Common Stock or pursuant to a split or subdivision of the
outstanding shares of Common Stock), such Person shall be deemed to be an Acquiring Person unless
upon becoming the Beneficial Owner of such additional shares of Common Stock of the Company such
Person does not beneficially own 15% or more of the shares of Common Stock of the Company then
outstanding. Notwithstanding the foregoing: (i) if the Board determines in good faith that a Person
who would otherwise be an “Acquiring Person,” as defined herein, has become such inadvertently
(including, without limitation, because (A) such Person was unaware that it beneficially owned a
percentage of the shares of Common Stock that would otherwise cause such Person to be an “Acquiring
Person,” as defined herein, or (B) such Person was aware of the extent of the shares of Common
Stock it beneficially owned but had no actual knowledge of the consequences of such beneficial
ownership under this Agreement) and without any intention of changing or influencing control of the
Company, and if such Person divested or divests as promptly as practicable a sufficient number of
shares of Common Stock so that such Person would no longer be an “Acquiring Person,” as defined
herein, then such Person shall not be deemed to be or to have become an “Acquiring Person” for any
purposes of this Agreement; (ii) if, as of the date hereof, any Person is the Beneficial Owner of
15% or more of the shares of Common Stock outstanding, such Person shall not be or become an
“Acquiring Person,” as defined herein, unless and until such time as such Person shall become the
Beneficial Owner of additional shares of Common Stock in an amount equal to 5% of the Company’s
outstanding common stock other than pursuant to a grant under a Company equity incentive plan, a
dividend or distribution paid or made by the Company on the outstanding shares of Common Stock in
shares of Common Stock or pursuant to a split or subdivision of the outstanding shares of Common
Stock, unless, upon becoming the Beneficial Owner of such additional shares of Common Stock, such
Person is not then the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding; and (iii) if the Board determines in good faith that a Person who would otherwise be
an “Acquiring Person,” as defined herein, has become an Acquiring Person solely as a result of such
Person acting (a) as a broker, dealer, distributor, initial purchaser or underwriter of securities
of the Company or as a market-maker with respect to securities of the Company or (b) in connection
with share lending agreements or similar agreements between the Company or any of the Company’s
Affiliates and such Person or any of such Person’s Affiliates or Associates, then such Person shall
not be deemed to be or to have become an Acquiring Person for any purposes of this Agreement unless
and until such time as such Person shall become an Acquiring Person by the acquisition of
additional shares of Common Stock through means other than as described above in clause (iii)(a) or
(iii)(b) of this sentence and other than pursuant to a dividend or distribution paid or made by the
Company on the outstanding shares of Common Stock in shares of Common Stock or pursuant to a split
or subdivision of the outstanding shares of Common Stock.




          “Adjustment fraction” shall have the meaning set forth in Section 11(a)(i)
hereof.




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




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          A Person shall be deemed the “Beneficial Owner” of and shall be deemed to
“Beneficially Own” any securities:





	 	(i)	 	which such Person or any of such Person’s Affiliates or Associates
beneficially owns, directly or indirectly, for purposes of Section 13(d)
of the Exchange Act and Rule 13d-3 thereunder (or any comparable or
successor law or regulation);
	 
	 	(ii)	 	which such Person or any of such Person’s Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed
pursuant to this subsection (ii)(A) to be the Beneficial Owner of, or to
beneficially own, (1) securities tendered pursuant to a tender or exchange
offer made 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 (2) securities which a Person or any of such
Person’s Affiliates or Associates may be deemed to have the right to
acquire pursuant to any merger or other acquisition agreement between the
Company and such Person (or one or more of its Affiliates or Associates)
if such agreement has been approved by the Board of Directors of the
Company prior to there being an Acquiring Person; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security under this subsection (ii)(B) if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response
to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act
and (2) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
	 
	 	(iii)	 	which are beneficially owned, directly or indirectly, by any other
Person (or any Affiliate or Associate thereof) with which such Person or
any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding, whether or not in writing (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated
by the proviso to




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	 	 	 	subsection (ii)(B) above) or disposing of any securities of the
Company; provided, however, that in no case shall an officer or
director of the Company be deemed (x) the Beneficial Owner of any
securities beneficially owned by another officer or director of
the Company solely by reason of actions undertaken by such persons
in their capacity as officers or directors of the Company or (y)
the Beneficial Owner of securities held of record by the trustee
of any employee benefit plan of the Company or any Subsidiary of
the Company for the benefit of any employee of the Company or any
Subsidiary of the Company, other than the officer or director, by
reason of any influence that such officer or director may have
over the voting of the securities held in the plan.





          “Business Day” shall mean any day other than a Saturday, Sunday or a day on which the
New York Stock Exchange is authorized or obligated by law or executive order to close.




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




          “Common Stock” shall have the meaning set forth in the preamble. Common Stock when
used with reference to any Person other than the Company shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned
Person.




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




          “Company” shall have the meaning set forth in the preamble, subject to the terms of
Section 13(a)(iii)(c) hereof.




          “Current Per Share Market Price” of any security (a “Security” for purposes of this
definition), for all computations other than those made pursuant to Section 11(a)(iii) hereof,
shall mean the average of the daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price of any Security on any
date shall be deemed to be the average of the daily closing prices per share of such Security for
the ten (10) consecutive Trading Days immediately prior to such date; provided,
however, that in the event that the Current Per Share Market Price of the Security is
determined during a period following the announcement by the issuer of such Security of (i) a
dividend or distribution on such Security payable in shares of such Security or securities
convertible into such shares or (ii) any subdivision, combination or reclassification of such
Security, and prior to the expiration of the applicable thirty (30) Trading Day or ten (10) Trading
Day period, after the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be








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appropriately adjusted to reflect the current market price per share equivalent of such Security.
The closing price for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities exchange, the last sale
price or, if such last sale price is not reported, the average of the high bid and low asked prices
in the over-the-counter market, as reported by Nasdaq or such other system then in use, or, if on
any such date the Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company. If on any such date no market maker is making a
market in the Security, the fair value of such shares on such date as determined in good faith by
the Board of Directors of the Company shall be used. If the Preferred Shares are not publicly
traded, the Current Per Share Market Price of the Preferred Shares shall be conclusively deemed to
be the Current Per Share Market Price of the shares of Common Stock as determined pursuant to this
definition, as appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof, multiplied by 1000. If the Security is not publicly
held or so listed or traded, Current Per Share Market Price shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for all purposes.




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




          “Distribution Date” shall mean the earlier of (i) the Close of Business on the tenth
day after the “Shares Acquisition Date” as hereinafter defined (or, if the tenth day after the
Shares Acquisition Date occurs before the Record Date, the Close of Business on the Record Date) or
(ii) the Close of Business on the tenth Business Day (or such later date as may be determined by
action of the Company’s Board of Directors) after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if, assuming the successful consummation thereof, such Person would be an Acquiring
Person.




          “Equivalent Shares” shall mean Preferred Shares and any other class or series of
capital stock of the Company which is entitled to the same rights, privileges and preferences as
the Preferred Shares.




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




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






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          “Exercise Price” shall have the meaning set forth in Section 4(a) hereof.




          “Expiration Date” shall mean the earliest to occur of: (i) the Close of Business on the Final
Expiration Date, (ii) the Redemption Date, or (iii) the time at which the Board of Directors orders
the exchange of the Rights as provided in Section 24 hereof.




          “Final Expiration Date” shall mean May 20, 2021.




          “Nasdaq” shall mean the National Association of Securities Dealers, Inc. Automated
Quotations System.




          “Person” shall mean any individual, firm, corporation or other entity, and shall
include any successor (by merger or otherwise) of such entity.




          “Post-event Transferee” shall have the meaning set forth in Section 7(e)
hereof.




          “Preferred Shares” shall mean shares of Series A Participating Preferred Stock, U.S.
$0.01 par value, of the Company.




          “Pre-event Transferee” shall have the meaning set forth in Section 7(e)
hereof.




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




          “Record Date” shall have the meaning set forth in the recitals at the beginning of
this Rights Agreement.




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




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




          “Rights Agent” shall mean American Stock Transfer & Trust Company, LLC or its
successor or replacement as provided in Sections 19 and 21 hereof.




          “Rights Certificate” shall mean a certificate substantially in the form attached
hereto as Exhibit B.




          “Section 11(a)(ii) Trigger Date” shall have the meaning set forth in Section
11(a)(iii) hereof.




          “Section 13 Event” shall mean any event described in clause (i), (ii) or (iii) of
Section 13(a) hereof.




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




          “Shares Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, a report filed pursuant to Section
13(d) under the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such; provided that, if such Person is determined not to have




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become an Acquiring Person as defined herein, then no Shares Acquisition Date shall be deemed to
have occurred.




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




          “Subsidiary” of any Person shall mean any corporation or other entity of which an
amount of voting securities sufficient to elect a majority of the directors or Persons having
similar authority of such corporation or other entity is beneficially owned, directly or
indirectly, by such Person, or any corporation or other entity otherwise controlled by such Person.




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




          “Summary of Rights” shall mean a summary of this Agreement substantially in the form
attached hereto as Exhibit C.




          “Total Exercise Price” shall have the meaning set forth in Section 4(a) hereof.




          “Trading Day” shall mean a day on which the principal national securities exchange on which a
referenced security is listed or admitted to trading is open for the transaction of business or, if
a referenced security is not listed or admitted to trading on any national securities exchange, a
Business Day.




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




     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 also be the holders of the shares of Common Stock) 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, upon ten (10) days’ prior written notice to the Rights Agent. The Rights
Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions
of any such co-Rights Agent.



     3. Issuance of Rights Certificates.



          (a) Until the Distribution Date, (i) the Rights will be evidenced (subject to the provisions
of Sections 3(b) and 3(c) hereof) by the certificates for shares of Common Stock registered in the
names of the holders thereof (which certificates shall also be deemed to be Rights Certificates)
and not by separate Rights Certificates and (ii) the right to receive Rights Certificates will be
transferable only in connection with the transfer of shares of Common Stock. Until the earlier of
the Distribution Date or the Expiration Date, the surrender for transfer of certificates for shares
of Common Stock shall also constitute the surrender for transfer of the Rights associated with the
shares of Common Stock represented thereby. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the Company will send or
cause to be sent (and the Rights Agent will, if requested, send) by first-class, postage-prepaid
mail, to each record holder of shares of Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown







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on the records of the Company, a Rights Certificate evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section 11 hereof, then 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 the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates and may be transferred by the transfer of the Rights Certificates as permitted
hereby, separately and apart from any transfer of shares of Common Stock, and the holders of such
Rights Certificates as listed in the records of the Company or any transfer agent or registrar for
the Rights shall be the record holders thereof.




          (b) On the Record Date or as soon as practicable thereafter, the Company will send a copy of
the Summary of Rights by first-class, postage-prepaid mail, to each record holder of shares of
Common Stock as of the Close of Business on the Record Date, at the address of such holder shown on
the records of the Company’s transfer agent and registrar. With respect to certificates for shares
of Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the holders thereof together with the
Summary of Rights. Until the Distribution Date (or, if earlier, the Expiration Date), the
surrender for transfer of any certificate for shares of Common Stock outstanding on the Record
Date, with or without a copy of the Summary of Rights, shall also constitute the transfer of the
Rights associated with the shares of Common Stock represented thereby.




          (c) Unless the Board of Directors by resolution adopted at or before the time of the issuance
of any shares of Common Stock specifies to the contrary, Rights shall be issued in respect of all
shares of Common Stock that are issued after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date or, in certain circumstances provided in Section 22
hereof, after the Distribution Date. Certificates representing such shares of Common Stock shall
also be deemed to be certificates for Rights, and shall bear a legend substantially in the form of:





THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET
FORTH IN A STOCKHOLDERS RIGHTS AGREEMENT BETWEEN OCEAN RIG UDW INC. AND AMERICAN STOCK
TRANSFER & TRUST COMPANY, LLC AS THE RIGHTS AGENT, DATED AS OF MAY 20, 2011 (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 OCEAN RIG UDW INC. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY
SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. OCEAN RIG UDW
INC. WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT
CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH
IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN
ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.


With respect to such certificates containing the foregoing legend, until the earlier of (i)
the Distribution Date or (ii) the Expiration Date, the Rights associated with the shares of
Common Stock represented by such certificates shall be evidenced by such certificates alone, and
the







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surrender for transfer of any such certificate shall also constitute the transfer of the Rights
associated with the shares of Common Stock represented thereby.




          (d) In the event that the Company purchases or acquires any shares of Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such shares of Common
Stock shall be deemed canceled and retired so that the Company shall not be entitled to exercise
any Rights associated with the shares of Common Stock which are no longer outstanding.




     4. Form of Rights Certificates.



          (a) The Rights Certificates (and the forms of election to purchase shares of Common Stock and
of assignment to be printed on the reverse thereof) shall be substantially in the form of Exhibit B
hereto and may have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange
or a national market system, on which the Rights may from time to time be listed or included, or to
conform to usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date (or in the case of Rights
issued with respect to shares of Common Stock issued by the Company after the Record Date, as of
the date of issuance of such shares of Common Stock) and on their face shall entitle the holders
thereof to purchase such number of one- thousandths of a Preferred Share as shall be set forth
therein at the price set forth therein (such exercise price per one one-thousandth of a Preferred
Share being hereinafter referred to as the “Exercise Price” and the aggregate Exercise
Price of all Preferred Shares issuable upon exercise of one Right being hereinafter referred to as
the “Total Exercise Price”), but the number and type of securities purchasable upon the
exercise of each Right and the Exercise Price shall be subject to adjustment as provided herein.




          (b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such or (iii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Company’s Board of Directors has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect 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 (to the extent feasible) the following legend:





THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS



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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.



     5. Countersignature and Registration.



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




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




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



          (a) Subject to the provisions of Sections 7(e), 14 and 24 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 or Rights Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of one-thousandths of a Preferred Share (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) as the Rights Certificate or Rights
Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate
or Rights Certificates to be transferred, split up, combined or exchanged at the office of the
Rights Agent designated for such purpose. 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 shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Rights Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent shall, subject to Sections 7(e),







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14 and 24 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 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.




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




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



          (a) Subject to Sections 7(e), 23(b) and 24(b) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date and prior to the Close of Business on the
Expiration Date by surrender of the Rights Certificate, with the form of election to purchase on
the reverse side thereof 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-thousandth of
a Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the
case may be) as to which the Rights are exercised.




          (b) The Exercise Price for each one-thousandth of a Preferred Share issuable pursuant to the
exercise of a Right shall initially be one hundred U.S. dollars ($100), shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c) below.




          (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the Exercise Price for the number of
one-thousandths of a Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Rights Certificate in accordance with Section 9(e)
hereof, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent for the Preferred Shares) a certificate or certificates for the number of
one-thousandths of a Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests or (B) if the Company shall have elected to deposit
the total number of one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent depositary receipts representing
such number of one-thousandths of
a Preferred Share (or, following a Triggering Event, other securities, cash or other assets as
the case may be) as are to







11









 







be purchased (in which case certificates for the Preferred Shares (or, following a Triggering
Event, other securities, cash or other assets as the case may be) represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs
the depositary agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder and (iv) when appropriate,
after receipt thereof, deliver such cash to or upon the order of the registered holder of such
Rights Certificate. The payment of the Exercise Price (as such amount may be reduced (including to
zero) pursuant to Section 11(a)(iii) hereof) and an amount equal to any applicable transfer tax
required to be paid by the holder of such Rights Certificate in accordance with Section 9(e)
hereof, may be made in cash or by certified bank check, cashier’s check or bank draft payable to
the order of the Company. In the event that the Company is obligated to issue securities of the
Company other than Preferred Shares, pay cash and/or distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent, if and when appropriate.




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




          (e) Notwithstanding anything in this Agreement to the contrary, from and after the first
occurrence of a Triggering Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such (a
“Post-Event Transferee”), (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the Company’s Board of
Directors has determined is part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e) (a “Pre-Event Transferee”) or (iv) any
subsequent transferee receiving transferred Rights from a Post-Event Transferee or a Pre-Event
Transferee, either directly or through one or more intermediate transferees, shall become null and
void without any further action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of this Section 7(e) and Section
4(b) hereof are complied with, but shall have no liability to any holder of Rights Certificates or
to any other Person as a result of its failure to make any determinations with respect to
an Acquiring Person or any of such Acquiring Person’s Affiliates, Associates or transferees
hereunder.







12









 








          (f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless such registered holder
shall, in addition to having complied with the requirements of Section 7(a), have (i) completed and
signed the certificate contained in 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) or Affiliates or Associates
thereof as the Company shall reasonably request.




     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 canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Rights Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.



     9. Reservation and Availability of Preferred Shares.



          (a) The Company covenants and agrees that it will use its best efforts to cause to be reserved
and kept available out of its authorized and unissued Preferred Shares not reserved for another
purpose (and, following the occurrence of a Triggering Event, out of its authorized and unissued
shares of Common Stock and/or other securities), the number of Preferred Shares (and, following the
occurrence of the Triggering Event, Common Stock and/or other securities) that will be sufficient
to permit the exercise in full of all outstanding Rights.




          (b) If the Company shall hereafter list any of its Preferred Shares on a national securities
exchange, then so long as the Preferred Shares (and, following the occurrence of a Triggering
Event, shares of Common Stock and/or other securities) issuable and deliverable upon exercise of
the Rights may be listed on such exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable (but only to the extent that it is reasonably
likely that the Rights will be exercised), all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.




          (c) The Company shall use its best efforts to (i) file, as soon as practicable following the
earliest date after the first occurrence of a Triggering Event in which the consideration to be
delivered by the Company upon exercise of the Rights is described in Section 11(a)(ii) or Section
11(a)(iii) hereof, or as soon as is required by law following the Distribution Date, as the case
may be, a registration statement under the Securities Act with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing and (iii) cause such
registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act) until the
earlier of (A) the date as of which the Rights are no







13









 







longer exercisable for such securities and (B) the date of expiration of the Rights. The Company
may temporarily suspend, for a period 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 and notify the Rights Agent that the
exercisability of the Rights has been temporarily suspended, as well as a public announcement and
notification to the Rights Agent at such time as the suspension is no longer in effect. The Company
will 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. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction, unless the requisite qualification in such jurisdiction shall have
been obtained, or an exemption therefrom shall be available, and until a registration statement has
been declared effective.




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




          (e) The Company further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any Preferred Shares (or other securities of
the Company) upon the exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of Rights Certificates to
a person other than, or the issuance or delivery of certificates or depositary receipts for the
Preferred Shares (or other securities of the Company) in a name other than that of, the registered
holder of the Rights Certificate evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred Shares (or other securities of the
Company) upon the exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company’s satisfaction that no such tax is due.




     10. Record Date. Each Person in whose name any certificate for a number of
one-thousandths of a Preferred Share (or other securities of the Company) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of record of
Preferred Shares (or other securities of the Company) represented thereon, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Total Exercise Price with respect to which the Rights have been
exercised (and any applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a holder of Preferred Shares (or other
securities of the Company) for which the Rights shall be exercisable, including, without
limitation, the
right to vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall



14









 




not be entitled to receive any notice of any proceedings of the Company, except as provided herein.




     11. Adjustment of Exercise Price, Number of Shares or Number of Rights. The Exercise
Price, the number and kind of shares or other property covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in this Section 11.




(a) (i) Notwithstanding anything in this Agreement to the contrary, in the event
the Company shall at any time after the date of this Agreement (A) declare a
dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares (by
reverse stock split or otherwise) into a smaller number of Preferred Shares, or (D)
issue any shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation), then, in each
such event, except as otherwise provided in this Section 11 and Section 7(e)
hereof: (1) 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 shall be adjusted so that the Exercise Price thereafter shall
equal the result obtained by dividing the Exercise Price in effect immediately
prior to such time by a fraction (the “Adjustment Fraction”), the numerator
of which shall be the total number of Preferred Shares (or shares of capital stock
issued in such reclassification of the Preferred Shares) outstanding immediately
following such time and the denominator of which shall be the total number of
Preferred Shares outstanding immediately prior to such time; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of such Right; and (2) the number of
one-thousandths of a Preferred Share (or share of such other capital stock)
issuable upon the exercise of each Right shall equal the number of one-thousandths
of a Preferred Share (or share of such other capital stock) as was issuable upon
exercise of a Right immediately prior to the occurrence of the event described in
clauses (A)-(D) of this Section 11(a)(i), multiplied by the Adjustment Fraction;
provided, however, that, no such adjustment shall be made pursuant
to this Section 11(a)(i) to the extent that there shall have simultaneously
occurred an event described in clause (A), (B), (C) or (D) of Section 11(n) with a
proportionate adjustment being made thereunder. Each share of Common Stock that
shall become outstanding after an adjustment has been made pursuant to this Section
11(a)(i) shall have associated with it the number of Rights, exercisable at the
Exercise Price and for the number of one-thousandths of a Preferred Share (or
shares of such other capital stock) as one share of Common Stock has associated
with it immediately following the adjustment made pursuant to this Section
11(a)(i).




(ii) Subject to Section 24 of this Agreement, in the event a Triggering Event shall
have occurred, then promptly following such Triggering Event each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have the right
to



15









 






receive for each Right, upon exercise thereof in accordance with the terms of this
Agreement and payment of the Exercise Price in effect immediately prior to the occurrence
of the Triggering Event, in lieu of a number of one-thousandths of a Preferred Share, such
number of shares of Common Stock of the Company as shall equal the result obtained by
multiplying the Exercise Price in effect immediately prior to the occurrence of the
Triggering Event by the number of one-thousandths of a Preferred Share for which a Right
was exercisable (or would have been exercisable if the Distribution Date had occurred)
immediately prior to the first occurrence of a Triggering Event, and dividing that product
by 50% of the Current Per Share Market Price for shares of Common Stock on the date of
occurrence of the Triggering Event; provided, however, that the Exercise
Price and the number of shares of Common Stock of the Company so receivable upon exercise
of a Right shall be subject to further adjustment as appropriate in accordance with Section
11(e) hereof to reflect any events occurring in respect of the shares of Common Stock of
the Company after the occurrence of the Triggering Event.




(iii) In lieu of issuing shares of Common Stock in accordance with Section 11(a)(ii)
hereof, the Company may, if the Company’s Board of Directors determines that such action is
necessary or appropriate and not contrary to the interest of holders of Rights and, in the
event that the number of shares of Common Stock which are authorized by the Company’s
Certificate of Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights are not sufficient to permit the exercise in full of
the Rights, or if any necessary regulatory approval for such issuance has not been obtained
by the Company, the Company shall: (A) determine the excess of (1) the value of the shares
of Common Stock issuable upon the exercise of a Right (the “Current Value”) over
(2) the Exercise Price (such excess, the “Spread”) and (B) with respect to each
Right, make adequate provision to substitute for such shares of Common Stock, upon exercise
of the Rights, (1) cash, (2) a reduction in the Exercise Price, (3) other equity securities
of the Company (including, without limitation, shares or units of shares of any series of
preferred stock which the Company’s Board of Directors has deemed to have the same value as
Common Stock (such shares or units of shares of preferred stock are herein called
“Common Stock Equivalents”)), except to the extent that the Company has not
obtained any necessary stockholder or regulatory approval for such issuance, (4) debt
securities of the Company, except to the extent that the Company has not obtained any
necessary stockholder or regulatory approval for such issuance, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to the Current Value, where
such aggregate value has been determined by the Company’s Board of Directors based upon the
advice of a nationally recognized investment banking firm selected by the Company’s Board
of Directors; provided, however, if the Company shall not have 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 Triggering Event and (y) the date on
which the Company’s right of redemption pursuant to Section 23(a) expires (the later of (x)
and (y) being referred to herein as the “Section 11(a)(ii)



16









 






Trigger Date”), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Exercise
Price, Common Stock (to the extent available), except to the extent that the
Company has not obtained any necessary stockholder or regulatory approval for such
issuance, and then, if necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If the Company’s Board of Directors shall determine in
good faith that it is likely that sufficient additional Common Stock could be
authorized for issuance upon exercise in full of the Rights or that any necessary
regulatory approval for such issuance will be obtained, the thirty (30) day period
set forth above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such additional shares or take
action to obtain such regulatory approval (such period, as it may be extended, the
“Substitution Period”). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that
such action shall apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares, to take any action to obtain
any required regulatory approval and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the value of the Common
Stock shall be the Current Per Share Market Price of the Common Stock on the
Section 11(a)(ii) Trigger Date and the value of any Common Stock Equivalent shall
be deemed to have the same value as the Common Stock on such date.



          (b) In case the Company shall, at any time after the date of this Agreement, fix a record date
for the issuance of rights, options or warrants to all holders of Preferred Shares entitling such
holders (for a period expiring within forty-five (45) calendar days after such record date) to
subscribe for or purchase Preferred Shares or Equivalent Shares or securities convertible into
Preferred Shares or Equivalent Shares at a price per share (or having a conversion price per share,
if a security convertible into Preferred Shares or Equivalent Shares) less than the then Current
Per Share Market Price of the Preferred Shares or Equivalent Shares on such record date, then, in
each such 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 number of Preferred Shares and Equivalent Shares (if any)
outstanding on such record date, plus the number of Preferred Shares or Equivalent Shares, as the
case may be, which the aggregate offering price of the total number of Preferred Shares or
Equivalent Shares, as the case may be, to be offered or
issued (and/or the aggregate initial conversion price of the convertible securities to be
offered or issued) would purchase at such current market price, and the denominator of which shall
be the number of Preferred Shares and Equivalent Shares (if any) outstanding on such record date,
plus the number of additional Preferred Shares or Equivalent Shares, as the case may be, to be
offered for subscription or







17









 







purchase (or into which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Company’s Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of the Rights. Preferred Shares and Equivalent Shares owned by or
held for the account of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such 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 which would then be in effect if such record date had not been
fixed.




          (c) In case the Company shall, at any time after the date of this Agreement, fix a record date
for the making of a distribution to all holders of the Preferred Shares or of any class or series
of Equivalent Shares (including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend, if any, or a dividend payable
in Preferred Shares) or subscription rights, options or warrants (excluding those referred to in
Section 11(b)), then, in each such 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 Per Share Market Price of a
Preferred Share or an Equivalent Share on such record date, less the fair market value per
Preferred Share or Equivalent Share (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a Preferred Share or Equivalent Share, as the case
may be, and the denominator of which shall be such Current Per Share Market Price of a Preferred
Share or Equivalent Share on such record date; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company 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
which would have been in effect if such record date had not been fixed.




          (d) Notwithstanding anything to the contrary, no adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at least 1% in the
Exercise Price; provided, however, that any adjustments which 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 share of Common Stock or other share or one hundred-thousandth
of a Preferred Share, as the case may be. Notwithstanding the first sentence of this Section 11(d),
any adjustment required by this Section 11 shall be made no later than the earlier of (i) three (3)
years
from the date of the transaction which requires such adjustment or (ii) the Expiration Date.







18









 








          (e) If as a result of an adjustment made pursuant to Section 11(a) or 13(a) hereof, the holder
of any Right thereafter exercised shall become entitled to receive any shares of capital stock
other than Preferred Shares, thereafter the number of such other shares so receivable upon exercise
of any Right and, if required, the Exercise Price thereof, shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect
to the Preferred Shares contained in Sections 11(a), 11(b), 11(c), 11(d), 11(g), 11(h), 11(i),
11(j), 11(k) and 11(l), and the provisions of Sections 7, 9, 10, 13 and 14 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 shall evidence the right to purchase, at the adjusted Exercise Price, the
number of one-thousandths of a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.




          (g) Unless the Company shall have exercised its election as provided in Section 11(h), upon
each adjustment of the Exercise Price as a result of the calculations made in Section 11(b) and
(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of Preferred Shares
(calculated to the nearest one hundred-thousandth of a share) obtained by (i) multiplying (x) the
number of Preferred Shares covered by a Right immediately prior to this adjustment, by (y) 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 as a
result of the calculations made in Section 11(b) or (c) to adjust the number of Rights, in
substitution for any adjustment in the number of Preferred Shares purchasable upon the exercise of
a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights (calculated to the nearest
one hundred-thousandth) 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 of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which the 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 the 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, 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 shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of record in substitution
and replacement for the 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 shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed and countersigned




19









 




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.




          (i) Irrespective of any adjustment or change in the Exercise Price or the number of Preferred
Shares 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 Preferred Share and
the number of one-thousandths of a Preferred 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 par or stated value, if any, of the number of one-thousandths of a Preferred Share issuable
upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally issue as fully paid
and nonassessable shares such number of one-thousandths of a Preferred Share at such adjusted
Exercise Price.




          (k) In any case in which this Section 11 shall require 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
until the occurrence of such event the issuing to the holder of any Right exercised after such
record date of the number of one-thousandths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above the number of
one-thousandths of a Preferred Share and other capital stock 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) 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 shall be entitled to make such reductions in the Exercise Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Shares or Common Stock, (ii) issuance wholly for cash of any Preferred Shares or
Common Stock at less than the current market price, (iii) issuance wholly for cash of Preferred
Shares or Common Stock or securities which by their terms are convertible into or exchangeable for
Preferred or Common Stock, (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 or
Common Stock shall not be taxable to such stockholders.




          (m) The Company covenants and agrees that, after the Distribution Date, it will not, except as
permitted by Sections 23, 24 or 27 hereof, take (or permit to be taken) 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.




          (n) In the event the Company shall at any time after the date of this Agreement (A) declare a
dividend on the Common Stock payable in shares of Common Stock, (B) subdivide the outstanding
shares of Common Stock, (C) combine the outstanding Common




20









 




Stock (by reverse stock split or otherwise) into a smaller number of shares of Common Stock, or (D)
issue any shares of its capital stock in a reclassification of the shares of Common Stock
(including any such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11(a) and Section 7(e) hereof: (1) each share of Common Stock (or shares
of capital stock issued in such reclassification of the Common Stock) outstanding immediately
following such time shall have associated with it the number of Rights as were associated with one
share of Common Stock immediately prior to the occurrence of the event described in clauses (A)-(D)
above; (2) 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 shall be adjusted so that the
Exercise Price thereafter shall equal the result obtained by multiplying the Exercise Price in
effect immediately prior to such time by a fraction, the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to the event described in clauses
(A)-(D) above, and the denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such event; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of such Right; and (3) the number
of one-thousandths of a Preferred Share (or shares of such other capital stock) issuable upon the
exercise of each Right outstanding after such event shall equal the number of one- thousandths of a
Preferred Share (or shares of such other capital stock) as were issuable with respect to one Right
immediately prior to such event. Each share of Common Stock that shall become outstanding after an
adjustment has been made pursuant to this Section 11(n) shall have associated with it the number of
Rights, exercisable at the Exercise Price and for the number of one-thousandths of a Preferred
Share (or shares of such other capital stock) as one share of Common Stock has associated with it
immediately following the adjustment made pursuant to this Section 11(n). If an event occurs which
would require an adjustment under both this Section 11(n) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(n) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.




     12. Certificate of Adjusted Exercise Price or Number of Shares. Whenever an
adjustment is made as provided in Sections 11 and 13 hereof, the Company shall promptly (a) prepare
a certificate setting forth such adjustment and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the Preferred Shares a
copy of such certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 26 hereof. Notwithstanding the foregoing sentence, the
failure of the Company to make such certification or give such notice shall not affect the validity
of such adjustment or the force or effect of the requirement for such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any adjustment contained therein
and shall not be deemed to have knowledge of such adjustment unless and until it shall have
received such certificate.



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



          (a) In the event that, following a Shares Acquisition Date, directly or indirectly:






21









 









(i) the Company shall consolidate with, or merge with and into, any other Person (other
than a wholly-owned Subsidiary of the Company in a transaction the principal purpose of
which is to change the state of incorporation of the Company and which complies with
Section 11(m) hereof);




(ii) any Person shall consolidate with the Company, or merge with and into the Company and
the Company shall be the continuing or surviving corporation of such consolidation or
merger and, in connection with such merger, all or part of the shares of Common Stock shall
be changed into or exchanged for stock or other securities of any other person (or the
Company); or




(iii) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company or one or more of
its wholly owned Subsidiaries in one or more transactions, each of which individually (and
together) complies with Section 11(m) hereof),




then, concurrent with and in each such case:




(a) each holder of a Right (except as provided in Section 7(e)
hereof) shall thereafter have the right to receive, upon the
exercise thereof, at a price equal to the Total Exercise Price
applicable immediately prior to the occurrence of the Section 13
Event in accordance with the terms of this Agreement, such number
of validly authorized and issued, fully paid, nonassessable and
freely tradeable shares of Common Stock of the Principal Party (as
hereinafter defined), free of any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the
result obtained by dividing such Total Exercise Price by 50% of
the Current Per Share Market Price of the shares of Common Stock
of such Principal Party on the date of consummation of such
Section 13 Event, provided, however, that the
Exercise Price and the number of shares of Common Stock of such
Principal Party so receivable upon exercise of a Right shall be
subject to further adjustment as appropriate in accordance with
Section 11(e) hereof;




(b) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Agreement;



22









 






(c) the term “Company” shall 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 Section 13 Event;




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




(e) upon the subsequent occurrence of any consolidation, merger,
sale or transfer of assets or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and
payment of the Total Exercise Price as provided in this Section
13(a), such cash, shares, rights, warrants and other property
which such holder would have been entitled to receive had such
holder, at the time of such transaction, owned the shares of
Common Stock of the Principal Party receivable upon the exercise
of such Right pursuant to this Section 13(a), and such Principal
Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms
hereof for such cash, shares, rights, warrants and other property.




(f) For purposes hereof, the “earning power” of the Company and
its Subsidiaries shall be determined in good faith by the
Company’s Board of Directors on the basis of the operating
earnings of each business operated by the Company and its
Subsidiaries during the three fiscal years preceding the date of
such determination (or, in the case of any business not operated
by the Company or any Subsidiary during three full fiscal years
preceding such date, during the period such business was operated
by the Company or any Subsidiary).




(b) For purposes of this Agreement, the term “Principal Party” shall mean:




(i) in the case of any transaction described in clause (i) or (ii) of Section 13(a) hereof:
(A) the Person that is the issuer of the securities into which the shares of



23









 






Common Stock are converted in such merger or consolidation, or, if there is more
than one such issuer, the issuer the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or (B) if no securities are
so issued, (x) the Person that is the other party to the merger, if such Person
survives said merger, or, if there is more than one such Person, the Person the
shares of Common Stock of which have the greatest aggregate market value of shares
outstanding or (y) if the Person that is the other party to the merger does not
survive the merger, the Person that does survive the merger (including the Company
if it survives) or (z) the Person resulting from the consolidation; and




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



          (c) The Company shall not consummate any Section 13 Event unless the Principal Party shall
have a sufficient number of authorized shares of Common Stock that have not been issued or reserved
for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such issuer shall have executed and delivered to the Rights
Agent a supplemental agreement confirming that such Principal Party shall, upon consummation of
such Section 13 Event, assume this Agreement in accordance with Sections 13(a) and 13(b) hereof,
that all rights
of first refusal or preemptive rights in respect of the issuance of shares of Common Stock of
such Principal Party upon exercise of outstanding Rights have been waived, that there are no
rights, warrants, instruments or securities outstanding







24









 







or any agreements or arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the Rights and that
such transaction shall not result in a default by such Principal Party under this Agreement, and
further providing that, as soon as practicable after the date of such Section 13 Event, such
Principal Party will:





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




(ii) use its best efforts to list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on a national securities
exchange or to meet the eligibility requirements for quotation on Nasdaq and list
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on Nasdaq; and




(iii) deliver to holders of the Rights historical financial statements for such
Principal Party which comply in all respects with the requirements for registration
on Form F-1 (or any successor form) under the Exchange Act.


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




          (d) In case the “Principal Party” for purposes of Section 13(b) hereof has provision in any of
its authorized securities or in its certificate of incorporation or by-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i) causing such
Principal Party to issue (other than to holders of Rights pursuant to Section 13 hereof), in
connection with, or as a consequence of, the consummation of a Section 13 Event, shares of Common
Stock or Equivalent Shares of such Principal Party at less than the then Current Per Share Market
Price thereof or securities exercisable for, or convertible into, shares of Common Stock or
Equivalent Shares of such Principal Party at less than such then Current Per Share Market Price, or
(ii) providing for any special payment, tax or similar provision in connection with the issuance of
the shares of Common Stock of such Principal Party pursuant to the provisions of Section 13 hereof,
then, in such event, the Company hereby agrees with each holder of Rights that it shall not
consummate any such transaction unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled, waived or amended, or that
the authorized securities shall be redeemed, so that the applicable provision will have no effect
in connection with or as a consequence of, the consummation of the proposed transaction.







25









 








          (e) The Company covenants and agrees that it shall not, at any time after the Distribution
Date, effect or permit to occur any Section 13 Event, if (i) at the time or immediately after such
Section 13 Event there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (ii) prior to, simultaneously with or immediately after such
Section 13 Event, the stockholders of the Person who constitutes, or would constitute, the
“Principal Party” for purposes of Section 13(b) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or (iii) the form or nature
of organization of the Principal Party would preclude or limit the exercisability of the Rights.




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




     14. Fractional Rights and Fractional Shares.



          (a) The Company shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14(a), the current market value of
a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable, as determined pursuant to
this Agreement.




          (b) The Company shall not be required to issue fractions of Preferred Shares (other than
fractions that 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 that are integral multiples of one one-thousandth of a Preferred Share). Interests in
fractions of Preferred Shares in integral multiples of one one-thousandth of a Preferred Share may,
at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided, that such agreement shall
provide that the holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred Shares represented by
such depositary receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-thousandth of a Preferred Share, the Company shall pay to the registered holders of
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 a Preferred Share. For purposes of this
Section 14(b), the current market value of a Preferred Share shall be one thousand times the
closing price of a share of Common Stock (as determined pursuant to the terms hereof) for the
Trading Day immediately prior to the date of such exercise.




          (c) The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock upon the exercise or
exchange of Rights. In lieu of such fractional shares of Common Stock, the Company shall pay to the
registered holders of 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







26









 







value of a share of Common Stock. For purposes of this Section 14(c), the current market value of a
share of Common Stock shall be the closing price of a share of Common Stock (as determined pursuant
to the terms hereof) for the Trading Day immediately prior to the date of such exercise.




          (d) The holder of a Right by the acceptance of the Right expressly waives his or her right to
receive any fractional Rights or any fractional shares (other than fractions that are integral
multiples of one one-thousandth of a Preferred Share) upon exercise of a Right.




     15. Rights of Action. All rights of action in respect of this Agreement, excepting the
rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the shares of Common Stock); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the shares of Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, of the
shares of Common Stock), may, in his or her own behalf and for his or her own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his or her 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 and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of any Person subject
to this Agreement.



     16. Agreement of Rights Holders. Every holder of a Right, by accepting the same,
consents and agrees with the Company and the Rights Agent and with every other holder of a Right
that:



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




          (b) after the Distribution Date, the Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office or offices 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 fully executed; and




          (c) subject to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent may deem and
treat the person in whose name the Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock 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 Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary.




     17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of any
Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose to be



27









 




the holder of the Preferred Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.




     18. The Rights Agent.



          (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss, liability or expense,
incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending against any claim
of liability in the premises. In no event will the Rights Agent be liable for special, indirect,
incidental or consequential loss or damage of any kind whatsoever, even if the Rights Agent has
been advised of the possibility of such loss or damage.




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




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



28









 




name of the predecessor Rights Agent 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. 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.




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



          (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the written advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such written 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, without limitation, the identity of
any Acquiring Person and the determination of Current Per Share Market Price) be proved or
established by the Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer,
the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon such certificate.




          (c) The Rights Agent shall be liable hereunder to the Company and any other Person only for
its own gross negligence, bad faith or willful misconduct.




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




          (e) The Rights Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided for in Sections 3, 11, 13, 23
or 24, or the ascertaining of the existence of facts that would require any such change or





29









 







adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after
receipt by the Rights Agent of a certificate furnished pursuant to Section 12 describing such
change or adjustment); nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any Preferred Shares will, when issued,
be validly authorized and issued, fully paid and nonassessable.




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




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




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




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




          (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 its rights if there shall be reasonable
grounds for believing







30









 







that repayment of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.




     21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign
and be discharged from its duties under this Agreement upon thirty (30) days’ written notice mailed
to the Company and to each transfer agent of the Preferred Shares and the Common Stock by
registered or certified mail, and to the holders of the Rights Certificates by first-class mail. In
the event the transfer agency relationship in effect between the Company and the Rights Agent
terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from
its duties under this Agreement as of the effective date of such termination, and the Company shall
be responsible for sending any required notice. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days’ written notice, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the Preferred Shares and
the Common Stock by registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company
shall fail to make such appointment within a period of thirty (30) days after giving notice of such
removal or after receiving written notice of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice,
submit his or her Rights Certificate for inspection by the Company), then the 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 corporation organized and doing business under the laws of the United States or of any
state of the United States, in good standing, which is authorized under such laws to exercise
corporate trust or stockholder services powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as Rights Agent, along with
its Affiliates, a combined capital and surplus of at least U.S. $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as
if it had been originally named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer agent of the
Preferred Shares and the Common Stock, and mail a written notice thereof to the registered holders
of the Rights Certificates. Failure to give any notice provided for in this Section 21, however,
or any defect therein, shall not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the case may be.



     22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Exercise Price and the number or kind or class of shares or other
securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock following the Distribution Date and
prior to the redemption



31









 




or expiration of the Rights, the Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement
or upon the exercise, conversion or exchange of other securities of the Company outstanding at the
date hereof 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 of
Directors of the Company, issue Rights Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued and this sentence shall be null and void ab initio if, and to
the extent that, such issuance or this sentence would create a significant risk of or result in
material adverse tax consequences to the Company or the Person to whom such Rights Certificate
would be issued or would create a significant risk of or result in such options’ or employee plans’
or arrangements’ failing to qualify for otherwise available special tax treatment and (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.




     23. Redemption.



          (a) The Company may, at its option and with the approval of the Board of Directors, at any
time prior to the Close of Business on the earlier of (i) the Shares Acquisition Date and (ii) the
Final Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption
price of U.S. $0.001 per Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption price being herein referred
to as the “Redemption Price”) and the Company may, at its option, pay the Redemption Price
either in shares of Common Stock (based on the Current Per Share Market Price thereof at the time
of redemption) or cash. Such redemption of the Rights by the Company may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its sole discretion may
establish. The date on which the Board of Directors elects to make the redemption effective shall
be referred to as the “Redemption Date”.




          (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights, evidence of which shall have been filed with the Rights Agent, and
without any further action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give or any defect in, any such notice shall not affect the
validity of such redemption. Within ten (10) days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock.
Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of shares of Common Stock prior to the
Distribution Date.







32









 








     24. Exchange.



          (a) Subject to applicable laws, rules and regulations, and subject to subsection 24(c) below,
the Company may, at its option, by action of the Board of Directors, at any time after the
occurrence of a Triggering Event, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any
entity holding Common Stock for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common
Stock then outstanding.




          (b) Immediately upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to subsection 24(a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company shall give public
notice of any such exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. The Company shall mail a
notice of any such exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the shares of Common Stock for
Rights will be effected and, in the event of any partial exchange, the number of Rights which will
be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.




          (c) In the event that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with Section 24(a), the Company shall either take such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of the Rights or
alternatively, at the option of a majority of the Board of Directors, with respect to each Right
(i) pay cash in an amount equal to the Current Value (as hereinafter defined), in lieu of issuing
shares of Common Stock in exchange therefor, or (ii) issue debt or equity securities or a
combination thereof, having a value equal to the Current Value, in lieu of issuing shares of Common
Stock in exchange for each such Right, where the value of such securities shall be determined by a
nationally recognized investment banking firm selected by majority vote of the Board of Directors,
or (iii) deliver any combination of cash, property, shares of Common Stock and/or other securities
having a value equal to the Current Value in exchange for each Right. For purposes of this Section
24(c) only, the Current Value shall mean the product of the Current Per Share Market Price of
shares of Common Stock on the date of the
occurrence of the event described above in subparagraph (a), multiplied by the number of
shares of Common







33









 







Stock for which the Right otherwise would be exchangeable if there were sufficient shares
available. To the extent that the Company determines that some action need be taken pursuant to
clauses (i), (ii) or (iii) of this Section 24(c), the Board of Directors may temporarily suspend
the exercisability of the Rights for a period of up to sixty (60) days following the date on which
the event described in Section 24(a) shall have occurred, in order to seek any authorization of
additional shares of Common Stock and/or to decide the appropriate form of distribution to be made
pursuant to the above provision and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended.




          (d) The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the current market value of a whole share
of Common Stock (as determined pursuant to the terms hereof).




          (e) The Company may, at its option, by majority vote of the Board of Directors, at any time
before any Person has become an Acquiring Person, exchange all or part of the then outstanding
Rights for rights of substantially equivalent value, as determined reasonably and with good faith
by the Board of Directors, based upon the advice of one or more nationally recognized investment
banking firms.




          (f) Immediately upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to subsection 24(e) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of rights in exchange therefor as has been
determined by the Board of Directors in accordance with subsection 24(e) above. The Company shall
give public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such exchange. The Company
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 transfer agent for the shares of Common
Stock of the Company. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Rights will be effected.




     25. Notice of Certain Events.



          (a) In case the Company shall propose to effect or permit to occur any Triggering Event or
Section 13 Event, the Company shall give notice thereof to each holder of Rights in accordance with
Section 26 hereof at least twenty (20) days prior to occurrence of such Triggering Event or such
Section 13 Event.




          (b) In case any Triggering Event or Section 13 Event shall occur, then, in any such case, the
Company shall as soon as practicable thereafter give to each holder of a Rights Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of such event, which







34









 







shall specify the event and the consequences of the event to holders of Rights under Sections
11(a)(ii) and 13 hereof.




     26. 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 mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:




Ocean Rig UDW Inc.




10 Skopa Street, Tribune House, 2nd Floor, Office 202




CY 1075




Nicosia, Cyprus




Attention: Chief Executive Officer




with a copy to:




Seward & Kissel LLP




One Battery Park Plaza




New York, New York 10004




Attention: Gary J. Wolfe, Esq.


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 mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:





American Stock Transfer & Trust Company, LLC




6201 15th Avenue




Brooklyn, NY 11219




Attention: Jennifer Donovan




With copy to (which shall not constitute notice to the Rights Agent):




American Stock Transfer & Trust Company, LLC




6201 15th Avenue




Brooklyn, NY 11219




Attention: General Counsel


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 shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.




     27. Supplements and Amendments. Prior to the occurrence of a Distribution Date, the
Company may supplement or amend this Agreement in any respect without the approval of any holders
of Rights and the Rights Agent shall, if the Company so directs, execute such supplement or
amendment. From and after the occurrence of a Distribution Date, the Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of any holders of
Rights in order to (i) cure any ambiguity, (ii) correct or supplement



35









 




any provision contained herein which may be defective or inconsistent with any other provisions
herein, (iii) shorten or lengthen any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or desirable and that shall
not adversely affect the interests of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable or (B) any other time
period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company that states that the proposed supplement or amendment is in compliance with
the terms of this Section 27, the Rights Agent shall execute such supplement or amendment, provided
that such supplement or amendment does not adversely affect the rights, duties or obligations of
the Rights Agent 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 shares of Common Stock.




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



     29. Determinations and Actions by the Board of Directors, etc. For all purposes of
this Agreement, any calculation of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the particular percentage of such
outstanding shares of Common Stock 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. The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers specifically granted
to the Board, or the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret the provisions of
this Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not redeem the Rights or
to amend the Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights Certificates and all other parties and (y) not
subject the Board to any liability to the holders of the Rights.



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



     31. Severability. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable,



36









 




the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or invalidated; provided,
however, that 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 of Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the purpose or effect of
this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth day following the date of such
determination by the Board of Directors.




     32. Governing Law. This Agreement and each Right and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws of New York and for all purposes
shall be governed by and construed in accordance with the laws of such jurisdiction applicable to
contracts to be made and performed entirely within such jurisdiction.



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



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



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



37









 




IN WITNESS WHEREOF, the parties have executed this Amended & Restated Stockholders Rights Agreement
as of the date first written above.




	 	 	 	 	 
	 	OCEAN RIG UDW INC.

 	 
	 	By:  	/s/ George Economou
 	 
	 	 	Name:  	George Economou 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



	 	 	 	 	 
	 	AMERICAN STOCK TRANSFER & TRUST

COMPANY, LLC

 	 
	 	By:  	/s/ John Baker
 	 
	 	 	Name:  	John Baker 	 
	 	 	Title:  	Senior Vice President 	 



38









 






	 	 	 	 	 



Exhibit A




CERTIFICATE OF DESIGNATIONS OF RIGHTS, PREFERENCES AND PRIVILEGES OF

SERIES A PARTICIPATING PREFERRED STOCK OF

OCEAN RIG UDW INC.



The undersigned, Mr. George Economou and Mr. Ioannis Cleanthous do hereby certify:



1. That they are the duly elected and acting Chief Executive Officer and Secretary, respectively,
of Ocean Rig UDW Inc., a Marshall Islands corporation (the “Company”).



2. That pursuant to the authority conferred by the Company’s Amended and Restated
Articles of Incorporation, the Company’s Board of Directors on April  , 2011 adopted the following
resolution designating and prescribing the relative rights, preferences and limitations of the
Company’s Series A Participating Preferred Stock:





     RESOLVED, that pursuant to the authority vested in the Board of Directors (the “Board”) of the
Company by the Articles of Incorporation, the Board does hereby establish a series of preferred
stock, par value U.S. $0.01 per share, and the designation and certain powers, preferences and
other special rights of the shares of such series, and certain qualifications, limitations and
restrictions thereon, are hereby fixed as follows:



     Section 1. Designation and Amount. The shares of such series shall be designated as
“Series A Participating Preferred Stock”. The Series A Participating Preferred Stock shall
have a par value of U.S. $0.01 per share, and the number of shares constituting such series shall
initially be 8,000,000, which number the Board may from time to time increase or decrease (but not
below the number then outstanding).



     Section 2. Proportional Adjustment. In the event the Company shall at any time after
the issuance of any share or shares of Series A Participating Preferred Stock (i) declare any
dividend on the common stock of the Company par value U.S. $0.01 per share (the “Common
Stock”) payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in each such case the
Company shall simultaneously effect a proportional adjustment to the number of outstanding shares
of Series A Participating Preferred Stock.



     Section 3. Dividends and Distributions.



          (a) Subject to the prior and superior right of the holders of any shares of any series of
preferred stock ranking prior and superior to the shares of Series A Participating Preferred Stock
with respect to dividends, the holders of shares of Series A Participating Preferred Stock shall be
entitled to receive when, as and if declared by the Board out of funds







39









 







legally available for the purpose, quarterly dividends payable in quarterly in each year (each such
date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of
Series A Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal
to 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A Participating
Preferred Stock.




          (b) The Company shall declare a dividend or distribution on the Series A Participating
Preferred Stock as provided in paragraph (a) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares of Common Stock).




          (c) Dividends shall begin to accrue on outstanding shares of Series A Participating Preferred
Stock from the Quarterly Dividend Payment Date immediately preceding the date of issue of such
shares of Series A Participating Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record date for the determination of
holders of shares of Series A Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Participating Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board may fix a record date for the determination of holders of shares of Series
A Participating Preferred Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed for the payment
thereof.




     Section 4. Voting Rights. The holders of shares of Series A Participating Preferred
Stock shall have the following voting rights:



          (a) Each share of Series A Participating Preferred Stock shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the stockholders of the Company .




          (b) Except as otherwise provided herein or by law, the holders of shares of Series A
Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the Company .




          (c) Except as required by law, holders of Series A Participating Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the










40









 







extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any
corporate action.




     Section 5. Certain Restrictions.



          (a) The Company shall not declare any dividend on, make any distribution on, or redeem or
purchase or otherwise acquire for consideration any shares of Common Stock after the first issuance
of a share or fraction of a share of Series A Participating Preferred Stock unless concurrently
therewith it shall declare a dividend on the Series A Participating Preferred Stock as required by
Section 3 hereof.




          (b) Whenever quarterly dividends or other dividends or distributions payable on the Series A
Participating Preferred Stock as provided in Section 3 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A
Participating Preferred Stock outstanding shall have been paid in full, the Company shall not (i)
declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Participating Preferred Stock; (ii) declare
or pay dividends on, make any other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with Series A Participating
Preferred Stock, except dividends paid ratably on the Series A Participating Preferred Stock and
all such parity stock on which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled; (iii) redeem or purchase or
otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Participating Preferred Stock,
provided that the Company may at any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the Company ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series A Participating Preferred
Stock; (iv) purchase or otherwise acquire for consideration any shares of Series A Participating
Preferred Stock, or any shares of stock ranking on a parity with the Series A Participating
Preferred Stock, 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.




          (c) The Company shall not permit any subsidiary of the Company to purchase or otherwise
acquire for consideration any shares of stock of the Company unless the Company could, under
paragraph (a) of this Section 5, purchase or otherwise acquire such shares at such time and in such
manner.




     Section 6. Reacquired Shares. Any shares of Series A Participating Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of preferred stock and may be reissued as part of a new
series of preferred stock to be created by resolution or resolutions of the Board, subject to the



41









 




conditions and restrictions on issuance set forth herein and, in the Articles of Incorporation, as
then amended.




     Section 7. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution
or winding up of the Company, the holders of shares of Series A Participating Preferred Stock shall
be entitled to receive an aggregate amount per share equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock plus an amount equal to any accrued
and unpaid dividends on such shares of Series A Participating Preferred Stock.



     Section 8. Consolidation, Merger, etc. In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case the shares of Series A Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to 1,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged.



     Section 9. No Redemption. The shares of Series A Participating Preferred Stock shall
not be redeemable.



     Section 10. Ranking. The Series A Participating Preferred Stock shall rank junior to
all other series of the Company’s preferred stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall provide otherwise.



     Section 11. Amendment. The Articles of Incorporation of the Company shall not be
further amended in any manner which would materially alter or change the powers, preference or
special rights of the Series A Participating Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of a majority of the outstanding shares of Series A
Participating Preferred Stock, voting separately as a class.



     Section 12. Fractional Shares. Series A Participating Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such holder’s fractional
shares, to exercise voting rights, receive dividends, participate in distributions and to have the
benefit of all other rights of holders of Series A Participating Preferred Stock.



     RESOLVED FURTHER, that the President, Chief Executive Officer or any Vice President and the
Secretary or any Assistant Secretary of this Company be, and they hereby are, authorized and
directed to prepare and file a Certificate of Designation of Rights, Preferences and Privileges in
accordance with the foregoing resolution and the provisions of Marshall Islands law and to take
such actions as they may deem necessary or appropriate to carry out the intent of the foregoing
resolution.”



REMAINDER OF PAGE INTENTIONALLY LEFT BLANK



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     We further declare under penalty of perjury that the matters set forth in the foregoing
Certificate of Designation are true and correct of our own knowledge.



          Executed in Nicosia, Cyprus on     , 2011.




	 	 	 	 	 
	 	 	 
	 	
 	 
	 	George Economou 	 
	 	Chief Executive Officer 	 



	 	 	 	 	 
	 	
 	 
	 	Ioannis Cleanthous 	 
	 	Secretary 	 



 









 






	 	 	 	 	 



Exhibit B




FORM OF RIGHTS CERTIFICATE



[OMITTED]





 









 







Exhibit C




SUMMARY OF RIGHTS




	 	 	 

	Distribution and
Transfer of Rights;
Distribution Date:

	 	The rights will separate from the common stock
and become exercisable after (1) the
10th day after public announcement
that a person or group acquires ownership of
15% or more of the company’s common stock or
(2) the 10th business day (or such later date
as determined by the company’s board of
directors) after a person or group announces a
tender or exchange offer which would result in
that person or group holding 15% or more of the
company’s common stock.
	 
	 	 
	Preferred Stock
Purchasable Upon Exercise
of Rights:

	 	On the Distribution Date, each holder of a
right will be entitled to purchase for U.S.
$100 (the “Exercise Price”) a fraction
(1/1000th) of one share of the company’s
preferred stock which has similar economic
terms as one share of common stock.
	 
	 	 
	Flip-in:

	 	If an acquiring person (an “Acquiring Person”)
acquires more than 15% of the company’s common
stock then each holder of a right (except that
acquiring person) will be entitled to buy at
the Exercise Price, a number of shares of the
company’s common stock which has a market value
of twice the Exercise Price.
	 
	 	 
	Flip-over:

	 	If after an Acquiring Person acquires more than
15% of the company’s common stock, the company
merges into another company (either as the
surviving corporation or as the disappearing
entity) or the company sells more than 50% of
its assets or earning power, then each holder
of a right (except for those owned by the
acquirer) will be entitled to purchase at the
Exercise Price, a number of shares of common
stock of the surviving entity which has a then
current market value of twice the Exercise
Price.
	 
	 	 
	Exchange Provision:

	 	Any time after the date an Acquiring Person
obtains more than 15% of the company’s common
stock and before that Acquiring






 









 






	 	 	 

	 
	 	Person acquires more than 50% of the
company’s outstanding common stock, the
company may exchange each right owned by all
other rights holders, in whole or in part,
for one share of the company’s common stock.

	 
	Redemption of Rights:

	 	The company can redeem the rights at any
time prior to a public announcement that a
person has acquired ownership of 15% or more
of the company’s common stock.
	 
	 	 
	Expiration of Rights:

	 	The rights expire on the earliest of (1) May
20, 2021 or (2) the exchange or redemption
of the rights as described above.
	 
	 	 
	Amendment of Terms of Rights:

	 	The terms of the rights and the Stockholder
Rights Plan may be amended without the
consent of the rights holders at any time on
or prior to the Distribution Date. After the
Distribution Date, the terms of the rights
and the Stockholder Rights Plan may be
amended to make changes, which do not
adversely affect the rights of the rights
holders (other than the Acquiring Person).
	 
	 	 
	Voting Rights:

	 	The rights will not have any voting rights.
	 
	 	 
	Anti-dilution Provisions:

	 	The rights will have the benefit of certain
customary anti-dilution protections.








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