Document:

Exhibit 4.3

 

SUBSCRIPTION AGREEMENT

 

THIS SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of                         ,
2009, is entered into by and between Baltic Trading Limited, a corporation
incorporated under the laws of the Republic of the Marshall Islands (the “Corporation”)
and Genco Investments LLC, a limited liability company formed under the laws of
the Republic of the Marshall Islands (“Purchaser”).

 

WHEREAS, the Corporation desires to issue and sell to
Purchaser, and Purchaser desires to subscribe for and purchase from the
Corporation, a number of shares of the Class B Stock, par value $0.01 per
share, of the Corporation (“Class B Stock”); and

 

WHEREAS, immediately prior to the execution hereof, Purchaser
has surrendered to the Corporation its certificate for 100 shares of the
Corporation’s capital stock for no consideration for cancellation, and the
Corporation has caused to become effective its Amended and Restated Articles of
Incorporation which provide, among other things, for the Class B Stock as
authorized capital stock of the Company;

 

WHEREAS, the Corporation and Purchaser are executing and
delivering this Agreement in reliance upon the exemption from securities
registration afforded by the provisions of the Securities Act of 1933, as amended
(the “Securities Act”), and the rules and regulations promulgated
by the U.S. Securities and Exchange Commission thereunder.

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants and obligations hereinafter
set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Corporation and Purchaser,
intending to be legally bound, hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

The following capitalized terms used in this Agreement
shall have the following respective meanings:

 

“Affiliate” means a
person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, another person.

 

“Antidilution Shares” means a number of shares
of Class B Stock equal to two percent (2%) of the number of shares of
Common Stock that the Corporation may issue from time to time, excluding the
Incentive Shares and the Over-allotment Shares.

 

“Common Stock” means the Common Stock, par
value $0.01 per share, of the Corporation.

 

“Control” including
the terms “controlling,” “controlled by” and “under common control with,” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting shares, by contract or otherwise. A person who is the owner
of 20% or more of the outstanding 

 

 

voting shares of any corporation, partnership, unincorporated
association or other entity shall be presumed to have control of such entity,
in the absence of proof by a preponderance of the evidence to the
contrary.  Notwithstanding the foregoing,
a presumption of control shall not apply where such person holds voting shares,
in good faith and not for the purpose of circumventing this provision, as an
agent, bank, broker, nominee, custodian or trustee for one or more owners who
do not individually or as a group have control of such entity.

 

“Incentive Shares”
means any shares of Common Stock constituting or issuable pursuant to any award
under the Corporation’s 2009 Equity Incentive Plan.

 

“Initial Shares” means                                 
(                    )
shares of Class B Stock.

 

“Over-allotment Shares” means any shares of
Common Stock issuable pursuant to the underwriters’ over-allotment option as
described in the Registration Statement on Form S-1 (File No. 333-162456)
for the Corporation’s initial public offering of Common Stock.

 

“Purchase Price” means the sum of Seventy-Five
Million Dollars ($75,000,000).  
Purchaser shall be entitled to receive credit towards the Purchase Price
for any advances of cash made to the Corporation prior to consummation of the
transactions contemplated in Sections 2.1 and 2.2 hereof.

 

“Surplus” means the surplus (as such term is
used in Section 41(1) of the Business Corporations Act of the
Republic of the Marshall Islands) of the Corporation attributable to the
Purchase Price.

 

ARTICLE II

PURCHASE AND SALE OF SHARES

 

SECTION 2.1.                      Agreement to Sell and
Purchase the Shares; Antidilution Rights.  Subject to
the terms and conditions hereof, the Corporation agrees to issue and sell to
Purchaser, and Purchaser agrees to subscribe for and purchase from the
Corporation, the Initial Shares and the Antidilution Shares in exchange for the
Purchase Price paid by Purchaser simultaneously with the execution hereof or
through prior advances of cash as described in Article I above.

 

SECTION 2.2.                      Issuance of Initial Shares. 
Simultaneously with the execution hereof, the Corporation shall issue
the Initial Shares to Purchaser.

 

SECTION 2.3.                      Issuances of Antidilution
Shares.

 

(a)         Subject to the terms and conditions of
this Section 2.4, the Corporation shall issue Antidilution Shares to
Purchaser from time to time simultaneously with each future issuance of Common
Stock other than the Incentive Shares and the Over-allotment Shares.

 

(b)         To the extent the Corporation has any
remaining Surplus, then consistent with resolutions adopted by the Corporation’s
Board of Directors prior to the execution hereof, 

 

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such Surplus shall be reduced, and the Corporation’s stated capital
increased, by the aggregate par value per share of any Antidilution Shares to
be issued.

 

(c)         If Corporation has no remaining Surplus,
then the issuance of further Antidilution Shares shall be subject to Purchaser’s
prior payment to the Corporation of the aggregate par value per share for such
Antidilution Shares.

 

(d)         The Purchaser’s right to receive Antidilution
Shares shall terminate at such time as Purchaser, together with its Affiliates,
ceases to own at least 10% of the aggregate number of outstanding shares of the
Corporation’s Common Stock and Class B Stock.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser hereby
represents and warrants to the Corporation as follows:

 

(a)         The Purchaser has the legal capacity,
power and authority to enter into and perform all of its obligations under this
Agreement.  The execution, delivery and
performance of this Agreement by the Purchaser will not violate any other
material agreement to which the Purchaser is a party.  This Agreement has been duly and validly
authorized, executed and delivered by the Purchaser and constitutes a valid and
binding agreement of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except that such enforceability (i) may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
or relating to enforcement of creditors’ rights generally and (ii) is
subject to general principles of equity.

 

(b)         The Purchaser represents and warrants
that the Purchaser: (i)  is familiar with the Corporation and its business
prospects and (ii) has had an opportunity to select and consult with such
attorneys, business consultants and any other person(s) the Purchaser has
wished to confer with.  The Purchaser
acknowledges that the Corporation has made available to the Purchaser prior to
the signing of this Agreement and sale of any Class B Stock, the opportunity
to ask questions of any person authorized to act on behalf of the Corporation
concerning any aspect of the investment and to obtain any additional
information, to the extent the Corporation possesses such information or can
acquire it without unreasonable effort or expense, necessary to verify the
accuracy of the information.

 

(c)         Purchaser knows and understands that an
investment in the Class B Stock of the Corporation is a speculative
investment that involves a high risk of loss and that on and after the date
hereof, there will be no public market for the Class B Stock and the
Corporation does not contemplate that a public market will develop.

 

(d)         The Purchaser is an institutional “accredited
investor,” as such term is defined in Rule 501(a) of Regulation D
under the Securities Act.   The Purchaser
has substantial knowledge and experience in financial, investment and business
matters, and has the requisite knowledge and experience to evaluate the risks
and merits of this investment.  The
decision of the Purchaser to purchase the Class B Stock hereunder has been
made by the Purchaser independent of any statements, disclosures or judgments
as to the properties, business, prospects 

 

3

 

or condition (financial or otherwise) of the Corporation that may have
been made or given to the Purchaser.  The
Purchaser can and will bear the economic risks of the Purchaser’s investment in
the Corporation and is able to hold the Corporation’s Class B Stock
indefinitely without registration and is able to sustain a complete loss if the
Class B Stock becomes worthless.

 

(e)         The shares of Class B Stock being
purchased hereunder have not been registered under the Securities Act, (ii) such
shares are being sold pursuant an exemption under Section 4(2) of the
Securities Act, and (iii) the Corporation’s reliance on such exemption is
predicated in part on the Purchaser’s representations made pursuant to this
Agreement.  The Purchaser has no
contract, undertaking, agreement or arrangement with any other person or entity
to sell, transfer or pledge any Class B Stock that the Purchaser is
purchasing hereunder, and the Purchaser has no present plans or intentions to
enter into any such contract, undertaking, agreement or arrangement.  The Purchaser acknowledges that no such
shares of Class B Stock have been registered or qualified for resale under
applicable securities laws and may not be sold except pursuant to such
registration or qualification thereunder or an exemption therefrom.

 

ARTICLE IV

MISCELLANEOUS

 

SECTION 4.1.                      Governing Law. 
This Agreement shall be governed by and construed under the law of the
State of New York without regard to its choice of law provisions.

 

SECTION 4.2.                      Assignment. 
Neither this Agreement nor any right, remedy, obligation or liability
arising hereunder shall be assignable by either the Corporation or Purchaser
without the other’s prior written consent, except that Purchaser (or any
successor assignee) may assign any or all of the foregoing in whole or in part
to one or more of its Affiliates.

 

SECTION 4.3.                      Binding Effect. 
The provisions of this Agreement shall be binding upon and accrue to the
benefit of the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.

 

SECTION 4.4.                      Section and Other
Headings; Interpretation.  The section
and other headings herein are for convenience of reference only, do not
constitute part of this Agreement and shall not be deemed to limit or otherwise
affect any of the provisions hereof.

 

SECTION 4.5.                      Counterparts. 
This Agreement may be executed in counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
together shall be deemed to be one and the same agreement.

 

SECTION 4.6.                      Entire Agreement; Waiver,
Amendment.  This Agreement contains the entire agreement
of the parties with respect to the subject matter hereof and supersedes any and
all prior agreements, understandings or undertakings, written or oral.  Neither this Agreement nor any provision
hereof shall be waived, amended, modified, changed, discharged or terminated
except by an instrument in writing, signed by the party against whom any
waiver, amendment, modification, change, discharge or termination is sought.

 

[Signature
page follows.]

 

4

 

IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Agreement as of the date first above written.

 

 

	
   

  	
  BALTIC TRADING LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  John C. Wobensmith

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GENCO INVESTMENTS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  John C.
  Wobensmith

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  

 

[Signature Page to Baltic
Trading Limited Subscription Agreement]

 

5Exhibit 4.4

 

SHAREHOLDERS RIGHTS AGREEMENT

 

This
Shareholders Rights Agreement (this “Agreement”) is made and entered
into as of December       , 2009, by and
between Baltic Trading Limited, a Marshall Islands corporation (the “Company”),
and Mellon Investor Services LLC (operating with the service name BNY Mellon
Shareowner Services), a New Jersey limited liability company, as Rights Agent
(the “Rights Agent”).

 

WHEREAS,
the Board of Directors of the Company (the “Board”) has authorized the issuance
of one right (a “Common Stock Right”) for each share of common stock,
par value $.01 per share (the “Common Stock”) that shall become
outstanding and one right (the “Class B Right” and together with
the Common Stock Right, the “Rights”) for each share of Class B
Stock, par value $.01 per share (“Class B Stock” and together with
the Common Stock, the “Voting Stock”) 
that shall become outstanding (a) at any time between the date
hereof and the earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date (as such terms are hereinafter defined) or (b) upon
the exercise or conversion, prior to the earlier of the Redemption Date or the
Final Expiration Date, of any option or other security exercisable for or
convertible into Applicable Shares (as defined below), which option or other
such security is outstanding on the Distribution Date; and

 

WHEREAS,
each Right represents the right of the holder thereof to purchase one one-tenth
of an Applicable Share (as such number may hereafter be adjusted pursuant to
the provisions hereof), upon the terms and subject to the conditions set forth
herein.

 

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

 

1.             Certain
Definitions.

 

“Acquiring
Person” shall mean any Person, other than Genco Shipping & Trading
Limited and its Affiliates or their respective employee benefit plans or any
trustee of any such plan, Peter C. Georgiopoulos, or any Person who acquires
Voting Stock through a Permitted Offer, who or which, together with all
Affiliates and Associates of such Person, shall be a 15% Beneficial Owner.  Notwithstanding the foregoing, no Person
shall be deemed to be an “Acquiring Person” as the result of an acquisition of
shares of Voting Stock by the Company which, by reducing the number of shares
of Voting Stock outstanding, increases the proportionate number of shares of
Voting Stock beneficially owned by such Person to cause such Person to become a
15% Beneficial Owner; provided, however, that a Person who (a) becomes
a 15% Beneficial Owner by reason of Voting Stock purchases by the Company and (b) then
after such Voting Stock purchases by the Company, becomes the Beneficial Owner
of an additional 1% of the outstanding shares of any class of Voting Stock of
the Company (other than pursuant to a dividend or distribution paid or made by
the Company on the outstanding shares of Voting Stock in shares of Voting Stock
or pursuant to a split or subdivision of the outstanding shares of Voting Stock),
such Person shall be deemed to be an “Acquiring Person” unless upon becoming
the Beneficial Owner of such additional shares of Voting Stock of the Company
such Person does not become a 15% Beneficial Owner.  Notwithstanding the foregoing, if the Board

 

 

determines in good faith that a Person who would otherwise be an “Acquiring
Person,” as defined herein, has become such inadvertently (including, without
limitation, because (A) such Person was unaware that it beneficially owned
a percentage of the shares of Voting Stock that would otherwise cause such
Person to be an “Acquiring Person,” as defined herein, or (B) such Person
was aware of the extent of the shares of Voting Stock it beneficially owned but
had no actual knowledge of the consequences of such beneficial ownership under
this Agreement) and without any intention of changing or influencing control of
the Company, and if such Person divested or divests as promptly as practicable
a sufficient number of shares of Voting Stock so that such Person would no
longer be an “Acquiring Person,” as defined herein, then such Person shall not
be deemed to be or to have become an “Acquiring Person” for any purposes of
this Agreement.

 

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

 

“Applicable
Shares” shall mean the same class of shares (Common Stock or Class B
Stock, as the case may be) to which the Rights were originally attached, except
that if such Rights were originally attached to shares of Class B Stock
which are subsequently converted into Common Stock, Applicable Shares in
respect of such Rights shall be shares of Common Stock.

 

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

 

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

 

(a)           which such Person or any of
such Person’s Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the Exchange Act and Rule 13d-3
thereunder (or any comparable or successor law or regulation);

 

(b)           which such Person or any of
such Person’s Affiliates or Associates has (i) the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed pursuant to this subsection (b)(i) to be the
Beneficial Owner of, or to beneficially own, (A) 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 (B) securities which a Person or
any of such Person’s Affiliates or Associates may be deemed to have the right
to acquire pursuant to any merger or other acquisition agreement between the
Company and such Person (or one or more of its Affiliates or Associates) if
such agreement has been approved by the Board prior to there being an Acquiring
Person; or (ii) the right to vote pursuant to any agreement, arrangement
or understanding; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially own, any security under
this subsection (b)(ii) if

 

2

 

the agreement, arrangement
or understanding to vote such security (A) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (B) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report); or

 

(c)           which are beneficially
owned, directly or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such Person’s Affiliates or
Associates has any agreement, arrangement or understanding, whether or not in
writing (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to subsection (b)(2) above) or
disposing of any securities of the Company; provided, however,
that in no case shall an officer or director of the Company be deemed (x) the
Beneficial Owner of any securities beneficially owned by another officer or
director of the Company solely by reason of actions undertaken by such persons
in their capacity as officers or directors of the Company or (y) the
Beneficial Owner of securities held of record by the trustee of any employee
benefit plan of the Company or any Subsidiary of the Company for the benefit of
any employee of the Company or any Subsidiary of the Company, other than the
officer or director, by reason of any influence that such officer or director
may have over the voting of the securities held in the plan.

 

“Board”
shall have the meaning set forth in the preamble.

 

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

 

“Class B
Stock” shall have the meaning set forth in the preamble.

 

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

 

“Common
Stock” shall have the meaning set forth in the preamble.

 

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

 

“Current
Per Share Market Price” of any security (a “Security” for purposes of this
definition), for all computations other than those made pursuant to Section 11(a)(iii) hereof,
shall mean the average of the daily closing prices per share of such Security
for the thirty (30) consecutive Trading Days immediately prior to but not
including such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof,
the Current Per Share Market Price of any Security on any date shall be deemed
to be the average of the daily closing prices per share of such Security for
the ten (10) consecutive Trading Days immediately prior to but not

 

3

 

including such date; provided, however, that in the
event that the Current Per Share Market Price of the Security is determined
during a period following the announcement by the issuer of such Security of (a) a
dividend or distribution on such Security payable in shares of such Security or
securities convertible into such shares or (b) any subdivision,
combination or reclassification of such Security, and prior to the expiration
of a thirty (30) Trading Day or ten (10) Trading Day period, as
applicable, after the ex-dividend date for such dividend or distribution or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the Current Per Share Market Price shall be appropriately
adjusted to reflect the current market price per share equivalent of such
Security.  The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last sale price or, if such last sale price is not reported, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such date
the Security is not quoted by any such system, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Security selected by the Board.  If
on any such date no market maker is making a market in the Security, the fair
value of such shares on such date as determined in good faith by the Board
shall be used.    The Current Per Share
Market Price of Class B Stock shall be deemed to be the same as the
Current Per Share market Price of Common Stock determined in accordance with
this definition.  If any Security other
than the Class B Stock is not publicly held or so listed or traded,
Current Per Share Market Price shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

“15%
Beneficial Owner” shall mean a Beneficial Owner of 15% or more of the any
class of Voting Stock then outstanding but shall not include the Company, any
Subsidiary of the Company or any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person holding shares of Common Stock for or
pursuant to the terms of any such plan.

 

“Final
Expiration Date” shall mean
                    
      ,  2019.

 

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

 

“Permitted
Offer” shall mean a tender or exchange offer for all the outstanding shares
of Voting Stock at a price and on terms that a majority of the members of the
Board who are independent from the Acquiring Person or the person making the
offer determines to be fair to and otherwise in the best interest of the
Company and its shareholders.

 

“Person”
shall mean (a) any individual, firm, corporation, partnership, limited
liability company, trust, association, joint venture, syndicate or other
entity, and shall include any successor (by merger or otherwise) of such entity
or (b) a “group” as that term is used for purposes of Section 13(d)(3) of
the Exchange Act.

 

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

 

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

 

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

 

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

 

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

 

“Rights
Agent” shall mean Mellon Investor Services LLC, or its successor or
replacement as provided in Sections 19 and 21 hereof.

 

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

 

“Section 11(a)(ii) Trigger
Date” means the later of (x) the first occurrence of a Triggering
Event and (y) the date on which the Company’s right of redemption pursuant
to Section 23(a) expires.

 

5

 

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

 

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

 

“Shares
Acquisition Date” shall mean the first date of public announcement (which,
for purposes of this definition, shall include, without limitation, a report
filed pursuant to Section 13(d) under the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such; provided, however,
if such Person is determined not to have become an Acquiring Person as defined
herein, then no Shares Acquisition Date shall be deemed to have occurred.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.             Appointment of
Rights Agent.  The Company
hereby appoints the Rights Agent to act as rights agent for the Company in
accordance with the express terms and conditions hereof (and no implied terms
or conditions), and the Rights Agent hereby accepts such appointment.  The Company may from time to time appoint
such co-Rights Agents as it may

 

6

 

deem
necessary or desirable.  The Rights Agent
shall have no duty to supervise, and in no event shall be liable for, the acts
or omissions of any such co-Rights Agent.

 

3.             Issuance of
Rights Certificates.

 

(a)           Until the
Distribution Date, (i) the Rights will be evidenced (subject to the
provisions of Sections 3(b) and 3(c) hereof) by the
certificates for shares of Voting Stock registered in the names of the holders
thereof (which certificates shall also be deemed to be Rights Certificates) and
not by separate Rights Certificates and (ii) the right to receive Rights
Certificates will be transferable by, and only in connection with the transfer
of shares of Voting Stock.  Until the
earlier of the Distribution Date or the Expiration Date, the surrender for
transfer of certificates for shares of Voting Stock shall also constitute the
surrender for transfer of the Rights associated with the shares of Voting Stock
represented thereby.  As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be
sent (and the Rights Agent will, if requested and provided with all necessary
information, send) by first-class, postage-prepaid mail, to each record holder
of shares of Voting Stock as of the Close of Business on the Distribution Date,
at the address of such holder shown on the records of the Company or the
transfer agent or registrar for the Voting Stock, a Rights Certificate
evidencing one Right for each share of Voting Stock so held, subject to
adjustment as provided herein.  In the
event that an adjustment in the number of Rights per share of Voting Stock has
been made pursuant to Section 11 hereof, then at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights.  As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates and may be
transferred by the transfer of the Rights Certificates as permitted hereby,
separately and apart from any transfer of shares of Voting Stock, and the
holders of such Rights Certificates as listed in the records of the Company or
any transfer agent or registrar for the Rights shall be the record holders
thereof.

 

(b)           The Company
shall promptly notify the Rights Agent in writing upon the occurrence of the
Distribution Date and, if such notification is given orally, the Company shall
confirm the same in writing on or prior to the Business Day next
following.  Until such notice is received
by the Rights Agent, the Rights Agent may presume conclusively for all purposes
that the Distribution Date has not occurred.

 

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

 

7

 

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

 

THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE
HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH IN A SHAREHOLDERS RIGHTS AGREEMENT
BETWEEN BALTIC TRADING LIMITED AND MELLON INVESTOR SERVICES LLC, AS THE RIGHTS
AGENT, DATED AS OF
                    
      , 2009 (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 BALTIC TRADING LIMITED.  UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES
AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE.  BALTIC TRADING LIMITED WILL MAIL TO THE
HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR. 
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR
ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.

 

(e)           With respect to
such certificates containing the foregoing legend, until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the Rights associated with
the shares of Voting Stock represented by such certificates shall be evidenced
by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with
the shares of Voting Stock represented thereby.

 

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

 

4.             Form of
Rights Certificates.

 

(a)           The Rights
Certificates (and the forms of election to purchase Applicable Shares and of
assignment to be printed on the reverse thereof) shall be substantially in the
form of Exhibit A hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate (but which do not affect the rights, duties or
responsibilities of the Rights Agent) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any national securities exchange, on which
the Rights may from time to time be listed or included, or to conform to
usage.  Subject to the provisions of Sections
11 and 22 hereof, the Rights Certificates, whenever distributed,
shall be dated as of the date hereof (or in the case of Rights issued with
respect to shares of Voting Stock issued by the Company after the date hereof,
as of the date of issuance of such shares of Voting Stock) and on their face
shall entitle the holders thereof to purchase such number of tenths of an
Applicable Share as shall be set forth therein at the price set forth therein
(such exercise price per tenth of an Applicable Share being hereinafter

 

8

 

referred
to as the “Exercise Price” and the aggregate Exercise Price of all
Applicable Shares issuable upon exercise of one Right being hereinafter
referred to as the “Total Exercise Price”), but the number and type of
securities purchasable upon the exercise of each Right and the Exercise Price
shall be subject to adjustment as provided herein.

 

(b)           Any Rights
Certificate issued pursuant to Sections 3(a) or 22 hereof
that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person; (ii) a transferee
(whether direct or indirect) of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee after the Acquiring Person becomes such;
or (iii) a transferee (whether direct or indirect) of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of Section 7(e) hereof,
and any Rights Certificate issued pursuant to Sections 6 or 11
hereof upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain, provided that the
Company has notified the Rights Agent in writing that this Section 4(b) applies,
and to the extent feasible, a legend in substantially the following form:

 

THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT).  ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.

 

5.             Countersignature
and Registration.

 

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

 

9

 

(b)           Following the
Distribution Date, receipt by the Rights Agent of notice to that effect from
the Company and all other relevant information referred to in Section 3(a),
the Rights Agent will keep or cause to be kept, at its office designated for
such purposes, books for registration and transfer of the Rights Certificates
issued hereunder.  Such books shall show
the names and addresses of the respective holders of the Rights Certificates,
the number of Rights evidenced on its face by each of the Rights Certificates
and the date of each of the Rights Certificates.

 

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

 

(a)           Subject to the
provisions of Sections 7(e), 14 and 24 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or Rights
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of tenths of an Applicable Share (or, following a
Triggering Event, other securities, cash or other assets, as the case may be)
as the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase.  Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Rights Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined or exchanged at the office
of the Rights Agent designated for such purpose.  The Right Certificates shall be transferable
only on the registry books of the Rights Agent. 
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have (i) properly completed
and duly signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate, (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof and the Rights evidenced thereby as the
Company or the Rights Agent shall reasonably request, and (iii) paid a sum
sufficient to cover any tax or charge that may be imposed in connection with
any transfer, split up, combination or exchange of Rights Certificates as
required by Section 9(e) hereof.  Thereupon the Rights Agent shall, subject to Sections
7(e), 14 and 24 hereof, manually or by facsimile, countersign
and deliver to the person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested, registered in such name or
names as may be designated by the surrendering registered holder. The Company
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates. The Rights Agent shall have no duty or
obligation under any Section of this Agreement requiring the payment of
taxes and charges, unless and until it is satisfied that all such taxes and/or
charges have been paid.

 

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

 

10

 

like
tenor to the Rights Agent for countersignature and delivery to the registered
holder in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.

 

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

 

(a)                                  Subject to Sections
7(e), 23(b) and 24(b) hereof, the registered holder
of any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date and prior to the Close of Business on the Expiration Date by
surrender of the Rights Certificate, with the form of election to purchase on
the reverse side thereof properly completed and duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the Exercise Price for each tenth of an Applicable Share (or,
following a Triggering Event, other securities, cash or other assets as the
case may be) as to which the Rights are exercised, and an amount equal to any
tax or charge required to be paid under Section 9(e) hereof,
by certified check, cashier’s check, bank draft or money order payable to the
order of the Company.  Except for those
provisions herein which expressly survive the termination of this Agreement,
this Agreement shall terminate at such time as the Rights are no longer
exercisable.

 

(b)                                 The Exercise
Price for each tenth of an Applicable Share issuable pursuant to the exercise
of a Right shall initially be One-Hundred Dollars ($100), shall be subject to
adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.

 

(c)                                  Upon receipt of
a Rights Certificate representing exercisable Rights, with the form of election
to purchase properly completed and the certificate duly executed, accompanied
by payment of the Exercise Price for the number of tenths of an Applicable
Share (or, following a Triggering Event, other securities, cash or other assets
as the case may be) to be purchased and an amount equal to any applicable tax
required to be paid by the holder of such Rights Certificate in accordance with
Section 9(e) hereof, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of the
Applicable Shares (or make available, if the Rights Agent is the transfer agent
for the Applicable Shares) a certificate or certificates for the number of
tenths of an Applicable Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests or (B) if the Company shall have elected to deposit the
total number of tenths of an Applicable Share (or, following a Triggering
Event, other securities, cash or other assets as the case may be) issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of tenths of an
Applicable Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) as are to be purchased (in which case
certificates for the Applicable Shares (or, following a Triggering Event, other
securities, cash or other assets as the case may be) represented by such
receipts shall be deposited by the transfer agent with the depositary agent)
and the Company hereby directs the depositary agent to comply with such
request, (ii) when necessary to comply with this Agreement, requisition
from the Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such

 

11

 

holder
and (iv) when necessary to comply with this Agreement, after receipt
thereof, deliver such cash to or upon the order of the registered holder of
such Rights Certificate.  The payment of
the Exercise Price (as such amount may be reduced (including to zero) pursuant
to Section 11(a)(iii) hereof) and an amount equal to any
applicable tax required to be paid by the holder of such Rights Certificate in
accordance with Section 9(e) hereof, may be made in cash or by
certified bank check, cashier’s check or bank draft payable to the order of the
Company.  In the event that the Company
is obligated to issue securities of the Company other than Applicable Shares,
pay cash and/or distribute other property pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when necessary to comply with this Agreement.

 

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

 

(e)                                  Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of a Triggering Event, any Rights beneficially owned by (i) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee (whether direct or indirect) of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such (a “Post-Event Transferee”), (iii) a transferee
(whether direct or indirect) of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e) (a
“Pre-Event Transferee”) or (iv) any subsequent transferee (whether
direct or indirect) of an Acquiring Person receiving transferred Rights from a Post-Event
Transferee or a Pre-Event Transferee, either directly or through one or more
intermediate transferees, shall become null and void without any further action
and no holder of such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement or otherwise.  The Company shall use all reasonable efforts
to ensure that the provisions of this Section 7(e) and Section 4(b) hereof
are complied with, but neither the Company nor the Rights Agent shall have any
liability to any holder of Rights Certificates or to any other Person as a
result of the Company’s failure to make any determinations with respect to an
Acquiring Person or any of such Acquiring Person’s Affiliates, Associates or
transferees (whether direct or indirect) hereunder.

 

(f)                                    Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall, in addition to having complied with the
requirements of Section 7(a), have (i) properly completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for such 

 

12

 

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 or the Rights Agent shall reasonably request.

 

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

 

9.                                       Reservation and
Availability of Shares of Voting Stock.

 

(a)                                  The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued shares of Voting Stock not reserved for another
purpose, the number of shares of Voting Stock that will be sufficient to permit
the exercise in full of all outstanding Rights.

 

(b)                                 So long as the
shares of Voting Stock issuable and deliverable upon exercise of the Rights may
be listed on such exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable (but only to the
extent that it is reasonably likely that the Rights will be exercised), all
shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.

 

(c)                                  The Company
shall use its best efforts to (i) file, as soon as practicable following
the earliest date after the first occurrence of a Triggering Event in which the
consideration to be delivered by the Company upon exercise of the Rights is
described in Sections 11(a)(ii) or 11(a)(iii) hereof
but subject to the following sentence,  a
registration statement under the Securities Act with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as practicable after
such filing and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights
are no longer exercisable for such securities and (B) the Expiration
Date.  The Company may temporarily
suspend, for a period not to exceed ninety (90) days after the date set forth
in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. 
Upon any such suspension, the Company shall issue a public announcement
and give the Rights Agent a copy of any such announcement that exercisability
of the Rights has been temporarily suspended, as well as a public announcement
and copy to the Rights Agent at such time as the suspension is no longer in
effect.  The Company will also take such
action as may be appropriate under, or to ensure compliance with federal or
state securities laws in connection with the exercisability of the Rights.  Notwithstanding any provision of this 

 

13

 

Agreement
to the contrary, the Rights shall not be exercisable in any jurisdiction,
unless the requisite qualification in such jurisdiction shall have been
obtained, or an exemption therefrom shall be available, and until a
registration statement has been declared effective.

 

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

 

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

 

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

 

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

 

(a)                                  (i)  Notwithstanding
anything in this Agreement to the contrary, in the event the Company shall at
any time after the date of this Agreement (A) declare a dividend on the
shares of Voting Stock payable in shares of Voting Stock, (B) 

 

14

 

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

 

(ii)                                  Subject to Section 24
of this Agreement, in the event a Triggering Event shall have occurred, then
promptly following such Triggering Event each holder of a Common Stock Right
and each holder of a Class B Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive for each Right, upon exercise
thereof in accordance with the terms of this Agreement and payment of the
Exercise Price in effect immediately prior to the occurrence of the Triggering
Event, in lieu of a number of tenths of an Applicable Share, such number of
shares of Common Stock and Class B Stock, respectively, as shall equal the
result obtained by multiplying the Exercise Price in effect immediately prior
to the occurrence of the Triggering Event by the number of tenths of an
Applicable Share for which a Right was exercisable (or would have been
exercisable if the Distribution Date had occurred) immediately prior to the
first occurrence of a Triggering Event, and dividing that product by 50% of the
Current Per Share Market Price for shares of Common Stock on the date of
occurrence of the Triggering Event; provided, however, that the
Exercise Price and the number of Applicable Shares so receivable upon exercise
of a Right shall 

 

15

 

be subject to further
adjustment as appropriate in accordance with Section 11(e) hereof
to reflect any events occurring in respect of the Applicable Shares after the
occurrence of the Triggering Event.

 

(iii)                               In lieu of
issuing Applicable Shares in accordance with Section 11(a)(ii) hereof,
the Company may, if the Board determines that such action is necessary or
appropriate and not contrary to the interest of holders of Rights and, in the
event that the number of shares of Voting Stock which are authorized by the
Company’s Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of the Rights, or if any necessary regulatory
approval for such issuance has not been obtained by the Company, the Company
shall: (A) determine the excess of (1) the value of the shares of
Voting Stock issuable upon the exercise of a Right (the “Current Value”)
over (2) the Exercise Price (such excess, the “Spread”), and (B) with
respect to each Right, make adequate provision to substitute for such shares of
Voting Stock, upon exercise of the Rights, (1) cash, (2) a reduction
in the Exercise Price, (3) other equity securities of the Company
(including, without limitation, shares or units of shares of any series of
preferred stock which the Board has deemed to have the same value as such
Voting Stock (such shares or units of shares of preferred stock are herein
called “Voting Stock Equivalents”)), except to the extent that the
Company has not obtained any necessary Shareholder or regulatory approval for
such issuance, (4) debt securities of the Company, except to the extent
that the Company has not obtained any necessary Shareholder or regulatory
approval for such issuance, (5) other assets or (6) any combination
of the foregoing, having an aggregate value equal to the Current Value, where
such aggregate value has been determined by the Board based upon the advice of
a nationally recognized investment banking firm selected by the Board; provided,
however, if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days
following the first occurrence of a Triggering Event, then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Exercise Price, Applicable Shares (to the extent
available), except to the extent that the Company has not obtained any
necessary Shareholder or regulatory approval for such issuance, and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread.  If the Board shall determine in
good faith that it is likely that sufficient additional shares of Voting Stock
could be authorized for issuance upon exercise in full of the Rights or that
any necessary regulatory approval for such issuance will be obtained, the
thirty (30) day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek Shareholder approval for the
authorization of such additional shares or take action to obtain such
regulatory approval (such period, as it may be extended, the “Substitution
Period”).  To the extent that the
Company determines that some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until 

 

16

 

the expiration of the
Substitution Period in order to seek any authorization of additional shares, to
take any action to obtain any required regulatory approval and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof.  In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no longer in
effect, (in each case, with prompt written notice thereof to the Rights
Agent).  For purposes of this Section 11(a)(iii),
the value of the Applicable Shares shall be the Current Per Share Market Price
of the Common Stock on the Section 11(a)(ii) Trigger Date and the value
of any Voting Stock Equivalent shall be deemed to have the same value as the
Common Stock on such date.

 

(b)                                 In case the
Company shall, at any time after the date of this Agreement, fix a record date
for the issuance of rights, options or warrants to all holders of Applicable
Shares entitling such holders (for a period expiring within forty-five (45)
calendar days after but not including such record date) to subscribe for or
purchase Applicable Shares or Equivalent Shares or securities convertible into
Applicable Shares or Equivalent Shares at a price per share (or having a
conversion price per share, if a security convertible into Applicable Shares or
Equivalent Shares) less than the then Current Per Share Market Price of the
Applicable Shares or Equivalent Shares on such record date, then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of
Applicable Shares and Equivalent Shares (if any) outstanding on such record
date, plus the number of Applicable Shares or Equivalent Shares, as the case
may be, which the aggregate offering price of the total number of Applicable Shares
or Equivalent Shares, as the case may be, to be offered or issued (and/or the
aggregate initial conversion price of the convertible securities to be offered
or issued) would purchase at the Current Per Share Market Price, and the
denominator of which shall be the number of Applicable Shares and Equivalent
Shares (if any) outstanding on such record date, plus the number of additional
Applicable Shares or Equivalent Shares, as the case may be, to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right.  In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. 
Applicable Shares and Equivalent Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation.  Such adjustment shall be
made successively whenever such a record date is fixed.  In the event that such rights, options or
warrants are not so issued, the Exercise Price shall be adjusted to be the
Exercise Price which would then be in effect if such record date had not been
fixed.  To the extent that any such
rights, options, or warrants expire unexercised, the Exercise Price shall be
adjusted to be the Exercise Price which would then be in effect if only the exercised
number of such rights, options, or warrants had been issued.

 

17

 

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

 

(d)                                 Notwithstanding
anything to the contrary, no adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Exercise Price; provided, however, that any
adjustments which by reason of this Section 11(d) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment.  All calculations
under this Section 11 shall be made to the nearest cent or to the
nearest hundredth of a share of Common Stock or other Applicable Share, as the
case may be.  Notwithstanding the first
sentence of this Section 11(d), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three (3) years from
the date of the transaction which requires such adjustment or (ii) the
Expiration Date.

 

(e)                                  If as a result
of an adjustment made pursuant to Sections 11(a) or 13(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock other than Applicable Shares, thereafter the number
of such other shares so receivable upon exercise of any Right and, if required,
the Exercise Price thereof, shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Applicable Shares contained in Sections 11(a)-(d) and
(g)-(l), and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the Applicable Shares shall apply on
like terms to any such other shares.

 

(f)                                    All Rights
originally issued by the Company subsequent to any adjustment made to the
Exercise Price hereunder shall evidence the right to purchase, at the adjusted
Exercise Price, the number of tenths of an Applicable Share purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.

 

18

 

(g)                                 Unless the
Company shall have exercised its election as provided in Section 11(h),
upon each adjustment of the Exercise Price as a result of the calculations made
in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Exercise Price, that number of
Applicable Shares (calculated to the nearest tenth of a share) obtained by (i) multiplying
(x) the number of Applicable Shares covered by a Right immediately prior
to this adjustment, by (y) the Exercise Price in effect immediately prior
to such adjustment of the Exercise Price, and (ii) dividing the product so
obtained by the Exercise Price in effect immediately after such adjustment of
the Exercise Price.

 

(h)                                 The Company may
elect on or after the date of any adjustment of the Exercise Price as a result
of the calculations made in Sections 11(b) or (c) to
adjust the number of Rights, in substitution for any adjustment in the number
of Applicable Shares purchasable upon the exercise of a Right.  Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of
tenths of an Applicable Share for which a Right was exercisable immediately
prior to such adjustment.  Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest thousandth) obtained by
dividing the Exercise Price in effect immediately prior to adjustment of the
Exercise Price by the Exercise Price in effect immediately after adjustment of
the Exercise Price.  The Company shall
make a public announcement of its election to adjust the number of Rights (with
prompt written notice thereof to the Rights Agent), indicating the record date
for the adjustment, and, if known at the time, the amount of the adjustment to
be made.  This record date may be the
date on which the Exercise Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. 
If Rights Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(h), the Company shall,
as promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment.  Rights Certificates so to be distributed
shall be issued, executed and delivered by the Company, and countersigned and
delivered by the Rights Agent in the manner provided for herein (and may bear,
at the option of the Company, the adjusted Exercise Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.

 

(i)                                     Irrespective of
any adjustment or change in the Exercise Price or the number of Applicable
Shares issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Exercise Price
per tenth of an Applicable Share and the number of tenths of an Applicable
Share which were expressed in the initial Rights Certificates issued hereunder.

 

(j)                                     Before taking
any action that would cause an adjustment reducing the Exercise Price below the
par or stated value, if any, of the number of tenths of an Applicable Share
issuable upon exercise of the Rights, the Company shall take any corporate
action which 

 

19

 

may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue as fully paid and nonassessable shares such number of
tenths of an Applicable Share at such adjusted Exercise Price.

 

(k)                                  In any case in
which this Section 11 shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified event, the
Company may elect to defer (with prompt written notice thereof to the Rights
Agent) until the occurrence of such event the issuing to the holder of any
Right exercised after such record date of the number of tenths of an Applicable
Share and other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the number of tenths of an Applicable Share
and other capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Exercise Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such holder’s right to
receive such additional shares (fractional or otherwise) upon the occurrence of
the event requiring such adjustment.

 

(l)                                     Notwithstanding
anything in this Section 11 to the contrary, prior to the
Distribution Date, the Company shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required by this Section 11,
as and to the extent that it in its sole discretion shall determine to be
advisable in order that any (i) consolidation or subdivision of the Voting
Stock, (ii) issuance wholly for cash of any Voting Stock at less than the
current market price, (iii) issuance wholly for cash of Voting Stock or
securities which by their terms are convertible into or exchangeable for Voting
Stock, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company
to holders of its Voting Stock shall not be taxable to such Shareholders.

 

(m)                               The Company
covenants and agrees that, after the Distribution Date, it will not, except as
permitted by Sections 23, 24 or 27 hereof, take (or permit
to be taken) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights

 

(n)                                 For the
avoidance of doubt, no adjustment to the Exercise Price shall be made pursuant
to Sections 11(b) or (c) in respect of the issuance of shares of Class B
Stock consisting of Antidilution Shares as defined under that certain
Subscription Agreement by and between the Company and Genco Investments LLC
dated as of                           ,
2009.

 

12.                                 Certificate of
Adjusted Exercise Price or Number of Shares.  Whenever an adjustment is made as provided in
Sections 11 and 13 hereof, the Company shall promptly (a) prepare
a certificate setting forth such adjustment and a brief statement of the facts,
computations and methodology accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Applicable Shares a copy
of such certificate and (c) mail a brief summary thereof to each holder of
a Rights Certificate in accordance with Section 25 and Section 26
hereof.  Notwithstanding the foregoing
sentence, the failure of the Company to make such certification or give such
notice shall not affect the validity of such adjustment or the force or effect
of the requirement for such adjustment. 
The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment or statement contained therein and shall 

 

20

 

not
be deemed to have knowledge of such adjustment unless and until it shall have
received such certificate.

 

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

 

(a)                                  In the event
that, following a Triggering Event, directly or indirectly:

 

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

 

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

 

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

 

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

 

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

 

(C)                                the term “Company”
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of 

 

21

 

Section 11 hereof
shall apply only to such Principal Party following the first occurrence of a Section 13
Event;

 

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

 

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

 

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

 

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

 

(i)                                     in the case of
any transaction described in clause (i) or (ii) of Section 13(a) hereof:
(A) the Person that is the issuer of the securities into which the shares
of Voting Stock are converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer the shares of Voting Stock of which have
the greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one such
Person, the Person the shares of Voting Stock of which have the greatest
aggregate market value of shares outstanding or (y) if the Person that is
the other party to the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives) or (z) the
Person resulting from the consolidation; and

 

22

 

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

 

(c)           The Company shall
not consummate any Section 13 Event unless the Principal Party shall have
a sufficient number of authorized shares of Voting Stock that have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the
Company and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Agreement in accordance
with Sections 13(a) and 13(b) hereof, that all rights
of first refusal or preemptive rights in respect of the issuance of shares of
Voting Stock of such Principal Party upon exercise of outstanding Rights have
been waived, that there are no rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights and that such transaction shall
not result in a default by such Principal Party under this Agreement, and
further providing that, as soon as practicable after the date of such Section 13
Event, such Principal Party will:

 

(i)            prepare and file a registration
statement under the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form, use
its best efforts to cause such registration statement to become effective as
soon as practicable after such filing and use its 

 

23

 

best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date, and
similarly comply with applicable state securities laws;

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

14.           Fractional
Rights and Fractional Shares.

 

(a)           The Company shall
not be required to issue fractions of Rights or to distribute the Rights
Certificates which evidence fractional Rights. 
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Common Stock Right or Class B Right,
as the case may be.  For the purposes of
this Section 14(a), the current market value of a whole Common
Stock Right shall be the closing price (as determined in accordance with the
method set forth in the definition of Current Per Share Market Price) of such
Right for the Trading Day immediately prior to the date on which such
fractional Rights, would have been otherwise issuable, as determined pursuant
to this Agreement, and a Class B Right shall be deemed to have the same
current market value as a Common Stock Right.

 

(b)           The Company shall
not be required to issue fractions of Applicable Shares (other than fractions
that are integral multiples of one tenth of an Applicable Share) upon exercise
of the Rights or to distribute certificates which evidence fractional
Applicable Shares (other than fractions that are integral multiples of one
tenth of an Applicable Share).  Interests
in fractions of Applicable Shares in integral multiples of one tenth of an
Applicable 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, however, such
agreement shall provide that the holders of such depositary receipts shall have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Applicable Shares represented by such depositary
receipts.  In lieu of fractional
Applicable Shares that are not integral multiples of one tenth of an Applicable
Share, the Company shall pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of an Applicable
Share.  For purposes of this Section 14(b),
the current market value of an Applicable Share shall be  the closing price of a share of Common Stock
(as determined in accordance with the method set forth in the definition of
Current Per Share Market Price).

 

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

 

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

 

25

 

fractional
shares unless and until the Rights Agent shall have received such a certificate
and sufficient monies.

 

15.           Rights of
Action.  All rights of action in
respect of this Agreement, excepting the rights of action given to the Rights
Agent under Sections 18 and 20 hereof, are vested in the
respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the shares of Voting Stock); and
any registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the shares of Voting Stock), without the consent of the Rights Agent
or of the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the shares of Voting Stock), may, in his or her own behalf and for his
or her own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
or her right to exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement.  Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.  Notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, judgment, decree or ruling
(whether interlocutory or final) issued by a court or by a governmental,
regulatory, self-regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, that the Company must use all
reasonable efforts to have any such injunction, order, judgment, decree or
ruling lifted or otherwise overturned as soon as possible.

 

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

 

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

 

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

 

(c)           the Company and the
Rights Agent may deem and treat the Person in whose name the Rights Certificate
(or, prior to the Distribution Date, the associated Voting Stock certificate)
is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Voting Stock certificate made by anyone other
than the Company or the Rights 

 

26

 

Agent)
for all purposes whatsoever, and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary;

 

(d)           this Agreement may
be supplemented or amended from time to time in accordance with its terms; and

 

(e)           the power and
authority delegated to the Board pursuant to this Agreement shall be exclusive
and shall be as set forth in Section 29.

 

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

 

18.           The Rights
Agent.

 

(a)           The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and disbursements (including but not limited to counsel
fees and disbursements) incurred in the preparation, delivery, amendment,
administration and execution of this Agreement and the exercise and performance
of its duties hereunder.  The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, damage, judgment, fine, penalty, claim, demand,
settlement, cost or expense (including, without limitation, the reasonable fees
and expenses of legal counsel), incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent (which gross negligence, bad
faith or willful misconduct must be determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction), for
anything done, suffered or omitted by the Rights Agent in connection with the
acceptance, administration, exercise and performance of its duties under this
Agreement.  The costs and expenses
incurred in enforcing this right of indemnification shall be paid by the
Company.  The provisions of this Section 18
and Section 20 below shall survive the termination of this
Agreement, the exercise or expiration of the Rights and the resignation,
replacement or removal of the Rights Agent. 
Anything to the contrary notwithstanding, in no event will the Rights
Agent be liable for special, punitive, indirect, incidental or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the possibility of such
loss or damage.  Any liability of the
Rights Agent under this Agreement will be limited to the amount of annual fees
paid by the Company to the Rights Agent.

 

(b)           The Rights Agent
shall be authorized and protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its 

 

27

 

acceptance
and administration of this Agreement and the exercise and performance of its
duties hereunder, in reliance upon any Rights Certificate or certificate for
the shares of Voting Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or otherwise upon
the advice of counsel as set forth in Section 20 hereof. The Rights
Agent shall not be deemed to have knowledge of any event of which it was
supposed to receive notice thereof hereunder, and the Rights Agent shall be
fully protected and shall incur no liability for failing to take action in
connection therewith unless and until it has received such notice in writing.

 

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

 

20.           Duties of
Rights Agent.  The Rights
Agent undertakes to perform only the duties and obligations expressly imposed
by this Agreement (and no implied duties) upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:

 

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

 

(b)           Whenever in the
performance of its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter (including, without 

 

28

 

limitation,
the identity of any Acquiring Person and the determination of Current Per Share
Market Price) be proved or established by the Company prior to taking,
suffering or omitting to take any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full and complete authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for or in respect of
any action taken, suffered or omitted by it under the provisions of this
Agreement in reliance upon such certificate.

 

(c)           The Rights Agent
shall be liable hereunder to the Company and any other Person only for its own
gross negligence, bad faith or willful misconduct (which gross negligence, bad
faith or willful misconduct must be determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction).

 

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

 

(e)           The Rights Agent
shall not have any liability for or be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall
it be responsible for any change in the exercisability of the Rights or any adjustment
in the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 11, 13, 23 or 24,
or the ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights evidenced
by Rights Certificates after receipt by the Rights Agent of a certificate
furnished pursuant to Section 12 describing such change or
adjustment upon which the Rights Agent may rely); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Applicable Shares to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any Applicable Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.

 

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

 

(g)           The Rights Agent is
hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Secretary or any Assistant Secretary of the Company, and
to apply to such officers for advice or instructions in connection with its
duties, and such instructions shall be full 

 

29

 

authorization
and protection to the Rights Agent and the Rights Agent shall not be liable for
or in respect of any action taken, suffered or omitted by it in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions.  The Rights Agent
shall be fully authorized and protected in relying upon the most recent
instructions received by any such officer. 
Any application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken, suffered omitted by the Rights Agent under this Agreement
and the date on and/or after which such action shall be taken or suffered or
such omission shall be effective.  The
Rights Agent shall not be liable for any action taken or suffered by, or
omission of, the Rights Agent in accordance with a proposal included in any
such application on or after the date specified in such application (which date
shall not be less than five (5) Business Days after the date any officer
of the Company actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the Rights
Agent shall have received written instructions in response to such application
specifying the action to be taken or omitted.

 

(h)           The Rights Agent and
any shareholder, affiliate, director, officer or employee of the Rights Agent
may buy, sell or deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Agreement.  Nothing herein shall preclude the Rights
Agent or any such shareholder, affiliate, director, officer or employee 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 (through its directors, officers and
employees) or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company or any other Person
resulting from any such act, default, neglect or misconduct, absent gross
negligence, bad faith or willful misconduct in the selection and continued
employment thereof (which gross negligence, bad faith or willful misconduct
must be determined by a final, non-appealable order, judgment, decree or ruling
of a court of competent jurisdiction.

 

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

 

(k)           If, with respect to
any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been properly
completed or indicates an affirmative response to clause 1 and/or 2 thereof,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

 

30

 

21.           Change of
Rights Agent.  The Rights
Agent or any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days’ written notice mailed to the
Company and to each transfer agent of the shares of Voting Stock by registered
or certified mail, and to the holders of the Rights Certificates by first-class
mail.  The Company may remove the Rights
Agent or any successor Rights Agent upon thirty (30) days’ written notice,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the shares of Voting Stock by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail.  If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent.  If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after receiving written notice of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his or
her Rights Certificate for inspection by the Company), then the registered
holder of any Rights Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. 
Any successor Rights Agent, whether appointed by the Company or by such
a court, shall be a Person organized and doing business under the laws of the
United States or of any state of the United States, in good standing, which is
authorized under such laws to exercise stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or an Affiliate of such a Person.  After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose.  Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the shares of Voting Stock,
and mail a written notice thereof to the registered holders of the Rights Certificates.  Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect
the legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.

 

22.           Issuance of New
Rights Certificates. 
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board to reflect any
adjustment or change in the Exercise Price and the number or kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement.  In addition, in connection with the issuance
or sale of shares of Voting Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with
respect to shares of Voting Stock so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement or upon the exercise,
conversion or exchange of other securities of the Company outstanding at the
date hereof or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company and (b) may, in any other case, if
deemed necessary or appropriate by the Board, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate
shall be issued and this sentence shall be null and void ab initio
if, and to the extent that, such issuance or this sentence would create a 

 

31

 

significant
risk of or result in material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued or would create a
significant risk of or result in such options’ or employee plans’ or
arrangements’ failing to qualify for otherwise available special tax treatment and
(ii) no such Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.

 

23.           Redemption.

 

(a)           The Company may, at
its option and with the approval of the Board, at any time prior to the Close
of Business on the earlier of (i) the close of business on the tenth day
after  the Shares Acquisition Date and (ii) the
Final Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $0.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being herein referred to as the “Redemption
Price”) and the Company may, at its option, pay the Redemption Price either
in shares of Common Stock (based on the Current Per Share Market Price thereof
at the time of redemption) or cash.  Such
redemption of the Rights by the Company may be made effective at such time, on
such basis and with such conditions as the Board in its sole discretion may
establish.  The date on which the Board
elects to make the redemption effective shall be referred to as the “Redemption
Date”.

 

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

 

24.           Exchange.

 

(a)           Subject to
applicable laws, rules and regulations, and subject to subsection 24(c) below,
the Company may, at its option, by action of the Board, at any time after the
occurrence of a Triggering Event, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for shares
of Voting Stock at an exchange ratio of one share of Common Stock and one share
of Class B Stock per Common Stock Right and Class B Right,
respectively, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring

 

32

 

 

after
the date hereof (such exchange ratio being hereinafter referred to as the “Exchange
Ratio”).  Notwithstanding the
foregoing, the Board shall not be empowered to effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or any entity
holding Voting Stock for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Voting Stock then outstanding.

 

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

 

(c)                                  In the event
that there shall not be sufficient shares of Voting Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with Section 24(a), the Company shall
either take such action as may be necessary to authorize additional shares of
Voting Stock for issuance upon exchange of the Rights or alternatively, at the
option of a majority of the Board, with respect to each Right (i) pay cash
in an amount equal to the Current Value (as hereinafter defined), in lieu of
issuing shares of Voting Stock in exchange therefor, or (ii) issue debt or
equity securities or a combination thereof, having a value equal to the Current
Value, in lieu of issuing shares of Voting Stock in exchange for each such
Right, where the value of such securities shall be determined by a nationally
recognized investment banking firm selected by majority vote of the Board, or (iii) deliver
any combination of cash, property, shares of Voting Stock and/or other
securities having a value equal to the Current Value in exchange for each
Right.  For purposes of this Section 24(c) only,
the Current Value shall mean the product of the Current Per Share Market Price
of shares of Common Stock or Class B Stock, as the case may be, on the
date of the occurrence of the event described above in subparagraph (a),
multiplied by the number of tenths of shares of Common Stock or Class B
Stock, as the case may be, for which the Right otherwise would be exchangeable
if there were sufficient shares available. 
To the extent that the Company determines that some action need be taken
pursuant to clauses (i), (ii) or (iii) of this Section 24(c),
the Board may temporarily suspend the exercisability of the Rights for a period
of up to sixty (60) days following the date on which the event described in Section 24(a) shall
have occurred, in order to seek any authorization of additional shares of
Voting Stock and/or to decide the appropriate form of distribution to be made
pursuant to the above provision and to determine the value thereof.  In the event of any 

 

33

 

such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended (with prompt
written notice thereof to the Rights Agent).

 

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

 

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

 

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

 

25.                                 Notice of
Certain Events.

 

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

 

(b)                                 In case any
Triggering Event or Section 13 Event shall occur, then, in any such case,
the Company shall as soon as practicable thereafter give to each holder of
Rights and the Rights Agent, in accordance with Section 26 hereof,
a notice of the occurrence of such event, which shall specify the date of such
Triggering Event or Section 13 Event, event and the consequences of the
event to holders of Rights under Sections 11(a)(ii) and 13
hereof.

 

26.                                 Notices.  Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights to or on the Company shall be sufficiently 

 

34

 

given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing by the Company with the Rights Agent) as follows:

 

Baltic Trading Limited

299 Park Avenue, 20th Floor

New York, NY 
10171

Attention: John C. Wobensmith, President

 

with a copy to:

 

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, NY 10036

Attention: Thomas E. Molner

 

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

 

Mellon Investor Services LLC

Newport Office Center VII

480 Washington Blvd.

Jersey City, New Jersey 07310

Attn: Relationship Manager

Fax: (201) 680-4604

 

with a copy to:

 

Mellon Investor Services LLC

Newport Office Center VII

480 Washington Blvd.

Jersey City, New Jersey 07310

Attention: Legal Department

Fax: (201) 680-4610

 

Notices
or demands authorized by this Agreement to be given or made by the Company or
the Rights Agent to the holder of any Rights Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Company.

 

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

 

35

 

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

 

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

 

29.                                 Determinations
and Actions by the Board, etc.  The Board shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a determination to redeem
or not redeem the Rights or to amend the Agreement).  All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the
Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights Certificates and all other
parties and (y) not subject the Board to any liability to the holders of
the Rights. The Rights Agent is entitled always to assume the Board acted in
good faith and shall be fully protected and incur no liability in reliance
thereon.

 

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

 

31.                                 Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, 

 

36

 

however,
that notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or authority to
be invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set forth
in Section 23 hereof shall be reinstated (if already expired) and
shall not expire until the Close of Business on the tenth day following the
date of such determination by the Board.

 

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

 

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

 

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

 

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

 

[Signature page follows]

 

37

 

IN WITNESS WHEREOF, the
parties have executed this Shareholders Rights Agreement as of the date first
written above.

 

	
   

  	
  BALTIC TRADING LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MELLON INVESTOR SERVICES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

38

 

Exhibit A

 

[FORM OF
RIGHTS CERTIFICATE]

 

	
  No. R-

  	
   

  	
                           Rights

  

 

NOT
EXERCISABLE AFTER THE EARLIER OF
                        
      , 2019 AND THE DATE ON WHICH THE RIGHTS
EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH IN THE
RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR
HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, MAY BE NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME 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 BE OR MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.](1) THE
RIGHTS SHALL NOT BE EXERCISABLE FOR SECURITIES IN ANY JURISDICTION IF (I) THE
REQUISITE QUALIFICATION IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED, (II) SUCH
EXERCISE SHALL NOT BE PERMITTED UNDER APPLICABLE LAW OR (III) IF
APPLICABLE, A REGISTRATION STATEMENT IN RESPECT OF SUCH SECURITIES SHALL NOT
HAVE BEEN DECLARED EFFECTIVE.

 

RIGHT CERTIFICATE

BALTIC TRADING LIMITED

 

This
Right Certificate certifies that
                                                  ,
or registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the holder (upon the terms and subject to
the conditions set forth in the Rights Agreement dated as of
                    
      , 2009 (the “Rights Agreement”)
between Baltic Trading Limited, a Marshall Islands Corporation (the “Company”),
and Mellon Investor Services LLC (the “Rights Agent”)) to purchase from
the Company, at any time after the Distribution Date and prior to the
Expiration Date, tenth of an Applicable Share issuable pursuant to the exercise
of a Right for one-hundred Dollars ($100) (the “Exercise Price”),
payable in lawful money of the United States of America, upon surrender of this
Right Certificate, with the form of election to purchase and related
certificate duly executed, and payment of the Purchase Price at an office of
the Rights Agent designated for such purpose.

 

(1) If applicable, insert this portion of the legend and delete
the preceding sentence.

 

A-1

 

Terms
used herein and not otherwise defined herein have the meanings assigned to them
in the Rights Agreement.

 

The
number of Rights evidenced by this Right Certificate (and the number and kind
of shares issuable upon exercise of each Right) and the Purchase Price set forth
above are as of
                    
      , 2009, and may have been or in the future
be adjusted as a result of the occurrence of certain events, as more fully
provided in the Rights Agreement.

 

Upon
the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced
by this Right Certificate are beneficially owned by (a) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (b) a
transferee (whether direct or indirect) of an Acquiring Person (or any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (c) under certain circumstances specified in the Rights
Agreement, a transferee (whether direct or indirect) of an Acquiring Person (or
any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such, such Rights shall become
null and void, and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section l1(a)(ii) Event.

 

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 hereunder 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
such Rights under the specific circumstances set forth in the Rights
Agreement.  Copies of the Rights
Agreement are on file at the principal executive offices of the Company.

 

Upon
surrender at an office of the Rights Agent designated for such purpose and
subject to the terms and conditions set forth in the Rights Agreement, any
Rights Certificate or Certificates may be transferred or exchanged for another
Rights Certificate or Certificates evidencing a like number of Rights as the
Rights Certificate or Certificates surrendered.

 

Subject
to the provisions of the Rights Agreement, the Board of Directors of the
Company may, at its option at any time prior to the earlier of (i) the
close of business on the tenth day after the Share Acquisition Date (or such
later date as a majority of the Continuing Directors may designate prior to
such time as the Rights are no longer redeemable) and (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights
at a redemption price of $0.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof.

 

No
fractional Common Shares will be issued upon the exercise of any Right or
Rights evidenced hereby, but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Certificates for the number of whole Rights not exercised.

 

A-2

 

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

 

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

 

A-3

 

IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed under its corporate seal by its authorized
officers.

 

	
  Dated as of

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BALTIC TRADING LIMITED

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE COMMON SEAL

  	
  )

  	
   

  	
  By:

  	
   

  
	
  OF BALTIC TRADING LIMITED

  	
   

  	
   

  	
  Name: 

  
	
   

  	
  )

  	
   

  	
   

  	
  Title: 

  
	
  was affixed to this deed

  	
  ) 

  	
   

  	
   

  	
   

  
	
  in the presence of

  	
  )

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Countersigned: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mellon Investor Services LLC 

  as Rights Agent 

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signature

  	
   

  	
   

  	
   

  
						

 

A-4

 

Form of Reverse Side of Right
Certificate

 

FORM OF ASSIGNMENT

 

(To be executed if the registered 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:
                                    ,
  20

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  
	
  Signature Guaranteed:

  	
   

  

 

 

Signatures
must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc.
Medallion Signature Program.

 

A-5

 

Certificate

 

The
undersigned hereby certifies by checking the appropriate boxes that:

 

(1)           the Rights evidenced by this Right
Certificate        are
       are not being assigned by or on behalf of
a Person who is or was an Acquiring Person or an Affiliate or Associate of any
such Acquiring 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:
                        ,
  20

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

 

Signature
Guaranteed:

 

Signatures
must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc.
Medallion Signature Program.

 

The
signatures to the foregoing Assignment and Certificate 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.

 

A-6

 

FORM OF ELECTION TO PURCHASE

 

(To be executed if the registered holder
desires to exercise

Rights represented by the Right Certificate.)

 

To:
Baltic Trading Limited

The
undersigned hereby irrevocably elects to exercise
                          
Rights represented by this Right Certificate to purchase shares of
                      
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
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 shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance of such Rights shall be
registered in the name of and delivered to:

 

Please insert social security 

or other identifying number

 

	
   

  	
   

  	
   

  
	
   

  	
  (Please print name and
  address)

  	
   

  
	
   

  	
   

  	
   

  

 

	
  Dated:
                          ,
  20

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

 

Signature
Guaranteed:

 

Signatures
must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc.
Medallion Signature Program.

 

A-7

 

Certificate

 

The
undersigned hereby certifies by checking the appropriate boxes that:

 

(1)           the Rights evidenced by this Right
Certificate [      ] are
[      ] are not being assigned by or on behalf
of a Person who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring 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:
                        ,
  20

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

 

Signature
Guaranteed:

 

Signatures
must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc.
Medallion Signature Program.

 

The
signatures to the foregoing Assignment and Certificate 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.

 

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

 

A-8

 

Exhibit B

 

SUMMARY OF RIGHTS

 

	
  Distribution and Transfer of Rights:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Distribution Date:

  	
   

  	
  The rights will separate from the common stock or Class B Stock,
  as the case may be, and become exercisable after (1) a person or group
  becomes a “15% Beneficial Owner” defined as an owner of 15% or more of the
  common stock outstanding or (2) the 10th day (or such later date as
  determined by the company’s board of directors) after a person or group
  announces a tender or exchange offer which would result in that person or
  group becoming a 15% Beneficial Owner.

  
	
   

  	
   

  	
   

  
	
  Stock Purchasable Upon Exercise of Rights:

  	
   

  	
  On the Distribution Date, each holder of a right will be entitled to
  purchase for $100 (the “Exercise Price”) a fraction (one tenth) of one
  share of the company’s common stock or Class B Stock.

  
	
   

  	
   

  	
   

  
	
  Flip-in:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Flip-over:

  	
   

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

  

 

B-1

 

	
  Exchange Provision:

  	
   

  	
  Any time after the date an Acquiring Person becomes a 15% Beneficial
  Owner and before that Acquiring Person acquires more than 50% of the
  company’s outstanding common stock, the company may exchange each right owned
  by all other rights holders, in whole or in part, for one share of the
  company’s common stock or Class B Stock, as the case may be.

  
	
   

  	
   

  	
   

  
	
  Redemption of Rights:

  	
   

  	
  The company can redeem the rights at any time prior to a public
  announcement that a person has become a 15% Beneficial Owner.

  
	
   

  	
   

  	
   

  
	
  Expiration of Rights:

  	
   

  	
  The rights expire on the earliest of
  (1)                   
        , 2019 or (2) the exchange or
  redemption of the rights as described above.

  
	
   

  	
   

  	
   

  
	
  Amendment of Terms of Rights:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Voting Rights:

  	
   

  	
  The rights will not have any voting rights.

  
	
   

  	
   

  	
   

  
	
  Anti-dilution Provisions:

  	
   

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

  

 

B-2

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