Document:

Exhibit 10.3

 

EXECUTION VERSION

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of December 23, 2014, by and among Lime Energy Co., a Delaware corporation (the “Company”), Bison Capital Partners IV, L.P., a Delaware limited partnership (including its successors and assigns, the “Investor”) and each of the Holders of Permissible Piggyback Shares (as defined below).

 

WHEREAS, in connection with the Securities Purchase Agreement by and among the Company and the Investor dated December 23, 2014 (the “Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions set forth in the Purchase Agreement, to issue and sell to the Investor a certain number of shares of Series C Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”);

 

WHEREAS, in accordance with the terms of the Purchase Agreement, the Company has agreed to provide certain registration rights to the Investor under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws; and

 

WHEREAS, the Company has previously granted certain registration rights to the Holders of Permissible Piggyback Shares.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company, the Investor and the Holders of Permissible Piggyback Shares hereby agree as follows:

 

1.                                      Definitions.  Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement will have the respective meanings given such terms in the Purchase Agreement.  As used in this Agreement, the following terms have the respective meanings set forth in this Section 1:

 

“Advice” has the meaning set forth in Section 9(d).

 

“Beneficial Ownership” by a Person of any securities means ownership of such securities in respect of which such Person is considered to be a “beneficial owner” under Rule 13d-3 under the Exchange Act as in effect on the date hereof.

 

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing.

 

“Commission Comments” means written comments pertaining solely to Rule 415 which are received by the Company from the Commission to a filed Registration Statement, a copy of which shall have been provided by the Company to the Holders, which either (i) requires the Company to limit the number of Registrable Securities and Permissible Piggyback Shares which may be included therein to a number which is less than the number sought to be included thereon as filed with the Commission or (ii) requires the Company to either exclude Registrable Securities and Permissible Piggyback Shares held by specified Holders or deem such Holders to be underwriters with respect to Registrable Securities and Permissible Piggyback Shares they seek to include in such Registration Statement.

 

“Common Stock” means the Company’s common stock, par value $0.0001 per share, or any other Capital Stock of the Company (including, without limitation, any preferred stock) into which such stock is reclassified or reconstituted.

 

“Cut Back Shares” has the meaning set forth in Section 2(a)(v).

 

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“Demand Registration” has the meaning set forth in Section 2(a)(i).

 

“Demanding Holders” means the Investor or, if the Investor does not have Beneficial Ownership of [a majority] of the Registrable Securities at any time, the beneficial owners (as defined under Rule 13d-3 under the Exchange Act) of a majority of the Registrable Securities then outstanding.

 

“Effective Date” means, as to a Registration Statement, the date on which such Registration Statement is first declared effective by the Commission.

 

“Effectiveness Date” means the earlier of: (i) the 90th day following the applicable Filing Date for a Registration Statement and (ii) the fifth Trading Day following the date on which the Company is notified by the Commission that such Registration Statement will not be reviewed or is no longer subject to further review; provided, that, if the Commission reviews and has written comments to such filed Registration Statement that would require the filing of a pre-effective amendment thereto with the Commission, then the Effectiveness Date shall be the 150th day following the applicable Filing Date.

 

“Effectiveness Period” means, as to any Registration Statement required to be filed pursuant to this Agreement, the period commencing on the Effective Date of such Registration Statement and ending on (a) the date that all of the Registrable Securities covered by such Registration Statement have been sold by the Holders of the Registrable Securities included therein, or (b) such time as all of the Registrable Securities covered by such Registration Statement may be sold by the Holders without volume restrictions pursuant to Rule 144 as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders.

 

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

 

“Filing Date” means, subject to Sections 2(a)(i), 2(a)(iv) and 2(a)(v), (a) with respect to any Registration Statement required to be filed pursuant to a Demand Registration, no later than sixty (60) days (or 120 days, if the filing of such Registration Statement would require the Company to commence an audit) after receipt by the Company of a request for such Demand Registration pursuant to Section 2(a); (b) with respect to any additional Registration Statements required to be filed due to SEC Restrictions, the applicable Restriction Termination Date; and (c) with respect to a Registration Statement on Form S-3, no later than sixty (60) days after receipt by the Company of a request for such Registration Statement pursuant to Section 2(b); provided that, if such Filing Date is between forty-six (46) and ninety (90) days after the Company’s fiscal year end and the Company does not on such date meet the conditions described under paragraph (c) of Regulation S-X, Item 3-01 promulgated under the Securities Act and the Exchange Act, the Filing Date shall be extended until fifteen (15) days after the earlier of the date the Company files its annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act for the prior fiscal year and the due date for such annual report.

 

“FINRA” means the Financial Industry Regulatory Authority, Inc.

 

“Holders” means the Holders of Permissible Piggyback Shares and Holders of Registrable Securities, collectively.

 

“Holder of Permissible Piggyback Shares” or “Holders of Permissible Piggyback Shares” means the holder or holders, as the case may be, of Permissible Piggyback Shares set forth on Annex A hereto.

 

“Holder of Registrable Securities” or “Holders of Registrable Securities” means the holder or holders, as the case may be, from time to time of Registrable Securities and, if other than the Investor, a Person to whom the rights hereunder have been properly assigned pursuant to Section 7 hereof.

 

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“Indemnified Party” has the meaning set forth in Section 5(c).

 

“Indemnifying Party” has the meaning set forth in Section 5(c).

 

“Losses” has the meaning set forth in Section 5(c).

 

“Permissible Piggyback Shares” means (i) the shares identified on Annex C hereto, which shall be included in a Registration Statement pursuant to the terms of this Agreement and (ii) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event, or any price adjustment as a result of such stock splits, reverse stock splits or similar events with respect to any of the securities referenced in (i) above.  Notwithstanding the foregoing, a security shall cease to be a Permissible Piggyback Share for purposes of this Agreement from and after such time as the Holder of such Permissible Piggyback Share may resell such security without volume restrictions under Rule 144, as determined by the counsel to the Company pursuant to a written opinion to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders of Permissible Piggyback Shares.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities and Permissible Piggyback Shares (if any) covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

 

“Registrable Securities” means: (i) the shares of Common Stock issuable or issued upon conversion of the Series C Preferred Stock held by the Holders and any assignee thereof in accordance with Section 7 of this Agreement, and (ii) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event, or any price adjustment as a result of such stock splits, reverse stock splits or similar events with respect to any of the securities referenced in (i) above.  Notwithstanding the foregoing, a security shall cease to be a Registrable Security for purposes of this Agreement from and after such time as the Holder of such security may resell such security without volume restrictions under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders of Registrable Securities.

 

“Registration Statement” means any registration statement required to be filed under this Agreement, including in each case the Prospectus, amendments and supplements to such registration statements or Prospectus, including pre- and post- effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference therein.

 

“Restriction Termination Date” has the meaning set forth in Section 2(a)(v).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

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“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Restrictions” has the meaning set forth in Section 2(a)(v).

 

“Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities and Permissible Piggyback Shares, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Stockholder Counsel borne and paid by the Company as provided in Section 4.

 

“Selling Stockholder” has the meaning set forth in Section 3(a).

 

“Selling Stockholder Counsel” has the meaning set forth in Section  4.

 

“Selling Holder Questionnaire” means the selling security holder notice and questionnaire attached as Annex B hereto.

 

“Tolling Date” has the meaning set forth in Section 2(a)(v).

 

“Trading Market” means any of the New York Stock Exchange, the NYSE AMEX, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, the OTCBB or any other market on which the Common Shares are listed or quoted for trading on the date in question.

 

2.                                      Registrations.

 

(a)                     Demand Registration

 

(i)                                     Request for Registration.  At any time after the first anniversary of the date of this Agreement, the Demanding Holders may make a written request for registration under the Securities Act of all or part (but in no event less than twenty five percent (25%)) of their Registrable Securities (a “Demand Registration”).  Such request for a Demand Registration must specify the number of shares of Registrable Securities proposed to be sold and must also specify the intended method of disposition thereof. Upon receipt of such written request, the Company will promptly give written notice of the proposed Demand Registration to all other Holders. Upon any such request, the Demanding Holders (and any other Holder or Holders) joining in such request as are specified in a written request given within 15 days after receipt of such written notice from the Company) shall be entitled to have their Registrable Securities and Permissible Piggyback Shares included in the Demand Registration, subject to Section 2(a)(iv) and Section 2(a)(v).  Notwithstanding the foregoing, the Company shall not be obligated to effect any such Demand Registration if the Company furnishes to the Holders a certificate signed by the Chief Executive Officer or President of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its stockholders for such Demand Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the registration statement for such Demand Registration for only that period of time as the Board of Directors in good faith reasonably deems necessary to avoid such material detriment to the Company, but, in any case, not more than ninety (90) days after receipt of the request of the Holder or Holders under this Section 2(a); provided, however, that (i) the Company shall in no event be entitled to defer registration if the deferral is 

 

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caused by, will cause or arises out of a material breach of any right of the Investor under the Transaction Documents (as defined in the Purchase Agreement), or if the facts or circumstances for such deferral existed at the time that a registration right held by another holder of Capital Stock of the Company was exercised and no deferral was requested, and (ii) the Company shall not be allowed to exercise this deferral right more than once in any three hundred sixty-five (365)-day period. The Company shall not be obligated to effect more than one Demand Registration under this Section 2(a).

 

(ii)                                  Effective Registration. Except in the case of a withdrawal governed by the last sentence of Section 2(a)(vi), a registration will not count as a Demand Registration until the Registration Statement covering the Registrable Securities (including any Cut Back Shares) that are the subject of such Demand Registration has become effective and the Company has complied with all of its obligations under this Agreement with respect thereto; provided, however, that, after such Registration Statement has been declared effective, if the offering of Registrable Securities pursuant to such Demand Registration is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Demand Registration will be deemed not to have become effective during the period of such interference.

 

(iii)                               Underwritten Offering.  If the Demanding Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2(a)(i), and the Company shall include such information in the notice to other Holders.  The underwriter(s) will be selected by the Demanding Holders, subject only to the reasonable approval of the Company.  In such event, the right of any Holder to include such Registrable Securities or Permissible Piggyback Shares in such registration shall be conditioned upon the participation of such Holder in such underwriting and the inclusion of such Registrable Securities or Permissible Piggyback Shares in the underwriting to the extent provided herein.  All Holders proposing to distribute their securities through such underwriting shall (together with the Company) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting.  Notwithstanding any other provision of this Section 2(a)(iii), if the managing underwriter(s) advise(s) the Demanding Holders that marketing factors require a limitation on the number of shares to be underwritten, then the Demanding Holders shall so advise all Holders that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities and Permissible Piggyback Shares that may be included in the underwriting shall be allocated in accordance with the allocation set forth in Section 2(a)(iv).

 

(iv)                              Reduction of Offering.  If the managing underwriter(s) for a Demand Registration that is to be an underwritten offering advises the Company and the Demanding Holders that the dollar amount or number of shares of Registrable Securities and Permissible Piggyback Shares which the Demanding Holders and the other Holders desire to sell, taken together with all other shares of Common Stock or other securities which the Company desires to sell and the shares of Common Stock or other securities, if any, as to which registration has been requested pursuant to any other outstanding piggy-back registration rights or which other stockholders of the Company desire to sell, exceeds the maximum dollar amount or number that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method or the probability of success of such offering (the “Maximum Number of Shares”), then the Company shall include in such registration:

 

a)             first, Registrable Securities and Permissible Piggyback Shares as to which Demand Registration has been requested by the Demanding Holders and the other Holders (pro rata in accordance with the number of shares of Registrable Securities and Permissible Piggyback Shares held by each Holder, regardless of the number of shares of Registrable Securities or Permissible Piggyback Shares which such Holder has requested be 

 

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included in such registration) that can be sold without exceeding the Maximum Number of Shares;

 

b)             second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (a), the shares of Common Stock for the account of other persons that the Company is obligated to register pursuant to any other registration rights agreement (to be allocated among the persons requesting inclusion in such registration pursuant to such agreements pro rata in accordance with the number of shares of Common Stock with respect to which such person has the right to request such inclusion under such agreements, regardless of the number of shares which such person has actually requested be included in such registration) that can be sold without exceeding the Maximum Number of Shares; and

 

c)              third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (a) and (b), the shares of Common Stock that other stockholders desire to sell that can be sold without exceeding the Maximum Number of Shares.

 

(v)                                 Cut Back Shares; SEC Restrictions.  Notwithstanding anything to the contrary contained in this Section 2(a), if the Company receives Commission Comments, and following discussions with and responses to the Commission in which the Company uses its reasonable efforts and time to cause as many Registrable Securities and Permissible Piggyback Shares for as many Holders as possible to be included in the Registration Statement filed pursuant to Section 2(a) without characterizing any Holder as an underwriter unless such characterization is consistent with written information provided by the Holder in the Selling Holder Questionnaire (and in such regard uses its reasonable best efforts to cause the Commission to permit the affected Holders or their respective counsel to participate in Commission conversations on such issue together with the Company’s counsel, and timely conveys relevant information concerning such issue with the affected Holders or their respective counsel) (the day that such discussions and responses are concluded shall be referred to as the “Tolling Date”), the Company is unable to cause the inclusion of all Registrable Securities and Permissible Piggyback Shares, then the Company may, following not less than three (3) Trading Days prior written notice to the Holders (i) remove from the Registration Statement such Registrable Securities (the “Cut Back Shares”) and Permissible Piggyback Shares and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities and Permissible Piggyback Shares, in each case as the Commission may require in order for the Commission to allow such Registration Statement to become effective; provided, that in no event may the Company characterize any Holder as an underwriter unless such characterization is consistent with written information provided by the Holder in the Selling Holder Questionnaire or otherwise approved by the Holder in writing (collectively, the “SEC Restrictions”).  Unless the SEC Restrictions otherwise require, any cut-back imposed pursuant to this Section 2(a)(v) shall be allocated in accordance with the allocation set forth in Section 2(a)(iv).  The required Effectiveness Date for such Registration Statement will be tolled until such time as the Company is able to effect the registration of the Cut Back Shares in accordance with any SEC Restrictions if such Registrable Securities cannot at such time be resold by the Holders thereof without volume limitations pursuant to Rule 144 (such date, the “Restriction Termination Date”).  From and after the Restriction Termination Date, all provisions of this Section 2 shall again be applicable to the Cut Back Shares (which, for avoidance of doubt, retain their character as “Registrable Securities”) if such Registrable Securities cannot at such time be resold by the Holders thereof without volume limitations pursuant to Rule 144 so that the Company will be required to file with and cause to be declared effective by the Commission such additional Registration Statements in the time frames set forth herein as necessary to ultimately cause to be covered by effective Registration Statements all Registrable Securities included in the Demand Registration.  For the avoidance of doubt, the time 

 

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period starting from the Tolling Date and ending with the Restriction Termination Date shall be excluded in calculating the applicable Effectiveness Date.

 

(vi)                              Withdrawal.  If the Demanding Holders or any of them disapprove of the terms of any underwriting or are not entitled to include all of their Registrable Securities in any offering, such Demanding Holders may elect to withdraw from such offering by giving written notice to the Company and the Underwriter of their request to withdraw prior to the effectiveness of the Registration Statement. If the Demanding Holders or any of them withdraw from a proposed offering relating to a Demand Registration and, solely as a result of such withdrawal the Registration Statement is withdrawn prior to being declared effective, such registration shall count as a Demand Registration provided for in Section 2(a) unless the withdrawing Demanding Holders pay their pro rata share (based upon the number of shares to be included in such Registration Statement) of the expenses incurred in connection with such Registration Statement. 

 

(vii)                           Filing Demand Registration Statement.  The Company shall prepare and file with the Commission such Registration Statement on or prior to the applicable Filing Date.  Such Registration Statement shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement, other than as to the characterization of any Holder as an underwriter, which shall not occur unless such characterization is consistent with written information provided by the Holder in the Selling Holder Questionnaire or otherwise approved by the Holder in writing) the “Plan of Distribution” attached hereto as Annex A.  The Company shall cause any Registration Statement required to be filed under this Section 2(a) to be declared effective under the Securities Act as soon as possible but, in any event, no later than its Effectiveness Date, and shall use its reasonable best efforts to keep each such Registration Statement continuously effective during its entire Effectiveness Period.  By 5:00 p.m. (New York City time) on the Business Day immediately following the Effective Date of each Registration Statement, the Company shall file with the Commission in accordance with Rule 424 under the Securities Act the final prospectus to be used in connection with sales pursuant to such Registration Statement (whether or not such filing is technically required under such Rule). If for any reason other than due solely to SEC Restrictions, a Registration Statement is effective but not all outstanding Registrable Securities are registered for resale pursuant thereto, then the Company shall prepare and file by a date that is reasonably promptly after such unregistered Registrable Securities become Registrable Securities, an additional Registration Statement to register the resale of all such unregistered Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415.

 

(b)                     Registrations on Form S-3.

 

(i)                                     At any time after the first anniversary of the date of this Agreement, the Holders of Registrable Securities may request in writing that the Company register the resale of any or all of such Registrable Securities on Form S-3 (or any similar short-form registration which may be available at such time). Upon receipt of such written request, the Company will promptly give written notice of the proposed registration to all other Holders, and, as soon as practicable thereafter, effect the registration of all or such portion of such Holder’s or Holders’ Registrable Securities or Permissible Piggyback Shares, as applicable, as are specified in such request, together with all or such portion of the Registrable Securities or Permissible Piggyback Shares of any other Holder or Holders joining in such request as are specified in a written request given within 15 days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration pursuant to this Section 2(b) if (a) the Company is not eligible to use a Form S-3 (or any successor form) to register such Registrable Securities and Permissible Piggyback Shares, (b) the Holders propose to effect an underwritten offering, or (c) the Company furnishes to the Holders a certificate signed by the Chief Executive Officer or President of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and 

 

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its stockholders for such Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 Registration Statement for only that period of time as the Board of Directors in good faith reasonably deems necessary to avoid such material detriment to the Company, but, in any case, not more than ninety (90) days after receipt of the request of the Holder or Holders under this Section 2(b); provided, however, that (i) the Company shall in no event be entitled to defer registration if the deferral is caused by, will cause or arises out of a material breach of any right of the Investor under the Transaction Documents (as defined in the Purchase Agreement), or if the facts or circumstances for such deferral existed at the time that a registration right held by another Holder of Capital Stock was exercised and no deferral was requested, and (ii) the Company shall not be allowed to exercise this deferral right more than once in any three hundred sixty-five (365)-day period.  The Company shall use its reasonable best efforts to maintain each Registration Statement under this Section 2(b) for the Effectiveness Period.  Registrations effected pursuant to this Section 2(b) shall not be counted as a Demand Registration effected pursuant to Section 2(a), but the Company may, to the extent permitted by the Commission and in lieu of filing a new Registration Statement for such Demand Registration, use the Registration Statement on Form S-3 and amend or supplement the same, within the time frames set forth in Section 2(a) for a new Registration Statement in order to accommodate the request made pursuant to Section 2(a)(i).

 

(ii)                                  Any Registration Statement on Form S-3 shall be filed by the Filing Date for such Registration Statement and declared effective under the Securities Act as soon as possible thereafter, but in any event prior to the Effectiveness Date therefor.  Such Registration Statement on Form S-3 shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement, other than as to the characterization of any Holder as an underwriter, which shall not occur unless such characterization is consistent with written information provided by the Holder in the Selling Holder Questionnaire) the “Plan of Distribution” attached hereto as Annex A.  The Company shall use its reasonable best efforts to keep such Registration Statement continuously effective under the Securities Act during the entire Effectiveness Period.  By 5:00 p.m. (New York City time) on the Business Day immediately following the Effective Date of such Registration Statement, the Company shall file with the Commission in accordance with Rule 424 under the Securities Act the final prospectus to be used in connection with sales pursuant to such Registration Statement (whether or not such filing is technically required under such Rule).

 

(c)                      Piggy-Back Registrations.  If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and Permissible Piggyback Shares and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen calendar days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities and Permissible Piggyback Shares such Holder requests to be registered, subject to customary underwriter cutbacks applicable to all holders of registration rights.

 

(d)                     Company Registrations.

 

(i)                                     In connection with any offering involving an underwriting of shares of the Company’s Capital Stock pursuant to Section 2(c), the Company shall not be required to include any Registrable Securities or Permissible Piggyback Shares in such underwriting unless the Holders thereof accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion 

 

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determine will not jeopardize the success of the offering by the Company.  If the total number of securities, including Registrable Securities and Permissible Piggyback Shares, requested by Holders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities and Permissible Piggyback Shares, which the underwriters in their sole discretion determine will not jeopardize the success of the offering.  If the underwriters determine that less than all of the Registrable Securities and Permissible Piggyback Shares requested to be registered can be included in such offering, then the Registrable Securities and Permissible Piggyback Shares that are included in such offering shall be allocated in accordance with the the allocation set forth in Section 2(d)(ii).

 

(ii)                                  Reduction of Offering.  If the managing underwriter(s) for a Company registration pursuant to Section 2(d)(i) advises the Company, in writing, that the dollar amount or number of shares of Registrable Securities and Permissible Piggyback Shares which the Holders desire to sell, taken together with all other shares of Common Stock or other securities which the Company desires to sell and the shares of Common Stock or other securities, if any, as to which registration has been requested pursuant to any other outstanding piggy-back registration rights or which other stockholders of the Company desire to sell, exceeds the Maximum Number of Shares, then the Company shall include in such registration:

 

a)             first, the shares of Common Stock that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares;

 

b)             second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (a), Registrable Securities and Permissible Piggyback Shares as to which registration has been requested by the Holders (pro rata in accordance with the number of shares of Registrable Securities or Permissible Piggyback Shares which such Holder has requested be included in such registration) that can be sold without exceeding the Maximum Number of Shares;

 

c)              third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (a) and (b), the shares of Common Stock for the account of other persons that the Company is obligated to register pursuant to any other registration rights agreement (to be allocated among the persons requesting inclusion in such registration pursuant to such agreements pro rata in accordance with the number of shares of Common Stock with respect to which such person has the right to request such inclusion under such agreements, regardless of the number of shares which such person has actually requested be included in such registration) that can be sold without exceeding the Maximum Number of Shares; and

 

d)             fourth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (a), (b) and (c), the shares of Common Stock that other stockholders desire to sell that can be sold without exceeding the Maximum Number of Shares.

 

(e)                      Selling Holder Questionnaire.  Each Holder agrees to furnish to the Company a completed Questionnaire in the form attached to this Agreement as Annex B (a “Selling Holder Questionnaire”).  The Company shall not be required to include the Registrable Securities or the Permissible Piggyback Shares in a Registration Statement and shall not be required to pay any damages to any Holder of such securities who fails to furnish to the Company a fully completed Selling Holder Questionnaire at least four Trading Days prior to the applicable Filing Date (subject to the requirements set forth in Section 3(a)); provided, that the Company shall have furnished a copy of Selling Holder 

 

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Questionnaire to such Holder and requested a completed Selling Holder Questionnaire from such Holder ten Trading Days prior to each applicable Filing Date.

 

(f)                       Waiver by Holders of Permissible Piggyback Shares.  Each Holder of Permissible Piggyback Shares hereby permanently and irrevocably waives any and all of its registration rights in respect of the Capital Stock of the Company (other than the registration rights granted with respect to Permissible Piggyback Shares pursuant to the terms of this Agreement).

 

3.                                      Registration Procedures.

 

In connection with the Company’s registration obligations hereunder:

 

(a)                     Not less than four Trading Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto, the Company shall furnish to each Holder whose Registrable Securities and Permissible Piggyback Shares are included therein (the “Selling Stockholders”) copies of the “Selling Stockholders” section of such document, the “Plan of Distribution” and any risk factor contained in such document that addresses specifically this transaction or the Selling Stockholders, as proposed to be filed, which documents will be subject to the review of such Selling Stockholder, which review shall not be delayed.  The Company shall not file a Registration Statement, any Prospectus or any amendments or supplements thereto in which the “Selling Stockholder” section thereof differs from the disclosure received from a Selling Stockholder in its Selling Holder Questionnaire (as amended or supplemented).  The Company shall not file a Registration Statement, any Prospectus or any amendments or supplements thereto in which it (i) characterizes any Selling Stockholder as an underwriter, unless such characterization is consistent with written information provided by the Selling Stockholder in the Selling Holder Questionnaire, or is otherwise approved by the Holder in writing or (ii) reduces the number of Registrable Securities and Permissible Piggyback Shares being registered on behalf of a Selling Stockholder except pursuant to, in the case of subsection (ii), the Commission Comments, without, in each case, such Selling Stockholder’s express written authorization, unless such reduction is made pursuant to Section 2(a)(iii), Section 2(a)(iv), Section 2(a)(v) or 2(d) hereof.  If the Commission issues written comments to the Registration Statement requiring a Holder to be characterized as an underwriter, the Company shall provide a copy of such comments to such Holder.  If following discussions with and responses to the Commission in which the Company uses its reasonable efforts and time to persuade the Commission that such Holder should not be characterized as an underwriter, and in which such Holder and its counsel shall be entitled to participate, the Commission insists that such Holder be characterized as an underwriter as a condition to declaring the Registration Statement effective, such Holder may elect either (i) to consent in writing to characterization of it as an underwriter or (ii) to elect to have its shares removed from the Registration Statement (in which case such Registration Statement shall not be counted as a Demand Registration effected pursuant to Section 2(a)).  The Company shall also ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading.

 

(b)                     The Company shall (i) prepare and file with the Commission such amendments, including post-effective amendments, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities and Permissible Piggyback Shares; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible; and (iv) comply in all material respects

 

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with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statement(s) and the disposition of all Registrable Securities and Permissible Piggyback Shares covered by each Registration Statement.

 

(c)                      The Company shall notify the Selling Stockholders as promptly as reasonably possible (i) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; and with respect to each Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities and Permissible Piggyback Shares or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities or Permissible Piggyback Shares for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(d)                     The Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities and Permissible Piggyback Shares for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Selling Stockholders of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

(e)                      The Company shall furnish to each Selling Stockholder, without charge and at the option of the Company in electronic format, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits, as well as a copy of each Prospectus and each amendment or supplement thereto, to the extent requested by such Selling Stockholder (including those previously furnished) promptly after the filing of such documents with the Commission.

 

(f)                       Prior to any public offering of Registrable Securities and Permissible Piggyback Shares, the Company shall, if necessary, register or qualify such Registrable Securities and Permissible Piggyback Shares for offer and sale under the securities or Blue Sky laws of all jurisdictions within the United States as any Selling Stockholder may reasonably request, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities and Permissible Piggyback Shares covered by the Registration Statements; provided, however, in connection with any such registration or qualification, the Company shall not be required to (i) qualify to do business in any jurisdiction where the Company would not otherwise be required to qualify, (ii) subject itself to general taxation in any such jurisdiction, (iii) file a general consent to service of process in any jurisdiction, or (iv) make any change to the Company’s articles of incorporation or bylaws.

 

(g)                      The Company shall cooperate with the Selling Stockholders to facilitate the timely preparation and delivery of certificates representing Registrable Securities and Permissible Piggyback Shares to be delivered to a transferee pursuant to the Registration Statement(s), which 

 

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certificates shall, unless prohibited by the Company’s transfer agent (notwithstanding consent of the Company and the provision of legal opinions requested by the transfer agent to effect this Section 3(g)) or the regulations or published interpretations of the Commission, be free of all restrictive legends, and to enable such Registrable Securities and Permissible Piggyback Shares to be in such denominations and registered in such names as any such Holders may request.

 

(h)                     Upon the occurrence of any event contemplated by Section 3(c), as promptly as reasonably possible, the Company shall prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statements or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(i)             The Company shall notify each Selling Stockholder in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission.  The Company shall also promptly notify each Selling Stockholder in writing when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective.

 

(j)            If any Selling Stockholder is required under applicable securities laws to be described in the Registration Statement as an underwriter, at the reasonable request of such Selling Stockholder, the Company shall furnish to such Selling Stockholder, on the date of the effectiveness of the Registration Statement and thereafter upon the effectiveness of each post-effective amendment to the Registration Statement or filing of the Company’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act, if such Selling Stockholder may reasonably request: (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Selling Stockholders, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance reasonably acceptable to such counsel and as is customarily given in an underwritten public offering, addressed to the Selling Stockholders.

 

(k)         The Company shall hold in confidence and not make any disclosure of information concerning a Selling Stockholder provided to the Company unless: (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement.  The Company agrees that it shall, upon learning that disclosure of such information concerning a Selling Stockholder is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Selling Stockholder and allow such Selling Stockholder, at the Selling Stockholder’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

 

(l)             The Company shall use its reasonable best efforts to cause all of the Registrable Securities and Permissible Piggyback Shares covered by a Registration Statement to be listed on each 

 

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national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities and Permissible Piggyback Shares is then permitted under the rules of such exchange.  The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(a).

 

(m)     If requested by a Selling Stockholder, the Company shall as soon as practicable: (i) incorporate in a prospectus supplement or post-effective amendment such information as a Selling Stockholder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities and Permissible Piggyback Shares, including, without limitation, information with respect to the number of Registrable Securities and Permissible Piggyback Shares being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities and Permissible Piggyback Shares to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by a Holder holding any Registrable Securities or Permissible Piggyback Shares.

 

(n)         The Company shall use its reasonable best efforts to cause the Registrable Securities and Permissible Piggyback Shares covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities and Permissible Piggyback Shares.

 

4.                                      Registration Expenses.  All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements, not to exceed $10,000, of one counsel for the Selling Stockholders (“Selling Stockholder Counsel”), who shall be selected by the Investor, shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2(a) if the registration request is subsequently withdrawn at the request of the Demanding Holders (in which case all selling Holders of Registrable Securities shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration); provided further that if, at the time of such withdrawal, the Demanding Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Demanding Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the selling Holders of Registrable Securities shall not be required to pay any of such expenses.  All Selling Expenses relating to Registrable Securities registered pursuant to Section 2 shall be borne and paid by such Selling Stockholders pro rata on the basis of the number of Registrable Securities and Permissible Piggyback Shares registered on their behalf.

 

5.                                      Indemnification.

 

(a)                     Indemnification by the Company.  The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Selling Stockholder, the officers, directors, agents, investment and legal advisors, partners, members and employees of each of them, each Person who controls any such Selling Stockholder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in 

 

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the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading; provided, however, that the Company shall not be required to provide such indemnification to the extent, but only to the extent, that (1) such untrue statements or omissions are based solely upon information regarding such Selling Stockholder furnished in writing to the Company by such Selling Stockholder expressly for use therein, or to the extent that such information relates to such Selling Stockholder or such Selling Stockholder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Selling Stockholder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that each Selling Stockholder has approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in Section 3(c), the use by such Selling Stockholder of an outdated or defective Prospectus after the Company has notified such Selling Stockholder in writing that the Prospectus is outdated or defective and prior to the receipt by such Selling Stockholder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected.  The Company shall notify the Selling Stockholders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement.

 

(b)                     Indemnification by Selling Stockholders. Each Selling Stockholder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon: (x) such Selling Stockholder’s failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent, but only to the extent that, (1) such untrue statements or omissions are based solely upon information regarding such Selling Stockholder furnished in writing to the Company by such Selling Stockholder expressly for use therein, or to the extent that such information relates to such Selling Stockholder or such Selling Stockholder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Selling Stockholder expressly for use in the Registration Statement (it being understood that each Selling Stockholder has approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of an event of the type specified in Section 3(c), the use by such Selling Stockholder of an outdated or defective Prospectus after the Company has notified such Selling Stockholder in writing that the Prospectus is outdated or defective and prior to the receipt by such Selling Stockholder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected.  In no event shall the aggregate liability of any Selling Stockholder be greater in amount than the dollar amount of the net proceeds received by such Selling Stockholder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

(c)                      Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party will, promptly after the receipt of notice of the commencement of any such Proceeding, notify the Person from whom indemnity is sought (the “Indemnifying Party”), in writing of the commencement thereof.  The failure of any Indemnified Party so to notify the Indemnifying Party of any such action shall not relieve it from any liability which it may have to such Indemnified Party unless, and only to the extent that, such failure results in the Indemnifying Party’s legal position being prejudiced or it results in a forfeiture of substantive rights or defenses.  In case any such Proceeding shall be brought against any Indemnified Party and it shall notify the Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to assume the defense thereof at its 

 

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own expense, with counsel reasonably satisfactory to the Indemnified Party; provided, however, that any Indemnified Party may, at its own expense, retain separate counsel to participate in such defense.  Notwithstanding the foregoing, in any third party Proceeding in which the Indemnifying Party and an Indemnified Party is, or is reasonably likely to become, a party, such Indemnified Party shall have the right to employ separate counsel at the Indemnifying Party’s expense (and the Indemnifying Party shall reasonably promptly reimburse the Indemnified Party for such reasonable expense upon presentation of invoices therefor (it being further agreed that the Indemnified Party shall return such reimbursement amounts if there is a Final Gross Negligence Determination (as defined in the Purchase Agreement) against such Indemnified Party)) and to control its own defense of such Proceeding if the named parties to any such Proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and if, in the reasonable opinion of counsel to such Indemnified Party, the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such Proceeding based on one or more material legal defenses available to such Indemnified Party that are inconsistent with those available to the Indemnifying Party (other than differing interests associated with the Indemnifying Party’s obligation to indemnify), in which cases the reasonable fees and expenses of one counsel plus, if applicable, one local counsel, of the Indemnified Party shall be paid by the Indemnifying Party on a timely basis.  The Indemnifying Party agrees that it will not (nor shall any of its subsididaries), without the prior written consent of the Indemnifed Party, settle, compromise or consent to the entry of any judgment in any pending or threatened Proceeding relating to the matters contemplated hereby (if any Indemnified Party is a party thereto or has been actually threatened to be made a party thereto) unless such settlement, compromise or consent includes an unconditional release of the Investor and each other Indemnified Party from all liability arising or that may arise out of such claim, action or proceeding.  The rights accorded to Indemnified Parties hereunder shall be in addition to any rights that any Indemnified Party may have at common law, in equity, by separate agreement or otherwise.

 

The parties agree that reasonable attorneys’ fees and costs shall be paid to the prevailing party by the non-prevailing party in any action brought under this Section 5.  This Section 5 shall survive the termination of this Agreement.  If any Indemnified Party makes any payment to any other Indemnified Party with respect to an indemnified liability as to which the Indemnifying Party was required to indemnify the Indemnified Party receiving such payment, the Indemnified Party making such payment is entitled to be indemnified and reimbursed by the Indemnifying Party with respect thereto.  WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO LOSSES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PARTY OR OF ANY OTHER PERSON, UNLESS SUCH LOSSES ARE EXPRESSLY EXCLUDED FROM THE INDEMNIFYING PARTY’S INDEMNIFICATION OBLIGATIONS.

 

(d)                     Contribution.  If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.  The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission.  The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

 

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The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this Section 5(d), (i) no Person involved in the sale of Registrable Securities or Permissible Piggyback Shares which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities or Permissible Piggyback Shares who was not guilty of fraudulent misrepresentation; and (ii) no Selling Stockholder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Selling Stockholder from the sale of the Registrable Securities or Permissible Piggyback Shares, as applicable, subject to the Proceeding exceeds the amount of any damages that such Selling Stockholder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

 

The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

 

6.                                      Reports Under the Exchange Act.  With a view to making available to the Holders of Registrable Securities the benefits of Rule 144 or any other similar rule or regulation of the SEC that may at any time permit the Holders of Registrable Securities to sell Registrable Securities of the Company to the public without registration, the Company agrees, for so long as Registrable Securities are outstanding and held by the Holders of Registrable Securities, to:

 

(a)                     make and keep public information available, as those terms are understood, defined and required in Rule 144;

 

(b)                     file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

 

(c)                      furnish to each Holder of Registrable Securities so long as such Holder of Registrable Securities owns Registrable Securities, promptly upon request, such information as may be reasonably and customarily requested to permit the Holders of Registrable Securities to sell such securities pursuant to Rule 144 without registration.

 

7.                                      Legends.

 

(a)                     Registrable Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of the Registrable Securities other than pursuant to an effective registration statement, to the Company, to an Affiliate of the Investor or in connection with a pledge as contemplated in Section 7(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act.

 

(b)                     Certificates evidencing the Registrable Securities will contain the following legend, so long as is required by this Section 7:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, 

 

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ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT.

 

The Company acknowledges and agrees that a Holder of Registrable Securities may from time to time pledge pursuant to a bona fide margin account and, if required under the terms of such account, such Holder may transfer pledged or secured Registrable Securities to the pledgees or secured parties. Such pledge or transfer would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but the legend shall remain on the pledged Registrable Securities and such legal opinion may be required in connection with a subsequent transfer following default by the Holder transferee of the pledge. Further, no notice shall be required of such pledge. At the expense of the appropriate Holder of Registrable Securities, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Registrable Securities may reasonably request in connection with a pledge or transfer of the Registrable Securities including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder.

 

(c)                Certificates evidencing the Registrable Securities shall not contain any legend (including the legend set forth in Section 7(b): (i) unless prohibited by the Company’s transfer agent (notwithstanding consent of the Company and the provision of legal opinions requested by the transfer agent to effect this Section 7(c)) or the regulations or published interpretations of the Commission while a registration statement (including the Registration Statement) covering the resale of such Registrable Securities is effective under the Securities Act, or (ii) following any sale of such Registrable Securities pursuant to Rule 144, or (ii) if such Registrable Securities are eligible for sale under Rule 144(b)(i), or (iii) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the Commission). The Company shall cause its counsel to issue any legal opinion required by the Company’s transfer agent to effect this Section 7(c).  Following the Effective Date or at such earlier time as a legend is no longer required for the Registrable Securities under this Section 7(c), the Company will, no later than three (3) Business Days following the delivery by a Holder of Registrable Securities to the Company or the Company’s transfer agent of a certificate representing Registrable Securities containing a restrictive legend, deliver or cause to be delivered to such Holder a certificate representing such Registrable Securities that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section 7.

 

8.                                      Assignment of Registration Rights.  The rights under this Agreement shall be automatically assignable by the Investor to any permitted transferee of a minimum of 10% of the Registrable Securities then outstanding if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within five (5) Business Days after such assignment; (ii) the Company is, within five (5) Business Days after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act or applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement.

 

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9.                                      Miscellaneous.

 

(a)                     Remedies.  In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement.  The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

 

(b)                     No Piggyback on Registrations; Waiver.  Except for the Permissible Piggyback Shares, neither the Company nor any of its security holders (other than the Holders of Registrable Securities in such capacity pursuant hereto) have the contractual right to include securities of the Company in a Registration Statement other than the Registrable Securities, and the Company shall not during the Effectiveness Period enter into any agreement providing any such right to any of its security holders without the consent of the Demanding Holders.

 

(c)                      Compliance.  Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities or Permissible Piggyback Shares pursuant to the Registration Statement.

 

(d)                     Discontinued Disposition.  Each Selling Stockholder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c), such Selling Stockholder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Selling Stockholder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement.  The Company may provide appropriate stop transfer orders to enforce the provisions of this paragraph.

 

(e)                      Amendments and Waivers.  Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Demanding Holders.  Notwithstanding the foregoing, (i) a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder and that does not directly or indirectly affect the rights of other Holders may be given by the Holder to which such waiver or consent relates and (ii) no amendment or waiver of any provision of this Agreement that adversely affects the Holders of Permissible Piggyback Shares in a materially disproportionate manner (compared to the effect on Holders of Registrable Securities) may be effected only with the consent of the Holders of a majority of the Permissible Piggyback Shares; provided, that no amendment or waiver to any provision of this Agreement relating to naming any Holder or requiring the naming of any Holder as an underwriter may be effected in any manner without such Holder’s prior written consent.

 

(f)                       Notices.  All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, facsimile (with receipt confirmed), courier service or personal delivery to the address of each of the parties set forth on the signature pages hereto.  All such notices and communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial overnight courier service; if mailed, five (5) business days after being deposited in the mail, postage prepaid; or when sent, if sent via facsimile during the recipient’s normal business hours with confirmation of sending.

 

18

 

(g)                      Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder.  The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder.  Each Holder may assign their respective rights hereunder; provided that such assignee, after giving effect to such assignment, would own a minimum of 10% of the Registrable Securities then outstanding (for assignees of the Investor) or Permissible Piggyback Shares then outstanding (for assignees of holders of Permissible Piggyback Shares).

 

(h)                     Execution and Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement.  In the event that any signature is delivered by facsimile or email transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile or email signature were the original thereof.

 

(i)                         Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware without regard to the principles of conflicts of law thereof.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.  If either party shall commence a Proceeding to enforce any provisions of this Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

 

(j)                        Cumulative Remedies.  The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

 

(k)                     Entire Agreement. This Agreement, the other Transaction Documents (as defined in the Purchase Agreement) and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein.  This Agreement, the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

 

(l)                         Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

(m)                 Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

19

 

[Signature Page Follows]

 

20

 

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

 

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
LIME   ENERGY CO.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Adam Procell
    
	
 
    	
 
    	
Name: Adam Procell
    
	
 
    	
 
    	
Title: President & CEO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ADDRESS FOR NOTICE
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    	
16810 Kenton Drive, Suite 240
    
	
 
    	
 
    	
 
    	
Huntersville, NC 28078
    
	
 
    	
 
    	
Tel:
    	
 
    
	
 
    	
 
    	
Fax:
    	
 
    
	
 
    	
 
    	
Email:
    	
 
    
	
 
    	
 
    	
Attention:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
With a copy to (which shall not constitute notice):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Company:
    	
Drinker Biddle & Reath LLP
    
	
 
    	
 
    	
Address:
    	
One Logan Square, Ste. 2000
    
	
 
    	
 
    	
 
    	
Philadelphia, PA 19103
    
	
 
    	
 
    	
Tel:
    	
215-988-2880
    
	
 
    	
 
    	
Fax:
    	
215-988-2770
    
	
 
    	
 
    	
Email:
    	
Stephen.Burdumy@dbr.com
    
	
 
    	
 
    	
Attention:
    	
Stephen T. Burdumy, Esq.
    

 

 

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

 

	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
BISON CAPITAL PARTNERS IV, L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By: Bison Capital   Partners IV GP, L.P.
    
	
 
    	
Its:  General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
By: Bison Capital Partners GP, LLC
    
	
 
    	
 
    	
Its:  General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Andreas Hildebrand
    
	
 
    	
 
    	
Name: Andreas Hildebrand
    
	
 
    	
 
    	
Title: Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ADDRESS FOR NOTICE
    
	
 
    	
 
    
	
 
    	
Address:
    	
780 Third Avenue, 30th   Floor
    
	
 
    	
 
    	
New York, NY 10017
    
	
 
    	
Tel:
    	
646-792-2081
    
	
 
    	
Fax:
    	
646-590-9021
    
	
 
    	
Email:
    	
ahildebrand@bisoncapital.com
    
	
 
    	
Attention:
    	
Andreas Hildebrand
    
	
 
    	
 
    
	
 
    	
With a copy to (which shall not constitute notice):
    
	
 
    	
 
    
	
 
    	
Company:
    	
Sheppard Mullin Richter & Hampton LLP
    
	
 
    	
Address:
    	
12275 El Camino Real #200
    
	
 
    	
 
    	
Del Mar, CA 92130
    
	
 
    	
Tel:
    	
858-720-8943
    
	
 
    	
Fax:
    	
858-847-4871
    
	
 
    	
Email:
    	
jtishler@sheppardmullin.com
    
	
 
    	
Attention:
    	
John D. Tishler, Esq.
    
						

 

 

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

 

	
 
    	
HOLDER OF PERMISSIBLE PIGGYBACK SHARES:
    
	
 
    	
 
    
	
 
    	
RICHARD   KIPHART
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ RICHARD P. KIPHART
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ADDRESS FOR NOTICE
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    	
c/o William Blair &   Co 
   222 W. Adams St Chicago, IL 60606
    
	
 
    	
Tel:
    	
312-364-8420
    
	
 
    	
Fax:
    	
773-442-0214
    
	
 
    	
Email:
    	
rkiphart@williamblair.com
    
	
 
    	
Attention:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
With a copy to (which shall not constitute notice):
    
	
 
    	
 
    	
 
    
	
 
    	
Company:
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
Tel:
    	
 
    
	
 
    	
Fax:
    	
 
    
	
 
    	
Email:
    	
 
    
	
 
    	
Attention:
    	
 
    

 

 

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

 

	
 
    	
HOLDER OF PERMISSIBLE PIGGYBACK SHARES:
    
	
 
    	
 
    
	
 
    	
THE   JOHN THOMAS HURVIS REVOCABLE TRUST
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ John Thomas Hurvis
    
	
 
    	
 
    	
Name: John Thomas Hurvis
    
	
 
    	
 
    	
Title: Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
ADDRESS FOR NOTICE
    
	
 
    	
 
    
	
 
    	
Address:
    	
4065 Commercial Ave.,
   Northbrook IL 60062
    
	
 
    	
Tel:
    	
(847) 559-2034
    
	
 
    	
Fax:
    	
(847) 664-7254
    
	
 
    	
Email:
    	
tpappas@oldworld.com
    
	
 
    	
Attention:
    	
Tommy Pappas
    
	
 
    	
 
    
	
 
    	
With a copy to (which shall not constitute notice):
    
	
 
    	
 
    
	
 
    	
Company:
    
	
 
    	
Address:
    
	
 
    	
Tel:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    
	
 
    	
Attention:
    
				

 

 

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

 

 

	
 
    	
HOLDER OF PERMISSIBLE PIGGYBACK SHARES:
    
	
 
    	
 
    
	
 
    	
GREENER   CAPITAL PARTNERS II, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Charles H. Finnie
    
	
 
    	
 
    	
Name: Charles H. Finnie
    
	
 
    	
 
    	
Title: Managing Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ADDRESS FOR NOTICE
    
	
 
    	
 
    
	
 
    	
Address:
    	
cfinnie@efwpartners.com
    
	
 
    	
Tel:
    	
510-684-4865
    
	
 
    	
Fax:
    	
 
    
	
 
    	
Email:
    	
 
    
	
 
    	
Attention:
    	
 
    
	
 
    	
 
    
	
 
    	
With a copy to (which shall not constitute notice):
    
	
 
    	
 
    
	
 
    	
Company:
    
	
 
    	
Address:
    
	
 
    	
Tel:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    
	
 
    	
Attention:
    
				

 

 

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

 

	
 
    	
HOLDER OF PERMISSIBLE PIGGYBACK SHARES:
    
	
 
    	
 
    
	
 
    	
NETTLESTONE   ENTERPRISES LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael Heyworth
    
	
 
    	
 
    	
Name: Michael Heyworth
    
	
 
    	
 
    	
Title: Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ADDRESS FOR NOTICE
    
	
 
    	
 
    
	
 
    	
Address:
    	
PO Box 665, Roseneath,   The Grange, 
   St. Peter Port, Guernsey GY1 3SJ
    
	
 
    	
Tel:
    	
+441481730430
    
	
 
    	
Fax:
    	
+441481730460
    
	
 
    	
Email:
    	
michael.heyworth@trustcorpci.com
    
	
 
    	
Attention
    	
Michael Heyworth
    
	
 
    	
 
    
	
 
    	
With a copy to (which shall not constitute notice):
    
	
 
    	
 
    
	
 
    	
Company:
    
	
 
    	
Address:
    
	
 
    	
Tel:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    
	
 
    	
Attention:
    
				

 

 

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

 

	
 
    	
HOLDER OF PERMISSIBLE PIGGYBACK SHARES:
    
	
 
    	
 
    
	
 
    	
CHRISTOPHER   CAPPS
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Christopher Capps
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ADDRESS FOR NOTICE
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
Tel:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    
	
 
    	
Attention:
    
	
 
    	
 
    
	
 
    	
With a copy to (which shall not constitute notice):
    
	
 
    	
 
    
	
 
    	
Company:
    
	
 
    	
Address:
    
	
 
    	
Tel:
    
	
 
    	
Fax:
    
	
 
    	
Email:
    
	
 
    	
Attention:
    

 

 

Annex A

 

Plan of Distribution

 

The Selling Stockholders and any of their pledgees, donees, transferees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of Common Stock on any stock exchange, market or trading facility on which the shares are traded or quoted or in private transactions.  These sales may be at fixed or negotiated prices.  The Selling Stockholders may use any one or more of the following methods when selling shares:

 

·                  ordinary brokerage transactions and transactions in which the broker-dealer solicits Investors;

 

·                  block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

 

·                  purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

·                  an exchange distribution in accordance with the rules of the applicable exchange;

 

·                  privately negotiated transactions;

 

·                  through the writing of options on the shares;

 

·                  to cover short sales made after the date that this Registration Statement is declared effective by the Commission;

 

·                  broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; and

 

·                  a combination of any such methods of sale.

 

The Selling Stockholders may also sell shares under Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus. The selling stockholders shall have the sole and absolute discretion not to accept any purchase offer or make any sale of shares if it deems the purchase price to be unsatisfactory at any particular time.

 

The Selling Stockholders or their respective pledgees, donees, transferees or other successors in interest, may also sell the shares directly to market makers acting as principals and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal or both, which compensation as to a particular broker-dealer might be in excess of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their own risk. It is possible that a selling stockholder will attempt to sell shares of common stock in block transactions to market makers or other purchasers at a price per share which may be below the then existing market price. We cannot assure that all or any of the shares offered in this prospectus will be issued to, or sold by, the Selling Stockholders. The Selling Stockholders and any brokers, dealers or agents, upon effecting the sale of any of the shares offered in this prospectus, may be deemed to be “underwriters” as that term is defined under the Securities Act, the Exchange Act and the rules and regulations of such acts. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

 

 

We are required to pay all fees and expenses incident to the registration of the shares, including fees and disbursements of counsel to the Selling Stockholders (up to an agreed upon aggregate amount), but excluding brokerage commissions or underwriter discounts.

 

The Selling Stockholders, alternatively, may sell all or any part of the shares offered in this prospectus through an underwriter.  The Selling Stockholders have not entered into any agreement with a prospective underwriter and there is no assurance that any such agreement will be entered into.

 

The Selling Stockholders may pledge their shares to their brokers under the margin provisions of customer agreements. If a Selling Stockholder defaults on a margin loan, the broker may, from time to time, offer and sell the pledged shares. The Selling Stockholders and any other persons participating in the sale or distribution of the shares will be subject to applicable provisions of the Exchange Act, and the rules and regulations under such act, including, without limitation, Regulation M. These provisions may restrict certain activities of, and limit the timing of purchases and sales of any of the shares by, the Selling Stockholders or any other such person. In the event that any of the Selling Stockholders are deemed an affiliated purchaser or distribution participant within the meaning of Regulation M, then the Selling Stockholders will not be permitted to engage in short sales of common stock. Furthermore, under Regulation M, persons engaged in a distribution of securities are prohibited from simultaneously engaging in market making and certain other activities with respect to such securities for a specified period of time prior to the commencement of such distributions, subject to specified exceptions or exemptions. In addition, if a short sale is deemed to be a stabilizing activity, then the Selling Stockholders will not be permitted to engage in a short sale of our common stock. All of these limitations may affect the marketability of the shares.

 

If a Selling Stockholder notifies us that it has a material arrangement with a broker-dealer for the resale of the common stock, then we would be required to amend the registration statement of which this prospectus is a part, and file a prospectus supplement to describe the agreements between the Selling Stockholder and the broker-dealer.

 

 

Annex B

 

LIME ENERGY CO.

 

Selling Stockholder Notice and Questionnaire

 

The undersigned beneficial owner of common stock (the “Common Stock”), of Lime Energy Co., a Delaware corporation (the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a Registration Statement for the registration and resale of the Registrable Securities and Permissible Piggyback Shares (if applicable), in accordance with the terms of the Registration Rights Agreement, dated as of [·], 2014 (the “Registration Rights Agreement”), between the Company, the Investor and the Holders of Permissible Piggyback Shares named therein.  A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.  All capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

 

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

1.                                      Name.

 

(a)                                 Full Legal Name of Selling Stockholder

 

 

(b)                                 Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities or Permissible Piggyback Shares Listed in Item 3 below are held:

 

 

(c)                                  Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire):

 

 

2.  Address for Notices to Selling Stockholder:

 

 

	
Telephone:
    
	
Fax:
    
	
Contact Person:
    

 

3.  Beneficial Ownership of Registrable Securities or Permissible Piggyback Shares:

 

Type and Principal Amount of Registrable Securities or Permissible Piggyback Shares beneficially owned:

 

30

 

 

4.  Broker-Dealer Status:

 

(a)                            Are you a broker-dealer?

 

Yes   o         No   o

 

Note:             If yes, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

(b)                            Are you an affiliate of a broker-dealer?

 

Yes   o         No   o

 

(c)                             If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities or Permissible Piggyback Shares to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities or Permissible Piggyback Shares?

 

Yes   o         No   o

 

Note:             If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

5.  Beneficial Ownership of Other Securities of the Company Owned by the Selling Stockholder.

 

Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities or Permissible Piggyback Shares listed above in Item 3.

 

Type and Amount of Other Securities beneficially owned by the Selling Stockholder:

 

 

 

6.  Relationships with the Company:

 

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

 

State any exceptions here:

 

 

7.  The Company has advised each Selling Stockholder that it is the view of the Commission that it may not use shares registered on the Registration Statement to cover short sales of Common Stock made prior to the date on which the Registration Statement is declared effective by the Commission, in accordance with 1997 Securities and Exchange Commission Manual of Publicly Available Telephone Interpretations Section A.65.  If a Selling Stockholder uses the prospectus for any sale of the Common Stock, it will be subject to the prospectus delivery requirements of the Securities Act.  The Selling Stockholders will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such Selling Stockholders in connection with resales of their respective shares under the Registration Statement.

 

The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof and prior to the Effective Date for the Registration Statement.

 

Certain legal consequences arise from being named as a Selling Stockholder in the Registration Statement and related prospectus.  Accordingly, the undersigned is advised to consult their own securities law counsel regarding the consequence of being named or not being named as a Selling Stockholder in the Registration Statement and the related prospectus.

 

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 6 and the inclusion of such information in the Registration Statement and the related prospectus.  The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.  The undersigned hereby elects to include the Registrable Securities or Permissible Piggyback Shares owned by it and listed above in Item 3 (unless otherwise specified in Item 3) in the Registration Statement.

 

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

 

	
Dated:
    	
 
    	
 
    	
Beneficial Owner:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
						

 

PLEASE FAX OR EMAIL A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

[Company]

[Address]

[Email]

[Fax]

 

 

Annex C

 

Schedule of Holders of Permissible Piggyback Shares

 

	
Name of Holders of Permissible
   Piggyback Shares
    	
 
    	
Number of Permissible
   Piggyback Shares
    	
 
    
	
Richard Kiphart
    	
 
    	
2,389,774
    	
 
    
	
The John Thomas   Hurvis Revocable Trust
    	
 
    	
1,892,173
    	
 
    
	
Greener Capital   Partners II, L.P.
    	
 
    	
787,028
    	
 
    
	
Nettlestone   Enterprises Limited
    	
 
    	
370,743
    	
 
    
	
Christopher   Capps
    	
 
    	
27,980Exhibit 4.1

 

 

SMTC CORPORATION

 

and

 

COMPUTERSHARE INC.,

 

as Rights Agent

 

TAX BENEFITS PRESERVATION PLAN

 

Dated as of December 29, 2014

 

 

 

 

    	 

    	 

    

 

Table of Contents

 

	1.   Certain Definitions	2
	2.   Appointment of Rights Agent	10
	3.   Evidence and Transfer of Rights	10
	3.1.   Prior to Distribution Date	10
	3.2.   After Distribution Date	10
	3.3.   Summary of Rights	10
	3.4.   Stock Then Outstanding on the Record Date	11
	3.5.   Future Issuances of Stock; Stock Legends	11
	4.   Rights Certificates	12
	4.1.   Form of Rights Certificates	12
	4.2.   Legends	12
	5.   Countersignature and Registration	12
	6.   Replacement of Rights Certificates	13
	6.1.   Transfer, Split-up, Combination and Exchange of Rights Certificates	13
	6.2.   Mutilated, Destroyed, Lost or Stolen Rights Certificates	14
	7.   Exercise of Rights; Purchase Price; Expiration Date of Rights	14
	7.1.   Exercise of Rights	14
	7.2.   Purchase Price	14
	7.3.   Duties of Rights Agent Upon Exercise	14
	7.4.   Partial Exercise	15
	7.5.   Rights Owned by Acquiring Person or Disqualified Transferee Null and Void	15
	7.6.   Proper Exercise Required	15
	8.   Cancellation and Destruction of Rights Certificates	16
	9.   Reservation	16
	9.1.   Reservation and Availability of Preferred Stock	16
	9.2.   Best Efforts to List Shares Issuable Upon Exercise	16
	9.3.   Duly Authorized, Fully Paid, Nonassessable Shares	16
	9.4.   Taxes	17
	9.5.   Registration of Securities Issuable Upon Exercise of Rights	17
	10.   Issuance of Stock Upon Exchange; No Rights as Stockholder Until Exercise	18
	11.   Adjustments to Rights	18
	11.1.   Stock Splits; Flip-in Provisions	18
	11.2.   Issuance of Other Rights to Purchase Preferred Stock	21

 

    	i

    	 

    

	11.3.   Distributions of Cash or Other Assets	22
	11.4.   Determination of Current Market Price and Closing Price	22
	11.5.   Minor Adjustments; Calculation Precision; Purchase Price Reductions	23
	11.6.   Comparable Adjustments upon Substitution of Securities	23
	11.7.   Status of Rights Certificates After a Purchase Price Adjustment	23
	11.8.   Status of Rights Certificates After Certain Adjustments	24
	11.9.   Option to Adjust Number of Rights	24
	11.10.   No Obligation to Re-Issue Adjusted Right Certificates	24
	11.11.   Adjustments Below Par Value	25
	11.12.   Delay in Issuance of Rights Until Occurrence of Adjustment Event	25
	11.13.   Adjustments to Purchase Price for Tax Reasons	25
	11.14.   No Prejudice of Rights Through Business Combinations	25
	11.15.   Adjustment of Rights upon Common Stock Dividend, Split or Combination	26
	12.   Certificate of Adjustments	26
	13.   Fractional Rights and Fractional Shares	27
	13.1.   Cash in Lieu of Fractional Rights	27
	13.2.   Cash in Lieu of Fractional Shares Upon Exercise	27
	13.3.   Waiver of Right to Fractions	27
	14.   Rights of Action	28
	15.   Agreement of Rights Holders	28
	16.   Rights Holder Not Deemed a Stockholder	29
	17.   Payment and Indemnification of the Rights Agent	29
	18.   Merger or Consolidation or Change of Name of Rights Agent	29
	19.   Rights and Duties of Rights Agent	30
	19.1.   Consultation with Legal Counsel	30
	19.2.   Officers’ Certificate	30
	19.3.   Liability	30
	19.4.   No Liability for Facts or Recitals	31
	19.5.   Limitations on Responsibility	31
	19.6.   Further Assurances by the Company	31
	19.7.   Authorization to Rely upon Instructions	31
	19.8.   Transactions with the Company	32
	19.9.   No Liability for Acts of Agents	32
	19.10.   No Financial Risk	32

 

    	ii

    	 

    

	19.11.   Acting on Void Rights	32
	19.12.   No Liability to Third Parties	32
	20.   Change of Rights Agent	33
	21.   Issuance of New Rights Certificates	34
	22.   Redemption and Termination	34
	23.   Exchange	35
	23.1.   Exchange Option	35
	23.2.   Termination of Right to Exercise; Notices	35
	23.3.   Substitution for Common Stock	36
	23.4.   Authorization of Additional Shares	36
	23.5.   No Fractions	36
	24.   Notice of Proposed Actions	36
	25.   Notices	38
	26.   Supplements and Amendments	38
	27.   Successors	39
	28.   Determinations and Actions by the Board; Etc	39
	29.   Benefits of this Plan	39
	30.   Severability	39
	31.   Governing Law	40
	32.   Counterparts	40
	33.   Descriptive Headings	40
	34.   Force Majeure	40
	35.   USA PATRIOT Act Notice	40

EXHIBITS

 

Exhibit A: Form of Certificate of Designations, Preferences
and Rights of Preferred Stock 

Exhibit B: Form of Rights Certificates 

Exhibit C: Summary of Rights

 

    	iii

    	 

    

TAX BENEFITS
PRESERVATION PLAN

 

This Tax Benefits Preservation Plan dated
as of December 29, 2014 (the “Plan”) is between SMTC Corporation, a Delaware corporation (the “Company”),
and Computershare Inc., a Delaware corporation, as rights agent (the “Rights Agent”).

 

W I T N
E S S E T H:

 

WHEREAS, the Company has generated substantial
operating losses and other tax attributes in previous years which, under the Internal Revenue Code of 1986, as amended (the “Code”)
and rules promulgated by the Internal Revenue Service, the Company may in certain circumstances use to offset current and future
earnings and thus reduce its future federal income tax liability (subject to certain requirements and restrictions); and

 

WHEREAS, if the Company experiences an “Ownership
Change,” as defined in Section 382 of the Code and the Treasury Regulations thereunder or any successor or replacement provisions
(“Section 382”), its ability to use the Tax Attributes (as hereinafter defined) could be substantially limited or lost
altogether; and

 

WHEREAS, the Company believes that the Tax
Attributes are a substantial asset of the Company and that it is in the best interest of the Company and its stockholders that
the Company provide for the protection of the Tax Attributes on the terms and conditions set forth herein; and

 

WHEREAS, the Company desires to avoid an
“Ownership Change” and, in furtherance of such objective, the Company wishes to enter into this Plan; and

 

WHEREAS, on December 29, 2014 the Board
of Directors of the Company (the “Board”) authorized the issuance of rights (collectively, the “Rights,”
and individually a “Right”), each Right being a right to purchase, on the terms and subject to the provisions of this
Plan, one one-hundredth of a share of the Company’s Preferred Stock (as hereinafter defined); and

 

WHEREAS, on December 29, 2014 (the “Declaration
Date”) the Board (a) authorized and declared a dividend distribution of one Right for every share of Common Stock (as hereinafter
defined), $.01 par value per share, of the Company then outstanding at the Close of Business (as hereinafter defined) on January
12, 2015 (the “Dividend Record Date”) and (b) authorized the issuance of, and agreed to issue, one Right (as such number
may be adjusted in accordance with Section 11.9 or 11.15 hereof) for every share of Common Stock of the Company issued between
the Dividend Record Date and the earlier of the Distribution Date (as hereinafter defined) and the Expiration Date (as hereinafter
defined), upon the terms and subject to the conditions hereinafter set forth; and

 

WHEREAS, the Board intends to submit the
Plan to stockholders of the Company for ratification at the 2015 Annual Meeting of Stockholders (the “2015 Annual Meeting”)
and may elect to extend the Plan for one or more successive three-year periods by re-submitting the Plan (together with any supplements
or amendments) to the stockholders of the Company for ratification at one or more Annual Meetings of the Company’s Stockholders
prior to the expiration date of the Plan; and

 

    	A-1

    	 

    

WHEREAS, the Company desires to appoint
the Rights Agent to act as rights agent hereunder, in accordance with the terms and conditions hereof.

 

PLAN

 

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

 

1.                 
Certain Definitions.

 

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

 

“Acquiring Person” shall mean
any Person who, together with all Affiliates of such Person, shall be the Beneficial Owner of 4.99% or more of the shares of Common
Stock then outstanding (as calculated herein), but shall not include:

 

(a)               
the Company;

 

(b)              
any Subsidiary of the Company;

 

(c)               
any employee benefit plan or compensation arrangement of the Company or of any Subsidiary of the Company;

 

(d)              
any Person organized, appointed, or established by the Company or a Subsidiary of the Company pursuant to the terms
of any plan or arrangement described in clause (c) above; or

 

(e)               
 any Person who would otherwise be an Acquiring Person upon the adoption of this Plan, unless and until such Person,
or any Affiliate of such Person, acquires Beneficial Ownership of any additional Stock after adoption of this Plan (other than
pursuant to a stock dividend or a stock split), in which case such Person shall be an Acquiring Person.

 

Notwithstanding the foregoing:

 

(a)               
if the Board determines in good faith that a Person who would otherwise be an “Acquiring Person” has
become such inadvertently, and such Person divests as promptly as practicable (as determined in good faith by the Board) or enters
into a written agreement with the Company to divest a sufficient number of shares of Common Stock, in the manner determined by
the Board in its sole discretion, so that such Person, together with such Person’s Affiliates, would no longer be an “Acquiring
Person, ”as defined herein (provided that such divestiture may be subject to terms and conditions satisfactory to the Board),
then such Person shall not be deemed to be or to have been an “Acquiring Person” for any purposes of this Plan;

 

(b)              
no Person shall become an “Acquiring Person” as the result of an acquisition by the Company of Common
Stock which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such
Person to 4.99% or more of the shares of Common Stock then outstanding; provided, however, that if a Person shall become
the Beneficial Owner of 4.99% or more of the shares of Common Stock then outstanding by reason of share purchases by the Company
and shall, after such share purchases by the Company, become the Beneficial Owner of any additional shares (other than pursuant
to a stock split, stock dividend or similar transaction) of Stock and immediately thereafter be the Beneficial Owner of 4.99% or
more of the shares of Common Stock then outstanding, then such Person shall be deemed to be an “Acquiring Person;”

 

    	A-2

    	 

    

(c)               
if the Board determines that characterizing a Person who would otherwise be an “Acquiring Person,” as
an “Acquiring Person” would adversely impact the availability of the Company’s Tax Attributes to a greater extent
than not characterizing such Person as an “Acquiring Person,” then in each case, such Person shall not be deemed to
be an “Acquiring Person” for any purposes of this Plan unless and until such Person shall again become an “Acquiring
Person”; and

 

(d)              
an “Acquiring Person” shall not include any Person who or which the Board determines prior to the time
such Person would otherwise be an Acquiring Person, should be exempted from this definition, unless and until such Person acquires
Beneficial Ownership of any additional shares of Stock other than pursuant to a stock split, stock dividend or similar transaction;
provided, however, that the Board may make such exemption subject to such conditions, if any, which the Board may determine.

 

In determining whether a Person or Persons
owns 4.99% or more of the shares of Common Stock then outstanding for all purposes of this Plan, all of the Stock owned or deemed
owned by such Person or Person shall be taken into account in the numerator and only the Common Stock then outstanding shall be
taken into account in the denominator. Without limiting the foregoing, any Person or Persons shall be treated as owning 4.99% or
more of the shares of Common Stock then outstanding if, in the determination of the Board, that Person or Persons would be treated
as a “5-percent shareholder” for purposes of Section 382 (substituting “4.99”for “five” or
“5”each time “five” or “5”is used in or for purposes of Section 382).

 

“2015 Annual Meeting” shall
have the meaning set forth in the preamble to this Plan.

 

“Act” shall mean the Securities
Act of 1933 (or any successor act), as amended and as may from time to time be in effect.

 

“Affiliate,” with respect to
any Person, shall mean any other Person who is, or who would be deemed to be, an “affiliate” or an “associate”
of such Person within the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, and to the extent not included within the foregoing clause of this Section, shall also include, with respect to any
Person, any other Person (whether or not an Exempt Person) whose Stock would be deemed constructively or otherwise owned by, or
otherwise aggregated with shares owned by, such first Person or owned by a single “entity” pursuant to the provisions
of Section 382, provided, however, that a Person will not be deemed to be the Affiliate of another Person solely because
either or both Persons are or were directors of the Company.

 

A Person shall be deemed the “Beneficial
Owner” of, and shall be deemed to “beneficially own” or have “Beneficial Ownership” of, any securities:

 

    	A-3

    	 

    

(a)               
which such Person or any of such Person’s Affiliates has, directly or indirectly, “beneficial ownership”
of within the meaning of Section 13d-3 of the General Rules and Regulations under the Exchange Act;

 

(b)              
which such Person or any of such Person’s Affiliates has, directly or indirectly, the right to acquire (whether
such right is exercisable immediately or after the passage of time or the fulfillment of a condition or both) pursuant to any agreement,
arrangement or understanding (whether or not in writing) (including any purchase orders for Stock initiated prior the first public
announcement of the adoption of this Plan) or upon the exercise of conversion, exchange or other rights, warrants or options (including,
without limitation, within the meaning of Section 382), or otherwise;

 

(c)               
which such Person or any of such Person’s Affiliates has, directly or indirectly, the right to vote or dispose
of, including pursuant to any agreement, arrangement or understanding (whether or not in writing); provided, however, that
a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any security for purposes
of clause (c) of this definition as a result of either:

 

(1) an agreement, arrangement or understanding to vote
such security if such agreement, arrangement or understanding:

 

(i)                
arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable proxy solicitation rules and regulations promulgated under the Exchange Act; and

 

(ii)              
is not also then reportable by such Person on Schedule 13D or Schedule 13G under the Exchange Act (or any comparable
or successor report); or

 

(2) securities issued or issuable pursuant to any employee
benefit plan of the Company or any Subsidiary of the Company or any employment agreement, arrangement or other understanding between
the Company or any Subsidiary of the Company and any Person or any of such Person’s Affiliates;

 

or

 

(d)              
which are beneficially owned, directly or indirectly, by any other Person or any Affiliate thereof with which such
Person or any of such Person’s Affiliates has any agreement, arrangement or understanding (whether or not in writing), with
respect to acquiring, holding, voting (except pursuant to a revocable proxy or in connection with a proxy or consent solicitation
described in the proviso to clause (c) of this definition) or disposing of any securities of the Company;

 

    	A-4

    	 

    

To the extent not included within the foregoing
provisions of this Section, a Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially
own” or have “beneficial ownership” of, securities which such Person (i) would be deemed to constructively or
otherwise own, or which would otherwise be aggregated with shares owned or beneficially owned by such Person, for purposes of Section
382, or (ii) would be deemed to have a direct or indirect economic or pecuniary interest, including, without limitation, interests
or rights acquired through derivative, hedging or similar transactions relating to such securities with a counterparty, as determined
by the Board in its sole and absolute discretion.

 

Notwithstanding the foregoing:

 

(a)               
for purposes of this definition a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially
own”:

 

(i)                
securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates
until such tendered securities are accepted for purchase or exchange;

 

(ii)              
securities issuable upon exercise of Rights at any time prior to the occurrence of a Common Stock Event; or

 

(iii)            
securities issuable upon exercise of Rights which were held by a Person or such Person’s Affiliates prior to
the Distribution Date as long as such Person is not responsible for the occurrence of the Common Stock Event giving rise to the
Distribution Date;

 

(b)              
no Person engaged in business as an underwriter of securities shall be deemed the Beneficial Owner of any securities
acquired through such Person’s participation as an underwriter in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition;

 

(c)               
no Person that is an officer or director of the Company, solely by reason of their status as such, shall constitute
a group notwithstanding that they may be Affiliates of one another or may be deemed to constitute a group for purposes of Section
13(d) of the Exchange Act or to be deemed to own securities owned by another officer or director of the Company.

 

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

 

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

 

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

 

“Closing Price” shall have the
meaning set forth in Section 11.4 hereof.

 

“Code” shall have the meaning
set forth in the preamble to this Plan.

 

    	A-5

    	 

    

“Common Stock” shall mean the
Common Stock, $.01 par value per share, of the Company, except that “Common Stock” when used with respect to any Person
other than the Company shall mean either (a) the capital stock or other equity interest of such Person with the greatest voting
power, or (b) the equity securities or other equity interests having power to control or direct the management and affairs of such
Person, or if such Person is a Subsidiary of another Person, the Person (x) who ultimately controls such Person that is the Subsidiary
and (y) which has outstanding such common stock (or such other capital stock, equity securities or interests). “Common Stock”
when used with reference to any Person not organized in corporate form shall mean units of beneficial interest which (x) shall
represent the right to participate generally in the profits and losses of such Person (including without limitation any flow-through
tax benefits resulting from an ownership interest in such Person) and (y) shall be entitled to exercise the greatest voting power
of such Person or, in the case of a limited partnership, shall have the power to remove or otherwise replace the manager or managers,
general partner, or partners or persons or entities performing similar functions.

 

“Common Stock Equivalents” shall
have the meaning set forth in Section 11.1.3(b)(iii) hereof.

 

“Common Stock Event” shall mean
when any Person, alone or together with such Person’s Affiliates, at any time after the Declaration Date becomes an Acquiring
Person.

 

“Company” shall have the meaning
set forth in the preamble to this Plan.

 

“Current Market Price” shall
have the meaning set forth in Section 11.4 hereof.

 

“Current Value” shall have the
meaning set forth in Section 11.1.3 hereof.

 

“Declaration Date” shall have
the meaning set forth in the preamble to this Plan.

 

“Directors” shall mean the members
of the Board.

 

“Disqualified Transferee” shall
mean any Person who is a direct or indirect transferee of any Right from an Acquiring Person or an Affiliate of an Acquiring Person
and who became such a transferee (a) after the occurrence of a Common Stock Event or (b) prior to or concurrently with the Acquiring
Person becoming such and received such Right pursuant to a transfer (whether or not for value) (x) from the Acquiring Person to
holders of its Stock or other equity securities or to any Person with whom the Acquiring Person has any continuing agreement, arrangement
or understanding (whether or not in writing) regarding the transferred Right, the shares of Stock associated with such Rights or
the Company, or (y) which a majority of the Board determines is part of a plan, arrangement or understanding (whether or not in
writing) which has as a primary purpose or effect, the avoidance of Section 7.5 hereof.

 

“Distribution Date” shall mean
the date which is the later of (a) the earlier of the close of business (i) the 10th calendar day following the Stock Acquisition
Date or (ii) the 10th Business Day following the Offer Commencement Date or (b) such specified or unspecified date thereafter which
is on or after the Dividend Record Date, as may be determined by a majority of the Board.

 

    	A-6

    	 

    

“Dividend Record Date” shall
have the meaning set forth in the preamble to this Plan.

 

“Equivalent Preferred Stock”
shall have the meaning set forth in Section 11.2 hereof.

 

“Excess Amount” shall have the
meaning set forth in Section 11.1.3 hereof.

 

“Excess Common Shares” shall
have the meaning set forth in Section 23.4 hereof.

 

“Excess Exchange Shares” shall
have the meaning set forth in Section 23.1 hereof.

 

“Excess Flip-In Shares” shall
have the meaning set forth in Section 11.1.2 hereof.

 

“Exchange Act” shall mean the
Securities Exchange Act of 1934 (or any successor act), as in effect on the Declaration Date.

 

“Exchange Date” shall mean the
time at which Rights are exchanged as provided in Section 23 hereof.

 

“Exchange Ratio” shall have
the meaning set forth in Section 23.1 hereof.

 

“Exempt Person” shall mean a
Person whose Beneficial Ownership (together with all Affiliates of such Person) of 4.99% or more of the Common Stock then-outstanding
will not, as determined by the Board in its sole discretion, jeopardize or endanger the availability to the Company of the Tax
Attributes, provided, however, that such a Person will cease to be an “Exempt Person” if the Board makes a contrary
determination with respect to the effect of such Person’s Beneficial Ownership (together with all Affiliates of such person)
on the availability to the Company of the Tax Attributes.

 

“Expiration Date” shall mean
the earliest of (i) the Close of Business on December 29, 2015, provided, that if the Plan is submitted to the stockholders of
the Company for ratification at the 2015 Annual Meeting (or any adjournment or postponement thereof), then the Plan will be extended
to the Close of Business on the third anniversary of the date of this Plan if the Plan is approved by the affirmative vote of a
majority of shares of Common Stock of the Company present in person or represented by proxy at the 2015 Annual Meeting (or any
adjournment or postponement thereof) and will be extended for one or more successive three-year periods expiring on the Close of
Business on the date of the anniversary of the Plan three years thereafter if, prior to the expiration of the then current three-year
period, the Plan, together with any supplement or amendment thereof, is submitted to the stockholders of the Company for ratification
at one or more Annual Meetings of the Company’s Stockholders and the Plan (together with any supplements or amendments) is
approved by the affirmative vote of a majority of shares of Common Stock of the Company present in person or represented by proxy
at such Annual Meeting of the Company’s Stockholders (or any adjournment or postponement thereof), (ii) the Close of Business
on the first Business Day following the date on which the Plan is submitted to the stockholders of the Company for ratification
at the Company’s Annual Meeting of Stockholders if the Plan is not approved by the affirmative vote of a majority of shares
of Common Stock of the Company present in person or represented by proxy at that Annual Meeting of Stockholders (or any adjournment
or postponement thereof), (iii) the Redemption Date, (iv) the Exchange Date, (v) the consummation of a reorganization transaction
entered into by the Company resulting in the imposition of stock transfer restrictions that the Board determines will provide protection
for the Company’s Tax Attributes similar to that provided by this Plan, (vi) Close of Business on the effective date of the
repeal of Section 382 (but excluding the repeal or withdrawal of any Treasury Regulations thereunder), or any other change, if
the Board determines that this Plan is no longer necessary or desirable for the preservation of Tax Attributes, or (vii) the beginning
of a taxable year of the Company to which the Board determines that no Tax Attributes may be carried forward. Notwithstanding the
foregoing, the Plan will be terminated and be of no further force and effect if not approved by the stockholders of the Company
at the 2015 Annual Meeting or within a reasonable time thereafter prior to any Distribution Date.

 

    	A-7

    	 

    

“Offer Commencement Date” shall
mean the date of the commencement by any Person, other than (a) the Company, (b) a Subsidiary of the Company, (c) any employee
benefit plan of the Company or of any Subsidiary of the Company or (d) any Person organized, appointed, or established by the Company
or such Subsidiary pursuant to the terms of any such plan, of a tender or exchange offer (including when such offer 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 upon consummation
thereof such Person and Affiliates thereof would be the Beneficial Owner of 4.99% or more of the then outstanding shares of Common
Stock (including any such date which is after the date of this Plan and prior to the issuance of the Rights on the Dividend Record
Date or thereafter).

 

“Officers’ Certificate”
has the meaning set forth in Section 19.2 hereof.

 

“Other Consideration” has the
meaning set forth in Section 6.1 hereof.

 

“Patriot Act” has the meaning
set forth in Section 35 hereof.

 

“Permitted Offer” shall mean
a tender or exchange offer for all outstanding Common Shares made in the manner prescribed by Section 14(d) of the Exchange Act
and the rules and regulations promulgated thereunder; provided that a majority of the disinterested Directors then in office has
determined that the offer is both adequate and otherwise in the best interests of the Company and its stockholders (taking into
account all factors that such Directors deem relevant, including without limitation prices that could reasonably be achieved if
the Company or its assets were sold on an orderly basis designed to realize maximum value).

 

“Person” shall mean (a) a company,
corporation, association, partnership, joint venture, limited liability company, trust, estate, organization, business, entity
or individual, and shall include any successor (by merger or otherwise) thereto (b) a “group” as that term is used
for purposes of Section 13(d)(3) of the Exchange Act, or (c) any group of Persons that have a formal or informal understanding
among themselves to make a “coordinated acquisition” of shares of Stock, or any Person or Persons that is or are otherwise
treated as an “entity” each within the meaning of Section 382, as determined by the Board.

 

“Preferred Stock” shall mean
the series of preferred stock, $.01 par value per share, of the Company designated Series A Participating Preferred Stock, having
the rights and preferences set forth in the form of Certificate of Designations, Preferences and Rights of Preferred Stock attached
hereto as Exhibit A.

 

    	A-8

    	 

    

“Purchase Price” shall have
the meaning set forth in Section 7.2 hereof.

 

“Redemption Date” shall mean
the time at which the Rights are redeemed as provided in Section 22 hereof.

 

“Redemption Price” shall have
the meaning set forth in Section 22 hereof.

 

“Reduced Threshold” shall have
the meaning set forth in Section 26 hereof.

 

“Rights” shall have the meaning
set forth in the preamble to this Plan.

 

“Rights Agent” shall have the
meaning set forth in the preamble of this Plan subject to the appointment of a successor Rights Agent pursuant to Section 20 hereof.

 

“Rights Certificates” shall
have the meaning set forth in Section 3.2 hereof.

 

“Section 382” shall have the
meaning set forth in the preamble to this Plan.

 

“Stock” shall mean the Common
Stock.

 

“Stock Acquisition Date” shall
mean the earlier of (a) the date of the first public announcement by an Acquiring Person or the Company that an Acquiring Person
has become such (including the first date on which any filing with any governmental authority disclosing that an Acquiring Person
has become such becomes available to the public) or (b) the date on which a majority of the Directors have actual knowledge that
an Acquiring Person has become such; provided, however, that if such Person is determined not to have become an Acquiring
Person pursuant to this Section 1 then no Stock Acquisition Date shall be deemed to have occurred.

 

“Subsidiary” of any Person shall
mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interests
is owned, directly or indirectly, by such Person.

 

“Substitution Period” shall
have the meaning set forth in Section 11.1.4 hereof.

 

“Summary of Rights” shall have
the meaning set forth in Section 3.3 hereof.

 

“Tax Attributes” shall mean
the net operating loss carryforwards, capital loss carryforwards, general business credit carryforwards, alternative minimum tax
credit carryforwards and foreign tax credit carryforwards, as well as any loss or deduction attributable to a “net unrealized
built-in loss” within the meaning of Section 382, of the Company or any of its Subsidiaries.

 

The term, “then outstanding”,
when used with reference to the percentage of the then outstanding securities beneficially owned by a Person, shall mean the number
of securities then issued and outstanding together with the number of such securities not then actually issued and outstanding
which such Person or any of such Person’s Affiliates would be deemed to beneficially own hereunder.

 

    	A-9

    	 

    

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

 

“Trust” shall have the meaning
set forth in Section 23.1 hereof.

 

“Trust Agreement” shall have
the meaning set forth in Section 23.1 hereof.

 

2.                 
Appointment of Rights Agent.

 

The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable, upon 10 days’ prior
written notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and in no event be liable for, the acts or
omissions of any such co-Rights Agent. If the Company appoints one or more co-rights agents, the respective duties of the Rights
Agent and any co-rights agents shall be determined by the Company.

 

3.                 
Evidence and Transfer of Rights.

 

3.1.           
Prior to Distribution Date. Until the Distribution Date, (a) the Rights will be evidenced by the certificates
representing shares of Stock registered in the names of the holders of the Stock (which certificates shall be deemed also to be
certificates for the associated Rights) and not by separate rights certificates, and the registered holders of the Stock shall
also be the registered holders of the associated Rights and (b) the Rights will be transferable only in connection with the transfer
of the associated shares of Stock.

 

3.2.           
After Distribution Date. As soon as practicable after the Company has notified the Rights Agent of 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, and has provided the Rights Agent with all necessary information (and if the Rights Agent is not
also the transfer agent and registrar of Stock, has provided the Rights Agent with the names and addresses of all record holders
of Stock), the Rights Agent will send by first class, insured, postage-prepaid mail, to each record holder of the Stock as of the
Close of Business on the Distribution Date, at the address of such holder shown on the stock transfer records of the Company, one
or more rights certificates, in substantially the form of Exhibit B hereto (the “Rights Certificates”), evidencing
in the aggregate that number of Rights to which such holder is entitled in accordance with the provisions of this Plan. As of and
after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates. The Rights are exercisable only in
accordance with the provisions of Section 7 hereof and are redeemable only in accordance with Section 22 hereof.

 

3.3.           
Summary of Rights. As soon as practicable after the Dividend Record Date, the Company will make available
a copy of a Summary of Rights, in substantially the form attached hereto as Exhibit C (the “Summary of Rights”), to
any holder of Rights who may request it from time to time prior to the Expiration Date.

 

    	A-10

    	 

    

3.4.           
Stock Then Outstanding on the Record Date. Until the Distribution Date (or the earlier redemption, expiration
or termination of the Rights), the surrender for transfer of any of the certificates representing shares of the Stock then outstanding
on the Dividend Record Date, with or without a copy of the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Stock represented by such certificate.

 

3.5.           
Future Issuances of Stock; Stock Legends. Rights shall be issued in respect of all shares of Common Stock
issued by the Company (whether originally issued or delivered from the Company’s treasury) after the Dividend Record Date
but prior to the earliest of (a) the Distribution Date, (b) the Expiration Date or (c) the redemption of the Rights. Certificates
representing such shares of Stock and certificates issued on transfer of any shares of Stock, with or without a copy of the Summary
of Rights, prior to the Distribution Date (or earlier expiration or redemption of the Rights) shall be deemed also to be certificates
for the associated Rights, and commencing as soon as reasonably practicable following the Dividend Record Date shall bear the following
legend (or a legend substantially in the form thereof):

 

“This certificate also evidences and entitles the holder
to Rights set forth in a Tax Benefits Preservation Plan between the issuer and Computershare Inc., as Rights Agent (the “Rights
Agent”), dated as of December 29, 2014 (the “Plan”), the terms of which are incorporated herein by reference
and a copy of which is on file at the office of the Rights Agent designated for such purpose. The Rights Agent will mail to the
registered holder of this certificate a copy of the Plan, as in effect on the date of mailing, without charge upon written request.
Under certain circumstances set forth in the Plan, such Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. Under certain circumstances set forth in the Plan, Rights issued to, or held by any Person who
is, was or becomes, or acquires shares from, an Acquiring Person or any Affiliate of an Acquiring Person (as each such term is
defined in the Plan and generally relating to the ownership or purchase of certain shareholdings), whether currently held by or
on behalf of such Person or Affiliate or by certain subsequent holders, may become null and void.

 

Until the Distribution Date (as defined in the Plan) or the
earlier redemption, expiration or termination of the Rights, the Rights associated with the Stock shall be evidenced by the Stock
certificates alone and the registered holders of Stock shall also be the registered holders of the associated Rights, and the surrender
for transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Stock represented
by such certificate.”

 

With respect to such certificates containing the foregoing legend,
the Rights associated with the Stock represented by such certificates shall be evidenced by such certificates alone until the earlier
of the Distribution Date, the Expiration Date or the Redemption Date, and the transfer of any of such certificates shall also constitute
the transfer of the Rights associated with the Stock represented by such certificates. The failure to print the foregoing legend
on any such certificate representing Stock or any defect therein shall not affect in any manner whatsoever the application or interpretation
of the provisions of Section 7.5 hereof, the enforceability of any other part of this Agreement or the rights of any holder of
the Rights. In the event that the Company purchases or acquires any Stock after the Record Date but prior to the Distribution Date,
any Rights associated with such Stock shall be deemed canceled and retired so that the Company shall not be entitled to exercise
any Rights associated with the Stock which are no longer outstanding.

 

    	A-11

    	 

    

4.                 
Rights Certificates.

 

4.1.           
Form of Rights Certificates. The Rights Certificates (and the form of assignment and the form of exercise
notice and certificate to be printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit B hereto
and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company
may deem appropriate (but which do not affect the rights, duties, liabilities or responsibilities of the Rights Agent) and as are
not inconsistent with the provisions of this Plan, or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time
be listed or traded, or to conform to usage. Subject to the provisions of Sections 11 and 21 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Dividend Record Date (or, if the shares to which the Rights are attached are issued thereafter,
such date of issuance), shall include the date of countersignature and on their face shall entitle the holders thereof to purchase
such number of one one-hundredths of a share of Preferred Stock as shall be set forth therein at the Purchase Price, but the amount
and type of securities issuable upon the exercise of each Right and the Purchase Price shall be subject to adjustment as provided
herein.

 

4.2.           
Legends. Subject to Section 7.5, any Rights Certificate issued pursuant to Section 3.2 or 21 hereof that represents
Rights beneficially owned by (a) any Acquiring Person or any Affiliate of an Acquiring Person, or (b) any Disqualified Transferee,
and any other Rights Certificate issued pursuant to Section 6 or 11 hereof upon the transfer, exchange, replacement or adjustment
of any such Rights Certificate, shall contain (to the extent the Rights Agent has actual knowledge thereof 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 (which includes both affiliates and
associates) of an Acquiring Person (as each such term is defined in the Tax Benefits Preservation Plan between the issuer and Computershare
Inc., as Rights Agent, dated as of December 29, 2014 (the “Plan”)). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances specified in Section 7.5 of the Plan. The Rights Agent will mail
to the registered holder of this certificate a copy of the Plan as in effect on the date of such mailing, without charge upon written
request.”

 

In the event that the Rights become exercisable, the Rights
Agent and the Company will agree upon a reasonable procedure for determining which Rights will be so legended.

 

    	A-12

    	 

    

5.                 
Countersignature and Registration. The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President or any Vice President, either manually or by facsimile signature, and shall have affixed thereto
the Company’s seal or facsimile thereof which shall be attested by the Treasurer or an Assistant Treasurer or Secretary or
Assistant Secretary of the Company, either manually or by facsimile signature. 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 so 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, issued and delivered with the same force and effect as though the person who signed such
Rights Certificates had not ceased to be such officer of the Company. 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 Plan any such person was not such an officer. Following
the Distribution Date, the Rights Agent shall keep or cause to be kept, at the office of the Rights Agent designated for such purpose,
books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses
(as reflected in the records of, and as provided to the Rights Agent by, the Company) 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 countersignature thereof by the
Rights Agent.

 

6.                 
Replacement of Rights Certificates.

 

6.1.           
Transfer, Split-up, Combination and Exchange of Rights Certificates. Subject to the provisions of Sections
4.2 and 7.5 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the earlier of the Close
of Business on the Expiration Date or the redemption of the Rights, any Rights Certificate may be transferred, split up, combined
or exchanged for another Rights Certificate or Rights Certificates, entitling the registered holder to purchase a like number of
one one-hundredths of a share of Preferred Stock (or, following a Common Stock Event, Stock and/or such other securities, cash,
or other assets as shall be issuable in respect of the Rights in accordance with the terms of this Plan (such other securities,
cash or other assets being referred to herein as “Other Consideration”)) as the Rights Certificate surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate shall make such request in writing delivered to the Rights Agent, and shall surrender
the Rights Certificate to be transferred, split up, combined, or exchanged at the office of the Rights Agent designated for such
purpose, accompanied by a signature guarantee and such other documentation as the Rights Agent may reasonably request. 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 properly completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the
Beneficial Owner from whom the Rights evidenced by such Rights Certificate are to be transferred (or the Beneficial Owner to whom
such Rights are to be transferred) or Affiliates thereof as the Company or the Rights Agent shall reasonably request. Thereupon,
subject to Sections 4.2, and 13 hereof, the Company shall execute and the Rights Agent shall countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The Company may require payment
by the holders of Rights of 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 which the Company is not required to pay in accordance with Section 9.4 hereof.
The Rights Agent shall have no duty or obligation under any Section of this Plan or Exhibit incorporated by reference herein requiring
the payment of any taxes or charges unless and until the Rights Agent is satisfied that all such taxes and/or charges have been
paid.

 

    	A-13

    	 

    

6.2.           
Mutilated, Destroyed, Lost or Stolen Rights Certificates. 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, the receipt of indemnity or security satisfactory to them, and upon 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, accompanied by a signature guarantee and such other documentation as the Rights Agent may
reasonably request, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature
and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed, or mutilated.

 

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

 

7.1.           
Exercise of Rights. Except as otherwise provided herein, the registered holder of any Rights Certificate may
exercise the Rights evidenced thereby in whole or in part at any time from and after the Distribution Date and at or prior to the
Close of Business on the Expiration Date. Immediately after the Close of Business on the Expiration Date (or the earlier redemption
of the Rights), all Rights shall be extinguished and all Rights Certificates shall become null and void. To exercise Rights, the
registered holder of the Rights Certificate evidencing such Rights shall surrender such Rights Certificate, with the form of election
to purchase on the reverse side thereof and the certificate contained therein duly executed, to the Rights Agent at the office
of the Rights Agent designated for such purpose, accompanied by a signature guarantee and such other documentation as the Rights
Agent may reasonably request, together with payment in cash, only if by electronic or wire transfer, or by certified check or bank
check, of the Purchase Price with respect to the total number of one one-hundredths of a share of Preferred Stock (or, after a
Common Stock Event, shares and/or similar units of Stock or Other Consideration) as to which the Rights are exercised (which payment
shall include any additional amount payable by such Person in accordance with Section 9.4 hereof). The Rights Agent shall promptly
deliver to the Company all payments of the Purchase Price received in respect of Rights Certificates accepted for exercise.

 

7.2.           
Purchase Price. The purchase price for each one one-hundredth of a share of Preferred Stock issuable pursuant
to the exercise of a Right (the “Purchase Price”) shall initially be $1.94, shall be subject to adjustment as provided
in Section 11 hereof, and shall be payable in lawful money of the United States of America.

 

7.3.           
Duties of Rights Agent Upon Exercise. Subject to Section 11.1.2, upon receipt of a Rights Certificate representing
the Rights, with the form of election to purchase set forth on the reverse side thereof and the certificate contained therein duly
executed, accompanied by payment of the Purchase Price, with respect to each Right so exercised, the Rights Agent, subject to Sections
7.5, 11.1.3 and 19.11 hereof, shall thereupon:

 

    	A-14

    	 

    

(a)               
 requisition from any transfer agent of the Preferred Stock (or Common Stock, as the case may be) (or from the Company
if there shall be no such transfer agent, or make available if the Rights Agent is such transfer agent) certificates for the total
number of one one-hundredths of a share of Preferred Stock (or Common Stock, as the case may be) to be purchased, and the Company
hereby irrevocably authorizes such transfer agent to comply with any such request,

 

(b)              
after receipt of such certificates, 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 in writing by such holder, and

 

(c)               
when necessary to comply with this Plan, requisition from the Company the amount of cash to be paid in lieu of issuance
of a fractional share in accordance with Section 13 hereof and after receipt deliver such cash to or upon the order of the registered
holder of such Rights Certificate.

 

After the occurrence of a Common Stock Event, the Company shall
make all necessary arrangements so that any Other Consideration then deliverable in respect of the Rights is available for distribution
by the Rights Agent. For purposes of this Section 7, the Rights Agent shall be entitled to rely, and shall be protected in relying,
on an Officers’ Certificate from the Company to the effect that the Distribution Date has occurred.

 

7.4.           
Partial Exercise. Subject to Sections 4.2, and 13 hereof, 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 executed and delivered by the Company to the Rights Agent and countersigned and delivered by the
Rights Agent to the registered holder of such Rights Certificate or to such holder’s duly authorized assigns.

 

7.5.           
Rights Owned by Acquiring Person or Disqualified Transferee Null and Void. Notwithstanding anything in this
Plan to the contrary, from and after the first occurrence of a Common Stock Event, any Rights beneficially owned by (a) an Acquiring
Person or an Affiliate of an Acquiring Person or (b) a Disqualified Transferee shall become null and void and such Rights shall
be deemed to be not outstanding 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 Plan or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7.5 and Section 4.2 hereof are complied with, but the Company shall have no liability
to any holder of Rights Certificates or other Person, and none of the terms of this Plan or the Rights shall be deemed to be waived
with respect to such holder or other Person, as a result of any failure by the Company to make any determinations with respect
to an Acquiring Person or any Affiliate of an Acquiring Person or Disqualified Transferees hereunder or any failure to have a legend
placed on any Rights Certificate in accordance with Section 4.2 hereof or on any Stock certificate in accordance with Section 3.5
hereof.

 

    	A-15

    	 

    

7.6.           
Proper Exercise Required. Notwithstanding anything in this Plan to the contrary, neither the Rights Agent
nor the Company shall be obligated to undertake any action with respect to a holder of any Rights Certificate upon the occurrence
of any purported exercise thereof unless such holder shall have (a) 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 exercise and (b)
provided such additional evidence of the identity of the Beneficial Owner from whom the Rights evidenced by such Rights Certificate
are to be transferred (or the Beneficial Owner to whom such Rights are to be transferred) or Affiliates 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
and accepted for exercise (including certificates submitted pursuant to Section 7.4 hereof), or surrendered for the purpose of
redemption, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents (other than
the Rights Agent), be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Plan. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificates purchased or retired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company, or may, at the written request of the Company,
but shall not be required to, destroy such canceled Rights Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.

 

9.                 
Reservation 

 

9.1.           
Reservation and Availability of Preferred Stock. The Company covenants and agrees that on and after the Distribution
Date, it shall use reasonable efforts to cause to be reserved and kept available out of its authorized and unissued shares of Preferred
Stock (or, following the occurrence of a Common Stock Event, out of its authorized and unissued shares of Common Stock and/or Other
Consideration, or out of its authorized and issued shares held in its treasury), the number of shares of Preferred Stock (or, following
a Common Stock Event, shares of Common Stock and/or Other Consideration) that, except as provided in Section 11.1.3 hereof, would
then be sufficient to permit the exercise in full of all outstanding Rights; provided, however, that the reservation of
such shares shall be subject and subordinate to any other reservation of such shares made by the Company at any time for any lawful
purpose; provided, further, however, that in no event shall such failure to so reserve shares affect the rights of any holder
of Rights hereunder.

 

9.2.           
Best Efforts to List Shares Issuable Upon Exercise. The Company covenants and agrees that on and after the
Distribution Date so long as the Preferred Stock (or, following a Common Stock Event, shares and/or similar units of Common Stock
and/or Other Consideration) issuable upon the exercise of Rights may be listed on any national securities exchange or comparable
system, the Company shall use its best efforts to cause all shares (or similar units) reserved for such issuance to be listed on
such exchange or comparable system upon official notice of issuance upon such exercise.

 

    	A-16

    	 

    

9.3.           
Duly Authorized, Fully Paid, Nonassessable Shares. The Company covenants and agrees that it shall take all
such action as may be necessary to ensure that each one one-hundredth of a share of Preferred Stock (or, following a Common Stock
Event, each share and/or similar unit of Common Stock or Other Consideration delivered upon exercise of Rights) shall, at the time
of delivery of the certificates for such shares (or units), subject to payment in full of the Purchase Price, be duly and validly
authorized and issued and fully paid and nonassessable.

 

9.4.           
Taxes. The Company covenants and agrees that it shall pay when due and payable any and all taxes and transfer
charges which may be payable in respect of the issuance or delivery of the Rights Certificates or of any shares of Preferred Stock
(or, following the occurrence of a Common Stock Event, each share and/or similar unit of Common Stock or Other Consideration) upon
the exercise of Rights; provided, however, that the Company shall not be required to pay any such tax or transfer charge
which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or in the issuance
or delivery of certificates for any shares of Preferred Stock (or, following the occurrence of a Common Stock Event, each share
and/or similar unit of Common Stock or Other Consideration) in a name other than that of the registered holder of the Rights Certificate
evidencing Rights surrendered for exercise or to issue or deliver any certificates for any shares of Preferred Stock (and, following
the occurrence of a Common Stock Event, any shares and/or similar units of Common Stock or Other Consideration) upon the exercise
of any Rights until any such tax or charge shall have been paid (any such tax or charge being payable by the holder of such Rights
Certificate at the time of surrender thereof) or until it has been established to the Company’s satisfaction that no such
tax or charge is due.

 

9.5.           
Registration of Securities Issuable Upon Exercise of Rights. The Company shall use its best efforts (a) to
file, as soon as practicable following the earliest date after the first occurrence of a Common Stock Event on which the consideration
to be delivered by the Company upon exercise of the Rights has been determined in accordance with this Plan, or as soon as is required
by law following the Distribution Date, as the case may be, a registration statement under the Act, with respect to the securities
issuable upon exercise of the Rights on an appropriate form, (b) to cause such registration statement to become effective as soon
as practicable after such filing and (c) to cause such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (i) the date as of which the Rights are no longer exercisable for such
securities, or (ii) the Expiration Date or earlier redemption of the Rights. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or “blue sky” laws of the various states of the United States in
connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed 90 days
after the date set forth in clause (a) of this Section 9.5, the exercisability of the Rights in order to prepare and file such
registration statement or to permit it to become effective. Upon any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended. The Company shall thereafter issue a public announcement
at such time as the suspension is no longer in effect. The Company shall notify the Rights Agent whenever it makes a public announcement
pursuant to this Section 9.5 and give the Rights Agent a copy of such announcement. Notwithstanding any provision of this Plan
to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained.

 

    	A-17

    	 

    

10.             
Issuance of Stock Upon Exchange; No Rights as Stockholder Until Exercise. Each Person in whose name any certificate
for any shares of Preferred Stock (or, following the occurrence of a Common Stock Event, shares and/or similar units of Common
Stock or Other Consideration) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder
of record of such shares of Preferred Stock (or such shares and similar units of Common Stock and/or Other Consideration, as the
case may be) represented thereby, and such certificate shall be dated the date which is the later of (a) the date upon which the
Rights Certificate evidencing such Rights was duly surrendered, or (b) the date upon which payment of the Purchase Price (and any
applicable taxes or charges) in respect thereof was made; provided, however, that if such date is a date upon which the
relevant transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares
(or Other Consideration) on, and such certificate shall be dated, the next succeeding Business Day on which such transfer books
of the Company are open; provided, further, that the Company covenants and agrees that it shall not close such transfer books for
a period exceeding ten consecutive days. Prior to the exercise of the Rights evidenced thereby (which shall be deemed to have occurred
on the date such certificate for shares and/or similar units of Preferred Stock, Common Stock or Other Consideration shall be dated
in accordance with this Section 10), the holder of a Rights Certificate, as such, shall not be entitled to any rights of a security
holder of the Company with respect to the shares of Preferred Stock (and/or such shares or similar units of Common Stock or Other
Consideration) 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 expressly provided herein.

 

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

 

11.1.       
Stock Splits; Flip-in Provisions.

 

11.1.1         
Stock Splits and Other Adjustments to Preferred Stock. In the event that the Company shall at any time after the
Record Date but prior to the Declaration Date (a) declare and pay a dividend on the Preferred Stock payable in shares of Preferred
Stock, (b) subdivide the outstanding Preferred Stock, (c) combine the outstanding Preferred Stock into a smaller number of shares
or (d) issue, change, or alter any of its shares of capital stock in a reclassification or recapitalization (including any such
reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving Person), except
as otherwise provided in this Section 11.1 and Section 7.5 hereof, then, and in each such case, the Purchase Price in effect at
the time of the record date for such dividend or the effective time of such subdivision, combination, reclassification or recapitalization,
and the number and kind of shares of capital stock issuable upon exercise of the Rights at such time, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of
shares of Preferred Stock or other capital stock which, if such Right had been exercised immediately prior to such time at the
Purchase Price then in effect and at a time when the transfer books for the Preferred Stock (or other capital stock) of the Company
were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision,
combination, reclassification or recapitalization. If an event occurs which would require an adjustment under both this Section
11.1.1 and Section 11.1.2 hereof, the adjustment provided in this Section 11.1.1 shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11.1.2 hereof.

 

    	A-18

    	 

    

11.1.2         
Flip-in Provisions. Subject to Section 23, in the event a Common Stock Event shall have occurred, then promptly following
such Common Stock Event, proper provision shall be made so that each holder of a Right, except as provided in Section 7.5 hereof,
shall thereafter have the right to receive, upon exercise thereof at the Purchase Price in effect at the time of exercise in accordance
with the terms of this Plan, in lieu of a number of one one-hundredths of a share of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x) multiplying an amount equal to the then current Purchase
Price by an amount equal to the number of one one-hundredths of a share of Preferred Stock for which a Right was or would have
been exercisable immediately prior to the first occurrence of any such event whether or not such Right was then exercisable and
(y) dividing that product by 50% of the Current Market Price per share of the Common Stock of the Company determined as of the
date of such first occurrence; provided, however, that in connection with any exercise effected pursuant to this Section
11.1.2, the Board may (but shall not be required to) determine that a holder of Rights shall not be entitled to receive shares
of Common Stock that would result in such holder, together with such holder’s Affiliates, becoming the Beneficial Owner of
more than 4.99% of the total number of shares of Stock then-outstanding. If a holder would, but for the previous sentence, be entitled
to receive a number of shares of Stock then-outstanding (such shares, the “Excess Flip-In Shares”), in lieu of receiving
such Excess Flip-In Shares, such holder will be entitled to receive an amount in (1) cash, (2) debt securities of the Company,
(3) other assets, or (4) any combination of the foregoing, having an aggregate value equal to the Current Market Price per share
of the Common Stock on the date of the occurrence of a Common Stock Event multiplied by the number of Excess Flip-In Shares that
would otherwise have been issuable to such holder.

 

11.1.3         
Substitution of Securities or Assets Issued Upon Exercise. In the event that:

 

(a)               
the number of shares of Preferred Stock (or Common Stock) which are authorized by the Company’s charter 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 in accordance with Section 7 hereof, or

 

(b)              
a majority of the Board determines that it would be appropriate and not contrary to the interests of the holders
of Rights (other than any Acquiring Person or Disqualified Transferee or any Affiliate of the Acquiring Person or Disqualified
Transferee),

 

then,

 

    	A-19

    	 

    

in lieu of issuing whole or fractional shares of Preferred
Stock (or Common Stock) in accordance with Section 7 hereof, the Board shall determine an amount, if any, (the “Excess Amount”)
equal to the excess of (x) the value (the “Current Value”) of the whole or fractional shares of Preferred Stock (or
Common Stock) issuable upon the exercise of a Right in accordance with Section 7.3 hereof, over (y) the Purchase Price, and the
Company shall, with respect to each Right, make adequate provision to substitute for such whole or fractional shares of Preferred
Stock (or Common Stock), upon payment of the applicable Purchase Price,

 

(i)                
cash,

 

(ii)              
a reduction in the Purchase Price,

 

(iii)            
Common Stock or other equity securities of the Company (including, without limitation, shares or units of Preferred
Stock or preferred stock which the Board has deemed in good faith to have the same value as a share of Common Stock (such shares
of preferred stock being referred to herein as “Common Stock Equivalents”)),

 

(iv)            
debt securities of the Company,

 

(v)              
other assets, or

 

(vi)            
any combination of the foregoing (which would include the additional consideration provided to any holder by reducing
the Purchase Price) having an aggregate value equal to the Current Value, where such aggregate value has been determined by the
Board;

 

provided, however, that the Board may (but shall
not be required to) determine that a holder of Rights shall not be entitled to receive equity securities under this Section 11.1.3
to the extent the Company determines the receipt thereof could limit the Company’s ability to utilize the Tax Attributes
and, provided, further, subject to the provisions of Section 9.5 hereof, that if the Company shall not have made adequate
provision to deliver value pursuant to this Section 11.1.3 within 30 days following the first occurrence of a Common Stock Event
described in Section 11.1.2 hereof, then the Company shall be obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, whole or fractional shares of Preferred Stock (or Common Stock) (to the extent
available) and then, if necessary, cash, securities, and/or assets which in the aggregate are equal to the Excess Amount.

 

    	A-20

    	 

    

11.1.4         
 Substitution Period; Suspension of Exercisability. If the Board shall determine in good faith that it is likely
that sufficient additional shares of Common Stock or Common Stock Equivalents could be authorized for issuance upon exercise in
full of the Rights, the 30-day period set forth in Section 11.1.3 may be extended to the extent necessary, but not more than 90
days following the first occurrence of such a Common Stock Event (such 30 day period as it may be extended to 90 days, is referred
to herein as the “Substitution Period”). To the extent that the Company determines that some action is to be taken
pursuant to Section 11.1.3 and the preceding provision of this Section 11.1.4, the Company (a) shall provide, subject to Section
7.5 hereof, that (except as to the form of consideration which shall be determined as appropriate by a majority of the Board) such
action shall apply uniformly to all outstanding Rights which shall not have become null and void and (b) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such provisions 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. The Company shall thereafter issue a public announcement at such time as the suspension is no longer in effect. The
Company shall notify the Rights Agent whenever it makes a public announcement pursuant to this Section 11.1.4, and give the Rights
Agent a copy of such announcement. For purposes of Section 11.1.3 and this Section 11.1.4 the value of the Common Stock issuable
upon exercise of a Right in accordance with Section 7.3 hereof shall be the Current Market Price per share of the Common Stock
(as determined pursuant to Section 11.4 hereof) on the Close of Business on the date of the first occurrence of such a Common Stock
Event and the value of any Common Stock Equivalent shall be deemed to be equal to the Current Market Price per share of the Common
Stock on such date.

 

11.2.       
Issuance of Other Rights to Purchase Preferred Stock. In the event the Company shall, after the Dividend Record
Date, fix a record date for the issuance of any options, warrants, or other rights to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase (a) Preferred Stock, (b)
shares having the same rights, privileges and preferences as the shares of any number of one one-hundredths of a share of Preferred
Stock (“Equivalent Preferred Stock”) or (c) securities convertible into Preferred Stock or Equivalent Preferred Stock
at a price per share of Preferred Stock or Equivalent Preferred Stock (or having a conversion price per share of Preferred Stock
or Equivalent Preferred Stock, if a security is convertible into Preferred Stock or Equivalent Preferred Stock) less than the Current
Market Price per share of Preferred Stock (determined in accordance with Section 11.4 hereof) determined as of such record date,
the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on
such record date plus the number of shares of Preferred Stock and/or Equivalent Preferred Stock which the aggregate minimum offering
price of the total number of shares of one one-hundredths of a share of Preferred Stock and/or Equivalent Preferred Stock so to
be offered (and/or the aggregate minimum conversion price of such convertible securities so to be offered) would purchase at such
Current Market Price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record
date plus the maximum number of additional shares of Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription
or purchase (or the maximum number of shares into which such convertible securities so to be offered are convertible). In case
such subscription price may be paid by delivery of consideration part or all of which shall be in a form other than cash, for purposes
of this Section 11.2 the value of such consideration shall be the fair market value thereof as determined in good faith by the
Board (which determination shall be described in an Officers’ Certificate filed with the Rights Agent). Shares of Preferred
Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such options, warrants or
other rights are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed (subject, however, to such other adjustments as are provided herein).

 

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11.3.       
Distributions of Cash or Other Assets. In the event that the Company shall, after the Dividend Record Date,
fix a record date for the making of a distribution to all holders of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the surviving or continuing Person) of evidences of indebtedness, cash (other
than cash dividends paid out of the earnings or retained earnings of the Company and its Subsidiaries determined on a consolidated
basis in accordance with generally accepted accounting principles consistently applied), other property (other than a dividend
payable in a number of one one-hundredths of a share of Preferred Stock, but including any dividend payable in capital stock other
than Preferred Stock), or subscription rights or warrants (excluding those referred to in Section 11.2 hereof), the Purchase Price
to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, of which the numerator shall be (a) the Current Market Price per share of Preferred Stock determined
as of such record date, less (b) the sum of (i) that portion of cash plus (ii) the fair market value, as determined in good
faith by the Board (which determination shall be described in an Officers’ Certificate filed with the Rights Agent) of that
portion of such evidences of indebtedness, such other property, and/or such subscription rights or warrants applicable to one share
of Preferred Stock and of which the denominator shall be such Current Market Price per share of the Preferred Stock. Such adjustments
shall be made successively whenever such a record date is fixed; and in the event such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed (subject,
however, to such other adjustments as are provided herein).

 

11.4.       
Determination of Current Market Price and Closing Price. For purposes of any computation hereunder, the “Current
Market Price” per share (or unit) of any security on any date shall be deemed to be the average of the daily Closing Prices
of such security for the 30 consecutive Trading Days immediately prior to, but not including such date; provided, however,
that in the event that the Current Market Price per share of such 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 (or units) of such security
or securities convertible into shares (or units) of such security, or (b) any subdivision, combination or reclassification of such
security, and prior to the expiration of such 30 Trading Days after (x) the ex-dividend date for such dividend or distribution
or (y) the record or effective date for such subdivision, combination or reclassification, as the case may be, then, and in each
such case, the “Current Market Price” shall be the Closing Price of such security on the last day of such 30 Trading
Day period.

 

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For purposes of this Plan, the “Closing
Price” of any security on any day shall be the last sale price, regular way, with respect to shares (or units) of such security,
or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, with respect to
such security, in either case as reported in the principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the national exchange on which such security is listed; or, if such security is not so listed
or admitted to trading, the last quoted sale price with respect to shares (or units) of such security, or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market with respect to shares (or units) of such security;
or, if on any such date such security is not quoted by any such organization, the average of the closing bid and asked prices with
respect to shares (or units) of such security, as furnished by a professional market maker making a market in such security selected
by the Board; or, if no such market maker is available, the fair market value of shares (or units) of such security as of such
day as determined in good faith by the Board (which determination shall be described in an Officers’ Certificate filed with
the Rights Agent); provided, however, that the “Closing Price” of one one-hundredth of a share of Preferred
Stock as of any Trading Day shall be equal to the Closing Price of a whole share of Preferred Stock on such Trading Day divided
by 100; provided, further, that if the Closing Price of such a share of Preferred Stock as of any Trading Day cannot be
reasonably determined by the foregoing provisions, the “Closing Price” of one one-hundredth of a share of Preferred
Stock on such Trading Date shall be the Closing Price of a share of Common Stock on such Trading Day.

 

11.5.       
Minor Adjustments; Calculation Precision; Purchase Price Reductions. No adjustment in the Purchase Price shall
be required unless adjustment would require an increase or decrease of at least 1% in such price; provided, however, that
any adjustments which by reason of this Section 11.5 are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest (a) one-thousandth
of a share (or similar unit) of Stock or securities other than Preferred Stock or Equivalent Preferred Stock or (b) one-millionth
of a share of Preferred Stock or Equivalent Preferred Stock. Notwithstanding the first sentence of this Section 11.5, any adjustment
required by this Section 11 shall be made no later than the earlier of (x) three years from the date of the transaction which mandates
the adjustment or (y) the Expiration Date. Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those required by this Section 11.5, as it in its discretion shall
determine to be advisable in order that any dividends, subdivision of shares, distribution of rights to purchase shares of beneficial
interest or other stock or securities, or distribution of securities convertible into or exchangeable for stock hereafter made
by the Company to its stockholders shall not be taxable.

 

11.6.       
Comparable Adjustments upon Substitution of Securities. In the event that at any time, as a result of an adjustment
made in respect of a Common Stock Event, the holder of any Right thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than shares of Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase 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 such other shares contained in Sections 11.1, 11.2, 11.3,
11.5, 11.7, 11.8, 11.9, 11.10, 11.11, 11.13 and 11.15, and the provisions of Sections 7, 9, 10, 11.4, and 13 hereof with respect
to the shares of Preferred Stock shall apply on like terms to any such other shares.

 

11.7.       
Status of Rights Certificates After a Purchase Price Adjustment. All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a share of Preferred Stock purchasable from time to time hereunder upon exercise of
the Rights represented thereby, all subject to further adjustment as provided herein.

 

    	A-23

    	 

    

11.8.       
Status of Rights Certificates After Certain Adjustments. Unless the Company shall have exercised its election
as provided in Section 11.9 hereof, upon each adjustment of the Purchase Price as a result of the calculations made pursuant to
Sections 11.2 and 11.3 hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths of a share of Preferred Stock (calculated
to the nearest one-millionth of a share) obtained by (a) multiplying (i) the number of one one-hundredths of a share of Preferred
Stock covered by a Right immediately prior to this adjustment, by (ii) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (b) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.

 

11.9.       
Option to Adjust Number of Rights. Assuming that no other adjustment pursuant to this Section 11 has been
made, the Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights in substitution
for any adjustment in the number of one one-hundredth of a share of Preferred Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-hundredth
of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to such adjustment of the Purchase Price by the Purchase Price
in effect immediately after such adjustment of the Purchase Price. The Company shall make a public announcement (with prompt written
notice thereof to the Rights Agent) of its election to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least 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 11.9 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 13 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed, and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Rights Certificates on the record date specified in the public announcement.

 

11.10.   
No Obligation to Re-Issue Adjusted Right Certificates. Irrespective of any adjustment or change in the Purchase
Price or the number of whole or fractional shares of Preferred Stock issuable upon exercise of such Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per share and the number of one one-hundredths of
a share of Preferred Stock which were expressed in the initial Rights Certificates issued hereunder.

 

    	A-24

    	 

    

11.11.   
Adjustments Below Par Value. Before taking any action that would cause an adjustment reducing the Purchase
Price below the then par value, if any, of the number of one one-hundredths of a share of Preferred Stock issuable upon exercise
of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue such number of fully paid and nonassessable one one-hundredths of a share of Preferred
Stock at such adjusted Purchase Price.

 

11.12.   
Delay in Issuance of Rights Until Occurrence of Adjustment Event. In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect
to defer (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 one one-hundredths of a share of Preferred Stock or other capital
stock or securities of the Company, if any, issuable upon such exercise over and above the number of one one-hundredths of a share
of Preferred Stock or other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder’s right to receive such additional securities upon the occurrence
of the event requiring such adjustment.

 

11.13.   
 Adjustments to Purchase Price for Tax Reasons. Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that it, by means of a resolution of the Board acting in good faith, shall determine to
be advisable in order that any consolidation or subdivision of the Common Stock, issuance wholly for cash of any Common Stock at
less than the Current Market Price thereof, issuance wholly for cash of Common Stock (or other securities which by their terms
are convertible into or exchangeable for Common Stock), dividends payable in shares of Common Stock or other capital stock or shares
of beneficial interest, or issuance of rights, options, or warrants referred to hereinabove in this Section 11, hereafter made
or declared by the Company to the holders of its Stock, shall not be taxable to such holders.

 

11.14.   
No Prejudice of Rights Through Business Combinations. The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (a) consolidate with any other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11.14 hereof), (b) merge with or into any other Person (other than a Subsidiary of the Company in a
transaction that complies with the proviso at the end of this sentence), or (c) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction or a series of related transactions, more than 25% of (i) the assets (taken at net asset value
as stated on the books of the Company and determined on a consolidated basis in accordance with generally accepted accounting principles
consistently applied) or (ii) the earning power of the Company and its Subsidiaries (determined on a consolidated basis in accordance
with generally accepted accounting principles consistently applied) to any other Person or Persons (other than the Company or any
of its Subsidiaries in a transaction that complies with the proviso at the end of this sentence), if (x) at the time of or immediately
after such consolidation, merger, sale or transfer, there are any rights, warrants or other instruments or securities outstanding
or agreements (whether or not in writing) in effect that would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger, sale or transfer,
the stockholders of such other Person shall have received a distribution of Rights previously owned by such Person or any of such
Person’s Affiliates; provided, however, that, subject to the following sentence, this Section 11.14 shall not affect
the ability of any Subsidiary of the Company to consolidate with, or merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company. The Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 22 or 26 hereof, take (or permit any Subsidiary of the Company to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.

 

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11.15.   
Adjustment of Rights upon Common Stock Dividend, Split or Combination. Anything in this Plan to the contrary
notwithstanding, in the event that the Company shall at any time after the Declaration Date and prior to the Distribution Date
(a) declare or pay a dividend on the then outstanding shares of Common Stock payable in shares of Common Stock or (b) effect a
subdivision, combination or consolidation of the then outstanding Common Stock (by reclassification or otherwise than by payment
of dividends in shares of Common Stock) into a greater or smaller number of shares, then in any such case, (x) the number of one
one-hundredths of a share of Preferred Stock purchasable after such event upon proper exercise of each Right shall be determined
by multiplying the number of one one-hundredths of a share of Preferred Stock so purchasable immediately prior to such event by
a fraction the numerator of which shall be the total number of shares of Common Stock then outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number of shares of Common Stock then outstanding immediately
following the occurrence of such event; and (y) each share of Common Stock then outstanding immediately after such event shall
have issued with respect to it that number of Rights which each share of Common Stock then outstanding immediately prior to such
event had issued with respect to it. The adjustments provided for in this Section 11.15 shall be made successively whenever such
a dividend is declared or paid or such a subdivision, combination or consolidation is effected.

 

12.             
Certificate of Adjustments. Whenever an adjustment (including without limitation, an event which causes Rights
to become null and void) is made as provided in Section 11 or Section 12 hereof, the Company shall (a) promptly prepare an Officers’
Certificate setting forth such adjustment, including any adjustment in Purchase Price, the number of shares or Other Consideration
payable, and a brief statement of the facts, computation and methodology accounting for such adjustment, (b) promptly file with
the Rights Agent and with the applicable transfer agent for the Preferred Stock and Stock a copy of such Officers’ Certificate,
and (c) mail a brief summary thereof to each registered holder of a Rights Certificate in accordance with Section 25 hereof. Notwithstanding
the foregoing, 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 Officers’ Certificate and on any adjustment therein contained, and shall have no duty or liability with respect
to, and shall not be deemed to have knowledge of any such adjustment unless and until it shall have received such an Officers’
Certificate.

 

    	A-26

    	 

    

13.             
Fractional Rights and Fractional Shares.

 

13.1.       
Cash in Lieu of Fractional Rights. The Company shall not be required to issue fractions of Rights or to distribute
fractions of Rights, except prior to the Distribution Date as provided in Section 11.9 hereof, or to distribute Rights Certificates
which evidence fractional Rights. In lieu of issuing such fractional Rights, at the election of the Company, there shall be paid
to the registered holders of the Rights with regard to which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 13.1, the current market
value of a whole Right shall be the Closing Price of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable, as determined pursuant to the second paragraph of Section 11.4 hereof.

 

13.2.       
Cash in Lieu of Fractional Shares Upon Exercise. The Company shall not be required to issue fractions of shares
of its capital stock upon exercise of the Rights or to distribute certificates which evidence fractional shares (other than, in
each case with respect to Preferred Stock or Equivalent Preferred Stock, fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock or Equivalent Preferred Stock, as the case may be). Fractions of shares of Preferred Stock or Equivalent
Preferred Stock, as the case may be, in integral multiples of one one-hundredth of a share of Preferred Stock or Equivalent Preferred
Stock may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the
Company and a depository selected by it, provided that such agreement shall provide that the holders of such depositary receipts
shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Stock or
the Equivalent Preferred Stock represented by such depositary receipts. In lieu of fractional shares, at the election of the Company,
there shall be paid to the registered holders of Rights at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of a share of such capital stock. For purposes of this Section 13.2, the
current market value of a share of such capital stock shall be the Closing Price of such capital stock for the Trading Day immediately
prior to the date of such exercise.

 

13.3.       
Waiver of Right to Fractions. The holder of a Right, by the acceptance of the Right, expressly waives such
holder’s right to receive any fractional Rights or (except as provided in Section 13.2 hereof) any fractional share upon
exercise of a Right. 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 an Officers’ 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 or liability 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 plan relating to the payment of fractional
Rights or fractional shares unless and until the Rights Agent shall have received such a certificate and sufficient monies.

 

    	A-27

    	 

    

14.             
Rights of Action. Excepting the rights of action given the Rights Agent under any Section hereunder and except
as set forth in Section 19.12 hereof, all rights of action in respect of this Plan are vested in the registered holder of each
Right; and any registered holder of any Right, without the consent of the Rights Agent or of the holder of any other Right, may,
in its own behalf and for its own benefit, enforce, and may institute and maintain any suit, action, or proceeding against the
Company to enforce, or otherwise act in respect of, such registered holder’s right to exercise the rights evidenced by such
Right in the manner provided in such Rights Certificate and in this Plan, and the Company hereby agrees to reimburse such registered
holder for all expenses (including reasonable attorneys’ fees) incurred by such registered holder in connection therewith.
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 the obligations hereunder, and shall be entitled to injunctive
relief against actual or threatened violations of the obligations hereunder of any Person subject to this Plan.

 

15.             
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 Stock;

 

(b)              
from and after the Distribution Date, the Rights Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the office of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer with a form of assignment and certificate set forth on the reverse side thereof duly executed, accompanied
by a signature guarantee and such other documentation as the Rights Agent may reasonably request;

 

(c)               
subject to Sections 6.1 and 7.6 hereof, the Company and the Rights Agent may deem and treat the person in whose name
a Rights Certificate (or, prior to the Distribution Date, the associated 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 Certificate or,
prior to the Distribution Date, the associated Stock certificate, made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary; and

 

(d)              
 notwithstanding anything in this Plan 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 Plan by reason
of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining performance of such obligation; provided, however,
the Company agrees to use its best efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as possible.

 

    	A-28

    	 

    

16.             
Rights Holder Not Deemed a Stockholder. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends, or otherwise be deemed for any purpose the holder of any securities of the Company which may be issuable
on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed
to confer upon the holder of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to
vote in the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent
to any action by the Company, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section
24 hereof), or to receive dividends or preemptive rights, or otherwise, until the time specified in Section 10 hereof.

 

17.             
Payment and Indemnification of the Rights Agent. The Company agrees to pay to the Rights Agent such reasonable
compensation as shall be agreed to in writing between the Company and the Rights Agent for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements
incurred in the preparation, delivery, amendment, administration and execution of this Plan 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 and all loss,
liability, damages, judgments, fines, penalties, claims, demands, settlements, costs or expenses (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 judgment
of a court of competent jurisdiction), for any action taken, suffered or omitted by the Rights Agent in connection with the acceptance,
administration, exercise and performance of this Plan, including the costs and expenses of defending against any claim of liability
for any of the foregoing. The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company.
The provisions of this Section 17 and Section 19 below shall survive the termination of this Plan, the exercise or expiration of
the Rights and the resignation or removal of the Rights Agent. Except to the extent of its gross negligence, bad faith or willful
misconduct, the Rights Agent shall be fully protected and shall incur no liability for or in respect of any action taken, suffered,
or omitted by it in connection with its acceptance and administration of this Plan and the exercise and performance of its duties
hereunder in reliance upon any Rights Certificate, Officers’ Certificate or certificate for any number of one one-hundredths
of a share of Preferred Stock, or for shares of Common Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, instruction, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed and executed by the proper Person or Persons, and verified
or acknowledged as required by this Plan, or otherwise upon the advice of counsel as set forth in Section 19 hereof.

 

    	A-29

    	 

    

18.             
Merger or Consolidation or Change of Name of Rights Agent. Any Person into which the 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 shall
be a party, or any Person succeeding to the shareholder services business of the Rights Agent, shall be the successor to the Rights
Agent under this Plan 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 20 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Plan and 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 Plan. 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 such 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 Plan.

 

19.             
Rights and Duties of Rights Agent. The Rights Agent undertakes to perform only the duties and obligations
expressly imposed upon it by this Plan and no implied duties or obligations shall be read into this Plan against the Rights Agent.
The Rights Agent shall perform its duties and obligations hereunder upon the following terms and conditions:

 

19.1.       
Consultation with Legal Counsel. The Rights Agent may consult with legal counsel of its selection (who may
be legal counsel to the Company or an employee of the Rights Agent), and the reliance on 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 to any action taken, suffered or omitted by and in accordance with such advice or opinion.

 

19.2.       
Officers’ Certificate. Whenever in the performance of its duties under this Plan the Rights Agent shall
deem it necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person) 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 (an “Officers’ Certificate”) signed by a person believed by the Rights Agent to be the Chairman
of the Board, the President or any Vice President and by the Treasurer or any Assistant Treasurer or the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such Officers’ Certificate shall be full and complete authorization
and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered
or omitted to be taken by it under the provisions of this Plan in reliance upon such Officers’ Certificate except to the
extent set forth in Section 19.3.

 

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19.3.       
Liability. Notwithstanding anything contained herein, the Rights Agent shall be liable hereunder only for
its own gross negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined
by a final, non-appealable judgment of a court of competent jurisdiction). Anything to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, punitive, indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to, any loss of profits, business or anticipated savings), even if the Rights Agent has been advised
of the likelihood of such loss or damage. Any liability of the Rights Agent under this Plan will be limited to the amount of fees
paid by the Company to the Rights Agent.

 

19.4.       
No Liability for Facts or Recitals. The Rights Agent shall not be liable for or by reason of any of the statements
of fact or recitals contained in this Plan, in the Rights Certificates (except its countersignature on such Rights Certificate),
or Officers’ Certificate 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. 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 any action in connection therewith unless and until it has received such notice.

 

19.5.       
Limitations on Responsibility. The Rights Agent shall not have any liability for or be under any responsibility
in respect of the validity of this Plan 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 Plan or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of Sections 11 or 22 hereof or be responsible for the manner, method
or amount of any such adjustment or procedures or the ascertaining of the existence of facts that would require any such adjustment
or procedure (except with respect to the exercise of Rights evidenced by Rights Certificates after receipt of a certificate delivered
pursuant to Section 12 hereof, describing any such adjustment or procedures); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any Preferred Stock, Common Stock or other securities
to be issued pursuant to this Plan or any Rights Certificate or as to whether any shares of Common Stock, or any shares or similar
units of other securities, will, when issued, be validly authorized and issued, fully paid, and nonassessable.

 

19.6.       
Further Assurances by the Company. The Company agrees that it will perform, execute, acknowledge and deliver,
or cause to be performed, executed, acknowledged and delivered, all such further and other acts, instruments and assurances as
may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this
Plan.

 

19.7.       
Authorization to Rely upon Instructions. The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any person believed by the Rights Agent to be the Chairman of the
Board, the President or any Vice President or the Secretary or any Assistant Secretary or the Treasurer or any Assistant Treasurer
of the Company, and to apply to such officers for advice or instructions in connection with its duties, and such instruction shall
be full and complete authorization and protection to the Rights Agent and it shall not be liable for or in respect to any action
taken, suffered or omitted to be taken by it in accordance with instructions of any such officer. The Rights Agent shall be fully
authorized and protected in relying upon the most recent instructions received by any 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 or omitted by the Rights Agent with respect to its duties or obligations under this Plan and the date on and/or
after which such action shall be taken, suffered or omitted and the Rights Agent shall not be liable for or in respect to any action
taken, suffered or omitted in accordance with a proposal included in any such application on or after the date specified therein
(which date shall not be less than three Business Days after the date any such officer actually receives such application, unless
any such officer shall have consented in writing to an earlier date) unless, prior to taking, suffering or omitting any such action,
the Rights Agent has received written instructions from the Company in response to such application specifying the action to be
taken, suffered or omitted.

 

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19.8.       
Transactions with the Company. The Rights Agent and any stockholder, director, officer, Affiliate 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 Plan. Nothing herein shall preclude the Rights Agent or any stockholder,
director, Affiliate, officer, or employee of the Rights Agent from acting in any other capacity for the Company or for any other
Person.

 

19.9.       
No Liability for Acts of Agents. The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, 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 judgment of a court of competent jurisdiction).

 

19.10.   
No Financial Risk. No provision of this Plan 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.

 

19.11.   
Acting on Void Rights. If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise
or transfer, the certification appearing on the reverse side thereof following the form of election to purchase 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 of transfer without first consulting with the Company.

 

19.12.   
No Liability to Third Parties. The provisions of this Section 19 are solely for the benefit of the Rights
Agent, its successors and assigns or the Company and any failure or omission under this Section 19 shall not affect the rights
of the Company under this Plan, and neither the Rights Agent nor the Company shall have any liability to any holder of Rights or
other Person on account of such failure or omission.

 

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20.             
Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its
duties under this Plan upon 30 days’ notice in writing mailed to the Company and to the applicable transfer agent of the
Stock by registered or certified overnight mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30
days’ notice in writing, mailed to the Rights Agent, to the applicable transfer agent of the Stock by registered or certified
mail, and, subsequent to the Distribution Date, 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 30 days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit such holder’s 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)               
a Person organized and doing business under the laws of the United States or of any State of the United States, in
good standing, having an office designated for such purpose, 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 $50,000,000, or

 

(b)              
an Affiliate of a Person described in clause (a) of this sentence.

 

After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent 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; and, except
as the context herein otherwise requires, such successor Rights Agent shall be deemed to be the “Rights Agent” for
all purposes of this Plan. Not later than the effective date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and the applicable transfer agent of the Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in this Section 20, 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.

 

Except as otherwise provided immediately above in this Section
20, effective immediately upon its resignation or removal, the predecessor Rights Agent shall be discharged from its duties and
obligations under this Plan. If the Rights Agent is no longer acting in the capacity of transfer agent of the Stock or other securities
of the Company, the Rights Agent’s role, duties and obligations hereunder shall terminate immediately.

 

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21.             
Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Plan 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 Purchase Price per share and the number or kind or class of shares of stock
or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Plan.
In addition, in connection with the issuance or sale by the Company of shares of Stock following the Distribution Date and prior
to the redemption or expiration of the Rights, the Company (a) shall, with respect to shares of 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 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 (x) no such Rights evidenced by a Rights Certificate shall be issued if, and to the extent that, the Company shall be advised
by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person
to whom such Rights would be issued, and (y) 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.

 

22.             
Redemption and Termination. The Board may, at its option, at any time prior to a Common Stock Event, redeem
all (but not less than all) of the then outstanding Rights at a redemption price of $.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend, combination of shares, or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the “Redemption Price”). The redemption of the Rights may be made effective
at such time and on such basis and subject to such conditions as the Board in its sole discretion may establish. Immediately upon
the taking of such action ordering the redemption of all 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 so redeemed will terminate and the
only right thereafter of the holders of such Rights so redeemed shall be to receive the Redemption Price (without the payment of
any interest thereon). The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the Current
Market Price of the Common Stock at the time of redemption) or any other form of consideration deemed appropriate by the Board.
Within 10 days after such action ordering the redemption of all of the Rights, the Company shall give notice of such redemption
to the holders of the then outstanding Rights by mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the applicable transfer
agent for the Stock; provided, that, failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption shall state the method by which the payment of the Redemption Price shall be made. If
legal or contractual restrictions prevent the Company from paying the Redemption Price (in the form deemed appropriate by the Board)
at the time of redemption, the Company will pay the Redemption Price, without interest, promptly after such time as the Company
ceases to be so prevented from paying the Redemption Price.

 

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23.             
Exchange.

 

23.1.       
Exchange Option. The Board may, at its option, at any time after a Common Stock Event, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions
of Section 7.5 hereof) for shares of Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted
to reflect any adjustment in the number of Rights pursuant to Section 11 occurring after the date hereof (such exchange ratio,
as the same may be so adjusted from time to time, being hereinafter referred to as the “Exchange Ratio”); provided,
however, that in connection with any exchange effected pursuant to this Section 23, the Board may (but shall not be required
to) determine that a holder of Rights shall not be entitled to receive shares of Common Stock that would result in such holder,
together with such holder’s Affiliates, becoming the Beneficial Owner of more than 4.99% of the shares of Stock then-outstanding.
If a holder would, but for the proviso set forth in the previous sentence, be entitled to receive a number of shares under this
Section 23.1 that would otherwise result in such holder, together with such holder’s Affiliates, becoming the Beneficial
Owner of shares of stock in excess of 4.99% of the shares of Stock then-outstanding (such shares, the “Excess Exchange Shares”),
in lieu of receiving such Excess Exchange Shares, such holder will be entitled to receive an amount in (1) cash, (2) debt securities
of the Company, (3) other assets, or (4) any combination of the foregoing, having an aggregate value equal to the Current Market
Price per share of the Common Stock on the date of the occurrence of a Common Stock Event multiplied by the number of Excess Exchange
Shares that would otherwise have been issuable to such holder. The exchange of the Rights by the Board may be made effective at
such time, upon such basis and with such conditions as the Board in its sole discretion may establish. Prior to effecting an exchange
pursuant to this Section 23.1, the Board may direct the Company to enter into a Trust Agreement in such form and with such terms
as the Board shall then approve (the “Trust Agreement”). If the Board so directs, the Company shall enter into the
Trust Agreement and shall issue to the trust created by such agreement (the “Trust”) all of the shares of Common Stock
issuable pursuant to the exchange, and all Persons entitled to receive shares pursuant to the exchange shall be entitled to receive
such shares (and any dividends or distributions made thereon after the date on which such shares are deposited in the Trust) only
from the Trust and solely upon compliance with the relevant terms and provisions of the Trust Agreement. Notwithstanding the foregoing,
the Board shall not be empowered to effect any such exchange at any time after any Acquiring Person, together with all Affiliates
of such Person, becomes the Beneficial Owner of 50% or more of the Common Stock then-outstanding.

 

23.2.       
Termination of Right to Exercise; Notices. Immediately upon the action of the Board ordering the exchange
of any Rights pursuant to Section 23.1 and without any further action and without any notice, the right to exercise such Rights
shall terminate, and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect
the validity of such exchange. The Company promptly shall mail a notice of any such exchange to the Rights Agent and to all of
the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice
of exchange shall state the method by which the exchange of the Common Stock for Rights shall be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become null and void pursuant to the provisions of Section 7.5 hereof) held by each
holder of Rights.

 

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23.3.       
Substitution for Common Stock. In any exchange pursuant to this Section 23, the Company, at its option, may
substitute shares of Preferred Stock (or shares of Equivalent Preferred Stock) for shares of Common Stock exchangeable for Rights,
at the initial rate of one one-hundredth of a share of Preferred Stock (or share of Equivalent Preferred Stock) for each share
of Common Stock, as appropriately adjusted to reflect adjustments in the voting rights of shares of Preferred Stock pursuant to
the terms thereof, so that the fraction of a share of Preferred Stock (or share of Equivalent Preferred Stock) delivered in lieu
of each share of Common Stock shall have the same voting rights as one share of Common Stock.

 

23.4.       
Authorization of Additional Shares. In the event that there shall not be sufficient shares of Common Stock
or Preferred Stock authorized but unissued or issued but not outstanding to permit any exchange of Rights as contemplated in accordance
with this Section 23.4, the Company shall take all such action as may be necessary to authorize additional Common Stock or Preferred
Stock for issuance upon exchange of the Rights; provided, however, the Board may (but shall not be required to) determine
that a holder of Rights shall not be entitled to receive shares of Common Stock that would result in such holder, together with
such holder’s Affiliates and Associates, becoming the Beneficial Owner of more than 4.99% of the Common Stock to be then-outstanding.
If a holder would, but for the previous sentence, be entitled to receive a number of shares of Common Stock that would otherwise
result in such holder, together with such holder’s Affiliates, becoming the Beneficial owner of in excess of 4.99% of the
Common Stock to be then-outstanding (such shares, the ”Excess Common Shares”), in lieu of receiving such Excess Common
Shares, such holder will be entitled to receive an amount in (1) cash, (2) debt securities of the Company, (3) other assets, or
(4) any combination of the foregoing, having an aggregate value equal to the Current Market Price per share of the Common Stock
on the date of the occurrence of a Common Stock Event multiplied by the number of Excess Common Shares that would otherwise have
been issuable to such holder.

 

23.5.       
No Fractions. The Company shall not be required to issue fractions of shares of Common Stock or to distribute
certificates which evidence fractional shares of Common Stock. In lieu of such fractional shares of Common Stock, the Company shall
pay to each registered holder of a Rights Certificate with regard to which a fractional share of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market value of a whole share of Common Stock. For the purposes
of this Section 23.5, the current market value of a whole share of Common Stock shall be the Closing Price of a share of Common
Stock (as determined pursuant to Section 11.4 hereof) for the Trading Day immediately prior to the date of exchange pursuant to
this Section 23.5.

 

24.             
Notice of Proposed Actions. In case the Company shall after the Distribution Date propose:

 

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(a)               
to pay any dividend payable in stock of any class to the holders of its Preferred Stock or to make any other distribution
to the holders of its Preferred Stock (other than a cash dividend out of earnings or the retained earnings of the Company);

 

(b)              
to offer to the holders of its Preferred Stock rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock, Common Stock or shares of stock of any other class or any other securities, rights, or options;

 

(c)               
to effect any reclassification of the Preferred Stock (other than a reclassification involving only the subdivision
of outstanding shares of Preferred Stock);

 

(d)              
to effect any consolidation or merger into or with any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11.14 hereof), or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one transaction or a series of related transactions, of more than 50% of:

 

(i)                
the assets of the Company and its Subsidiaries (taken at net asset value as stated on the books of the Company and
determined on a consolidated basis in accordance with generally accepted accounting principles consistently applied), or

 

(ii)              
the earning power of the Company and its Subsidiaries (determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) to any other Person or Persons (other than the Company or any of its Subsidiaries
in one or more transactions each of which complies with Section 11.14 hereof); or

 

(e)               
to effect the liquidation, dissolution or winding up of the Company,

 

then, in each such case, the Company shall give to
the Rights Agent and each holder of a Right, to the extent feasible and in accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to
take place and the date of participation therein by the holders of Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (a) or (b) above at least 20 days prior to the record date for determining
holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation therein by the holders of Stock whichever shall be
the earlier. The failure to give notice required by this Section 24 or any defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any such action. In case any Common Stock Event described in Section 11.1.2
hereof shall occur, then, in any such case, the Company shall as soon as practicable thereafter give to the Rights Agent and each
holder of a Rights Certificate, to the extent feasible and in accordance with Section 25 hereof, a notice of the occurrence of
such Common Stock Event, which shall specify such event and the consequences of the event to holders of Rights under Section 11.1.2
hereof. Notwithstanding anything in this Plan to the contrary, prior to the Distribution Date a filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to the holders of securities of the Company, including the
Rights, for purposes of this Plan and no other notice need be given.

 

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25.             
Notices. Notices or demands authorized by this Plan to be given or made by the Rights Agent or by the holder
of any Rights Certificate to the Company shall be sufficiently given or made if sent by first class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:

 

SMTC Corporation 

635 Hood Road 

Markham, Ontario, L3R 4N6 

Attention: Chief Financial Officer

 

Subject to the provisions of Sections 18
and 20 hereof, any notice or demand authorized by this Plan 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:

 

Computershare Inc. 

250 Royal Street 

Canton Massachusetts 02021 

Attention: General Counsel

 

Notices or demands authorized by this Plan
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.

 

26.             
Supplements and Amendments. For as long as the Rights are then redeemable and except as provided in the last
sentence of this Section 26, the Company may in its sole and absolute discretion, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Plan without the approval of any holders of the Rights. At any time when the
Rights are not then redeemable and except as provided in the last sentence of this Section 26, the Company may, and the Rights
Agent shall if the Company so directs, supplement or amend this Plan without the approval of any holders of Right Certificates
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein or (iii) to change or supplement the provisions hereunder in any manner which the Company may
deem necessary or desirable; provided that no such supplement or amendment pursuant to this clause (iii) shall materially adversely
affect the interest of the holders of Rights (other than an Acquiring Person or any other Person in whose hands Rights are null
and void under the provisions of 7.5 hereof). Upon the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment; provided, however, that the Rights Agent shall not be obligated to enter into any such supplement
or amendment that adversely affects the Rights Agent’s own rights, duties, obligations or immunities under this Plan and
shall not be bound by any such supplement or amendment not executed by it. Without limiting the foregoing, the Company may at any
time prior to the time any Person becomes an Acquiring Person amend this Plan to raise or lower the threshold set forth in definition
“Acquiring Person”(the “Reduced Threshold”), to raise or lower the Redemption Price or to extend or shorten
the Expiration Date; provided, however, that no Person who beneficially owns a number of shares of Common Stock equal to
or greater than the Reduced Threshold shall become an Acquiring Person unless such Person shall, after the public announcement
of the Reduced Threshold, increase its beneficial ownership of the then outstanding Common Stock (other than as a result of an
acquisition of Common Stock by the Company) to an amount equal to or greater than the greater of (A) the Reduced Threshold or (B)
the sum of (x) the lowest beneficial ownership of such Person as a percentage of the then outstanding Common Stock as of any date
on or after the date of the public announcement of such Reduced Threshold plus (y) 0.001%.

 

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27.             
Successors. All the covenants and provisions of this Plan 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.

 

28.             
Determinations and Actions by the Board; Etc. The Board shall have the exclusive power and authority to administer
this Plan and to exercise all rights and powers specifically granted to the Board, or to the Company, or as may be necessary or
advisable in the administration of this Plan, including, without limitation, the right and power to (a) interpret the provisions
of this Plan and (b) make all determinations deemed necessary or advisable for the administration of this Plan. 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 and with the concurrence of a majority of the Board then in office
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties and
(y) not subject any Director to any liability to the holders of the Rights. The Rights Agent shall be entitled to assume the Board
acted in good faith and shall be fully protected and incur no liability in the Rights Agent’s reliance thereon. Nothing contained
in Section 28 shall affect the rights, duties, liabilities or immunities of the Rights Agent as provided herein.

 

29.             
Benefits of this Plan. Nothing in this Plan shall be construed to give to any Person other than the Company,
the Rights Agent, and the registered holders of the Rights (and, prior to the Distribution Date, the associated shares of Stock)
any legal or equitable right, remedy, or claim under this Plan or the Rights; but this Plan shall be for the sole and exclusive
benefit of the Company, the Rights Agent, and the registered holders of the Rights (and, prior to the Distribution Date, the associated
Stock).

 

    	A-39

    	 

    

30.             
Severability. The invalidity or unenforceability of any term or provision hereof shall not affect the validity
or enforceability of any term or provision hereof shall not affect the validity or enforceability of any other term or provision
hereof shall not affect the validity or enforceability of any other term or provision hereof; provided, however, if such
excluded provision shall affect the rights, immunities, duties or obligations of the Rights Agent, the Rights Agent shall be entitled
to resign immediately. If any term, provision, covenant or restrictions of this Plan 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 Plan would
adversely affect the purpose or effect of this Plan, the right of redemption set forth in Section 22 hereof shall be reinstated
and shall not expire until the Close of Business on the 10th day following the date of such determination by the Board.

 

31.             
Governing Law. This Plan and each Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of
said State applicable to contracts to be made and performed entirely within said State; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and to be performed entirely within such State.

 

32.             
Counterparts. This Plan 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.

 

33.             
Descriptive Headings. Descriptive headings of the several Sections of this Plan are inserted for convenience
only and shall not control or affect the meaning or construction of any of the provisions hereof.

 

34.             
Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable
for any delays or failures in the performance of its obligations under this Plan arising out of or caused, directly or indirectly,
by circumstances 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.

 

35.             
USA PATRIOT Act Notice. The Rights Agent hereby notifies the Company that pursuant to the requirements of
the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it must obtain,
verify and record certain information that identifies the Company, which information includes the name and address of the Company
and other information that will allow the Rights Agent to identify the Company in accordance with the Patriot Act.

 

[The next page is the signature page.]

 

    	A-40

    	 

    

IN WITNESS WHEREOF, the parties hereto have
caused this Plan to be duly executed and set their respective hands and seals, all as of the day and year first above written.

 

SMTC Corporation

 

By: /s/ Sushil Dhiman

Name: Sushil Dhiman 

Title: President and Chief
Executive Officer

 

Computershare Inc., as Rights Agent

 

By: /s/ Dennis V. Moccia

Name: Dennis V. Moccia

Title: Manager, Contract Administration

 

 

 

 

    	A-41

    	 

    

EXHIBIT A

 

 

FORM OF CERTIFICATE OF DESIGNATION,
PREFERENCES AND

RIGHTS OF PREFERRED STOCK

 

of

 

SMTC Corporation

 

Pursuant to Section 151 of the

Delaware General Corporation Law

 

SMTC Corporation, a corporation organized
and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”)
DOES HEREBY CERTIFY:

 

That pursuant to the authority conferred
upon the Board of Directors (the “Board of Directors”) by the Certificate of Incorporation of the Corporation,
as amended from time to time, and in accordance with the provisions of Section 151 of the General Corporation Law of the State
of Delaware, the Board of Directors on December 29, 2014 adopted a resolution providing for the authorization of a series of Preferred
Stock, $.01 par value per share (the “Preferred Stock”) as follows:

 

RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of its Certificate of Incorporation, as amended from time to
time, a series of Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount thereof and
the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and
the qualifications, limitations or restrictions thereof are as follows:

 

		1.	Designation and Amount. The shares of such series shall be designated as “Series A Participating Preferred Stock”
(the “Series A Participating Preferred Stock”), shall have a par value per share equal to $.01 and the number of shares
constituting such series shall be 500,000. The number of shares of Series A Participating Preferred Stock may be increased or decreased
by a resolution duly adopted by the Board of Directors, but may not be decreased below the number of shares of Series A Participating
Preferred Stock then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights
or warrants or upon conversion of any outstanding securities convertible into Series A Participating Preferred Stock.

 

		2.	Dividends and Distributions.

 

		2.1.	Dividend Preference. Subject to the prior and superior rights of the holders of any shares of any series of Preferred
Stock ranking prior and superior to the shares of Series A Participating Preferred Stock with respect to dividends, the holders
of shares of Series A Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September and
December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing
on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision
for adjustment set forth in Section 8 hereof, 1000 times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock, $.01 par value per share, of the Corporation (the “Common Stock”), or a subdivision
of the then outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Participating Preferred Stock.

 

    	A-1

    	 

    

		2.2.	Timing of Dividend Declaration. The Corporation shall declare a dividend or distribution on the Series A Participating Preferred
Stock as in Section 2.1 immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable
in shares of or a subdivision with respect to Common Stock); provided, however, that, in the event no dividend or distribution
shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Dates, a dividend of $1.00
per share on the Series A Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.

 

		2.3.	Dividends Cumulative. Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Participating
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Participating
Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue
is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A
Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A Participating Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders
of shares of Series A Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 60 days prior to the date fixed for the payment thereof.

 

    	A-2

    	 

    

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

 

		(a)	Subject to the provision for adjustment set forth in Section 8 hereof, each share of Series A Participating Preferred Stock
shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation.

 

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

 

		(c)	Except as set forth herein or required by applicable law, holders of Series A Participating Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock
as set forth herein) for taking any corporate action.

 

    	A-3

    	 

    

		4.	Certain Restrictions.

 

		4.1.	Restrictions. Whenever quarterly dividends or other dividends or distributions payable on the Series A Participating
Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Participating Preferred Stock outstanding shall have been paid in full, the Corporation
shall not:

 

		(a)	declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Participating
Preferred Stock;

 

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

 

		(c)	redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Participating Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of any such parity stock (i) in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Participating
Preferred Stock or (ii) in accordance with Section 4.2; or

 

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

 

		4.2.	Subsidiaries. The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the Corporation could, under Section 4.1, purchase or otherwise acquire
such shares at such time and in such manner.

 

		5.	Reacquired Shares. Any shares of Series A Participating Preferred Stock redeemed, purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions
on issuance set forth herein.

 

		6.	Liquidation, Dissolution or Winding Up.

 

    	A-4

    	 

    

		6.1.	Liquidation Preference. Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation,
no distribution shall be made to the holders of shares of Common Stock or any other stock of the Corporation ranking junior (upon
liquidation, dissolution or winding up) to the Series A Participating Preferred Stock unless, prior thereto, the holders of shares
of Series A Participating Preferred Stock shall have received $100.00 per share plus an amount equal to all accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of such payment (the “Series A Participating
Preferred Stock Liquidation Preference”). Following the payment of the full amount of the Series A Participating Preferred
Stock Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Participating Preferred
Stock unless, prior thereto, the holders of shares of Common Stock (which term shall include, for the purposes only of this Section
6, any series of the Corporation’s Preferred Stock ranking on a parity with the Common Stock upon liquidation, dissolution
or winding up) shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained
by dividing (a) the Series A Participating Preferred Stock Liquidation Preference by (b) 100 (as appropriately adjusted as set
forth in Section 8 hereof to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common
Stock; such number in this clause (b), as the same may be adjusted from time to time, is hereinafter referred to as the “Adjustment
Number”). In the event, however, that there are not sufficient assets available to permit payment in full of the Common
Adjustment, then any remaining assets shall be distributed ratably to the holders of Common Stock. Following the payment of the
full amount of the Series A Participating Preferred Stock Liquidation Preference and the Common Adjustment in respect of all then
outstanding shares of Series A Participating Preferred Stock and Common Stock, respectively, holders of shares of Series A Participating
Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of any remaining assets
to be distributed in the ratio of the Adjustment Number to one (1) with respect to such Series A Participating Preferred Stock
and Common Stock, on a per share basis, respectively.

 

		6.2.	Insufficient Assets. In the event, however, that there are not sufficient assets available to permit payment in full
of the Series A Participating Preferred Stock Liquidation Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A Participating Preferred Stock, then any remaining assets shall be distributed
ratably to the holders of the Series A Participating Preferred Stock and the holders of such parity stock in proportion to their
respective liquidation preferences.

 

		6.3.	Deemed Liquidations Only for Cash. None of the merger or consolidation of the Corporation into or with any other entity,
the sale of all or substantially all of the property and assets of the Corporation or the distribution to the stockholders of the
Corporation of all or substantially all of the consideration for such sale, unless such consideration (apart from the assumption
of liabilities) or the net proceeds thereof consists substantially entirely of cash, shall be deemed to be a liquidation, dissolution
or winding up within the meaning of this Section 6.

 

		6.4.	Parity Upon Liquidation. Each share of Series A Participating Preferred Stock shall stand on a parity with each other
share of Series A Participating Preferred Stock or any other series of the same class of Preferred Stock upon voluntary or involuntary
liquidation, dissolution or distribution of assets or winding up of the Corporation.

 

    	A-5

    	 

    

		7.	Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other
transaction in which the then outstanding shares of Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the then outstanding shares of Series A Participating Preferred Stock shall at
the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment set forth in Section
8 hereof) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or exchanged.

 

		8.	Certain Adjustments. In the event the Corporation shall at any time declare or pay any dividend on Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or consolidation of the then outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then, in each such case, the amounts set forth in Sections 2.1, 2.2, 3(a), 6.1 and 7 hereof with respect to the
multiple of (a) cash and non-cash dividends, (b) votes, (c) the Series A Participating Preferred Stock Liquidation Preference and
(d) an aggregate amount of stock, securities, cash and/or other property referred to in Section 7 hereof, shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock then outstanding immediately
after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to
such event.

 

		9.	Ranking. The Series A Participating Preferred Stock shall rank pari passu with (or if determined by the Board of Directors
in any vote establishing any other series of Preferred Stock, either senior and prior in preference to, or junior and subordinate
to, as the case may be) each other series of Preferred Stock of the Corporation with respect to dividends and/or preference upon
liquidation, dissolution or winding up.

 

		10.	Redemption. The shares of Series A Participating Preferred Stock may be purchased by the Corporation at such times and
on such terms as may be agreed to between the Corporation and the redeeming stockholder, subject to any limitations which may be
imposed by law or the Certificate of Incorporation, as amended from time to time.

 

		11.	Amendment. The Certificate of Incorporation of the Corporation, as amended from time to time, shall not be amended in
any manner which would materially alter or change the powers, preferences or special rights of the Series A Participating Preferred
Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds or more of the then outstanding
shares of Series A Participating Preferred Stock, voting together as a single class.

 

    	A-6

    	 

    

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

 

 

 

 

 

    	A-7

    	 

    

IN WITNESS WHEREOF, this Certificate of
Designation was executed on behalf of the Corporation by its President and attested by its President on December 29, 2014.

 

By ___________________________

 

Name:

Title:

 

 

 

 

 

    	A-8

    	 

    

EXHIBIT B

 

FORM OF
RIGHTS CERTIFICATE

 

Certificate No. R-Rights

 

NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE
PLAN) OR EARLIER IF ORDER OF REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001
PER RIGHT ON THE TERMS SET FORTH IN THE PLAN. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN AFFILIATE (WHICH INCLUDES AFFILIATES AND ASSOCIATES) OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN THE PLAN) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD,
BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER,
OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. THE RIGHTS AGENT WILL MAIL TO THE REGISTERED
HOLDER OF THIS RIGHTS CERTIFICATE A COPY OF THE PLAN, AS IN EFFECT ON THE DATE OF SUCH MAILING, WITHOUT CHARGE UPON WRITTEN REQUEST.

 

[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 (WHICH INCLUDES AFFILIATES AND ASSOCIATES)
OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN THE PLAN). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7.5 OF THE PLAN. THE RIGHTS AGENT WILL MAIL TO THE
REGISTERED HOLDER OF THIS CERTIFICATE A COPY OF THE PLAN AS IN EFFECT ON THE DATE OF SUCH MAILING, WITHOUT CHARGE UPON WRITTEN
REQUEST.]

 

    	B-1

    	 

    

Rights Certificate

 

SMTC CORPORATION

 

This certifies that                  , or registered assigns,
is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms,
provisions, and conditions of the Tax Benefits Preservation Plan dated as of December 29, 2014, as may be amended from time to
time (the “Plan”) between SMTC Corporation (the “Company”), and Computershare Inc., as Rights
Agent (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term
is defined in the Plan) and prior to the Expiration Date (as such term is defined in the Plan) at the office of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one one-hundredths of a share of the Series A Participating Preferred
Stock, with a par value of $.01 per share (“Preferred Stock”), of the Company per each Right represented hereby,
at a purchase price of $ 2.01per one one-hundredth of a share (the “Purchase Price”) upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase set forth on the reverse side hereof and the certificate contained
therein duly completed and executed, accompanied by a signature guarantee and such other documentation as the Rights Agent may
reasonably request. The number of Rights evidenced by this Rights Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as
of December 29, 2014, based on the shares of Common Stock of the Company as constituted at such date.

 

As more fully set forth in the Plan, upon
the occurrence of a Common Stock Event (as such term is defined in the Plan), if the Rights evidenced by this Rights Certificate
are beneficially owned by (a) an Acquiring Person or an Affiliate of an Acquiring Person (as each such term is defined in the Plan)
or (b) a Disqualified Transferee (as such term is defined in the Plan), such Rights shall automatically become null and void and
no holder hereof shall have any right with respect to such Rights from and after the occurrence of such Common Stock Event.

 

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

 

As provided in the Plan, the Purchase Price
and the number of whole or fractional shares of Preferred Stock which may be purchased upon the exercise of the Rights evidenced
by this Rights Certificate are subject to modification and adjustment upon the happening of certain events.

 

This Rights Certificate is subject to all
of the terms, provisions, and conditions of the Plan, which terms, provisions, and conditions are hereby incorporated herein by
reference and made a part hereof and to which Plan reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties, and immunities hereunder of the Rights Agent, the Company, and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances
set forth in the Plan. Copies of the Plan are on file at the office of the Rights Agent designated for such purpose and may be
obtained by the holder of any Rights upon written request to the Rights Agent.

 

    	B-2

    	 

    

This Rights Certificate, with or without
other Rights Certificates, upon surrender at the office of the Rights Agent designated for such purpose, accompanied by a signature
guarantee and such other documentation as the Rights Agent may reasonably request, may be exchanged for another Rights Certificate
or Rights Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of whole
or fractional shares of Preferred Stock (or other consideration, as the case may be) as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised in
part, the holder shall be entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.

 

Subject to the provisions of the Plan, the
Rights evidenced by this Rights Certificate may be redeemed by the Company at its option at any time prior to the earlier of (a)
the Distribution Date or (b) the Close of Business (as defined in the Plan) on the Expiration Date, at a redemption price of $.001
per Right (which amount is subject to adjustment as provided in the Plan). In addition, the Rights may be exchanged by the Company
at its option, in whole or in part, for shares of Common Stock (as such term is defined in the Plan), shares of preferred stock
of the Company having essentially the same rights, privileges and preferences as such shares or other consideration as provided
by the Plan. Immediately upon the action of the Board of Directors of the Company authorizing any such exchange, and without any
further action or any notice, the Rights (other than Rights which are not subject to such exchange) will terminate and the Rights
will only enable holders to receive the shares issuable upon such exchange.

 

The Company is not obligated to issue whole
or fractional shares of Preferred Stock (or other securities) upon the exercise of any Right or Rights evidenced hereby, but in
lieu thereof a cash payment may be made at the election of the Company, as provided in the Plan.

 

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

 

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

 

    	B-3

    	 

    

WITNESS the facsimile signature of the proper
officers and the seal of the Company. Dated as of , 20 .

 

SMTC Corporation

 

By: _________________________

 

Title:

 

Countersigned:

 

Computershare Inc. as Rights Agent

 

By: _________________________

 

Authorized Signatory

Date of Countersignature:

 

    	B-4

    	 

    

[Form of Reverse Side of Rights Certificate]

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder
if such

 

holder desires to transfer the Rights
Certificate)

 

FOR VALUE RECEIVED
_______________________ hereby sells, assigns and transfers unto ____________________________________________________________________________________________________

 

(Please print name and
address of transferee)

 

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

 

Dated: _______________________

 

Signature: ____________________

 

Signature Guaranteed:*

 

____________________________

 

*Signature guarantee by an “Eligible
Guarantor Institution” (with membership in an approved signature guarantee medallion program) may be required by the transfer
agent pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.

 

    	B-5

    	 

    

Certificate

 

The undersigned hereby certifies by checking
the appropriate boxes that:

 

(1)
the Rights evidenced by this Rights Certificate [ ] are [ ] are not being sold, assigned and transferred by or on behalf
of a Person who is or was an Acquiring Person or an Affiliate of an Acquiring Person (as each such term is defined in the Plan);
and

 

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

 

Dated:                                                       _________________________ 

                                                                  Signature

 

Signature Guaranteed:*

 

 _______________________

 

*Signature guarantee by an “Eligible Guarantor Institution”
(with membership in an approved signature guarantee medallion program) may be required by the transfer agent pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.

 

    	B-6

    	 

    

FORM OF ELECTION TO PURCHASE

 

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

 

To SMTC Corporation,

 

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

 

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 Rights Certificate, a new Rights Certificate for the balance remaining of such Rights shall be registered in the name of
and delivered to:

 

Please insert social security or other identifying number

 

____________________________________________________________

 

____________________________________________________________

(Please print name and address)

 

Dated:

 

___________________________

Signature

 

(Signature must conform in all respects to name of

holder as specified on the face of this Rights Certificate)

 

Signature Guaranteed:*

 

__________________________

 

		*	Signature guarantee by an “Eligible Guarantor Institution” (with membership in an approved signature guarantee
medallion program) may be required by the transfer agent pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.

 

    	B-7

    	 

    

Certificate

 

The undersigned hereby certifies by checking
the appropriate boxes that:

 

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

 

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

 

(3) to the best knowledge of the undersigned,
exercise of Rights evidenced by this Rights Certificate [ ] will result [ ] will not result in it, together with its Affiliates,
becoming the Beneficial Owner (as such term is defined in the Plan) of more than 4.99% of the total number of shares of Stock then-outstanding.

 

Dated:                                             __________________________

                                                        Signature

 

Signature Guaranteed:*

 

 _______________________

 

		*	Signature guarantee by an “Eligible Guarantor Institution” (with membership in an approved signature guarantee
medallion program) may be required by the transfer agent pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.

 

NOTICE

 

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

 

IN THE EVENT THE CERTIFICATIONS SET FORTH IN THE FOREGOING
FORMS OF ASSIGNMENT AND ELECTION TO PURCHASE, AS THE CASE MAY BE, ARE NOT COMPLETED, THEN THE COMPANY AND THE RIGHTS AGENT WILL
DEEM THE BENEFICIAL OWNER OF THE RIGHTS EVIDENCED BY THIS RIGHTS CERTIFICATE TO BE AN ACQUIRING PERSON, AN AFFILIATE OF AN ACQUIRING
PERSON OR A DISQUALIFIED TRANSFEREE (AS EACH SUCH TERM IS DEFINED IN THE PLAN) AND SUCH ASSIGNMENT OR ELECTION TO PURCHASE WILL
NOT BE HONORED AND THE RIGHTS EVIDENCED BY THIS RIGHTS CERTIFICATE WILL BE DEEMED TO BE NULL AND VOID.

 

    	B-8

    	 

    

EXHIBIT C

 

SMTC CORPORATION

 

SUMMARY OF PURCHASE RIGHTS

 

On December 29, 2014, SMTC Corporation (the
“Company”) adopted a Tax Benefits Preservation Plan (the “Plan”) and pursuant to the Plan
declared a dividend distribution of one preferred stock purchase right (collectively, the “Rights”, and individually,
a “Right”) for each share of its common stock, $.01 par value per share (the “Common Stock”).

 

The Plan is intended to protect the Company’s
ability to utilize its net operating loss carryforwards and other tax attributes (the “Tax Attributes”) by deterring
any person or group from acquiring, without the approval of the Board, the right to acquire 4.99% or more of the Company’s
equity securities. There is no guarantee, however, that the Plan will prevent the Company from experiencing an ownership change.

 

The determination of percentage ownership
for the purposes of the Plan takes into account the provisions of Section 382 of the Internal Revenue Code of 1986, as amended,
and the Treasury Regulations promulgated thereunder. In addition, for all purposes of the Plan, when determining whether a Person
or Persons own 4.99% or more of the shares of Common Stock then outstanding, the shares of Common Stock owned or deemed owned by
such Person or Person shall be taken into account in the numerator and only the shares of Common Stock then outstanding shall be
taken into account in the denominator.

 

Each Right entitles the registered holder
to purchase from the Company after the Distribution Date (described below) one one-hundredths of a share of its Series A Participating
Preferred Stock, $.01 par value per share (the “Preferred Stock”). The exercise price is $1.94 for each one-hundredth
of a share of Preferred Stock. The distribution of Rights is payable on January13, 2015 to the record holders of Stock at the close
of business on January 12, 2014. One Right will also be issued for each share of Stock issued between January 12, 2015 and the
Distribution Date.

 

Exercisability of the Rights; Distribution
Date. The Rights are not exercisable until the Distribution Date. The Distribution Date would occur, if ever, and unless delayed
by the Company’s board of directors, 10 business days after either of the following events:

 

		·	A public announcement that a person or group other than certain exempt persons (an “Acquiring Person”) has acquired,
or obtained the right to acquire, beneficial ownership of 4.99% or more (determined as explained above) of the Company’s
then outstanding Common Stock or that certain person that would otherwise be Acquiring Persons have acquired or obtained the right
to acquire beneficial ownership of any additional shares of Common Stock (the “Stock Acquisition Date”), or

 

		·	The commencement or announcement of an intention to make a tender offer or exchange offer that would result in a person or
group, other than certain exempt persons, owning 4.99% or more (determined as explained above) of the Company’s then outstanding
Common Stock.

 

    	C-1

    	 

    

In the event that any person becomes an
Acquiring Person, then each holder of a Right (other than the Acquiring Person) would have the right to receive, upon exercise
of the Right, that number of shares of Common Stock (or, in certain circumstances, cash, property or other securities of the Company)
having a market value of two times the exercise price of the Right:

 

Exchange Option. The Board may, at
its option, at any time after any person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable
Rights for shares of Common Stock at an exchange ratio of one share of Common Stock per Right. The Board, however, may not effect
an exchange at any time after any person (other than (a) the Company, (b) any subsidiary of the Company, or (c) any employee benefit
plan of the Company or any such subsidiary or any entity holding Common Stock for or pursuant to the terms of any such plan), together
with all affiliates of such person, becomes the beneficial owner of 50% or more of the Common Stock then outstanding. Immediately
upon the action of the Board ordering the exchange of any Rights and without any further action and without any notice, the right
to exercise such Rights will terminate and the only right thereafter of a holder of such Rights will be to receive that number
of shares of Common Stock equal to the number of such Rights held by the holder.

 

Transferability of Rights. Until
the Distribution Date, the Common Stock certificates will evidence the Rights, and the transfer of the Common Stock certificates
will constitute a transfer of the Rights. After the Distribution Date, separate certificates evidencing the Rights would be mailed
to holders of record of the Company’s Common Stock as of the close of business on the Distribution Date, and such separate
Rights certificates alone would evidence the Rights.

 

Redemption. The Board of Directors,
by a majority vote of disinterested directors, may redeem the Rights at a redemption price of $.001 per Right at any time before
the earlier of the Distribution Date or the close of business on the Expiration Date described below. Immediately upon such redemption,
the right to exercise the Rights will terminate, and the Rights holders will become entitled only to receive the redemption price.

 

Expiration Date of Rights. If not previously exercised
or redeemed, the Rights will expire on the earliest of (i) the Close of Business on December 29, 2015, provided, that if the Plan
is submitted to the stockholders of the Company for ratification at the 2015 Annual Meeting (or any adjournment or postponement
thereof), then the Plan will be extended to the Close of Business on the third anniversary of the date of this Plan if the Plan
is approved by the affirmative vote of a majority of shares of Common Stock of the Company present in person or represented by
proxy at the 2015 Annual Meeting (or any adjournment or postponement thereof) and will be extended for one or more successive three-year
periods expiring on the Close of Business on the date of the anniversary of the Plan three years thereafter if, prior to the expiration
of the then current three-year period, the Plan, together with any supplement or amendment thereof, is submitted to the stockholders
of the Company for ratification at one or more Annual Meetings of the Company’s Stockholders and the Plan (together with
any supplements or amendments) is approved by the affirmative vote of a majority of shares of Common Stock of the Company present
in person or represented by proxy at such Annual Meeting of the Company’s Stockholders (or any adjournment or postponement
thereof), (ii) the Close of Business on the first Business Day following the date on which the Plan is submitted to the stockholders
of the Company for ratification at the Company’s Annual Meeting of Stockholders if the Plan is not approved by the affirmative
vote of a majority of shares of Common Stock of the Company present in person or represented by proxy at that Annual Meeting of
Stockholders (or any adjournment or postponement thereof), (iii) the Redemption Date, (iv) the Exchange Date, (v) the consummation
of a reorganization transaction entered into by the Company resulting in the imposition of stock transfer restrictions that the
Board determines will provide protection for the Company’s Tax Attributes similar to that provided by this Plan, (vi) Close
of Business on the effective date of the repeal of section 382 of the Code or any successor statute (but excluding the repeal or
withdrawal of any Treasury Regulations thereunder), or any other change, if the Board determines that this Plan is no longer necessary
or desirable for the preservation of Tax Attributes, or (vii) the beginning of a taxable year of the Company to which the Board
determines that no Tax Attributes may be carried forward. Notwithstanding the foregoing, the Plan will be terminated and be of
no further force and effect if not approved by the stockholders of the Company at the 2015 Annual Meeting or within a reasonable
time thereafter prior to any Distribution Date.

 

    	C-2

    	 

    

Anti-Dilution Adjustment. The exercise
price, the redemption price, the exchange ratio and the number of shares of the Preferred Stock or other securities or property
issuable upon exercise of the Rights are subject to adjustment from time to time to prevent dilution under the following circumstances:

 

		·	in the event of a stock dividend on, or a subdivision, combination or reclassification of the Preferred Stock, or

 

		·	upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for shares of the Preferred Stock
or convertible securities at less than the current market price, or

 

		·	upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly
cash dividends out of the earnings or retained earnings of the Company and dividends payable in shares of Preferred Stock) or of
subscription rights or warrants (other than those referred to above).

 

With certain exceptions, no adjustment in
the exercise price will be required until cumulative adjustments require an adjustment of at least 1% in such price. At the Company’s
option, cash (based on the market price on the last trading date prior to the date of the exercise) will be paid instead of issuing
fractional shares of any securities (other than fractional shares of Preferred Stock in integral multiples of one-hundredth of
a share).

 

No Stockholder Rights. A Right holder,
as such, has no rights as a stockholder of the Company, including, without limitation, the right to vote or receive dividends.

 

Amendments. Any of the provisions
of the Plan (described below) may be amended by the board of directors of the Company prior to the Distribution Date without the
approval of any holders of the Rights. After the Distribution Date, the board of directors may amend the Plan to cure any ambiguity,
to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person)
or to shorten or lengthen any time period under the Plan. A majority vote of the disinterested members of the Board would be required
to effect any amendment.

 

    	C-3

    	 

    

Tax Consequences. The Company believes
that the issuance of Rights to holders with respect to its Common Stock should not be a taxable event for U.S. federal income tax
purposes. The U.S. federal income tax consequences of the separation of the Rights on the Distribution Date, the exercise of the
Rights and the subsequent ownership of the Preferred Stock are complex and uncertain, and holders should consult their own tax
advisors for the specific tax consequences to them.

 

Plan. The terms of the Rights are
set forth in a Tax Benefits Preservation Plan (the “Plan”) between the Company and Computershare Inc., as Rights Agent.
A copy of the Plan is an Exhibit to Form 8-A filed with the Securities and Exchange Commission. A copy of the Plan is available
free of charge from the Rights Agent at the following address:

 

250 Royal Street

 

Canton, MA 02021

 

This summary does not purport to be complete and is qualified
in its entirety by reference to the Plan, which is incorporated in this summary by reference.

 

 

 

 

 

 

C-4

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