Document:

Exhibit 4.1  

        EXECUTION COPY 

Rights Agreement

Dated as of June 21, 2002,

By and Between

WASHINGTON GROUP INTERNATIONAL, INC.

and

Wells Fargo Bank Minnesota, National Association,

as Rights Agent  

   TABLE OF CONTENTS  

	1.	 	Certain Definitions	 	1
	2.	 	Appointment of Rights Agent	 	4
	3.	 	Issue of Right Certificates	 	4
	4.	 	Form of Right Certificates	 	6
	5.	 	Countersignature and Registration	 	6
	6.	 	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	 	6
	7.	 	Exercise of Rights; Purchase Price; Expiration Date of Rights	 	7
	8.	 	Cancellation and Destruction of Right Certificates	 	8
	9.	 	Company Covenants Concerning Securities and Rights	 	8
	10.	 	Record Date	 	9
	11.	 	Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights	 	10
	12.	 	Certificate of Adjusted Purchase Price or Number of Securities	 	16
	13.	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	 	17
	14.	 	Fractional Rights and Fractional Securities	 	19
	15.	 	Rights of Action	 	20
	16.	 	Agreement of Rights Holders	 	20
	17.	 	Right Certificate Holder Not Deemed a Stockholder	 	21
	18.	 	Concerning the Rights Agent	 	21
	19.	 	Merger or Consolidation or Change of Name of Rights Agent	 	21
	20.	 	Duties of Rights Agent	 	22
	21.	 	Change of Rights Agent	 	23
	22.	 	Issuance of New Right Certificates	 	24
	23.	 	Redemption	 	24
	24.	 	Exchange	 	25
	25.	 	Notice of Certain Events	 	26
	26.	 	Notices	 	26
	27.	 	Supplements and Amendments	 	27
	28.	 	Successors; Certain Covenants	 	27
	29.	 	Benefits of This Agreement	 	27
	30.	 	Governing Law	 	28
	31.	 	Severability	 	28
	32.	 	Descriptive Headings, Etc	 	28
	33.	 	Determinations and Actions by the Board	 	28
	34.	 	Counterparts	 	28
	Exhibit A	 	A-1
	Exhibit B	 	B-1
	Exhibit C	 	C-1

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RIGHTS AGREEMENT  

        This RIGHTS AGREEMENT, dated as of June 21, 2002 (this "Agreement"), is made and entered into by and
between Washington Group International, Inc., a Delaware corporation (the "Company"), and Wells Fargo Bank Minnesota, National Association, as
Rights Agent (the "Rights Agent"). 

RECITALS  

        WHEREAS, on June 21, 2002, the Board of Directors of the Company authorized and declared a dividend distribution of one right (a
"Right") for each share of Common Stock, par value $0.01 per share, of the Company (a "Common Share")
outstanding as of the Close of Business (as hereinafter defined) on July 15, 2002 (the "Record Date"), each Right initially representing the
right to purchase one one-hundredth of a Preferred Share (as hereinafter defined), on the terms and subject to the conditions herein set forth, and further authorized and directed the
issuance of one Right (subject to adjustment as provided herein) with respect to each Common Share issued or delivered by the Company (whether originally issued or delivered from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution Date (as hereinafter defined) and the Expiration Date (as hereinafter defined) or as provided in Section 22. 

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

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

        (a)  "Acquiring Person" means any Person (other than the Company, any Related Person, any Person that has reported or is
permitted to report ownership of less than 20% of the Company's then-outstanding Common Shares on Schedule 13G under the Exchange Act
("Schedule 13G") or any successor report, but only for such time as such Person is permitted to report its ownership of the Company's Common
Shares on Schedule 13G (a "13G Filer") or Washington (as hereinafter defined) (unless and until Washington, together with his Affiliates and
Associates, shall have become the Beneficial Owner of more than 40% of the then-outstanding Common Shares, at which time Washington shall be an Acquiring Person)) who or which, together
with all Affiliates and Associates of such Person, is the Beneficial Owner of 15% or more of the then-outstanding Common Shares; provided,  however, that a
Person (other than the Company, any Related Person, a 13G Filer or Washington) that or which, together with all Affiliates and
Associates of such Person, is as of the Record Date the Beneficial Owner of 15% or more of the then-outstanding Common Shares shall not be deemed to have become
an Acquiring Person unless and until such time as (A) such Person or any Affiliate or Associate of such Person thereafter becomes the Beneficial Owner of additional Common Shares representing
1% or more of the then-outstanding Common Shares other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Common
Shares are treated equally or (B) any other Person who is the Beneficial Owner of Common Shares representing 1% or more of the then-outstanding Common Shares thereafter becomes an
Affiliate or Associate of such Person and provided, further,  however, that a Person will not be deemed to
have become an Acquiring Person solely as a result of a reduction in the number of Common Shares
outstanding unless and until such time as (i) such Person or any Affiliate or Associate of such Person thereafter becomes the Beneficial Owner of additional Common Shares representing 1% or
more of the then-outstanding Common Shares, other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Common Shares are
treated equally, or (ii) any other Person who is the Beneficial Owner of Common Shares representing 1% or more of the then-outstanding Common Shares thereafter becomes an Affiliate
or Associate of such Person. Notwithstanding the foregoing, if the Board of the Company determines in good faith that a Person who would otherwise be an "Acquiring Person" as defined pursuant to the
foregoing provisions of this Section 1(a), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring 

 

Person" as defined pursuant to the foregoing provisions of this Section 1(a), then such Person shall not be deemed to be an "Acquiring Person" for any purposes of this Agreement. 

        (b)  "Affiliate" and "Associate" will have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Agreement,  provided however, that a Person
will not be deemed to be the Affiliate or Associate of another Person solely because either or both Persons are or were
Directors of the Company. 

        (c)  A
Person will be deemed the "Beneficial Owner" of, and to "Beneficially
Own," any securities: 

        (i)    the
beneficial ownership of which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange
rights, warrants, options or other rights (in each case, other than upon exercise or exchange of the Rights); provided,  however, that a Person will not be
deemed the Beneficial Owner of, or to Beneficially Own, 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 

        (ii)  which
such Person or any of such Person's Affiliates or Associates, directly or indirectly, has or shares the right to vote or dispose of, including pursuant to any
agreement, arrangement or understanding (whether or not in writing); or 

        (iii)  of
which any other Person is the Beneficial Owner, if such Person or any of such Person's Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) with such other Person (or any of such other Person's Affiliates or Associates) with respect to acquiring, holding, voting or disposing of any securities of the Company; 

provided, however, that a Person will not be deemed the Beneficial Owner of, or to Beneficially Own, any
security (A) if such Person has the right to vote such security pursuant to an agreement, arrangement or understanding (whether or not in writing) which (1) arises solely from a
revocable proxy 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), (B) if such beneficial ownership arises solely as a result of such
Person's status as a "clearing agency," as defined in Section 3(a)(23) of the Exchange Act, or (C) if such beneficial ownership arises solely as a result of such Person's status as a
disbursing agent for the holders of claims pursuant to the Company's Second Amended Joint Plan of Reorganization, as modified and confirmed by the United States Bankruptcy Court for the District of
Nevada; provided further, however, that nothing in this paragraph (c) will cause a Person engaged
in business as an underwriter of securities to be the Beneficial Owner of, or to Beneficially Own, any securities acquired through such Person's participation in good faith in an underwriting
syndicate until the expiration of 40 calendar days after the date of such acquisition, or such later date as the Directors of the Company may determine in any specific case. 

        (d)  "Business Day" means any day other than a Saturday, Sunday or a day on which banking institutions in the State of New
York (or such other state in which the principal office of the Rights Agent is located) are authorized or obligated by law or executive order to close. 

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        (e)  "Close of Business" on any given date means 5:00 p.m., Eastern time, on such date;  provided, however, that if
such date is not a Business Day it means 5:00 p.m., Eastern time, on
the next succeeding Business Day. 

        (f)    "Common Shares" when used with reference to the Company means the shares of Common Stock, par value $0.01 per share, of
the Company; provided, however, that if the Company is the continuing or surviving corporation in a
transaction described in Section 13(a)(ii), "Common Shares" when used with reference to the Company means shares of the capital stock or units of the equity interests with the greatest
aggregate voting power of the Company. "Common Shares" when used with reference to any corporation or other legal entity other than the Company, including an Issuer, means shares of the
capital stock or units of the equity interests with the greatest aggregate voting power of such corporation or other legal entity. 

        (g)  "Company" means Washington Group International, Inc., a Delaware corporation. 

        (h)  "Distribution Date" means the earlier of: (i) the Close of Business on the tenth calendar day following the Share
Acquisition Date, or (ii) the Close of Business on the tenth Business Day (or, unless the Distribution Date shall have previously occurred, such later date as may be specified by the Board of
Directors of the Company) after the commencement of a tender or exchange offer by any Person (other than the Company or any Related Person), if upon the consummation thereof such Person would be an
Acquiring Person. 

        (i)    "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        (j)    "Expiration Date" means the earliest of (i) the Close of Business on the Final Expiration Date, (ii) the
time at which the Rights are redeemed as provided in Section 23, and (iii) the time at which all exercisable Rights are exchanged as provided in Section 24. 

        (k)  "Final Expiration Date" means the tenth anniversary of the Record Date. 

        (l)    "Flip-in Event" means any event described in clauses (A), (B) or (C) of
Section 11(a)(ii). 

        (m)  "Flip-over Event" means any event described in clauses (i), (ii) or (iii) of
Section 13(a). 

        (n)  "Issuer" has the meaning set forth in Section 13(b). 

        (o)  "Nasdaq" means The Nasdaq Stock Market. 

        (p)  "Person" means any individual, firm, corporation or other legal entity, and includes any successor (by merger or
otherwise) of such entity. 

        (q)  "Preferred Shares" means shares of Series A Junior Participating Preferred Stock, par value $0.01 per share, of
the Company having the rights and preferences set forth in the form of Certificate of Designation of Series A Junior Participating Preferred Stock attached as  Exhibit A. 

        (r)  "Purchase Price" means initially $125.00 per one one-hundredth of a Preferred Share, subject to adjustment
from time to time as provided in this Agreement. 

        (s)  "Record Date" has the meaning set forth in the Recitals to this Agreement. 

        (t)    "Redemption Price" means $.01 per Right, subject to adjustment by resolution of the Board of Directors of the Company to
reflect any stock split, stock dividend or similar transaction occurring after the Record Date. 

        (u)  "Related Person" means (i) any Subsidiary of the Company or (ii) any employee benefit or stock ownership
plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan. 

        (v)  "Right" has the meaning set forth in the Recitals to this Agreement. 

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        (w)  "Right Certificates" means certificates evidencing the Rights, in substantially the form attached as  Exhibit B. 

        (x)  "Rights Agent" means Wells Fargo Bank Minnesota, National Association, unless and until a successor Rights Agent has
become such pursuant to the terms of this Agreement, and thereafter, "Rights Agent" means such successor Rights Agent. 

        (y)  "Securities Act" means the Securities Act of 1933, as amended. 

        (z)  "Share Acquisition Date" means the first date of public announcement by the Company (by press release, filing made with
the Securities and Exchange Commission or otherwise) that an Acquiring Person has become such. 

        (aa) "Subsidiary" when used with reference to any Person means any corporation or other legal entity of which a majority of
the voting power of the voting equity securities or equity interests is owned, directly or indirectly, by such Person; provided,  however, that for purposes
of Section 13(b), "Subsidiary" when used with reference to any Person means any corporation or other legal entity of
which at least 20% of the voting power of the voting equity securities or equity interests is owned, directly or indirectly, by such Person. 

        (bb) "Trading Day" means any day on which the principal national securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the Common Shares are not listed or admitted to trading on any national securities exchange, a Business Day. 

        (cc) "Triggering Event" means any Flip-in Event or Flip-over Event. 

        (dd) "Washington" means Mr. Dennis R. Washington or any trust or foundation created by (or on behalf of) and solely
for the benefit of Mr. Dennis R. Washington, and includes the estate of Mr. Dennis R. Washington. 

        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, will also be, prior to the Distribution Date, the holders of the Common Shares) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment and hereby certifies that it complies with the requirements of the New York Stock Exchange governing transfer agents and registrars. The Company may from
time to time act as Co-Rights Agent or appoint such Co-Rights Agents as it may deem necessary or desirable. Any actions which may be taken by the Rights Agent pursuant to the
terms of this Agreement may be taken by any such Co-Rights Agent. To the extent that any Co-Rights Agent takes any action pursuant to this Agreement, such Co-Rights
Agent will be entitled to all of the rights and protections of, and subject to all of the applicable duties and obligations imposed upon, the Rights Agent pursuant to the terms of this Agreement. 

        3.    Issue of Right Certificates. (a) Until the Distribution Date, (i) the Rights will be evidenced by the
certificates representing Common Shares registered in the names of the record holders thereof (which certificates representing Common Shares will also be deemed to be Right Certificates),
(ii) the Rights will be transferable only in connection with the transfer of the underlying Common Shares, and (iii) the surrender for transfer of any certificates evidencing Common
Shares in respect of which Rights have been issued will also constitute the transfer of the Rights associated with the Common Shares evidenced by such certificates. On or as promptly as practicable
after the Record Date, the Company will send by first class, postage prepaid mail, to each record holder of Common Shares as of the Close of Business on the Record Date, at the address of such holder
shown on the records of the Company as of such date, a copy of a Summary of Rights to Purchase Preferred Stock in substantially the form attached as  Exhibit C. 

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        (b)  Rights
will be issued by the Company in respect of all Common Shares (other than Common Shares issued upon the exercise or exchange of any Right) issued or delivered by
the Company (whether originally issued or delivered from the Company's treasury) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares will have stamped on, impressed on, printed on, written on, or otherwise affixed to them the following legend or such similar legend as the Company may deem appropriate
and as is 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 transaction reporting system on which the Common Shares may from time to time be listed or quoted, or to conform to usage: 

This
Certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Rights Agreement between Washington Group International, Inc. and Wells Fargo Bank Minnesota,
National Association, dated as of June 21, 2002 (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 Washington Group International, Inc. The Rights are not exercisable prior to the occurrence of certain events specified in the
Rights Agreement. Under certain circumstances, as set forth in the Rights Agreement, such Rights may be redeemed, may be exchanged, may expire, may be amended, or may be evidenced by separate
certificates and no longer be evidenced by this Certificate. Washington Group International, Inc. will mail to the holder of this Certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge promptly after receipt of a written request therefor. Under certain circumstances as set forth in the Rights Agreement, Rights that are or were beneficially owned by an
Acquiring Person or any Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement) may become null and void. 

        (c)  Any
Right Certificate issued pursuant to this Section 3 that represents Rights beneficially owned by an Acquiring Person or any Associate or Affiliate thereof and
any Right Certificate issued at any time upon the transfer of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate
and any Right Certificate issued pursuant to Section 6 or 11 hereof upon transfer, exchange, replacement or adjustment of any other Right Certificate referred to in this sentence, shall be
subject to and contain the following legend or such similar legend as the Company may deem appropriate and as is 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 on which the Rights may from time to time be listed, or to conform to
usage: 

The
Rights represented by this Right Certificate are or were beneficially owned by a Person who was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). This Right Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 11(a)(ii) or
Section 13 of the Rights Agreement. 

        (d)  As
promptly as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign and the Company will send or cause to be
sent (and the Rights Agent will, if requested, send), by first class, insured, postage prepaid mail, to each record holder of Common Shares as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate evidencing one Right for each Common Share so held, subject to adjustment as provided herein. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right Certificates. 

5

  

        (e)  In
the event that the Company purchases or otherwise acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares will be deemed canceled and retired so that the Company will not be entitled to exercise any Rights associated with the Common Shares so purchased or acquired. 

        4.    Form of Right Certificates. The Right Certificates (and the form of election to purchase and the form of assignment
to be printed on the reverse thereof) will be substantially in the form attached as Exhibit Bwith such changes and 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 transaction reporting system on which the Rights may from
time to time be listed or quoted, or to conform to usage. Subject to the provisions of Section 22, the Right Certificates, whenever issued, on their face will entitle the holders thereof to
purchase such number of one one-hundredths of a Preferred Share as are set forth therein at the Purchase Price set forth therein, but the Purchase Price, the number and kind of securities
issuable upon exercise of each Right and the number of Rights outstanding will be subject to adjustment as provided herein. 

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

        (b)  Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at the principal office of the Rights Agent designated for such purpose and at such
other offices 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 any transaction
reporting system on which the Rights may from time to time be listed or quoted, books for registration and transfer of the Right Certificates issued
hereunder. Such books will show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date
of each of the Right Certificates. 

        6.    Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. (a) Subject to the provisions of Sections 7(d) and 14, at any time after the Close of Business on the Distribution Date and prior to the
Expiration Date, any Right Certificate or Right Certificates representing exercisable Rights may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths of a Preferred Share (or other securities, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange any such Right
Certificate or Rights Certificates must make such request in a writing delivered to the Rights Agent and must surrender the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent designated for 

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such purpose. Thereupon or as promptly as practicable thereafter, subject to the provisions of Sections 7(d) and 14, the Company will prepare, execute and deliver to the Rights Agent,
and the Rights Agent will countersign and deliver, a Right Certificate or Right 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 Right 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 Right Certificate and, in
case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, if requested by the Company, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will prepare, execute and deliver a new Right Certificate of
like tenor to the Rights Agent and the Rights Agent will countersign and deliver such new Right Certificate to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated. 

        7.    Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) The registered holder of any Right Certificate
may exercise the Rights evidenced thereby (except as otherwise provided herein) in whole or in part at any time after the Distribution Date and prior to the Expiration Date, upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the office or offices of the Rights Agent designated for such purpose,
together with payment in cash, in lawful money of the United States of America by certified check or bank draft payable to the order of the Company, equal to the sum of (i) the exercise price
for the total number of securities as to which such surrendered Rights are exercised and (ii) an amount equal to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with the provisions of Section 9(d). 

        (b)  Upon
receipt of a Right Certificate representing exercisable Rights with the form of election to purchase duly executed, accompanied by payment as described above, the
Rights Agent will promptly (i) requisition from any transfer agent of the Preferred Shares (or make available, if the Rights Agent is the transfer agent) certificates representing the number of
one one-hundredths of a Preferred Share to be purchased (and the Company hereby irrevocably authorizes and directs its transfer agent to comply with all such requests), or, if the Company
elects to deposit Preferred Shares issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (and the Company hereby irrevocably authorizes and directs such depositary agent to comply with all such requests),
(ii) after receipt of such certificates (or depositary receipts, as the case may be), cause the same to be delivered to or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder, (iii) when appropriate, requisition from the Company or any transfer agent therefor (or make available, if the Rights Agent
is the transfer agent) certificates representing the number of equivalent common shares to be issued in lieu of the issuance of Common Shares in accordance with the provisions of
Section 11(a)(iii), (iv) when appropriate, after receipt of such certificates, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder, (v) when appropriate, requisition from the Company the amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with the provisions of Section 14 or in lieu of the issuance of Common Shares in accordance with the provisions of Section 11(a)(iii), (vi) when appropriate,
after receipt, deliver such cash to or upon the order of the registered holder of such Right Certificate, and (vii) when appropriate, deliver any due bill or other instrument 

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provided to the Rights Agent by the Company for delivery to the registered holder of such Right Certificate as provided by Section 11(l). 

        (c)  In
case the registered holder of any Right Certificate exercises less than all the Rights evidenced thereby, the Company will prepare, execute and deliver a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised and the Rights Agent will countersign and deliver such new Right Certificate to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of Section 14. 

        (d)  Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company will be obligated to undertake any action with respect to any
purported transfer, split up, combination or exchange of any Right Certificate pursuant to Section 6 or exercise of a Right Certificate as set forth in this Section 7 unless the
registered holder of such Right Certificate has (i) completed and signed the certificate following the form of assignment or the form of election to purchase, as applicable, set forth on the
reverse side of the Right Certificate surrendered for such transfer, split up, combination, exchange or 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 may reasonably request. 

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

        9.    Company Covenants Concerning Securities and Rights. The Company covenants and agrees that: 

        (a)  It
will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or any Preferred Shares held in its treasury, a number of Preferred
Shares that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7. 

        (b)  So
long as the Preferred Shares (and, following the occurrence of a Triggering Event, Common Shares and/or other securities) issuable upon the exercise of the Rights may
be listed on a national securities exchange, or quoted on Nasdaq, it will endeavor to cause, from and after such time as the Rights become exercisable, all securities reserved for issuance upon the
exercise of Rights to be listed on such exchange, or quoted on Nasdaq, upon official notice of issuance upon such exercise. 

        (c)  It
will take all such action as may be necessary to ensure that all Preferred Shares (and, following the occurrence of a Triggering Event, Common Shares and/or other
securities) delivered upon exercise of Rights, at the time of delivery of the certificates for such securities, will be (subject to payment of the Purchase Price) duly authorized, validly issued,
fully paid and nonassessable securities. 

        (d)  It
will pay when due and payable any and all federal and state transfer taxes and charges that may be payable in respect of the issuance or delivery of the Right
Certificates and of any certificates representing securities issued upon the exercise of Rights; provided,  however, that the Company will not be required
to pay any transfer tax or charge which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of certificates or depositary receipts representing securities issued upon the exercise of Rights in a name other than that of, the
registered holder of the Right Certificate evidencing Rights 

8

 

surrendered for exercise, or to issue or deliver any certificates or depositary receipts representing securities issued upon the exercise of any Rights until any such tax or charge has been paid (any
such tax or charge being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company's reasonable satisfaction that no such tax is due. 

        (e)  It
will use its best efforts (i) to file on an appropriate form, as soon as practicable following the later of the Share Acquisition Date and the Distribution
Date, a registration statement under the Securities Act with respect to the securities issuable upon exercise of the Rights, (ii) to cause such registration statement to become effective as
soon as practicable after such filing, and (iii) to 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 longer exercisable for such securities and (B) the Expiration Date. 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. The Company may temporarily suspend, for a
period of time after the date set forth in clause (i) of the first sentence of this Section 9(e), the exercisability of the Rights in order to prepare and file such registration
statement and to permit it to become effective. Upon any such suspension, the Company will issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in effect. In addition, if the Company determines that a registration statement should be filed under the Securities Act or
any state securities laws following the Distribution Date, the Company may temporarily suspend the exercisability of the Rights in each relevant jurisdiction until such time as a registration
statement has been declared effective and, upon any such suspension, the Company will 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. Notwithstanding anything in this Agreement to the contrary, the Rights will not be exercisable in any jurisdiction if
the requisite registration or qualification in such jurisdiction has not been effected or the exercise of the Rights is not permitted under applicable law. 

        (f)    Notwithstanding
anything in this Agreement to the contrary, after the later of the Share Acquisition Date and the Distribution Date it will not take (or permit any
Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will eliminate or otherwise diminish the benefits intended to be afforded by the
Rights. 

        (g)  In
the event that the Company is obligated to issue other securities of the Company and/or pay cash pursuant to Section 11, 13, 14 or 24 it will make all
arrangements necessary so that such other securities and/or cash are available for distribution by the Rights Agent, if and when appropriate. 

        10.  Record Date. Each Person in whose name any certificate representing Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights will for all purposes be deemed to have become the holder of record of the Preferred Shares (or Common Shares and/or other
securities, as the case may be) represented thereby on, and such certificate will be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all 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 for the Preferred
Shares (or Common Shares and/or other securities, as the case may be) are closed, such Person will be deemed to have become the record holder of such securities on, and such certificate will be dated,
the next succeeding Business Day on which the transfer books of the Company for the Preferred Shares (or Common Shares and/or other securities, as the case may be) are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate will not be entitled to any rights of a holder of any security for which the Rights are or may become exercisable, including, 

9

 

without limitation, the right to vote, to receive dividends or other distributions, or to exercise any preemptive rights, and will not be entitled to receive any notice of any proceedings of the
Company, except as provided herein. 

        11.  Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights. The Purchase Price, the number and kind
of securities issuable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 

        (a)  (i) In
the event that the Company at any time after the Record Date (A) declares a dividend on the Preferred Shares payable in Preferred Shares,
(B) subdivides the outstanding Preferred Shares, (C) combines the outstanding Preferred Shares into a smaller number of Preferred Shares, or (D) issues 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),
except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or
reclassification and/or the number and/or kind of shares of capital stock issuable on such date upon exercise of a Right, will be proportionately adjusted so that the holder of any Right exercised
after such time is entitled to receive upon payment of the Purchase Price then in effect the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the transfer books of the Company for the Preferred Shares were open, the holder of such Right would have owned upon such exercise (and, in the case of a
reclassification, would have retained after giving effect to such reclassification) and would have been entitled to receive by virtue of such dividend, subdivision, combination or reclassification;  provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) or Section 13, the adjustment provided for in this Section 11(a)(i) will be in addition to, and will be made
prior to, any adjustment required pursuant to Section 11(a)(ii) or Section 13. 

        (ii)  Subject
to the provisions of Section 24, if: 

        (A)  any
Person becomes an Acquiring Person; or 

        (B)  any
Acquiring Person or any Affiliate or Associate of any Acquiring Person, directly or indirectly, (1) merges into the Company or otherwise combines with the
Company and the Company is the continuing or surviving corporation of such merger or combination (other than in a transaction subject to Section 13), (2) merges or otherwise combines
with any Subsidiary of the Company, (3) in one or more transactions (otherwise than in connection with the exercise, exchange or conversion of securities exercisable or exchangeable for or
convertible into shares of any class of capital stock of the Company or any of its Subsidiaries) transfers cash, securities or any other property to the Company or any of its Subsidiaries in exchange
(in whole or in part) for shares of any class of capital stock of the Company or any of its Subsidiaries or for securities exercisable or exchangeable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries, or otherwise obtains from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class of capital
stock of the Company or any of its Subsidiaries or securities exercisable or exchangeable for or convertible into shares of any class of capital stock of the Company or any of its Subsidiaries
(otherwise than as part of a pro rata distribution to all holders of shares of any class of capital stock of the Company, or any of its Subsidiaries), (4) sells, purchases, leases, exchanges,
mortgages, pledges, transfers
or otherwise disposes (in one or more transactions) to, from, with or of, as the case may be, the Company or any of its 

10

 

Subsidiaries (otherwise than in a transaction subject to Section 13), any property, including securities, on terms and conditions less favorable to the Company than the Company would be able
to obtain in an arm's-length transaction with an unaffiliated third party, (5) receives any compensation from the Company or any of its Subsidiaries other than compensation as a director or a
regular full-time employee, in either case at rates consistent with the Company's (or its Subsidiaries') past practices, or (6) receives the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its
Subsidiaries; or 

        (C)  during
such time as there is an Acquiring Person, there is any reclassification of securities of the Company (including any reverse stock split), or any recapitalization
of the Company, or any merger or consolidation of the Company with any of its Subsidiaries, or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether
or not with or into or otherwise involving an Acquiring Person), other than a transaction subject to Section 13, which has the effect, directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries, or of securities exercisable or exchangeable for or convertible into equity
securities of the Company or any of its Subsidiaries, of which an Acquiring Person, or any Affiliate or Associate of any Acquiring Person, is the Beneficial Owner; 

then,
and in each such case, from and after the latest of the Distribution Date, the Share Acquisition Date and the date of the occurrence of such Flip-in Event, proper provision will be
made so that each holder of a Right, except as provided below, will thereafter have the right to receive, upon exercise thereof in accordance with the terms of this Agreement at an exercise price per
Right equal to the product of the then-current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately
prior to the date of the occurrence of such Flip-in Event (or, if any other Flip-in Event shall have previously occurred, the product of the then-current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the first occurrence of a Flip-in
Event), in lieu of Preferred Shares, such number of Common Shares as equals the result obtained by (x) multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the occurrence of such Flip-in Event (or, if any other
Flip-in Event shall have previously occurred, multiplying the then-current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right
was exercisable immediately prior to the date of the first occurrence of a Flip-in Event), and dividing that product by (y) 50% of the current per share market price of the Common
Shares (determined pursuant to Section 11(d)) on the date of the occurrence of such Flip-in Event. Notwithstanding anything in this Agreement to the contrary, from and after the
first occurrence of a Flip-in Event, any Rights that are Beneficially Owned by (A) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (B) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the occurrence of a Flip-in Event, or (C) a transferee of any Acquiring Person
(or any such Affiliate or Associate) who became a transferee prior to or concurrently with the occurrence of a Flip-in Event pursuant to either (1) a transfer from an Acquiring
Person to holders of its equity securities or to any Person with whom it has any continuing agreement, arrangement or understanding regarding the transferred Rights or (2) a transfer which the
Directors of the Company have determined
is part of a plan, arrangement or understanding which has the purpose or effect of avoiding the provisions of this Section 11(a)(ii), and subsequent transferees of any of such Persons, will be
void without any further action and any holder of such Rights will thereafter have no rights whatsoever with respect to such Rights under any provision of this Agreement. The Company will use all
reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but will have no liability 

11

 

to any holder of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. Upon the occurrence of a Flip-in Event, no Right Certificate that represents Rights that are or have become void pursuant to the provisions of this
Section 11(a)(ii) will thereafter be issued pursuant to Section 3 or Section 6, and any Right Certificate delivered to the Rights Agent that represents Rights that are or
have become void pursuant to the provisions of this Section 11(a)(ii) will be canceled. Upon the occurrence of a Flip-over Event, any Rights that shall not have been
previously exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only pursuant to Section 13 and not pursuant to this Section 11(a)(ii). 

        (iii)  Upon
the occurrence of a Flip-in Event, if there are not sufficient Common Shares authorized but unissued or issued but not outstanding to permit the
issuance of all the Common Shares issuable in accordance with Section 11(a)(ii) upon the exercise of a Right, the Board of Directors of the Company will use its best efforts promptly to
authorize and, subject to the provisions of Section 9(e), make available for issuance additional Common Shares or other equity securities of the Company having equivalent voting rights and an
equivalent value (as determined in good faith by the Board of Directors of the Company) to the Common Shares (for purposes of this Section 11(a)(iii), "equivalent common
shares"). In the event that equivalent common shares are so authorized, upon the exercise of a Right in accordance with the provisions of Section 7, the registered
holder will be entitled to receive (A) Common Shares, to the extent any are available, and (B) a number of equivalent common shares, which the Board of Directors of the Company has
determined in good faith to have a value equivalent to the excess of (x) the aggregate current per share market value on the date of the occurrence of the most recent Flip-in Event
of all the Common Shares issuable in accordance with Section 11(a)(ii) upon the exercise of a Right (the "Exercise Value") over
(y) the aggregate current per share market value on the date of the occurrence of the most recent Flip-in Event of any Common Shares available for issuance upon the exercise of such
Right; provided, however, that if at any time after 90 calendar days after the latest of the
Share Acquisition Date, the Distribution Date and the date of the occurrence of the most recent Flip-in Event, there are not sufficient Common Shares and/or equivalent common shares
available for issuance upon the exercise of a Right, then the Company will be obligated to deliver, upon the surrender of such Right and without requiring payment of the Purchase Price, Common Shares
(to the extent available), equivalent common shares (to the extent available) and then cash (to the extent permitted by applicable law and any agreements or instruments to which the Company is a party
in effect immediately prior to the Share Acquisition Date), which securities and cash have an aggregate value equal to the excess of (1) the Exercise Value over (2) the product of the
then-current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the
occurrence of the most recent Flip-in Event (or, if any other Flip-in Event shall have previously occurred, the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which a Right would have been exercisable immediately prior to the date of the occurrence of such
Flip-in Event if no other Flip-in Event had previously occurred). To the extent that any legal or contractual restrictions prevent the Company from paying the full amount of
cash payable in accordance with the foregoing sentence, the Company will pay to holders of the Rights as to which such payments are being made all amounts which are not then restricted on a pro rata
basis and will continue to make payments on a pro
rata basis as promptly as funds become available until the full amount due to each such Rights holder has been paid. 

12

  

        (b)  In
the event that the Company fixes a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Shares (or securities having equivalent rights, privileges and preferences as the Preferred
Shares (for purposes of this Section 11(b), "equivalent preferred shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into Preferred Shares or equivalent preferred shares)
less than the current per share market price of the Preferred Shares (determined pursuant to Section 11(d)) on such record date, the Purchase Price to be in effect after such record date will
be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which is the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase at such current per share market price and the denominator of which is the number of Preferred Shares outstanding on
such record date plus the number of additional Preferred Shares and/or equivalent preferred shares to be offered for subscription or purchase (or into which the convertible securities so to be offered
are initially convertible); provided, however, that in no event 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 issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part
or all of which is in a form other than cash, the value of such consideration will be as determined in good faith by the Board of Directors of the Company, whose determination will be described in a
statement filed with the Rights Agent. Preferred Shares owned by or held for the account of the Company will not be deemed outstanding for the purpose of any such computation. Such adjustment will be
made successively whenever such a record date is fixed, and in the event that such rights, options or warrants are not so issued, the Purchase Price will be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed. 

        (c)  In
the event that the Company fixes a record date for the making of a distribution to all holders of Preferred Shares (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend), assets, stock (other
than a dividend payable in Preferred Shares) or subscription rights, options or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record
date will be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which is the current per share market price of the Preferred
Shares (as determined pursuant to Section 11(d)) on such record date or, if earlier, the date on which Preferred Shares begin to trade on an ex-dividend or when issued basis for
such distribution, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent)
of the portion of the evidences of indebtedness, cash, assets or stock so to be distributed or of such subscription rights, options or warrants applicable to one Preferred Share, and the denominator
of which is such current per share market price of the Preferred Shares; 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 issuable upon exercise of one Right. Such adjustments will be made successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price will again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 

        (d)  (i) For
the purpose of any computation hereunder, the "current per share market price" of Common Shares on any
date will be deemed to be the average of the daily closing prices per share 

13

 

of such Common Shares for the 30 consecutive Trading Days immediately prior to such date; provided,  however, that in the event that the current per share
market price of the Common Shares is determined during a period following the announcement by the
issuer of such Common Shares of (A) a dividend or distribution on such Common Shares payable in such Common Shares or securities convertible into such Common Shares (other than the Rights) or
(B) any subdivision, combination or reclassification of such Common Shares, and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price will be appropriately adjusted to take into
account ex-dividend trading or to reflect the current per share market price per Common Share equivalent. The closing price for each day will 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 Common Shares are 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 Common Shares are listed or admitted to trading or, if
the Common Shares are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use, or, if on any such date the Common Shares are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Shares selected by the Board of Directors of the Company. If the Common Shares are not
publicly held or not so listed or traded, or are not the subject of available bid and asked quotes, "current per share market price" will mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent. 

        (ii)  For
the purpose of any computation hereunder, the "current per share market price" of the Preferred Shares will be
determined in the same manner as set forth above for Common Shares in Section 11(d)(i), other than the last sentence thereof. If the current per share market price of the Preferred Shares
cannot be determined in the manner provided above, the "current per share market price" of the Preferred Shares will be conclusively deemed to be an amount equal to the current per share market price
of the Common Shares multiplied by one hundred (as such number may be appropriately adjusted to reflect events such as stock splits, stock dividends, recapitalizations or similar transactions relating
to the Common Shares occurring after the date of this Agreement). If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, or the subject of available bid and
asked quotes, "current per share market price" of the Preferred Shares will mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination will
be described in a statement filed with the Rights Agent. For all purposes of this Agreement, the current per share market price of one one-hundredth of a Preferred Share will be equal to
the current per share market price of one Preferred Share divided by one hundred. 

        (e)  Except
as set forth below, no adjustment in the Purchase Price will be required unless such adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this Section 11(e) are not
required to be made will be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 will be made to the nearest cent or to the nearest one
one-millionth of a Preferred Share or one ten-thousandth of a Common Share or other security, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 

14

 

will be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment and (ii) the Expiration Date. 

        (f)    If
as a result of an adjustment made pursuant to Section 11(a), the holder of any Right thereafter exercised becomes entitled to receive any securities of the
Company other than Preferred Shares, thereafter the number and/or kind of such other securities so receivable upon exercise of any Right (and/or the Purchase Price in respect thereof) will 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 (and the Purchase Price in respect thereof)
contained in this Section 11, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares (and the Purchase Price in respect thereof) will apply on like terms
to any such other securities (and the Purchase Price in respect thereof). 

        (g)  All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder will evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a Preferred Share issuable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided
herein. 

        (h)  Unless
the Company has exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price pursuant to Section 11(b) or
Section 11(c), each Right outstanding immediately prior to the making of such adjustment will thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a Preferred Share (calculated to the nearest one one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a Preferred Share issuable upon exercise of a Right immediately prior to such adjustment of the Purchase Price by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. 

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

15

 

        (j)    Without
respect to any adjustment or change in the Purchase Price and/or the number and/or kind of securities issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number and kind of securities which were expressed in the initial Right Certificate issued hereunder. 

        (k)  Before
taking any action that would cause an adjustment reducing the Purchase Price below one one-hundredth of the then par value, if any, of the Preferred
Shares or below the then par value, if any, of any other securities of the Company issuable upon exercise of the Rights, the Company will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable Preferred Shares or such other securities, as the case may be, at such adjusted Purchase
Price. 

        (l)    In
any case in which this Section 11 otherwise requires that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of Preferred Shares or other securities of the
Company, if any, issuable upon such exercise over and above the number of Preferred Shares or other securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company delivers to such holder a due bill
or other appropriate instrument evidencing such holder's right to receive such additional Preferred Shares or other securities upon the occurrence of the event requiring such adjustment. 

        (m)  Notwithstanding
anything in this Agreement to the contrary, the Company will be entitled to make such reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in its good faith judgment the Board of Directors of the Company determines to be advisable in order that any
(i) consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for cash of Preferred Shares at less than the current per share market price therefor,
(iii) issuance wholly for cash of Preferred Shares or securities which by their terms are convertible into or exchangeable for Preferred Shares, (iv) stock dividends, or
(v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred Shares is not taxable to such stockholders. 

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

        12.  Certificate of Adjusted Purchase Price or Number of Securities. Whenever an adjustment is made as provided in
Section 11 or Section 13, the Company will 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 and the Common Shares a copy of such certificate, and (c) if such adjustment is made after the
Distribution Date, mail a brief summary of such adjustment to each holder of a Right Certificate in accordance with Section 26. 

16

   
        13.  Consolidation, Merger or Sale or Transfer of Assets or Earning Power. (a) In the event that: 

        (i)    at
any time after a Person has become an Acquiring Person, the Company consolidates with, or merges with or into, any other Person and the Company is not the continuing
or surviving corporation of such consolidation or merger; or 

        (ii)  at
any time after a Person has become an Acquiring Person, any Person consolidates with the Company, or merges with or into the Company, and the Company is the
continuing or surviving corporation of such merger or consolidation and, in connection with such merger or consolidation, all or part of the Common Shares is changed into or exchanged for stock or
other securities of any other Person or cash or any other property; or 

        (iii)  at
any time after a Person has become an Acquiring Person, the Company, directly or indirectly, sells or otherwise transfers (or one or more of its Subsidiaries sells
or otherwise transfers), in one or more transactions, assets or earning power (including without limitation securities creating any obligation on the part of the Company and/or any of its
Subsidiaries) representing in the aggregate more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons other than the Company or one
or more of its wholly owned Subsidiaries; 

then,
and in each such case, proper provision will be made so that from and after the latest of the Share Acquisition Date, the Distribution Date and the date of the occurrence of such
Flip-over Event (A) each holder of a Right thereafter has the right to receive, upon the exercise thereof in accordance with the terms of this Agreement at an exercise price per
Right equal to the product of the then-current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately
prior to the Share Acquisition Date, such number of duly authorized, validly issued, fully paid, nonassessable and freely tradeable Common Shares of the Issuer, free and clear of any liens,
encumbrances and other adverse claims and not subject to any rights of call or first refusal, as equals the result obtained by (x) multiplying the then-current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a Right is exercisable immediately prior to the Share Acquisition Date and dividing that product by (y) 50% of the
current per share market price of the Common Shares of the Issuer (determined pursuant to Section 11(d)), on the date of the occurrence of such Flip-over Event; (B) the
Issuer will thereafter be liable for, and will assume, by virtue of the occurrence of such Flip-over Event, all the obligations and duties of the Company pursuant to this Agreement;
(C) the term "Company" will thereafter be deemed to refer to the Issuer; and (D) the Issuer will take such steps (including without
limitation the reservation of a sufficient number of its Common Shares to permit the exercise of all outstanding Rights) in connection with such
consummation as may be necessary to assure that the provisions hereof are thereafter applicable, as nearly as reasonably may be possible, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights. 

        (b)  For
purposes of this Section 13, "Issuer" means (i) in the case of any Flip-over Event
described in Sections 13(a)(i) or (ii) above, the Person that is the continuing, surviving, resulting or acquiring Person (including the Company as the continuing or surviving
corporation of a transaction described in Section 13(a)(ii) above), and (ii) in the case of any Flip-over Event described in Section 13(a)(iii) above,
the Person that is the party receiving the greatest portion of the assets or earning power (including without limitation securities creating any obligation on the part of the Company and/or any of its
Subsidiaries) transferred pursuant to such transaction or transactions; provided, however, that, in any
such case, (A) if (1) no class of equity security of such Person is, at the time of such merger, consolidation or transaction and has been continuously over the preceding
12-month period, registered pursuant to Section 12 of the Exchange Act, and (2) such Person is a Subsidiary, directly or indirectly, of another Person, a class of equity
security of which is and has been so registered, the term "Issuer" means such other Person; and (B) in 

17

 

case such Person is a Subsidiary, directly or indirectly, of more than one Person, a class of equity security of two or more of which are and have been so registered, the term "Issuer" means
whichever of such Persons is the issuer of the equity security having the greatest aggregate market value. Notwithstanding the foregoing, if the Issuer in any of the Flip-over Events
listed above is not a corporation or other legal entity having outstanding equity securities, then, and in each such case, (x) if the Issuer is directly or indirectly wholly owned by a
corporation or other legal entity having outstanding equity securities, then all references to Common Shares of the Issuer will be deemed to be references to the Common Shares of the corporation or
other legal entity having outstanding equity securities which ultimately controls the Issuer, and (y) if there is no such corporation or other legal entity having outstanding equity securities,
(I) proper provision will be made so that the Issuer creates or otherwise makes available for purposes of the exercise of the Rights in accordance with the terms of this Agreement, a kind or
kinds of security or securities having a fair market value at least equal to the economic value of the Common Shares which each holder of a Right would have been entitled to receive if the Issuer had
been a corporation or other legal entity having outstanding equity securities; and (II) all other provisions of this Agreement will apply to the issuer of such securities as if such securities
were Common Shares. 

        (c)  The
Company will not consummate any Flip-over Event if, (i) at the time of or immediately after such Flip-over Event, there are or would
be any rights, warrants, instruments or securities outstanding or any agreements or arrangements in effect which would eliminate or substantially diminish the benefits intended to be afforded by the
Rights, (ii) prior to, simultaneously with or immediately after such Flip-over Event, the stockholders of the Person who constitutes, or would constitute, the Issuer for purposes of
Section 13(a) 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 the organization of the
Issuer would preclude or limit the exercisability of the Rights. In addition, the Company will not consummate any Flip-over Event unless the Issuer has a sufficient number of authorized
Common Shares (or other securities as contemplated in Section 13(b) above) which 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 to such consummation the Company and the Issuer have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth
in subsections (a) and (b) of this Section 13 and
further providing that as promptly as practicable after the consummation of any Flip-over Event, the Issuer will: 

        (A)  prepare
and file a registration statement under the Securities Act with respect to the Rights and the securities issuable upon exercise of the Rights on an
appropriate form, and use its best efforts to cause such registration statement to (1) become effective as soon as practicable after such filing and (2) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date; 

        (B)  take
all 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; and 

        (C)  deliver
to holders of the Rights historical financial statements for the Issuer and each of its Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act. 

        (d)  The
provisions of this Section 13 will similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a
Flip-over Event occurs at any time after the occurrence of a Flip-in Event, except for Rights that have become void pursuant to Section 11(a)(ii), Rights that shall not
have been previously exercised will cease to be exercisable 

18

 

in the manner provided in Section 11(a)(ii) and will thereafter be exercisable in the manner provided in Section 13(a). 

        14.  Fractional Rights and Fractional Securities. (a) The Company will not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, the Company will pay as promptly as practicable to the registered holders of the Right
Certificates with regard to which such fractional Rights otherwise would be issuable, an amount in cash equal to the same fraction of the current market value of one Right. For the purposes of this
Section 14(a), the current market value of one Right is the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights otherwise would have
been issuable. The closing price for any day is 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 Rights are 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 Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by Nasdaq or such other system then in use, or, if on any such date the
Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If the Rights are not publicly held or are not so listed or traded, or are not the subject of available bid and asked quotes, the current market value of one Right
will mean the fair value thereof as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent. 

        (b)  The
Company will not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a
Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-hundredth 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 provides that the holders of such depositary
receipts 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-hundredth of a Preferred Share, the Company may pay to any Person to whom or which such fractional Preferred Shares would
otherwise be issuable an amount in cash equal to the same fraction of the current market value of one Preferred Share. For purposes of this Section 14(b), the current market value of one
Preferred Share is the closing price of the Preferred Shares (as determined in the same manner as set forth for Common Shares in the second sentence of Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise; provided, however, that if the closing price of the
Preferred Shares cannot be so determined, the closing price of the Preferred Shares for such Trading Day will be conclusively deemed to be an amount equal to the closing price of the Common Shares
(determined pursuant to the second sentence of Section 11(d)(i)) for such Trading Day multiplied by one hundred (as such number may be appropriately adjusted to reflect events such as stock
splits, stock dividends, recapitalizations or similar transactions relating to the Common Shares occurring after the date of this Agreement); provided
further, however, that if neither the Common Shares nor the Preferred Shares are publicly held or listed or admitted to trading
on any national securities exchange, or the subject of available bid and asked quotes, the current market value of one Preferred Share will mean the fair value 

19

 

thereof as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent. 

        (c)  Following
the occurrence of a Triggering Event, the Company will not be required to issue fractions of Common Shares or other securities issuable upon exercise or
exchange of the Rights or to distribute certificates which evidence any such fractional securities. In lieu of issuing any such fractional securities, the Company may pay to any Person to whom or
which such fractional securities would otherwise be issuable an amount in cash equal to the same fraction of the current market value of one such security. For purposes of this Section 14(c),
the current market value of one Common Share or other security issuable upon the exercise or exchange of Rights is the closing price thereof (as determined in the same manner as set forth for Common
Shares in the second sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date of such exercise or exchange; provided,  however,
that if neither the Common Shares nor any such other securities are publicly held or listed or admitted to trading on any national securities
exchange, or the subject of available bid and asked quotes, the current market value of one Common Share or such other security will mean the fair value thereof as determined in good faith by the
Board of Directors of the Company, whose determination will mean the fair value thereof as will be described in a statement filed with the Rights Agent. 

        15.  Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights
Agent under Section 18, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the holder of any Common Shares), may in his own behalf and for his 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 right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations under this Agreement, 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 are transferable only in connection with the transfer of the Common Shares; 

        (b)  After
the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer; 

        (c)  The
Company and the Rights Agent may deem and treat the person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Share
certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the associated Common
Share certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent will be affected by any notice to the contrary; 

        (d)  Such
holder expressly waives any right to receive any fractional Rights and any fractional securities upon exercise or exchange of a Right, except as otherwise provided
in Section 14. 

20

 

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

        17.  Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate will be entitled to vote,
receive dividends, or be deemed for any purpose the holder of Preferred Shares or any other securities of the Company which may at any time be issuable upon the exercise of the Rights represented
thereby, nor will anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of Directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in Section 25), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions of this Agreement or exchanged pursuant to the provisions of Section 24. 

        18.  Concerning the Rights Agent. (a) The Company will 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 will also indemnify the Rights Agent for, and hold it harmless against, any loss, liability, suit, action, proceeding or
expense, incurred without negligence, bad faith, or willful misconduct on the part of the Rights Agent, for anything done or omitted to be done 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 arising therefrom, directly or indirectly. 

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

        19.  Merger or Consolidation or Change of Name of Rights Agent. (a) 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 or consolidation to which the Rights Agent or any successor Rights Agent is a
party, or any corporation succeeding to the corporate trust business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21. If at the time such successor Rights Agent succeeds to the agency created by this Agreement any of the Right Certificates shall have been countersigned but not
delivered, any
such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and if at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights 

21

 

Agent; and in all such cases such Right Certificates will have the full force provided in the Right Certificates and in this Agreement. 

        (b)  If
at any time the name of the Rights Agent changes and at such time any of the Right Certificates have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Right Certificates so countersigned; and if at that time any of the Right Certificates have not been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates will have the full force provided in the Right 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 Right Certificates, by their acceptance thereof, will be bound: 

        (a)  The
Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel will be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. 

        (b)  Whenever
in the performance of its duties under this Agreement the Rights Agent deems it necessary or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the President, any Vice President, the Secretary or the Treasurer of the Company and delivered to the Rights Agent, and
such certificate will 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 will be liable hereunder only for its own negligence, bad faith or willful misconduct. 

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

        (e)  The
Rights Agent will not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution and
delivery hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor will it be responsible for any breach by the Company
of any covenant contained in this Agreement or in any Right Certificate; nor will it be responsible for any adjustment required under the provisions of Sections 11 or 13 (including any
adjustment which results in Rights becoming void) or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after actual notice of any such adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares of stock or other securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of stock or other securities will, when issued, be duly authorized, validly issued, fully paid and nonassessable. 

22

  

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

        (g)  The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the
Board, the President, any Vice President, the Secretary or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it will not be
liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer. 

        (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 will preclude the Rights Agent from acting in any other capacity for the Company or for any other Person. 

        (i)    The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or
agents, and the Rights Agent will 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. The Rights Agent will not be under any duty or responsibility to ensure
compliance with any applicable federal or state securities laws in connection with the issuance, transfer or exchange of Right Certificates. 

        (j)    If,
with respect to any Right Certificate surrendered to the Rights Agent for exercise, transfer, split up, combination or exchange, either (i) the certificate
attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response to clause 1 or 2 thereof, or
(ii) any other actual or suspected irregularity exists, the Rights Agent will not take any further action with respect to such requested exercise, transfer, split up, combination or exchange
without first consulting with the Company, and will thereafter take further action with respect thereto only in accordance with the Company's written instructions. 

        21.  Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 calendar days' notice in writing mailed to the Company and to each transfer agent of the Preferred Shares or the Common Shares by registered or certified mail, and to the
holders of the Right Certificates by first class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30 calendar days' notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent of the Preferred Shares and the Common Shares by registered or certified mail, and to the holders of the Right Certificates by
first class mail. If the Rights Agent resigns or is removed or otherwise becomes incapable of acting, the Company will appoint a successor to the Rights Agent. If the Company fails to make such
appointment within a period of 30 calendar days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who will, with such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may
apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, will be a corporation or other
legal entity organized and doing business under the laws of the United States or 

23

 

of the State of New York (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the State of New York), in good standing,
having a principal office in the State of New York, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million. After appointment, the successor Rights Agent will 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 will 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 will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Preferred Shares or the Common Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, will 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 Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase
Price per share and the number or kind of securities issuable upon exercise of the Rights made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale
by the Company of Common Shares following the Distribution Date and prior to the Expiration Date, the Company (a) will, with respect to Common Shares so issued or sold pursuant to the exercise,
exchange or conversion of securities (other than Rights) issued prior to the Distribution Date which are exercisable or exchangeable for, or convertible into Common Shares, and (b) may, in any
other case, if deemed necessary, appropriate or desirable by the Board of Directors of the Company, issue Right Certificates representing an equivalent number of Rights as would have been issued in
respect of such Common Shares if they had been issued or sold prior to the Distribution Date, as appropriately adjusted as provided herein as if they had been so issued or sold; provided, however,
that (i) no such Right Certificate will be issued if, and to the extent that, in its good faith judgment the Board of Directors of the Company determines that the issuance of such Right
Certificate could have a material adverse tax consequence to the Company or to the Person to whom or which such Right Certificate
otherwise would be issued and (ii) no such Right Certificate will be issued if, and to the extent that, appropriate adjustment otherwise has been made in lieu of the issuance thereof. 

        23.  Redemption. (a) Prior to the Expiration Date, the Board of Directors of the Company may, at its option, redeem all
but not less than all of the then-outstanding Rights at the Redemption Price at any time prior to the Close of Business on the later of (i) the Distribution Date and
(ii) Share Acquisition Date. Any such redemption will be effective immediately upon the action of the Board of Directors of the Company ordering the same, unless such action of the Board of
Directors of the Company expressly provides that such redemption will be effective at a subsequent time or upon the occurrence or nonoccurrence of one or more specified events (in which case such
redemption will be effective in accordance with the provisions of such action of the Board of Directors of the Company). 

        (b)  Immediately
upon the effectiveness of the redemption of the Rights as provided in Section 23(a), and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the holders of Rights will be to receive the Redemption Price, without interest thereon. Promptly after the effectiveness of the
redemption of the Rights as provided in Section 23(a), the Company will publicly announce such redemption and, within 10 calendar days thereafter, will give notice of such redemption to
the holders of the then-outstanding Rights by mailing such notice to all such holders at their last addresses as they 

24

 

appear upon the registry books of the Company; provided, however, that the failure to give, or any
defect in, any such notice will not affect the validity of the redemption of the Rights. Any notice that is mailed in the manner herein provided will be deemed given, whether or not the holder
receives the notice. The notice of redemption mailed to the holders of Rights will state the method by which the payment of the Redemption Price will be made. The Company may, at its option, pay the
Redemption Price in cash, Common Shares (based upon the current per share market price of the Common Shares (determined pursuant to Section 11(d)) at the time of redemption), or any other form
of consideration deemed appropriate by the Board of Directors of the Company (based upon the fair market value of such other consideration, determined by the Board of Directors of the Company in good
faith) or any combination thereof. The Company may, at its option, combine the payment of the Redemption Price with any other payment being made concurrently to holders of Common Shares and, to the
extent that any such other payment is discretionary, may reduce the amount thereof on account of the concurrent payment of the Redemption Price. If legal or contractual restrictions prevent the
Company from paying the Redemption Price (in the form of consideration deemed appropriate by the Board of Directors) at the time of redemption, the Company will pay the Redemption Price, without
interest, promptly after such time as the Company ceases to be so prevented from paying the Redemption Price. 

        24.  Exchange. (a) The Board of Directors of the Company may, at its option, at any time after the later of the Share
Acquisition Date and the Distribution Date, exchange all or part of the then-outstanding and exercisable Rights (which will not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii)) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the Record Date (such exchange ratio being hereinafter referred to as the "Exchange Ratio"). Any such exchange will be effective
immediately upon the action of the Board of Directors of the Company ordering the same, unless such action of the Board of Directors of the Company expressly provides that such exchange will be
effective at a subsequent time or upon the occurrence or nonoccurrence of one
or more specified events (in which case such exchange will be effective in accordance with the provisions of such action of the Board of Directors of the Company). Notwithstanding the foregoing, the
Board of Directors of the Company will not be empowered to effect such exchange at any time after any Person (other than the Company or any Related Person), who or which, together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more of the then-outstanding Common Shares. 

        (b)  Immediately
upon the effectiveness of the exchange of any Rights as provided in Section 24(a), and without any further action and without any notice, the right to
exercise such Rights will terminate and the only right with respect to such Rights thereafter of the holder of such Rights will be to receive that number of Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. Promptly after the effectiveness of the exchange of any Rights as provided in Section 24(a), the Company will publicly announce such
exchange and, within 10 calendar days thereafter, will give notice of 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; provided, however, that the failure to give, or any defect in, such notice will not affect
the validity of such exchange. Any notice that is mailed in the manner herein provided will be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange will be
effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii)) held by each holder of Rights. 

        (c)  In
any exchange pursuant to this Section 24, the Company, at its option, may substitute for any Common Share exchangeable for a Right (i) equivalent common
shares (as such term is 

25

 

used in Section 11(a)(iii)), (ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v) any combination of the foregoing, in any event having an
aggregate value, as determined in good faith by the Board of Directors of the Company (whose determination will be described in a statement filed with the Rights Agent), equal to the current market
value of one Common Share (determined pursuant to Section 11(d)) on the Trading Day immediately preceding the date of the effectiveness of the exchange pursuant to this Section 24. 

        25.  Notice of Certain Events. (a) If, after the Distribution Date, the Company proposes (i) to pay any dividend
payable in stock of any class to the holders of Preferred Shares or to make any other distribution to the holders of Preferred Shares (other than a regular periodic cash dividend), (ii) to
offer to the holders of Preferred Shares rights, options or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of
assets or earning power (including, without limitation, securities creating any obligation on the part of the Company and/or any of its Subsidiaries) representing more than 50% of the assets and
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, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or reclassification of the Common Shares then, in each such case, the Company will
give to each holder of a Right Certificate, to the extent feasible and in accordance with Section 26, a notice of such proposed action, which specifies the record date for the purposes of such
stock dividend, distribution or offering of rights, options or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up is to
take place and the date of participation therein by the holders of the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice will be so given, in the case of any
action covered by clause (i) or (ii) above, at least 10 calendar days prior to the record date for determining holders of the Preferred Shares for purposes of such action,
and, in the case of any such other action, at least 10 calendar days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common
Shares and/or Preferred Shares, whichever is the earlier. 

        (b)  In
case any Triggering Event occurs, then, in any such case, the Company will as soon as practicable thereafter give to the Rights Agent and each holder of a Right
Certificate, in accordance with Section 26, a notice of the occurrence of such event, which specifies the event and the consequences of the event to holders of Rights. 

        26.  Notices. (a) Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate to or on the Company will 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: 

Washington
Group International, Inc.

720 Park Boulevard

Boise, Idaho 83729

Attention: General Counsel 

        (b)  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 Right
Certificate to or 

26

 

on the Rights Agent will 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: 

Wells
Fargo Bank Minnesota, National Association

Shareowner Services

161 North Concord Exchange

South St. Paul, Minnesota 55075

Attention: Account Manager 

        (c)  Notices
or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate (or, if prior the
Distribution Date, to the holder of any certificate evidencing Common Shares) will 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 time at which the Rights cease to be redeemable pursuant to Section 23,
and subject to the last sentence of this Section 27, the Company may in its sole and absolute discretion, and the Rights Agent will if the Company so directs, supplement or amend any provision
of this Agreement in any respect without the approval of any holders of Rights or Common Shares. From and after the time at which the Rights cease to be redeemable pursuant to Section 23, and
subject to the last sentence of this Section 27, the Company may, and the Rights Agent will if the Company so directs, supplement or amend this Agreement without the approval of any holders of
Rights or Common Shares in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions
herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to supplement or amend the provisions hereunder in any manner which the Company may deem desirable; provided that
no such supplement or amendment shall adversely affect the interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no such
supplement or amendment shall cause the Rights again to become redeemable or cause this Agreement again to become supplementable or amendable otherwise than in accordance with the provisions of this
sentence. Without limiting the generality or effect of the foregoing, this Agreement may be supplemented or amended to provide for such voting powers for the Rights and such procedures for the
exercise thereof, if any, as the Board of Directors of the Company may determine to be appropriate. Upon the delivery of a certificate from an officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent will execute such supplement or amendment; provided, however, that the failure or refusal of the
Rights Agent to execute such supplement or amendment will not affect the validity of any supplement or amendment adopted by the Board of Directors of the Company, any of which will be effective in
accordance with the terms thereof. Notwithstanding anything in this Agreement to the contrary, no supplement or amendment may be made which decreases the stated Redemption Price to an amount less than
$.01 per Right. 

        28.  Successors; Certain Covenants. All the covenants and provisions of this Agreement by or for the benefit of the Company or
the Rights Agent will be binding on and inure to the benefit of their respective successors and assigns hereunder. 

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

27

 

        30.  Governing Law. This Agreement, each Right and each Right Certificate issued hereunder will be deemed to be a contract
made under the internal substantive laws of the State of Delaware and for all purposes will be governed by and construed in accordance with the internal substantive laws of such State applicable to
contracts to be made and performed entirely within such State. 

        31.  Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement will remain in full force and effect and will
in no way be affected, impaired or invalidated; provided, however, that nothing contained in this Section 31 will affect the ability of the Company under the provisions of Section 27 to
supplement or amend this Agreement to replace such invalid, void or unenforceable term, provision, covenant or restriction with a legal, valid and enforceable term, provision, covenant or restriction. 

        32.  Descriptive Headings, Etc. Descriptive headings of the several Sections of this Agreement are inserted for
convenience only and will not control or affect the meaning or construction of any of the provisions hereof. Unless otherwise expressly provided, references herein to Articles, Sections and
Exhibits are to Articles, Sections and Exhibits of or to this Agreement. 

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

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

[Signatures appear on following page]

28

 

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

	

 	
 	

WASHINGTON GROUP INTERNATIONAL, INC.
	

 	
 	

By:	
 	

/s/  STEPHEN G. HANKS      
 Name: Stephen G. Hanks

Title: President and Chief Executive Officer
	

 	
 	

WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
	

 	
 	

By:	
 	

/s/  SUZANNE M. SWITS      
 Name: Suzanne M. Swits

Title: Vice President

29

   EXHIBIT A  

 CERTIFICATE OF DESIGNATION

of

SERIES A JUNIOR PARTICIPATING

PREFERRED STOCK

of

WASHINGTON GROUP INTERNATIONAL, INC.

(Pursuant to Section 151 of the

General Corporation Law of the State of Delaware)  

        Washington Group International, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the
"Company"), DOES HEREBY CERTIFY: 

        That,
pursuant to authority vested in the Board of Directors of the Company by its Amended and Restated Certificate of Incorporation, and pursuant to the provisions of Section 151
of the General Corporation Law, the Board of Directors of the Company has adopted the following resolution providing for the issuance of a series of Preferred Stock: 

        RESOLVED,
that pursuant to the authority expressly granted to and vested in the Board of Directors of the Company (the "Board of
Directors" or the "Board") by the Amended and Restated Certificate of Incorporation of the Company, a series of Preferred Stock,
par value $0.01 per share (the "Preferred Stock"), of the Company be, and it hereby is, created, and that the designation and amount thereof and the
powers, designations, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as
follows: 

I. Designation and Amount  

        The shares of such series will be designated as Series A Junior Participating Preferred Stock (the "Series A
Preferred") and the number of shares constituting the Series A Preferred is 1,000,000. Such number of shares may be increased or decreased by resolution of the Board;  provided, however, that no decrease will reduce the number of shares of Series A Preferred to a
number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the
Company convertible into Series A Preferred. 

II. Dividends and Distributions  

        (a)  Subject
to the rights of the holders of any shares of any series of Preferred Stock ranking prior to the Series A Preferred with respect to dividends, the holders
of shares of Series A Preferred, in preference to the holders of Common Stock, par value $0.01 per share (the "Common Stock"), of the Company,
and of any other junior stock, will be entitled to receive, when, as and if declared by the Board out of funds legally available for the purpose, dividends payable in cash (except as otherwise
provided below) on such dates as are from time to time established for the payment of dividends on the Common Stock (each such date being referred to herein as a "Dividend
Payment Date"), commencing on the first Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred (the
"First Dividend Payment Date"), in an amount per share (rounded to the nearest cent) equal to the greater of (i) $1.00 or (ii) subject to
the provision for adjustment hereinafter set forth, one hundred times the aggregate per share amount of all cash dividends, and one hundred times the aggregate per share amount (payable in kind) of
all non-cash dividends, 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 

A-1

 

preceding Dividend Payment Date or, with respect to the First Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred. In the event that the
Company at any time (i) declares a dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivides the outstanding shares of Common Stock,
(iii) combines the outstanding shares of Common Stock into a smaller number of shares, or (iv) issues any shares of its capital stock in a reclassification of the outstanding 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 case and regardless
of whether any shares of Series A Preferred are then issued or outstanding, the amount to which holders of shares of Series A Preferred would otherwise be entitled immediately prior to
such event under clause (ii) of the preceding sentence will be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

        (b)  The
Company will declare a dividend on the Series A Preferred as provided in the immediately preceding paragraph immediately after it declares a dividend on the
Common Stock (other than a dividend payable in shares of Common Stock). Each such dividend on the Series A Preferred will be payable immediately prior to the time at which the related dividend
on the Common Stock is payable. 

        (c)  Dividends
will accrue on outstanding shares of Series A Preferred from the Dividend Payment Date next preceding the date of issue of such shares, unless
(i) the date of issue of such shares is prior to the record date for the First Dividend Payment Date, in which case dividends on such shares will accrue from the date of the first issuance of a
share of Series A Preferred or (ii) the date of issue is a Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A
Preferred entitled to receive a dividend and before such Dividend Payment Date, in either of which events such dividends will accrue from such Dividend Payment Date. Accrued but unpaid dividends will
cumulate from the applicable Dividend Payment Date but will not bear interest. Dividends paid on the shares of Series A Preferred in an amount less than the total amount of such dividends at
the time accrued and payable on such shares will 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 Preferred entitled to receive payment of a dividend or distribution declared thereon, which record date will be not more than 60
calendar days prior to the date fixed for the payment thereof. 

III. Voting Rights  

        The holders of shares of Series A Preferred will have the following voting rights: 

        (a)  Subject
to the provision for adjustment hereinafter set forth, each share of Series A Preferred will entitle the holder thereof to one hundred votes on all
matters submitted to a vote of the stockholders of the Company. In the event the Company at any time (i) declares a dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivides the outstanding shares of Common Stock, (iii) combines the outstanding shares of Common Stock into a smaller number of shares, or (iv) issues any
shares of its capital stock in a reclassification of the outstanding 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 case and regardless of whether any shares of Series A Preferred are then issued or outstanding, the number of votes per share to
which holders of shares of Series A Preferred would otherwise be entitled immediately prior to such event will be adjusted by multiplying such number by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such
event. 

A-2

 

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

        (c)  Except
as set forth in the Amended and Restated Certificate of Incorporation or herein, or as otherwise provided by law, holders of shares of Series A Preferred
will have no voting rights. 

IV. Certain Restrictions  

        (a)  Whenever
dividends or other dividends or distributions payable on the Series A Preferred are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred outstanding have been paid in full, the Company will not: 

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

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

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

        (iv)  Redeem,
purchase or otherwise acquire for consideration any shares of Series A Preferred, or any shares of stock ranking on a parity with the shares of
Series A Preferred, 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, may determine in good faith will result in fair and equitable
treatment among the respective series or classes. 

        (b)  The
Company will not permit any majority-owned 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 Article IV, purchase or otherwise acquire such shares at such time and in such manner. 

V. Reacquired Shares  

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

A-3

 

VI. Liquidation, Dissolution or Winding Up  

        Upon any liquidation, dissolution or winding up of the Company, no distribution will be made (a) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the shares of Series A Preferred unless, prior thereto, the holders of shares of Series A Preferred have received $100
per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment;  provided, however, that the holders of shares of Series A Preferred will be entitled to receive
an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to one hundred times the aggregate amount to be distributed per share to holders of shares of Common
Stock or (b) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the shares of Series A Preferred, except
distributions made ratably on the shares of Series A Preferred and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Company at any time (i) declares a dividend on the outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivides the outstanding shares of Common Stock, (iii) combines the outstanding shares of Common Stock into a smaller number of shares, or (iv) issues any shares of its
capital stock in a reclassification of the outstanding 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 case and regardless of whether any shares of Series A Preferred are then issued or outstanding, the aggregate amount to which each holder of shares
of Series A Preferred would otherwise be entitled immediately prior to such event under the proviso in clause (a) of the preceding sentence will be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event. 

VII. Consolidation, Merger, Etc.  

        In the event that the Company enters 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 each such case, each share of Series A Preferred will at the same time be similarly exchanged for or changed
into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to one hundred times the aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Company at any time (a) declares a dividend on the outstanding shares
of Common Stock payable in shares of Common Stock, (b) subdivides the outstanding shares of Common Stock, (c) combines the outstanding shares of Common Stock in a smaller number of
shares, or (d) issues any shares of its capital stock in a reclassification of the outstanding 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 case and regardless of whether any shares of Series A Preferred are then issued or outstanding, the
amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred will be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to
such event. 

VIII. Redemption  

        The shares of Series A Preferred are not redeemable. 

A-4

 

IX. Rank  

        The Series A Preferred rank, with respect to the payment of dividends and the distribution of assets, junior to all other series of the Company's Preferred
Stock. 

X. Amendment  

        Notwithstanding anything contained in the Amended and Restated Certificate of Incorporation of the Company to the contrary and in addition to any other vote
required by applicable law, the Amended and Restated Certificate of Incorporation of the Company may not be amended in any manner that would materially alter or change the powers, preferences or
special rights of the Series A Preferred so
as to affect them adversely without the affirmative vote of the holders of at least 80% of the outstanding shares of Series A Preferred, voting together as a single series. 

        IN
WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the Company by its [    ]
and attested by its [    ] this    day
of                        20    . 

	

 	
 	

WASHINGTON GROUP INTERNATIONAL, INC.
	

 	
 	

By:	
 	

 Name:

Title:
	

Attest:	
 	

 	
 	

 
	

 Name:

Title:	
 	

 	
 	

 

A-5

   EXHIBIT B  

 FORM OF RIGHT CERTIFICATE  

	Certificate No. R-	 	
	 	
	 	Rights

NOT
EXERCISABLE AFTER JULY 15, 2012 OR EARLIER IF REDEEMED, EXCHANGED OR AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE OPTION OF THE COMPANY, ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF MAY BECOME NULL AND VOID. 

Right Certificate

WASHINGTON GROUP INTERNATIONAL, INC. 

        This
certifies that                        , or registered assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the
terms, provisions, and conditions of the
Rights Agreement, dated as of June 21, 2002 (the "Rights Agreement"), between Washington Group International, Inc., a Delaware corporation
(the "Company"), and Wells Fargo Bank Minnesota, National Association (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 p.m. (Eastern time) on the Expiration Date (as such term is defined
in the Rights Agreement) at the principal office or offices of the Rights Agent designated for such purpose, one one-hundredth of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, par value $0.01 per share (the "Preferred Shares"), of the Company, at a purchase price of $125.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase and related Certificate duly executed. If this Right Certificate is exercised in part, the holder will be entitled to receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exercised. The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a Preferred Share which
may be purchased upon exercise thereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of the date of the Rights Agreement, based on the Preferred Shares
as constituted at such date. 

        As
provided in the Rights Agreement, the Purchase Price and/or the number and/or kind of securities issuable upon the exercise of the Rights evidenced by this Right Certificate are
subject to adjustment upon the occurrence of certain events. 

        This
Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities of the Rights
Agent, the Company and the holders of the Right Certificates, which limitations of rights include the temporary suspension of the exercisability of the Rights under the circumstances specified in the
Rights Agreement. Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and can be obtained from the Company without charge upon written request therefor. Terms
used herein with initial capital letters and not defined herein are used herein with the meanings ascribed thereto in the Rights Agreement. 

B-1

 

        Pursuant
to the Rights Agreement, from and after the occurrence of a Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring Person (or any
Affiliate or Associate of any Acquiring Person), (ii) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the occurrence of a
Flip-in Event, or (iii) a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or concurrently with the Flip-in Event
pursuant to either (a) a transfer from an Acquiring Person to holders of its equity securities or to any Person with whom it has any continuing agreement, arrangement or understanding regarding
the transferred Rights or (b) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has the purpose or effect of avoiding
certain provisions of the Rights Agreement, and subsequent transferees of any of such Persons, will be void without any further action and any holder of such Rights will thereafter have no rights
whatsoever with respect to such Rights under any provision of the Rights Agreement. From and after the occurrence of
a Flip-in Event, no Right Certificate will be issued that represents Rights that are or have become void pursuant to the provisions of the Rights Agreement, and any Right Certificate
delivered to the Rights Agent that represents Rights that are or have become void pursuant to the provisions of the Rights Agreement will be canceled. 

        This
Right Certificate, with or without other Right Certificates, may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates entitling the
holder to purchase a like number of one one-hundredths of a Preferred Share (or other securities, as the case may be) as the Right Certificate or Right Certificates surrendered entitled
such holder (or former holder in the case of a transfer) to purchase, upon presentation and surrender hereof at the principal office of the Rights Agent designated for such purpose, with the
Form of Assignment (if appropriate) and the related Certificate duly executed. 

        Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $0.01 per Right or may
be exchanged in whole or in part. The Rights Agreement may be supplemented and amended by the Company, as provided therein. 

        The
Company is not required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share, which may, at
the option of the Company, be evidenced by depositary receipts) or other securities issuable upon the exercise of any Right or Rights evidenced hereby. In lieu of issuing such fractional Preferred
Shares or other securities, the Company may make a cash payment, as provided in the Rights Agreement. 

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

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

B-2

 

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

	

ATTEST:	
 	

WASHINGTON GROUP INTERNATIONAL, INC.
	

 	
 	

By:	
 	

 Name:

Title:

	Countersigned:	 	 
	

WELLS FARGO BANK MINNESOTA,

NATIONAL ASSOCIATION	
 	

 
	

By:	
 	

 Authorized Signature	
 	

 

B-3

 
Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate) 

        FOR
VALUE RECEIVED,                          hereby sells, assigns and transfers unto 

(Please print name and address of transferee) 

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

Dated:                        ,        

	 	 	 	 	
 Signature
	Signature Guaranteed:	 	 	 	 
	 	 	
	 	 

B-4

 
CERTIFICATE  

        The undersigned hereby certifies by checking the appropriate boxes that: 

        (1)  the
Rights evidenced by this Right Certificate [    ]are  [    ] are not being sold, assigned, transferred, split up,
combined or exchanged by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such Person (as such terms are defined in the Rights Agreement); 

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

Dated:                        ,            

	 	 	
 Signature

B-5

 
FORM OF ELECTION TO PURCHASE
  (To be executed if holder desires to

exercise the Right Certificate) 

To
Washington Group International, Inc. 

        The
undersigned hereby irrevocably elects to exercise                        Rights represented by this Right Certificate to purchase
the one one-hundredths of a Preferred Share or
other securities issuable upon the exercise of such Rights and requests that certificates for such securities be issued in the name of and delivered to: 

	Please insert social security

or other identifying number:	 	 
	 	 	

	

	(Please print name and address)
	

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

	Please insert social security

or other identifying number:	 	 
	 	 	

	

	(Please print name and address)
	

Dated:                        ,            

	 	 	 	 	
 Signature
	Signature Guaranteed:	 	 	 	 
	 	 	
	 	 

B-6

 
CERTIFICATE  

        The undersigned hereby certifies by checking the appropriate boxes that: 

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

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

Dated:                        ,            

	 	 	
 Signature

NOTICE 

        Signatures on the foregoing Form of Assignment and Form of Election to Purchase and in the related Certificates must correspond to the name as
written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.

        Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an
approved medallion signature program) pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.

B-7

   EXHIBIT C  

 SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK  

        On June 21, 2002, the Board of Directors of Washington Group International, Inc. (the "Company") adopted a rights plan and declared a dividend of
one preferred share purchase right for each outstanding share of the Company's Common Stock, par value $0.01 per share. The dividend is payable on July 15, 2002 to our stockholders of record on
that date. The terms of the rights and the rights plan are set forth in a Rights Agreement, dated as of May 23, 2002, by and between the Company and Wells Fargo Bank Minnesota, National
Association, as rights agent. 

        Our
Board adopted the rights plan to protect our stockholders from coercive takeover practices or takeover bids that are inconsistent with their best interests. In general terms, the
rights plan imposes a significant penalty upon any person or group (other than holders of less than 20% of our outstanding stock that report their ownership on Schedule 13G under the Exchange
Act) that acquires 15% or more (or, in the case of Mr. Dennis Washington, more than 40%) of our outstanding common stock without the prior approval of our Board. A person or group that acquires
a percentage of our common stock in excess of the applicable threshold is called an "acquiring person." Any person or group that beneficially owns more than the applicable percentage of our
outstanding common stock on the date the rights are distributed will not be deemed to become an acquiring person until such person acquires an additional 1% of our outstanding common stock. Any rights
held by an acquiring person are void and may not be exercised. 

        This
summary of rights provides a general description of the rights plan. Because it is only a summary, this description should be read together with the entire rights plan, which we
incorporate in this summary by reference. We have filed the rights plan with the Securities and Exchange Commission as an exhibit to our registration statement on Form 8-A. Upon
written request, we will provide a copy of the rights plan free of charge to any stockholder. 

        The Rights.    Our Board of Directors authorized the issuance of one right per each outstanding share of our common stock on
July 15, 2002. If the rights become exercisable, each right would allow its holder to purchase from us one one-hundredth of a share of our Series A Junior Participating
Preferred Stock for a purchase price of $125.00. Each fractional share of preferred stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of
our common stock. Prior to exercise, however, a right does not give its holder any dividend, voting or liquidation rights. 

        Exercisability.    The rights will not be exercisable until the earlier of: 

	•
	10 days
after a public announcement by the Company that a person or group has become an acquiring person; and

	•
	10
business days (or a later date determined by our Board) after a person or group begins a tender or exchange offer that, if completed, would result
in that person or group becoming an acquiring person. 

        We
refer to the date that the rights become exercisable as the "distribution date." Until the distribution date, our common stock
certificates will also evidence the rights and will contain a notation to that effect. Any transfer of shares of common stock prior to the distribution date will constitute a transfer of the
associated rights. After the distribution date, the rights will separate from the common stock and be evidenced by rights certificates, which we will mail to all holders of rights that have not become
void. 

        Flip-in Event.    After the distribution date, if a person or group already is or becomes an
acquiring person, all holders of rights, except the acquiring person, may exercise their rights upon payment of the 

C-1

 

purchase price to purchase shares of our common stock (or other securities or assets as determined by the Board) with a market value of two times the purchase price. 

        Flip-over Event.    After the distribution date, if a flip-in event has already
occurred and the Company is acquired in a merger or similar transaction, all holders of rights except the acquiring person may exercise their rights upon payment of the purchase price, to purchase
shares of the acquiring corporation with a market value of two times the purchase price of the rights. 

        Rights
may be exercised to purchase our preferred shares only after the distribution date occurs and prior to the occurrence of a flip-in event as described above. A
distribution date resulting from the commencement of a tender offer or exchange offer described in the second bullet point above could precede the occurrence of a flip-in event, in which
case the rights could be exercised to purchase our preferred shares. A distribution date resulting from any occurrence described in the first bullet point above would necessarily follow the occurrence
of a flip-in event, in which case the rights could be exercised to purchase shares of common stock or other securities as described above. 

        Expiration.    The rights will expire on July 15, 2012, unless earlier redeemed or exchanged. 

        Redemption.    Our Board may redeem all (but not less than all) of the rights for a redemption price of $0.01 per right at any
time before the later of the distribution date and the date of the first public announcement or disclosure by the Company that a person or group has become an acquiring person. Once the rights are
redeemed, the right to exercise rights will terminate, and the only right of the holders of rights will be to receive the redemption price. The redemption price will be adjusted if we declare a stock
split or issue a stock dividend on our common stock. 

        Exchange.    After the later of the distribution date and the date of the first public announcement by the Company that a person
or group has become an acquiring person, but before an acquiring person owns 50% or more of our outstanding common stock, our Board may exchange each right (other than rights that have become void)
for one share of common stock or an equivalent security. 

        Anti-Dilution Provisions.    Our Board may adjust the purchase price of the preferred shares, the number of
preferred shares issuable and the number of outstanding rights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a
reclassification of the preferred shares or our common stock. No adjustments to the purchase price of less than 1% will be made. 

        Amendments.    Before the time rights cease to be redeemable, our Board may amend or supplement the rights plan without the
consent of the holders of the rights, except that no amendment may decrease the redemption price below $0.01 per right. At any time thereafter, our Board may amend or supplement the rights plan only
to cure an ambiguity, to alter time period provisions, to correct inconsistent provisions or to make any additional changes to the rights plan, but only to the extent that those changes do not impair
or adversely affect any rights holder and do not result in the rights again becoming redeemable. 

*
* * 

C-2QuickLinks
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EXHIBIT 10.17    
  

 
 

INDUSTRIAL LEASE AGREEMENT    
  

        This lease agreement (the "Lease") is made and entered into as of the 17th day of November, 2000, between Research Interchange One L. P. a Texas Limited
Partnership (the "Landlord"), and Testchip Technologies, Inc., a Texas Corporation (the "Tenant"): 

 
 

WITNESSETH:    
  

        SEC. 1.    LEASED PREMISES:    In consideration of the mutual covenants set forth herein, Landlord hereby leases to
Tenant and Tenant hereby leases from Landlord for the rental and on the terms and conditions hereinafter set forth approximately 25,140 square feet of rentable space as indicated on the plan attached
hereto as EXHIBIT "A" and known as Suite 180 (the "Premises") in the office and warehouse building (the "Building") located at 9300 United Drive, in the city of Austin, Travis County, Texas. The
Building is part of a multi-building complex (the "Project"), which is located on the land (the "Land") more particularly described on EXHIBIT "B" attached hereto. The Premises, Building, Project and
Land together with all improvements (including, without limitation, all parking facilities) thereon are herein collectively called the "Property". 

        It
is agreed that the total rentable area of the Project is 121,870 square feet and that the Premises (and Tenant's pro rata share for Additional Rental purposes) is agreed to be 20.63%
thereof. It is agreed that the total rentable area of the Building is 50,210 square feet and that the Premises (and Tenant's pro rata share of the Building for Additional Rental purposes) is agreed to
be 50.07% thereof. All categories of Additional Rental shall be based on the prorations in this paragraph except for water and wastewater service to the Building which shall be fully charged to the
tenants of the Building regardless of the occupancy rate of the Building. 

        SEC. 2.    TERM:    Subject to the conditions set forth herein, and in any exhibit or addendum hereto, signed by both
parties, the term of this Lease shall begin on the earlier of the date that Tenant actually occupies the Premise or March 1, 2001 ("Commencement Date") and shall end at midnight on
February 28, 2006, subject to delay as provided in the Work Letter attached hereto as EXHIBIT "G". If the Commencement Date begins prior to March 1, 2001, Base Rental as hereinafter
defined will not be charged to Tenant prior to March 1, 2001. Additional Rental as hereinafter defined will be charged to Tenant from the Commencement Date of the Lease however. 

        SEC. 3.    USE:    The Premises shall be used and occupied by Tenant solely for office, wholesale sales, shipping and
warehouse purposes and for no other purpose. The office area of the Premises may be used only for general office purposes, and not for storage, loading, shipping or other warehouse-type
purposes. No manufacturing operations may be conducted at the Premises. For this purpose, manufacturing shall be defined as production of a tangible product for sale at the wholesale or retail level.
The term manufacturing shall not include light assembly or construction conducted in connection with Tenant's current business activities. It is further agreed that operation of a Test Lab shall not
be construed as manufacturing. No vehicle maintenance or servicing may take place on the Premises or the Project. 

        SEC. 4.    ADVANCE AND SECURITY DEPOSIT:    A security deposit of $32,436.00 ("Security Deposit") and $37,464.00
representing Base Rental and Additional Rental due under this Lease for the first full month of the term of this Lease is due from Tenant on Lease execution date. Upon the occurrence of any event of
default by Tenant, Landlord may, from time to time with prior written notice, without prejudice to any other remedy, use the Security Deposit to the extent necessary to satisfy delinquent Rent or to
cure any Tenant default or to compensate Landlord for any loss or damage which Landlord may suffer by reason of Tenant's default. If any portion of the Security Deposit 

1

 

is so used or applied, Tenant shall, upon demand therefore, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount and Tenant's failure to do so
shall constitute a default hereunder by Tenant. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit shall be returned to Tenant
within sixty (60) days after termination of this Lease. 

        SEC. 5.    BASE RENTAL:    As part of the consideration for the execution of this Lease, Tenant agrees to pay as "Base
Rental", the total sum listed on Exhibit D payable at the office of Landlord in monthly installments, as shown on Exhibit D each in legal tender of the United States of America, in
advance, without demand and without deduction, on the first day of each calendar month during their term hereof: provided, however, that if the term of this Lease commences on a date other than the
first day of a calendar month, the first rental payment, to be made on Lease execution shall be the rental for one full calendar month plus the pro rated rental remainder for the calendar month in
which the Lease term commences. 

        SEC. 6.    ADDITIONAL RENTAL:    In addition to the Base Rental, as specified in this Lease, Tenant agrees to pay to
Landlord as additional rent ("Additional Rental) an amount equal to Tenant's pro rata share of the Operating Expenses (as hereinafter defined) for each calendar year during the term of this Lease.
Tenant's liability for Additional Rental for any partial year during the term of this Lease shall be prorated based upon the ratio of the number of days within the term of this Lease as compared to
the total number of days in such year. 

        A.    Operating Expenses:    For the purposes of determining Additional Rental, "Operating Expenses" shall mean all of
Landlord's costs and expenses paid or incurred in operating and maintaining the Property for a particular calendar year or portion thereof, as determined by Landlord; provided, however, that Operating
Expenses shall not include any expenses otherwise the obligation of the Tenant under the other terms of this Lease. 

        Operating
Expenses shall include, without limitation: 

        (i)    all
general real estate taxes and all special assessments, costs and expenses of contesting the validity or amount of real estate taxes; insurance premiums; water,
sewer, electrical and other utility charges not separately metered to the Premises; landscape and sprinkler maintenance costs; pest control costs; exterior lighting maintenance costs including
replacement elements; asphalt and concrete paving maintenance costs; telecommunications equipment maintenance costs; security services (if provided by Landlord, in Landlord's sole discretion);
license, permit and inspection fees; property management fees which do not exceed the greater of four percent (4%) of gross rent (Base Rental plus Additional Rental) or the going rate for the
management of similar properties; trash removal; and, in general, all other costs and expenses which would generally be regarded as operating and maintenance costs and expenses, including those which
would normally be amortized over a period not to exceed five (5) years. 

        (ii)  the
costs of any capital improvements made to the Project by Landlord that reduce operating expenses or that are required under any governmental law or regulation not
applicable to the Project or not in effect at the time it was constructed, such cost to be amortized over such reasonable period as Landlord shall determine with a return on capital at the then
current prime interest rate (as published by the Wall Street Journal) on the unamortized balance or at such higher interest rate as may have been paid by Landlord on funds borrowed for the purpose of
constructing such capital improvements. However, the portion of any increase in annual Operating Expenses for capital improvements that reduce operating expenses shall never exceed the amount of
reduction in the annual Operating Expenses attributable to such improvements. 

2

 

        Operating
Expense Exclusion. Notwithstanding anything to the contrary in this Lease, Operating Expenses shall not include, (i) the wages and benefits of any on-site
employees above the level of Building manager; (ii) the wages and benefits of any employee who does not devote substantially all of his or her time to the Building unless such wages and
benefits are allocated to, reflect the actual time
spent on operating and managing the Building vis-à-vis time spent on matters unrelated to operating and managing the Building. 

Federal
and State taxes imposed upon or measured by the gross receipts or income of Landlord shall not be considered a part of Operating Expenses unless a future change in the method of taxation
causes any franchise, gross receipts, income, profit or other tax to be levied against Landlord in substitution in whole or in part for or in lieu of or in addition to any tax included as an Operating
Expense hereunder. In such event, any such franchise, gross receipts, income, profit or other tax shall (with appropriate adjustments, where necessary) be deemed to be Operating Expenses for the
purposes hereof. 

or
the purpose of this Section, payments made by tenants of the Project, either to third parties or to Landlord, under agreements for direct reimbursement for services (e.g., separately metered
utilities, separately contracted janitorial services, property taxes directly reimbursed to Landlord, etc.) shall not be included in Operating Expenses. 

        B.    Monthly Payment of Estimated Additional Rental:    Tenant's proportionate share of Operating Expenses for the
remainder of the calendar year after the Commencement Date and for each subsequent calendar year shall be estimated by Landlord, and written notice thereof shall be given to Tenant. Upon receipt of
said written notice from Landlord, the estimated Additional Rental shall be due and payable as herein provided. For any such remainder of the calendar year after the Commencement Date, Tenant agrees
to pay Landlord each month, at the same time the Base Rental is due, an amount equal to the amount of such estimated monthly Additional Rental for the remainder of such calendar year, and during each
calendar year thereafter Tenant agrees to pay Landlord each month, at the same time the Base Rental is due, an amount equal to one-twelfth (1/12) of the estimated annual
Additional Rental due. 

        C.    Annual Adjustment of Additional Rental:    Within seventy-five (75) days after the end of
each calendar year, Landlord shall prepare and deliver to Tenant a statement showing Tenant's total amount of Additional Rental. Within thirty (30) days after receipt of the aforementioned
statement, Tenant agrees to pay Landlord, or if Tenant has overpaid, Landlord shall credit against the next Additional Rental payment or payments due from Tenant, as the case may be, the difference
between Tenant's actual Additional Rental due for the preceding calendar year and the estimated Additional Rental paid by Tenant during such year. Upon completion of the year end statement of
Additional Rental, Landlord may revise the estimated Additional Rental for the then current year by giving Tenant written notice to that effect, and thereafter Tenant agrees to pay Landlord, in each
of the remaining months of such year, an additional amount equal to the amount of such annual increase or decrease in the estimated Additional Rental divided by the number of months remaining in such
year. Tenant shall have the right to audit Landlord's Additional Rental charges, at Tenant's expense, within sixty (60) days of receipt by Tenant of any particular year-end
accounting for Additional Rental. If any errors are found resulting in an overcharge to the Tenant, Landlord will reimburse the overcharge to the Tenant and if the overcharge is more than 5% of the
yearly Additional Rental charged to Tenant, Landlord will reimburse to Tenant the reasonable costs of the audit. 

        SEC. 7.    RENT:    The Base Rental, Additional Rental, and all other sums required to be paid by Tenant hereunder,
are sometimes collectively referred to as, and shall constitute, "Rent". 

        Rent
shall be paid by Tenant when due, or if paid by mail the rent must be postmarked before the due date and received within five (5) business days of due date, without prior
demand therefore and 

3

 

without deduction or set off unless otherwise specifically provided herein, at the office of the Landlord or at such other place as Landlord may designate from time to time. 

        In
the event any installment of Base Rental, Additional Rent or other amount due from Tenant to Landlord under this Lease shall not be paid when due, a late charge of five cents ($.05)
per each dollar so overdue may be charged by Landlord for the purpose of defraying Landlord's administrative expenses incident to the handling of such overdue payments, and Tenant agrees to pay such
Rent to Landlord upon demand, unless the delay is caused by United States Postal Service performance outside of Tenant's control. 

        SEC. 8.    PAYMENT FOR OTHER SERVICES:    Tenant agrees to pay to Landlord all charges for any services, goods, or
materials furnished by Landlord at Tenant's request which are not required to be furnished by Landlord under this Lease, within 10 days after written receipt of Landlord's request for payment. 

        SEC. 9.    TENANT'S OCCUPANCY AND USE:    The Premises shall be used solely for the purpose specified in
Section 3. Tenant will not use, occupy or permit the use or occupancy of the Premises for any purpose which is, directly or indirectly, forbidden by law, ordinance or governmental or municipal
regulation or order, or which may be dangerous to life, limb or property; or permit the maintenance of any public or private nuisance; or do or permit any other thing which may disturb the quiet
enjoyment of any other tenant of the Project; or keep any substance or carry on or permit any operation which might emit offensive odors or conditions into other portions of the Property or use any
apparatus which might make undue noise or set up vibrations in the Project; or permit anything to be done which would increase the fire and extended coverage insurance rate on the Project or contents,
and if there is any increase in such rate by reason of acts of Tenant, then Tenant agrees to pay such increase promptly upon demand by Landlord. Payment by Tenant of any such rate increase shall not
be a waiver of Tenant's duty to comply herewith. Tenant agrees to comply with all requirements of the Americans with Disabilities Act (Public Law 101-336 July 26, 1990)) and the
Texas Architectural Barriers Act (Article 9102, Tex. Rev. Civ. St. (1991)) applicable to the Premises and applicable to the Project to the extent necessary to accommodate any special
requirements of Tenant's employees, invitees and customers not applicable to the other tenants in the Project. Tenant acknowledges that it shall be wholly responsible for any accommodations or
alterations which need to be made to the Premises to accommodate Tenant's employees, customers and invitees and for making any additional accommodations or alterations which need to be made to the
Project to accommodate any special requirements of Tenant's employees, invitees and customers not applicable to the other tenants in the Project. Tenant agrees to indemnify and
hold Landlord harmless from any and all expense (including, without limitation, attorneys' fees), liabilities, costs, or damages suffered by Landlord as a result of Tenant's failure to comply with its
obligations under this Section 9.

        SEC. 10.    SUITABILITY OF PREMISES:    Except as provided in Exhibit G, Tenant warrants to Landlord that it
has, prior to the execution hereof, fully inspected the Premises and that it has made, performed, obtained and received all studies, inspections, reports, diagnoses and tests that Tenant desires
relative to the Premises and Tenant's proposed business use of the Premises. Tenant understands and agrees that it is accepting the Premises in its present "AS-IS", "WHERE-IS"
condition, "WITH ALL FAULTS", subject to the provisions of Section 16 and Exhibit G herein and also subject to any non-cosmetic, significant latent construction defects in
any other component of the Premises in existence at the Commencement Date which reveal themselves on or before May 31, 2001. Tenant warrants that it used all due diligence in conducting all
studies, inspections, diagnoses and tests on the Premises that Tenant deemed necessary or appropriate. Tenant acknowledges that Landlord has not made and does not make, and Landlord hereby disclaims,
any and all warranties, express or implied, which in any way relate to the Premises or the condition thereof, including without limitation any implied warranty of suitability or habitability. Tenant
further understands that Landlord has relied 

4

 

upon Tenant's having made all inspections Tenant desired prior to leasing the Premises from Landlord, and that but for such inspections by Tenant, Landlord would not have leased the Premises to
Tenant. 

        SEC. 11.    LANDLORD'S RIGHT OF ACCESS:    Landlord or its authorized agents shall at any and all reasonable times,
with reasonable notice to Tenant (except during an emergency), have the right to enter the Premises to inspect the same, to supply any service Landlord deems necessary to provide hereunder, to show
the Premises to prospective purchasers or tenants, improve or repair the Premises or any other portion of the Property all without being deemed guilty of an eviction of Tenant and without abatement of
Rent, and may for that purpose erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, provided the business of Tenant shall be
interfered with as little as is reasonably practicable. Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant's business, any loss of occupancy or
quiet enjoyment of the Premises, and any other loss occasioned thereby unless due to Landlord's willful misconduct or gross negligence. Landlord shall have the right to use any and all means which
Landlord may deem proper to open any door(s) in an emergency without liability therefore. 

        SEC. 12.    QUIET POSSESSION:    Upon Tenant's paying the Rent reserved hereunder and observing and performing all of
the covenants, conditions and provisions on Tenant's part to be observed and performed hereunder, Tenant shall have the quiet possession of the Premises for the entire Term hereof, subject to all of
the provisions of this Lease, and subject to the terms of all restrictions, easements and other matters of record applicable to the Property. 

        SEC. 13.    UTILITIES:    Landlord agrees to provide normal utility connections to the building in which the Premises
are located for water, electricity, telephone service and sewage service to the Premises. Tenant shall arrange for and promptly pay to the applicable utility company all charges for electricity,
telephone service, sewage service and other utilities furnished to the Premises, including, but not limited to initial connection charges. Tenant shall pay for all wiring, risers, transformers,
electrical panels, air conditioning or beating equipment and other item necessary, or as required by Landlord (in Landlord's reasonable discretion), to accommodate Tenant's design loads and capacities
in the
Premises, or as required by the utility company, including the cost of installation and maintenance thereof. Notwithstanding the foregoing, Landlord may refuse to install and withhold consent for
Tenant's installation of any wiring, risers, transformers, electrical panels, or air conditioning or heating equipment if, in Landlord's sole reasonable judgment, the same are not necessary or would
cause damage or injury to the Project or the Premises, or cause or create a dangerous or hazardous condition or entail excessive or unreasonable alterations or repairs to the Project or the Premises
or would interfere with or create or constitute a disturbance to other tenants or occupants of the Project. In no event shall Landlord incur any liability for Landlord's refusal to install, or
Landlord's withholding of consent for Tenant's installation of, any such facility or equipment. Landlord may, if it so elects, furnish one or more utility services to the Tenant, and in such event
Tenant shall purchase the use of such services as are tendered by Landlord and shall pay on demand as additional Rent the rates established therefore by Landlord which shall not exceed the rates which
would be charged for the same services if furnished directly by the local public utility company supplying such service. Unless caused by the gross negligence or willful misconduct of Landlord,
Landlord shall not be liable in damages or otherwise for failure, stoppage or interruption of any such service, nor shall the same be construed as an eviction of the Tenant, work an abatement of Rent,
or relieve Tenant from the operation of any covenant or agreement; but in the event of any failure, stoppage or interruption thereof, Landlord shall use reasonable diligence to cause such service to
be resumed promptly after written notice to Landlord of such failure, stoppage or interruption. 

5

 

        SEC. 14.    REPAIRS AND MAINTENANCE:    

        A.    Landlord's Repairs:    Subject to reimbursement pursuant to Section 6. above, Landlord shall provide or
cause to be provided, cleaning and maintenance of the public portions of the Project, including landscaping, exterior lighting, asphalt and concrete paving, as Landlord shall reasonably deem
appropriate. Unless otherwise expressly stipulated herein, Landlord shall not be required to make any improvements or repairs of any kind or character in the Premises during the term of this Lease,
other than structural repairs to exterior and load-bearing walls, the foundation, and the roof, but only after such repairs have been requested by Tenant in writing. Landlord's obligation
to make repairs shall be limited to material, substantial, structural repairs only, and not to repairs of a cosmetic or minor nature. Landlord shall not be liable to Tenant for any damage or
inconvenience and Tenant shall not be entitled to any abatement or reduction of Rent by reason of any repairs, alterations or additions made by Landlord under this Lease or made by Landlord under
other tenant leases in the Project. Pursuant to five (5) days advance written notice to Tenant, Landlord may at its option and at the sole cost and expense of Tenant, repair or replace any
damage or injury done to the Project or any part thereof, caused by Tenant, Tenant's agents, employees, licensees, invitees or visitors; and Tenant shall pay the costs thereof plus a fifteen percent
(15%) administrative fee to Landlord upon receipt of written demand. All requests for repairs and maintenance that are the responsibility of Landlord pursuant to any provision of this Lease must be
made in writing to Landlord at the address set forth herein, or as subsequently changed from time to time by Landlord in writing. 

        B.    Tenant's Repairs:    Except for those items expressly the responsibility of the Landlord pursuant to
Section 14.A. above, Tenant agrees to maintain and keep the Premises in good repair and condition at Tenant's expense. Tenant's obligation to maintain the Premises shall include the obligation
to maintain
the heating, ventilation and air conditioning systems and related equipment servicing the Premises, and Tenant shall at all times during the term of this Lease keep in full force and effect an
agreement with a third party contractor for the maintenance of such heating, ventilation and air conditioning systems and related equipment, such contractor to be approved in advance, in writing by
Landlord. Additionally, Tenant shall maintain all exterior glass, storefront doors and overhead doors attached to the Premises. The maintenance and repair of electrical, telecommunications, water,
waste water and gas facilities providing such services to the Premises shall be the Tenant's responsibility. Tenant agrees not to commit or allow any waste or damage to be committed on any portion of
the Property, and at the termination of this Lease, by lapse of time or otherwise, to deliver up the Premises to Landlord in as good condition as they existed on the date of possession by Tenant,
ordinary wear and tear alone excepted, and Landlord shall have the right to re-enter and resume possession of the Premises whether or not the Premises are vacated by Tenant. 

        SEC. 15.    TENANT'S ALTERATIONS, FIXTURES AND PERSONAL PROPERTY:    Tenant covenants and agrees that it will make no
structural change or other change affecting the exterior of the Building or Project without Landlord's written consent in advance, such consent not to be unreasonably withheld, and without first
furnishing the Landlord fifteen (15) days advance notice outlining in detail the proposed changes or alterations. Tenant covenants and agrees that it will make no other alterations or additions
exceeding $2,500 in value without Landlord's written consent in advance, which consent shall not be unreasonably withheld, and without first furnishing the Landlord fifteen (15) days advance
notice outlining in detail the proposed changes or alterations. All changes, alterations, and additions must be of a high quality consistent with the original construction provided. All penetrations
of the roof shall be performed by Landlord's roof contractor, so as to maintain all existing roof warranties. 

        Any
such changes, interior alterations or additions approved in writing by Landlord shall be surrendered to Landlord upon termination of this Lease. All costs and expenses of any
approved changes, interior alterations or additions shall be borne solely by Tenant. Any contractor or person making such improvements for Tenant must first be approved in writing by Landlord. 

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        Tenant
may remove its trade fixtures, office supplies, movable office furniture or equipment and other personal property not attached to the building in which the Premises are located
provided: (a) such removal is made prior to the termination of this Lease; (b) Tenant is not in default of any obligation or covenant under this Lease at the time of such removal; and
(c) Tenant promptly repairs all damage caused by such removal. 

        SEC. 16.    TENANT FINISH:    Except as otherwise provided in the Work Letter attached hereto as Exhibit G, all
installations and improvements now or hereafter placed on the Premises shall be for Tenant's account and at Tenant's cost, which cost shall be payable by Tenant to Landlord upon demand as additional
Rent. Upon completion of the initial improvements in accordance with the Work Letter, Tenant agrees to execute and deliver to Landlord a letter accepting delivery of the Premises, in the form attached
as Exhibit F. 

        Landlord
shall have the right at any time to change the arrangement, locations and/or size of the public parts of the Project and, upon giving Tenant reasonable notice thereof, to change
the name, number or designation by which the Project is commonly known. 

        SEC. 17.    LIENS BY TENANT:    Tenant shall keep the Premises free from any liens arising out of any work performed,
materials furnished, or obligations incurred by or for Tenant. In the event that Tenant shall not, within ten (10) days following the imposition of any such lien, cause the same to be released
of record by payment or posting of a proper bond, Landlord shall have, in addition to all other remedies provided herein and by law, the right but not the obligation, to cause the same to be released
by such means as it shall deem proper, including payment of or defense against the claim giving rise to such lien. All sums paid by Landlord and all expenses incurred by it in connection therewith
shall create automatically an obligation of Tenant to pay, on demand, an equivalent amount together with interest at the rate of 12% per annum. No work which Landlord permits Tenant to perform in the
Premises shall be deemed to be for the immediate use and benefit of Landlord so that no mechanics or other lien shall be allowed against the estate of Landlord by reason of its consent to such work. 

        SEC. 18.    SUBLETTING AND ASSIGNING:    Tenant shall not assign this lease, or allow it to be assigned, in whole or
in part, by operation of law or otherwise, or mortgage or pledge the same, or sublet the Premises, or any part thereof, without the prior written consent of Landlord, which consent shall not be
unreasonable withheld, and in no event shall any such assignment or sublease ever release Tenant from any obligation or liability hereunder. No assignee or sublessee of the Premises or any portion
thereof may assign or sublet the Premises or any portion thereof. Landlord shall not collect any rents or other payments from any party other than Tenant unless Tenant is in default under the terms of
the Lease. Any collection by Landlord from any approved assignee or sublessee or any other party on behalf of Tenant's account shall not be construed to constitute a novation or a release of Tenant
from further performance of its obligations under this Lease. 

        If
the Tenant desires to assign or sublet all or any part of the demised Premises, it shall submit all necessary information as may be required by Landlord at least sixty
(60) days in advance of the date on which Tenant desires to make such assignment or sublease, and shall submit a copy of the proposed assignment or sublease. Within fifteen (15) days
after Landlord's receipt of Tenant's proposed assignment or sublease and the other information, Landlord shall have the option to: 

        (a)  Cancel
the Lease as to the Premises or portion thereof proposed to be assigned or sublet; or 

        (b)  Consent
to the proposed assignment or sublease. Should Tenant sublease space for an amount that is in excess of the agreed rental rate in this lease, Landlord shall have
the right to 50% of such excess, or should Tenant sublease space for less than the agreed rental rate in this Lease, Tenant shall be obligated to Landlord for the difference between the agreed upon
rental rate in this Lease and the rate in the sublease agreement; or 

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        (c)  Refuse
its consent to the proposed assignment or sublease but allow Tenant to continue in the search for an assignee or sublessee that may be acceptable to Landlord. 

        Notwithstanding
anything herein to the contrary, Landlord will allow Tenant to sublease, without Landlord's prior written consent, to any subsidiary or affiliated corporation of which
Tenant owns all or substantially all of its assets or any parent corporation which owns all of Tenant. In no event will any such sublease ever release Tenant from any obligation or liability
hereunder. For the purposes of this Lease, the sale of fifty percent (50%) or more of the capital stock or other equity interest in Tenant shall be deemed an assignment of this Lease, except for the
sale of capital stock or other stock in an initial or subsequent public equity offering. 

        SEC. 19.    FIRE AND CASUALTY:    The parties hereto mutually agree that if the Premises or Project are partially or
totally destroyed by fire or other casualty, then Landlord may, at Landlord's option, repair and restore the Premises and Project, to substantially the same condition in which the Premises and Project
were before such damage, or it may terminate the Lease; provided, however, that in the event the Premises or Project are completely destroyed or so badly damaged that in Landlord's reasonable
estimation, repairs cannot be commenced within ninety (90) days and completed within six (6) months thereafter, then Landlord shall so notify Tenant and this Lease shall be terminable as
of the date of the occurrence of the damage or destruction, by either party hereto by serving written notice upon the other within thirty (30) days after such notice; and provided further, that
in any event if repairs have not been commenced within ninety (90) days from the date of said damage and thereafter completed within nine (9) months from commencement, this Lease may be
immediately terminated by Tenant as of the date of occurrence of the damage or destruction, by serving notice upon the Landlord at any time prior to commencement of construction if the grounds for
termination is failure to commence construction within ninety (90) days, or at any time prior to completion of construction if termination is based upon the failure to complete construction
within nine (9) months. 

        In
the event the Premises are completely destroyed or so damaged by fire or other casualty that it cannot reasonably be used by Tenant for the purposes herein provided and this Lease is
not terminated as above provided, then there shall be a total abatement of Rent until the Premises are made usable. In the event the Premises are partially destroyed or damaged by fire or other hazard
so that such Premises can be only partially used by Tenant for the purpose herein provided, then there shall be a partial abatement in the Rent corresponding to the time and extent which the Promises
cannot be used by Tenant. Landlord shall not be obligated in any way or manner to insure any personal property (including, but not limited to, any fixtures, furniture, machinery, goods, supplies or
improvements) of Tenant or which Tenant may have upon or within the Premises or any fixtures installed by or paid for by Tenant upon or within the Premises. 

        Except
as provided in Section 20 below, if any portion of the, Property shall be damaged by fire or other casualty resulting from the fault or negligence of Tenant, or the agents,
employees, licensees, or invitees of Tenant, such damage shall be repaired by and at the expense of Tenant under the direction and supervision of Landlord, and Rent shall continue without abatement. 

        SEC. 20.    WAIVER OF SUBROGATION:    Landlord and Tenant hereby waive any rights each may have against the other, on
account of any loss or damage occasioned to Landlord or Tenant, as the case may be, their respective property, the Premises, its contents or to the other portion of the Property arising from any risk
covered by valid and enforceable insurance, to the extent of such coverage. Landlord and Tenant each agree to cause an endorsement to be furnished to their respective insurance policies recognizing
this waiver of subrogation, or take such other action as to reasonably requested by the other party to verify the effectiveness of this waiver of subrogation. 

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        SEC. 21.    DEFAULT BY TENANT:    

        A.    Event of Default:    The occurrence of any of the following shall constitute a material default and breach of
this lease by Tenant: 

        (i)    Any
failure by Tenant to pay Rent or to make any other payment required to be made by Tenant hereunder when due, where such failure continues for ten (10) days
after written notice to Tenant; 

        (ii)  Any
failure by Tenant to observe and perform any other provision of this Lease to be observed or performed by Tenant, where such failure continues for twenty
(20) days after written notice to Tenant; 

        (iii)  Tenant
admits in writing that it cannot meet its obligations as they become due; or is declared insolvent according to any law; or assignment of Tenant's property is
made for the benefit of creditors; or a receiver or trustee is appointed for Tenant or its property; or the interest of Tenant under this Lease is levied on under execution or other legal process; or
any petition is filed by or against Tenant to declare Tenant bankrupt or to delay, reduce or modify Tenant's debts or obligations; or any petition is filed or other action taken to reorganize or
modify Tenant's capital structure if Tenant be a corporation or other entity (provided that no such levy, execution, legal process or petition filed against Tenant shall constitute a breach of this
Lease if Tenant shall contest the same by appropriate proceedings and shall remove or vacate the same within thirty (30) days from the date of its creation, service or filing). 

        (iv)  Lessee
shall cease its business in the Premises or shall vacate any substantial portion of the Premises, and discontinues payment of rent. 

        (v)  Lessee
shall fail or refuse to move into or take possession of the Premises within fifteen (15) days after the date on which the term of this Lease commences
under the terms of Section 2 of this Lease. 

        B.    Landlord's Remedies:    In the event of any such default by Tenant, Landlord, at its option, may have one or
more of the following remedies, in addition to all other legal rights and remedies: 

        (i)    Landlord
may terminate this Lease and without further notice repossess the Premises by picking or changing locks to the Premises or otherwise, and be entitled to recover
as damages a sum of money equal to the total of (1) the cost of recovering the Premises, (2) the unpaid Rent earned at the time of termination, (3) the balance of the Rent for the
remainder of the term, (4) costs of reletting and refurbishing, and (5) any other sum of money and damages owed by Tenant to Landlord; 

        (ii)  Landlord
may immediately terminate Tenant's right of possession of the Premises, but not terminate the Lease, and without notice or demand enter upon the Premises or
any part thereof and take absolute possession of the same, pick or change the locks, and, at Landlord's sole option may relet the Premises or any part thereof for such terms and such rents as Landlord
may reasonably elect. In the event Landlord shall elect to so relet, then rent received by Landlord from such reletting shall be applied first to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord, second to the payment of any cost of such reletting, including, without limitation, refurbishing costs and leasing commissions, and third to the payment of Rent due
and unpaid hereunder, and Tenant shall satisfy and pay any deficiency upon demand therefore from time to time. In no event will Landlord be obligated to pay to Tenant any excess Rent received from
reletting. Any entry into and possession of the Premises by Landlord shall be without liability or responsibility to Tenant and shall not be in lieu of or in substitution for any other legal rights of
Landlord hereunder. Tenant further agrees that Landlord may file suit to recover any sums due under the terms of this Lease and that no recovery of any portion due 

9

 

Landlord hereunder shall be any defense to any subsequent action brought for any amount not previously reduced to judgment in favor of Landlord. Reletting of the Premises shall not be construed as an
election on the part of Landlord to terminate this Lease and, notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for default. 

        (iii)  Landlord
may offset against any security deposits held by Landlord for any non-payment of Rent or any damage to the Premises or any sums due under the
terms of this Lease. 

        (iv)  Landlord
may enter upon the Premises and do whatever Tenant is obligated to do under the terms of this Lease; and Tenant agrees to reimburse Landlord on demand for any
expenses which Landlord
may incur in effecting compliance with Tenant's obligation under this Lease, and Tenant further agrees that Landlord shall not be liable for any damages resulting to the Tenant from such action. 

        (v)  Landlord
may change the door locks on the Premises, and Landlord shall have no obligation to provide a new key to such locks. Tenant hereby waives the provisions of
Section 93.002 Texas Property Code (and any successor statute), to the extent permitted by law. 

        SEC. 22.    Intentionally omitted.    

        SEC. 23.    DEFAULT BY LANDLORD:    Except as otherwise provided in this Lease, Landlord shall be in default under
this Lease if Landlord fails to perform any of its obligations hereunder and said failure continues for a period of thirty (30) days after written notice thereof from Tenant to Landlord (unless
such failure cannot reasonably be cured within thirty (30) days and Landlord shall have commenced to cure said failure within said thirty (30) days and continues diligently to pursue the
curing of the same.) If Landlord shall be in default under this Lease and, if as a consequence of such default, Tenant shall recover a money judgment against Landlord, such judgment shall be satisfied
only out of the right, title and interest of Landlord in the Project as the same may then be encumbered and Landlord shall not be liable for any deficiency. In no event shall Tenant have the right to
levy execution against any property of Landlord other than its interest in the Project. 

        SEC. 24.    INDEMNITY OF LANDLORD-INSURANCE:    

        A.    Indemnity:    Tenant covenants that Landlord shall not be liable to Tenant or to Tenant's agents, employees,
customers or invitees for any injury to person or damage to property, including consequential loss or damage, arising out of the construction, use, occupancy or enjoyment of the Premises by Tenant or
any person therein or holding under Tenant or by, or through the acts or omissions of other tenants of the Project or Landlord, except to the extent caused by Landlord's gross negligence or willful
misconduct. Tenant hereby agrees, as part of the material consideration for this Lease, to indemnify and save Landlord harmless from all claims, action, demands, costs and expenses and liability
whatsoever, including reasonable attorneys' fees, on account of any such real or claimed damage or liability, and from all liens, claims and demands occurring in, on or at any portion of Premises or
arising out of the construction, use, occupancy or enjoyment of any portion of the Premises and its facilities by Tenant or anyone holding under Tenant, or any repairs or alterations which Tenant may
make upon the Premises. 

        B.    Tenant's Insurance:    Tenant, at its own expense, shall maintain during the term of this Lease a policy or
policies of comprehensive general liability insurance, including personal injury and property damage, with contractual liability endorsement, in the amount of One Million Dollars ($1,000,000) for
property damage and One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate for personal injuries or deaths of persons occurring in or about the Premises
and automobile liability insurance in the amount of One Million Dollars ($1,000,000). Tenant, at its own expense, shall also maintain during the term of this Lease fire and extended coverage 

10

 

insurance covering the replacement cost of (i) all alterations, additions, partitions and improvements installed or placed in the Premises by Tenant or by Landlord on behalf of Tenant,
including storefront, exterior doors and all plate glass; and (ii) all of Tenant's personal property contained within the Premises. Said policies shall (i) name the Landlord and
management company as additional insured and insure Landlord's and management company's contingent liability under or in connection with this Lease (except for the workers' compensation policy, which
instead shall include a waiver of subrogation endorsement in favor of Landlord); (ii) be issued by an insurance company which is acceptable to Landlord and has at least an "A" rating from A. M.
Best; and (iii) provide that said insurance shall not be canceled unless thirty (30) days prior written notice has been given to Landlord. Said policy or policies or certificates thereof
shall be delivered to Landlord by Tenant on or before the Commencement Date and upon each renewal of said insurance. Tenant, at its own expense, shall maintain during the term of this Lease a policy
or policies of workers' compensation or 24 hour—7 day a week health and accident insurance coverage for Tenant's employees. 

        SEC. 25.    ATTORNEY'S FEES:    In the event of any legal action or proceeding brought by either party against the
other arising out of this Lease, the prevailing party shall be entitled to recover reasonable attorney's fees and costs incurred in such action and such amount shall be included in any judgment
rendered in such proceeding. 

        SEC. 26.    TRANSFER OR ASSIGNMENT BY LANDLORD:    Landlord shall have the right to assign or transfer, in whole or in
part, every feature of its right and obligations hereunder and the Property. Such assignments or transfers may be made to a corporation, trust, trust company, individual or group of individuals or any
other type entity, and howsoever made shall be in all things respected and recognized by Tenant. In the event of a sale or conveyance by Landlord of the Property, the same shall operate to release
Landlord from any and all liability under this Lease arising after the date of such sale. Tenant's right to quiet possession of the Premises shall not be disturbed so long as Tenant shall pay the Rent
and observe and perform all of the provisions of this Lease to be observed and performed by Tenant, unless this Lease is terminated pursuant to specific provisions relating thereto or contained
herein. If any security deposit has been made by Tenant, Landlord may transfer such security deposit to the purchaser and thereupon Landlord shall be discharged from any further liability in reference
thereto. 

        SEC. 27.    ESTOPPEL CERTIFICATE:    Tenant shall, within ten (10) business days after a request of the
Landlord or any mortgagee of Landlord, without additional consideration, execute and deliver an Estoppel Certificate certifying the following: 

        (a)  This
Lease is in full force and effect; and 

        (b)  The
date through which Rent has been paid; and 

        (c)  This
Lease has not been modified or amended (or a description of any modifications or amendments if it has been modified or amended); and 

        (d)  Neither
Landlord nor Tenant is in default and each has fully performed all of its obligations hereunder (or a description of any defaults if Landlord or Tenant has
defaulted); and 

        (e)  Any
such further information as may be requested by Landlord or Landlord's mortgagee. 

        SEC. 28.    CONDEMNATION:    If the whole or substantially the whole of the Project or the Premises should be taken
for any public or quasi-public use, by right of eminent domain or otherwise or should be sold in lieu of condemnation then this Lease shall terminate as of the date when physical possession of the
Project or the Premises is taken by the condemning authority. If less than the whole or substantially the whole of the Project or the Premises is taken or sold, Landlord (whether or not the Premises
are affected thereby) or Tenant (in the event the Premises are materially affected by such condemnation) may terminate this Lease by giving written notice thereof to the other party, in which 

11

 

event this Lease shall terminate as of the date when physical possession of such portion of the Project or Premises is taken by the condemning authority. If this Lease is not so terminated upon any
such taking or sale, the Base Rental payable hereunder shall be diminished by an equitable amount, and Landlord shall, to the extent Landlord deems feasible, restore the Project and the Premises to
substantially their former condition, but such work shall not exceed the scope of the work done by Landlord in originally constructing the Project and installing improvements in the Premises, nor
shall Landlord in any event be required to spend for such work an amount in excess of the amount received by Landlord as compensation for such taking. All amounts awarded upon a taking of any part or
all of the Property, Project or the Premises shall belong to Landlord, and Tenant shall not be entitled to and expressly waives all claims to any such compensation. 

        SEC. 29.    TAXES ON TENANT'S PROPERTY:    Tenant shall be liable for and shall pay, prior to their becoming
delinquent, any and all taxes and assessments levied against any personal property or trade or other fixtures or equipment placed by Tenant in or about the Premises, including any additional real
estate taxes or assessments which may be levied against the Property by reason of Tenant's fixtures and/or furnishings in the Premises. 

        SEC. 30.    SIGNS:    No signs of any kind or nature, symbol or identifying mark shall be put on the Project, the
Property, in the halls, elevators, staircases, entrances, parking areas or upon the doors or walls, whether plate glass or otherwise, of the Premises nor within the Premises so as to be visible from
the public areas or exterior of the building in which the Premises are located, without prior written approval of Landlord which consent shall not be unreasonably withheld. All signs or lettering
shall conform in all respects to the sign and/or lettering criteria established by Landlord. 

        SEC. 31.    PARKING:    Subject to the following terms and conditions, Tenant shall have a non-exclusive
license to use 91 parking spaces associated with the Project. Tenant's right to such parking spaces are subject to Landlord's rights to grant other tenants of the Project the rights to parking spaces
associated with the Project. Landlord reserves the right from time to time to assign, or re-assign, the location of such parking spaces in any manner that Landlord in Landlord's sole
discretion deems beneficial to the operation of the Project, provided that Tenant shall always have the non-exclusive license to use 91 parking spaces associated with the Project. Should
Landlord, pursuant to this right, re-assign spaces to reserved or other preferential parking associated with the Building, Tenant shall be entitled to a portion of such spaces based on its
rentable square footage as a percentage of total Building square footage. Tenant agrees that it will employ its best efforts to prevent the use by Tenant's employees and visitors of parking spaces
allocated to other tenants. Landlord reserves the right to promulgate rules and regulations for the use of all parking areas at any time during the term of this Lease. All motor vehicles (including
all contents thereof), shall be parked in such spaces at the sole risk of Tenant, its employees, agents, invitees and licensees, it being expressly agreed and understood that Landlord has no duty to
insure any of said motor vehicles (including the contents thereof), and that Landlord it not responsible for the protection and security of such vehicles, or the contents thereof. Landlord shall have
no liability whatsoever for any property damage and/or personal injury which might occur as a result of or in connection with the parking of said motor vehicles in any of the parking spaces. Nothing
herein shall be deemed to create a bailment between the parties hereto, it being expressly agreed and understood that the only relationship created between Landlord and Tenant hereby is that of
licensor and licensee, respectively. 

        SEC. 32.    RULES AND REGULATIONS:    Such reasonable rules and regulations applying to all Tenants in the Project as
may be adopted by Landlord for the safety, care, cleanliness, preservation of good order, or operation of the Premises, the Project and the Property, are hereby made a part hereof and Tenant agrees to
comply with all such rules and regulations. Landlord shall have the right at all times to change any of the rules and regulations or to amend them in any manner deemed reasonable by the Landlord. All
changes and amendments will be sent by Landlord to Tenant in writing and shall be thereafter carried out and observed by Tenant (See "Rules and Regulations" attached hereto as EXHIBIT "C"). 

12

  

        SEC. 33.    FORCE MAJEURE:    In the event Landlord shall be delayed, hindered, or prevented front the performance of
any act required hereunder by reason of acts of God, strikes, lockouts, labor disputes, labor troubles, inability to procure materials, failure of power, restrictive governmental laws or regulations,
riots, insurrection, war or other cause not within the reasonable control of Landlord, then the performance of such act shall be excused for the period of the delay and the period for the performance
of any such act shall be extended for a period equivalent to the period of such delay. 

        SEC. 34.    HOLDING OVER:    In the event Tenant, or any party claiming under Tenant, retains possession of the
Premises after the expiration or earlier termination of this Lease, such possession shall be an unlawful detainer, and no tenancy or interest shall result from such possession; such parties shall be
subject to immediate eviction and removal, and Tenant or any such party shall pay Landlord as Rent for the period of such hold-over an amount equal to 150% of the Rent in effect at the
time of such termination or expiration. 

        Tenant
will vacate the Premises and deliver same to Landlord immediately upon Tenant's receipt of notice to do so from Landlord. The Rent during such hold-over period shall
be payable to Landlord on demand. No holding over by Tenant, whether with or without consent of Landlord, shall operate to extend this Lease. 

        SEC. 35.    NON-WAIVER:    No waiver by Landlord of any provision of this Lease or of any breach by Tenant
hereunder shall be deemed to be a waiver of any other provision hereof, or of any subsequent breach by Tenant of the same or any other provision. Landlord's consent to or approval of any act by Tenant
requiring Landlord's consent or approval shall not be deemed to render unnecessary the obtaining of Landlord's consent to or approval of any subsequent act of Tenant. No act or thing done by Landlord
or Landlord's agents during the term of this Lease shall be deemed an acceptance of a surrender of the Premises, unless done in writing signed by Landlord. The delivery of the keys to any employee or
agent of Landlord shall not operate as a termination of the Lease or a surrender of the Premises. The acceptance of any Rent by Landlord following a breach of this Lease by Tenant shall not constitute
a waiver by Landlord of such breach or any other breach unless such waiver is expressly stated in writing signed by Landlord. 

        SEC. 36.    SUBORDINATION AND ATTORNMENT:    

        A.    Subordination:    This Lease shall be subject to and subordinate to any lease wherein Landlord is the lessee and
to the lien of any and all mortgages or deeds of trust, regardless of whether such lease, mortgages or deeds of trust now exist or may hereafter be created with regard to all or any part of the
Project or the Property, or both, and to any and all advances to be made thereunder, and to the interest thereon, and all modifications, consolidations, renewals, replacements and extensions thereof.
Tenant also agrees that any lessor or mortgagee may elect to make this Lease prior and superior to any lease or lien of its mortgage or deed of trust. Any such election must be in writing and shall be
effective when filed in the Real Property Records of the County in which the Project is located. In the event of such election, this Lease shall be deemed prior and superior to the said lease or lien
of said mortgage or deed of trust, whether this Lease is dated prior to or subsequent to the date of said lease, mortgage or deed of trust. 

        B.    Attornment:    In the event of any proceedings brought for the foreclosure of any mortgage or deed of trust
covering the Property, or any part thereof, or in the event of the exercise of a power of sale pursuant thereto and upon the written request of a purchaser at such foreclosure proceedings, Tenant
shall, at the request of such purchaser, attorn to and recognize such purchaser as Landlord under this Lease. 

        C.    Instruments of Confirmation:    The above subordination and attornment clauses shall be
self-operative and no further instruments of subordination or attornment need be required by any mortgagee, trustee, lessor, purchaser or assignee. In confirmation thereof, Tenant agrees
that, upon ten 

13

 

(10) days prior written notice from Landlord, or any such lessor or mortgagee, Tenant shall execute and deliver whatever instruments may be required for such purposes in order to carry out the
intent of this Section. In the event that Tenant should fail to execute and deliver such instruments in compliance with this Section, Tenant hereby irrevocably constitutes Landlord as its
attorney-in-fact to execute such instrument in Tenant's name, place and stead, it being agreed that such power is one coupled with an interest. 

        D.    Non-Disturbance Agreement:    Upon written request by Tenant, Landlord agrees to request of any
existing lessor, mortgagee or lien holder, a non-disturbance agreement executed by such party, stating that so long as Tenant is not in default under this Lease, Tenant's leasehold estate,
and the right to the use, possession, tenancy and occupancy hereunder, shall remain undisturbed and survive any and all terminations of such Lease or foreclosures or conveyances in lieu thereof or
other actions taken or entered into to enforce any such lease, mortgage or deed of trust. Landlord shall have no obligation beyond the requesting of such non-disturbance agreement, and
shall not be in default hereunder in the event such lessor, mortgagee or other lien holder refuses to execute and deliver such non-disturbance agreement. 

        SEC. 37.    ENVIRONMENTAL COMPLIANCE:    Other than incidentally in the course of Tenant's business or practice,
Tenant shall not use, and shall not permit any servant, licensee, employee, agent, or invitee to use any portion of the Premises or Project for the placement, storage, manufacture, disposal, or
handling of any "Hazardous Materials" (as herein defined). To the extent used in the course of Tenant's business or practice, Tenant shall manage, handle, and provide safeguards for the Premises,
the remainder of the Project, and all persons coming to the Premises, or to the Project, in accordance with all rules, regulations, orders, guidelines, or other instructions or directives of the
United States of America, any State, any political subdivision of' either of such governmental entities, or any other governmental entity having authority to regulate such Hazardous Materials. In the
event there is no entity with authority to regulate any portion of the Hazardous Materials used in the ordinary course of Tenant's practice, then Tenant agrees to handle, use, and dispose of such
Hazardous Materials in the same manner that a prudent person would handle the same, and consistent with standard industry practice. Tenant shall, upon Landlord's written request, provide Landlord with
a written list of any Hazardous Materials handled by it at the Premises as well as such other information as Landlord may request regarding such Hazardous Materials and Tenant's handling of the same.
In the event that Landlord shall reasonably determine that the handling by Tenant of any Hazardous Material shall pose an unacceptable risk to Landlord or its affiliates, Landlord reserves the right
to require additional liability insurance and/or bonding of Tenant's operations. In the event that Landlord shall elect to require such insurance or bonding of Tenant, Tenant shall be solely
responsible for obtaining same. Landlord may object at any time to Tenant's improper use, handling, disposal or record keeping practices concerning such Hazardous Materials and Tenant shall
immediately correct such practices as soon as receiving any notice of such concerns from Landlord (unless Tenant can demonstrate that such practices are proper under both current law and current,
customary industry practice). Notwithstanding the foregoing, Landlord shall be under no obligation to supervise Tenant's business, operations or procedures. Tenant shall be responsible for the costs
of any removal, abatement, or remediation of any Hazardous Materials placed, stored, manufactured, disposed of, or handled by Tenant or Tenant's servants, licensees, or any of Tenant's employees,
agents, or invitees, in the Premises or elsewhere on the Project. Such costs shall include, without limitation, the reasonable cost of any consultant retained by Landlord in connection with such work.  Tenant shall indemnify
Landlord and hold Landlord harmless from and against any loss, cost, liability, or expense (including reasonable attorney's fees and court costs) arising
out of the placement, storage, manufacture, disposal, handling, removal, abatement, or remediation of any Hazardous Materials by Tenant, or any removal, abatement or remediation of any Hazardous
Materials required hereunder to be performed or paid for by Tenant, with respect to any portion of the Premises or Project, or arising out of any breach by Tenant of its obligations under this
Section 37. The provisions of this Section 37 shall survive the termination of this 

14

 

Lease. The term "Hazardous Materials" as used herein shall mean (i) any substance the presence of which requires special handling, investigation, notification, or remediation under any
federal, state, or local statute, regulation, ordinance, order, action, policy, or common law; (ii) any substance which is or becomes defined as a hazardous waste, hazardous substance,
pollutant or contaminant under any federal, state, or local statute, regulation, rule, or ordinance or amendments thereto: (iii) any substance which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board, agency, or instrumentality of
the United States, the State of Texas, or any political subdivision thereof, (iv) any substance the presence of which causes or threatens to cause an erosion, contamination, drainage, or
nuisance problem (including to adjacent properties, nearby public roads and rights-of-way) or poses or threatens to pose a hazard to the health or safety of persons in or about
the Project; (v) any substance which contains gasoline, diesel fuel, or other petroleum hydrocarbons; and (vi) any substance which contains polychlorinated biphenyls, asbestos, or urea
formaldehyde foam insulation. 

        SEC. 38.    SUCCESSORS AND ASSIGNS:    Except as otherwise provided in this Lease, all of the covenants, conditions
and provisions of this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns. 

        SEC. 39.    INTEREST ON TENANT'S OBLIGATION:    Any Rent, or other amount due from Tenant to Landlord which is not
paid when due shall bear interest at the lesser of twelve percent (12%) per annum or the highest rate allowed by law on such amounts from the date such payment is due until paid, but the payment of
such interest shall not excuse or cure the default. 

        SEC. 40.    TIME:    Time is of the essence. 

        SEC. 41.    APPLICABLE LAW:    This Lease shall be governed by and construed pursuant to the laws of the State of
Texas. 

        SEC. 42.    SEVERABILITY:    If any provision of this Lease or the application thereof to any person or circumstances
shall be invalid or unenforceable to any extent, the remainder of this Lease and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law. 

        SEC. 43.    EXAMINATION OF LEASE:    Submission of this instrument for examination or signature by Tenant does not
constitute a reservation of or option for lease, and it is not effective as a lease or otherwise until execution by and delivery to both Landlord and Tenant. 

        SEC. 44.    AUTHORITY OF TENANT:    If Tenant executes this Lease in other than an individual capacity, each of the
persons executing this Lease on behalf of Tenant does hereby personally covenant and warrant that Tenant is a duly authorized and existing legal entity as herein represented, that Tenant has and is
qualified to do business in Texas, that Tenant has the full right and authority to enter into this Lease, and that each person signing on behalf of Tenant is authorized to do so. Upon request the
signatories hereto will furnish satisfactory evidence of their authority to execute this Lease on behalf of Tenant. 

        SEC. 45.    BROKERS:    Tenant warrants that it has had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, excepting only the following broker(s) and that it knows of no other real estate broker(s) or agent(s) who is (are) or might be entitled to a commission in
connection with this Lease: Jackson & Cooksey. Landlord agrees to pay real estate commissions due in connection with this Lease only to the broker(s) named herein and only pursuant to the terms
of a separate written agreement with said broker(s) which has been signed by Landlord. Tenant agrees to indemnify and hold harmless Landlord from and against any liability from all other claims for
commission arising from the negotiation of this Lease, to the extent based upon the acts of Tenant. 

15

 

        SEC. 46.    NOTICES:    All notices which Landlord or Tenant may be required, or may desire, to serve on the other
shall be in writing and may be served, as an alternative to personal service, by depositing the same with the U.S. Postal Service, by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows: (i) to Landlord at the address set forth below; (ii) to Tenant at the address set forth below; or (iii) to the Tenant at the Premises. Any
requirement of notice or service set forth herein shall be deemed satisfied three (3) business days after deposit with the Postal Service. The addresses stated below shall be effective for all
notices to the respective parties until written notice of a change of address is given pursuant to the provisions hereof. 

	If to Tenant	 	If to Landlord:

By Mail:	 	Research Interchange One, L.P.

P.O. Box 10085

Austin, Texas 78766-1085
	
        
	 	By Delivery:	 	Research Interchange One, L.P.

7600 Burnet Road, Ste. 210

Austin, Texas 78757

        SEC. 47    MISCELLANEOUS PROVISIONS:    

        A.    Captions:    The title captions appearing in this Lease are inserted and included solely for convenience and
shall never be considered or given any effect in construing this Lease, or any provision or provisions hereof, or in connection with the duties, obligations or liabilities of the respective parties
hereto or in ascertaining intent, if any question of intent exists. 

        B.    Limitation on Personal Liability of Landlord:    Notwithstanding anything to the contrary contained in this
Lease, it is understood and agreed that there shall be no personal liability on the part of the Landlord or any of its successors or assigns, with respect to any of the terms, covenants and conditions
of this Lease, and Tenant shall look solely to the interest of Landlord in the Premises in the event of any default or liability of Landlord under this Lease, such exculpation of liability to be
absolute and without any exception whatsoever. 

        C.    Personal Pronouns:    All personal pronouns used in this Lease shall include the other genders, whether used in
the masculine, feminine or neuter gender, and the singular shall include the plural whenever and as often as may be appropriate. 

        D.    Recordation:    Tenant agrees not to record this Lease. 

        SEC. 48.    ENTIRE AGREEMENT:    This Lease contains all of the agreements of the parties hereto with respect to any
matter covered or mentioned in this Lease, and no prior agreement, understanding or representation pertaining to any such matter shall be effective for any purpose. No provision of this Lease may be
amended or added to except by an agreement in writing signed by the parties hereto or their respective successors in interest. 

16

 

        SEC. 49.    EXHIBITS:    The following exhibits are attached to and made a part of this Lease for all purposes:

Exhibit A—Floor
Plan of Premises

Exhibit B—Legal Description of the Land

Exhibit C—Rules and Regulations

Exhibit D—Schedule of Rental Rates

Exhibit E—Special Provisions

Exhibit F—Letter of Acceptance

Exhibit G—Work Letter 

	 	 	Tenant
	

 	
 	

Testchip Technologies, Inc.
	

 	
 	

By:	
 	

/s/ Brenda Stoner

	

 	
 	

Name:	
 	

Brenda Stoner

	

 	
 	

Title:	
 	

Vice President

	

 	
 	

Date:	
 	

November 13, 2000

	

 	

 	

 Landlord
	

 	
 	

Research Interchange One, L. P.
	

 	
 	

By:	
 	

/s/ Brian F. Gaston

	

 	
 	

Name:	
 	

Brian F. Gaston

	

 	
 	

Title:	
 	

President of the General Partner

	

 	
 	

Date:	
 	

November 17, 2000

17

 
 
 

EXHIBIT A
  RESEARCH INTERCHANGE—BUILDING A
  9300 UNITED DRIVE
  AUSTIN, TEXAS    
  

[FLOOR PLAN]  

        Note: Details pertinent to the location nod number of exterior parking spaces, curbs, green space, glass and glazing, overhead doors and personnel entry/exit
doors may have been changed during construction. See building site for actual conditions. 

18

 
 
 

EXHIBIT "B"
  LAND
  (LEGAL DESCRIPTIONS)    
  

        The Land is described in a survey dated November 1, 1999 by Ralph Harris Surveyor Inc., Invoice No. 35895, Work Order No. 34475, as
follows: 

        9.131
acres consisting of Lot 3, a 0.365 acre portion of Lot 1 and a 3.545 acre portion of Lot 2, all of Research Interchange Subdivision, a subdivision in Travis County, Texas,
according to the map or plat of record in Volume 95, Page 305, Plat Records of Travis County, Texas, and a 0.957 acre portion of Lot 2, Northwestern Industrial Addition of record in Volume 11, Page
18, and a 0.578 acre portion of Lot A Industrial Terrace Section 5, of record in Volume 83, Page 125D, all of the Travis County, Texas Plat Records. 

        At
some date in the future, the property within the Land may be involved in the amended plat process such that the boundaries of the Land correspond to legal lot lines. Upon such
amendment, this description of the Land will be substituted with the new legal lot designation. 

	AGREED AND ACCEPTED:	 	Tenant	 	/s/ Brenda Stoner

	

 	
 	

Landlord	
 	

/s/ Brian F. Gaston

19

 
 
 

EXHIBIT C
  RULES AND REGULATIONS    
  

        1.    Tenant
will refer to Landlord all contractors, contractor's representatives and installation technicians rendering any service for Tenant for Landlord's supervision
and/or written approval before performance of any such contractual services. This shall apply to all work performed in the Project, including, without limitation: (1) installation of
telephones, electrical devices and attachments, and installations of any and every nature affecting floors, wall, woodwork, trim, windows, ceiling, equipment or any other physical portion of the
Project, (2) painting or (3) drilling, boring, cutting or stringing of wires. 

        2.    Tenant
shall not place, install or operate on the Property any engine, stove, machinery, or conduct mechanical operations or cook therein, or place or use in or about the
Premises any explosives, gasoline, kerosene, oil, acids, caustics, or any other flammable, explosive, hazardous or odorous material without the prior written consent of Landlord.  Microwave usage by Tenant's employees and
guests is acceptable and the prior consent of Landlord shall not be required. If consent is granted, Tenant
will be required to furnish approved fire extinguishers and have them inspected and approved by the proper local authorities on an annual basis. 

        3.    Landlord
will not be responsible for any lost or stolen personal property, equipment, money or jewelry, from any of the Property or any public areas regardless of whether
such loss occurs when the area is locked against entry or not. 

        4.    Tenant,
or the employees, agents, servants, visitors, or licensees of Tenant shall not at any time or place, leave or discard any rubbish, paper articles, or objects of
any kind whatsoever outside the doors
of the Premises, or in the passageways of any portion of the Property other than in designated trash receptacles. Drums, pallets, equipment, vehicles, etc. are not allowed to be stored outside of the
Premises or the Building. 

        5.    No
birds, animals, or vehicles shall be brought into or kept in or about the Project, except for vehicles and parked or stored in areas designated by Landlord. 

        6.    Landlord
shall have the right to determine and prescribe the proper weight and proper position of any unusually heavy equipment, including without limitation, all safes,
large files and computers, that are to be placed in the Premises, and only those which in the sole opinion of the Landlord will not damage the floors, structure, and/or elevators may be moved into
said Premises. Any damage, occasioned in connection with the moving or installation of such aforementioned articles in said Premises, or the existence of same in said Premises shall be paid for by
Tenant. 

        7.    Tenant
shall give immediate notice to the Property Manager in case of accidents in the Premises or any portion of the Property or of defects therein or in any fixtures or
equipment, or of any other type of emergency on or about the Property. 

        8.    Tenant
shall not use the Premises or permit the Premises to be used for photographic or multigraph reproductions except in connection with its own business and then only
with the Landlord's prior written consent. 

        9.    Any
requests by Tenant will be attended to only upon application at the office of the Property Manager. Employees of the Property shall not perform any work or do
anything outside their regular duties unless under special instructions from the office of the Property Manager. 

        10.  The
parking areas and driveways are to be used only for the purposes intended by Landlord and shall not be obstructed or misused in any way. Parking in any unauthorized
area is prohibited. Landlord may from time to time designate parking areas and make other rules and regulations governing parking on the Property. Tenant shall not leave any vehicle in a state of
disrepair (including, without limitation, flat tires, out of date inspection stickers, or license plates) on the Project. No vehicle 

20

 

maintenance or servicing shall occur on the Project. If Tenant or any of its employees, agents or invitees park their vehicles in areas other than designated parking areas or leave any vehicle in a
state of disrepair, Landlord shall have the right to remove such vehicles at Tenant's expense, in accordance with applicable laws. 

        11.  Tenant
shall not place anything or allow anything to be placed on the glass of any window, door, partition or wall and the expense of any breakage or damage resulting
from the violation of this rule shall be borne by the Tenant who, or whose employees or invitees shall have caused it. 

        12.  The
toilet rooms, urinals, wash bowls and other apparatus shall not be used for any purposes other than that for which they were constructed and no foreign substance of
any kind whatsoever shall be thrown therein and the expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the Tenant who, or whose employees or
invitees shall have caused it. 

        13.  Landlord
reserves the right to exclude or expel from the building any person who in the judgment of Landlord is under the influence of liquor or drugs, or who shall in
any manner do any act in violation of any of these Rules and Regulations. 

        14.  Without
the written consent of Landlord, Tenant shall not use the name of the Building in connection with or in promoting or advertising the business of Tenant except as
Tenant's address. 

        15.  Landlord
shall have the right to control and operate the public portions of the Property, the public facilities, as well as facilities furnished for the common use of
the tenants of the Project, in such manner as it deems best for the benefit of the tenants generally. 

        16.  Trash
removal is the Tenant's responsibility and all costs associated with such removal, if not removed by Tenant, shall be borne by the Tenant. Tenant shall maintain
adequate receptacles for such removal, the design, placement, and capacity of such receptacles to be approved by Landlord. It is the Tenant's responsibility to maintain in a clean condition, the truck
area immediately adjoining the Premises. At Tenant's request, Landlord will make best efforts to provide for a shared dumpster for the tenants in the Building and pass through the cost in an
appropriate manner through Additional Rental charges. 

        17.  Landlord
reserves the right at any time to rescind any of these Rules and Regulations of the Project and to make such other and further Rules and Regulations as in its
sole judgment shall from time to time be needful for the safety, protection, care and cleanliness of the Project, the Premises and the parking areas, the operation thereof, the preservation of good
order therein and the protection and comfort of the other tenants in the Project and their agents, employees and invitees, which Rules and Regulations, when made and written notice thereof is given to
Tenant, shall be binding upon Tenant in like mariner as if originally herein prescribed. 

	AGREED AND ACCEPTED:	 	Tenant	 	/s/ Brenda Stoner

	

 	
 	

Landlord	
 	

/s/ Brian F. Gaston

21

 
 
 

EXHIBIT D
  RENTAL RATES    
  

	Time Period
 
	 	Monthly Base Rental*
	 	Total Base Rental*

	3/01/2001-2/29/2004	 	$	32,436.00	 	$	1,167,696.00
	

3/01/2004-2/28/2006	
 	
$	

35,680.00	
 	
$	

856,320.00
	

 	
 	
 	

TOTAL:	
 	
$	

2,024,016.00
	 
	 	 
	 	

*Exclusive
of Additional Rental. 

	AGREED AND ACCEPTED:	 	Tenant	 	/s/ Brenda Stoner

	

 	
 	

Landlord	
 	

/s/ Brian F. Gaston

22

 
 
 

EXHIBIT E
  SPECIAL PROVISIONS    
  

        1.    Option to Renew the Lease: Tenant is granted the option to renew this Lease for one (1) additional term of five
(5) years (the "Renewal Term"), such Renewal Term commencing on the date following the expiration of this Lease. If Tenant wishes to exercise the
foregoing option, Tenant shall give Landlord written notice thereof at least nine (9) months prior to the beginning of the Renewal Term, in which event the Lease will be renewed at the Fair
Market Value Rent (hereinafter defined) as reasonably determined by Landlord and Tenant. In the event that a renewal agreement has not been executed at least six (6) months prior to Lease
termination, this option shall become null and void. 

        "Fair Market Value Rent" shall mean the monthly rent charged tenants for space in comparable buildings (age, number of stories, total
size, comparable location) in the area in which the Premises are located, taking into account all financial terms, including without limitation, base rent, free rent, escalations, refurbishment or new
construction costs funded by the respective parties, credit worthiness of the Tenant, allowances, and leasing and brokerage commissions. 

        The
foregoing option to renew shall terminate if this Lease is assigned or the Premises sublet to any entity other than a Related Entity. 

        2.    One-time Right of First Refusal: Tenant shall have a one-time right to lease the available vacant
space immediately contiguous to the Premises of this Lease. If Landlord has an acceptable bona fide offer for the space, Tenant's right to lease will be under the same terms and conditions as the
offer. Written acceptance or rejection of Tenant's right to lease must be received by Landlord within five (5) business days of receiving the option right and Tenant must execute the lease for
the space within ten (10) business days. If Tenant elects not to accept the offer, then this One-time Right of First Refusal will become null and void forevermore. 

        Upon
eight (8) months prior written notice, Tenant shall have the right to require Landlord to provide Tenant with up to twenty-one (21) Additional Parking
Spaces ("APS") on land owned by Bill Gaston, Inc. on property adjacent to the Project and to the south of the Project currently described as the portion of Lot 1, Block A, Research Interchange
Subdivision, Travis County, Texas not contained in the Project ("Phase 2"), provided Bill Gaston, Inc. or a related entity owns Phase 2 at the time of Tenant's exercise of this right. Upon
delivery of the APS, Tenant shall pay additional Rent in the amount of $50 per parking space leased. If Tenant ever reduces the number of APS it requires, Tenant will be limited to that number of APS
thereafter. 

        Upon
redevelopment of Phase 2, Landlord shall be allowed to cease leasing the APS to Tenant. Landlord will work cooperatively with Tenant to provide Tenant with up to 21 APS upon
completion of the redevelopment of Phase 2 under terms reasonably determined in Landlord's sole discretion taking into account the cost of development of the parking structures associated with the
redevelopment of Phase 2. If Tenant leases APS in the redevelopment of Phase 2, Tenant will be not be allowed to reduce the number of APS it leases during the term of this Lease or its renewal. 

	AGREED AND ACCEPTED:	 	Tenant	 	/s/ Brenda Stoner

	

 	
 	

Landlord	
 	

/s/ Brian F. Gaston

23

 
 
 

EXHIBIT F
  LETTER OF ACCEPTANCE    
  

TENANT: 

LANDLORD: 

DATE
LEASE SIGNED: 

TERM
OF LEASE:                          MONTHS 

ADDRESS
OF PREMISES: 

COMMENCEMENT
DATE: 

EXPIRATION
DATE: 

        The
above-described Premises are accepted by Tenant as in compliance with the Lease and suitable for the purpose for which they were leased. The above-described Lease commences and
expires on the dates set forth above. Tenant acknowledges that it has received from Landlord            keys to the Premises. 

	TENANT	 	 	 	 
	

 (Name of Tenant)	
 	

 	
 	

 
	

By	
 	

        
 (Signature)	
 	

 	
 	

 
	

 (Name and Title)	
 	

 	
 	

 
	

LANDLORD	

 	

 	

 	

 
	

 (Name of Landlord)	
 	

 	
 	

 
	

By	
 	

        
 (Signature)	
 	

 	
 	

 
	

 (Name and Title)	
 	

 	
 	

 

24

 
 
 

EXHIBIT G
  WORK LETTER    
  

        It is agreed that Landlord will complete construction of the Premises leased by Landlord to Tenant in that certain Lease to which a copy of this Work Letter is
attached, in accordance with the following: 

        1.    Within
ten (10) working days of the execution of the Lease, Tenant shall provide to Landlord (a) a preliminary space plan showing all proposed interior
partitions, doors, plumbing fixtures and millwork and (b) preliminary specifications for all interior improvements and finishes. Such space plan and specifications shall be (a) prepared
by either Landlord's architect and engineer or an architect and engineer selected by Tenant, provided that the Tenant's architect and engineer must be previously approved in writing at Landlord's sole
discretion and Landlord's architect and engineer shall review the working drawings and specifications of materials at Tenant's expense, (b) in accordance with such specifications as Landlord
has established for the construction of all interior improvements within the Project (the "Building Standards") and (c) subject to approval by Landlord. Landlord shall have a period of five
(5) days after receipt of the preliminary space plan and specifications in order to approve or disapprove same. If Landlord shall disapprove Tenant's plans and specifications within such five
(5) day period and advise Tenant in writing of the changes which will be necessary in order for Landlord to approve same, Tenant shall make the changes in the preliminary space plan and
specifications required by Landlord and submit a revised preliminary space plan and specifications to Landlord not
later than five (5) days after receipt of Landlord's written comments thereon and/or requirements with respect thereto. Any delay occasioned as a result of Landlord's disapproval of Tenant's
plans and specifications shall not delay the Commencement Date under this Lease. In the event that Landlord fails to approve the originally submitted preliminary space plan and specifications within
the aforesaid five (5) day period or to disapprove same with comments and/or requirements with respect thereto having been submitted to Tenant by Landlord within such five (5) days,
Tenant shall have the right to give Landlord written notice of Landlord's failure to approve or disapprove Tenant's plans and specifications on or before the expiration of five (5) days
following the expiration of the aforesaid five (5) day period, and if Landlord shall not have responded to such notice from Tenant within five (5) days thereafter by enumerating reasons
for Landlord's disapproval of Tenant's plans and specifications, this Lease automatically shall be null and void and neither Landlord nor Tenant shall have any further rights or obligations hereunder.
When the preliminary space plan and specifications as revised are approved by Landlord, then the architect and engineer mutually selected by Tenant and Landlord, but under contract to Landlord, shall
commence the preparation of the construction documents for the Improvements. At such time as the construction documents are completed then Tenant and Landlord shall review same and each initial and
date the construction documents (the "Construction Documents"). 

        2.    Landlord
shall obtain at least three (3) bids for the construction of the Improvements in accordance with the Construction Documents. The selection of the general
contractor to perform the construction of the Improvements shall made by Landlord with the consent of Tenant and shall be based on the following: (a) the contractor's qualifications and
experience, (b) the ability of the contractor to perform on the schedule and meet or exceed the projected commencement date and (c) the contractor's proposed contract amount. The cost of
the Improvements for the purpose of billing shall equal the cost to Landlord of constructing such Improvements (including the cost of supervision and coordination) plus the following amount: 4% if
Landlord employs a general contractor. 

        3.    Architectural
and engineering fees relating to the Premises (including any architectural and engineering fees incurred by Landlord in reviewing Tenant's working drawings
and specifications and in modifying Landlord's master working drawings to incorporate plans prepared by Tenant's architect or engineer, where an architect or engineer other than Landlord's architect
or engineer has prepared Tenant's working drawings and specifications) shall be paid by Tenant. All costs and expenses incurred in the construction of Improvements shall be borne by Tenant (and are
hereinafter referred to as 

25

 

"Tenant's Costs"); provided, however, that Tenant shall receive an allowance (the "Allowance") of $703,920.00 to be credited against the billing costs of constructing the Improvements. Any excess
(the "Excess") of Tenant's Costs over the Allowance shall be payable as follows: 

        (a)  Tenant
shall pay to Landlord, prior to the commencement of construction of the Improvements, an amount equal to the greater of: (i) $90,000 or (ii) sixty
percent (60%) of the Excess (as then estimated by Landlord); 

        (b)  After
substantial completion of the Improvements, but prior to occupancy of the Premises by Tenant, Tenant shall pay to Landlord an amount equal to eighty percent (80%)
of the then unpaid balance of the Excess (as then estimated by Landlord); and 

        (c)  As
soon as the final accounting can be prepared and submitted to Tenant, Tenant shall pay to Landlord the entire unpaid balance of the actual Excess, based on the final
costs to Landlord measured as described in Paragraph 2 hereof. 

        The
amounts payable hereunder shall constitute Rent due pursuant to the Lease at the times specified herein and failure to make any such payments when due shall constitute a default
under the Lease, entitling Landlord to all of its remedies thereunder, as well as all remedies otherwise available to Landlord. 

        The
Excess to be paid by Tenant shall be required to be at least $150,000.00. In the event that the Excess is less than $150,000.00, the amount of the difference (the
"Make-up Amount") shall be paid to Landlord by Tenant as soon as the final accounting is determined as in Section 3(c) herein. In the event that a Make-up Amount is due
and paid by Tenant, the remaining Base Rental shall be reduced by amortizing the Make-up Amount over the remaining primary Term of the Lease using an 11% amortization factor. 

        4.    If
Tenant requests any changes in the approved plans and specifications for the Improvements, Tenant shall present Landlord with revised plans and specifications. If
Landlord approves such changes, Landlord shall incorporate such changes in the Improvements; Landlord, however, may require, prior to proceeding with any changes, additional cash advances against the
Excess in the event Landlord determines that Tenant's proposed changes will increase the amount of such Excess. 

        5.    If
Tenant requests changes in the approved plans and specifications for the improvements and if such changes shall delay the work to be performed hereunder, or if Tenant
shall otherwise delay the completion of said work, including, without limitation, delay resulting from Tenant's failure to timely submit final working drawings and specifications of materials for
Landlord's approval, then, notwithstanding any provision to the contrary in the Lease, Tenant's obligation to pay rent hereunder shall nevertheless commence on the date in Section 2 of the
Lease and the Commencement Date under the Lease shall not be delayed as hereinafter provided. If by the Commencement Date specified in Section 2 of the Lease, the Premises have not been
substantially completed pursuant to the terms of this Work Letter, due to any cause other than delays caused by Tenant as provided above, then, as Tenant's sole remedy for the delay in Tenant's
occupancy of the Premises, the Commencement Date shall be delayed and the Rent under the Lease shall not commence until the earlier of actual occupancy by Tenant or substantial completion of the
Improvements. 

        6.    Within
seven (7) days after delivery of the Improvements to Tenant, Tenant shall have the right to submit a written "punch list" to Landlord, setting forth any
defective item of construction, and Landlord shall promptly cause such items to be corrected. During the first year of the term of this
Lease, Tenant shall give notice to Landlord whenever any defect becomes reasonably apparent, and Landlord will use reasonable efforts to enforce the warranties of the contractors. 

26

 

        7.    All
terms herein used shall have the same meaning as when used in the Lease. 

	AGREED AND ACCEPTED:	 	Tenant	 	/s/ Brenda Stoner

	

 	
 	

Landlord	
 	

/s/ Brian F. Gaston

27

QuickLinks

EXHIBIT 10.17

INDUSTRIAL LEASE AGREEMENT

WITNESSETH

EXHIBIT A RESEARCH INTERCHANGE—BUILDING A 9300 UNITED DRIVE AUSTIN, TEXAS

EXHIBIT "B" LAND (LEGAL DESCRIPTIONS)

EXHIBIT C RULES AND REGULATIONS

EXHIBIT D RENTAL RATES

EXHIBIT E SPECIAL PROVISIONS

EXHIBIT F LETTER OF ACCEPTANCE

EXHIBIT G WORK LETTER

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