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Exhibit 4.1    
  

        NEOMAGIC CORPORATION  

 and  

 EQUISERVE TRUST COMPANY, N.A.  

 PREFERRED STOCK RIGHTS AGREEMENT  

 Dated as of December 19, 2002  

  

 
 

TABLE OF CONTENTS    
  

	 
	 	 
	 	Page

	Section 1.	 	Certain Definitions	 	1
	

Section 2.	
 	

Appointment of Rights Agent	
 	

5
	

Section 3.	
 	

Issuance of Rights Certificates	
 	

6
	

Section 4.	
 	

Form of Rights Certificates	
 	

7
	

Section 5.	
 	

Countersignature and Registration	
 	

8
	

Section 6.	
 	

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

8
	

Section 7.	
 	

Exercise of Rights; Exercise Price; Expiration Date of Rights	
 	

9
	

Section 8.	
 	

Cancellation and Destruction of Rights Certificates	
 	

10
	

Section 9.	
 	

Reservation and Availability of Preferred Shares	
 	

10
	

Section 10.	
 	

Record Date	
 	

12
	

Section 11.	
 	

Adjustment of Exercise Price, Number of Shares or Number of Rights	
 	

12
	

Section 12.	
 	

Certificate of Adjusted Exercise Price or Number of Shares	
 	

17
	

Section 13.	
 	

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

18
	

Section 14.	
 	

Fractional Rights and Fractional Shares	
 	

21
	

Section 15.	
 	

Rights of Action	
 	

22
	

Section 16.	
 	

Agreement of Rights Holders	
 	

22
	

Section 17.	
 	

Rights Certificate Holder Not Deemed a Stockholder	
 	

22
	

Section 18.	
 	

Concerning the Rights Agent	
 	

23
	

Section 19.	
 	

Merger or Consolidation or Change of Name of Rights Agent	
 	

23
	

Section 20.	
 	

Duties of Rights Agent	
 	

24
	

Section 21.	
 	

Change of Rights Agent	
 	

25
	

Section 22.	
 	

Issuance of New Rights Certificates	
 	

26
	

Section 23.	
 	

Redemption	
 	

26
	

Section 24.	
 	

Exchange	
 	

27
	

Section 25.	
 	

Notice of Certain Events	
 	

29
	

Section 26.	
 	

Notices	
 	

29
	

Section 27.	
 	

Supplements and Amendments	
 	

29
	

Section 28.	
 	

Successors	
 	

30
	

Section 29.	
 	

Determinations and Actions by the Board of Directors, etc	
 	

30
	

Section 30.	
 	

Benefits of this Agreement	
 	

30
	

Section 31.	
 	

Severability	
 	

30
	
 	
 	

 	
 	

 

i

 

	

Section 32.	
 	

Governing Law	
 	

30
	

Section 33.	
 	

Counterparts	
 	

31
	

Section 34.	
 	

Descriptive Headings	
 	

31
	

Section 35.	
 	

Force Majeure.	
 	

31
	

EXHIBITS	
 	

 	
 	

 
	

Exhibit A	
 	

Form of Certificate of Designation	
 	

 
	

Exhibit B	
 	

Form of Rights Certificate	
 	

 
	

Exhibit C	
 	

Summary of Rights	
 	

 

ii

  

 
 

PREFERRED STOCK RIGHTS AGREEMENT    
  

        This Preferred Stock Rights Agreement is dated as of December 19, 2002, between NeoMagic Corporation, a Delaware corporation, (the "Company"), and
EquiServe Trust Company, N.A. (the "Rights Agent"). 

        On
December 19, 2002, (the "Rights Dividend Declaration Date"), the Board of Directors of the Company authorized and declared a
dividend of one Preferred Share Purchase Right (a "Right") for each Common Share (as hereinafter defined) of the Company outstanding as of the Close of
Business (as hereinafter defined) on January 10, 2002 (the "Record Date"), each Right representing the right to purchase one
one-thousandth (0.001) of a share of Series A Participating Preferred Stock (as such number may be adjusted pursuant to the provisions of this Agreement), having the rights,
preferences and privileges set forth in the form of Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock attached hereto as  Exhibit A,
upon the terms and subject to the conditions herein set forth, and further authorized and directed the issuance of one Right (as such
number may be adjusted pursuant to the provisions of this Agreement) with respect to each Common Share that shall become outstanding between the Record Date and the earlier of the Distribution Date
and the Expiration Date (as such terms are hereinafter defined), and in certain circumstances after the Distribution Date. 

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

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

        (a)  "Acquiring Person" shall mean any Person, who or which, together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 15% or more of the Common Shares then outstanding, but shall not include the Company, any Subsidiary of the Company or any employee benefit plan of the Company or of any
Subsidiary of the Company, or any entity holding Common Shares for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring Person as the
result of an acquisition of Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 15% or
more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial Owner of 15% or more of the Common Shares of the Company 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 Common Shares of the Company (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding Common Shares in Common Shares or pursuant to a split or subdivision of the outstanding Common Shares), then such Person shall
be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of such additional Common Shares of the Company such Person does not beneficially own 15% or more of the Common Shares of
the Company then outstanding. Notwithstanding the foregoing, (i) if the Company's Board of Directors determines in good faith that a Person who would otherwise be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently (including, without limitation, because (A) such Person was unaware that it beneficially
owned a percentage of the Common Shares that would otherwise cause such Person to be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), or
(B) such Person was aware of the extent of the Common Shares it beneficially owned but had no actual knowledge of the consequences of such beneficial ownership under this Agreement) and without
any intention of changing or influencing control of the Company, and if such Person divested or divests as promptly as practicable a sufficient number of Common Shares so that such Person would no
longer be an 

1

 

"Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be or to have become an "Acquiring Person" for any purposes
of this Agreement including, without limitation Section 1(gg) hereof; and (ii) if, as of the date hereof, any Person is the Beneficial Owner of 15% or more of the Common Shares
outstanding, such Person shall not be or become an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), unless and until such time as such Person shall
become the Beneficial Owner of additional Common Shares (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Shares in Common Shares or pursuant to
a split or subdivision of the outstanding Common Shares), unless, upon becoming the Beneficial Owner of such additional Common Shares, such Person is not then the Beneficial Owner of 15% or more of
the Common Shares then outstanding. 

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

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

        (d)  A
Person shall be deemed the "Beneficial Owner" of and shall be deemed to "beneficially
own" any securities: 

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

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

        (iii)  which
are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding, whether or not in writing (other than customary agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(d)(ii)(B)) or disposing of any
securities of the Company; provided, however, that in no case shall an officer or director 

2

 

of the Company be deemed (x) the Beneficial Owner of any securities beneficially owned by another officer or director of the Company solely by reason of actions undertaken by such persons in
their capacity as officers or directors of the Company or (y) the Beneficial Owner of securities held of record by the trustee of any employee benefit plan of the Company or any Subsidiary of
the Company for the benefit of any employee of the Company or any Subsidiary of the Company, other than the officer or director, by reason of any influence that such officer or director may have over
the voting of the securities held in the plan. 

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

        (f)    "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. 

        (g)  "Common Stock Equivalents" shall have the meaning set forth in Section 11(a)(iii) hereof.  "Common Shares" when used with reference to the
Company shall mean the shares of Common Stock of the Company, par value at $0.001 per share. Common
Shares when used with reference to any Person other than the Company shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person. 

        (h)  "Company" shall mean NeoMagic Corporation, a Delaware corporation, subject to the terms of Section 13(a)(iii)(C)
hereof. 

        (i)    "Current Per Share Market Price" of any security (a "Security" for purposes of this definition), for all computations
other than those made pursuant to Section 11(a)(iii) hereof, shall mean the average of the daily closing prices per share of such Security for the thirty (30) consecutive Trading
Days immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price of any Security on any date shall be
deemed to be the average of the daily closing prices per share of such Security for the ten (10) consecutive Trading Days immediately prior to such date; provided,
however, that in the event that the Current Per Share Market Price of the Security is determined during a period following the announcement by the issuer of such Security of
(i) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares or (ii) any subdivision, combination or reclassification of
such Security, and prior to the expiration of the applicable thirty (30) Trading Day or ten (10) Trading Day period, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the Current Per Share Market Price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national
securities exchange, the last sale price or, if such last sale price is not reported, the average of the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Security, the fair 

3

 

value of such shares on such date as determined in good faith by the Board of Directors of the Company shall be used. If the Preferred Shares are not publicly traded, the Current Per Share Market
Price of the Preferred Shares shall be conclusively deemed to be (x) the Current Per Share Market Price of the Common Shares as determined pursuant to this Section 1(j), as appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof, multiplied by (y) 1,000. If the Security is not publicly held or so listed or traded,
Current Per Share Market Price shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. 

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

        (k)  "Distribution Date" shall mean the earlier of (i) the Close of Business on the tenth (10th) Business
day (or such later date as may be determined by action of the Company's Board of Directors) after the Shares Acquisition Date (or, if the tenth (10th) business day after the Shares
Acquisition Date occurs before the Record Date, the Close of Business on the Record Date) or (ii) the Close of Business on the tenth (10th) Business Day (or such later date as may
be determined by action of the Company's Board of Directors) after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if, assuming the successful consummation thereof, such Person would be
an Acquiring Person. 

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

        (m)  "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 

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

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

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

        (q)  "Final Expiration Date" shall mean January 10, 2013. 

        (r)  "Nasdaq" shall mean The Nasdaq Stock Market, Inc. 

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

        (t)    "Post-Event Transferee" shall have the meaning set forth in Section 7(e) hereof. 

        (u)  "Preferred Shares" shall mean shares of Series A Participating Preferred Stock, par value $0.001 per share, of the
Company. 

        (v)  "Pre-Event Transferee" shall have the meaning set forth in Section 7(e) hereof. 

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

        (x)  "Record Date" shall have the meaning set forth in the recitals at the beginning of this Agreement. 

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

4

 

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

        (aa) "Rights Agent" shall mean (i) EquiServe Trust Company, N.A., (ii) its successor or replacement as provided
in Sections 19 and 21 hereof or (iii) any additional Person appointed pursuant to Section 2 hereof. 

        (bb) "Rights Certificate" shall mean a certificate substantially in the form attached hereto as  Exhibit B. 

        (cc) "Rights Dividend Declaration Date" shall have the meaning set forth in the recitals at the beginning of this Agreement. 

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

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

        (ff)  "Securities Act" shall mean the Securities Act of 1933, as amended. 

        (gg) "Shares Acquisition Date" shall mean the first date of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such;  provided that, if
such Person is determined not to have become an Acquiring Person pursuant to Section 1(a) hereof, then no Shares Acquisition
Date shall be deemed to have occurred by virtue of such event. 

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

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

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

        (kk) "Summary of Rights" shall mean a summary of this Agreement substantially in the form attached hereto as  Exhibit C. 

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

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

        (nn) A
"Triggering Event" shall be deemed to have occurred upon any Person becoming an Acquiring Person. 

        Section
2.    Appointment of Rights Agent.    The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to
the Distribution Date also be the holders of the Common Shares) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such co-Rights Agents as it may deem necessary or desirable, upon ten (10) days' prior written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any co-Rights Agent. 

5

 

        Section
3.    Issuance of Rights Certificates.    

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

        (b)  On
the Record Date or as soon as practicable thereafter, the Company will send a copy of the Summary of Rights by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Record Date, at the address of such holder shown on the records of the Company's transfer agent and registrar. With respect to certificates
for Common Shares outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with the
Summary of Rights. 

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

        THIS
CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN NEOMAGIC CORPORATION AND EQUISERVE TRUST COMPANY, N.A., AS THE
RIGHTS AGENT, DATED AS OF DECEMBER 19, 2002 (THE "RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES
OF NEOMAGIC CORPORATION. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE.
THE COMPANY WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, 

6

 

RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD
BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID. 

With
respect to such certificates containing the foregoing legend, until the earlier of the Distribution Date or the Expiration Date, the Rights associated with the Common Shares represented by such
certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate shall also constitute the transfer of the Rights associated with the Common Shares
represented thereby. 

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

        Section
4.    Form of Rights Certificates.    

        (a)  The
Rights Certificates (and the forms of election to purchase Common Shares and of assignment to be printed on the reverse thereof) shall be substantially in the form
of Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or a national market system, on which the Rights may from time to time be listed or included, or to conform to usage.
Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as of the Record Date (or in the case of Rights issued with
respect to Common Shares issued by the Company after the Record Date, as of the date of issuance of such Common Shares) and on their face shall entitle the holders thereof to purchase such number of
one-thousandths (0.001) of a Preferred Share as shall be set forth therein at the price set forth therein (such exercise price per one one-thousandth (0.001) of a Preferred
Share being hereinafter referred to as the "Exercise Price" and the aggregate Exercise Price of all Preferred Shares issuable upon exercise of one Right
being hereinafter referred to as the "Total Exercise Price"), but the number and type of securities purchasable upon the exercise of each Right and the
Exercise Price shall be subject to adjustment as provided herein. 

        (b)  Any
Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a Post-Event Transferee, (iii) a Pre-Event Transferee or (iv) any subsequent transferee receiving
transferred Rights from a Post-Event Transferee or a Pre-Event Transferee, either directly or through one or more intermediate transferees, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend: 

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

7

   
        Section 5.    Countersignature and Registration.    

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

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

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

        (a)  Subject
to the provisions of Sections 7(e), 14 and 24 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the Close of Business
on the Expiration Date, any Rights Certificate or Rights Certificates may be transferred, split up, combined or exchanged for another Rights Certificate or Rights Certificates, entitling the
registered holder to purchase a like number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other assets, as the case may be)
as the Rights Certificate or Rights Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate or
Rights Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Rights Certificates to be transferred,
split up, combined or exchanged at the office of the Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Rights Certificate until the registered holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Sections 7(e), 14 and 24 hereof, countersign and deliver to the person entitled thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested. The Company may require payment from the registered holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates. 

        (b)  Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company's request, reimbursement to the Company and the Rights Agent of all reasonable 

8

 

expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Company will make and deliver a new Rights Certificate of like tenor
to the Rights Agent for delivery to the registered holder in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated. 

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

        (a)  Subject
to Sections 7(e), 23(b) and 24(b) hereof, the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date and prior to the Close of Business on the Expiration Date by surrender of the Rights Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the Exercise Price for each
one-thousandth (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the case may be) as to which the Rights are exercised. 

        (b)  The
Exercise Price for each one-thousandth (0.001) of a Preferred Share issuable pursuant to the exercise of a Right shall initially be $25.00, shall be
subject to adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. 

        (c)  Upon
receipt of a Rights Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by payment of the Exercise Price
for the number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the case may be) to be purchased and an amount
equal to any applicable transfer tax
required to be paid by the holder of such Rights Certificate in accordance with Section 9(e) hereof, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly
(i) (A) requisition from any transfer agent of the Preferred Shares (or make available, if the Rights Agent is the transfer agent for the Preferred Shares) a certificate or certificates for the
number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the case may be) to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests or (B) if the Company shall have elected to deposit the total number of one-thousandths (0.001) of a
Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the case may be) issuable upon exercise of the Rights hereunder with a depository agent, requisition from
the depository agent depository receipts representing such number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other assets
as the case may be) as are to be purchased (in which case certificates for the Preferred Shares (or, following a Triggering Event, other securities, cash or other assets as the case may be)
represented by such receipts shall be deposited by the transfer agent with the depository agent) and the Company hereby directs the depository agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depository receipts, cause the same to be delivered to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt thereof, deliver such cash to or upon the order of the registered holder of such Rights Certificate. The payment of the Exercise Price (as
such amount may be reduced (including to zero) pursuant to Section 11(a)(iii) hereof) and an amount equal to any applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 9(e) hereof, may be made in cash or by certified bank check, cashier's check or bank draft payable to the order of the Company. In the event that the
Company is obligated to issue securities of the Company other than Preferred Shares, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such 

9

 

other securities, cash and/or other property are available for distribution by the Rights Agent, if and when appropriate. 

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

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

        (f)    Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a
registered holder upon the occurrence of any purported exercise as set forth in Section 7 unless such registered holder shall, in addition to having complied with the requirements of subsection
7(a), have (i) completed and signed the certificate contained in the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. 

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

        Section
9.    Reservation and Availability of Preferred Shares.    

        (a)  The
Company covenants and agrees that it will use its best efforts to cause to be reserved and kept available out of its authorized and unissued Preferred Shares not
reserved for another purpose (and, following the occurrence of a Triggering Event, out of its authorized and unissued 

10

 

Common Shares and/or other securities), the number of Preferred Shares (and, following the occurrence of the Triggering Event, Common Shares and/or other securities) that will be sufficient to permit
the exercise in full of all outstanding Rights. 

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

        (c)  The
Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of a Triggering Event in which
the consideration to be delivered by the Company upon exercise of the Rights is described in Section 11(a)(ii) or Section 11(a)(iii) hereof, or as soon as is required by
law following the Distribution Date, as the case may be, a registration statement under the Securities Act with respect to the securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become effective as soon as practicable after such filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities and (B) the
date of expiration of the Rights. The Company may temporarily suspend, for a period not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. Upon any such suspension, the Company shall issue a
public announcement stating, and notify the Rights Agent, that the exercisability of the Rights has been temporarily suspended, as well as a public announcement and notification to the Rights Agent at
such time as the suspension is no longer in effect. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or "blue sky" laws of the various
states in connection with the exercisability of the Rights. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction, unless the
requisite qualification in such jurisdiction shall have been obtained, or an exemption therefrom shall be available, and until a registration statement has been declared and remains effective. 

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

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

11

 

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

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

        (a)  (i) Anything
in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the date of this Agreement
(A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares (by
reverse stock split or otherwise) into a smaller number of Preferred Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, in each such event, except as otherwise provided in this
Section 11 and Section 7(e) hereof: (1) the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or
reclassification shall be adjusted so that the Exercise Price thereafter shall equal the result obtained by dividing the Exercise Price in effect immediately prior to such time by a fraction (the  "Adjustment
Fraction"), the numerator of which shall be the total number of Preferred Shares (or shares of capital stock issued in such reclassification
of the Preferred Shares) outstanding immediately following such time and the denominator of which shall be the total number of Preferred Shares outstanding immediately prior to such time;  provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of such Right; and (2) the number of one-thousandths (0.001) of a Preferred Share (or share of such other capital stock)
issuable upon the exercise of each Right shall equal the number of one-thousandths (0.001) of a Preferred Share (or share of such other capital stock) as was issuable upon exercise of a
Right immediately prior to the occurrence of the event described in clauses (A)-(D) of this Section 11(a)(i), multiplied by the Adjustment Fraction; provided, however, that, no such adjustment
shall be made pursuant to this Section 11(a)(i) to the extent that there shall have simultaneously occurred an event described in clause (A), (B), (C) or (D) of
Section 11(n) with a proportionate adjustment being made thereunder. Each Common Share that shall become outstanding after an adjustment has been made pursuant to this
Section 11(a)(i) shall have associated with it the number of Rights, exercisable at the Exercise Price and for the number of one-thousandths (0.001) of a Preferred Share (or
shares of such other capital stock) as one Common Share has associated with it immediately following the adjustment made pursuant to this Section 11(a)(i). 

12

 

        (ii)  Subject
to Section 24 of this Agreement, in the event that a Triggering Event shall have occurred, then promptly following such Triggering Event each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive for each Right, upon exercise thereof in accordance with the terms of this Agreement and payment of
the Exercise Price in effect immediately prior to the occurrence of the Triggering Event, in lieu of a number of one-thousandths (0.001) of a Preferred Share, such number of Common Shares
of the Company as shall equal the quotient obtained by dividing (A) the product obtained by multiplying (1) the Exercise Price in effect immediately prior to the occurrence of the
Triggering Event by (2) the number of one-thousandths (0.001) of a Preferred Share for which a Right was exercisable (or would have been exercisable if the Distribution Date had
occurred) immediately prior to the first occurrence of a Triggering Event, by (B) fifty percent (50%) of the Current Per Share Market Price for Common Shares on the date of occurrence of the
Triggering Event; provided, however, that the Exercise Price and the number of Common Shares of the Company so receivable upon exercise of a Right shall
be subject to further adjustment as appropriate in accordance with Section 11(e) hereof to reflect any events occurring in respect of the Common Shares of the Company after the occurrence of
the Triggering Event. 

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

13

 

thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the  "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval
and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Shares shall be the Current Per Share Market Price of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of
any Common Stock Equivalent shall be deemed to have the same value as the Common Shares on such date. 

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

14

  

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

        (d)  Anything
herein to the contrary notwithstanding, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at
least one percent (1%) of the Exercise Price; provided, however, that any adjustments which by reason of this Section 11(d) are not required to
be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth (0.0001) of a Common Share or other share or one hundred-thousandth (0.00001) of a Preferred Share, as the case may be. Notwithstanding the first sentence of this
Section 11(d), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three (3) years from the date of the transaction which requires
such adjustment or (ii) the Expiration Date. 

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

        (f)    All
Rights originally issued by the Company subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted
Exercise Price, the number of one-thousandths (0.001) of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein. 

        (g)  Unless
the Company shall have exercised its election as provided in Section 11(h), upon each adjustment of the Exercise Price as a result of the calculations made
in Section 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number
of Preferred Shares (calculated to the nearest one hundred-thousandth (0.00001) of a share) obtained by (i) multiplying (x) the number of Preferred Shares covered by a Right immediately
prior to this 

15

 

adjustment, by (y) the Exercise Price in effect immediately prior to such adjustment of the Exercise Price, and (ii) dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price. 

        (h)  The
Company may elect on or after the date of any adjustment of the Exercise Price as a result of the calculations made in Section 11(b) or (c) to adjust
the number of Rights, in substitution for any adjustment in the number of Preferred Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of one-thousandths (0.001) of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one hundred-thousandth (0.00001)) obtained by dividing the Exercise Price in
effect immediately prior to adjustment of the Exercise Price by the Exercise Price in effect immediately after adjustment of the Exercise Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which
the Exercise Price is adjusted or any day thereafter, but, if any Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(h), the Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Exercise Price) and shall be
registered in the names of the holders of record of Rights Certificates on the record date specified in the public announcement. 

        (i)    Irrespective
of any adjustment or change in the Exercise Price or the number of Preferred Shares issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Exercise Price per one one-thousandth (0.001) of a Preferred Share and the
number of one-thousandths (0.001) of a Preferred Share which were expressed in the initial Rights Certificates issued hereunder. 

        (j)    Before
taking any action that would cause an adjustment reducing the Exercise Price below the par or stated value, if any, of the number of one-thousandths
(0.001) of a Preferred Share issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue as fully paid and nonassessable shares such number of one-thousandths (0.001) of a Preferred Share at such adjusted Exercise Price. 

        (k)  In
any case in which this Section 11 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the number of one-thousandths (0.001) of a
Preferred Share and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the number of one-thousandths (0.001) of a Preferred Share and
other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other 

16

 

appropriate instrument evidencing such holder's right to receive such additional shares (fractional or otherwise) upon the occurrence of the event requiring such adjustment. 

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

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

        (n)  In
the event that the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Shares payable in Common Shares,
(B) subdivide the outstanding Common Shares, (C) combine the outstanding Common Shares (by reverse stock split or otherwise) into a smaller number of Common Shares, or (D) issue
any shares of its capital stock in a reclassification of the Common Shares (including any such reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation), then, in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof: (1) each
Common Share (or shares of capital stock issued in such reclassification of the Common Shares) outstanding immediately following such time shall have associated with it the number of Rights as were
associated with one Common Share immediately prior to the occurrence of the event described in clauses (A)-(D) above; (2) the Exercise Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or reclassification shall be adjusted so that the Exercise Price thereafter shall equal the result obtained by multiplying the
Exercise Price in effect immediately prior to such time by a fraction, the numerator of which shall be the total number of Common Shares outstanding immediately prior to the event described in clauses
(A)-(D) above, and the denominator of which shall be the total number of Common Shares outstanding immediately after such event; provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Right; and (3) the number of
one-thousandths (0.001) of a Preferred Share (or shares of such other capital stock) issuable upon the exercise of each Right outstanding after such event shall equal the number of
one-thousandths (0.001) of a Preferred Share (or shares of such other capital stock) as were issuable with respect to one Right immediately prior to such event. Each Common Share that
shall become outstanding after an adjustment has been made pursuant to this Section 11(n) shall have associated with it the number of Rights, exercisable at the Exercise Price and for the
number of one-thousandths (0.001) of a Preferred Share (or shares of such other capital stock) as one Common Share has associated with it immediately following the adjustment made pursuant
to this Section 11(n). If an event occurs which would require an adjustment under both this Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(n) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof. 

        Section
12.    Certificate of Adjusted Exercise Price or Number of Shares.    Whenever an adjustment is made as
provided in Sections 11 and 13 hereof, the Company shall promptly (a) prepare a certificate 

17

 

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

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

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

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

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

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

        then,
concurrent with and in each such case, 

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

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

        (C)  the
term "Company" shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section 13 Event; 

18

 

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

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

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

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

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

        (ii)  in
the case of any transaction described in clause (iii) of Section 13(a) hereof, the Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such transaction or transactions, or, if more than one Person that is a party to such transaction or transactions receives the same portion of the
assets or earning power so transferred and each such portion would, were it not for the other equal portions, constitute the greatest portion of the assets or earning power so transferred, or if the
Person receiving the greatest portion of the assets or earning power cannot be determined, whichever of such Persons is the issuer of Common Shares having the greatest aggregate market value of shares
outstanding; provided that in any such case described in the foregoing clause (b)(i) or (b)(ii), if the Common Shares of such Person are not at such time or have not been continuously
over the preceding 12-month period registered under Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, the term "Principal Party" shall refer to such other Person, or (2) if
such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Shares of which are and have been so registered, the term "Principal 

19

 

Party" shall refer to whichever of such Persons is the issuer of Common Shares having the greatest aggregate market value of shares outstanding, or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly by the same Person, the rules set forth in clauses (1) and (2) above shall apply
to each of the owners having an interest in the venture as if the Person owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in each such case
shall bear the obligations set forth in this Section 13 in the same ration as its interest in such Person bears to the total of such interests. 

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

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

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

        (iii)  deliver
to holders of the Rights historical financial statements for such Principal Party which comply in all respects with the requirements for registration on
Form 10 (or any successor form) under the Exchange Act. 

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

        (d)  In
case the "Principal Party" for purposes of Section 13(b) hereof has provision in any of its authorized securities or in its certificate of incorporation or
by-laws or other instrument governing its corporate affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders of Rights
pursuant to Section 13 hereof), in connection with, or as a consequence of, the consummation of a Section 13 Event, Common Shares or Equivalent Shares of such Principal Party at less
than the then Current Per Share Market Price thereof or securities exercisable for, or convertible into, Common Shares or Equivalent Shares of such Principal Party at less than such then Current Per
Share Market Price, or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the Common Shares of 

20

 

such Principal Party pursuant to the provisions of Section 13 hereof, then, in such event, the Company hereby agrees with each holder of Rights that it shall not consummate any such
transaction unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection with or as a
consequence of, the consummation of the proposed transaction. 

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

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

        Section
14.    Fractional Rights and Fractional Shares.    

        (a)  The
Company shall not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right.
For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable, as determined pursuant to the second sentence of Section 1(j) hereof. 

        (b)  The
Company shall not be required to issue fractions of Preferred Shares (other than fractions that are integral multiples of one one-thousandth (0.001) of a
Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions that are integral multiples of one
one-thousandth (0.001) of a Preferred Share). Interests in fractions of Preferred Shares in integral multiples of one one-thousandth (0.001) of a Preferred Share may, at the
election of the Company, be evidenced by depository 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 depository receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depository
receipts. In lieu of fractional Preferred Shares that are not integral multiples of one one-thousandth (0.001) of a Preferred Share, the Company shall pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of a Preferred Share. For purposes of this
Section 14(b), the current market value of a Preferred Share shall be (x) one thousand multiplied by (y) the closing price of a Common Share (as determined pursuant to the second
sentence of Section 1(j) hereof) for the Trading Day immediately prior to the date of such exercise. 

        (c)  The
Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares upon the exercise or exchange
of Rights. In lieu of such fractional Common Shares, the Company shall pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash
equal to 

21

 

the same fraction of the current market value of a Common Share. For purposes of this Section 14(c), the current market value of a Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 1(j) hereof) for the Trading Day immediately prior to the date of such exercise. 

        (d)  The
holder of a Right by the acceptance of the Right expressly waives his or her right to receive any fractional Rights or any fractional shares (other than fractions
that are integral multiples of one one-thousandth (0.001) of a Preferred Share) upon exercise of a Right. 

        Section
15    Rights of Action.    All rights of action in respect of this Agreement, excepting the rights of action
given to the Rights Agent pursuant to Section 18 hereof, are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the Common Shares), may, in his or her own behalf and for his or her own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect of, his or her right to exercise
the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations of, the obligations of any Person subject to this Agreement. 

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

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

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

        (c)  subject
to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent may deem and treat the person in whose name the Rights Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Shares certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary. 

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

22

 

until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with the provisions hereof. 

        Section
18.    Concerning the Rights Agent.    

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

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

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

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

23

  

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

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

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

        (b)  Whenever
in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the determination of Current Per Share Market Price) be proved or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such
certificate. 

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

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

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

        (f)    The
Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts,
instruments 

24

 

and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 

        (g)  The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Secretary or any Assistant Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Rights Agreement and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent in accordance with a proposal included in any such application on or after the date specified in such application (which
date shall not be less than five (5) Business Days after the date on which any officer of the Company actually receives such application, unless any such officer shall have consented in writing
to an earlier date) unless, prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted. 

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

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

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

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

        Section
21.    Change of Rights Agent.    The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days' notice in writing mailed to the Company and to each transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class mail. In the event the transfer agency relationship in effect between the Company and the Rights terminates, the Rights
Agent will be deemed to resign automatically on the effective date of such termination; and any required notice will be sent by the Company. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights Agent or successor 

25

 

Rights Agent, as the case may be, and to each transfer agent of the Preferred Shares and the Common Shares by registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of thirty (30) days after giving notice of such removal or after 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 his or her Rights Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. After appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Preferred Shares and the Common Shares, 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 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 

        Section
22.    Issuance of New Rights Certificates.    Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or
change in the Exercise Price and the number or kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of Common Shares following the Distribution Date and prior to the redemption or expiration of the Rights, the Company (a) shall,
with respect to Common Shares so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement or upon the exercise, conversion or exchange of other securities of
the Company outstanding at the date hereof or upon the exercise, conversion or exchange of securities hereinafter issued by the Company and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale;  provided, however, that
(i) no such Rights Certificate shall be issued and this sentence shall be null and void ab
initio if, and to the extent that, such issuance or this sentence would create a significant risk of or result in material adverse tax consequences to the Company or the Person
to whom such Rights Certificate would be issued or would create a significant risk of or result in such options' or employee plans' or arrangements' failing to qualify for otherwise available special
tax treatment and (ii) no such Rights Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof. 

        Section
23.    Redemption.    

        (a)  The
Company may, at its option and with the approval of the Board of Directors, at any time prior to the Close of Business on the earlier of (i) the fifth day
following the Shares Acquisition Date (or such later date as may be determined by action of the Company's Board of Directors and publicly announced by the Company) and (ii) the Final Expiration
Date, redeem all but not less than all the then outstanding Rights at a redemption price of $0.001 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being herein referred to as the "Redemption Price") and the Company may, at its option, pay the
Redemption Price either in Common Shares (based on the Current Per Share Market Price thereof at the time of redemption) or cash. Such 

26

 

redemption of the Rights by the Company may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. The date on which
the Board of Directors elects to make the redemption effective shall be referred to as the "Redemption Date."

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

        Section
24.    Exchange.    

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

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

27

 

which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights. 

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

        (d)  The
Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares. In lieu of such fractional
Common Shares, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional Common Shares would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Common Share (as determined pursuant to the second sentence of Section 1(j) hereof). 

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

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

28

 

        Section
25.    Notice of Certain Events.    

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

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

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

NeoMagic
Corporation

3250 Jay Street

Santa Clara, California 95054

Attn: Chief Financial Officer 

with
a copy to:

Wilson Sonsini Goodrich & Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, California 94304-1050

Attn: Michael J. Danaher 

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

EquiServe
Trust Company, N.A.

150 Royall Street

Canton, MA 02021

Attn: Client Administration 

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

        Section
27.    Supplements and Amendments.    Prior to the occurrence of a Distribution Date, the Company may
supplement or amend this Agreement in any respect without the approval of any holders of Rights and the Rights Agent shall, if the Company so directs, execute such supplement or amendment. From and
after the occurrence of a Distribution Date, the Company and the Rights Agent may from time to time supplement or amend this Agreement without the approval of any holders of Rights in order to
(i) cure any ambiguity, (ii) correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) shorten or
lengthen any time period hereunder or (iv) to change or supplement the provisions hereunder in any manner that the Company may deem necessary or desirable and that shall not adversely affect
the interests of the holders of Rights (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person); 

29

 

 provided, this Agreement may not be supplemented or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when the Rights
may be redeemed at such time as the Rights are not then redeemable or (B) any other time period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon the delivery of a certificate from an appropriate officer of
the Company that states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of Common Shares. 

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

        Section
29.    Determinations and Actions by the Board of Directors, etc.    For all purposes of this Agreement, any
calculation of the number of Common Shares outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Common Shares of which any
Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The
Board of Directors of the Company shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board, or the Company, or
as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power (i) to interpret the provisions of this Agreement and (ii) to
make all determinations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights Certificates and all other parties and (y) with respect to claims
specifically arising from the Agreement, not subject the Board to any liability to the holders of the Rights. 

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

        Section
31.    Severability.    If any term, provision, covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything in this Agreement to the contrary, if
any such term, provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable and the Board of Directors of the Company determines in its good faith
judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the Close of Business on the tenth day following the date of such determination by the Board of Directors. 

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

30

 

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

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

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

31

 

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

	"COMPANY"	 	NEOMAGIC CORPORATION

	

 	
 	

By:	

/s/  STEPHEN T. LANZA      

	

 	
 	

Name:	

Stephen T. Lanza

	

 	
 	

Title:	

Chief Financial Officer

	
"RIGHTS AGENT"	
 	
EQUISERVE TRUST COMPANY, N.A.

	

 	
 	

By:	

/s/  MARGARET PRENTICE      

	

 	
 	

Name:	

Margaret Prentice

	

 	
 	

Title:	

Managing Director

32

 
 

EXHIBIT A

CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES AND PRIVILEGES OF SERIES A PARTICIPATING PREFERRED STOCK OF NEOMAGIC CORPORATION  

        The undersigned, [            ], does hereby certify: 

        1.    That
he/she is duly elected and
acting            of                        ,
a            corporation (the  "Corporation").
 

        2.    That
pursuant to the authority conferred upon the Board of Directors by the Amended and Restated Certificate of Incorporation of the said Corporation, the said Board of
Directors of the Corporation on December 19, 2002, adopted the following resolutions creating a series of            shares of Preferred Stock designated as Series A Participating
Preferred Stock: 

        "RESOLVED,
that pursuant to the authority vested in the Board of Directors of the corporation by the Amended and Restated Certificate of Incorporation, the Board of Directors does hereby
provide for the issue of a series of Preferred Stock of the Corporation and does hereby fix and herein state and express the designations, powers, preferences and relative and other special rights and
the qualifications, limitations and restrictions of such series of Preferred Stock as follows: 

        Section 1.    Designation and Amount.    The shares of such series shall be designated as  "Series A Participating Preferred Stock." The Series A Participating Preferred Stock shall have a par value of $0.001 per share, and the
number of shares constituting such series shall be            . 

        Section 2.    Proportional Adjustment.    In the event that the Corporation shall at any time after the
issuance of any share or shares of Series A Participating Preferred Stock (i) declare any dividend on Common Stock of the Corporation ("Common
Stock") payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Corporation shall simultaneously effect a proportional adjustment to the number of outstanding shares of Series A Participating Preferred Stock. 

        Section 3.    Dividends and Distributions.    

        (a)  Subject
to the prior and superior right of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A
Participating Preferred Stock with respect to dividends, the holders of shares of Series A Participating Preferred Stock shall be entitled to receive when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of January, April, July, and October in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times
the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Participating Preferred Stock. 

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

        (c)  Dividends
shall begin to accrue on outstanding shares of Series A Participating Preferred Stock from the Quarterly Dividend Payment Date 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 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 30 days prior to the date fixed for the payment thereof. 

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

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

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

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

        Section 5.    Certain Restrictions.    

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

        (b)  Whenever
quarterly dividends or other dividends or distributions payable on the Series A Participating Preferred Stock as provided in Section 3 are in
arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Participating Preferred Stock outstanding shall have been paid
in full, the Corporation shall not 

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

        (ii)  declare
or pay dividends on, 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; 

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

2

 

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; 

        (iv)  purchase
or otherwise acquire for consideration any shares of Series A Participating Preferred Stock, or any shares of stock ranking on a parity with the
Series A Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares 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. 

        (c)  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 paragraph (a) of this Section 5, purchase or otherwise acquire such shares at such time and in such manner. 

        Section 6.    Reacquired Shares.    Any shares of Series A Participating Preferred Stock purchased or
otherwise acquired by the 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 and in the Amended and Restated Certificate of Incorporation, as then amended. 

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

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

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

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

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

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

3

 

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

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

        Executed
at            , California on    , 2002. 

	 	
 NAME

TITLE

4

 
 

EXHIBIT B
  FORM OF RIGHTS CERTIFICATE    
  

	Certificate No. R-	 	                         Rights

NOT
EXERCISABLE AFTER THE EARLIER OF (i) JANUARY 10, 2013, (ii) THE DATE TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES THE RIGHTS PURSUANT TO THE RIGHTS
AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
RIGHTS AGREEMENT.]* 

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

 
 

RIGHTS CERTIFICATE
  NeoMagic 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 Rights Agreement dated as of December 19, 2002, (the "Rights Agreement"), between
NeoMagic Corporation, a Delaware corporation (the "Company"), and EquiServe Trust Company, N.A. (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., New York time, on
January 10, 2012 at the office of the Rights Agent designated for such purpose, or at the office of its successor as Rights Agent, one one-thousandth (0.001) of a fully paid and
non-assessable share of Series A Participating Preferred Stock, par value $0.001 per share (the "Preferred Shares"), of the Company,
at an Exercise Price of $25.00 per one-thousandth (0.001) of a Preferred Share (the "Exercise Price"), upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The number of Rights evidenced by this Rights Certificate (and the number of
one-thousandths (0.001) of a Preferred Share which may be purchased upon exercise hereof) set forth above are the number and Exercise Price as of January 10, 2002 based on the
Preferred Shares as constituted at such date. As provided in the Rights Agreement, the Exercise Price and the number and kind of Preferred Shares or other securities 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 Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances
set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the above-mentioned office of the Rights Agent. 

 

        Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Rights Certificate (i) may be redeemed by the Company, at its option, at a redemption price of
$0.001 per Right or (ii) may be exchanged by the Company in whole or in part for Common Shares, substantially equivalent rights or other consideration as determined by the Company. 

        This
Rights Certificate, with or without other Rights Certificates, upon surrender at the office of the Rights Agent designated for such purpose, 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 amount of securities 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. 

        No
fractional portion of less than one one-thousandth (0.001) of a Preferred Share will be issued upon the exercise of any Right or Rights evidenced hereby but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement. 

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

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

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

	ATTEST:	 	NeoMagic Corporation
	

        
 Secretary	
 	

By:	
 	

        

	

 	
 	

 	
 	

Its:	
 	

        

	

Countersigned:	
 	

 	
 	

 
	

EquiServe Trust Company, N.A.

as Rights Agent	
 	

 	
 	

 
	

By:	
 	

        
	
 	

 	
 	

 
	

Its:	
 	

        
	
 	

 	
 	

 

2

 
 

Form of Reverse Side of Rights Certificate    
  

 
 

FORM OF ASSIGNMENT    
  

(To
be executed by the registered holder if such

holder desires to transfer the Rights Certificate) 

        FOR
VALUE RECEIVED            hereby sells, assigns and transfers unto 

	
 (Please print name and address of transferee)

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

	Dated:                         ,
            	 	 
	

 	
 	

 Signature

Signature
Guaranteed: 

        Signatures
must be guaranteed by an "Eligible Guarantor Institution" (with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of
the Securities Exchange Act of 1934, as amended. 

 
 

CERTIFICATE    
  

        The undersigned hereby certifies by checking the appropriate boxes that: 

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

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

	Dated:                         ,
            	 	 
	

 	
 	

 Signature

Signature
Guaranteed: 

        Signatures
must be guaranteed by an "Eligible Guarantor Institution" (with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of
the Securities Exchange Act of 1934, as amended. 

 
 

Form of Reverse Side of Rights Certificate—continued    
  

 
 

FORM OF ELECTION TO PURCHASE    
  

(To
be executed if holder desires to

exercise the Rights Certificate) 

To:
                         

        The
undersigned hereby irrevocably elects to exercise                        Rights represented by this Rights Certificate to purchase
the number of one-thousandths (0.001) of a
Preferred Share issuable upon the exercise of such Rights and requests that certificates for such number of one-thousandths (0.001) of a Preferred Share 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
Guaranteed: 

        Signatures
must be guaranteed by an "Eligible Guarantor Institution" (with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of
the Securities Exchange Act of 1934, as amended. 

 
 

CERTIFICATE    
  

        The undersigned hereby certifies by checking the appropriate boxes that: 

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

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

	Dated:                         ,
            	 	 
	

 	
 	

 Signature

Signature
Guaranteed: 

        Signatures
must be guaranteed by an "Eligible Guarantor Institution" (with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of
the Securities Exchange Act of 1934, as amended. 

 
 

Form of Reverse Side of Rights Certificate—continued    
  

 
 

NOTICE    
  

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

 
 

EXHIBIT C    
  

STOCKHOLDER RIGHTS PLAN

NeoMagic Corporation

Summary of Rights  

	Distribution and Transfer of Rights; Rights Certificate:	 	The Board of Directors has declared a dividend of one Right for each share of Common Stock of NeoMagic Corporation (the "Company") outstanding. Prior to the
Distribution Date referred to below, the Rights will be evidenced by and trade with the certificates for the Common Stock. After the Distribution Date, the Company will mail Rights certificates to the Company's stockholders and the Rights will become
transferable apart from the Common Stock.
	

Distribution Date:	
 	

Rights will separate from the Common Stock and become exercisable following (a) the tenth business day (or such later date as may be determined by the Company's Board of Directors) after a person or group acquires beneficial ownership of 15% or more
of the Company's Common Stock or (b) the tenth business day (or such later date as may be determined by the Company's Board of Directors) after a person or group announces a tender or exchange offer, the consummation of which would result in
ownership by a person or group of 15% or more of the Company's Common Stock.
	

Preferred Stock Purchasable Upon Exercise of Rights:	
 	

After the Distribution Date, each Right will entitle the holder to purchase for $25.00 (the "Exercise Price"), a fraction of a share of the Company's Preferred Stock with economic terms similar to
that of one share of the Company's Common Stock.
	

Flip-In:	
 	

If an acquirer (an "Acquiring Person") obtains 15% or more of the Company's Common Stock, then each Right (other than Rights owned by an Acquiring
Person or its affiliates) will entitle the holder thereof to purchase, for the Exercise Price, a number of shares of the Company's Common Stock having a then-current market value of twice the Exercise Price.
	

Flip-Over:	
 	

If, after an Acquiring Person obtains 15% or more of the Company's Common Stock, (a) the Company merges into another entity, (b) an acquiring entity merges into the Company or (c) the Company sells more than 50% of the Company's assets or earning
power, then each Right (other than Rights owned by an Acquiring Person or its affiliates) will entitle the holder thereof to purchase, for the Exercise Price, a number of shares of Common Stock of the
person engaging in the transaction having a then current market value of twice the Exercise Price.
	

Exchange Provision:	
 	

At any time after the date on which an Acquiring Person obtains 15% or more of the Company's Common Stock and prior to the acquisition by the Acquiring Person of 50% of the outstanding Common Stock, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by the Acquiring Person or its affiliates), in whole or in part, for shares of Common Stock of the Company at an exchange ratio of one share of Common Stock per Right (subject to adjustment).
	
 	
 	

 

 

	

Redemption of the Rights:	
 	

Rights will be redeemable at the Company's option for $0.001 per Right at any time on or prior to the fifth day (or such later date as may be determined by the Company's Board of Directors) after public announcement that a Person has acquired
beneficial ownership of 15% or more of the Company's Common Stock (the "Shares Acquisition Date").
	

Expiration of the Rights:	
 	

The Rights expire on the earliest of (a) January 10, 2013 or (b) exchange or redemption of the Rights as described above.
	

Amendment of Terms of Rights:	
 	

The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the Rights holders on or prior to the Distribution Date; thereafter, the terms of the Rights and the Rights Agreement may be amended without the
consent of the Rights holders in order to cure any ambiguities or to make changes which do not adversely affect the interests of Rights holders (other than the Acquiring Person).
	

Voting Rights:	
 	

Rights will not have any voting rights.
	

Anti-Dilution Provisions:	
 	

Rights will have the benefit of certain customary anti-dilution provisions.
	

Taxes:	
 	

The Rights distribution should not be taxable for federal income tax purposes. However, following an event which renders the Rights exercisable or upon redemption of the Rights, stockholders may recognize taxable income.

The
foregoing is a summary of certain principal terms of the Stockholder Rights Plan only and is qualified in its entirety by reference to the Preferred Stock Rights Agreement dated as of
December 19, 2002, between the Company and EquiServe Trust Company, N.A. as Rights Agent (the "Rights Agreement"). The Rights Agreement may be
amended from time to time. A copy of the Rights Agreement was filed with the Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A dated December 23, 2002. A copy of the Rights Agreement is available free of charge from the Company. 

2

QuickLinks

Exhibit 4.1

TABLE OF CONTENTS

PREFERRED STOCK RIGHTS AGREEMENT

EXHIBIT A

EXHIBIT B FORM OF RIGHTS CERTIFICATE

RIGHTS CERTIFICATE NeoMagic Corporation

Form of Reverse Side of Rights Certificate

FORM OF ASSIGNMENT

CERTIFICATE

Form of Reverse Side of Rights Certificate—continued

FORM OF ELECTION TO PURCHASE

CERTIFICATE

Form of Reverse Side of Rights Certificate—continued

NOTICE

EXHIBIT CQuickLinks
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Exhibit 10.1  

Loan
Agreement dated December 10, 2002 between the Operating Partnership and

Equitable Life Insurance Company of Iowa and Security Life of Denver Insurance Company. 

 
 
 
LOAN AGREEMENT  

by and among  

GREAT LAKES REIT, L.P.,
  a Delaware limited partnership  

 and  

EQUITABLE LIFE INSURANCE COMPANY OF IOWA,
  an Iowa corporation,  

 and  

SECURITY LIFE OF DENVER INSURANCE COMPANY,
  a Colorado corporation  

 Dated as of December 10, 2002  

LOAN AGREEMENT  

        THIS AGREEMENT is made and entered into as of December 10, 2002 by and among GREAT LAKES REIT, L.P.,
a Delaware limited partnership ( "Borrower"), and EQUITABLE LIFE INSURANCE COMPANY OF IOWA, an Iowa corporation
("Equitable"), and SECURITY LIFE OF DENVER INSURANCE COMPANY, a Colorado corporation ("Security Life")
(collectively "Lender"). 

WITNESSETH:  

        WHEREAS, Borrower, has requested that Lender make that certain loan (the
"Loan") to Borrower in the aggregate principal amount of $165,000,000.00, and 

        WHEREAS, Lender is willing to make the Loan to Borrower on the terms and subject to the conditions and requirements set forth in this
Agreement. 

        NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties to this Agreement hereby agree as
follows: 

DEFINITIONS; CONSTRUCTION  

        Definitions. For purposes of this Agreement, the following terms shall have the
indicated meanings as set forth below: 

        "Affiliate" shall mean any corporation, limited liability company, partnership or other entity which is controlling of, controlled by or
under common control with Borrower. 

        "Agreement" shall mean this Loan Agreement, as amended, supplemented or modified from time to time. 

        "Assignment of Management Agreement" shall mean, the Assignment, Consent and Subordination Regarding Management Agreement executed this
date by Borrower in favor of Lender, and any modifications or replacements thereof or therefor. 

        "Assignments of Rents and Leases" shall mean the Assignment of Rents and Leases executed this date by Borrower in favor of Lender. 

        "Borrower" shall have the meaning given such term in the preamble to this Agreement and shall include its successors and assigns. 

        "Business Day" shall mean any day excluding Saturday, Sunday and any other day on which banks in Atlanta, Georgia are customarily closed. 

        "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. 

        "Collateral" shall mean any and all of the property which is granted, pledged or assigned to Lender or in which Lender is otherwise
granted a Lien to secure the obligations pursuant to any and all of the Security Documents. 

        "Default" shall mean any condition or event which, with notice or lapse of time or both, would constitute an Event of Default. 

        "Environmental Indemnification Agreement" shall mean collectively the Environmental Indemnification Agreements executed this date by
Borrower in favor of Lender, and any extensions, renewals, modifications or replacements thereof or therefor. 

        "Event of Default" shall have the meaning provided in Article VII hereof. 

        "Improvements" shall mean all improvements constructed on the Land. 

        "Land" shall mean, collectively, all of the real property described and defined as "Land" in the Mortgage. 

        "Leases" shall have the meaning given such term in the Security Instruments. 

 

        "Lender" shall have the meaning given such term in the preamble to this Agreement and shall include such Persons' successors and assigns. 

        "Lien" shall mean any mortgage, deed to secure debt, Mortgage, pledge, security interest, security deposit, encumbrance, lien or charge of
any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction). 

        "Loan" shall have the meaning given such term in the preamble to this Agreement. 

        "Loan Documents" shall mean, collectively, this Agreement, the Note, the Security Documents, and any other certificates or written
undertakings of Borrower in favor of Lender delivered contemporaneously with the delivery of this Agreement, other than the Environmental Indemnification Agreement. 

        "Material Adverse Effect" shall mean a material adverse effect upon, or a material adverse change in, any of the (i) results of
operations, properties, or financial condition of Borrower, (ii) validity, binding effect or enforceability of any Loan Document or the Environmental Indemnification Agreement, or
(iii) ability of Borrower to perform its payment obligations or other Obligations under the Loan Documents or the Environmental Indemnification Agreement. 

        "Mortgage" shall mean collectively the Mortgages, Security Agreements, Financing Statements, and Fixture Filings executed this date by
Borrower for the benefit of Lender, to be recorded in the real estate records of the county where the Property is located, and any extensions, renewals, modifications or replacements thereof or
therefor. 

        "Note" shall mean collectively, Note A, Note B, Note C and Note D. 

        "Note A" shall mean Promissory Note A executed by Borrower and payable to the order of Equitable in the original principal amount of
$35,000,000.00 as evidence of a portion of the Loan, and any extensions, renewals, modifications or replacements thereof or therefor. 

        "Note B" shall mean Promissory Note B executed by Borrower and payable to the order of Equitable in the original principal amount of
$40,000,000.00 as evidence of a portion of the Loan, and any extensions, renewals, modifications or replacements thereof or therefor. 

        "Note C" shall mean Promissory Note C executed by Borrower and payable to the order of Security Life in the original principal amount of
$50,000,000.00 as evidence of a portion of the Loan, and any extensions, renewals, modifications or replacements thereof or therefor. 

        "Note D" shall mean Promissory Note D executed by Borrower and payable to the order of Security Life in the original principal amount of
$40,000,000.00 as evidence of a portion of the Loan, and any extensions, renewals, modifications or replacements thereof or therefor. 

        "Obligations" shall mean, collectively, all amounts now or hereafter owing to Lender by Borrower pursuant to the terms of or as a result
of this Agreement, the Note, or any other Loan Documents or the Environmental Indemnification Agreement, including without limitation, the unpaid principal balance of the Loan and all interest, fees,
expenses and other charges relating thereto or accruing thereon, as well as any and all other indebtedness, liabilities, covenants, duties and obligations of Borrower, whether direct or indirect,
absolute or contingent, or liquidated or unliquidated, monetary or non-monetary, which may be now existing or may hereafter arise under or as a result of any of the Loan Documents, the Environmental
Indemnification Agreement, and together with any and all renewals, extensions, or modifications of any of the foregoing. 

2

 

        "Person" shall mean any individual, partnership, limited partnership, limited liability company, firm, corporation, association, joint
venture, trust or other entity, or any government or political subdivision or agency, department or instrumentality thereof. 

        "Property" shall mean, collectively, the property, including the Land and all improvements, fixtures and related personal property located
thereon. 

        "Requirements" shall have the meaning given such term in Section 4.12 hereof. 

        "Security Documents" shall mean, collectively, the Security Instruments, the Assignment of Management Agreement, and each other affidavit,
certificate, security, mortgage, assignment, financing statements or other collateral document, whether now existing or hereafter executed and delivered in connection with, or securing any or all of,
the Obligations. 

        "Security Instruments" shall mean, collectively, the Mortgage, the Assignment of Rents and Leases, the UCC Financing Statements, and other
security instruments executed this date by Borrower in favor of Lender, to be recorded in the real estate records of the county where the Property is located, and any extensions, renewals,
modifications or replacements thereof or therefor. 

        "Taxes" shall mean any present or future taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges of
whatever nature, now or hereafter imposed or levied by the United States of America, or any state or local government or by any department, agency or other political subdivision or taxing authority
thereof or therein and all interest, penalties, additions to tax and similar liabilities with respect thereto other than taxes on the income of Lender. 

        Other Definitional Terms.    The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole, and not to any particular provision of this Agreement. Any pronoun used herein shall be deemed to cover all genders and all
singular terms used herein shall include the plural and vice versa. Unless otherwise expressly indicated herein, all references herein to a period of time which runs "from" or "through" a particular
date shall be deemed to include such date, and all references herein to a period of time which runs "to" or "until" a particular date shall be deemed to exclude such date. 

LOANS  

        Section 1.01    Disbursement.    Subject to the terms and conditions of this Agreement,
Lender agrees to advance to Borrower the Loan in accordance with the terms and provisions of the Note. 

        Section 1.02    Note; Repayment of Principal and Interest.    Borrower's obligations to
pay to Lender the principal of and interest on the Loan shall be evidenced by the Note. The Loan shall bear interest at the rate or rates per annum specified in the Note and such interest shall be
calculated and shall be paid and shall accrue in the manner specified in the Note. 

3

   ARTICLE II  

GENERAL TERMS  

        Section 2.01    Fees.    In consideration of Lender's entering into this Agreement and
making the Loan hereunder, Borrower agrees to pay (from deposits previously delivered to Lender) to Lender, on the date of the funding of the Loan hereunder, a processing fee in the amount set forth
in the Agreement, which processing fee shall be deemed fully earned upon Lender's execution and delivery of this Agreement and the funding of the Loan. 

        Section 2.02    Payments, Prepayments and Computations.    Except as may be otherwise
specifically provided herein, all payments by Borrower with respect to the Loan or any other Obligations under this Agreement or any of the other Loan Documents or the Environmental Indemnification
Agreement shall be made without defense, set-off or counterclaim to Lender not later than 2:00 p.m. (Eastern Time) on the date when due and shall be made in lawful money of the United States of
America in immediately available funds. Any payment received by Lender on a non-Business Day or after 2:00 p.m. (Eastern Time) on any Business Day shall be deemed received by Lender at the
opening of its business on the next Business Day. Whenever any payment to be made hereunder or under the Note or any of the other Loan Documents or the Environmental Indemnification Agreement shall be
stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest thereon shall be
payable at the applicable rate during such extension. Interest shall be calculated on the basis of a year consisting of 360 days and with twelve thirty-day months, except that interest due and payable
for less than a full month shall be calculated by multiplying the actual number of days elapsed in such period by a daily interest rate based on a 360-day year. The Loan may not be prepaid in whole or
in part except as specifically provided in the Note. 

        Section 2.03    Collateral.    The Obligations shall be secured pursuant to any or all
Security Documents. Borrower also shall execute or deliver (or cause to be executed and delivered) any and all financing
statements and such other documents as Lender may reasonably request from time to time in order to perfect or maintain the perfection of Lender's Liens under such Security Documents. 

        Section 2.04    Agreements Regarding Interest and Other Charges.    Borrower and Lender
hereby agree that the only charges imposed or to be imposed by Lender upon Borrower for the use of money in connection with the Loan is and will be the interest required to be paid under the
provisions of this Agreement as well as the related provisions of the Note. In no event shall the amount of interest due and payable under this Agreement, the Note or any of the other Loan Documents
or the Environmental Indemnification Agreement exceed the maximum rate of interest allowed by applicable law. It is the express intent hereof that Borrower not pay and Lender not receive, directly or
indirectly or in any manner, interest in excess of that which may be lawfully paid under applicable law. Any and all charges, fees, and other amounts payable hereunder not identified as "interest" are
not intended, and shall not be deemed, to be interest. All interest, and all other charges, fees or other amounts deemed to be interest notwithstanding the preceding sentence, which are paid or agreed
to be paid to Lender under this Agreement, the Note or any of the other Loan Documents shall, to the maximum extent permitted by applicable law, be amortized, allocated and spread on a  pro rata basis
throughout the entire actual term of the Loan (including any extension or renewal period), or at Lender's election and to the extent
permitted by applicable law, credited as a payment of principal. 

        Section 2.05    Letter of Credit.    In the event Lender requires or agrees to accept a
letter of credit with respect to the Loan, said letter of credit, and any extension, renewal, or replacement thereof, shall be an unconditional, irrevocable letter of credit issued by a bank approved
by Lender and in substance and form acceptable to Lender. Any such letter of credit shall not contain any conditions for its cashing beyond presentation by its authorized representative. Its term
shall be for not less than three 

4

 

(3) months beyond the end of the time period, or any extension thereof, specified by Lender for satisfaction of such requirement. 

        Section 2.06    Prohibition on Dry Cleaners.    Borrower shall not, during the term of
the Loan, conduct or permit any tenant to conduct any dry cleaning operations on or at the Property. 

        Section 2.07    Property Release Privilege.    Provided no Event of Default (as
hereinafter defined) exists, Borrower shall be allowed, subsequent to the Lockout Period in Note A and Note B (as those terms are defined in Note A and Note B,
respectively), to partially prepay the Loan, upon thirty (30) days prior written notice to Lender ("Release Request"), and to thereby obtain a
partial release of the Mortgage of any parcel of Property securing the Loan (the "Release Privilege") subject to the following conditions: 

	(i)
	The
total principal amount of the Loan to be funded pursuant to this Agreement is hereby allocated by Lender to each Property comprising the security
hereunder in the following initial amounts
("Principal Allocation"), resulting in the following percentages of the total Loan amount ("Allocation
Percentage") for each parcel as follows: 

	PROPERTY
	 	PRINCIPAL

ALLOCATION
	 	ALLOCATION

PERCENTAGE
	 
	(1)	 	191 Waukegan Building	 	$	2,850,000	 	1.73	%
	(2)	 	823 Commerce Building	 	$	3,240,000	 	1.96	%
	(3)	 	Arlington Business Center	 	 	 	 	 	 
	 	 	(a)  3455 Salt Creek Lane	 	$	1,578,000	 	0.96	%
	 	 	(b)  3550 Salt Creek Lane	 	$	1,532,000	 	0.92	%
	(4)	 	Bannockburn Corporate Center	 	$	18,820,000	 	11.41	%
	(5)	 	Centennial Center	 	$	20,120,000	 	12.19	%
	(6)	 	Highpoint Business Center	 	 	 	 	 	 
	 	 	(a)  165 Hansen Court	 	$	1,162,000	 	0.70	%
	 	 	(b)  175 Hansen Court	 	$	1,162,000	 	0.70	%
	 	 	(c)  185 Hansen Court	 	$	1,906,000	 	1.16	%
	(7)	 	Kensington Corporate Center	 	$	3,780,000	 	2.29	%
	(8)	 	Lisle Office Center	 	$	9,180,000	 	5.56	%
	(9)	 	One Century Centre	 	$	12,915,000	 	7.83	%
	(10)	 	1111 Touhy Building	 	$	6,490,000	 	3.93	%
	(11)	 	Brookfield Lakes Corporate Ctr	 	 	 	 	 	 
	 	 	(a)  150 Patrick Boulevard	 	$	1,908,000	 	1.16	%
	 	 	(b)  175 Patrick Boulevard	 	$	1,639,000	 	0.99	%
	 	 	(c)  250 Patrick Boulevard	 	$	1,818,000	 	1.10	%
	(12)	 	Corporate Woods	 	$	2,995,000	 	1.82	%
	(13)	 	One Riverwood Place	 	$	7,690,000	 	4.66	%
	(14)	 	Two Riverwood Place	 	$	6,885,000	 	4.17	%
	(15)	 	777 Eisenhower Building	 	$	16,365,000	 	9.92	%
	(16)	 	Tri-Atria Center	 	$	15,985,000	 	9.69	%
	(17)	 	Court International	 	$	18,825,000	 	11.41	%
	(18)	 	Princeton Hill Corporate Center	 	$	6,155,000	 	3.73	%
	 	 	
	 	
	 	
	 
	 	 	    TOTAL	 	$	165,000,000	 	100.00	%
	 	 	
	 	
	 	
	 

As
monthly installments of principal and interest are made in accordance with the terms and conditions of the Note and Loan Documents, the outstanding principal balance of Note A,
Note B, Note C and Note D will reduce in accordance with the amounts paid pursuant to the terms of subparagraph (i) of this  Section 3.07 above (and/or any exercised options under 

5

 

 Section 3.08 of this Agreement and the Conversion Section and the Fixed Rate Section, as those terms are defined in the Note), and such that the combined principal
balance is thereby reduced (subject to the Available Line, as defined below). Each of the eighteen (18) parcels listed in Schedule I attached
hereto and made a part hereof serves as collateral for the entire Loan. Accordingly, in order to release a particular parcel of the Property, the Borrower must pay a Release Price, as hereinafter
defined, plus any applicable prepayment premium determined in the manner set forth below. 

	(ii)
	Promptly
following Lender's receipt of Borrower's Release Request, Lender shall determine the release price (the "Release
Price") payable for each parcel of Property, which shall be an amount equal the product of multiplying a release factor of one hundred ten percent (110%)
("Release Factor") (except as otherwise provided in subparagraph (viii) of this  Section 3.07 times the combined outstanding principal balance of Note A, Note B, Note C and Note D (inclusive of any undrawn
but available funds under the Note D revolving line of credit up to the Revolver Limit, hereinafter the "Available Line") times the Allocation
Percentage for the particular parcel of the Property proposed to be released. For example, if Borrower submitted a request for a release of Property (1) 191 Waukegan Building in accordance with
the conditions herein set forth, the calculation would be as follows: 

	

 	
 	

(a)	
 	

Release Price =	

Combined Outstanding Principal Balance of Note A, Note B, Note C and Note D (plus the Available Line) x 110% x Allocation Percentage
	

 	
 	

(b)	
 	

Assuming a combined principal balance (plus Available Line) of $150,000,000, the Property (1) Release Price would be calculated as:

$150,000,000 x 1.10 x 1.73%: or $2,854,500 

	(iii)
	In
addition to the Release Price, Borrower also shall pay to Lender, simultaneously with the Release Price, the applicable Note A,
Note B, Note C or Note D Prepayment Premium (and/or Fixed Prepayment Premium, if applicable) on such Release Price calculated in accordance with the prepayment privilege (and/or
Fixed Prepayment Premium, if applicable) terms as set forth in the applicable Note, as provided in subparagraph (iv) in this  Section 3.04;

	(iv)
	Except
as otherwise herein provided, Borrower shall have the right to apply the Release Price to the Loan in such manner as Borrower may determine in
its sole discretion.

	(a)
	The
Release Price will first be applied to Note C, until Note C is paid in full.

	(b)
	In
the event any of Note A, Note B or Note D is paid down by application of a Release Price below an outstanding principal amount of $5,000,000, thereafter
payment of any further Release Price shall be applied to such note until such note is paid in full.

	(c)
	In
the event the Release Price is applied to Note D, notwithstanding the principal balance of Note D then outstanding under the revolving line of credit, the Release
Price shall be first used to reduce, permanently, the outstanding credit line available to Borrower, lowering the Revolver Limit (for example, if the balance of Note D is $8,000,000 with
another $32,000,000 available to be drawn at the time of the release and the Release Price to be applied to Note D is $4,000,000, the Revolver Limit shall first be reduced from $40,000,000 to
$36,000,000 and $8,000,000 may remain outstanding, with the Borrower to retain the proceeds after Lender's costs and expenses are paid in accordance herewith)(for further example, if the balance of
Note D is $35,000,000 with another $5,000,000 available to be drawn at the time of the release and the Release Price to be applied to Note D is $7,000,000, the Revolver Limit shall first
be reduced from 40,000,000 to $33,000,000 and $2,000,000 of the Release Price shall be paid to Lender to be applied to reduce the principal balance of Note D to the lowered Revolver Limit, with
the 

6

 

remaining
proceeds to be retained by Borrower after Lender's costs and expenses are paid in accordance herewith). 

	(v)
	After
the Lender has applied the Release Price to the Loan, Lender shall redetermine and reallocate the Allocation Percentages for the
remaining parcels of Property, in its sole discretion, and shall advise Borrower in writing within thirty (30) days of receipt of the Release Request as to the amounts of the reallocated
Allocation Percentages.

	(vi)
	Borrower
shall pay all costs, fees and expenses associated with the Release Privilege, including without limitation, 100% of all
attorneys' fees and expenses incurred by or on behalf of Lender in connection therewith, and all such sums shall be due and payable on the date of closing of the release and delivery of the release
documentation by Lender;

	(vii)
	Borrower
shall provide Lender with an endorsement to its loan title policy with respect to the remaining parcels in form and substance
satisfactory to Lender in its sole discretion insuring the Loan through the date and time of recording of the release and modification instrument, with no new exceptions since the original Loan
closing unless approved by Lender in writing. To the extent that a released Property adjoins a remaining parcel or shared common areas, parking, utilities or amenities or services with a remaining
parcel of Property, such endorsement will also (a) insure that the remaining Property has access to the same publicly dedicated streets as it did prior to the release, and (b) amend the
legal description to include only the remaining parcels. The remaining parcel shall also be in full compliance with all applicable laws (including, without limitation, zoning and subdivision laws) and
shall be a separate tax parcel; and

	(viii)
	Notwithstanding
the provisions of subparagraph (ii) above, the Release Factor on
the first $15,000,000 in principal of the Loan in the aggregate shall be at a Release Factor of 100% rather than 110%. 

        Section 2.08    Substitution of Collateral.    Notwithstanding the provisions of this
Agreement or any of the Loan Documents to the contrary, Borrower may submit a written request ("Substitution Request"), upon at least ninety (90) days
prior notice, that Lender permit a substitution (each a "Substitution") of a substitute property (each a "Substitute
Property") (which previously has not been the subject of inclusion in the collateral for the Loan) for any individual Property on Schedule I (in such capacity a
"Replaced Property") upon and subject to the following terms and conditions: 

	(a)
	Borrower
must submit a Substitution Request, identifying the proposed Substitute Property and the proposed Replaced Property at least ninety (90) days prior to the proposed closing
date for the Substitution. Lender shall evaluate the request for the proposed Substitution and the proposed Substitute Property pursuant to its then customary underwriting and pricing criteria. The
amount of the "Principal Allocation" Lender would determine to allocate to the Substitute Property must be at least
equal to the amount of the then remaining Principal Allocation for the proposed Replaced Property, and the loan-to-value ratio for the Lender's proposed Principal Allocation for the Substitute
Property, based upon a current MAI appraisal in accordance with subparagraph (b) below, must be at least equal to the then current loan-to-value
ratio for the proposed Replaced Property. In its underwriting and pricing analysis, Lender may review items such as, but not limited to, location, occupancy, lease term, rollover, tenant exposure and
tenant's credit.

	(b)
	The
owner of the Substitute Property must be the Borrower (such that the Substitute Property is owned 100% by the same entity as owns all the collateral constituting the Property). No
special purpose properties will be permitted (for example, hotels, health or 

7

 

senior
care facilities, or mobile home parks). The Substitute Property must be located in the continental United States and may not be located in Texas, Florida or New York. 

	(c)
	Lender
in its sole discretion shall acknowledge within ten (10) business days of the Lender's receipt of the Substitution Request whether the proposed Substitute Property appears to
be acceptable to permit the Substitution. If in the Lender's sole discretion it is determined that the proposed Substitute Property is equal to or greater in value and quality than the Property, then
Lender, through its loan correspondent, Northmarq Capital Inc. will process the Borrower's formal request for Substitution. The proposal will be reviewed by and presented to Lender's and ING
Investment Management LLC's investment review committees pursuant to each of their then current commercial mortgage loan policies, practices, standards and procedures. If the investment review
committee approves the formal request for Substitution, the Substitution will be subject to the other conditions outlined herein.

	(d)
	No
more than two (2) Substitution Requests shall be considered in any calendar year for the entire Loan.

	(e)
	Borrower
shall not be permitted to request and close more than a total of nine (9) Substitutions during the Loan term.

	(f)
	Borrower
shall pay a processing fee to Lender equal to $25,000 at closing of each approved Substitution. A "Substitution Deposit" of
$5,000 shall be required with submission of a Substitution Request, which deposit shall be applied to the processing fee at closing of the Substitution. The deposit and processing fee contemplated by
this subparagraph are in addition to attorneys' fees and expenses incurred in the documentation of such Substitution and in the review of due diligence.

	(g)
	All
improvements on the Substitute Property shall have been completed in a good and workmanlike manner and in compliance, in all material respects, with all applicable governmental
requirements. The Substitute Property must be lien free and all land, improvements and personal property must be paid for in full.

	(h)
	The
appraised fair market "As Is" value of the Substitute Property shall be equal to or greater than the greater of (x) the then appraised fair market value, or gross sales proceeds,
as the case may be, of the Replaced Property, and (y) the original appraised value of the Replaced Property as set forth in the appraisal delivered to Lender in connection with the closing of this
Loan. The fair market "As Is" value of the Replaced Property and Substitute Property shall be determined by a firm of appraisers selected by Northmarq Capital Inc. and approved by the Lender, based on
an MAI appraisal satisfactory to Lender, dated not more than ninety (90) days prior to the closing of the Substitution. All costs of such appraisals shall be paid by the Borrower on or prior to the
closing of the Substitution. Lender shall have the right to readjust the Principal Allocations and Allocation Percentages for all eighteen (18) properties (or such number remaining if the Release
Privilege previously has been exercised). The Release Factor set forth in Section 3.07 subparagraph (i) above shall remain the same upon
closing of the Substitution.

	(i)
	The
actual net operating income relating to the Substitute Property (based upon the trailing twelve (12) month financial results or such shorter period, as Lender deems appropriate,
for a Substitute Property opened for less than one year) shall equal or exceed the actual net operating income relating (based upon the trailing twelve (12) month financial results or such shorter
period, as Lender reasonably deems appropriate, for any Substitute Property opened for less than one year) to the Replaced Property. 

8

 

	(j)
	Lender's
outside counsel shall prepare and Borrower shall execute (1) amendments to the Loan Documents and this Agreement, and (2) all Loan Documents Lender shall deem
appropriate, including, but not limited to, any new Mortgage, assignment of rents and leases, environmental indemnities, etc. relating to the Substitute Property (all of which documentation shall be
substantially in the form of the applicable documents executed in connection with the Loan with such changes thereto as Lender reasonably deems appropriate to reflect the terms and circumstances of
the Substitution and Substitute Property) (collectively, the "Substitute Loan Documents"). The Substitution Loan Documents shall be cross-defaulted and
cross-collateralized with the existing Loan Documents for the Loan.

	(k)
	Borrower
shall be required to supply for Lender's review and approval due diligence materials relating to the Substitute Property prior to closing of the Substitution including those
items required for closing of this Loan, and such other materials as may then be customarily required as part of its then current commercial loan closing policies, procedures, standards and practices
for properties of similar type and in similar locations as the Substitute Property, including, without limitation, a current as-built ALTA survey, proof of adequate insurance, title insurance in
conformance with the requirements for the closing of this Loan, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and attornment
agreements. The Lender shall, at the Borrowers' sole cost and expense, receive for its review and approval all additional due diligence materials in any way relating to the Substitute Property,
including but not limited to, appraisal, hazardous substance report and engineer report, and seismic report if located in an area where Lender customarily requires such reports as part of its due
diligence prior to making a mortgage loan as required by Lender in its sole discretion. The items listed in this subparagraph are not exhaustive.

	(l)
	The
Substitute Loan Documents, financing statements, and other instruments required to perfect the liens in the Substitute Property and all collateral under such documents shall be
recorded, registered and filed (as applicable) in such manner as may be required by law to create a valid, perfected lien and security interest with respect to the Substitute Property and the personal
property related thereto. The liens created by the Substitute Loan Documents shall be first liens and security interests on the Substitute Property and the personal property related thereto, subject
only to such exceptions as Lender shall approve in its sole discretion. At closing of the Substitution, the Borrower shall have good and marketable title to the Substitute Property and good and valid
title to any personal property located thereon or used in connection therewith, in each case satisfactory to the Lender. The title policies to the remaining parcels of Property in the Loan must also
be endorsed to bring forward the effective dates thereof through the dates and times of recording of the modification instruments and showing no new exceptions since the original Loan closing unless
approved by Lender in writing and continuing all coverage provided in the original Loan title policies.

	(m)
	Lender
shall receive (1) a confirmation and reaffirmation of all Loan Documents by the Borrower for the other properties in the Loan, (2) a consent to such Substitution
by any guarantors or indemnitors, if any, and (3) such other instruments and agreements and such certificates and opinions of counsel, in form and substance satisfactory to the Lender in
connection with such Substitution as it may reasonably request.

	(n)
	Borrower
shall be responsible for all documentary stamp and intangible taxes on the Substitution and the Mortgage encumbering the Substitute Property and all other parcels of Property
in the Loan that shall arise in connection with such Substitution. Lender shall require payment of all such documentary stamp and intangibles taxes required by law and 

9

 

authorities
having jurisdiction as a condition of closing the Substitution and the corresponding loan modifications to the Loan, regardless of whether the taxing authority imposes taxes duplicative
of those incurred at the original closing on the original eighteen (18) parcels securing the Loan. 

	(o)
	No
Event of Default shall have occurred and be continuing hereunder or under any other Loan Documents for the Loan on the date of Substitution Request or at closing of the
Substitution.

	(p)
	Lender
shall be satisfied that no material adverse change in the financial condition, operations or prospects of Borrower (or general partner or limited partner as applicable) has
occurred after closing of this Loan. No Substitution shall be permitted if Borrower, at the time of the Substitution is insolvent, as such term is defined in the U.S. Bankruptcy Code, or if the
Substitution shall render the Borrower insolvent. Borrower shall provide sufficient audited, if available, or unaudited statements of its financial affairs including, but not limited to, balance
sheets and income and expense statements all accurately describing its financial condition of a date no later than three (3) months prior to the Substitution.

	(q)
	The
Borrower shall pay all reasonable out-of-pocket costs and expenses incurred in connection with any such Substitution and the reasonable out-of-pocket fees and expenses incurred by
Lender, its outside counsel and its loan correspondent and servicer in connection therewith. Without limiting the generality of the foregoing, the Borrower shall, in connection with, and as a
condition to, each Substitution, pay the reasonable fees and expenses of Lender's counsel, the reasonable fees and expenses of Lender's engineers, appraisers, construction consultants, insurance
consultants and other due diligence consultants and contractors, recording charges, title insurance charges, and documentary stamp and/or mortgage or similar taxes, transfer taxes.

	(r)
	In
the event the Substitute Property has not been identified prior to the sale of the Replaced Property, Lender will allow Borrower to post an unconditional, irrevocable Letter of
Credit ("LC") in accordance with all requirements of Section 3.05 until a Substitute Property is
added to the security, provided that the Loan to value (including any available funds under the revolving line of credit) of the remaining Properties securing the Loan, as determined by Lender in its
sole discretion, does not exceed seventy percent (70%). The amount of the LC will be equal to the Release Price for the Replaced Property, as calculated in  Section 3.07 above. If a Substitute
Property meeting all the requirements of this  Section 3.08 is not added to the security within twelve (12) months of the release of the Replaced Property, Lender will have a right to
draw on the LC and apply the proceeds to the Loan pursuant to Section 3.07 herein. Borrower shall have the ability to use an LC for up to two
(2) of the permitted Substitutions during the entire term of the Loan. The combined total of any outstanding LCs permitted under this Section
shall not exceed $20,000,000.

	(s)
	Any
LC used pursuant to Subparagraph (r) would be additional collateral for the Loan for the entire term. In the event of
default, Lender will be entitled to draw the LC in whole or in part and apply the amount so drawn to the indebtedness under the Loan and/or to the cure of any such default in such order and portions
as Lender may elect in its sole and absolute discretion. No such election to draw and/or application of funds shall be deemed an election of remedies or a cure of Borrower's default (or general
partner or limited partner's default, as applicable). All rights and remedies of Lender shall be cumulative. 

10

 

ARTICLE III  

REPRESENTATIONS AND WARRANTIES  

        Borrower hereby represents and warrants to Lender as follows: 

        Section 3.01    Organization; Authorization; Valid and Binding Obligations.    Borrower
is a limited partnership duly organized and validly existing under the laws of the state of its organization. Great Lakes REIT, a Maryland real estate investment trust (the
"General Partner"), is the General Partner of Borrower. General Partner is qualified as a foreign corporation to do business in Illinois, Michigan,
Wisconsin, Ohio, and Minnesota, but only if such applicable laws require it to so qualify and recognize REITs. Borrower is duly qualified and authorized to do business and is in good standing in all
other states and jurisdictions where the ownership of property or the nature of the business transacted by it, makes such qualification necessary, including, without limitation, the state where the
Property is located. Borrower has all requisite power and authority to execute and deliver the Loan Documents and the Environmental Indemnification Agreement, to perform its obligations under such
Loan Documents and the Environmental Indemnification Agreement and to own its property and carry on its business. The Loan Documents and the Environmental Indemnification Agreement have been duly
authorized by all requisite corporate, partnership or other action on the part of Borrower and duly executed and delivered by authorized officers, partners or other representatives (as the case may
be) of Borrower. Each of the Loan Documents and the Environmental Indemnification Agreement constitutes a valid obligation of Borrower, legally binding upon and enforceable against Borrower in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity. 

        Section 3.02    Financial Statements.    

        (a)  Borrower
covenants and agrees that it will keep and maintain books and records of account, or cause books and records of account to be kept and maintained in which full,
true and correct entries shall be made of all dealings and transactions relative to the Property, which books and records of account shall, at reasonable times during business hours and on reasonable
notice no more than twice per year for each individual property, be open to inspection by Lender and Lender's accountants and other duly authorized representatives. Such books of record and account
shall be kept and maintained either: 

	(i)
	In
accordance with generally accepted accounting principles consistently applied; or

	(ii)
	In
accordance with a cash basis or other recognized comprehensive basis of accounting consistently applied. 

        (b)  Borrower
covenants and agrees to furnish, or cause to be furnished to Lender, annually, within ninety (90) days following the end of each fiscal year of Borrower a copy
of a report of the operations of the Property, including a balance sheet and supporting schedules and containing a detailed statement of income and expenses and a current rent roll of the Property.
Borrower shall simultaneously deliver to Lender an unaudited financial statement of Borrower, prepared in accordance with the accounting requirements set forth above, certified by the Borrower, or by
the chief financial officer, manager or the managing general partner of any corporate, limited liability company or partnership Borrower. Each
report or statement shall be certified as correct in all material respects by the appropriate party. The aforementioned financial reports and statements shall be prepared by a certified public
accountant acceptable to Lender. 

        (c)  If
Borrower omits to deliver, or to cause to be delivered, as required any report or statement required by this  Section 4.02, and said omission is not cured by Borrower within sixty (60) days
after written notice of such omission has been given by
Lender to Borrower, Lender may elect, in addition 

11

 

to exercising any remedy for an Event of Default hereunder and as provided for in the Security Instruments, to make an audit of all books and records of Borrower including their respective bank
accounts which in any way pertain to the Property, and, in such event, Borrower shall cause such books and records to be made available to Lender upon request, and to prepare the statement or
statements which Borrower failed to procure and deliver. Such audit shall be made and such statement or statements shall be prepared by an independent certified public accountant to be selected by
Lender. Borrower shall pay all reasonable expenses of the audit and other services, which expenses shall be secured by the Security Instruments as additional Indebtedness and shall be immediately due
and payable with interest thereon at the Default Rate of interest as set forth in the Note and shall be secured by the Security Instruments. 

        Section 3.03    Actions Pending.    There is no action, suit, investigation or proceeding
pending or, to the knowledge of Borrower, threatened against Borrower, any properties, assets or rights of Borrower other than the Property, by or before any court, arbitrator or administrative or
governmental body that would have a material adverse effect on Borrower if resulting in a decision not in favor of Borrower. There is no action, suit, investigation or proceeding pending, or, to the
knowledge of Borrower, threatened against the Property, by or before any court, arbitrator or administrative or governmental body involving an amount in controversy exceeding $100,000 except as set
forth in Schedule 4.03 attached hereto. 

        Section 3.04    Title to Land.    The Land is free and clear of all liens and
encumbrances, except for the Loan Documents and except as specifically set forth in the mortgagee title policy(ies) delivered to Lender in connection with the Loan, and except for unrecorded leases
provided to Lender. 

        Section 3.05    Taxes.    Borrower has filed all federal, state and other income tax
returns prior to the required filing date which, to the knowledge of Borrower, are required to be filed, and has paid all Taxes as shown on such returns and on all assessments received by it to the
extent that such Taxes have become due, except such Taxes as are not due or which are being contested in good faith by Borrower by appropriate proceedings for which adequate reserves have been
established in accordance with sound accounting practices consistently applied or by any tenant under any Leases, in which case such contest is being conducted as permitted pursuant to the applicable
Lease(s). 

        Section 3.06    Conflicting Agreements and Other Matters.    Neither the execution nor
delivery of this Agreement, nor fulfillment of or compliance with the terms and provisions of this Agreement, will
conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien (other than any Lien
arising under any Loan Document) upon the Property or any other properties or assets of Borrower, the charter or by-laws or other organizational documents of Borrower, any award of any arbitrator or
any agreement, instrument, order, judgment, decree, statute, law, rule or regulation to which Borrower, the Property or any other properties or assets of Borrower is subject. 

        Section 3.07    Governmental Consent.    Except for any recording or filing which may be
required by applicable law to perfect or maintain the perfection of Lender's Liens in the Collateral, no consent, approval or authorization of, or declaration or filing with, any governmental
authority is required for the valid execution, delivery and performance by Borrower of the Loan Documents or the Environmental Indemnification Agreement or the consummation of any of the transactions
contemplated by the Loan Documents. 

        Section 3.08    Disclosure.    To Borrower's knowledge, neither this Agreement nor any
other document, certificate or statement furnished to Lender by Borrower in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to
make the statements contained herein and therein not materially misleading. 

12

 

        Section 3.09    Organization Documents.    Borrower has been formed, and is existing
pursuant to the terms of that certain Limited Partnership Agreement and a Certificate of Limited Partnership filed with the Office of Secretary of State of Delaware, as listed on  Exhibit "A",
copies of which have been delivered by Borrower to Lender. 

        Section 3.10    Improvements.    All certificates, permits and licenses required in
connection with the ownership, operation and occupancy of the Property have been issued and are in full force and effect. 

        Section 3.11    No Default.    The Loan Documents and the Environmental Indemnification
Agreement have been complied with and are in full force and effect and no defaults or events of default exist thereunder; Borrower has no knowledge of any facts or circumstances, which with the giving
of notice or passage of time (or both) would constitute a default or event of default thereunder, and all obligations and agreements required to be performed by Borrower thereunder have been
performed. 

        Section 3.12    Compliance with Requirements.    To the best of Borrower's knowledge, the
Improvements have been constructed free from faults and defects, and in all material respects conform to and comply with all valid and applicable laws, ordinances, regulations and rules of all
governmental entities having jurisdiction over, and all covenants, conditions, restrictions and reservations affecting the Land and the
Improvements (the "Requirements"). Borrower has no knowledge of any noncompliance (either substantial or unsubstantial) of the Improvements with any of
the applicable Requirements. 

        Section 3.13    Condition of Land and Improvements.    Neither the Land nor the
Improvements have been injured or damaged by fire or other casualty which has not been restored. 

        Section 3.14    Personalty.    Except as otherwise expressly provided in the Leases,
title to all goods, materials, supplies, equipment, machinery and other personal property and fixtures used in the operation or maintenance of the Property, is vested in Borrower free and clear of all
liens, encumbrances and security interests, other than the lien and security interest of the Security Instruments, and Borrower has not executed any security agreement, purchase order or other
contract or agreement under which any person or other entity is granted or reserves the right to retain title to, remove or repossess any of such goods, materials, supplies, equipment, machinery or
other personal property or fixtures. 

        Section 3.15    Zoning.    Under the applicable zoning ordinance of each jurisdiction in
which each parcel of Land is located, each parcel of Land is zoned in a zoning classification that permits the use of the Land and Improvements for all purposes as currently used, without any
conditions other than with respect to which such conditions have been complied in full and without exception. Furthermore, to the best of Borrower's knowledge, in the event the Improvements were
damaged or destroyed, the Improvements could be restored or reconstructed as they now exist without the requirement of any zoning variance or waiver. 

        Section 3.16    Restrictions.    To the best of Borrower's knowledge, the Land is not
subject to: (i) any use or occupancy restrictions, except those imposed by applicable zoning laws and regulations, except any such restrictions described in the mortgagee title policy(ies)
delivered to Lender in connection with the Loan and those restrictions set forth in the Security Instruments; (ii) special taxes or assessments; (iii) utility tap-in fees, except those
generally applicable throughout the tax districts in which the Land is located; or (iv) charges or restrictions, whether existing of record or arising by operation of law, unrecorded agreement, the
passage of time or otherwise, except any such charges or restrictions described in the mortgagee title policy(ies) delivered to Lender in connection with the Loan. 

        Section 3.17    Status of Service Contracts.    Borrower is not in default under any
development, management, service or other agreements and contracts relating to the operation or management of the Property in a manner which could reasonably be expected to have a Material Adverse
Effect; there is 

13

 

no material default on the part of any other party to any of such contracts, there is no material default of Borrower under any such contracts or the existence of any facts or circumstances, which
with the giving of notice or passage of time (or both), would constitute a material default under any of such contracts, which defaults could reasonably be expected to have a Material Adverse Effect.
Such contracts have not been modified or amended in any material respect since the date true and correct copies of the same were delivered to Lender by Borrower. Borrower has not done or omitted to do
any
act so as to be estopped from exercising any of its rights under any of such contracts, and there is no assignment of any of Borrower's rights under any of such contracts to any person or entity,
other than Lender. 

        Section 3.18    Status of Leases.    To its knowledge, Borrower is not in default under
any of the Leases, and there is no default on the part of any other party to any Lease, which defaults could reasonably be expected to have a Material Adverse Effect. None of the Leases have been
modified or amended in any material respect since the date true and correct copies of the same were delivered to Lender by Borrower. Borrower has not done or omitted to do any act so as to be estopped
from exercising any of its rights under any of the Leases, and there is no assignment of any of Borrower's right under any of such contracts to any person or entity other than Lender. 

        Section 3.19    Encroachments.    Except as shown on those certain surveys previously
delivered to Lender in connection with the Loan, there are no encroachments on the Land; there are no strips or gores within or affecting the boundaries of the Land; and all Improvements are situated
entirely within the boundaries of the Land and within any applicable building lines. 

        Section 3.20    Access.    All streets and roads necessary for access to the Land have
been completed, dedicated to public use and accepted for maintenance for all necessary governmental entities. 

        Section 3.21    Availability of Utilities.    Except as set forth in that certain
Certificate of Borrower executed and delivered in connection herewith, all utility facilities and services necessary for the full use, occupancy and operation of the Improvements are available to the
Land through public or private easements or rights-of-way at the boundaries of the Land, including, without limitation, water, storm and sanitary sewer, electricity and telephone. 

        Section 3.22    Brokerage Commissions.    All real estate and land brokerage commissions
payable in connection with the acquisition of the Land, construction of the Improvements and the Loan, and all brokerage commissions or finders fees due and payable in connection with the current
terms of any of the Leases, have been paid in full, or will be paid in full upon the execution of this Agreement. 

        Section 3.23    Composition of Property.    Subject to the matters disclosed in the title
policies delivered to Lender in connection with the Loan, the Property includes all improvements and land, and other estates and rights (including, without limitation, any appurtenant easement rights
and covenants and restrictions) which are necessary to allow for the continued use thereof as apartments, or other uses presently in effect as of the date of this Agreement, and as may be required by
any of the Requirements, or to satisfy all tenant requirements under the Leases. 

ARTICLE IV  

COVENANTS  

        For so long as this Agreement is in effect, and unless Lender expressly consents in writing to the contrary, Borrower covenants and agrees to comply with the
following covenants: 

        Section 4.01    Operating Statements and Rent Roll.    Borrower shall deliver to Lender
operating statements and rent rolls as required in Section 4.02 hereof. 

14

   
        Section 4.02    Books and Records.    Borrower shall keep its books, records and accounts
in accordance with accepted industry standards and as required hereunder and under the Loan Documents. 

        Section 4.03    Maintenance of Existence, Properties, Licenses, Etc.    Except to the
extent otherwise permitted hereby, Borrower will do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect the corporate, partnership or other legal
existence of Borrower and the patents, trademarks, service marks, trade names, service names, copyrights, licenses, leases, permits, franchises and other rights, that continue to be useful in some
material respect to the business of Borrower or to the operation of the Property, and at all times maintain, preserve and protect all licenses, leases, permits, franchises and other rights that
continue to be useful in some related in some material respect to the business of Borrower or to the operation of the Property. 

        Section 4.04    Payment of Taxes and Claims.    Borrower will pay and discharge or cause
to be paid and discharged all Taxes, assessments and governmental charges or levies imposed upon it or upon its respective income and profits or upon any of its property, real, personal or mixed or
upon any part thereof, before the same shall become in default as well as all lawful claims for labor, materials and supplies or otherwise, which, if unpaid, might become a Lien or charge upon such
properties or any part thereof, provided that Borrower shall not be required to pay and discharge or cause to be paid and discharged any such Tax,
assessment, charge, levy or claim so long as the validity thereof shall be timely contested in good faith by appropriate proceedings and it shall have set aside on its books adequate reserves with
respect to any such Tax, assessment, charge, levy or claim, so contested; provided, further, that
payment with respect to any such Tax, assessment, charge, levy or claim shall be made before the Property or any other property or assets of Borrower shall be seized or sold in satisfaction thereof,
and provided, further, that, with respect to any Taxes that constitute a Lien, Borrower shall provide to
Lender adequate security in connection therewith, as determined by Lender in its discretion. 

        Section 4.05    Parking Requirements.    At all times during the terms of the Loan, there
shall be sufficient parking spaces to satisfy requirements of all Leases, parking or cross-parking agreements, and applicable zoning requirements and other Requirements. 

        Section 4.06    Expenses.    Borrower shall pay all cost, fees, documentary stamp taxes,
intangibles taxes and charges of closing of the Loan, including, without limitation, Lender's attorneys' fees, recording costs, environmental audit costs, survey and appraisal costs, title examination
fees, and title insurance premiums. 

        Section 4.07    Indemnity.    Borrower covenants and agrees to indemnify and hold Lender
harmless from and against any and all claims for brokerage fees or commissions with respect to the making or consummation of the Loan, and all claims, actions, suits, proceedings, costs, expenses,
losses, damages and liabilities of any kind, including but not limited to attorneys' fees, expenses, penalties and interest, which may be asserted against or incurred by Lender by reason of any matter
relating directly to the Loan, and arising out of the ownership, condition, development, construction, sale, rental or financing of the Property or any part thereof, other than to the extent arising
as a direct result of the gross negligence or willful misconduct of Lender. The foregoing indemnity shall survive the payment and performance of all Obligations to Lender under the Loan Documents, and
should Lender incur any liability for or in defense of any of the foregoing matters, the amount thereof (and all costs, expenses and attorneys' fees incurred by Lender in connection therewith) shall
be added to the principal amount of the Loan and shall bear interest at the Default Rate (as defined in the Note) to the extent permitted by applicable law. Furthermore, Borrower covenants that, upon
notice from Lender that any action or proceeding has been brought against Lender by reason of any such matters, Borrower shall promptly resist or defend such action or proceeding in a manner
satisfactory to Lender at Borrower's expense. 

15

 

        Section 4.08    Fiscal Year.    Borrower shall not change its fiscal year except upon
prior written notice to Lender. 

        Section 4.09    Estoppel Certificates.    Borrower shall, from time to time, upon request
by Lender, promptly execute, acknowledge and deliver to Lender a certificate of Borrower stating the amount of principal and interest then owing on the Obligations, whether or not any setoffs or
defenses exist with respect to all or any part of the Obligations, and, if any such setoffs or defenses exist, stating in detail the specific facts relating to each such setoff or defense. Any such
certificate may be relied upon by any prospective assignee of Lender. 

        Section 4.10    Replacement of Note.    Upon receipt of notice from Lender of the loss,
theft, destruction or mutilation of the Note, Borrower shall execute and deliver, in lieu thereof, a replacement note identical in form and substance to the Note and dated as of the date of the Note,
except that such replacement note shall state on its face that it is a replacement and upon such execution and delivery all references in the Loan Documents and the Environmental Indemnification
Agreement, or in the loan documents and the environmental indemnification agreements for the Affiliate Loans, to such Note so replaced shall be deemed to refer to such replacement note. 

        Section 4.11    Notification of Name Change; Location.    Borrower shall furnish Lender
with notice of any change in Borrower's name or address or principal place of business within fifteen (15) days of the effective date of such change, and Borrower shall promptly execute any financing
statements or other instruments deemed necessary by Lender to prevent any filed financing statement from becoming misleading or losing its perfected status. 

        Section 4.12    No Joint Venture.    Neither the provisions of any of the Loan Documents
or the Environmental Indemnification Agreement nor the acts of the parties thereto shall be construed to create a partnership or joint venture between Borrower and Lender. 

        Section 4.13    Loans by Partners and Affiliates.    Borrower agrees that any loan or
other advance heretofore or hereafter made to Borrower by a partner, member or any Affiliate shall be subordinate in all respects to the Loan, and Borrower agrees that, following any Event of Default,
and until repayment of the Obligations, Borrower shall make no repayment to the partner, member or Affiliate of any such loan or advance. 

        Section 4.14    Waiver Regarding Wisconsin Mortgage Banking Act.    To the fullest extent
permitted by applicable law, Borrower hereby waives any and all rights of action, claims, defenses, offsets, counterclaims, suits, demands or other actions against Lender arising out of, or in
connection with, the Wisconsin Banking Act, Wis. Stat. §224.71 et seq., or any failure or alleged failure of Lender to comply therewith. 

ARTICLE V  

FURTHER DISBURSEMENTS  

        Section 5.01    Further Disbursements.    Borrower agrees that Note A, Note B and Note C
have been fully disbursed by Lender, and that Lender shall have no further duty or obligation to make any additional advances or disbursements to Borrower under Note A, Note B or
Note C. 

        Section 5.02    Note D is Revolving Line of Credit.    Note D evidences a
revolving line of credit. The principal of Note D may be drawn, repaid and redrawn in accordance with the terms of Note D. Notwithstanding anything in Note D to the contrary, the
funds available under Note D will be restricted as follows. At a gross rent from all Property (excluding tenant reimbursements) on a annualized basis (the "Base
Rent") of $35,500,000 the available funds under the Note D will be $25,000,000. The available funds will increase by $3.75 for each additional dollar of Base Rent in excess of
$35,500,000 up to the Revolving Limit. Eight buildings are currently rented on a net basis 

16

 

(Bannockburn Corporate Center, Centennial Center, Highpoint Business Center, Kensington Corporate Center, One Riverwood, Two Riverwood, Court International and Princeton Hill Corporate Center). For
determining the Base Rent for all new leases not represented on Exhibit E to the Application dated September 27, 2002 between Borrower and Lender, as amended, if a gross lease is signed
on space within a net lease building the expense stop stated within the lease (or $8.11/SF if the lease does not have an expense stop) will be deducted from the stated Base Rent within the lease to
determine the annual qualifying Base Rent for the above calculation. If a net lease is signed in a gross rent building (i.e. the remaining 10 properties) $8.17 per square foot will be added to the
annual net rental rate for the purpose of the calculation. In determining the annual Base Rent, any rent from the space occupied by AT&T in the One Century Centre building will be excluded. 

ARTICLE VI  

EVENTS OF DEFAULT  

        Section 6.01    Events of Default.    Each of the following events shall constitute an
Event of Default under this Agreement: 

        (a)  The
occurrence of an Event of Default under the Security Instruments or any of the other Loan Documents or the Environmental Indemnification Agreement; 

        (b)  Should
any Default occur in the performance or observance of any term, condition or provision contained in this Agreement which does not relate to the nonpayment of any
monetary sum, which Default shall continue for thirty (30) days after the Lender gives Borrower written notice thereof or within such longer period of time, not exceeding an additional sixty (60)
days, as may be reasonably necessary to cure such non-compliance if Borrower is diligently and with continuity of effort pursuing such cure and the failure is susceptible of cure within an additional
period of sixty days; provided, however, no notice and cure rights shall be afforded to Borrower for a Default of Paragraphs 15(a), (b), (d) (e) or (f) of the Mortgage; 

        (c)  Should
any representation or warranty made by Borrower herein or in any of the other Loan Documents or the Environmental Indemnification Agreement be false or misleading
in any material respect on the date as of which made (or deemed made); and 

        (d)  Should
Borrower be terminated, liquidated, dissolved or otherwise cease to exist. 

        Section 6.02    Remedies.    Upon the occurrence of an Event of Default, Lender may, in
its discretion, exercise one or more of the following remedies: 

        (a)  Accelerate
the maturity of the Obligations and declare the entire unpaid principal balance of, and any unpaid interest then accrued on, the Note, together with any
Prepayment Premium, without demand or notice of any kind to Borrower or any other Person, to be immediately due and payable. 

        (b)  Take
all, any or any combination of the actions Lender may take under any of the other Loan Documents or the Environmental Indemnification Agreement upon the occurrence
of a default or an event of default thereunder, notwithstanding the fact that the event that is an Event of Default hereunder may not constitute a default or an event of default under any such other
Loan Document or the Environmental Indemnification Agreement, including, without limitation acceleration of the Obligations evidenced by the Note and foreclosure and sale of the Land and the
Improvements under the Security Instruments. 

        (c)  Perform,
or cause to be performed, any obligation, covenant or agreement that Borrower has failed to perform or comply with, and in such event all costs and expenses
incurred by Lender in performing any such obligation, covenant or agreement shall be added to the Obligations and shall be secured by the Security Instruments, and shall bear interest at the Default
Rate (as 

17

 

defined in the Note) from the date paid or incurred by Lender, and the interest thereon shall also be added to and become a part of the Obligations and shall be secured by the Security Instruments. 

        (d)  Continue
to act, with respect to Borrower and the Loan, as if no Event of Default had occurred, which continuance shall not be or be construed as a waiver of Lender's
rights; and assert the Event of Default and take any action provided for herein at any time after the occurrence and during the existence of the Event of Default. 

        (e)  Proceed
as authorized by law to obtain payment of the Loan. 

        (f)    Take
all, any, or any combination of the actions Lender may take under applicable law or equity subject to the limitations on liability of Borrower contained herein and
in the Note and the Security Instruments. 

No
failure or delay on the part of Lender to exercise any right or remedy hereunder or under the Loan Documents or the Environmental Indemnification Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy hereunder preclude any further exercise thereof or the exercise of any further right or remedy hereunder or under the Loan Documents or the
Environmental Indemnification Agreement. No exercise by Lender of any remedy under the other Loan Documents or the Environmental Indemnification Agreement shall operate as a limitation on any rights
or remedies of Lender under this Agreement, except to the extent of moneys actually received by Lender under the other Loan Documents or the Environmental Indemnification Agreement. 

        Section 6.03    Costs and Expenses.    All costs and expenses incurred by Lender in
connection with any of the actions authorized in this Article, after an Event of Default, including without limitation attorneys' fees, shall be and constitute a portion of the Loan, secured in the
same manner and to the same extent as the Loan, even though such costs and expenses may cause the amount of the Loan to exceed the face amount of the Note. Whenever than terms of this Agreement
require Borrower to pay attorneys' fees of Lender, such obligation shall extend only to reasonable attorneys' fees, without regard to statutory interpretations, actually incurred at normal hourly
rates. 

        Section 6.04    Remedies Cumulative.    The foregoing remedies are cumulative of, and in
addition to, and not restrictive or in lieu of, the other remedies provided for herein and the remedies provided for or allowed by the other Loan Documents or the Environmental Indemnification
Agreement, or provided for or allowed by law, or in equity. 

ARTICLE VII  

MISCELLANEOUS  

        Section 7.01    Notices.    

	(a)
	All
notices, demands, requests, and other communications desired or required to be given hereunder ("Notices"), shall be in writing and
shall be given by: (i) hand delivery to the address for Notices; (ii) delivery by overnight courier service to the address for Notices; or (iii) sending the same by United States
mail, postage prepaid, certified mail, return receipt requested, addressed to the address for Notices.

	(b)
	All
Notices shall be deemed given and effective upon the earlier to occur of (i) the hand delivery of such Notice to the address for Notices; (ii) one business day after
the deposit of such Notice with an overnight courier service by the time deadline for next day delivery addressed to the address for Notices; or (iii) three business days after depositing the
Notice in 

18

 

the
United States mail as set forth in (a)(iii) above. All Notices shall be addressed to the following addresses: 

	

Borrower:	
 	

Great Lakes REIT, L.P.

c/o Great Lakes REIT

823 Commerce Drive

Suite 300

Oak Brook, Illinois 60523

Attention: Chief Financial Officer
	

With a copy to:	
 	

Holland & Knight LLC

500 West Madison

40th Floor

Chicago, Illinois 60661-2511

Attention: Francis L. Keldermans, Esq.
	

Lender:	
 	

Equitable Life Insurance Company of Iowa, and

Security Life of Denver Insurance Company

c/o ING Investment Management LLC

5780 Powers Ferry Road, NW, Suite 300

Atlanta, Georgia 30327-4349

Attention: Mortgage Loan Servicing Department
	

and to:	
 	

ING Investment Management at LLC

5780 Powers Ferry Road, NW, Suite 300

Atlanta, Georgia 30327-4349

Attention: Real Estate Law Department
	

With a copy to:	
 	

Powell, Goldstein, Frazer & Murphy, LLP

191 Peachtree Street, 16th Floor

Atlanta, Georgia 30303

Attention: John R. Parks, Esq.

or to such other persons or at such other place as any party hereto may by Notice designate as a place for service of Notice;  provided, however, that the "copy to" Notice to be given as
set forth above is a courtesy copy only; and a Notice given to such person is not sufficient
to effect giving a Notice to the principal party, nor does a failure to give such a courtesy copy of a Notice constitute a failure to give Notice to the principal party. 

        Section 7.02    No Waiver; Remedies Cumulative.    No failure or delay on the part of
Lender in exercising any right or remedy hereunder and no course of dealing between Borrower and Lender shall operate as a waiver thereof, nor shall any single or partial exercise of any right or
remedy hereunder or under the Note preclude any other or further exercise thereof or the exercise of any other right or remedy hereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which Lender would otherwise have. No notice to or demand on Borrower not required hereunder or under any other Loan Document in any case shall
entitle Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of Lender to any other or further action in any circumstances without
notice or demand. 

        Section 7.03    Successors and Assigns; Sale of Interest.    This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective legal representatives, successors and permitted assigns of the parties hereto; provided that Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written consent of Lender, other than to the extent expressly permitted by the Security Instruments. Lender may sell or assign all
or any part of Lender's rights, title or interests hereunder and under the other Loan Documents or the Environmental 

19

 

Indemnification Agreement without the prior written consent of Borrower; provided, however that any such assignment shall not increase any of the obligations of Borrower under the Loan Documents or
the Environmental Indemnification Agreement. In that event, such successor or assignee shall be entitled to all of the rights of Lender under the Loan Documents or the Environmental Indemnification
Agreement. 

        Section 7.04    Modification.    This Agreement shall not be modified or amended in any
respect except by a written agreement executed by the parties in the same manner as this Agreement is executed. 

        Section 7.05    Time of Essence.    Time is of the essence of this Agreement and each of
the other Loan Documents and the Environmental Indemnification Agreement. 

        Section 7.06    Governing Law.    This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of the State of Illinois, without regard to principles of conflicts of laws thereof. 

        Section 7.07    Counterparts.    This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the
same instrument. 

        Section 7.08    Effectiveness; Survival.    

	(a)
	This
Agreement shall become effective on the date on which all of the parties hereto shall have signed a copy hereof (whether the same or different copies) and Lender shall have
received the same.

	(b)
	All
representations and warranties made herein, in the certificates, reports, notices, and other documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement, the other Loan Documents, the Environmental Indemnification Agreement, and such other agreements and documents, the making of the Loan hereunder and the execution and
delivery of the Note, and shall terminate at such time as the Obligations have been paid and satisfied in full; provided,  however, that the Environmental
Indemnification Agreement shall remain in full force and effect in accordance with the terms thereof notwithstanding any
payment and dissatisfaction of the Obligations. 

        Section 7.09    Severability.    In case any provision in or Obligation under this
Agreement or the other Loan Documents or the Environmental Indemnification Agreement shall be invalid, illegal or unenforceable, in whole or in part, in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. 

        Section 7.10    Independence of Covenants.    All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitation
of, another covenant, shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists. 

        Section 7.11    Headings Descriptive.    The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 

        Section 7.12    Termination of Agreement.    At such time as all Obligations have been
paid and satisfied in full, this Agreement shall terminate; provided however, that any and all indemnity obligations of Borrower to Lender arising
hereunder or under any of the other Loan Documents, which are expressly stated to survive satisfaction of the Obligations shall survive the termination of this 

20

 

Agreement or such other Loan Documents, and provided further that all indemnity obligations under the Environmental Indemnification Agreement shall
survive such payment and satisfaction of the Obligations as set forth in the Environmental Indemnification Agreement. 

        Section 7.13    Entire Agreement.    This Agreement and the other Loan Documents and the
Environmental Indemnification Agreement constitute the entire agreement between Borrower and Lender with respect to the Loan, the other Obligations and the Collateral and supersede all prior
agreements, representations and understandings related to such subject matters. 

        Section 7.14    Jury Trial Waiver; Consent to Forum.    

	(a)
	TO
THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR THE ENVIRONMENTAL INDEMNIFICATION AGREEMENTS OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.

	(b)
	BORROWER
ALSO AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE ENVIRONMENTAL INDEMNIFICATION AGREEMENTS OR TO
ENFORCE ANY JUDGMENT OBTAINED AGAINST BORROWER IN CONNECTION WITH THIS AGREEMENT OR SUCH OTHER LOAN DOCUMENT, MAY BE BROUGHT BY LENDER IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF THE STATE
IN WHICH LENDER'S ADDRESS SHOWN ABOVE IS LOCATED, OR IN ANY ONE OR MORE OTHER STATE OR FEDERAL COURTS SITTING IN ANY COUNTY AND STATE IN WHICH ANY OF THE PROPERTY IS LOCATED. BORROWER IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE AFORESAID STATE AND FEDERAL COURTS, AND IRREVOCABLY WAIVES ANY PRESENT OR FUTURE OBJECTION TO VENUE IN ANY SUCH COURT, AND ANY PRESENT OR FUTURE CLAIM THAT ANY SUCH
COURT IS AN INCONVENIENT FORUM, IN CONNECTION WITH ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE ENVIRONMENTAL INDEMNIFICATION AGREEMENTS. 

        Section 7.15    Exculpation.    The liability of Borrower to pay the Indebtedness (as
defined in the Mortgage) or perform any obligation under this Agreement or the other Loan Documents is limited to the extent set forth in the Note. 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

21

   
        IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed and delivered on their behalf as of the date
first above stated. 

	

 	

GREAT LAKES REIT, L.P., a Delaware

limited partnership
	

 	

By:	

Great Lakes REIT, a Maryland real

estate investment trust, its general partner
	

 	

 	

By:	

/s/ James Hicks
 James Hicks, Treasurer

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

22

 
[SIGNATURES CONTINUED FROM PRECEDING PAGE]

	

 	
LENDER:
	

 	

SECURITY LIFE OF DENVER INSURANCE

COMPANY, a Colorado corporation
	

 	

By:	

ING Investment Management, LLC, as

Authorized Agent
	

 	

 	

By:	
 	

  

	 	 	Name:	 	  

	 	 	Title:	 	  

	

 	
EQUITABLE LIFE INSURANCE COMPANY

OF IOWA, an Iowa corporation
	

 	

 	

By:	
 	

  

	 	 	Name:	 	  

	 	 	Title:	 	  

23

EXHIBIT "A"  

SCHEDULE OF BORROWER'S ORGANIZATIONAL DOCUMENTS  

	Borrower
	 	Date of Certificate of

Limited Partnership
	 	Date of Limited Partnership

Agreement (and amendments)

	Great Lakes REIT, L.P.	 	September 27, 1996;

Amended and Restated—November 21, 1996;

Amendment—October 27, 1998	 	September 27, 1996;

Amended and Restated—December 19, 1996;

First Amendment—February 6, 1997;

Second Amendment—February 10, 1997;

Addendum—February 10, 1997;

Third Amendment—May 22, 1998;

Assignment and Assumption of General Partner Interest—July 27, 1998; and

Fourth Amendment—December 23, 1998

SCHEDULE I  

[LIST OF PROPERTIES]  

	(19)
	191
Waukegan Building, 191 Waukegan Road, Northfield, Illinois

	(20)
	823
Commerce Building, 823 Commerce Drive, Oak Brook, Illinois

	(21)
	Arlington
Business Center, 3455 and 3550 Salt Creek Lane, Arlington Heights, Illinois

	(22)
	Bannockburn
Corporate Center, 3000 Lakeside Drive, Bannockburn, Illinois

	(23)
	Centennial
Center, 1900 East Golf Road, Schaumburg, Illinois

	(24)
	Highpoint
Business Center, 165, 175, and 185 Hansen Court, Wood Dale, Illinois

	(25)
	Kensington
Corporate Center, 1660 Feehanville Drive, Mount Prospect, Illinois

	(26)
	Lisle
Office Center, 3030 Warrenville Road, Lisle, Illinois

	(27)
	One
Century Centre, 1750 East Golf Road, Schaumburg, Illinois

	(28)
	1111
Touhy Building, 1111 Touhy Avenue, Des Plaines, Illinois

	(29)
	Brookfield
Lakes Corporate Center, 150, 175 and 250 Patrick Boulevard, Brookfield, Wisconsin

	(30)
	Corporate
Woods, 375 Bishop's Way, Brookfield, Wisconsin

	(31)
	One
Riverwood Place, N17 W24222 Riverwood Drive, Pewaukee, Wisconsin

	(32)
	Two
Riverwood Place, N19 W24133 North Riverwood Drive, Pewaukee, Wisconsin

	(33)
	777
Eisenhower Building, 777 Eisenhower Parkway, Ann Arbor, Michigan

	(34)
	Tri-Atria
Center, 32255 Northwestern Highway, Farmington Hills, Michigan

	(35)
	Court
International, 2550 University Avenue, St. Paul, Minnesota

	(36)
	Princeton
Hill Corporate Center, 30 Merchant Street, Springdale, Ohio 

QuickLinks

LOAN AGREEMENT

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