Document:

Exhibit 4.1

Exhibit 4.1

EXECUTION COPY

RIGHTS AGREEMENT

dated as of

February 8, 2011

between

Retail Ventures, Inc.

and

Computershare Trust Company, N.A.,

Rights Agent

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	Section 1. Certain Definitions
	 	 	1	 
	Section 2. Appointment of Rights Agent
	 	 	7	 
	Section 3. Issuance of Rights Certificates
	 	 	7	 
	Section 4. Form of Rights Certificates
	 	 	9	 
	Section 5. Countersignature and Registration
	 	 	10	 
	Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates
	 	 	10	 
	Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	11	 
	Section 8. Cancellation and Destruction of Rights Certificates
	 	 	14	 
	Section 9. Reservation and Availability of Capital Stock
	 	 	14	 
	Section 10. Record Date for Securities Issued Upon Exercise
	 	 	15	 
	Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
	 	 	16	 
	Section 12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	22	 
	Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power
	 	 	23	 
	Section 14. Fractional Rights and Fractional Shares
	 	 	25	 
	Section 15. Rights of Action
	 	 	26	 
	Section 16. Agreement of Rights Holders
	 	 	26	 
	Section 17. Rights Certificate Holder Not Deemed a Stockholder
	 	 	27	 
	Section 18. Concerning the Rights Agent
	 	 	27	 
	Section 19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	28	 
	Section 20. Duties of Rights Agent
	 	 	29	 
	Section 21. Change of Rights Agent
	 	 	30	 
	Section 22. Issuance of New Rights Certificates
	 	 	31	 
	Section 23. Redemption and Termination
	 	 	32	 
	Section 24. Exchange
	 	 	33	 
	Section 25. Notice of Certain Events
	 	 	34	 
	Section 26. Notices
	 	 	35	 
	Section 27. Supplements and Amendments
	 	 	36	 
	Section 28. Successors
	 	 	36	 

 

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	 	 	Page	 
	Section 29. Determinations and Actions by the Board of Directors, etc.
	 	 	36	 
	Section 30. Benefits of this Agreement
	 	 	36	 
	Section 31. Severability
	 	 	37	 
	Section 32. Governing Law
	 	 	37	 
	Section 33. Counterparts
	 	 	37	 
	Section 34. Descriptive Headings
	 	 	37	 
	Section 35. Force Majeure
	 	 	37	 

EXHIBITS

	 	 	 	 	 

	Exhibit A	 	Form of Rights Certificate

	Exhibit B	 	Form of Summary of Rights

 

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RIGHTS AGREEMENT

RIGHTS AGREEMENT, dated as of February 8, 2011 (this “Agreement”), between Retail
Ventures, Inc., an Ohio corporation (the “Company”), and Computershare Trust Company, N.A.,
a federally chartered trust company, as Rights Agent (the “Rights Agent”).

W I T N E S S E T H

WHEREAS, on February 8, 2011 (the “Rights Dividend Declaration Date”), the Board of
Directors of the Company (the “Board of Directors”) authorized and the Company declared a
dividend distribution of one Right (as hereinafter defined) for each share of Common Stock (as
hereinafter defined) outstanding at the close of business on February 24, 2011 (the “Record
Date”), and the Board of Directors has authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of Section 11(a)(i) hereof) for each share of
Common Stock of the Company issued between the Record Date and the Distribution Date (as
hereinafter defined) and under certain circumstances thereafter, each Right initially representing
the right to purchase one share of Common Stock of the Company, upon the terms and subject to the
conditions hereinafter set forth (the “Rights”); and

WHEREAS, the Company has generated certain Tax Benefits (as defined herein) for United States
federal income tax purposes, such Tax Benefits may potentially provide valuable benefits to the
Company, the Company desires to avert an “ownership change” within the meaning of Section 382 of
the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations
promulgated thereunder, and thereby preserve its ability to utilize such Tax Benefits, and, in
furtherance of such objective, the Company desires to enter into this Agreement.

NOW, THEREFORE, in consideration of the premises 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) “5% Shareholder” shall mean (i) a Person or group of Persons that is a “5-percent
shareholder” of the Company pursuant to Section 1.382-2T(g) of the Treasury Regulations or (ii) a
Person that is a “first tier entity” or “higher tier entity” (as such terms are defined in Section
1.382-2T(f) of the Treasury Regulations) of the Company if that Person has a “public group” or
individual, or a “higher tier entity” of that Person has a “public group” or individual, that is
treated as a “5-percent shareholder” of the Company pursuant to Section 1.382-2T(g) of the Treasury
Regulations.

(b) “Acquiring Person” shall mean any Person who or which shall have become a 5%
Shareholder or shall be such a 5% Shareholder after the date hereof, in each case other than by
reason of Section 382(l)(3)(B) of the Code and Section 1.382-
2T(j)(3)(i) of the Treasury Regulations and whether or not such person continues to be a 5%
Shareholder, but shall not include:

 

 

 

(i) the Company;

(ii) any Subsidiary of the Company;

(iii) 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;

(iv) the U.S. Government;

(v) any Person who or which becomes a 5% Shareholder as a result of (A) a reduction in
the number of Company Securities outstanding due to the repurchase of Company Securities by
the Company or (B) a stock dividend, stock split, reverse stock split or similar
transaction effected by the Company, in each case unless and until such Person increases
its Percentage Stock Ownership over such Person’s lowest Percentage Stock Ownership on or
after the consummation of the relevant transaction, other than an increase solely as a
result of any subsequent transaction described in clauses (A) and (B) of this Section
1(b)(v) or with the Prior Approval of the Company;

(vi) any Person who or which was a 5% Shareholder on the date of this Agreement, or
becomes a 5% Shareholder solely as a result of a transaction or event (including a series
of related transactions or events) with respect to which such Person received the Prior
Approval of the Company, unless and until after the date of this Agreement or the date of
the relevant transaction or event, as applicable, such Person (A) increases its Percentage
Stock Ownership over such Person’s lowest Percentage Stock Ownership on or after the date
of this Agreement or the date of the relevant transaction or event, as applicable, other
than an increase solely as a result of any subsequent transaction described in clauses (A)
and (B) of Section 1(b)(v) hereof or with the Prior Approval of the Company or (B)
decreases its Percentage Stock Ownership below five percent (5%) and thereafter becomes a
5% Shareholder; or

(vii) any Person who or which inadvertently may become an Acquiring Person (including,
without limitation, because (A) such Person was unaware that it beneficially owned a
percentage of Common Stock that would otherwise cause such Person to be an “Acquiring
Person” or (B) such Person was aware of the extent of its beneficial ownership of Common
Stock but had no actual knowledge of the consequences of such beneficial ownership under
this Agreement), so long as such Person enters into and delivers to the Company promptly
after such Person acquires knowledge that it has become an Acquiring Person (and in any
event within ten (10) Business Days after such Person is notified by the Company that is
has become an Acquiring Person), an irrevocable commitment to promptly divest, and
thereafter promptly divests (without
exercising or retaining any power, including voting, with respect to such securities),
sufficient Company Securities so that such Person ceases to be an Acquiring Person,
provided that such prompt divestiture occurs within the time

 

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period (not less than ten (10)
Business Days), if any, specified by the Company to such Acquiring
Person; provided, however, that no Person shall be an Acquiring Person if the Board
of Directors shall have affirmatively determined, prior to the Distribution Date, in light
of the intent and purposes of this Agreement or other circumstances facing the Company,
that such Person shall not be deemed an Acquiring Person.

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

(d) “Adjustment Shares” shall have the meaning set forth in Section 11(a)(ii) hereof.

(e) “Agreement” shall have the meaning set forth in the preamble of this Agreement.

(f) A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to
“beneficially own,” any Company Securities which such Person directly owns, would be deemed
constructively to own pursuant to Sections 1.382-2T(h) and 1.382-4(d) of the Treasury Regulations,
owns pursuant to a “coordinated acquisition” treated as a single “entity” as defined in Section
1.382-3(a)(1) of the Treasury Regulations, or are otherwise aggregated with shares owned by such
Person, pursuant to the provisions of Section 382 of the Code and the Treasury Regulations
thereunder.

(g) “Board of Directors” shall have the meaning set forth in the recitals to this
Agreement.

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

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

(j) “Code” shall have the meaning set forth in the recitals to this Agreement.

(k) “Common Stock” shall mean the common stock, without par value, of the Company,
except that “Common Stock” when used with reference to any Person other than the Company shall mean
the capital stock of such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such Person (or, if such
Person is a Subsidiary of another Person, the Person or Persons that ultimately control such first
mentioned Person).

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

 

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(m) “Company” shall have the meaning set forth in the preamble of this Agreement.

(n) “Company Securities” shall mean (i) shares of Common Stock, (ii) shares of
preferred stock (other than preferred stock described in Section 1504(a)(4) of the Code) of the
Company, (iii) warrants, rights, or options (including options within the meaning of Section
1.382-4(d)(9) of the Treasury Regulations) to purchase stock (other than preferred stock described
in Section 1504(a)(4) of the Code) of the Company, and (iv) any other interest that would be
treated as “stock” of the Company pursuant to Section 1.382-2T(f)(18) of the Treasury Regulations.

(o) “Current Market Price” shall have the meaning set forth in Section 11(d) hereof.

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

(q) “Distribution Date” shall mean the earlier to occur of (i) the close of business
on the tenth Business Day after the Stock Acquisition Date (or, if the tenth Business Day after the
Stock Acquisition Date occurs before the Record Date, the close of business on the Record Date), or
(ii) the close of business on the tenth Business Day (or such later date as the Board of Directors
shall determine prior to such time as any Person becomes an Acquiring Person) 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) under the Exchange Act, if
upon consummation thereof, such Person would become an Acquiring Person; provided,
however, that a Distribution Date shall not occur if the Board of Directors shall have
affirmatively determined (upon or prior to the end of such applicable ten business day (or later)
period) that, in light of the intent and purposes of this Agreement or other circumstances facing
the Company, that a Distribution Date shall not be deemed to have occurred.

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

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

(t) “Expiration Date” shall have the meaning set forth in Section 7(a) hereof.

(u) “Final Expiration Date” shall have the meaning set forth in Section 7(a) hereof.

(v) “NYSE” shall have the meaning set forth in Section 11(d) hereof.

 

4

 

(w) “Percentage Stock Ownership” shall mean the percentage stock ownership interest as
determined in accordance with Sections 1.382-2(a)(3), 1.382-2T(g), (h), (j) and (k), 1.382-3(a),
and 1.382-4(d) of the Treasury Regulations; provided, however, that for the sole
purpose of determining the percentage stock ownership of any entity (and not for the purpose of
determining the percentage stock ownership of any other Person), Company Securities held by such
entity shall not be treated as no longer owned by such entity pursuant to Section
1.382-2T(h)(2)(i)(A) of the Treasury Regulations.

(x) “Person” shall mean any individual, firm, corporation, partnership, limited
liability company, limited liability partnership, trust, syndicate or other entity, group of
persons making a “coordinated acquisition” of Company Securities or otherwise treated as an
“entity” within the meaning of Section 1.382-3(a)(1) of the Treasury Regulations or otherwise, and
also includes any successor (by merger or otherwise) of any such individual or entity.

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

(z) “Prior Approval of the Company” shall mean express approval by action of the Board
of Directors (or a committee of the Board of Directors to which the Board of Directors has
delegated authority to determine whether to grant such approval), which approval shall only be
given after a determination by the Board of Directors, in its sole discretion, that such approval
shall not jeopardize or endanger the availability to the Company of any Tax Benefits or is
otherwise in the best interests of the Company; provided that a Person shall be treated as
having received the Prior Approval of the Company if such Person acquires Company Securities from
the Company pursuant to an issuance of Company Securities by the Company to such person that was
approved by the Board of Directors (or a committee of the Board of Directors to which the Board of
Directors has delegated authority to approve such issuance), or the exercise, conversion or
exchange of such Company Securities for other Company Securities in accordance with their terms.

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

(bb) “Record Date” shall have the meaning set forth in the recitals to this Agreement.

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

(dd) “Rights” shall have the meaning set forth in the recitals to this Agreement.

(ee) “Rights Agent” shall have the meaning set forth in the preamble of this
Agreement.

 

5

 

(ff) “Rights Certificates” shall have the meaning set forth in Section 3(a) hereof.

(gg) “Rights Dividend Declaration Date” shall have the meaning set forth in the
recitals to this Agreement.

(hh) “Section 11(a)(ii) Event” shall mean any event described in Section 11(a)(ii)
hereof.

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

(jj) “Section 13 Event” shall mean any event described in clauses (x), (y) or (z) of
Section 13(a) hereof.

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

(ll) “Stock Acquisition Date” shall mean the first date of public announcement by the
Company that an Acquiring Person has become such.

(mm) “Subsidiary” shall mean, with reference to any Person, any corporation or other
entity of an amount of which securities or other ownership interests having ordinary voting power
sufficient to elect at least a majority of the directors or other Persons performing similar
functions of such corporation or other entity is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.

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

(oo) “Summary of Rights” shall have the meaning set forth in Section 3(b) hereof.

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

(qq) “Trading Day” shall have the meaning set forth in Section 11(d)(i) hereof.

(rr) “Treasury Regulations” shall mean the final and temporary (but not proposed) tax
regulations promulgated under the Code, as such regulations may be amended from time to time.

 

6

 

(ss) “Triggering Event” shall mean any Section 11(a)(ii) Event or any Section 13
Event.

(tt) “U.S. Government” shall mean any of (i) the federal government of the United
States of America, (ii) any instrumentality or agency of the federal government of the United
States of America and (iii) any Person wholly-owned by, or the sole beneficiary of which is, the
federal government of the United States of America or any instrumentality or agency thereof.

Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-rights agents as it may deem necessary or desirable
upon 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 responsible for, the acts or omissions of any such co-rights
agent.

Section 3. Issuance of Rights Certificates.

(a) Until the Distribution Date, (x) the Rights will be evidenced (subject to the provisions
of paragraphs (b) and (c) of this Section 3) by the certificates for the Common Stock registered in
the names of the holders of the Common Stock (which certificates for Common Stock shall be deemed
also to be certificates for Rights) and not by separate certificates (or for shares participating
in the direct registration system, by notations in the respective book entry accounts for the
Common Stock), and (y) the Rights (and the right to receive Rights Certificates) will be
transferable only in connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). As soon as practicable after the Distribution Date, but
subject to the following sentence, the Rights Agent will send by such means as may be selected by
the Company, to each record holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit A hereto (the “Rights
Certificates”), evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. To the extent that a Triggering Event under Section 11(a)(ii) hereof
has also occurred, the Company may implement such procedures, as it deems appropriate in its sole
discretion, to minimize the possibility that Rights are received by Persons whose Rights would be
void under Section 7(e) hereof. In the event that an adjustment in the number of Rights per share
of Common Stock has been made pursuant to Section 11(a)(i) hereof, at the time of distribution of
the Rights Certificates, the Company shall make the necessary and appropriate rounding adjustments
(in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be evidenced solely
by such Rights Certificates, and the Rights will be transferable separately from the transfer of
the Common Stock. The Company shall promptly notify the Rights Agent in writing upon the
occurrence of the Distribution Date and, if such notification is given orally, the Company shall
confirm the same in writing on or prior to the Business Day

 

7

 

next following. Until such notice is
received by the Rights Agent, the Rights Agent shall presume conclusively for all purposes that the
Distribution Date has not occurred.

(b) The Company will make available, as promptly as practicable following the Record Date, a
copy of a Summary of Rights, in substantially the form attached hereto as Exhibit B (the
“Summary of Rights”) to any holder of Rights who may so request from time to time prior to
the Expiration Date. With respect to certificates for the Common Stock outstanding as of the Record
Date, or issued subsequent to the Record Date, unless and until the Distribution Date shall occur,
the Rights will be evidenced by such certificates for the Common Stock (or, in the case of shares
reflected on the direct registration system, the notations in the book entry account) and the
registered holders of the Common Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration Date, the transfer of any
shares of Common Stock in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Common Stock.

(c) Rights shall be issued in respect of all shares of Common Stock which are issued after the
Record Date but prior to the earlier of the Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock shall also be deemed to be certificates for Rights, and
shall bear the following legend if such certificates are issued after the Record Date but prior to
the earlier of the Distribution Date or the Expiration Date:

This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Rights Agreement between Retail Ventures, Inc.
(the “Company”) and Computershare Trust Company, N.A. (the “Rights
Agent”), dated as of February 8, 2011, as originally executed and as it
may be amended from time to time (the “Rights Agreement”), the terms of
which are hereby incorporated herein by reference and a copy of which is
on file at the principal offices of the Company. 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, as in effect on the date of mailing, without
charge, promptly after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights issued to,
or held by, any Person who is, was or becomes an Acquiring Person (as such
term is defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null and
void.

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

 

8

 

Rights associated
with the Common Stock represented by such certificates. Similarly, during such time periods,
transfers of shares participating in the direct registration system shall also be deemed to be
transfers of the associated Rights. In the case of any shares participating in the direct
registration system, the Company shall cause the transfer agent for the Common Stock to include on
each direct registration account statement with respect thereto issued prior to the Distribution
Date a notation to the effect that the Company will mail to the stockholder a copy of the Rights
Agreement, as in effect on the date of mailing, without charge, promptly after receipt of a written
request therefor and that the recipient of the statement, as a holder of shares of Common Stock,
may have certain rights thereunder. In the event that shares of Common Stock are not represented
by certificates, references in this Agreement to certificates shall be deemed to refer to the
notations in the book entry accounts reflecting ownership of such shares. In the event that the
Company purchases or acquires any Common Stock after the Record Date, but prior to the Distribution
Date, any Rights associated with such Common Stock shall be deemed canceled and retired so that the
Company shall not be entitled to exercise any Rights associated with the shares of Common Stock
that are no longer outstanding.

Section 4. Form of Rights Certificates.

(a) The Rights Certificates (and the forms of assignment and election to purchase to be
printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit A
hereto and may have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, 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 and on their face shall entitle the holders thereof to
purchase such number of shares of Common Stock as shall be set forth therein at the price set forth
therein (such exercise price per share of Common Stock, as adjusted from time to time hereunder,
the “Purchase Price”), but the amount and type of securities purchasable upon the exercise
of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein,
including Section 11 hereof.

(b) Any Rights Certificate issued pursuant to Section 3(a), Section 11(i) or Section 22 hereof
that represents Rights beneficially owned by: (i) an Acquiring Person, (ii) a transferee of an
Acquiring Person who becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person
with whom such Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors has determined is
part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance
of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange,

 

9

 

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 (as such term is
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.

Section 5. Countersignature and Registration.

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

(b) Following the Distribution Date, the Rights Agent will keep, or cause to be kept, at its
offices designated for such purpose, 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 Section 4(b), Section 7(e) and Section 14 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 (other than Rights Certificates
representing Rights that may have been exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates, entitling the
registered holder to

 

10

 

purchase a like number of shares of Common Stock (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 entitles such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange
any Rights Certificate 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 offices of the Rights Agent designated for such purpose.
Notwithstanding anything in this Agreement to the contrary, 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 or Rights Certificates until the registered holder shall have (i)
properly completed and duly signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate, (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) and the Rights evidenced thereby as the Company
or the Rights Agent shall reasonably request, and (iii) paid a sum sufficient to cover any tax or
charge that may be imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates. Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e),
Section 14 and Section 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 any holder of a Rights Certificate 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) Subject to the provisions of Section 4(b), Section 7(e) and Section 14 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, 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
reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights Certificate, if mutilated,
the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.

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

(a) Subject to Section 7(e) and Section 24 hereof, at any time after the Distribution Date,
the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except
as otherwise provided herein including, without limitation, the restrictions on exercisability set
forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part upon
surrender of the Rights Certificate, with the form of election to purchase and the certificate on
the reverse side thereof properly completed and duly executed, to the Rights Agent at the office or
offices of the Rights Agent designated for such purpose, together with payment of the aggregate
Purchase Price with respect to the total number of shares of Common Stock (or other securities,
cash or other assets, as

 

11

 

the case may be) as to which such surrendered Rights are then exercisable,
and an amount equal to any tax or charge required to be paid under Section 9(e) hereof, by
certified check, cashier’s check, bank draft or money order at or prior to the earlier of (i) 5:00
P.M., New York City time, on September 15, 2011, or such earlier or later date as may be
established by the Board of Directors prior to the expiration of the Rights (such date, as it may
be advanced or extended by the Board of Directors, the (“Final Expiration Date”), or (ii)
the time at which the Rights are redeemed or exchanged (other than Rights that have become void
pursuant to the provisions of Section 7(e) hereof) as provided in Section 23 and Section 24 hereof
(the earlier of (i) and (ii) being herein referred to as the “Expiration Date”).

(b) The Purchase Price for each share of Common Stock pursuant to the exercise of a Right
initially shall be $80.00 shall be subject to adjustment from time to time as provided in Section
11 and Section 13(a) hereof and shall be payable in accordance with paragraph (c) below.

(c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase properly completed and the certificate duly executed, accompanied by payment,
with respect to each Right so exercised, of the Purchase Price per share of Common Stock (or other
securities, cash or other assets, as the case may be) to be purchased as set forth below and an
amount equal to any applicable tax or charge required to be paid under Section 9(e) hereof by
certified check, cashier’s check, bank draft or money order payable to the order of the Company,
the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Common Stock (or make available, if the Rights Agent is
the transfer agent for such shares) certificates for the total number of shares of Common Stock 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 shares of
Common Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of shares of Common Stock as
are to be purchased (in which case certificates for the shares of Common Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request, (ii) when necessary,
requisition from the Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or, upon the order of the registered holder
of such Rights Certificate, registered in such name or names as may be designated by such holder,
and (iv) after receipt thereof, deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the Purchase Price (as such amount may be
reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. In the event that the Company is obligated to
issue other securities of the Company, pay cash and/or distribute other property pursuant to this
Section 7(c) or Section 11(a) hereof, the Company will make all arrangements necessary so that such
other securities, cash and/or other property are available for distribution by the Rights Agent, if
and when appropriate. In the event that, immediately prior to the

 

12

 

occurrence of a Distribution
Date, the number of shares of Common Stock which are authorized by the Company’s articles of
incorporation, as amended and in effect at such time, but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights, is not sufficient to permit exercise in full
of the Rights in accordance with their terms, the Company, acting by resolution of the Board of
Directors, shall follow the same procedures and may take any of the same actions in connection with
the exercise of Rights under this Section 7(c) as are required or permitted to be followed or taken
pursuant to Section 11(a)(iii) hereof with respect to substitution of value in connection with the
exercise of Rights under Section 11(a)(ii) hereof. The Company reserves the right to require prior
to the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Common Stock would be issued.

(d) In case the registered holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, 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 Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person,
(ii) a transferee of an Acquiring Person who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board 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), 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 any other Person as a result of its failure to
make any determinations with respect to an Acquiring Person. The Company shall give the Rights
Agent written notice of the identity of any such Acquiring Person or its nominee, and the Rights
Agent shall rely on such notice in carrying out its duties under this Agreement.

(f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless such registered holder
shall have (i) properly completed and duly 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)

 

13

 

thereof and of the Rights evidenced thereby as the Company or the Rights Agent
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 any of its agents, be delivered to
the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled 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
other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such cancelled Rights Certificates, and in
such case shall deliver a certificate of destruction thereof to the Company.

Section 9. Reservation and Availability of Capital Stock.

(a) The Company covenants and agrees that it will cause to be reserved and authorized for
issuance and kept available out of its authorized and unissued shares of Common Stock (and,
following the occurrence of a Triggering Event, other securities), or out of the authorized and
issued shares of Common Stock held in its treasury, the number of shares of Common Stock (and,
following the occurrence of a Triggering Event, other securities) that, as provided in this
Agreement, including Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full
of all outstanding Rights.

(b) So long as the shares of Common Stock (and, following the occurrence of a Triggering
Event, other securities) issuable and deliverable upon the exercise of the Rights may be listed on
any national securities exchange, the Company
shall use its best efforts to cause, from and after such time as the Rights become
exercisable, 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 Section 11(a)(ii) Event on which the consideration to
be delivered by the Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, a registration statement under the 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 Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities, and (B) the Expiration Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various
states in connection with the exercisability of the Rights. The Company may temporarily suspend,
for a period of time 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

 

14

 

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 that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the suspension has been
rescinded. In addition, if the Company shall determine that a registration statement is required
following the Distribution Date, the Company may temporarily suspend the exercisability of the
Rights until such time as a registration statement has been declared effective. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law, or a registration statement shall not
have been declared effective.

(d) The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all shares of Common Stock (and, following the occurrence of a Triggering Event, other
securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Purchase Price and compliance with all other provisions
of this Agreement), 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
taxes and charges which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for shares of Common Stock (or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required to pay any tax or
charge 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 a number of shares of Common Stock (or other
securities, as the case may be) in respect of a name other than, that of the registered holder of
the Rights Certificates evidencing Rights surrendered for exercise or to issue or deliver any
certificates for a number of shares of Common Stock (or other securities, as the case may
be) in a name other than that of the registered holder upon the exercise of any Rights until
such tax or charge shall have been paid (any such tax or charge being payable by the holder of such
Rights Certificates at the time of surrender) or until it has been established to the Company’s
satisfaction that no such tax or charge is due.

Section 10. Record Date for Securities Issued Upon Exercise. Each Person in whose name any certificate for a number of shares of Common Stock (or other
securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such fractional shares of Common Stock (or other
securities, as the case may be) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly surrendered with the forms
of election and certification duly executed and payment of the Purchase Price (and all applicable
taxes or charges) was made; provided, however, that if the date of such surrender
and payment is a date upon which the Common Stock (or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Stock (or other securities, as the case

 

15

 

may be) 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 stockholder of the Company
with respect to shares 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 Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares 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) In the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (B)
subdivide the outstanding Common Stock, (C) combine the outstanding Common Stock into a smaller
number of shares, or (D) issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of Common Stock (or other capital stock, as the case may be)
issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the Purchase Price then in effect,
the aggregate number and kind of shares of Common Stock (or other
capital stock, as the case may be) which, if such Right had been exercised immediately prior
to such date and at a time when the Common Stock transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.

(ii) In the event any Person shall, at any time after the Rights Dividend Declaration Date,
become an Acquiring Person, unless the event causing such Person to become an Acquiring Person is a
transaction set forth in Section 13(a) hereof, then, promptly following the occurrence of such
event, proper provision shall be made so that each holder of a Right (except as provided below and
in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the
then current Purchase Price in accordance with the terms of this Agreement, such number of shares
of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of shares of Common Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which, following such first occurrence, shall thereafter be referred to as
the “Purchase Price” for each Right and for all purposes of this Agreement) by 50% of the Current
Market Price (determined pursuant to Section 11(d) hereof) per

 

16

 

share of Common Stock on the date of
such first occurrence (such number of shares, the “Adjustment Shares”).

(iii) In the event that the number of shares of Common Stock which is authorized by the
Company’s articles of incorporation, but not outstanding or reserved and authorized for issuance
for purposes other than upon exercise of the Rights, is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company shall (A) determine the value of the Adjustment Shares issuable upon the exercise of a
Right (the “Current Value”), and (B) with respect to each Right (subject to Section 7(e)
hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a
Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) other equity securities of the Company (including, without limitation, shares, or units
of shares, of preferred stock which the Board of Directors has deemed to have essentially the same
value or economic rights as shares of Common Stock (such shares of preferred stock being referred
to as “Common Stock Equivalents”)), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less
the amount of any reduction in the Purchase Price), where such aggregate value has been determined
by the Board of Directors based upon the advice of a nationally recognized investment banking firm
selected by the 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 Section 11(a)(ii) 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 Purchase Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread.
For purposes of the preceding sentence, the term “Spread” shall mean the excess of (i) the
Current Value over (ii) the Purchase Price. If the Board of Directors determines in good faith
that it is likely that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be extended, is herein called the
“Substitution Period”). To the extent that the Company determines that action should be
taken pursuant to the first and/or third sentences of this Section 11(a)(iii), the Company (1)
shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (2) may suspend the exercisability of the Rights until the expiration of
the Substitution Period in order to seek such stockholder approval for such authorization of
additional shares 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

 

17

 

Section 11(a)(iii), the value of each Adjustment Share shall be
the Current Market Price per share of the Common Stock on the Section 11(a)(ii) Trigger Date and
the per share or per unit value of any Common Stock Equivalent shall be deemed to equal the Current
Market Price per share of the Common Stock on such date. Subject to the Company’s compliance with
this Section 11(a)(iii), the Company shall not be liable for its inability to reserve and keep
available for issuance upon exercise of the Rights pursuant to Section 11(a)(ii) hereof a number of
shares of Common Stock greater than the number then authorized by the Company’s articles of
incorporation, but not outstanding or reserved for any other purpose.

(b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Common Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record date) Common Stock, Common Stock
Equivalents or securities convertible into Common Stock or Common Stock Equivalents at a price per
share of Common Stock or per share of Common Stock Equivalents (or having a conversion price per
share, if a security convertible into Common Stock or Common Stock Equivalents) less than the
Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on
such record date, the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding on such record date,
plus the number of shares of Common Stock which the aggregate offering price of the total number of
shares of Common Stock and/or Common Stock Equivalents so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would purchase at such
Current Market Price, and the denominator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of additional shares of Common Stock and/or
Common Stock Equivalents to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such subscription price may be
paid by delivery of consideration, part or all of which may be in a form other than cash, the value
of such consideration shall be as determined in good faith by the 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. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed, and in the event
that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date had not been fixed.

(c) In case the Company shall fix a record date for a distribution to all holders of Common
Stock (including any such distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation), of cash (other than a regular periodic cash dividend
out of the earnings or retained earnings of the Company), assets (other than a dividend payable in
Common Stock, but including any dividend payable in stock other than Common Stock) or evidences of
indebtedness, or of subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the

 

18

 

Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of Common Stock on such record date, less the fair market value (as determined in
good faith by the Board of Directors, 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 share of Common Stock, and
the denominator of which shall be such Current Market Price (as determined pursuant to Section
11(d) hereof) per share of Common Stock. 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 Purchase Price
shall be adjusted to be the Purchase Price which would have been in effect if such record date had
not been fixed.

(d) For the purpose of any computation hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such Common Stock for the thirty
(30) consecutive Trading Days immediately prior to but not including such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of
Common Stock on any date shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the ten (10) consecutive Trading Days immediately following but not including
such date; provided, however, that in the event that the Current Market Price per
share of the Common Stock is determined during a period following the announcement by the issuer of
such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock, and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or reclassification, shall not
have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, then, and in each such case, the Current Market Price shall
be properly adjusted to take into account ex-dividend trading. The closing price for each Trading
Day shall be the last sale price, regular way, as reported in the consolidated transaction
reporting system with respect to securities listed on the New York Stock Exchange (the
“NYSE”) or any other national securities exchange or, if the shares of Common Stock are not
listed on any national securities exchange, the last sale price or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, in either case as reported by
the Over-the-Counter Bulletin Board, the Pink Sheets OTC Market, Inc. or such other
over-the-counter market system then in use. If on any such date the shares of Common Stock are not
listed on a national securities exchange, no sales take place and no bid and asked prices are
quoted in any over-the-counter market, the fair value of such shares on such date as determined in
good faith by the Board of Directors shall be used. The term “Trading Day” shall mean a
day on which the principal national securities exchange on which the shares of Common Stock are
listed is open for the transaction of business or, if the shares of Common Stock are not listed on
any national securities exchange, a

 

19

 

Business Day. If the Common Stock is not publicly held or not
so listed or traded, Current Market Price per share shall mean the fair value per share as
determined in good faith by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.

(e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at least one percent
(1%) in the Purchase Price; provided, however, that any adjustments which by reason
of this Section 11(e) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock or other share, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) two (2) years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration Date.

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

(g) All Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the
number of shares of Common Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

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

(i) The Company may elect on or after the date of any adjustment of the Purchase Price to
adjust the number of Rights, in lieu of any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable

 

20

 

for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of record prior to
such adjustment of the number of Rights shall become that number of Rights (calculated to the
nearest one-ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company 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 Purchase Price
is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at
least ten (10) days later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), 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, countersigned and delivered by the Company and the Rights
Agent, as applicable, in the manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record
of Rights Certificates on the record date specified in the public announcement.

(j) Irrespective of any adjustment or change in the Purchase Price or the number of shares of
Common Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per share of Common Stock and the
number of shares of Common Stock which were expressed in the initial Rights Certificates issued
hereunder.

(k) Before taking any action that would cause an adjustment reducing the Purchase Price below
the then stated value, if any, of the number of shares of Common Stock issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully paid and nonassessable
such number of shares of Common Stock at such adjusted Purchase Price.

(l) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of any Right exercised after such
record date the number of shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of shares of Common Stock
and other capital stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing
such

 

21

 

holder’s right to receive such additional shares (fractional or otherwise) or securities upon
the occurrence of the event requiring such adjustment.

(m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that in its good faith judgment the Board of Directors
shall determine to be advisable in order that any (i) consolidation or subdivision of the Common
Stock, (ii) issuance wholly for cash of any shares of Common Stock at less than the Current Market
Price, (iii) issuance wholly for cash of shares of Common Stock or securities which by their terms
are convertible into or exchangeable for shares of Common Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Common Stock shall not be taxable to such stockholders.

(n) The Company covenants and agrees that it shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof),
or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a
series of related transactions, assets, cash flow or earning power aggregating more than 50% 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 and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o) hereof), if (x) at the time of or immediately after such
consolidation, merger, sale or transfer there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger, sale or transfer, the
stockholders of the Person who constitutes, or would constitute, the “Principal Party” for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously owned by such
Person.

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

Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11 or Section 13 hereof, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Common Stock, a copy of such certificate and (c) if a Distribution Date has
occurred, mail a brief summary thereof to each holder of a Rights Certificate in accordance with
Section 25 hereof. Notwithstanding the foregoing sentence, the failure of the Company to prepare
such certificate or statement or make sure filings or mailings shall not affect the validity

 

22

 

of, 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 therein contained.

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

(a) In the event that, following the Stock Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or merger, (y) any Person
(other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof)
shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing
or surviving corporation of such consolidation or merger and, in connection with such consolidation
or merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged
for stock or other securities of any other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets, cash flow or earning
power aggregating more than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole)
to any Person or Persons (other than the Company or any Subsidiary of the Company in one or
more transactions each of which complies with Section 11(o) hereof), then, and in each such case,
proper provision shall be made so that: (i) 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 the then
current Purchase Price in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable shares of Common Stock of
the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of shares of Common Stock for which a
Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such shares of Common Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence of a Section 11(a)(ii) Event), and (2) dividing that
product (which, following the first occurrence of a Section 13 Event, shall be referred to as the
“Purchase Price” for each Right and for all purposes of this Agreement) by 50% of the Current
Market Price (determined pursuant to Section 11(d) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event; (ii) 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; (iii) 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; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its

 

23

 

Common Stock) in connection
with the consummation of any such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any Section 13
Event.

(b) “Principal Party” shall mean:

(i) in the case of any transaction described in clause (x) or (y) of the first
sentence of Section 13(a) hereof, the Person that is the issuer of any securities into
which shares of Common Stock of the Company are converted in such merger or consolidation,
and if no securities are so issued, the Person that is the other party to such merger or
consolidation; and

(ii) in the case of any transaction described in clause (z) of the first sentence of
Section 13(a) hereof, the Person that is the party receiving the greatest portion of the
assets, cash flow or earning power transferred pursuant to such transaction or
transactions; provided, however, that in any such case, (1) if the Common
Stock of such Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary
of another Person the Common Stock of which is and has been so registered, “Principal
Party” shall refer to such other Person; (2) in case such Person is a Subsidiary, directly
or indirectly, of more than one Person, the Common Stock of two or more of which are and
have been so registered, “Principal Party” shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value; and (3) if the
Common Stock of such Person is not and has not been so registered and 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 (1) and (2) above
shall apply to each of the chains of ownership having an interest in such joint venture as
if such party were a Subsidiary of both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the total of such
interests.

(c) The Company shall not consummate any such consolidation, merger, sale or transfer unless
the Principal Party shall have a sufficient number of authorized shares of its Common Stock which
have not been issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party, will at its own expense:

 

24

 

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

(ii) take all such other action as may be necessary to enable the Principal Party to
issue the securities purchasable upon exercise of the Rights, including but not limited to
the registration or qualification of such securities under all requisite securities laws of
jurisdictions of the various states and the listing of such securities on such exchanges
and trading markets as may be necessary or appropriate;

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

(iv) obtain waivers of any rights of first refusal or preemptive rights in respect of
the Common Stock of the Principal Party subject to purchase upon exercise of outstanding
Rights.

The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers. In the event that a Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a) hereof.

Section 14. Fractional Rights and Fractional Shares.

(a) The Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(i) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights, the Company may pay 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 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. The closing price of the Rights for any day
shall be the last sale price, regular way, as reported in the consolidated transaction reporting
system with respect to securities listed on the NYSE or any other national securities exchange, or
if the Rights are not listed on any national securities exchange, the last sale price or, in case
no such sale takes place on such day, the average of the closing bid and asked prices, in either
case as reported by the Over-the-Counter Bulletin Board, the Pink Sheets OTC Market, Inc. or such
other over-the-counter market system then in use. If on any such date the Rights are not listed on
a national securities exchange, no sales take place and no

 

25

 

bid and asked prices are quoted in any
over-the-counter market, the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.

(b) The Company shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of fractional shares of Common Stock, the Company may 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 one share of Common Stock. For purposes
of this Section 14(b), the current market value of one share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to Section 11(d) hereof) for the Trading
Day immediately prior to the date of such exercise.

(c) Whenever a payment for fractional Rights or fractional shares is to be made by the Rights
Agent, the Company shall (i) prepare and deliver to the Rights Agent a certificate setting forth in
reasonable detail the facts related to such payments and (ii) provide sufficient monies to the
Rights Agent in the form of fully available funds to make such payments.

(d) The holder of a Right by the acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares upon exercise of a Right, except as
permitted by this Section 14.

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

 

26

 

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

(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem
and treat the Person in whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate (or book entry shares in respect of Common Stock)) is
registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the associated Common Stock
certificate (or notices provided to holders of book entry shares of Common Stock) made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company
nor the Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be required to be
affected by any notice to the contrary; and

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

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

 

27

 

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.

(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 Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons.

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

(a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the
corporate trust, stock transfer or other shareholder services 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; but
only if such Person would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Rights Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the countersignature of a 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 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.

(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.

 

28

 

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 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 the Chairman of the Board of Directors, the Chief
Executive Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, 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 only for the Rights Agent’s and
its directors’, officers’, employees’, affiliates’, agents’, advisors’, and representatives’ 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 or be required to verify the
same (except as to its countersignature on such Rights Certificates), 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 adjustment required under the provisions of Section 11, Section 13 or Section
24 hereof or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any shares of Common Stock or other securities to be issued
pursuant to this Agreement or any Rights Certificate or as to whether any shares of

 

29

 

Common Stock or
other securities will, when so issued, be validly authorized and issued, fully paid and
nonassessable.

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

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

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

(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent 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, however, 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 properly completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this

 

30

 

Agreement upon thirty (30) days’ notice in writing mailed to the Company, and, in the
event that the Rights Agent or one of its affiliates is not also the transfer agent for the
Company, to each transfer agent of the Common Stock, by registered or certified mail. In the event
the transfer agency relationship in effect between the Company and the Rights Agent terminates, the
Rights Agent will be deemed to have resigned automatically and be discharged from its duties under
this Agreement as of the effective date of such termination, and the Company shall be responsible
for sending any required notice; provided, however, that the Rights Agent shall
provide such assistance as is reasonably requested by the Company in connection with the Company’s
transition to a replacement rights agent. 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 Rights Agent, as the case may be, and to each transfer agent of the Common
Stock, by registered or certified mail, and, if such removal occurs after the Distribution Date, to
the holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a period of 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 Rights Certificate for inspection by
the Company), then any registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be (a) a legal business entity organized
and doing business under the laws of the United States or of any state of the United States, in
good standing, which is authorized under such laws to exercise corporate trust, stock transfer or
shareholder services powers and which has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $50,000,000 or (b) an affiliate of a legal business entity
described in clause (a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it hereunder, and execute
and deliver any further assurance, conveyance, act or deed necessary for the purpose. 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 Common Stock, and, if such
appointment occurs after the Distribution Date, 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 the Board of Directors to reflect any adjustment or change in the Purchase 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

 

31

 

provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution Date and prior to
the redemption, exchange or expiration of the Rights, the Company (a) shall, with respect to shares
of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, granted or awarded as of the Distribution Date, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company (except as may otherwise be
provided in the instrument(s) governing such securities), and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors, 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 if, and to the extent that, the Company shall be advised
by counsel that such issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Rights Certificate would be issued, 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 and Termination.

(a) The Board of Directors may, at its option, at any time prior to the earlier of (i) the
close of business on the tenth Business Day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of business on the tenth
Business Day following the Record Date), or (ii) the Final Expiration Date, direct the Company to,
and if directed, the Company shall redeem all but not less than all of the then outstanding Rights
at a redemption price of $0.0001 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date hereof, (such
redemption price being hereinafter referred to as the “Redemption Price”). Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event until such time as the Company’s right of redemption
hereunder has expired. The Company may, at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the Current Market Price, as defined in Section 11(d) hereof, of the Common
Stock at the time of redemption) or any other form of consideration deemed appropriate by the Board
of Directors.

(b) Immediately upon the action of the Board of Directors 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 for each Right so
held. Promptly 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 each holder’s last address as it
appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives the notice. Each
such

 

32

 

notice of redemption will state the method by which the payment of the Redemption Price will
be made.

Section 24. Exchange.

(a) The Board of Directors may, at its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section 7(e) hereof) for
Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the “Exchange Ratio”).
Notwithstanding the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after an Acquiring Person becomes the Beneficial Owner of 50% or more of the
shares of Common Stock then outstanding.

(b) Immediately upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to subsection (a) of this Section 24, and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to 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 Stock for
Rights will be effected and, in the event of any partial exchange, the number of Rights which will
be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.

(c) Following the action of the Board of Directors ordering the exchange of any Rights
pursuant to subsection (a) of this Section 24, the Company may implement such procedures in its
sole discretion as it deems appropriate for the purpose of ensuring that the Common Stock (or such
other consideration) issuable upon an exchange pursuant to this Section 24 not be received by
holders of Rights that have become void pursuant to Section 7(e) hereof. In furtherance thereof,
if so directed by the Company, shares of Common Stock (or other consideration) potentially issuable
to holders of Rights upon an exchange pursuant to this Section 24, who have not verified to the
satisfaction of the Company, in its sole discretion, that they are not Acquiring Persons, may be
deposited in a trust established by the Company pending receipt of appropriate verification.

(d) In any exchange pursuant to this Section 24, the Company, at its option, may substitute
Common Stock Equivalents for Common Stock exchangeable for

 

33

 

Rights, at the initial rate of one
Common Stock Equivalent for each share of Common Stock, as appropriately adjusted to reflect stock
splits, stock dividends and other similar transactions after the date hereof.

(e) In the event that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of the Rights.

(f) The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the current market value of a whole share
of Common Stock. For the purposes of this subsection (f), the current market value of a whole
share of Common Stock shall be the closing price of a share of Common Stock (as determined pursuant
to the second sentence of Section 11(d) hereof) for the Trading Day immediately prior to the date
of exchange pursuant to this Section 24.

Section 25. Notice of Certain Events.

(a) In case the Company shall propose, at any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regular periodic cash dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the holders of Common Stock
rights or warrants to subscribe for or to purchase any additional shares of Common Stock or shares
of stock of any class or any other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification involving only the subdivision
of outstanding shares of Common Stock), or (iv) to effect any consolidation or merger into or with
any other Person (other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof),
or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders of the shares of
Common Stock, if any such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days prior

 

34

 

to the record date for
determining holders of the shares of Common Stock for purposes of such action, and in the case of
any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of participation therein by the holders
of the shares of Common Stock, whichever shall be the earlier.

(b) In the event that any Section 11(a)(ii) Event shall occur, (i) the Company shall as soon
as practicable thereafter give to the Rights Agent and each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 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 Section
11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Common Stock shall be
deemed thereafter to refer to, if appropriate, other securities.

(c) The failure of the Company to give any notice provided for in this Section 25, or any
defect therein, shall not (i) relieve the Company of any of its other obligations under this
Agreement or (ii) affect the legality or validity of the action for which notice was hereby
required.

	 	 	 	Section 26. Notices.

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

Retail Ventures, Inc.

4150 E. Fifth Avenue

Columbus, Ohio 43219

Attention: General Counsel

(b) Subject to the provisions of Section 21, 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 overnight delivery service or first-class
mail, postage prepaid, addressed (until another address is filed in writing by the Rights Agent
with the Company) as follows:

Computershare Trust Company, N.A.

7530 Lucerne Drive

Cleveland, Ohio 44130

Attention: Client Services

(c) Notices or demands authorized by this Agreement to be given or made by the Company or the
Rights Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock or book entry shares in respect of
Common Stock) shall be sufficiently given or

 

35

 

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 Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the approval of any holders of
shares of Common Stock. From and after the Distribution Date, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any other provisions
herein, (iii) to shorten or lengthen any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Rights Certificates (other than an
Acquiring Person). Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment, provided that such
supplement or amendment does not adversely affect the rights, duties or obligations of the Rights
Agent under this Agreement. Notwithstanding anything herein to the contrary, this Agreement may
not be amended (other than pursuant to clauses (i) or (ii) of the preceding sentence) at a time
when the Rights are not redeemable.

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.
The Board of Directors shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the Board of Directors or
to the Company, or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the Rights or to amend this
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 of Directors in good faith, shall (x) be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board of
Directors or any of the directors on the Board of Directors 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, registered holders of the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and exclusive

 

36

 

benefit of the
Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).

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 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 Business Day following the date of such determination by the Board of
Directors. Without limiting the foregoing, if any provision requiring a specific group of
directors to act is held by any court of competent jurisdiction or other authority to be invalid,
void or unenforceable, such determination shall then be made by the Board of Directors in
accordance with applicable law and the Company’s articles of incorporation and code of regulations,
as the same may be amended from time to time.

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

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. A signature to this Agreement transmitted
electronically shall have the same authority, effect, and enforceability as an original signature.

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

(Signature Page Follows)

 

37

 

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

	 	 	 	 	 
	 	Retail Ventures, Inc.

 	 
	 	By:  	/s/ James A. McGrady	 
	 	 	Name:  	James A. McGrady 	 
	 	 	Title:  	Chief Executive Officer,

Chief Financial Officer,

President and Treasurer 	 
	 
	 	Computershare Trust Company, N.A.,

as Rights Agent

 	 
	 	By:  	/s/ Michael Lang	 
	 	 	Name:  	Michael Lang	 
	 	 	Title:  	Senior Vice President	 

[Signature Page to Rights Agreement]

 

 

 

Exhibit A

[Form of Rights Certificate]

			
	 	 	 
	Certificate No. R-
	 	                     Rights

NOT EXERCISABLE AFTER SEPTEMBER 15, 2011 OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.0001 PER RIGHT AND TO
EXCHANGE, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS EVIDENCED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON (AS
SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
EVIDENCED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.]1

Rights Certificate

RETAIL VENTURES, INC.

This certifies that                                         , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of February 8, 2011 (the “Rights
Agreement”), between Retail Ventures, Inc., an Ohio corporation (the “Company”), and Computershare
Trust Company, N.A., a federally chartered trust company, as Rights Agent (the “Rights Agent”), to
purchase from the Company at any time after the Distribution Date and prior to 5:00 P.M. (New York
City time) on September 15, 2011 (unless such date is advanced or extended prior thereto by the
Board of Directors), at the office or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one share of the common stock, without par value, of the Company
(the “Common Stock”), at a purchase price of $80.00 per share (the “Purchase 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 shares of Common Stock which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase Price as of

 

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

 

Ex. A-1

 

                    , 2011 based on the Common Stock as constituted at such date. The Company reserves
the right to require prior to the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that a number of Rights be exercised so that only whole shares of Common Stock
will be issued.

Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned by (i) an
Acquiring Person (as such term is defined in the Rights Agreement), (ii) a transferee of any such
Acquiring Person, or (iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became an Acquiring Person, such Rights shall
become null and void and no holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.

As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of
Common Stock 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, including Triggering 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.

This Rights Certificate, with or without other Rights Certificates, upon surrender at the
office or offices 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 number of shares of Common Stock as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at its option at a redemption price of $0.0001 per Right at any time
prior to the earlier of the close of business on (i) the tenth Business Day following the Stock
Acquisition Date (as such time period may be extended pursuant to the Rights Agreement), and (ii)
the Final Expiration Date. In addition, under certain circumstances following the Stock
Acquisition Date, the Rights may be exchanged, in whole or in part, for shares of the Common Stock,
or equity securities having essentially the same value or economic rights as such shares.
Immediately upon the action of the Board of Directors authorizing any such exchange,

 

Ex. A-2

 

and without any further action or any notice, the Rights (other than Rights which are not
subject to such exchange) will terminate and the Rights will only enable holders to receive the
shares issuable upon such exchange.

No fractional shares of Common Stock 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. The Company, at its election, may require that a number of Rights be exercised so that
only whole shares of Common Stock would be issued.

No holder of this Rights Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of shares of Common Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall anything contained in
the 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 consent to or withhold
consent from 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.

 

Ex. A-3

 

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

Dated as of                      _____, _____

	 	 	 	 	 
	 	RETAIL VENTURES, INC.

 	 
	 	By:  	 	 
	 	 	Title: 	 

Countersigned:

COMPUTERSHARE TRUST COMPANY, N.A.,

as Rights Agent

	 	 	 	 	 

	By:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	Authorized Signature	 	 

 

Ex. A-4

 

[Form of Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate.)

FOR VALUE RECEIVED • hereby sells, assigns and transfers unto • (Please print name and address
of transferee) 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:

 

Ex. A-5

 

Certificate

The undersigned hereby certifies by checking the appropriate boxes that:

(1) The Rights evidenced by this Rights Certificate [   ] are [   ] are not beneficially owned by
an Acquiring Person and [   ] are [   ] are not being sold, assigned and transferred by or on behalf of
a Person who is or was an Acquiring Person (as such term is defined pursuant to the Rights
Agreement);

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

Dated:                                         ,_____

	 	 	 	 	 
	 	
 	 
	 	Signature 	 

Signature Guaranteed:

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

 

Ex. A-6

 

NOTICE

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

 

Ex. A-7

 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires

to exercise Rights represented

by the Rights Certificate.)

To: Retail Ventures, Inc.:

The undersigned hereby irrevocably elects to exercise                      Rights represented by this
Rights Certificate to purchase the shares of Common Stock issuable upon the exercise of the Rights
(or such other securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued in the name of and
delivered to:

Please insert social security

or other identifying number

 

(Please print name and address)

 

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

Please insert social security

or other identifying number

 

(Please print name and address)

 

Dated:                                         ,_____

	 	 	 	 	 
	 	Signature 	 

Signature Guaranteed:

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

 

Ex. A-8

 

Certificate

The undersigned hereby certifies that the Rights evidenced by this Rights Certificate are not
beneficially owned by, or being assigned to, an Acquiring Person (as such term is defined pursuant
to the Rights Agreement).

 

Ex. A-9

 

Certificate

The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated:                                         ,_____

	 	 	 	 	 
	 	
 	 
	 	Signature 	 

Signature Guaranteed:

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

 

Ex. A-10

 

NOTICE

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

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

 

Ex. A-11

 

Exhibit B

SUMMARY OF RIGHTS TO PURCHASE

COMMON STOCK

On February 8, 2011, the Board of Directors of Retail Ventures, Inc. (the “Company”)
authorized and declared a dividend distribution of one Right for each outstanding share of Company
Common Stock to stockholders of record at the close of business on February 24, 2011 (the “Record
Date”). Each Right entitles the registered holder to purchase from the Company a unit (a “Unit”)
consisting of a number of shares of Company Common Stock at a Purchase Price of $80.00 per Unit,
subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement
(the “Rights Agreement”) between the Company and Computershare Trust Company, N.A., a federally
chartered trust company, as Rights Agent.

The Rights Agreement is intended to help protect the Company’s tax net operating losses and
certain other tax assets (“Tax Benefits”) by deterring any person (other than the Company, any
subsidiary of the Company or any employee benefit plan of the Company) from becoming a 5%
Shareholder (as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the
“Code”)) without the approval of the Board of Directors (any such person who becomes a 5%
Shareholder, other than as described below, an “Acquiring Person”). Notwithstanding the foregoing,
shareholders who own 5% or more (by value) of our outstanding (i) Common Stock, (ii) any preferred
stock (other than preferred stock described in Section 1504(a)(4) of the Code) of the Company,
(iii) warrants, rights, or options (including options within the meaning of Section 1.382-4(d)(9)
of the Treasury Regulations) to purchase stock (other than preferred stock described in Section
1504(a)(4) of the Code) of the Company, and (iv) any other interest that would be treated as
“stock” of the Company pursuant to Section 1.382-2T(f)(18) of the Treasury Regulations, “Company
Securities”) as of the close of business on February 8, 2011, and shareholders who acquire such an
interest solely as a result of (A) a transaction in which such shareholder received the approval of
the Board of Directors or (B) an issuance by the Company that was approved by the Board of
Directors will not be an Acquiring Person and therefore will not trigger the Rights Plan, so long
as they do not acquire any additional Company Securities, or decrease their percentage ownership of
Company Securities below 5% and subsequently become a 5% Shareholder.

Initially, the Rights will be attached to all Common Stock certificates representing shares
then outstanding, and no separate Rights Certificates will be distributed. Subject to certain
exceptions specified in the Rights Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) the close of business on the tenth business
day following the date of public announcement that a person has become an Acquiring Person other
than by reason of a transaction approved by the Board of Directors or (ii) the close of business on
the tenth business day (or such later date as the Board of Directors shall determine prior to the
time

 

Ex. B-1

 

a person becomes an Acquiring Person) following the commencement of a tender offer or exchange
offer that would result in a person or group becoming an Acquiring Person (the earlier of the dates
in clause (i) or (ii) above being called the “Distribution Date”), provided,
however, the Distribution Date shall not occur if the Board of Directors shall have
affirmatively determined that, in light of the intent and purposes of this Rights Agreement or
other circumstances facing the Company, a Distribution Date shall not be deemed to have occurred.

Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates
(or, in the case of shares reflected on the direct registration system, by the notations in the
book entry accounts) and will be transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. Pursuant to the Rights
Agreement, the Company reserves the right to require prior to the occurrence of a Triggering Event
(as defined below) that, upon any exercise of Rights, a number of Rights be exercised so that only
whole shares of Common Stock will be issued.

The definition of Acquiring Person contained in the Rights Agreement contains several
exemptions, including for (i) the Company or any of its subsidiaries; (ii) 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; (iii) the
U.S. Government; (iv) any person who becomes a 5% Shareholder as a result of a reduction in the
number of Company Securities outstanding due to the repurchase of Company Securities by the Company
or a stock dividend, stock split, reverse stock split, or similar transaction effected by the
Company, unless and until such person increases its percentage ownership of Company Securities over
its lowest percentage ownership of Company Securities on or after the consummation of the relevant
transaction (other than an increase solely as a result of a stock dividend, stock split, reverse
stock split, or similar transaction effected by the Company); (v) any person who was a 5%
Shareholder on the date of the Rights Agreement, or becomes a 5% Shareholder solely by reason of
participation in a transaction approved by the Board of Directors, unless and until such person
increases its percentage ownership of Company Securities over its lowest percentage ownership of
Company Securities on or after the date of the Rights Agreement or the consummation of the relevant
transaction, as applicable (other than an increase solely as a result of a stock dividend, stock
split, reverse stock split, or similar transaction effected by the Company) or such person
decreases its percentage ownership of Company Securities below 5% and thereafter becomes a 5%
Shareholder; or (vi) any person who or which inadvertently may become an Acquiring Person
(including, without limitation, because (A) such person was unaware that it beneficially owned a
percentage of Common Stock that would otherwise cause such person to be an “Acquiring Person” or
(B) such person was aware of the extent of its beneficial ownership of Common Stock but had no
actual knowledge of the consequences of such beneficial ownership under the Rights Agreement), so
long as such person promptly enters into, and delivers to the Company, an irrevocable commitment

 

Ex. B-2

 

promptly to divest, and thereafter promptly divests (without exercising or retaining any
power, including voting, with respect to such securities), sufficient Company Securities so that
such person ceases to be an Acquiring Person, provided, however, that no person
shall be an Acquiring Person if the Board of Directors shall have affirmatively determined, prior
to the Distribution Date, in light of the intent and purposes of this Rights Agreement or other
circumstances facing the Company, that such person shall not be deemed an Acquiring Person.

The Rights are not exercisable until the Distribution Date and will expire at 5:00 P.M. (New
York City time) on September 15, 2011 unless such date is advanced or extended or the Rights are
earlier redeemed or exchanged by the Company as described below.

As soon as practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of the Common Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise
determined by the Board and except with respect to shares of Common Stock issued by the Company
after the date of the Rights Agreement (i) pursuant to exercises of stock options or as awards
under an employee plan or arrangement granted or awarded as of the Distribution Date or (ii) upon
the exercise, conversion or exchange of securities issued as of the Distribution Date, Rights will
only be issued with respect to shares of Common Stock that were issued prior to the Distribution
Date.

In the event that a person becomes an Acquiring Person, each holder of a Right will thereafter
have the right to receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times the exercise price
of the Right. Notwithstanding any of the foregoing, following the occurrence of the event set
forth in this paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of the event set forth above until such time as
the Rights are no longer redeemable by the Company as set forth below.

For example, at an exercise price of $80.00 per Right, each Right not owned by an Acquiring
Person (or by certain related parties) following an event set forth in the preceding paragraph
would entitle its holder to purchase $160.00 worth of Common Stock (or other consideration, as
noted above) for $80.00. Assuming that the Common Stock had a per share value of $16.00 at such
time, the holder of each valid Right would be entitled to purchase ten (10) shares of Common Stock
for $80.00.

In the event that, at any time after a person becomes an Acquiring Person, (i) the Company
engages in a merger or other business combination transaction (other than a merger or other
business combination transaction with a subsidiary of the Company) in which the Company is not the
surviving corporation, (ii) the Company engages in a merger or other business combination
transaction in which the Company is the surviving corporation and the Common Stock of the Company
is changed or

 

Ex. B-3

 

exchanged, or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold or
transferred, each holder of a Right (except Rights which have previously been voided as set forth
above) shall thereafter have the right to receive, upon exercise, common stock of the acquiring
company having a value equal to two times the exercise price of the Right. The events set forth in
this paragraph and in the second preceding paragraph are referred to as the “Triggering Events.”

At any time after a person becomes an Acquiring Person and prior to the acquisition by an
Acquiring Person of 50% or more of the then outstanding shares of Common Stock, the Board of
Directors may exchange the Rights (other than Rights owned by such person or group which have
become void), in whole or in part, at an exchange ratio of one share of Common Stock per Right
(subject to adjustment).

The Purchase Price payable, and the number of Units of Common Stock or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) if holders of the Common Stock are granted certain
rights or warrants to subscribe for Common Stock or convertible securities at less than the
current market price of the Common Stock, or (iii) upon the distribution to holders of the Common
Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends) or of
subscription rights or warrants (other than those referred to above).

With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price. The Company is under no obligation to
issue fractional Units and, in lieu thereof, an adjustment in cash may be made based on the market
price of the Common Stock on the last trading date prior to the date of exercise.

At any time until ten business days following the Stock Acquisition Date, the Company may
redeem the Rights in whole, but not in part, at a price of $0.0001 per Right, referred to as the
“Redemption Price” (payable in cash, Common Stock or other consideration deemed appropriate by the
Board of Directors). Immediately upon the action of the Board of Directors ordering redemption of
the Rights, the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to receive dividends. While
the distribution of the Rights will not be taxable to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for common stock of the
acquiring company or in the event of the redemption of the Rights as set forth above.

Any of the provisions of the Rights Agreement may be amended by the Board of Directors prior
to the Distribution Date. After the Distribution Date, the

 

Ex. B-4

 

provisions of the Rights Agreement may be amended by the Board of Directors in order to cure
any ambiguity, to make changes which do not adversely affect the interests of holders of Rights, or
to shorten or lengthen any time period under the Rights Agreement. The foregoing notwithstanding,
no amendment may be made at such time as the Rights are not redeemable.

A copy of the Rights Agreement will be filed with the Securities and Exchange Commission as an
Exhibit to a Registration Statement on Form 8-A and a Current Report on Form 8-K. This summary
description of the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein by reference.

 

Ex. B-5Exhibit 10.1

Exhibit 10.1

EXECUTION COPY

LOAN AGREEMENT

This LOAN AGREEMENT (this “Agreement”), dated as of February 8, 2011 (the “Effective Date”),
is made by and between SEI, Inc., a Nevada corporation (the “Lender”), and Retail Ventures, Inc.,
an Ohio corporation (the “Borrower”).

1. Credit Facility.

1.1 Scope. This Agreement, unless otherwise agreed to in writing by the Lender and the
Borrower or prohibited by any Legal Requirement (as defined herein), governs the Loans (as defined
herein). The Loans shall be subject to the terms and conditions of this Agreement and the other
Related Documents. Any procedures agreed to by the Lender shall not vary the terms or conditions
of this Agreement or the other Related Documents regarding the Loans.

1.2 Loans.

(a) Subject to the terms and conditions set forth herein, the Lender hereby agrees to make
revolving loans to the Borrower from time to time on and after the Effective Date and prior to the
Maturity Date (any such revolving loan, a “Loan,” and such revolving loans collectively, the
“Loans”); provided that (i) each Loan shall be in the minimum amount of $5,000,000, or in
integral multiples of $1,000,000 in excess thereof, (ii) the principal amount of the Loans, in the
aggregate, shall not exceed the sum of Thirty Million Dollars ($30,000,000), (iii) the Borrower
shall provide the Lender with telephonic notice of the amount and the disbursement instruction of
each Loan requested prior to 2:00 p.m. eastern time on the disbursement date requested (which shall
be a business day), which instruction shall be confirmed in writing within twenty-four hours
thereafter, and (iv) the Lender shall have no obligation to make any Loans at any time when a
Default has occurred and is continuing or a fact or circumstance exists, which upon the giving of
notice or a lapse of time would constitute a Default under this Agreement or a breach or default
under any other Related Document. The parties acknowledge and agree that the Loans constitute
indebtedness for U.S. federal income tax purposes and shall treat the Loans consistent therewith
unless otherwise required to do so by law.

(b) Interest shall accrue on the outstanding principal amount of each Loan at a rate per annum
equal to LIBOR plus 5.00%, which per annum rate of interest shall be calculated on a 360-day year
basis and based on the actual number of days that elapse during the interest calculation period.
Upon the occurrence and during the continuance of a Default (as defined herein), interest shall
accrue on the unpaid balance of the Loan (including all accrued but unpaid interest, fees and
costs) at the rate otherwise applicable to such Loan plus 2%, which per annum rate shall be
calculated on a 360-day year basis and based on the actual number of days that elapse during the
interest calculation period.

(c) Subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow the Loans.

(d) The proceeds of the Loans shall be used to provide for the ongoing working capital and
general corporate needs of the Borrower.

1.3 Payments.

(a) All interest accruing on the Loan shall be due and payable in arrears on the last business
day of each calendar year and on the Maturity Date. The unpaid principal amount of each Loan shall
be due and payable on the earlier to occur of (i) the Maturity Date, (ii) the date that is two (2)
business days after the occurrence of a merger of the Borrower with and into a Subsidiary of DSW,
Inc. (the “Merger”), and (iii) the date on which the Loans shall be due and payable pursuant to the
provisions of this Agreement, whether by acceleration or otherwise.

 

 

 

(b) Within five (5) business days following the receipt by Borrower of Net Cash Proceeds from
(A) any sale, transfer or other disposition of any securities owned by the Borrower, (B) any
dividend or other Distribution on account of any securities owned by the Borrower (including any
options, warrants or other rights), or (C) any redemption, retirement, purchase or other
acquisition of any security (including any options, warrants or
other rights) of the Borrower or any of its Subsidiaries, the Borrower or such Subsidiary
shall make a prepayment of the Loan in an amount equal to 100% of all Net Cash Proceeds received
from all such dispositions or Distributions; provided that any such Net Cash Proceeds less
than $250,000 in the aggregate received by the Borrower or any Subsidiary from any Person other
than the Lender or its Affiliates shall not be subject to the prepayment requirement of this
subsection 1.3(b). Nothing in this clause (b) shall be construed to permit any such sale, transfer
or other disposition that is prohibited by any other provision of this Agreement. Any such
prepayment amount shall not be re-advanced.

(c) At any time after the occurrence and during the continuance of a Default with respect to
any payment of interest, principal, costs, fees, expenses or other Liability on the Loans or under
any Related Document that is due or payable, the Borrower irrevocably authorizes the Lender, and
the Lender shall have the right, to make any such payment or pay any such Liability or cause any
such payment or such Liability to be made by offsetting, setting off or recouping any amount due
from the Lender to the Borrower with respect to the exercise of any warrant the Lender or its
Affiliates, including but not limited to SSC RVI, LLC, may hold that provides the Lender or its
Affiliates a right to purchase from Borrower shares of the Borrower or DSW Inc. This right of
offset, setoff and recoupment may be exercised at any time from time to time after the occurrence
and during the continuance of any Default, without prior notice to or demand on the Borrower, and
regardless of whether any Liabilities are contingent, unmatured or unliquidated. Any such payment
shall not be re-advanced.

2. Definitions. As used in this Agreement, the following terms have the following respective
meanings:

2.1 “Affiliate” means any Person which, directly or indirectly Controls or is Controlled by or
under common Control with, another Person.

2.2 “Authorizing Documents” means certificates of authority to transact business, certificates
of good standing, borrowing resolutions, appointments, officer’s certificates, certificates of
incumbency, and other documents that empower and authorize or evidence the power and authority of
all Persons (other than the Lender) executing each Related Document or their representatives to
execute and deliver each Related Document and to perform the Person’s obligations thereunder.

2.3 “Control” as used with respect to any Person, means the power to direct or cause the
direction of, the management and policies of that Person, directly or indirectly, whether through
the ownership of Equity Interests, by contract, or otherwise. “Controlling” and “Controlled” have
meanings correlative thereto.

2.4 “Distribution” means any dividend, redemption and other distribution made to any Equity
Owner, other than salary, bonuses, reimbursement of expenses and other compensation for services
expended in the current accounting period.

2.5 “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.

2.6 “Equity Owner” means a shareholder, partner, member, holder of a beneficial interest in a
trust or other owner of any Equity Interests.

2.7 “GAAP” means generally accepted accounting principles in effect from time to time in the
United States of America, consistently applied.

2.8 “Legal Requirement” means any law, ordinance, decree, requirement, order, judgment, rule,
regulation (or interpretation of any of the foregoing) of any foreign governmental authority, the
United States of America, any state thereof, any political subdivision of any of the foregoing or
any agency, department, commission, board, bureau, court or other tribunal having jurisdiction over
the Lender, the Borrower or any of its Subsidiaries or their respective Properties or any agreement
by which any of them is bound.

 

2

 

2.9 “Liabilities” means all indebtedness, liabilities and obligations of every kind and
character of the Borrower to the Lender under this Agreement or any other Related Document, whether
the obligations, indebtedness and liabilities are
individual, joint and several, contingent or otherwise, now or hereafter existing, including,
without limitation, all liabilities, interest, costs, fees, and any monetary obligations (including
interest) incurred hereunder or thereunder or accrued during the pendency of any bankruptcy,
insolvency, receivership or other similar proceedings, regardless of whether allowed or allowable
in such proceeding, and all renewals, extensions, modifications, consolidations, rearrangements,
restatements, replacements or substitutions hereof or thereof.

2.10 “LIBOR” means the rate of interest per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) announced or offered by PNC Bank, National Association as the daily London
interbank offered rate for deposits denominated in dollars with a one-month maturity. In the event
that such rate is not announced by PNC Bank, National Association, then “LIBOR” shall be the daily
London interbank offered rate denominated in dollars with a one-month maturity as announced or
offered by a financial institution or publication selected by the Lender, in its reasonable
discretion.

2.11 “Lien” means any mortgage, deed of trust, pledge, charge, encumbrance, security interest,
collateral assignment or other lien or restriction of any kind.

2.12 “Maturity Date” means the second anniversary of the Effective Date.

2.13 “Net Cash Proceeds” means the cash proceeds actually received from a disposition,
incurrence or issuance described in Section 1.3(b), net of any taxes payable in connection
therewith and any other reasonable and customary fees and expenses, in each case, to the extent
actually incurred in connection therewith.

2.14 “Note” means each promissory note or instrument now or hereafter evidencing the Loans.

2.15 “Organizational Documents” means, with respect to any Person, certificates of existence
or formation, documents establishing or governing the Person or evidencing or certifying that the
Person is duly organized and validly existing in accordance with all applicable Legal Requirements,
including all amendments, restatements, supplements or modifications to such certificates and
documents as of the date of the Related Document referring to the Organizational Document and any
and all future modifications thereto.

2.16 “Permitted Investments” means (1) readily marketable direct obligations of the United
States of America or any agency thereof with maturities of one year or less from the date of
acquisition; (2) fully insured certificates of deposit with maturities of one year or less from the
date of acquisition issued by any commercial lending institution operating in the United States of
America having capital and surplus in excess of $500,000,000.00; (3) commercial paper of a domestic
issuer if at the time of purchase such paper is rated in one of the two highest rating categories
of Standard and Poor’s Corporation or Moody’s Investors Service; and (4) investments, classified in
accordance with GAAP as current assets of the Borrower or any of its Subsidiaries, in money market
investment programs that are administered by financial institutions that have the highest rating
obtainable from either Standard and Poor’s Corporation or Moody’s Investors Service.

2.17 “Person” means any individual, corporation, partnership, limited liability company, joint
venture, joint stock association, association, Lender, business trust, trust, unincorporated
organization, any foreign governmental authority, the United States of America, any state of the
United States of America, including the District of Columbia and any political subdivision of any
of the foregoing or any other form of entity.

2.18 “Property” means any interest in any kind of property or asset, whether real, personal or
mixed, tangible or intangible.

2.19 “Related Documents” means this Agreement and all loan agreements, credit agreements,
Notes, reimbursement agreements, assignments and any other instruments or documents executed in
connection with this Agreement or with any of the Liabilities.

2.20 “Subsidiary” means, as to any particular Person (the “parent”), a Person the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of the date of
determination, as well as any other Person of which fifty percent (50%) or more of the Equity
Interests is at the time of determination directly or indirectly owned, Controlled or held, by the
parent or by any Person or Persons Controlled by the parent, either alone or together with the
parent. Notwithstanding the
foregoing, for purposes of this Agreement, the term “Subsidiary” shall not include DSW Inc.

 

3

 

3. Interpretations. Whenever possible, each provision of the Related Documents shall be
interpreted in such manner as to be effective and valid under applicable Legal Requirements. If
any provision of any Related Document cannot be enforced, the remaining portions of such Related
Document shall continue in effect. In the event of any conflict or inconsistency between this
Agreement and the provisions of any other Related Document, the provisions of this Agreement shall
control. Use of the term “including” does not imply any limitation on (but may expand) the
antecedent reference. Any reference to a particular document includes all modifications,
supplements, replacements, renewals or extensions of that document, but this rule of construction
does not authorize amendment of any document the amendment of which is otherwise restricted under
any Related Document, without the Lender’s consent. Section headings are for convenience of
reference only and do not affect the interpretation of this Agreement. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP. Whenever the Lender’s determination, consent, approval or satisfaction is
required under this Agreement or the other Related Documents or whenever the Lender may at its
option take or refrain from taking any action under this Agreement or the other Related Documents,
the decision as to whether or not the Lender makes the determination, consents, approves, is
satisfied or takes or refrains from taking any action, shall be in the sole and exclusive
discretion of the Lender, and the Lender’s decision shall be final and conclusive, unless otherwise
stated herein or in such other Related Document.

4. Conditions Precedent to Extensions of Credit.

4.1 Conditions to the Effective Date.

On or before the Effective Date and the making of any Loans, the Borrower shall deliver to the
Lender, in form and substance reasonably satisfactory to the Lender:

(a) Loan Documents. Evidence of the execution and delivery of this Agreement, a Note, a
closing certificate and any other documents which the Lender may reasonably require to give effect
to the transactions described in this Agreement and the other Related Documents;

(b) Organizational and Authorizing Documents. The Organizational Documents and Authorizing
Documents of the Borrower and any other Persons (other than the Lender) executing the Related
Documents that at a minimum: (i) document the due organization, valid existence and good standing
of the Borrower and every other Person (other than the Lender) that is a party to this Agreement or
any other Related Document; (ii) evidence that each Person (other than the Lender) which is a party
to this Agreement or any other Related Document has the power and authority to enter into the
transactions described therein; and (iii) evidence that the Person signing on behalf of each Person
that is a party to the Related Documents (other than the Lender) is duly authorized to do so;

(c) Representations. Certification that the representations of the Borrower and its
Subsidiaries in the Related Documents are true on and as of the Effective Date;

(d) No Default. Certification that no Default or event that would constitute a Default but
for the giving of notice, the lapse of time or both, has occurred in any provision of this
Agreement or any other Related Documents and is continuing or would result from any extension of
credit on the Effective Date;

(e) Additional Approvals, Opinions, and Documents. The Lender has received any other
approvals, opinions and documents as it may reasonably request;

(f) Commitment Fee. A one-time commitment fee equal to 8.75% of the total commitment of the
Lender under this Agreement; and

(g) No Prohibition or Onerous Conditions. The making of the Loan and any other extensions of
credit is not prohibited by and does not subject the Lender, the Borrower or any of its
Subsidiaries to any penalty or onerous condition under, any Legal Requirement.

 

4

 

4.2 Conditions to Loans.

The Lender shall not be required to make any Loan, unless on the applicable date of any
borrowing of any Loan:

(a) There exists no Default or event that would constitute a Default but for
the giving of notice, the lapse of time or both, in any provision of this Agreement
or any other Related Document or would result from such Loan; and

(b) The representations and warranties contained in Section 7 shall be true and
correct as of such date (except for such representations and warranties that expressly
relate to an earlier date, in which case such representations and warranties shall be true
and correct as of such earlier date).

5. Affirmative Covenants. The Borrower agrees to do, and cause each of its Subsidiaries to do, each
of the following:

5.1 Insurance. Maintain insurance with financially sound and reputable insurers, with such
insurance and insurers to be reasonably satisfactory to the Lender, covering its Property and
business against those casualties and contingencies and in the types and amounts as are in
accordance with sound business and industry practices, and furnish to the Lender, upon request of
the Lender, reports on each existing insurance policy showing such information as the Lender may
reasonably request.

5.2 Existence. Except to the extent failure to do so would not materially affect the
business, assets, affairs, prospects or financial condition of the Borrower and its Subsidiaries,
taken as a whole, (i) maintain its existence and business operations as presently in effect in
accordance with all applicable Legal Requirements (provided, however, that consummation of the
Merger shall not be deemed a violation of this Section 5.2(i)), (ii) pay its debts and obligations
when due under normal terms, and (iii) pay on or before their due date, all taxes, assessments,
fees and other governmental monetary obligations, except as they may be contested in good faith if
they have been properly reflected on its books and, at the Lender’s request, adequate funds or
security has been pledged or reserved to insure payment.

5.3 Financial Records. Maintain proper books and records of account, in accordance with GAAP,
and consistent with the financial statements previously submitted to the Lender. Promptly upon the
Lender’s reasonable request, provide the Lender with true and correct copies of any financial
statements or other financial information prepared by the Borrower (or on its behalf).

5.4 Notices of Claims, Litigation, Defaults, etc. Promptly inform the Lender in writing of:
(1) all existing and all threatened (in writing) litigation, claims, investigations, administrative
proceedings and similar actions or changes in Legal Requirements affecting it which could
materially affect the business, assets, affairs, prospects or financial condition of the Borrower
and its Subsidiaries, taken as a whole; and (2) the occurrence of any event which gives rise to a
Default.

5.5 Title to Assets and Property. Maintain good and marketable title to all of its
Properties, and defend them against all claims and demands of all Persons at any time claiming any
interest in them, except, in each case, to the extent failure to do so is not reasonably likely to
materially and adversely affect the business, assets, affairs, prospects or financial condition of
the Borrower and its Subsidiaries, taken as a whole.

5.6 Other Agreements. Comply with all terms and conditions of all other agreements, whether
now or hereafter existing, between it and any other Person, except to the extent failure to do so
is not reasonably likely to materially and adversely affect the business, assets, affairs,
prospects or financial condition of the Borrower and its Subsidiaries, taken as a whole,
provided, however, that this covenant shall not apply to the Merger Agreement.

5.7 Use of Proceeds. Use the proceeds of each Loan in accordance with Section 1.2(d).

5.8 Additional Assurances. Promptly make, execute and deliver any and all agreements,
documents, instruments and other records that the Lender may reasonably request to evidence any of
the Loans, cure any defect in the execution and delivery of any of the Related Documents, comply
with any Legal Requirement applicable to the Lender or the Loans or describe more fully particular
aspects of the agreements set forth or intended to be set forth in any of the Related Documents.

 

5

 

6. Negative Covenants.

6.1 Unless otherwise noted, the financial requirements set forth in Section 6.2 will
be computed in accordance with GAAP applied on a basis consistent with the financial statements
previously submitted by the Borrower to the Lender.

6.2 Without the written consent of the Lender and other than in connection with the Merger,
the Borrower will not and no Subsidiary of the Borrower will:

(a) Distributions. Other than in connection with a cashless exercise of outstanding
restricted stock or options of the Borrower, redeem, retire, purchase or otherwise acquire,
directly or indirectly, any of its Equity Interests, return any contribution to an Equity Owner or,
other than stock dividends and dividends paid to the Borrower from a Subsidiary, declare or pay any
Distributions.

(b) Sale of Equity Interests. Issue, sell or otherwise dispose of its Equity
Interests, other than (1) the issuance of the common stock of the Borrower upon exercise of
warrants outstanding as of the date hereof, (2) the issuance of stock options to directors of the
Borrower in the ordinary course of business and consistent with past practice or (3) any issuance
under the Indenture, dated as of August 16, 2006 (the “PIES Indenture”) between the Borrower and
HSBC Bank USA, National Association, the Notes and the Collateral Agreement (as defined in the PIES
Indenture) related to the 6.625% Mandatorily Exchangeable Notes due September 15, 2011.

(c) Debt. Incur, contract for, assume, or permit to remain outstanding, indebtedness
for borrowed money, installment obligations, obligations under capital leases, or any guarantee of
the indebtedness of another Person other than (1) indebtedness owing to the Lender, (2) the
indebtedness and guarantees set forth in Schedule 6.2(c) attached hereto, and (3)
endorsement of drafts for deposit and collection in the ordinary course of business.

(d) Liens. Create or permit to exist any Lien on any of its Property except: (1)
existing Liens set forth on Schedule 6.2(d) attached hereto and approved by the Lender; (2)
Liens in favor of the Lender; (3) Liens incurred in the ordinary course of business securing
current liabilities for taxes, worker’s compensation, unemployment insurance, social security and
pension liabilities that are (x) not overdue by more than 30 days or (y) that are being contested
in good faith and, at the Lender’s request, adequate funds or security has been pledged or reserved
to insure payment; (4) purchase money security interests which secure any purchase money
indebtedness permitted under this Agreement; (5) statutory Liens of landlords, warehousemen,
mechanics, materialmen, repairmen or other like Liens arising in the ordinary course of business
that secure obligations that (x) are not overdue by more than 30 days or (y) are being contested in
good faith and, at the Lender’s request, adequate funds or security has been pledged or reserved to
insure payment; (6) easements, rights-of-way, restrictions, encroachments, protrusions and other
similar encumbrances and minor title defects affecting real property that do not secure
indebtedness and do not materially and adversely affect the use of the Property subject thereto;
(7) Liens securing indebtedness permitted under Section 6.2(c) hereof to the extent Liens have been
granted prior to the Effective Date; (8) Liens arising solely by virtue of any statutory or common
law provision relating to banker’s liens, rights of set-off or similar rights and remedies as to
deposit or commodity trading or brokerage accounts or other funds maintained with a creditor
depository institution; (9) leases and licenses granted in the ordinary course of business; and
(10) Liens that are contractual rights of setoff under agreements entered into in the ordinary
course of business.

(e) Use of Proceeds. Use, or permit any proceeds of the Loan to be used, directly or
indirectly, for the purpose of “purchasing or carrying any margin stock” within the meaning of
Federal Reserve Board Regulation U. At the Lender’s request, the Borrower will furnish a completed
Federal Reserve Board Form U-1.

(f) Continuity of Operations. (1) Engage in any business activities substantially
different from those in which it is presently engaged and related activities; (2) cease operations,
liquidate, merge, transfer, acquire or consolidate with any other Person, change its name,
dissolve, or sell any assets out of the ordinary course of business; (3) enter into any arrangement
with any Person providing for the leasing by it of Property which has been sold or transferred by
it to such Person; or (4) change its business organization, the jurisdiction under which its
business organization is formed or organized, or its chief executive office, or any places of its
businesses.

(g) Conflicting Agreements. Enter into any agreement containing any provision that
would be violated or breached by the performance of its obligations under this Agreement or any of
the other Related Documents.

 

6

 

(h) Limitation on Loans, Advances to and Investments in Others and Receivables from
Others. Purchase, hold or acquire any Equity Interest or evidence of indebtedness of, make or
permit to exist any loans or advances to, permit to exist any receivable from, or make or permit to
exist any investment or acquire any interest whatsoever in, any Person, except: (1) investments in
cash and Permitted Investments; (2) loans, advances, investments and receivables existing as of the
date of this Agreement set forth on Schedule 6.2(h) attached hereto; (3) investments in
Subsidiaries of the Borrower existing as of the date hereof; and (4) guarantees permitted by
Section 6.2(c).

(i) Organizational Documents. Alter, amend or modify any of its Organizational
Documents, except in connection with the Merger.

(j) Government Regulation. (1) Be or become subject at any time to any Legal
Requirement or list of any government agency (including, without limitation, the U.S. Office of
Foreign Asset Control list) that prohibits or limits the Lender from making any advance or
extension of credit to it or from otherwise conducting business with it, or (2) fail to provide
documentary and other evidence of its identity as may be requested by the Lender at any time to
enable the Lender to verify its identity or to comply with any applicable Legal Requirement,
including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.

(k) Prepayments of other Indebtedness. Pay or make, or agree to pay or make, directly
or indirectly, any payment of or in respect of principal of any indebtedness owed by the Borrower
or any of its Subsidiaries, other than (i) regularly scheduled or other mandatory payments as and
when due in respect of any such indebtedness, (ii) refinancings of such indebtedness to the extent
permitted hereunder and (iii) payments and prepayments of indebtedness of the Borrower or any
Subsidiary which is owed to the Borrower or any Subsidiary.

(m) Subsidiaries. Form, create or acquire any Subsidiary.

7. Representations and Warranties.

7.1 To induce the Lender to enter into this Agreement and to make each Loan, the Borrower
represents and warrants as of the date of this Agreement and, except as otherwise provided below,
as of the date of each Loan hereunder, that each of the following statements is true and correct:

(a) The execution and delivery of this Agreement and the other Related Documents to which it
is a party, and the performance of the obligations they impose, do not violate any Legal
Requirement, conflict with any agreement by which it is bound, or require the consent or approval
of any other Person.

(b) This Agreement and the other Related Documents have been duly authorized, executed and
delivered by all parties thereto (other than the Lender) and are valid and binding agreements of
those Persons, enforceable according to their terms, except as may be limited by bankruptcy,
insolvency or other laws affecting the enforcement of creditors’ rights generally and by general
principles of equity.

(c) All balance sheets, profit and loss statements, and other financial statements and other
financial information furnished to the Lender in connection with the Liabilities are accurate in
all material respects and fairly reflect the financial condition of the Persons to which they apply
in all material respects on their effective dates.

(d) As of the Effective Date, no litigation, claim, investigation, administrative proceeding
or similar action (including those for unpaid taxes) which involves claims in excess of $1,000,000
in the aggregate is pending or threatened against it in writing, other than litigation, claims, or
other events, if any, that have been disclosed to and acknowledged by the Lender in writing, and no
other event has occurred which, in any one case or in the aggregate, would materially adversely
affect the financial condition, properties, business, affairs, prospects or operations of the
Borrower and its Subsidiaries, taken as a whole.

(e) All of its tax returns and reports that are or were required to be filed, have been filed,
and all taxes, assessments and other governmental charges have been paid in full, except those
presently being contested by it in good faith and for which adequate reserves have been provided.

(f) The execution and delivery of this Agreement and the other Related Documents to which it
is a party and the performance of the obligations they impose (i) are within its corporate powers,
(ii) have been duly authorized by all necessary action of its governing body, and (iii) do not
contravene the terms of its Organizational Documents or other material agreement or document
governing its affairs.

 

7

 

8. Default/Remedies.

8.1 Events of Default/Acceleration. If any of the following events occurs (each, a
“Default”), all Loans shall become due immediately, at the Lender’s option:

(a) The Borrower fails to pay when due (i) the principal amount or any interest of the Loans
or (ii) any of the other Liabilities or any other debt to any Person, or any amount payable with
respect to any of the Liabilities, or under the Note, any other Related Document, or any agreement
or instrument evidencing other debt to any Person and such failure continues for five (5) business
days.

(b) The Borrower: (i) fails to observe or perform or otherwise violates any term, covenant,
condition or agreement of Section 5.2, 5.7, or 6.2 of this Agreement; (ii) makes any materially
incorrect or misleading representation, warranty, or certificate to the Lender; or (iii) defaults
under the terms of any agreement or instrument relating to any debt for borrowed money (other than
the debt evidenced by the Related Documents) and the effect of such default will allow the creditor
to declare the debt due before its stated maturity.

(c) The Borrower fails to observe or perform or otherwise violates any term, covenant,
condition or agreement of any provision of this Agreement (other than as set forth in any other
subsection of this Section 8.1) or any other Related Document and any such failure continues for
thirty (30) days or more;

(d) The Borrower or any of its Subsidiaries: (i) becomes insolvent or unable to pay its debts
as they become due; (ii) makes an assignment for the benefit of creditors; (iii) consents to the
appointment of a custodian, receiver or trustee for itself or for a substantial part of its
Property; (iv) commences any proceeding under any bankruptcy, reorganization, liquidation,
insolvency or similar laws; or (v) conceals or removes any of its Property, with intent to hinder,
delay or defraud any of its creditors.

(e) A custodian, receiver, or trustee is appointed for the Borrower or any of its Subsidiaries
or for a substantial part of their respective Property.

(f) The Borrower or any of its Subsidiaries, without the Lender’s written consent: (i)
liquidates or is dissolved; (ii) merges or consolidates with any other Person; (iii) leases, sells
or otherwise conveys a substantial part of its assets or business outside the ordinary course of
its business; (iv) leases, purchases, or otherwise acquires a substantial part of the assets of any
other Person, except in the ordinary course of its business; or (v) agrees to do any of the
foregoing; provided, however, that (i) the Merger shall be permitted and (ii) any
Subsidiary of the Borrower may merge or consolidate with any other Subsidiary of the Borrower, or
with the Borrower, so long as the Borrower is the survivor.

(g) Proceedings are commenced under any bankruptcy, reorganization, liquidation, or similar
laws against the Borrower or any of its Subsidiaries and such proceedings remain undismissed for
thirty (30) days after commencement; or the Borrower or any of its Subsidiaries consents to the
commencement of those proceedings.

(h) Any final, non-appealable judgment is entered against the Borrower or any of its
Subsidiaries or any of the Property of such Persons, or any attachment, seizure, sequestration,
levy, or garnishment is issued against any Property of the Borrower or any of its Subsidiaries and
when added to any other judgment, attachment, seizure, sequestration, levy, or garnishment, the
amount of the same exceeds $1,000,000 in the aggregate.

(i) The market price of the common Equity Interests owned by the Borrower in DSW, Inc. traded
on the New York Stock Exchange shall close at a price less than $20.00 per share for a period of
five (5) or more consecutive business days or for any five (5) business days within any period of
ten (10) consecutive business days.

 

8

 

8.2 Remedies. At any time after the occurrence of a Default, the Lender may do one or more of
the following: (a) cease permitting the Borrower to incur any Liabilities; (b) terminate any
commitment of the Lender
evidenced by this Agreement; (c) declare the indebtedness under this Agreement and any Note,
to be immediately due and payable, without notice of acceleration, presentment and demand or
protest or notice of any kind, all of which are hereby expressly waived; (d) exercise all rights of
setoff that the Lender may have contractually, by law, in equity or otherwise; and (e) exercise any
and all other rights pursuant to any of the Related Documents, at law, in equity or otherwise;
provided, however, that upon the occurrence of any event specified in subsection
8.1(d), 8.1(e) or 8.1(g) above, the unpaid principal amount of the Loans and all interest and other
amounts as set forth in this Agreement shall automatically become due and payable without further
act of the Lender.

8.3 Generally. The rights of the Lender under this Agreement and the other Related Documents
are in addition to other rights (including without limitation, other rights of setoff) the Lender
may have contractually, by law, in equity or otherwise, all of which are cumulative and hereby
retained by the Lender.

8.4 Expenses. To the extent not prohibited by applicable Legal Requirements and whether or
not the transactions contemplated by this Agreement are consummated, the Borrower is liable to the
Lender and agrees to pay on demand all reasonable out-of-pocket costs and expenses incurred in
connection with the negotiation, preparation, execution, filing, recording, modification,
supplementing and waiver of the Related Documents, the making, servicing and collection of the
Loans and any other amounts owed under the Related Documents, including without limitation
reasonable attorneys’ fees and court costs. These costs and expenses include without limitation
any out-of-pocket costs or expenses incurred by the Lender in any bankruptcy, reorganization,
insolvency or other similar proceeding involving the Borrower or any of its Subsidiaries, or the
Property of the Borrower or any of its Subsidiaries. The obligations of the Borrower under this
section shall survive the termination of this Agreement.

9. Miscellaneous.

9.1 Notice. Any notices and demands under or related to this Agreement shall be in writing
and delivered to the Borrower at its address stated in this Agreement, and if to the Lender, at its
address specified in this Agreement, by one of the following means: (a) by hand; (b) by a
nationally recognized overnight courier service; or (c) by certified mail, postage prepaid, with
return receipt requested. Notice shall be deemed given: (a) upon receipt if delivered by hand; (b)
on the business day after the day of deposit with a nationally recognized courier service; or (c)
on the third business day after the notice is deposited in the mail. Any party may change its
address for purposes of the receipt of notices and demands by giving notice of the change in the
manner provided in this provision.

9.2 No Waiver. No delay on the part of the Lender in the exercise of any right or remedy
waives that right or remedy. No single or partial exercise by the Lender of any right or remedy
precludes any other future exercise of it or the exercise of any other right or remedy. The making
of a Loan during the existence of any Default or subsequent to the occurrence of a Default or when
all conditions precedent have not been met shall not constitute a waiver of the Default or
condition precedent. No waiver or indulgence by the Lender of any Default is effective unless it
is in writing and signed by the Lender, nor shall a waiver on one occasion bar or waive that right
on any future occasion.

9.3 Integration. This Agreement, the Note, and the other Related Documents embody the entire
agreement and understanding between the Borrower and the Lender and supersede all prior agreements
and understandings relating to their subject matter. If any one or more of the obligations of the
Borrower under this Agreement or the Note, is invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining obligations of the
Borrower shall not in any way be affected or impaired, and the invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or enforceability of
the obligations of the Borrower under this Agreement, the Note and the other Related Documents in
any other jurisdiction.

9.4 Governing Law and Venue. This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio (without giving effect to its laws of conflicts). The Borrower
agrees that any legal action or proceeding with respect to any of its obligations under this
Agreement may be brought by the Lender in any state or federal court located in the State of Ohio,
as the Lender in its sole discretion may elect. By the execution and delivery of this Agreement,
the Borrower submits to and accepts, for itself and in respect of its Property, generally and
unconditionally, the non-exclusive jurisdiction of those courts. The Borrower waives any claim
that the State of Ohio is not a convenient forum or the proper venue for any such suit, action or
proceeding.

 

9

 

9.5 Survival of Representations and Warranties. The Borrower understands and agrees that in
extending the Loans, the Lender is relying on all representations, warranties, and covenants
made by the Borrower in this Agreement or in any certificate or other instrument delivered by the
Borrower to the Lender under this Agreement or in any of the other Related Documents. The Borrower
further agrees that regardless of any investigation made by the Lender, all such representations,
warranties and covenants will survive the making of the Loans and delivery to the Lender of this
Agreement, shall be continuing in nature, and shall remain in full force and effect until such time
as the Liabilities shall be paid in full.

9.6 Non-Liability of the Lender. The relationship between the Borrower on one hand and the
Lender on the other hand shall be solely that of borrower and lender. The Lender shall have no
fiduciary responsibilities to the Borrower under this Agreement. The Lender undertakes no
responsibility to the Borrower to review or inform the Borrower of any matter in connection with
any phase of the Borrower’s business or operations.

9.7 Indemnification of the Lender. The Borrower agrees to indemnify, defend and hold the
Lender, its parent companies, Subsidiaries, Affiliates, their respective successors and assigns and
each of their respective shareholders, directors, officers, employees and agents (collectively, the
“Indemnified Persons”) harmless from any and against any and all loss, liability, obligation,
damage, penalty, judgment, claim, deficiency, expense, interest, penalties, attorneys’ fees
(including the fees and expenses of any attorneys engaged by the Indemnified Person) and amounts
paid in settlement (“Claims”) to which any Indemnified Person may become subject arising out of or
relating to the Loans, the Liabilities under this Agreement or any other Related Documents, except
to the limited extent that the Claims are proximately caused by the Indemnified Person’s gross
negligence or willful misconduct. The indemnification provided for in this paragraph shall survive
the termination of this Agreement and shall not be affected by the presence, absence or amount of
or the payment or nonpayment of any claim under, any insurance.

9.8 No Offset by the Borrower. The Borrower hereby acknowledges that it may enter into
agreements and contractual obligations with the Lender or its Affiliates and agreements in
connection therewith, make advances or other transfers to the Lender, may be the beneficiary of
representations and warranties from the Lender or otherwise do business with the Lender, and as a
result thereof the Lender may become obligated to the Borrower (collectively the “Lender
Liabilities”). With respect to the Lender’s obligations to pay any Lender Liability, the Borrower
(i) waives and relinquishes all rights or claims of offset, setoff, counterclaim or other
recoupment that it might otherwise assert premised upon or related to the Loans, this Agreement, or
any other Related Document, (ii) agrees not to withhold payment under this Agreement or any other
Related Document because of any default or breach by the Lender in the payment of any Lender
Liability, and (iii) agrees to pay to the Lender the Liabilities in the full amount without any
deduction for offset, set off, counterclaim or recoupment.

9.9 Counterparts. This Agreement may be executed in multiple counterparts, each of which,
when so executed, shall be deemed an original, but all such counterparts, taken together, shall
constitute one and the same agreement.

9.10 Advice of Counsel. The Borrower acknowledges that it has been advised by counsel, or had
the opportunity to be advised by counsel, in the negotiation, execution and delivery of this
Agreement and any other Related Documents.

9.11 Maximum Rate. Notwithstanding anything to the contrary contained in any of the Related
Documents, the interest paid or agreed to be paid under the Related Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”). If Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be
applied to the principal of the Note or, if it exceeds such unpaid principal, refunded to the
Borrower. In determining whether the interest contracted for, charged, or received by Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a)
characterize any payment that is not principal as an expense, fee, or premium rather than interest,
(b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the contemplated term of
the Liabilities hereunder.

9.12 Reinstatement. The Borrower agrees that to the extent any payment or transfer is
received by the Lender in connection with the Liabilities, and all or any part of the payment or
transfer is subsequently invalidated, declared to be fraudulent or preferential, set aside or
required to be repaid or transferred by the Lender or paid or transferred over to a trustee,
receiver or any other entity, whether under any proceeding or otherwise (any of those payments or
transfers is hereinafter referred to as a “Preferential Payment”), then this Agreement and the Note
shall continue to be effective or shall be reinstated, as the case may be, even if all those
Liabilities have been paid in full and whether or not the
Lender is in possession of the Note, and whether any Note, has been marked, paid, released or
cancelled, or returned to the Borrower and, to the extent of the payment, repayment or other
transfer by the Lender, the Liabilities or part intended to be satisfied by the Preferential
Payment shall be revived and continued in full force and effect as if the Preferential Payment had
not been made. The obligations of the Borrower under this section shall survive the termination of
this Agreement.

 

10

 

9.13 Assignments. The Borrower agrees that the Lender may at any time sell, assign or
transfer one or more interests or participations in all or any part of its rights and obligations
in this Agreement or the Note to one or more purchasers whether or not related to the Lender.

9.14 Waivers. The Borrower and each of its Subsidiaries waives (a) any right to receive
notice of the following matters before the Lender enforces any of its rights: (i) any demand,
diligence, presentment, dishonor and protest, or (ii) any action that the Lender takes regarding
any Person or any of the Liabilities, that it might be entitled to by law or under any other
agreement; (b) the benefit of any statute of limitations affecting liability of the Borrower or any
of its Subsidiaries or the enforcement hereof; (c) any defense based on or arising out of any
defense that the Borrower may have to the payment or performance of the Liabilities or any portion
thereof. The Borrower and each of its Subsidiaries consents to any extension or postponement of
time of its payment without limit as to the number or period, to any substitution, to the addition
of any other party, and to the release or discharge of, or suspension of any rights and remedies
against, the Borrower or any of its Subsidiaries. The Lender may waive or delay enforcing any of
its rights without losing them. Any waiver affects only the specific terms and time period stated
in the waiver. No modification or waiver of any provision of this Agreement or the Note is
effective unless it is in writing and signed by the Person against whom it is being enforced.

9.15 WAIVER OF SPECIAL DAMAGES. EACH OF THE BORROWER AND THE LENDER HEREBY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT THAT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL
ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

9.16 JURY WAIVER. THE BORROWER AND THE LENDER HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED
ON CONTRACT, TORT, OR OTHERWISE) BETWEEN THE BORROWER AND THE LENDER ARISING OUT OF OR IN ANY WAY
RELATED TO THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE LENDER TO PROVIDE THE
FINANCING DESCRIBED HEREIN.

 

11

 

Each of the parties has signed this Agreement as of the date set forth in the preamble above.

	 	 	 	 	 	 	 
	 	BORROWER: RETAIL VENTURES, INC.

 	 
	 	By:  	 	/s/ James A. McGrady
 	 
	 	 	 	Name:  	 	James A. McGrady 	 
	 	 	 	Its:	 	Chief Executive Officer, Chief Financial Officer

President and Treasurer 	 

Notice address:

4150 E. Fifth Avenue

Columbus, OH 43219

Attn: James McGrady

	 	 	 	 	 	 	 
	 	LENDER: SEI, INC.	 
	 
	 	 	 	 	 	 
	 

	By:	 	/s/
Brian Strayton	 
	 

	 	 	Name:	 	Brian Strayton	 
	 

	 	 	Its:	 	Treasurer	 

Notice Address:

4300 E. Fifth Avenue

Columbus, OH 43219

Facsimile: (614) 443-0972

Attention: General Counsel

[LOAN AGREEMENT SIGNATURE PAGE]

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