Document:

Amended and Restated Loan and Security Agreement

 EXHIBIT 10.16 
 PANDORA MEDIA, INC. 
 BRIDGE BANK, NATIONAL ASSOCIATION 

AMENDED AND RESTATED 
 LOAN AND SECURITY AGREEMENT 

 This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is entered into as of
September 10, 2009, by and between BRIDGE BANK, NATIONAL ASSOCIATION (“Bank”) and PANDORA MEDIA, INC. (“Borrower”). 
 RECITALS 
 Bank and Borrower previously entered into that certain Business
Financing Agreement dated as of December 24, 2008 (as such agreement was amended from time to time, the “Original Agreement”). Borrower and Bank wish to amend and restate the terms of the Original Agreement. 

This Agreement sets forth the terms on which Bank will advance credit to Borrower, and Borrower will repay the amounts owing to Bank.

 AGREEMENT 
 The parties agree as follows: 
 1. DEFINITIONS
AND CONSTRUCTION. 
 1.1 Definitions. As used in this Agreement, the following terms
shall have the following definitions: 
 “Accounts” means all presently existing and hereafter arising accounts,
contract rights, payment intangibles, and all other forms of obligations owing to Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other technology) or the rendering of services by
Borrower, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing.

 “Advance” or “Advances” means a cash advance or cash advances under the Revolving Facility. 

“Affiliate” means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person
that controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors, and partners. 
 “Bank Expenses” means all: reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the preparation, negotiation, administration, and
enforcement of the Loan Documents; reasonable Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan Documents (including fees and expenses of appeal), incurred
before, during and after an Insolvency Proceeding, whether or not suit is brought. 
 “Borrower’s Books” means
all of Borrower’s books and records including: ledgers; records concerning Borrower’s assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment,
containing such information. 
 “Borrowing Base” means an amount equal to eighty percent (80%) of Eligible
Accounts as determined by Bank with reference to the most recent Borrowing Base Certificate delivered by Borrower. 

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of California are
authorized or required to close. 
 “Change in Control” shall mean a transaction in which any “person” or
“group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly,
of a sufficient number of shares of all classes of stock then outstanding of Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the Board of Directors of
Borrower, who did not have such power before such transaction. 

  
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 “Closing Date” means the date of this Agreement. 

“Code” means the California Uniform Commercial Code. 
 “Collateral” means the property described on Exhibit A attached hereto. 
 “Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend,
letter of credit or other obligation of another; (ii) any obligations with respect to undrawn letters of credit, or corporate credit cards issued or provided for the account of that Person; and (iii) all obligations arising under any
agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is
made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by Bank in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations
under the guarantee or other support arrangement. 
 “Copyrights” means any and all copyright rights, copyright
applications, copyright registrations and like protections in each work or authorship and derivative work thereof. 

“Credit Extension” means each Advance, Letter of Credit, use of Credit Card Services, use of Cash Management Services, FX
Reserve, or any other extension of credit by Bank for the benefit of Borrower hereunder. 
 “Daily Balance” means the
amount of the Obligations owed at the end of a given day arising under this Agreement and the other Loan Documents. 

“Eligible Accounts” means those Accounts that arise in the ordinary course of Borrower’s business that comply with all of
Borrower’s representations and warranties to Bank set forth in Section 5.4; provided, that standards of eligibility may be fixed and revised from time to time by Bank in Bank’s reasonable judgment and upon notification thereof to
Borrower in accordance with the provisions hereof. Unless otherwise agreed to by Bank, Eligible Accounts shall not include the following: 
 (a) Accounts that the account debtor has failed to pay within ninety (90) days of invoice date; 
 (b) Accounts with respect to an account debtor, thirty-five percent (35%) of whose Accounts the account debtor has failed to pay within ninety (90) days of invoice date; 

(c) Accounts with respect to which the account debtor is an officer, employee, or agent of Borrower; 

(d) Accounts with respect to which goods are placed on consignment, guaranteed sale, sale or return, sale on approval, bill and
hold, or other terms by reason of which the payment by the account debtor may be conditional; 
 (e) Progress billings
or retention billings; 
 (f) Accounts with respect to which the account debtor is an Affiliate of Borrower; 

(g) Accounts with respect to which the account debtor does not have its principal place of business in the United States or
Canada, except for Eligible Foreign Accounts; 
 (h) Accounts with respect to which the account debtor is the United
States or any department, agency, or instrumentality of the United States; 

  
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 (i) Accounts with respect to which Borrower is liable to the account debtor for
goods sold or services rendered by the account debtor to Borrower or for deposits or other property of the account debtor held by Borrower, but only to the extent of any amounts owing to the account debtor against amounts owed to Borrower;

 (j) Accounts with respect to an account debtor, including Subsidiaries and Affiliates, whose total obligations to
Borrower exceed thirty percent (30%) of all Accounts, to the extent such obligations exceed the aforementioned percentage, except as approved in writing by Bank; 
 (k) Accounts with respect to which the account debtor disputes liability or makes any claim with respect thereto as to which Bank believes, in its sole but reasonable discretion, that there may be
a basis for dispute (but only to the extent of the amount subject to such dispute or claim), or is subject to any Insolvency Proceeding, or becomes insolvent, or goes out of business; and 

(l) Accounts the collection of which Bank reasonably determines to be doubtful, of which Bank shall use commercially reasonable
efforts to notify Borrower of such determination by Bank. 
 “Eligible Foreign Accounts” means Accounts with respect
to which the account debtor does not have its principal place of business in the United States or Canada and that (i) are supported by one or more letters of credit in an amount and of a tenor, and issued by a financial institution, reasonably
acceptable to Bank, or (ii) that Bank approves on a case-by-case basis. 
 “Equipment” means all present and
future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which Borrower has any interest. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder. 
 “Event of Default” has the meaning assigned in Article 8. 

“GAAP” means generally accepted accounting principles as in effect from time to time. 

“Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services,
including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations and
(d) all Contingent Obligations. 
 “Insolvency Proceeding” means any proceeding commenced by or against any
person or entity under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension
generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief. 
 “Intellectual
Property Collateral” means all of Borrower’s right, title, and interest in and to the following: Copyrights, Trademarks and Patents; all trade secrets, all design rights, claims for damages by way of past, present and future infringement
of any of the rights included above, all licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties arising from such use to the extent permitted by such license or rights; all amendments,
renewals and extensions of any of the Copyrights, Trademarks or Patents; and all proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty payable in respect of any of the
foregoing. 
 “Inventory” means all inventory in which Borrower has or acquires any interest, including work in
process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned by or in the custody or possession, actual or constructive, of Borrower,
including such inventory as is temporarily out of its custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and
any documents of title representing any of the above, and Borrower’s Books relating to any of the foregoing. 

  
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 “Investment” means any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital contribution to any Person. 
 “IRC” means
the Internal Revenue Code of 1986, as amended, and the regulations thereunder. 
 “Lien” means any mortgage, lien,
deed of trust, charge, pledge, security interest or other encumbrance. 
 “Loan Documents” means, collectively, this
Agreement, any note or notes executed by Borrower, and any other agreement entered into in connection with this Agreement, all as amended or extended from time to time. 
 “Material Adverse Effect” means a material adverse effect on (i) the business operations, or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole or
(ii) the ability of Borrower to repay the Obligations or otherwise perform its obligations under the Loan Documents or (iii) the value or priority of Bank’s security interests in the Collateral. 

‘Negotiable Collateral” means all letters of credit of which Borrower is a beneficiary, notes, drafts, instruments, securities,
documents of title, and chattel paper, and Borrower’s Books relating to any of the foregoing. 
 “Obligations”
means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any
interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrower to others that Bank may have obtained by assignment or otherwise. 

“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the same. 
 “Periodic Payments” means all
installments or similar recurring payments that Borrower may now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and Bank. 

“Permitted Indebtedness” means: 
 (a) Indebtedness of Borrower in favor of Bank arising under this Agreement or any other Loan Document; 
 (b) Indebtedness existing on the Closing Date and disclosed in the Schedule; 
 (c) Indebtedness to trade creditors incurred in the ordinary course of business; 
 (d) Indebtedness secured by a lien described in clause (c) of the defined term “Permitted Liens,” provided (i) such Indebtedness does not exceed the lesser of the cost or fair
market value of the equipment financed with such Indebtedness and (ii) such Indebtedness does not exceed $2,000,000 in the aggregate at any given time; 
 (e) Subordinated Debt; 
 (f) Other unsecured Indebtedness of
Borrower not existing on the Closing Date, provided that the aggregate principal amount of all such Indebtedness does not exceed $100,000; and 
 (g) Extensions, refinancings and renewals of any items of Permitted Indebtedness provided that the principal amount is not increased or the terms modified to impose more burdensome terms upon
Borrower. 
 “Permitted Investment” means: 
 (a) Investments existing on the Closing Date disclosed in the Schedule; and 

  
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 (b)(i) marketable direct obligations issued or unconditionally guaranteed by the
United States of America or any agency or any State thereof maturing within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of creation thereof and currently
having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) certificates of deposit maturing no more than one (1) year from the date of investment therein issued by
Bank, (iv) Bank’s money market accounts, and (v) similar marketable direct obligations as permitted under Borrower’s investment policy as approved by Borrower’s board of directors from time to time and reasonably acceptable
to Bank. 
 “Permitted Liens” means the following: 

(a) Any Liens existing on the Closing Date and disclosed in the Schedule or arising under this Agreement or the other Loan
Documents; 
 (b) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or
being contested in good faith by appropriate proceedings, provided the same have no priority over any of Bank’s security interests; 
 (c) Liens (i) upon or in any equipment which was not financed by Bank acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing the acquisition of such equipment, or (ii) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon,
and the proceeds of such equipment; 
 (d) Liens incurred in connection with the extension, renewal or refinancing of
the indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of
the indebtedness being extended, renewed or refinanced does not increase; 
 (e) Liens of carriers, warehousemen,
mechanics, materialmen, vendors, and landlords and other similar Liens imposed by law incurred in the ordinary course of business for sums not overdue more than 45 days or being contested in good faith, provided that adequate reserves for the
payment thereof have been established in accordance with GAAP; 
 (f) Deposits under workers’ compensation,
unemployment insurance and social security laws or to secure the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or to secure statutory obligations of surety or appeal bonds or to secure indemnity,
performance or other similar bonds in the ordinary course of business; and 
 (g) Liens arising from judgments, decrees
or attachments in circumstances not constituting an Event of Default. 
 “Person” means any individual, sole
proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.

 “Prime Rate” means the greater of (i) the variable rate of interest, per annum, most recently announced by
Bank, as its “prime rate,” whether or not such announced rate is the lowest rate available from Bank and (ii) four percent (4.0%) per annum. 
 “Responsible Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Controller of Borrower. 

“Revolving Facility” means the facility under which Borrower may request Bank to issue Advances, as specified in
Section 2.1(a) hereof. 
 “Revolving Line” means a credit extension of up to Ten Million Dollars ($10,000,000).

  
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 “Revolving Maturity Date” means March 10, 2011. 

“Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any. 

“Subordinated Debt” means any debt incurred by Borrower that is subordinated to the debt owing by Borrower to Bank on terms
reasonably acceptable to Bank (and identified as being such by Borrower and Bank). 
 “Subsidiary” means any
corporation, company or partnership in which (i) any general partnership interest or (ii) more than 50% of the stock or other units of ownership which by the terms thereof has the ordinary voting power to elect the Board of Directors,
managers or trustees of the entity, at the time as of which any determination is being made, is owned by Borrower, either directly or through an Affiliate. 
 “Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the
business of Borrower connected with and symbolized by such trademarks. 
 1.2 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP and all calculations made hereunder shall be made in accordance with GAAP. When used herein, the terms “financial statements” shall include the notes and schedules
thereto. 
 2. LOAN AND TERMS OF
PAYMENT. 
 2.1 Credit Extensions. 

Borrower promises to pay to the order of Bank, in lawful money of the United States of America, the aggregate unpaid principal amount of
all Credit Extensions made by Bank to Borrower hereunder. Borrower shall also pay interest on the unpaid principal amount of such Credit Extensions at rates in accordance with the terms hereof. 

(a) Revolving Advances. 
 (i) Subject to and upon the terms and conditions of this Agreement, Borrower may request Advances in an aggregate outstanding amount not to exceed the lesser of (i) the Revolving Line or
(ii) the Borrowing Base plus $5,000,000, minus, in each case, the aggregate face amount of all outstanding Letters of Credit that are not secured by cash, the Credit Card Exposure, the FX Reserve, and the amount used for Cash Management
Services. Subject to the terms and conditions of this Agreement, amounts borrowed pursuant to this Section 2.1(a) may be repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances under this
Section 2.1(a) shall be immediately due and payable. Borrower may prepay any Advances without penalty or premium. 

(ii) Whenever Borrower desires an Advance, Borrower will notify Bank by facsimile transmission or telephone no later than 3:00
p.m. Pacific time, on the Business Day that the Advance is to be made. Each such notification shall be promptly confirmed by a Payment/Advance Form in substantially the form of Exhibit B hereto. Bank is authorized to make Advances under this
Agreement, based upon instructions received from a Responsible Officer or a designee of a Responsible Officer, or without instructions if in Bank’s reasonable discretion such Advances are necessary to meet Obligations which have become due and
remain unpaid. Bank shall be entitled to rely on any telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss
suffered by Bank as a result of such reasonable reliance. Bank will credit the amount of Advances made under this Section 2.1(a) to Borrower’s deposit account. 
 (b) Letters of Credit. Subject to availability under the Revolving Line and Borrowing Base, at any time prior to the Revolving Maturity Date, Bank agrees to issue letters of credit for the account
of Borrower (each, a “Letter of Credit” and collectively, the “Letters of Credit”) in an aggregate outstanding face amount not to exceed $1,000,000, minus, in each case, the Credit Card Exposure at any time, the amount
used for Cash Management Services, and the FX Reserve. The aggregate amount of Advances which may be used for Letters of Credit, the Credit Card Exposure, the Cash Management Services and the FX Reserve shall not exceed $1,000,000. All Letters of
Credit shall be, in form and substance, reasonably acceptable to Bank in its sole discretion 

  
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and shall be subject to the terms and conditions of Bank’s form of standard application and letter of credit agreement (the “Application”), which Borrower hereby agrees to execute.
On any drawn but unreimbursed Letter of Credit, the unreimbursed amount shall be deemed an Advance under Section 2.1(a). Prior to the Revolving Maturity Date, Borrower shall secure in cash all obligations under any outstanding Letters of Credit
on terms reasonably acceptable to Bank. The obligation of Borrower to reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this
Agreement, the Application, and such Letters of Credit, under all circumstances whatsoever. Borrower shall indemnify, defend, protect, and hold Bank harmless from any loss, cost, expense or liability, including, without limitation, reasonable
attorneys’ fees, arising out of or in connection with any Letters of Credit, except for expenses caused by Bank’s gross negligence or willful misconduct. 
 (c) Corporate Credit Cards. Subject to availability under the Revolving Line and Borrowing Base, until the Revolving Maturity Date, Borrower may request corporate credit cards from Bank
(collectively, the “Credit Card Services”), provided that the aggregate limit of the corporate credit cards issued by Bank (the “Credit Card Exposure”) shall not in any case exceed $1,000,000 at any time, minus, in each
case, the face amount of all outstanding Letters of Credit, the amount used for Cash Management Services, and the FX Reserve. The aggregate amount of Advances which may be used for Letters of Credit, the Credit Card Exposure, the Cash Management
Services and the FX Reserve shall not exceed $1,000,000. The terms and conditions (including repayment and fees) of such Credit Card Services shall be subject to the terms and conditions of the Bank’s standard forms of application and agreement
for the Credit Card Services, which Borrower hereby agrees to execute as a condition precedent to the use of the Credit Card Services. All corporate credit cards will be cancelled on and no further Credit Card Services will be provided after the
Revolving Maturity Date. 
 (d) Foreign Exchange Facility. Subject to availability under the Revolving Line and
Borrowing Base, Borrower may enter into foreign exchange forward contracts with Bank under which Borrower commits to purchase from or sell to Bank a set amount of foreign currency more than one business day after the contract date (the “FX
Forward Contract”). Bank will subtract 10%, or such greater or lesser amount as determined by Bank, of each outstanding FX Forward Contract from the foreign exchange sublimit which is a maximum of $1,000,000 (the “FX Reserve”)
minus, in each case, the Credit Card Exposure at any time, the amount used for Cash Management Services, and the face amount of all outstanding Letters of Credit. The aggregate amount of Advances which may be used for Letters of Credit, the
Credit Card Exposure, the Cash Management Services and the FX Reserve shall not exceed $1,000,000. The total FX Forward Contracts at any one time may not exceed 10 times the amount of the FX Reserve. Ten percent (10%) of the amount of each
outstanding FX Forward Contract shall be treated as Advances hereunder and shall decrease, on a dollar-for-dollar basis, the amount available for other Advances. Bank may terminate the FX Forward Contracts if an Event of Default occurs. Each FX
Forward Contract shall be subject to additional terms set forth in the applicable FX Forward Contract or other agreements executed in connection with the foreign exchange facility. 

(e) Cash Management Services. Subject to availability under the Revolving Line and Borrowing Base, Borrower may use up to
$1,000,000 for Bank’s cash management services, which may include direct deposit of payroll, and check cashing services identified in various cash management services agreements related to such services (the “Cash Management
Services”) minus, in each case, the Credit Card Exposure at any time, the face amount of all outstanding Letters of Credit, and the FX Reserve. The aggregate amount of Advances which may be used for Letters of Credit, the Credit Card
Exposure, the Cash Management Services and the FX Reserve shall not exceed $1,000,000. All amounts Bank pays for any Cash Management Services will be treated as Advances under the Revolving Line and shall decrease, on a dollar-for-dollar basis, the
amount available for other Advances. The Cash Management Services shall be subject to additional terms set forth in applicable cash management services agreements. 
 2.2 Overadvances. If the aggregate amount of the outstanding Advances plus the aggregate face amount of all outstanding Letters of Credit, the Credit Card Exposure, the amount used for Cash
Management Services, and the FX Reserve, exceeds the lesser of (a) the Revolving Line or (b) the Borrowing Base plus $5,000,000 at any time, Borrower shall immediately pay to Bank, in cash, the amount of such excess. Notwithstanding the
foregoing, if the aggregate amount of the aggregate face amount of all outstanding Letters of Credit, the Credit Card Exposure, the amount used for Cash Management Services, and the FX Reserve, exceeds the

  
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lesser of $1,000,000 or the Borrowing Base at any time, Borrower shall immediately pay to Bank, in cash, the amount of such excess. 

2.3 Interest Rates, Payments, and Calculations. 
 (a) Interest Rates. 
 (i) Advances. Except as set forth in
Section 2.3(b), the Advances shall bear interest, on the outstanding Daily Balance thereof, at a rate equal to one-half of one percent (0.50%) above the Prime Rate. 
 (b) Late Fee; Default Rate. If any payment is not made within ten (10) days after the date such payment is due, Borrower shall pay Bank a late fee equal to the lesser of (i) five percent
(5%) of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under applicable law. All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default,
at a rate equal to five (5) percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default. 
 (c) Payments. Interest hereunder shall be due and payable on the tenth calendar day of each month during the term hereof. Bank shall, at its option, charge such interest, all Bank Expenses, and all
Periodic Payments against any of Borrower’s deposit accounts or against the Revolving Line, in which case those amounts shall thereafter accrue interest at the rate then applicable hereunder. Any interest not paid when due shall be compounded
by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder. All payments shall be free and clear of any taxes, withholdings, duties, impositions or other charges, to the end that
Bank will receive the entire amount of any Obligations payable hereunder, regardless of source of payment. Payments will be made via auto debit from Borrower’s account at Bank. 

(d) Computation. In the event the Prime Rate is changed from time to time hereafter, the applicable rate of interest hereunder
shall be increased or decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty
(360) day year for the actual number of days elapsed. 
 2.4 Crediting Payments. Prior to the occurrence of an Event
of Default, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation as Borrower specifies. After the occurrence of an Event of Default, the receipt by Bank of any wire transfer of funds,
check, or other item of payment shall be immediately applied to conditionally reduce Obligations, but shall not be considered a payment on account unless such payment is of immediately available federal funds or unless and until such check or other
item of payment is honored when presented for payment. Notwithstanding anything to the contrary contained herein, any wire transfer or payment received by Bank after 12:00 noon Pacific time shall be deemed to have been received by Bank as of the
opening of business on the immediately following Business Day. Whenever any payment to Bank under the Loan Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on
the next Business Day, and additional fees or interest, as the case may be, shall accrue and be payable for the period of such extension. 
 2.5 Fees. Borrower shall pay to Bank the following: 
 (a) Facility
Fee. On the Closing Date, a facility fee equal to $15,000, which shall be nonrefundable; and 
 (b) Bank Expenses.
On the Closing Date, all previously invoiced Bank Expenses incurred through the Closing Date not to exceed $12,500, including reasonable and documented attorneys’ fees and expenses and, after the Closing Date, all Bank Expenses, including
reasonable and documented attorneys’ fees and expenses, as and when they are incurred and invoiced by Bank. 
 2.6
Term. This Agreement shall become effective on the Closing Date and, subject to Section 12.7, shall continue in full force and effect for so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions
under this Agreement. Notwithstanding the foregoing, Bank shall have the 

  
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right to terminate its obligation to make Credit Extensions under this Agreement immediately and without notice upon the occurrence and during the continuance of an Event of Default.
Notwithstanding termination, Bank’s Lien on the Collateral shall remain in effect for so long as any Obligations are outstanding. 
 3. CONDITIONS OF LOANS. 
 3.1 Conditions Precedent to Initial Credit Extension. The obligation of Bank to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and
substance reasonably satisfactory to Bank, the following: 
 (a) this Agreement; 

(b) a certificate of the Secretary of Borrower with respect to incumbency and resolutions authorizing the execution and delivery
of this Agreement; 
 (c) UCC National Form Financing Statement; 

(d) an amended and restated intellectual property security agreement; 

(e) an account control agreement with State Street Bank; 

(f) agreement to provide insurance; 
 (g) payment of the fees and Bank Expenses then due specified in Section 2.5 hereof; and 
 (h) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate. 
 3.2 Conditions Precedent to all Credit Extensions. The obligation of Bank to make each Credit Extension, including the initial Credit Extension, is further subject to the following conditions:

 (a) timely receipt by Bank of the Payment/Advance Form as provided in Section 2.1; and 

(b) the representations and warranties contained in Section 5 shall be true and correct in all material respects on and as
of the date of such Payment/Advance Form and on the effective date of each Credit Extension as though made at and as of each such date, and no Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit
Extension. The making of each Credit Extension shall be deemed to be a representation and warranty by Borrower on the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2. 

4. CREATION OF SECURITY INTEREST. 

4.1 Grant of Security Interest. Borrower grants and pledges to Bank a continuing security interest in all presently existing and
hereafter acquired or arising Collateral in order to secure prompt repayment of any and all Obligations and in order to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents. Except as set forth in the
Schedule, such security interest constitutes a valid, first priority security interest in the presently existing Collateral, and will constitute a valid, first priority security interest in Collateral acquired after the date hereof. 

4.2 Delivery of Additional Documentation Required. Borrower shall from time to time execute and deliver to Bank, at the request of
Bank, all Negotiable Collateral, all financing statements and other documents that Bank may reasonably request, in form reasonably satisfactory to Bank, to perfect and continue the perfection of Bank’s security interests in the Collateral and
in order to fully consummate all of the transactions contemplated under the Loan Documents. Borrower from time to time may deposit with Bank specific time deposit accounts to secure specific Obligations. Borrower authorizes Bank to hold such
balances in pledge and to decline to honor any 

  
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drafts thereon or any request by Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Obligations are outstanding. 

4.3 Right to Inspect. Bank (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice,
from time to time during Borrower’s usual business hours but no more than once a year (unless an Event of Default has occurred and is continuing), to inspect Borrower’s Books and to make copies thereof and to check, test, and appraise the
Collateral in order to verify Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral. 
 5. REPRESENTATIONS AND WARRANTIES. 
 Borrower represents and warrants as follows: 
 5.1 Due Organization and
Qualification. Borrower and each Subsidiary is a corporation duly existing under the laws of its state of incorporation and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property
requires that it be so qualified. 
 5.2 Due Authorization; No Conflict. The execution, delivery, and performance of the
Loan Documents are within Borrower’s powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s Articles of Incorporation or Bylaws, nor will they constitute an event of
default under any material agreement to which Borrower is a party or by which Borrower is bound. Borrower is not in default under any material agreement to which it is a party or by which it is bound. 

5.3 No Prior Encumbrances. Borrower has good and marketable title to its property, free and clear of Liens, except for Permitted
Liens. 
 5.4 Bona Fide Eligible Accounts. The Eligible Accounts are bona fide existing obligations. The property and
services giving rise to such Eligible Accounts has been delivered or rendered to the account debtor or to the account debtor’s agent for immediate and unconditional acceptance by the account debtor. Borrower has not received notice of actual or
imminent Insolvency Proceeding of any account debtor that is included in any Borrowing Base Certificate as an Eligible Account. 

5.5 Merchantable Inventory. All Inventory is in all material respects of good and marketable quality, free from all material
defects, except for Inventory for which adequate reserves have been made. 
 5.6 Intellectual Property Collateral.
Borrower is the sole owner of the Intellectual Property Collateral, except for non-exclusive licenses granted by Borrower to its customers in the ordinary course of business. Each of the Patents is valid and enforceable, and no part of the
Intellectual Property Collateral has been judged invalid or unenforceable, in whole or in part, and no claim has been made that any part of the Intellectual Property Collateral violates the rights of any third party. Except as set forth in the
Schedule, Borrower’s rights as a licensee of intellectual property do not give rise to more than five percent (5%) of its gross revenue in any given month, including without limitation revenue derived from the sale, licensing, rendering or
disposition of any product or service. Except as set forth in the Schedule, Borrower is not a party to, or bound by, any agreement that restricts the grant by Borrower of a security interest in Borrower’s rights under such agreement.

 5.7 Name; Location of Chief Executive Office. Except as disclosed in the Schedule, Borrower has not done business
under any name other than that specified on the signature page hereof. The chief executive office of Borrower is located at the address indicated in Section 10 hereof. All Borrower’s Inventory and Equipment is located only at the location
set forth in Section 10 hereof, in transit to such location or to a customer of Borrower, or at Borrower’s existing co-location facilities. 
 5.8 Litigation. Except as set forth in the Schedule, there are no actions or proceedings pending by or against Borrower or any Subsidiary before any court or administrative agency in which could be
determined adversely to Borrower and if adversely determined could reasonably be expected to have a Material Adverse Effect, or a material adverse effect on Borrower’s interest or Bank’s security interest in the Collateral. 

  
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 5.9 No Material Adverse Change in Financial Statements. All consolidated and
consolidating financial statements related to Borrower and any Subsidiary that Bank has received from Borrower fairly present in all material respects Borrower’s financial condition as of the date thereof and Borrower’s consolidated and
consolidating results of operations for the period then ended. There has not been a material adverse change in the consolidated or the consolidating financial condition of Borrower since the date of the most recent of such financial statements
submitted to Bank. 
 5.10 Solvency, Payment of Debts. Borrower is solvent and able to pay its debts (including trade
debts) as they mature. 
 5.11 Regulatory Compliance. Borrower and each Subsidiary have met the minimum funding
requirements of ERISA with respect to any employee benefit plans subject to ERISA, and no event has occurred resulting from Borrower’s failure to comply with ERISA that could result in Borrower’s incurring any material liability. Borrower
is not an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940. Borrower is not engaged principally, or as one of the important activities,
in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System). Borrower has complied with all the provisions of the
Federal Fair Labor Standards Act. Borrower has not violated any statutes, laws, ordinances or rules applicable to it, violation of which could reasonably be expected to have a Material Adverse Effect. 

5.12 Environmental Condition. Except as disclosed in the Schedule, none of Borrower’s or any Subsidiary’s properties or
assets has ever been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous owners or operators, in the disposal of, or to produce, store, handle, treat, release, or transport, any hazardous waste or hazardous
substance other than in accordance with applicable law; to the best of Borrower’s knowledge, none of Borrower’s properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a
hazardous waste or hazardous substance disposal site, or a candidate for closure pursuant to any environmental protection statute; no lien arising under any environmental protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and neither Borrower nor any Subsidiary has received a summons, citation, notice, or directive from the Environmental Protection Agency or any other federal, state or other governmental agency concerning
any action or omission by Borrower or any Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste or hazardous substances into the environment. 
 5.13 Taxes. Borrower and each Subsidiary have filed or caused to be filed all tax returns required to be filed, and have paid, or have made adequate provision for the payment of all taxes reflected
therein (other than taxes the amount or validity of which are immaterial and being contested in good faith by appropriate proceedings). 
 5.14 Subsidiaries. Borrower does not own any stock, partnership interest or other equity securities of any Person, except for Permitted Investments. 

5.15 Government Consents. Borrower and each Subsidiary have obtained all material consents, approvals and authorizations of, made
all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of Borrower’s business as currently conducted. 

5.16 Accounts. Section 5.16 of the Schedule sets forth all of Borrower’s accounts maintained outside of Bank. Other than
Borrower’s account at State Street Bank which is covered by an Account Control Agreement acceptable to Bank, none of Borrower’s nor any Subsidiary’s property is maintained or invested with a Person other than Bank. 

5.17 Full Disclosure. No representation, warranty or other statement made by Borrower in any certificate or written statement
furnished to Bank contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading. 

6. AFFIRMATIVE COVENANTS. 

 

  
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 Borrower shall do all of the following: 

6.1 Good Standing. Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good standing in its
jurisdiction of incorporation and maintain qualification in each jurisdiction in which it is required under applicable law. Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and
agreements, the loss of which could reasonably be expected to have a Material Adverse Effect. 
 6.2 Government
Compliance. Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. Borrower shall comply, and shall cause each Subsidiary to comply,
with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which could reasonably be expected to have a Material Adverse Effect. 

6.3 Financial Statements, Reports, Certificates. Borrower shall deliver the following to 

Bank: (a) as soon as available, but in any event within thirty (30) days after the end of each calendar month, a company
prepared consolidated balance sheet, income, and cash flow statement covering Borrower’s consolidated operations during such period, prepared in accordance with GAAP (subject to the absence of footnotes and normal year-end adjustments),
consistently applied, in a form reasonably acceptable to Bank and certified by a Responsible Officer; (b) as soon as available, but in any event within one hundred eighty (180) days after the end of Borrower’s fiscal year, audited
consolidated financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an unqualified opinion on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank;
(c) copies of all statements, reports and notices sent or made available generally by Borrower to its security holders or to any holders of Subordinated Debt and, if applicable, all reports on Forms 10-K and 10-Q filed with the Securities and
Exchange Commission; (d) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of One Hundred Thousand
Dollars ($100,000) or more; (e) an operating budget for the following fiscal year within the earlier to occur of (i) ten (10) days after approval by Borrower’s board of directors or (ii) thirty (30) days after the end
of Borrower’s fiscal year; and (f) such sales projections, operating plans or other financial information as Bank may reasonably request from time to time. 
 Within twenty (20) days after the last day of each month, Borrower shall deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit C
hereto, together with aged listings of accounts receivable and accounts payable. Additionally, within (5) days following Bank’s reasonable request, Borrower shall deliver a report of aged listings of accounts receivable and accounts
payable. 
 Borrower shall deliver to Bank with the monthly financial statements a Compliance Certificate signed by a
Responsible Officer in substantially the form of Exhibit D hereto. 
 Bank shall have a right from time to time hereafter
to audit Borrower’s Accounts and appraise Collateral at Borrower’s expense, provided that such audits will be conducted no more often than every twelve (12) months and the expense of each audit shall not exceed $5,000, unless an Event
of Default has occurred and is continuing. 
 6.4 Inventory; Returns. Borrower shall keep all Inventory in good and
marketable condition, free from all material defects except for Inventory for which adequate reserves have been made. Returns and allowances, if any, as between Borrower and its account debtors shall be on the same basis and in accordance with the
usual customary practices of Borrower, as they exist at the time of the execution and delivery of this Agreement. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims, where the return, recovery, dispute
or claim involves more than Fifty Thousand Dollars ($50,000). 
 6.5 Taxes. Borrower shall make, and shall cause each
Subsidiary to make, due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of it by law, and will execute and deliver to Bank, on demand, appropriate certificates attesting to the
payment or deposit thereof; and Borrower will make, and will cause each Subsidiary to make, timely payment or deposit of all material tax payments and withholding taxes required of it by applicable laws, including, but not limited to, those laws

  
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concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Bank with proof satisfactory to Bank indicating that Borrower or a
Subsidiary has made such payments or deposits; provided that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent
required by GAAP) by Borrower. 
 6.6 Insurance. 

(a) Borrower, at its expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and
all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where Borrower’s business is conducted on the date hereof. Borrower shall also maintain insurance
relating to Borrower’s business, ownership and use of the Collateral in amounts and of a type that are customary to businesses similar to Borrower’s. 
 (b) All such policies of insurance shall be in such form, with such companies, and in such amounts as are reasonably satisfactory to Bank. All such policies of property insurance shall contain a
lender’s loss payable endorsement, in a form reasonably satisfactory to Bank, showing Bank as an additional loss payee thereof, and all liability insurance policies shall show the Bank as an additional insured and shall specify that the insurer
must give at least twenty (20) days notice to Bank before canceling its policy for any reason. Upon Bank’s request, Borrower shall deliver to Bank certified copies of such policies of insurance and evidence of the payments of all premiums
therefor. All proceeds payable under any such policy shall, at the option of Bank, be payable to Bank to be applied on account of the Obligations. 
 6.7 Accounts. Borrower shall maintain and shall cause each of its Subsidiaries to maintain its primary depository and operating accounts with Bank. The aggregate balance in those accounts shall be
not less than the lesser of (i) $5,000,000 or (ii) 75% of all of Borrower’s cash. Notwithstanding any other provisions of this Agreement, Borrower may maintain a balance of up to $500,000 at a deposit account with Bank of America, and
is not required to obtain an account control agreement in respect of that account. 
 6.8 Minimum Asset Coverage Ratio or
Cash Balance. Borrower shall maintain at all times (i) an Asset Coverage Ratio of at least 1.75 to 1.00 or (ii) Unrestricted cash and cash equivalents maintained with Bank plus Eligible Outside Cash solely held with Bridge Investment
Services of at least $10,000,000. “Asset Coverage Ratio” is the ratio of (a) Unrestricted cash and cash equivalents maintained with Bank, plus Eligible Outside Cash (including, but not limited to cash held at State Street Bank or with
Bridge Investment Services) plus Eligible Accounts to (b) Indebtedness owing to Bank. Eligible Outside Cash is unrestricted cash and cash equivalents maintained outside of Bank that are subject to an account control agreement which agreement
includes, in part, provisions that provide Bank with on-line “view only” access to such accounts that allow Borrower to transfer funds only to its operating account with Bank. 

6.9 Intellectual Property Rights. 
 (a) Borrower shall promptly give Bank written notice of any applications or registrations of intellectual property rights filed with the United States Patent and Trademark Office, including the
date of such filing and the registration or application numbers, if any. Borrower shall (i) give Bank not less than 10 Business Days prior written notice of the filing of any applications or registrations with the United States Copyright
Office, including the title of such intellectual property rights to be registered, as such title will appear on such applications or registrations, and the date such applications or registrations will be filed, and (ii) prior to the filing of
any such applications or registrations, shall execute such documents as Bank may reasonably request for Bank to maintain its perfection in such intellectual property rights to be registered by Borrower, and upon the request of Bank, shall file such
documents simultaneously with the filing of any such applications or registrations. Upon filing any such applications or registrations with the United States Copyright Office, Borrower shall promptly provide Bank with (i) a copy of such
applications or registrations, without the exhibits, if any, thereto, (ii) evidence of the filing of any documents requested by Bank to be filed for Bank to maintain the perfection and priority of its security interest in such intellectual
property rights, and (iii) the date of such filing. 

  
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 (b) Bank may audit Borrower’s Intellectual Property Collateral to confirm
compliance with this Section, provided such audit may not occur more often than once per year, unless an Event of Default has occurred and is continuing. Bank shall have the right, but not the obligation, to take, at Borrower’s sole expense,
any actions that Borrower is required under this Section to take but which Borrower fails to take, after 15 days’ notice to Borrower. Borrower shall reimburse and indemnify Bank for all reasonable costs and reasonable expenses incurred in the
reasonable exercise of its rights under this Section. 
 6.10 Further Assurances. At any time and from time to time
Borrower shall execute and deliver such further instruments and take such further action as may reasonably be requested by Bank to effect the purposes of this Agreement. 
 7. NEGATIVE COVENANTS. 
 Borrower will not do any of the following:

 7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”), or
permit any of its Subsidiaries to Transfer, all or any part of its business or property, other than: (i) Transfers of Inventory in the ordinary course of business; (ii) Transfers of non-exclusive licenses and similar arrangements for the
use of the property of Borrower or its Subsidiaries in the ordinary course of business; (iii) Transfers of worn-out, surplus or obsolete Equipment which was not financed by Bank; or (iv) other assets of Borrower or its Subsidiaries that do
not in the aggregate exceed $100,000 during any fiscal year. 
 7.2 Change in Business; Change in Control or Executive
Office. Engage in any business, or permit any of its Subsidiaries to engage in any business, other than the businesses currently engaged in by Borrower and any business substantially similar or related thereto (or incidental thereto); or cease
to conduct business in the manner conducted by Borrower as of the Closing Date; or suffer or permit a Change in Control without the prior written consent of Bank, which shall not be unreasonably withheld; or without thirty (30) days prior
written notification to Bank, relocate its chief executive office or state of incorporation or change its legal name; or without Bank’s prior written consent, change the date on which its fiscal year ends. 

7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any
other business organization, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person. 
 7.4 Indebtedness. Create, incur, assume or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness. 

7.5 Encumbrances. Create, incur, assume or suffer to exist any Lien with respect to any of its property, or assign or otherwise
convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens, or agree with any Person other than Bank not to grant a security interest in, or otherwise encumber, any
of its property, or permit any Subsidiary to do so. 
 7.6 Distributions. Pay any dividends or make any other
distribution or payment on account of or in redemption, retirement or purchase of any capital stock, or permit any of its Subsidiaries to do so, except that Borrower may repurchase the stock of former employees, consultants or directors pursuant to
stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase. 
 7.7 Investments. Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments; or maintain or
invest any of its property with a Person other than Bank or permit any of its Subsidiaries to do so unless such Person has entered into an account control agreement with Bank in form and substance reasonably satisfactory to Bank; or suffer or permit
any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends or otherwise distributing property to Borrower. 
 7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower except for transactions that are in the ordinary
course of Borrower’s 

  
 14 

 
business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person. 

7.9 Subordinated Debt. Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such
payment, except in compliance with the terms of such Subordinated Debt, or amend any provision contained in any documentation relating to the Subordinated Debt without Bank’s prior written consent. 

7.10 Inventory and Equipment. Store the Inventory or the Equipment with a bailee, warehouseman, or other third party with a value
in excess of $50,000 unless the third party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment for Bank’s benefit
or (b) is in pledge possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment. Store or maintain any Equipment or Inventory at a location other than the location set forth in Section 10 of this Agreement
(except for laptop computers and similar Equipment consisting of moveable goods with an aggregate value not to exceed $50,000 at any time). 
 7.11 Compliance. Become an “investment company” or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become principally
engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose. Fail to meet the minimum funding
requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur, fail to comply with the Federal Fair Labor Standards Act or violate any law or regulation, which violation could reasonably be expected to
have a Material Adverse Effect, or a material adverse effect on the Collateral or the priority of Bank’s Lien on the Collateral, or permit any of its Subsidiaries to do any of the foregoing. 

8. EVENTS OF DEFAULT. 

Any one or more of the following events shall constitute an Event of Default by Borrower under this Agreement: 

8.1 Payment Default. If Borrower fails to pay, when due, any of the Obligations; 

8.2 Covenant Default. 
 (a) If Borrower fails to perform any obligation under Article 6 or violates any of the covenants contained in Article 7 of this Agreement; or 

(b) If Borrower fails or neglects to perform or observe any other material term, provision, condition, covenant contained in this
Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition or covenant that can be cured, has failed to cure such default within
ten days after an officer of Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the ten day period or cannot after diligent attempts by
Borrower be cured within such ten day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall not in any case exceed 30 days) to attempt to cure such default, and
within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions will be made; 
 8.3 Investor Abandonment. Bank determines that it is the intention of Borrower’s main investors to not continue to fund Borrower in the amounts and timeframe necessary to enable Borrower to
maintain its business operations or satisfy the Obligations as they become due and payable; or 
 8.4 Attachment. If any
portion of Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or
distress warrant or levy has not been removed, discharged or rescinded within ten (10) days, or if Borrower is enjoined, restrained, or in any way prevented by court order from 

  
 15 

 
continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion of Borrower’s assets, or if a
notice of lien, levy, or assessment is filed of record with respect to any of Borrower’s assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency,
and the same is not paid within ten (10) days after Borrower receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a
good faith contest by Borrower (provided that no Credit Extensions will be required to be made during such cure period); 

8.5 Insolvency. If Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency
Proceeding is commenced against Borrower and is not dismissed or stayed within thirty (30) days (provided that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding); 

8.6 Other Agreements. If there is a default or other failure to perform in any agreement to which Borrower is a party or by which
it is bound resulting in a right by a third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) or that would reasonably be expected to
have a Material Adverse Effect; or if Borrower fails to perform any material obligation after giving effect to any applicable cure periods with respect to SoundExchange, Inc. pursuant to Borrower’s election to be treated as a “Commercial
Webcaster” as set forth in Section 2.2 of Exhibit A to the Pureplay Commercial Webcaster Settlement Agreements by and between SoundExchange, Inc. and Radio IO, Digitally Imported, Inc., and AccuRadio, each dated as of July 6, 2009;

 8.7 Judgments. If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of
at least Two Hundred Fifty Thousand Dollars ($250,000) shall be rendered against Borrower (and not covered by independent third-party insurance as to which liability has been acknowledged and accepted by such insurance carrier) and shall remain
unsatisfied and unstayed for a period of ten (10) days (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment); or 
 8.8 Misrepresentations. If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth herein or in any certificate delivered to Bank
by any Responsible Officer pursuant to this Agreement or to induce Bank to enter into this Agreement or any other Loan Document. 
 9. BANK’S RIGHTS AND REMEDIES. 

9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election, without
notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrower: 

(a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable (provided that upon the occurrence of an Event of Default described in Section 8.5, all Obligations shall become immediately due and payable without any action by Bank); 

(b) Cease advancing money or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement
between Borrower and Bank; 
 (c) Settle or adjust disputes and claims directly with account debtors for amounts, upon
terms and in whatever order that Bank reasonably considers advisable; 
 (d) Make such payments and do such acts as Bank
considers necessary or reasonable to protect its security interest in the Collateral. Borrower agrees to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes Bank to
enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be
prior or superior to its security interest and to pay all expenses incurred in connection therewith. With respect to any 

  
 16 

 
of Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of Bank’s
rights or remedies provided herein, at law, in equity, or otherwise; 
 (e) Set off and apply to the Obligations any and
all (i) balances and deposits of Borrower held by Bank, or (ii) indebtedness at any time owing to or for the credit or the account of Borrower held by Bank; 
 (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral. Bank is hereby granted a license or
other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter,
or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1,
Borrower’s rights under all licenses and all franchise agreements shall inure to Bank’s benefit; 
 (g)
Dispose of the Collateral by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrower’s premises) as Bank determines is commercially reasonable, and apply any proceeds to the
Obligations in whatever manner or order Bank deems appropriate; 
 (h) Bank may credit bid and purchase at any public
sale; and 
 (i) Any deficiency that exists after disposition of the Collateral as provided above will be paid
immediately by Borrower. 
 9.2 Power of Attorney. Effective only upon the occurrence and during the continuance of an
Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests for verification of Accounts or notify account debtors of
Bank’s security interest in the Accounts; (b) endorse Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (c) sign Borrower’s name on any invoice or bill of lading
relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims under and
decisions with respect to Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable; and (g) to
file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral. The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s rights and
powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions hereunder is terminated. 

9.3 Accounts Collection. At any time after the occurrence of an Event of Default, Bank may notify any Person owing funds to
Borrower of Bank’s security interest in such funds and verify the amount of such Account. Borrower shall collect all amounts owing to Borrower for Bank, receive in trust all payments as Bank’s trustee, and immediately deliver such payments
to Bank in their original form as received from the account debtor, with proper endorsements for deposit. 
 9.4 Bank
Expenses. If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then Bank may do any or all of the following after reasonable notice to
Borrower: (a) make payment of the same or any part thereof; (b) set up such reserves under a loan facility in Section 2.1 as Bank deems necessary to protect Bank from the exposure created by such failure; or (c) obtain and
maintain insurance policies of the type discussed in Section 6.6 of this Agreement, and take any action with respect to such policies as Bank deems prudent. Any amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be
immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral. Any payments made by Bank shall not constitute an agreement by Bank to make similar payments in the future
or a waiver by Bank of any Event of Default under this Agreement. 

  
 17 

 9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable
banking practices, Bank shall not in any way or manner be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of loss, damage or destruction of the Collateral shall be borne by Borrower. 

9.6 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall
be cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made in a written document signed on behalf of Bank and
then shall be effective only in the specific instance and for the specific purpose for which it was given. 
 9.7 Demand;
Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guarantees at any time held by Bank on which Borrower may in any way be liable. 

10. NOTICES. 
 Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for
financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt
requested, or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses set forth below: 
  

			
	If to Borrower:	  	PANDORA MEDIA, INC.
		  	360 22nd Street, Suite 440
		  	Oakland, CA 94612
		  	Attn: Joseph Kennedy, President and CEO
		  	FAX: (510) 451-4286
		
	If to Bank:	  	 Bridge Bank, National Association
 55 Almaden Blvd, Suite 100
 San Jose, CA 95113

		  	Attn: Mike Lederman
		  	FAX: (408) 282-1681

 The parties hereto
may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other. 
 11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 

This Agreement and all Loan Documents unless otherwise specified therein shall be governed by, and construed in accordance with, the
internal laws of the State of California, without regard to principles of conflicts of law. Each of Borrower and Bank hereby submits to the exclusive jurisdiction of the state and Federal courts located in the County of Santa Clara, State of
California. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND 

  
 18 

 
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 
 If the jury waiver set forth in Section is not enforceable, then any dispute, controversy or claim arising out of or relating to this Agreement, the Loan Documents or any of the transactions contemplated
therein shall be settled by judicial reference pursuant to Code of Civil Procedure Section 638 et seq. before a referee sitting without a jury, such referee to be mutually acceptable to the parties or, if no agreement is reached, by a referee
appointed by the Presiding Judge of the California Superior Court for Santa Clara County. This Section shall not restrict a party from exercising remedies under the Code or from exercising pre-judgment remedies under applicable law. 

12. GENERAL PROVISIONS. 

12.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns
of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Borrower without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion. Bank
shall have the right without the consent of or notice to Borrower to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder. 

12.2 Indemnification. Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against:
(a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank as a result of or in any way arising out of, following, or consequential to transactions between Bank and Borrower whether under this Agreement, or otherwise (including without limitation reasonable attorneys’ fees and expenses), except
for losses caused by Bank’s gross negligence or willful misconduct. 
 12.3 Time of Essence. Time is of the essence
for the performance of all obligations set forth in this Agreement. 
 12.4 Severability of Provisions. Each provision of
this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision. 
 12.5 Amendments in Writing, Integration. Neither this Agreement nor the Loan Documents can be amended or terminated orally. All prior agreements, understandings, representations, warranties, and
negotiations between the parties hereto with respect to the subject matter of this Agreement and the Loan Documents, if any, are merged into this Agreement and the Loan Documents. 

12.6 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. 
 12.7 Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding or Bank has any obligation
to make Credit Extensions to Borrower. The obligations of Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 12.2 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run. 
 12.8 Confidentiality. In handling any
confidential information Bank and all employees and agents of Bank, including but not limited to accountants, shall exercise the same degree of care that it exercises with respect to its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure of such information may be made (i) to the subsidiaries or affiliates of Bank in connection with their present or
prospective business relations with Borrower, (ii) to prospective transferees or purchasers of any interest in the Credit Extensions, provided that they have entered into a comparable confidentiality agreement in favor of Borrower and have
delivered a copy to Borrower, (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar order, (iv) as may be required in connection with the examination, audit or similar investigation of Bank and
(v) as Bank may determine 

  
 19 

 
in connection with the enforcement of any remedies hereunder. Confidential information hereunder shall not include information that either: (a) is in the public domain or in the knowledge or
possession of Bank when disclosed to Bank, or becomes part of the public domain after disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank by a third party, provided Bank does not have actual knowledge that such third party
is prohibited from disclosing such information. 
 12.9 Effect of Amendment and Restatement. Except as otherwise set
forth herein, this Agreement is intended to and does completely amend and restate, without novation, the Original Agreement. All security interests granted under the Original Agreement are hereby confirmed and ratified and shall continue to secure
all Obligations under this Agreement. 
 12.10 Patriot Act. To help the government fight the funding of terrorism and
money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. 

  
 20 

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

					
	PANDORA MEDIA, INC.
		
	By:	 	   /s/ William M. McDonagh

		 	Title:	 	CFO
	
	BRIDGE BANK, NATIONAL ASSOCIATION
		
	By:	 	   /s/ Michael Lederman

		 	Title:	 	SVP

  
 1 

			
	 DEBTOR
	  	PANDORA MEDIA, INC.
		
	 SECURED PARTY:
	  	BRIDGE BANK, NATIONAL ASSOCIATION

EXHIBIT A 

COLLATERAL DESCRIPTION ATTACHMENT 
 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
 All personal property
of Borrower (herein referred to as “Borrower” or “Debtor”) whether presently existing or hereafter created or acquired, and wherever located, including, but not limited to: 

(a) all accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), all
commercial tort claims, deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), general intangibles (including intellectual property, payment intangibles and software), goods
(including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), investment property (including securities
and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and records; 

(b) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds, and all
supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in the California Uniform Commercial Code, as amended or supplemented from time to time. 

Notwithstanding the foregoing, “Collateral” shall not include any Equipment subject to a security interest pursuant to that
certain Equipment Loan and Security Agreement dated as of September 4, 2009 with Pinnacle Ventures, LLC (the “Pinnacle Agreement”), to the extent the granting of a security interest therein (i) would be contrary to applicable law
or (ii) is prohibited or would constitute a default under such agreement; provided that upon the termination or lapsing of any such prohibition, such property shall automatically be part of the Collateral; and provided further that the
provisions of this paragraph shall in no case exclude from the definition of “Collateral” any Accounts, proceeds of the disposition of any property (other than Equipment financed pursuant under the Pinnacle Agreement), or general
intangibles consisting of rights to payment, all of which shall at all times constitute “Collateral.” 

 EXHIBIT B 
 ADVANCE REQUEST FORM  
 (To be submitted no later than 2:00 PM to
be considered for same day processing) 
  

					
	To:	  	 Bridge Bank, National Association
	  	
			
	Fax:	  	 (408) 282-1681
	  	
			
	Date:	  	  
	  	
			
	From:	  	 PANDORA MEDIA, INC.
	  	
		  	Borrower’s Name	  	
			
		  	  
 Authorized
Signature
	  	
			
		  	  
 Authorized Signer’s
Name (please print)
	  	
			
		  	  
 Phone Number
	  	

  

					
	To Account #	 	  
	 	

 Borrower hereby requests funding in the amount of $          in
accordance with the Advance as defined in the Amended and Restated Loan and Security Agreement dated September 10, 2009. 
 Borrower hereby
authorizes Lender to rely on facsimile stamp signatures and treat them as authorized by Borrower for the purpose of requesting the above advance. 
 All representations and warranties of Borrower stated in the Amended and Restated Loan and Security Agreement are true, correct and complete in all material respects as of the date of this Advance
Request: provided that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date. 

Capitalized terms used herein and not otherwise defined have the meanings set forth in the Loan and Security Agreement. 

  
 1 

 EXHIBIT C 
 BORROWING BASE CERTIFICATE 
  

 

			
	Borrower: PANDORA MEDIA, INC.	 	            Lender: Bridge Bank, National Association
	Commitment Amount: $10,000,000	 	

  
  

											
	ACCOUNTS RECEIVABLE	  				  	$	            	  
	1.	  	Accounts Receivable Book Value as of     	  				  	$	            	  
	2.	  	Additions (please explain on reverse)	  				  	$	            	  
	3.	  	TOTAL ACCOUNTS RECEIVABLE	  				  			
			
	ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)	  				  			
	4.	  	Amounts over 90 days due	  	$	            	  	  			
	5.	  	Balance of 35% over 90 day accounts	  	$	            	  	  			
	6.	  	Concentration Limits	  	$	            	  	  			
	7.	  	Foreign Accounts	  	$	            	  	  			
	8.	  	Governmental Accounts	  	$	            	  	  			
	9.	  	Contra Accounts	  	$	            	  	  			
	10.	  	Demo Accounts	  	$	            	  	  			
	11.	  	Intercompany/Employee Accounts	  	$	            	  	  			
	12.	  	Other (please explain on reverse)	  	$	            	  	  			
	13.	  	TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS	  				  	$	            	  
	14.	  	Eligible Accounts (#3 minus #13)	  				  	$	            	  
	15.	  	LOAN VALUE OF ACCOUNTS (80% of #14)	  				  	$	            	  
			
	BALANCES	  				  			
	16.	  	Maximum Loan Amount	  				  	$	            	  
	17.	  	Total Funds Available [Lesser of #16 or #15] plus $5,000,000	  				  	$	            	  
	18.	  	Present balance owing on Line of Credit (including non-formula Advances)	  				  	$	            	  
	19.	  	Outstanding under Sublimits (Letters of Credit, Cash Management Services, Credit Card Exposure, FX Reserve)	  				  	$	            	  
	20.	  	RESERVE POSITION (#17 minus #18 and #19)	  				  	$	            	  

 The
undersigned represents and warrants that the foregoing is true, complete and correct, and that the information reflected in this Borrowing Base Certificate complies with the representations and warranties set forth in the Amended and Restated Loan
and Security Agreement between the undersigned and Bridge Bank, National Association. 
  

			
	          PANDORA MEDIA, INC.
		
	          By:	 	  

		 	Authorized Signer

  
 1 

 EXHIBIT D 
 COMPLIANCE CERTIFICATE 
 TO:
             BRIDGE BANK, NATIONAL ASSOCIATION 
 FROM:
      PANDORA MEDIA, INC. 
 The undersigned authorized officer of PANDORA MEDIA, INC. hereby
certifies that in accordance with the terms and conditions of the Amended and Restated Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending
                     with all required covenants except as noted below and (ii) all representations and warranties of Borrower stated in
the Agreement are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting
Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes. 
 Please indicate compliance status by circling Yes/No under “Complies” column. 
  

															
	 Reporting Covenant
	 	  	  	 Required
	  	 	 	  	Complies	 
	Monthly financial statements	 		  	Monthly within 30 days	  	 	Yes	  	  	 	No	  
	Annual (CPA Audited)	 		  	FYE within 180 days	  	 	Yes	  	  	 	No	  
	10K and 10Q	 		  	(as applicable)	  	 	Yes	  	  	 	No	  
	A/R & A/P Agings	 		  	Monthly within 20 days, or within 5 days of	  	 	Yes	  	  	 	No	  
		 		  	Bank’s request	  				  			
	Borrowing Base Certificate	 		  	Monthly within 20 days	  	 	Yes	  	  	 	No	  
	A/R Audit	 		  	Annual	  	 	Yes	  	  	 	No	  
	IP Report	 		  	Quarterly within 30 days	  	 	Yes	  	  	 	No	  
	Deposit balances with Bank	 		  	$         	  				  			
		 		  	 	  				  			
	Deposit balances outside Bank	 		  	$         	  				  			
		 		  	 	  				  			
						
	 Financial Covenant
	 	  	  	 Required
	 	 Actual
	  	 	 	  	 Complies
	 
	Minimum Asset Coverage Ratio	 		  	1.75:1.00	 	             : 1.00	  	 	Yes	  	  	 	No	  
	or Minimum Cash	 		  	$10,000,000	 	$             	  	 	Yes	  	  	 	No	  
						
	Minimum Cash at Bank	 		  	 Lesser of $5,000,000

or 75% of total Cash
	 	$             	  	 	Yes	  	  	 	No	  

  

							
	Comments Regarding Exceptions: See Attached.	 		  	BANK USE ONLY
		 		  	Received by:
                                         
                                         
      
		 		  		 	 AUTHORIZED SIGNER

	Sincerely,	 		  		 	 
		 		  	Date:
                                         
                                         
                   
	  
	 		  	Verified:
                                         
                                         
               
	SIGNATURE	 		  		 	AUTHORIZED SIGNER
			 
	  
	 		  	Date:
                                         
                                         
                   
	TITLE	 		  	Compliance Status
                                         
               Yes            No
	  
	 		  		 	 
	DATE	 		  	 	 	 

  
 1 

 SCHEDULE OF EXCEPTIONS 
 Permitted Indebtedness (Section 1.1) 
 Indebtedness not to exceed $2,000,000 pursuant to
that certain Equipment Loan and Security Agreement dated as of September 4, 2009 with Pinnacle Ventures, LLC 
 Permitted
Investments (Section 1.1) 
 Permitted Liens (Section 1.1) 
 Liens on Equipment in connection with the indebtedness incurred pursuant to that certain Equipment Loan and Security Agreement dated as of September 4, 2009 with Pinnacle Ventures, LLC 

Inbound Licenses (Section 5.6) 

Prior Names (Section 5.7) 

Litigation (Section 5.8) 

Accounts (Section 5.16) 

  
 1Amended and Restated Tax Benefits Preservation Plan

 Exhibit 4.1 
 AMENDED AND RESTATED 
 TAX BENEFITS PRESERVATION PLAN 

dated as of 
 February 17, 2011 
 between 

THE PMI GROUP, INC., 
 and 
 AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

 as Rights Agent 

 Table of Contents 

 

							
	 	  	 	  	Page	 
	Section 1.	  	Definitions	  	 	1	  
	Section 2.	  	Other Definitional and Interpretative Provisions	  	 	5	  
	Section 3.	  	Issuance of Rights and Right Certificates	  	 	6	  
	Section 4.	  	Form of Right Certificates	  	 	7	  
	Section 5.	  	Registration; Transfer and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	  	 	7	  
	Section 6.	  	Exercise of Rights	  	 	8	  
	Section 7.	  	Cancellation and Destruction of Right Certificates	  	 	9	  
	Section 8.	  	Reservation and Availability of Capital Stock	  	 	10	  
	Section 9.	  	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights	  	 	10	  
	Section 10.	  	Certificate of Adjusted Purchase Price or Number of Shares	  	 	13	  
	Section 11.	  	Fractional Rights and Fractional Shares	  	 	13	  
	Section 12.	  	Rights of Action	  	 	14	  
	Section 13.	  	Agreement of Right Holders	  	 	14	  
	Section 14.	  	Right Certificate Holder Not Deemed a Stockholder	  	 	15	  
	Section 15.	  	Appointment of Rights Agent	  	 	15	  
	Section 16.	  	Merger or Consolidation or Change of Name of Rights Agent	  	 	15	  
	Section 17.	  	Duties of the Rights Agent	  	 	16	  
	Section 18.	  	Change of Rights Agent	  	 	17	  
	Section 19.	  	Redemption	  	 	18	  
	Section 20.	  	Exchange	  	 	18	  
	Section 21.	  	Notice of Proposed Actions and Certain Other Matters	  	 	19	  
	Section 22.	  	Notices	  	 	20	  
	Section 23.	  	Supplements and Amendments	  	 	20	  
	Section 24.	  	Successors	  	 	21	  
	Section 25.	  	Determinations and Actions by the Board, etc.	  	 	21	  
	Section 26.	  	Benefits of This Plan	  	 	21	  
	Section 27.	  	Severability	  	 	21	  
	Section 28.	  	Governing Law	  	 	21	  
	Section 29.	  	Counterparts	  	 	21	  
	Section 30.	  	Descriptive Headings	  	 	21	  
			
	Exhibit A	  	Form of Certificate of Designation of Preferred Stock	  			
	Exhibit B	  	Summary of Terms	  			
	Exhibit C	  	Form of Right Certificate	  			

 AMENDED AND RESTATED 

TAX BENEFITS PRESERVATION PLAN 
 THIS AMENDED AND RESTATED TAX BENEFITS PRESERVATION PLAN (this “Plan”) dated as of February 17, 2011, between The PMI Group, Inc., a Delaware corporation (the
“Company”), and American Stock Transfer & Trust Company, LLC, as Rights Agent (the “Rights Agent”), amends and restates that certain Tax Benefits Preservation Plan, dated as of August 12, 2010 (the
“Original Plan”). 
 W I T N E S S E T H 

WHEREAS, (a) the Company and certain of its Subsidiaries have generated certain Tax Benefits (as defined below) for United States
federal income tax purposes; (b) the Company desires to avoid an “ownership change” within the meaning of Section 382 (as defined below), and thereby preserve the Company’s ability to utilize such Tax Benefits, and
(c) in furtherance of such objective, the Company desires to enter into this Plan; 
 WHEREAS, in connection with the
Original Plan, on August 12, 2010, the Board of Directors of the Company authorized and declared a dividend of one preferred stock purchase right (a “Right”) for each share of Common Stock (as defined below) outstanding at the
close of business (as defined below) on August 23, 2010 (the “Record Date”) and authorized the issuance, upon the terms and subject to the conditions herein, of one Right (subject to adjustment) in respect of each share of
Common Stock issued after the Record Date, each Right representing the right to purchase, upon the terms and subject to the conditions herein, one one-millionth (subject to adjustment) of a share of Preferred Stock (as defined below); 

NOW, THEREFORE, the parties hereto agree as follows: 
 Section 1. Definitions. The following terms, as used herein, have the following meanings: 
 “5% Shareholder” means (i) a Person or group of Persons that is a “5-percent shareholder” of the Company pursuant to Treasury Regulation Section 1.382-2T(g) or
(ii) a Person that is a “first tier entity” or “higher tier entity” (as such terms are defined in Treasury Regulation Section 1.382-2T(f)) 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 Treasury Regulation Section 1.382-2T(g). 

“Acquire” (or “Own”) means to obtain (or have, respectively) ownership for purposes of Section 382
of the Code without regard to the constructive ownership rules described in Treasury Regulation Section 1.382-2T(h)(2), (h)(3) and (k) (and “Acquisition” shall have a correlative meaning). 

“Acquiring Person” means any Person who or which is or becomes a 5% Shareholder (other than by reason of Treasury
Regulation Section 1.382-2T(j)(3)(i) or solely as a result of a transaction in which no “5-percent shareholder” (as defined in Section 382 of the Code and Treasury Regulations thereunder) experiences an increase in its percentage
stock ownership interest of the Company, as determined in accordance with Treasury Regulation Sections 1.382-2(a), 1.382- 2T(g), (h), (j) and (k)), whether or not such Person continues to be a 5% Shareholder, but shall not include: 

 

	 	(i)	any Exempt Person; 

  

	 	(ii)	any Grandfathered Person; 

  

	 	(iii)	any Person who or which the Board determines, in its sole discretion, has inadvertently become a 5% Shareholder (or has inadvertently failed to continue to qualify as a
Grandfathered Person), so long as such Person promptly enters into, and delivers to the 

	 	 
Company, an irrevocable commitment 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’s Percentage Stock Ownership is less than 5% (or, in the case of any Person who or which has inadvertently failed to continue to qualify as a Grandfathered Person, the Company Securities that caused such
Person to so fail to qualify as a Grandfathered Person); 

  

	 	(iv)	any Person that has become a 5% Shareholder if the Board in good faith determines that such Person’s attainment of 5% Shareholder status has not jeopardized or
endangered the Company’s utilization of the Tax Benefits or is otherwise in the best interests of the Company; provided that such Person does not increase its Percentage Stock Ownership over such Person’s lowest Percentage Stock
Ownership immediately following such determination by the Board, other than any increase pursuant to or as a result of (A) a stock dividend, stock split, reverse stock split or similar transaction effected by the Company or (B) any
redemption of Company Securities by the Company; and provided further that such Person shall be an “Acquiring Person” if the Board makes a contrary determination in good faith; 

 

	 	(v)	any Person if, on the date that would have been (absent this clause (v) of the definition of “Acquiring Person”) a Stock Acquisition Date with respect to
such Person, such Person does not Beneficially Own any Company Securities; and 

  

	 	(vi)	any Person that Beneficially Owns at least a majority of the Common Stock following consummation of a Qualified Offer. 

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under
common control with, such other Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with
respect to any Person, means the possession, directly or indirectly, of the power to cause the direction of management and/or policies of such Person, whether through the ownership of voting securities by contract or otherwise. 

A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “Beneficially Own,” any
securities (i) which such Person directly owns or (ii) which such Person would be deemed to constructively own pursuant to Section 382 of the Code and the Treasury Regulations promulgated thereunder. 

“Board” means the Board of Directors of the Company. 

“Business Day” means 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. 
 “close of business” on any given date
means 5:00 p.m., New York City time, on such date; provided that if such date is not a Business Day “close of business” means 5:00 p.m., New York City time, on the next succeeding Business Day. 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. 

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

“Company Securities” means (i) shares of Common Stock, (ii) shares of preferred stock (other than Straight
Preferred Stock) of the Company, (iii) warrants, rights, or options (including any interest treated as an option pursuant to Treasury Regulation Section 1.382-4(d)(9)) to acquire stock (other than Straight Preferred Stock) of the Company
and (iv) any other interest that would be treated as “stock” of the Company pursuant to Treasury Regulation Section 1.382- 2T(f)(18). 

  
 2 

 “Distribution Date” means the earlier of (i) the close of business on
the tenth Business Day after a Stock Acquisition Date and (ii) the close of business on the tenth Business Day (or such later day as may be designated prior to a Stock Acquisition Date by the Board) after the date of the commencement of a
tender or exchange offer by any Person if, upon consummation thereof, such Person would or could be an Acquiring Person; provided, however, that if either of such dates occurs after the public announcement of this Plan and on or prior
to the Record Date, then the Distribution Date shall be the Record Date. 
 “Exchange Act” means the Securities
Exchange Act of 1934, as amended, unless otherwise expressly specified. 
 “Exempt Person” means the Company,
any Subsidiary of the Company (in each case including, without limitation, in any fiduciary capacity), any employee benefit plan or compensation arrangement of the Company or any Subsidiary of the Company, or any entity or trustee holding Company
Securities to the extent organized, appointed or established by the Company or any Subsidiary of the Company for or pursuant to the terms of any such employee benefit plan or compensation arrangement. 

“Expiration Date” means the earliest of (i) the Final Expiration Date, (ii) the time at which all Rights are
redeemed as provided in Section 19 or exchanged as provided in Section 20, (iii) the first day of a taxable year of the Company as to which the Board of Directors determines that no Tax Benefits may be carried forward, (iv) a
date prior to a Stock Acquisition Date on which the Board of Directors determines that the Rights and the Plan are no longer necessary for the preservation or existence of the Tax Benefits or are no longer in the best interests of the Company and
its shareholders, (v) the repeal or amendment of Section 382 or any successor statute, if the Board of Directors determines that this Plan is no longer necessary for the preservation of Tax Benefits, (vi) such time as the Board of
Directors determines that a limitation on the use of the Tax Benefits under Section 382 would no longer be material to the Company and (vii) August 11, 2011, if stockholder approval of this Plan has not been received before such time.
The Board of Directors shall at least annually consider whether to make the determination provided by clause (vi) above in light of all relevant factors, including, in particular, the amount and anticipated utilization of the Company’s Tax
Benefits and the Company’s market capitalization. The Company shall promptly notify the Rights Agent in writing upon the occurrence of the Expiration Date and, if such notification is given orally, the Company shall confirm the same in writing
on or prior to the immediately following Business Day. Until such notice is received by the Rights Agent, the Rights Agent may presume conclusively for all purposes, prior to the close of business on February 16, 2014, that the Expiration Date
has not occurred. 
 “Final Expiration Date “ means the close of business on February 16, 2014, subject to
extension. 
 “Grandfathered Person” means: 

 

	 	(i)	any Person who would otherwise qualify as an Acquiring Person as of immediately prior to the public announcement of this Plan, unless and until such Person’s
Percentage Stock Ownership shall be increased by more than one-tenth of one percentage point over such Person’s lowest Percentage Stock Ownership immediately prior to the public announcement of this Plan or thereafter, other than any increase
pursuant to or as a result of (A) the exercise of any option, warrant or convertible instrument to purchase Company Securities that such Person held as of immediately prior to the public announcement of this Plan, (B) a stock dividend,
stock split, reverse stock split or similar transaction effected by the Company or (C) any redemption or repurchase of Company Securities by the Company; and 

  
 3 

	 	(ii)	any Person who would otherwise qualify as an Acquiring Person as a result of a redemption or repurchase of Company Securities by the Company, unless and until such
Person’s Percentage Stock Ownership shall be increased by more than one-tenth of one percentage point over such Person’s lowest Percentage Stock Ownership on or after the date of such redemption or repurchase, other than any increase
pursuant to or as a result of (A) a stock dividend, stock split, reverse stock split or similar transaction effected by the Company or (B) any subsequent redemption or repurchase of Company Securities by the Company.

 “Percentage Stock Ownership” means the percentage stock ownership interest of the Company, as
determined in accordance with Treasury Regulation Sections 1.382-2(a)(3), 1.382-2T(g), (h), (j) and (k); 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 Treasury Regulation Section 1.382- 2T(h)(2)(i)(A). 

“Person” means any individual, firm, corporation, partnership, trust association, limited liability company, limited
liability partnership, governmental entity, or other entity, or any group of Persons making a “coordinated acquisition” of shares or otherwise treated as an entity within the meaning of Treasury Regulation Section 1.382-3(a)(1)(i) and
shall include any successor (by merger or otherwise) of any such entity. 
 “Preferred Stock” means the Series
A Participating Preferred Stock, $0.01 par value per share, of the Company, having the terms set forth in the form of certificate of designation attached hereto as Exhibit A. 
 “Purchase Price” means the price (subject to adjustment as provided herein) at which a holder of a Right may purchase one one-millionth of a share of Preferred Stock (subject to
adjustment as provided herein) upon exercise of a Right, which price shall initially be $15.00. 
 “Qualified
Offer” shall mean an offer determined by a majority of the Board to have each of the following characteristics with respect to the Common Stock: 
  

	 	(i)	a tender or exchange offer for all of the outstanding shares of Common Stock at the same per-share consideration; 

 

	 	(ii)	an offer that has commenced within the meaning of Rule 14d-2(a) under the Exchange Act; 

 

	 	(iii)	an offer that is conditioned on a minimum of at least a majority of the outstanding shares of the Common Stock being tendered and not withdrawn as of the offer’s
expiration date, which condition shall not be waivable; 

  

	 	(iv)	an offer pursuant to which the Person making such offer has announced that it intends, as promptly as practicable upon successful completion of the offer, to consummate
a second step transaction whereby all shares of the Common Stock not tendered into the offer will be acquired at the same form and amount of consideration per share actually paid pursuant to the offer, subject to stockholders’ statutory
appraisal rights, if any. 

 “Section 382” means Section 382 of the Code, or any comparable
successor provision. 

  
 4 

 “Securities Act” means the Securities Act of 1933, as amended, unless
otherwise expressly specified. 
 “Stock Acquisition Date” means the date of the first public announcement
(including the filing of a report on Schedule 13D or Schedule 13G under the Exchange Act (or any similar or successor report)) by the Company or an Acquiring Person indicating that an Acquiring Person has become such. 

“Straight Preferred Stock” means preferred stock that is not treated as stock pursuant to Treasury Regulation
Section 1.382-2(a)(3). 
 “Subsidiary” of any Person means any other Person of which securities or other
ownership interests having ordinary voting power, in the absence of contingencies, to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such first Person.

 “Tax Benefits” means 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. 
 “Trading Day” means a day on which the principal national securities exchange or
over-the-counter market on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange or
over-the-counter market, a Business Day. 
 “Treasury Regulation” means any final, proposed or temporary
regulation of the Department of Treasury under the Code and any successor regulation. 
 Each of the following terms is defined
in the Section set forth opposite such term: 
  

			
	 Term
	  	 Section

	Company	  	Preamble
	Exchange Ratio	  	20
	Ownership Statement	  	3(a)
	Plan	  	Preamble
	Record Date	  	Recitals
	Redemption Price	  	19
	Right	  	Recitals
	Rights Agent	  	Preamble
	Right Certificate	  	4
	Trust	  	20
	Trust Agreement	  	20

 Section 2.
Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Plan shall refer to this Plan as a whole and not to any particular provision of
this Plan. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Sections and Exhibits are to Sections and Exhibits of this Plan unless otherwise
specified. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Plan as if set forth in full herein. Any capitalized terms used in any Exhibit but not otherwise defined therein, shall have the meaning
as defined in this Plan. Any singular term in this Plan shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Plan, they shall
be 

  
 5 

 
deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and
comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time
to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate
schedule. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to any
statute, rules or regulations shall be deemed to refer to such statute, rules or regulations as amended from time to time and to any successors thereto. 
 Section 3. Issuance of Rights and Right Certificates. (a) As soon as practicable after the Record Date, the Company will send a summary of the Rights substantially in the form of Exhibit
B hereto, by first class mail, postage prepaid, to each record holder of the Common Stock as of the close of business on the Record Date. Certificates for the Common Stock, or current ownership statements issued with respect to uncertificated shares
of Common Stock in lieu of such a certificate (an “Ownership Statement”) (which Ownership Statements shall be deemed to be Right Certificates), issued after the Record Date but prior to the earlier of a Distribution Date and the
Expiration Date shall have printed or written on or otherwise affixed to them the following legend: 
 This [certificate]
[statement] also evidences certain Rights as set forth in an Amended and Restated Tax Benefits Preservation Plan between The PMI Group, Inc. (the “Company”) and American Stock Transfer & Trust Company, LLC, as Rights Agent,
dated as of February 17, 2011, and as amended from time to time (the “Plan”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of the Company. The
Company will mail to the holder of this [certificate] [statement] a copy of the Plan without charge promptly after receipt of a written request therefor. Under certain circumstances, as set forth in the Plan, such Rights may be evidenced by separate
[certificate] [statements] instead of by this [certificate] [statement] and may be redeemed or exchanged or may expire. 
 As
set forth in the Plan, Rights issued or transferred to, or Beneficially Owned by, any Person who is, was or becomes an Acquiring Person (as such terms are defined in the Plan), whether currently Beneficially Owned by or on behalf of such Person or
by any subsequent holder, may be null and void. 
 (b) Prior to a Distribution Date, (i) the Rights will be evidenced
by certificates for the Common Stock or Ownership Statements and not by separate Right Certificates (as hereinafter defined) and the registered holders of the Common Stock shall be deemed to be the registered holders of the associated Rights, and
(ii) the Rights will be transferable only in connection with the transfer of the underlying shares of Common Stock. 
 (c)
From and after a Distribution Date, the Rights will be evidenced solely by separate Right Certificates or Ownership Statements and will be transferable only in connection with the transfer of the Right Certificates pursuant to Section 5. As
soon as practicable after the Company has notified the Rights Agent of the occurrence of a Distribution Date, the Rights Agent will send, by first class, insured, postage prepaid mail, to each record holder of the Common Stock as of the close of
business on the Distribution Date (other than any Acquiring Person), one or more Right Certificates evidencing one Right (subject to adjustment as provided herein) for each share of Common Stock so held. If an adjustment in the number of Rights per
share of Common Stock has been made pursuant to Section 9, the Company shall, at the time of distribution of the Right Certificates, make the necessary and appropriate rounding adjustments in accordance with Section 11(a) so that Right
Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. 

  
 6 

 (d) Rights shall be issued in respect of all shares of Common Stock outstanding as of the
Record Date or issued (on original issuance or out of treasury) after the Record Date but prior to the earlier of a Distribution Date and the Expiration Date. In addition, in connection with the issuance or sale of shares of Common Stock following a
Distribution Date and prior to the Expiration Date, the Company (x) shall, with respect to shares of Common Stock so issued or sold (i) pursuant to the exercise of stock options or under any employee plan or arrangement or (ii) upon
the exercise, conversion or exchange of other securities issued by the Company prior to the Distribution Date, and (y) may, in any other case, if deemed appropriate by the Board, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided that no such Right Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise be made in lieu of the issuance thereof. 

Section 4. Form of Right Certificates. (a) The certificates evidencing the Rights (and the forms of assignment, election
to purchase and certificates to be printed on the reverse thereof) (the “Right Certificates”) shall be substantially in the form of Exhibit C 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 Plan, or as may be required to comply with any applicable law, rule or regulation or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to conform to usage. The Right Certificates, whenever distributed, shall be dated as of the Record Date. 

(b) The Right Certificates shall be executed on behalf of the Company by its Chief Executive Officer, 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, an Assistant Secretary, the Treasurer or any Assistant Treasurer of the
Company, either manually or by facsimile signature. The Right Certificates shall be countersigned, either manually or by facsimile signature, by the Rights Agent and shall not be valid for any purpose unless so countersigned. In case any officer of
the Company whose manual or facsimile signature is affixed to the Right Certificates ceases to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates may,
nevertheless, be countersigned by the Rights Agent and issued and delivered with the same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the Company. Any Right Certificate may be signed
on behalf of the Company by any Person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Plan any such Person
was not such an officer. 
 (c) Notwithstanding any of the provisions of this Plan or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares of stock issuable upon exercise of
the Rights made in accordance with the provisions of this Plan. 
 Section 5. Registration; Transfer and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) Following a Distribution Date, the Rights Agent shall keep or cause to be kept, at its principal office or offices designated as the place for surrender of
Right Certificates upon exercise, transfer or exchange, books for registration and transfer of the Right Certificates. Such books shall show with respect to each Right Certificate the name and address of the registered holder thereof, the number of
Rights indicated on the certificate and the certificate number. 
 (b) At any time after a Distribution Date and prior to the
Expiration Date, any Right Certificate or Certificates may, upon the terms and subject to the conditions set forth in this Plan, be transferred or exchanged for another Right Certificate or Certificates evidencing a like number of Rights as the
Right Certificate or Certificates surrendered. Any registered holder desiring to transfer or exchange 

  
 7 

 
any Right Certificate or Certificates shall surrender such Right Certificate or Certificates (with, in the case of a transfer, the form of assignment and certificate on the reverse side thereof
duly executed) to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate or Certificates until the registered holder of the Rights has complied with the requirements of Section 6(f). Upon satisfaction of the foregoing requirements, the Rights Agent shall, subject to Sections 6(e),
6(f), 8(e), 11 and 20, countersign and deliver to the Person entitled thereto a Right Certificate or Certificates as so requested. The Company may require payment of a sum sufficient to cover any transfer tax or other governmental charge that may be
imposed in connection with any transfer or exchange of any Right Certificate or Certificates. 
 (c) Upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the
Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will issue and
deliver a new Right Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 

Section 6. Exercise of Rights. (a) The registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein, including Sections 6(e), 6(f) and 8(c)) in whole or in part at any time after a Distribution Date and prior to the Expiration Date upon surrender of the Right Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together with payment (in lawful money of the United States of America by
certified check or bank draft payable in immediately available or next day funds to the order of the Company) of the aggregate Purchase Price with respect to the Rights then to be exercised and an amount equal to any applicable transfer tax or other
governmental charge. 
 (b) Upon satisfaction of the requirements of Section 6(a) and subject to Section 17(k), the
Rights Agent shall thereupon promptly (i)(A) requisition from any transfer agent of the Preferred Stock (or make available, if the Rights Agent is the transfer agent therefor) certificates for the total number of one one-millionths of a share of
Preferred 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 shares of Preferred Stock issuable upon exercise of the
Rights with a depositary agent, requisition from the depositary agent depositary receipts representing interests in such number of one one-millionths of a share of Preferred Stock to be purchased (in which case certificates for the shares of
Preferred 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) requisition from the Company the amount of cash,
if any, to be paid in lieu of issuance of fractional shares in accordance with Section 11 and (iii) after receipt of such certificates or depositary receipts and cash, if any, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate (with such certificates or receipts registered in such name or names as may be designated by such holder). If the Company is obligated to deliver Common Stock or other securities or assets pursuant to this
Plan, the Company will make all arrangements necessary so that such securities and assets are available for delivery by the Rights Agent, if and when appropriate. 
 (c) Each Person (other than the Company) in whose name any certificate for Preferred Stock is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of
such Preferred Stock represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any transfer taxes or other governmental
charges) was made; provided that if the date of such 

  
 8 

 
surrender and payment is a date upon which the transfer books of the Company relating to the Preferred Stock are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day on which the applicable transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right 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 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. 
 (d) In case the registered holder
of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing the number of Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Right Certificate, registered in such name or names as may be designated by such holder, subject to the provisions of Section 12. 
 (e) Notwithstanding anything in this Plan to the contrary, any Rights Beneficially Owned by (i) an Acquiring Person from and after the date on which the Acquiring Person becomes such or (ii) a
transferee of Rights Beneficially Owned by an Acquiring Person who (A) becomes a transferee after the Stock Acquisition Date with respect to such Acquiring Person or (B) becomes a transferee prior to or concurrently with the Stock
Acquisition Date with respect to such Acquiring Person and receives such Rights (I) with actual knowledge that the transferor is or was an Acquiring Person or (II) pursuant to either (x) 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 (y) a transfer
which the Board determines in good faith is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 6(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 this Plan or otherwise. The Company shall use all reasonable efforts to insure that the provisions of this Section 6(e) are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any transferee of an Acquiring Person hereunder. 

(f) Notwithstanding anything in this Plan to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to any purported transfer pursuant to Section 5 or exercise pursuant to this Section 6 unless the registered holder of the applicable Rights (i) shall have completed and signed the certificate contained in the form
of assignment or election to purchase, as the case may be, set forth on the reverse side of the Right Certificate surrendered for such transfer or exercise, as the case may be, (ii) shall not have indicated an affirmative response to clause 1
or 2 thereof and (iii) shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof as the Company shall reasonably request. 

Section 7. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for exercise, transfer or
exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by this Plan. The Company shall deliver to the Rights Agent for cancellation, and the Rights Agent shall cancel, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the
Company. 

  
 9 

 Section 8. Reservation and Availability of Capital Stock. (a) The Company
covenants and agrees that it will cause to be reserved and kept available a number of authorized but not outstanding shares of Preferred Stock sufficient to permit the exercise in full of all outstanding Rights as provided in this Plan. 

(b) So long as the Preferred Stock or other securities issuable upon the exercise of 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 securities reserved for such issuance to be listed on any such exchange upon official notice of issuance upon such exercise.

 (c) The Company shall (i) file, as soon as practicable following the earliest date after a Stock Acquisition Date and
determination of the consideration to be delivered by the Company upon exercise of the Rights in accordance with Section 9(a)(ii), or as soon as is required by law following a Distribution Date, as the case may be, a registration statement
under the Securities Act with respect to the securities issuable upon exercise of the Rights, (ii) cause such registration statement to become effective as soon as practicable after such filing and (iii) cause such registration statement
to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities and (B) the Expiration Date. The
Company shall also take such action as may be appropriate 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 90 days after the date set forth in Section 8(c)(i), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement when the suspension is no longer in effect. Notwithstanding anything contained in this Plan to the contrary, the
Rights shall not be exercisable for securities in any jurisdiction if the requisite qualification in such jurisdiction has not been obtained, such exercise is not permitted under applicable law or a registration statement in respect of such
securities has not been declared effective. 
 (d) The Company shall take all such action as may be necessary to ensure that all
one one-millionths of a share of Preferred Stock or other securities issuable upon exercise of Rights shall, at the time of delivery of the certificates for such securities (subject to payment of the Purchase Price), be duly authorized, validly
issued, fully paid and nonassessable. 
 (e) The Company shall pay when due and payable any and all federal and state transfer
taxes and other governmental charges that may be payable in respect of the issuance or delivery of the Right Certificates and of any certificates for Preferred Stock or other securities upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax or other governmental charge that may be payable in respect of any transfer involved in the issuance or delivery of any Right Certificates or any certificates for Preferred Stock or other securities to a Person other
than the registered holder of the applicable Right Certificate. Prior to any such issuance or delivery of any Right Certificates or any certificates for Preferred Stock or other securities, any such transfer tax or other governmental charge shall
have been paid by the holder of such Right Certificate or it shall have been established to the Company’s satisfaction that no such tax or other governmental charge is due. 

Section 9. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. (a)(i) To preserve the actual or
potential economic value of the Rights, if at any time after the date hereof there shall be any change in the Common Stock or the Preferred Stock, whether by reason of stock dividends, stock splits, reverse stock splits, recapitalization, mergers,
consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options
or warrants to holders of Common Stock or Preferred Stock, as the case may be (other than 

  
 10 

 
distribution of the Rights or regular quarterly cash dividends) or otherwise, then, in each such event the Board shall make such appropriate adjustments in the number of shares of Preferred Stock
(or the number and kind of other securities) issuable upon exercise of each Right (or in exchange for any Right pursuant to Section 20), the Purchase Price and Redemption Price in effect at such time and/or the number of Rights outstanding at
such time (including the number of Rights or fractional Rights associated with each share of Common Stock) such that following such adjustment such event shall not have had the effect of reducing or limiting the benefits the holders of the Rights
would have had absent such event. If an event occurs that requires an adjustment under both this Section 9(a)(i) and Section 9(a)(ii), the adjustment provided for in this Section 9(a)(i) shall be made prior to, and in addition to, any
adjustment required pursuant to Section 9(a)(ii). 
 (ii) If any Person becomes at any time after the public
announcement of this Plan an Acquiring Person, then each holder of a Right shall (except as otherwise provided herein, including Section 6(e)) be entitled to receive upon exercise thereof (in accordance with the provisions of Section 6) at
the then current Purchase Price such number of one-millionths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this Plan and in lieu of shares of Preferred Stock, such number of shares of Common
Stock equal to the result obtained by dividing 
 (x) the product obtained by multiplying the then current
Purchase Price by the number of one-millionths of a share of Preferred Stock for which a Right was exercisable immediately prior to such first occurrence (such product being from such time on the “Purchase Price” for each Right and for all
purposes of this Plan) by 
 (y) 50% of the current market price per share of Common Stock (determined pursuant
to Section 9(b)(i)) on the date of such first occurrence. 
 (iii) In the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit the exercise in full of the Rights as contemplated in accordance with subparagraph (ii) above, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock for issuance upon exercise of the Rights. In the event the Company shall, after good faith effort, be unable to take such action as may be necessary to authorize such additional shares of
Common Stock, the Company shall substitute, for each share of Common Stock that would otherwise be issuable upon exercise of a Right, a number of shares of Preferred Stock or fraction thereof such that the current market price of one share of
Preferred Stock multiplied by such number or fraction is equal to the current market price of one share of Common Stock as of the date of issuance of such shares of Preferred Stock or fraction thereof. 

(b)(i) For purposes of computations hereunder other than computations made pursuant to Section 12, the “current market
price” per share of Common Stock on any date shall be the average of the daily closing prices per share of such Common Stock at the close of the regular session of trading for the 30 Trading Days immediately prior to such date; and for purposes
of computations made pursuant to Section 11, the “current market price” per share of Common Stock for any Trading Day shall be the closing price per share of Common Stock at the close of the regular session of trading for such Trading
Day; provided that if the current market price per share of the Common Stock is determined during a period that is in whole or in part 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 exercisable for or convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and
prior to the ex-dividend date for such dividend or distribution or the record date for such subdivision, combination or reclassification, then, and in each such case, the “current market price” shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, at the close of the regular session of trading or, if no such sale takes place on such day, the average of the

  
 11 

 
closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system at the close of the regular session of trading with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices
in the over-the- counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or such other system then in use or, if on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board (in each case prices which are not identified as having been reported late to such
system). If on any such date, no market maker is making a market in the Common Stock or the Common Stock is not publicly held or not so listed or traded, the “current market value” of such shares on such date shall be as determined in good
faith by the Board (or, if at the time of such determination there is an Acquiring Person, by a nationally recognized investment banking firm selected by the Board) which determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. 
 (ii) For the purpose of any computation hereunder, the “current
market price” per share of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in Section 9(b)(i) (other than the last sentence thereof). If the current market price per share of Preferred Stock
cannot be determined in such manner, the “current market price” per share of Preferred Stock shall be conclusively deemed to be an amount equal to 1,000,000 (as such number may be appropriately adjusted for such events as stock splits,
reverse stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Plan) multiplied by the current market price per share of Common Stock (as determined pursuant to Section 9(b)(i)).
For all purposes of this Plan, the “current market price” of one one-millionth of a share of Preferred Stock shall be equal to the “current market price” of one share of Preferred Stock divided by 1,000,000. 

(iii) For the purpose of any computation hereunder, the value of any securities or assets other than Common Stock or
Preferred Stock shall be the fair value as determined in good faith by the Board, or, if at the time of such determination there is an Acquiring Person, by a nationally recognized investment banking firm selected by the Board, which determination
shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. 
 (c) Notwithstanding
any provision of this Plan to the contrary, no adjustment of any item described in Section 9(a)(i) (e.g., the Purchase Price, the Redemption Price, the number of shares of Preferred Stock issuable upon exercise of the Rights) shall be
required unless such adjustment would require an increase or decrease of at least 1% in the relevant item; provided that any adjustments which by reason of this Section 9(c) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section 9 shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share or one ten-billionth of a share of Preferred Stock, as
the case may be. 
 (d) All Rights originally issued by the Company subsequent to any adjustment made hereunder shall evidence
the right to purchase, at the Purchase Price then in effect, the then applicable number of one-millionths of a share of Preferred Stock and other capital stock issuable from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein. 

  
 12 

 (e) Irrespective of any adjustment or change in the Purchase Price or the number of
one-millionths of a share of Preferred Stock or other securities issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price per one one-millionth of a share and the
number of shares which were expressed in the initial Right Certificates issued hereunder. 
 (f) In any case in which this
Section 9 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 one-millionths of a share of Preferred Stock or other capital stock, if any, issuable upon such exercise over and above the number of one-millionths of a share of Preferred Stock or other capital stock, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such
additional shares upon the occurrence of the event requiring such adjustment. 
 (g) Anything in this Section 9 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 9, as and to the extent that it, in its sole discretion, determines to be
advisable so that any consolidation or subdivision of the Preferred Stock or Common Stock, issuance wholly for cash of any Preferred Stock or Common Stock at less than the current market price, issuance wholly for cash of any Preferred Stock, Common
Stock or securities which by their terms are convertible into or exercisable for Preferred Stock or Common Stock, stock dividends or issuance of rights, options or warrants referred to in this Section 9 hereafter made by the Company to the
holders of its Preferred Stock or Common Stock shall not be taxable to such stockholders. 
 (h) The Company agrees that after a
Distribution Date, it will not, except as permitted by Sections 19, 20 or 23, 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 substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights. 
 Section 10. Certificate of Adjusted Purchase
Price or Number of Shares. Whenever an adjustment is made as provided in Section 9, the Company shall (i) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment,
(ii) promptly file with the Rights Agent and with each transfer agent for the Preferred Stock and the Common Stock a copy of such certificate and (iii) mail a brief summary thereof to each holder of a Right Certificate (or, if prior to a
Distribution Date, to each holder of a certificate representing shares of Common Stock) in the manner set forth in Section 22. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained.

 Section 11. Fractional Rights and Fractional Shares. (a) The Company is not required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In lieu of any such fractional Rights, the Company shall pay to the registered holders of the Right 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 price of a whole Right. For purposes of this Section 11(a), the current market price of a whole Right shall be the closing price of a Right at the close of the
regular session of trading for the Trading Day immediately prior to the date on which such fractional Rights would otherwise have been issuable. The closing price of a Right for any day shall be determined in the manner set forth for the Common
Stock in Section 9(b)(i). 

  
 13 

 (b) The Company is not required to issue fractions of shares of Preferred Stock (other than
fractions which are multiples of one one-millionth of a share of Preferred Stock) upon exercise of the Rights or upon exchange of the Rights pursuant to Section 20(a), and the Company is not required to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are multiples of one one-millionth of a share of Preferred Stock). Fractions of shares of Preferred Stock in integral multiples of one one-millionth of a share of Preferred Stock may,
at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided that such agreement shall provide that the holders of such depositary receipts
shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Stock represented by such depositary receipts. In lieu of any such fractional shares of Preferred Stock, the Company shall pay to
the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market price of one one-millionth of a share of Preferred Stock. For purposes of this
Section 11(b), the current market price of one one-millionth of a share of Preferred Stock shall be one one-millionth of the closing price of a share of Preferred Stock (as determined pursuant to Section 9(b)) for the Trading Day
immediately prior to the date of such exercise. 
 (c) Upon any exchange pursuant to Section 20(c), 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 shall pay to the
registered holders of Right Certificates at the time such Rights are exercised or exchanged as herein provided an amount in cash equal to the same fraction of the current market price of a share of Common Stock. For purposes of this
Section 11(c), the current market price of a share of Common Stock shall be the closing price of a share of Common Stock (as determined pursuant to Section 9(b)) for the Trading Day immediately prior to the date of such exercise or
exchange. 
 (d) Each holder of a Right, by his acceptance of the Right, expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right except as permitted by this Section 11. 
 Section 12.
Rights of Action. All rights of action in respect of this Plan, excepting the rights of action given to the Rights Agent under Section 15 hereof, are vested in the respective registered holders of the Right Certificates (and, before the
Distribution Date, the registered holders of the Common Stock); and any registered holder of any Right Certificate (or, before the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, before the Distribution Date, of the Common Stock), on such holder’s own behalf and for such holder’s own benefit, may enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce,
or otherwise act in respect of, such holder’s right to exercise the Rights evidenced by such Right Certificate (or, before the Distribution Date, such Common Stock) in the manner provided in such Rights Certificate and in this Plan. 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 Plan and will be entitled to specific performance
of the obligations under, and injunctive relief against actual or threatened violations of, the obligations of any Person subject to this Plan 
 Section 13. Agreement of Right Holders. Each holder of a Right, by his acceptance of the Right, consents and agrees with the Company and the Rights Agent and with every other holder of a Right
that: 
 (a) prior to a Distribution Date, the Rights will be evidenced by and transferable only in connection with the transfer
of Common Stock; 
 (b) after a Distribution Date, the Rights will be evidenced by Right Certificates and transferable only on
the registry books of the Rights Agent pursuant to Section 5; 

  
 14 

 (c) subject to Sections 5 and 6, the Company and the Rights Agent may deem and treat the
Person in whose name a Right Certificate (or, prior to a Distribution Date, a certificate representing shares of Common Stock or an Ownership Statement) is registered as the absolute owner of such certificate and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificate or the certificate representing shares of Common Stock or Ownership Statement 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 6(e), shall be affected by any notice to the contrary; and 
 (d) notwithstanding anything in this Plan to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Plan by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission,
or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority prohibiting or otherwise restraining performance of such obligation; provided that the Company must use its reasonable best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon as possible. 
 Section 14. Right
Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the shares of capital stock which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company (including
any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, to give or withhold consent to any corporate action, to receive notice of meetings or other actions affecting stockholders (except
as provided in Section 21), or to receive dividends or subscription rights, or otherwise) until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof. 

Section 15. Appointment of Rights Agent. (a) 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 liable for, the acts or omissions of any such co-rights agent. If the Company appoints one or more co-rights agents, the respective
duties of the Rights Agent and any co-rights agents shall be as the Company shall determine. 
 (b) The Company shall 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 other disbursements incurred in the execution or
administration of this Plan and the exercise and performance of its duties hereunder. The Company also shall indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without 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 administration of this Plan or the exercise or performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability. 
 Section 16. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into or with which the Rights Agent or any successor Rights Agent may be merged, consolidated or combined, any corporation resulting from any merger, consolidation or combination to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate trust or stock transfer business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Plan without the execution or
filing of any paper or any further act on the part of 

  
 15 

 
any party hereto; provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 18. If at the time such successor Rights
Agent succeeds to the agency created by this Plan any of the Right Certificates have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates have not been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Plan. 
 (b) If at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates have been countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and if at that time any of the Right Certificates have not been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or its changed
name; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Plan. 
 Section 17. Duties of the Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Plan upon the following terms and conditions, by all of which the Company and the
holders of Right 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 Plan the Rights Agent deems it necessary that any fact or
matter (including the identity of any “Acquiring Person” and the determination of “current market price”) be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chief Executive Officer, the President or any Vice President, the Secretary,
any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken, suffered or omitted in good faith by it
under the provisions of this Plan in reliance upon such certificate. 
 (c) The Rights Agent shall be liable hereunder only for
its own 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 Plan or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company
only. 
 (e) The Rights Agent shall not be responsible (i) in respect of the validity of this Plan or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof), (ii) for any breach by the Company of any covenant or condition
contained in this Plan or in any Right Certificate, (iii) for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 6(e)) or (iv) any adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided herein or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after actual notice of any such
adjustment). The Rights Agent shall not by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Preferred Stock or other securities to be issued pursuant to this Plan or any Right
Certificate or as to whether any shares of Preferred Stock or other securities will, when issued, be duly authorized, validly issued, fully paid and nonassessable. 

  
 16 

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

(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder
from 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, suffered or omitted 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 the Rights Agent under this Plan. 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 or to any holders of Rights resulting from any such act, default, neglect or misconduct; provided that reasonable care was exercised in the selection and continued employment thereof.

 (j) No provision of this Plan shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably
assured to it. 
 (k) If, with respect to any Right 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 cases may be, has either not been completed or indicates an affirmative response to clause 1 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. 
 (l) 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 the administration of this Plan or the exercise or performance of its duties hereunder in reliance upon any Right 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, instruction, direction, consent, certificate, statement or other paper or
document reasonably believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons. 
 Section 18. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Plan upon 30 days’ notice to the Company and to
each transfer agent of the Common Stock and Preferred Stock. 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 

  
 17 

 
such termination, and the Company shall be responsible for sending any required notice. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and Preferred Stock by registered or certified mail, and, after a Distribution Date, to the holders of the Right Certificates. If the Rights
Agent resigns or is removed or otherwise becomes incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company fails to make such appointment within a period of 30 days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a corporation
organized, in good standing and doing business under the laws of the United States or of any state of the United States, authorized under such laws to exercise stock transfer or corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a corporation described in Section 18(a). 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 with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and, subsequent to a Distribution Date, mail a notice thereof to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 18, 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 19. Redemption. (a) At any time prior to a Distribution Date, the Board may, at its option, redeem all but not
less than all of the then outstanding Rights at a redemption price of $0.00001 per Right, as such amount may be appropriately adjusted pursuant to Section 9(a)(i) (such redemption price being hereinafter referred to as the “Redemption
Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. The Redemption Price shall be payable, at the option of the Company, in
cash, shares of Common Stock, or such other form of consideration as the Board shall determine. 
 (b) Immediately upon the
action of the Board electing to redeem the Rights (or at such later time as the Board may establish for the effectiveness of such redemption) and without any further action and without any notice, the right to exercise the Rights will terminate and
thereafter the only right of the holders of Rights shall be to receive the Redemption Price for each Right so held. The Company shall promptly thereafter give notice of such redemption to the Rights Agent and the holders of the Rights in the manner
set forth in Section 22; provided that the failure to give, or any defect in, such notice shall not affect the validity of such redemption. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. 
 Section 20. Exchange. (a) At any time on or after a Stock Acquisition Date, with respect to all or any part of the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to Section 6(e)), the Board may, at its option, exchange for each Right one share of Common Stock, subject to adjustment pursuant to Section 9(a)(i) (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). The exchange of the Rights by the Board may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Notwithstanding the foregoing, the Board 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. 

  
 18 

 (b) Immediately upon the effectiveness of the action of the Board to exchange any Rights
pursuant to Section 20(a) (or at such later time as the Board may establish) and without any further action and without any notice, the right to exercise such Rights will terminate and thereafter the only right of a holder of such Rights shall
be to receive that number of fractional shares 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 thereafter give notice of such exchange to the Rights Agent
and the holders of the Rights to be exchanged in the manner set forth in Section 22; provided that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. 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 Rights for shares of Common Stock 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 Section 6(e)) held by each holder of Rights.

 (c) In lieu of exchanging all or any part of the then outstanding and exercisable Rights for shares of Common Stock in
accordance with Section 20(a), the Board may, at its option, substitute, for each share of Common Stock that would otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or fraction thereof such that the current
market price of one share of Preferred Stock multiplied by such number or fraction is equal to the current market price of one share of Common Stock as of the date of issuance of such shares of Preferred Stock or fraction thereof. 

(d) Prior to effecting an exchange pursuant to this Section 20, the Board may direct the Company to enter into a Trust Agreement in
such form and with such terms as the Board of Directors shall then approve (the “Trust Agreement”). If the Board so directs, the Company shall enter into the Trust Agreement and shall issue to the trust created by such agreement
(the “Trust”) all of the fractional shares of Preferred Stock, or shares of Common Stock or other securities, if any, issuable pursuant to the exchange, and all Persons entitled to receive shares or other securities pursuant to the
exchange shall be entitled to receive such shares or other securities (and any dividends or distributions made thereon after the date on which such shares or other securities are deposited in the Trust) only from the Trust and solely upon compliance
with the relevant terms and provisions of the Trust Agreement. 
 Section 21. Notice of Proposed Actions and Certain
Other Matters. (a) If the Company proposes, at any time after a Distribution Date, (i) to pay any dividend payable in stock of any class or to make any other distribution (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company) to the holders of Preferred Stock, (ii) to offer to the holders of its Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class
or any other securities, rights or options, (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision or combination of outstanding shares of Preferred Stock), (iv) to effect,
or permit any of its Subsidiaries to effect, any consolidation, merger or combination with any other unaffiliated Person, or to effect any sale or other transfer, in one transaction or a series of related transactions, of assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries, taken as a whole, (v) to effect the liquidation, dissolution or winding-up of the Company or (vi) to declare or pay any dividend on the Common
Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of dividends in Common Stock), then, in each such case, the Company shall give to each
holder of a Right, a notice of such proposed action specifying the record date for the purposes of any such dividend, distribution or offering of rights or warrants, or the date on which any such reclassification, consolidation, merger, combination,
sale, transfer, liquidation, dissolution or winding-up is to take place and the date of participation therein by the 

  
 19 

 
holders of Preferred Stock or 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 Section 21(a)(i) or 21(a)(ii) above at
least 20 days prior to the record date for determining holders of the Preferred Stock entitled to participate in such dividend, distribution or offering, and in the case of any such other action, at least 20 days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of Preferred Stock, whichever shall be earlier. The failure to give notice required by this Section or any defect therein shall not affect the legality or validity of the
action taken by the Company or the vote upon any such action. 
 (b)(i) The Company shall as soon as practicable after a
Stock Acquisition Date give to each holder of a Right, in accordance with Section 22, 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 9(a)(ii),
and (ii) all references in Section 21 to Preferred Stock shall be deemed thereafter to refer to Common Stock or other capital stock, as the case may be. 
 Section 22. Notices. Except as set forth below, all notices, requests and other communications to any party hereunder and to the holder of any Right shall be in writing unless otherwise
expressly specified herein. Notices or demands authorized by this Plan to be given or made to or on the Company or (subject to Section 18) the Rights Agent shall be sufficiently given or made if sent by overnight delivery service or registered
or certified mail (postage prepaid) to the addresses set forth below (or such other address as such party specifies in writing to the other party): 
 if to the Company, to: 
 The PMI Group, Inc. 

PMI Plaza 

3003 Oak Road 

Walnut Creek, California 94597 
 Attention: General Counsel 
 Telephone: (925) 658-7878 

Facsimile: (925) 658-6175 
 if to the Rights Agent, to: 
 American Stock Transfer & Trust Company,
LLC 
 59 Maiden Lane 
 Plaza Level 
 New York, NY 10038 

Attention: REORGANIZATION DEPARTMENT 
 Telephone: (800) 937-5449 
 Facsimile: (718) 234-5001 

Except as otherwise expressly set forth in this Plan, notices or demands authorized by this Plan to be given or made by the Company or
the Rights Agent to the holder of any Right Certificate any certificate representing shares of Common Stock is sufficiently given or made if sent by first class mail (postage prepaid) to each record holder of such Certificate at the address of such
holder shown on the registry books of the Company. Notwithstanding anything in this Plan to the contrary, prior to a Distribution Date a public filing by the Company with the Securities and Exchange Commission shall constitute sufficient notice to
the holders of securities of the Company, including the Rights, for purposes of this Plan and no other notice need be given to such holders. 
 Section 23. Supplements and Amendments. At any time on or prior to a Distribution Date, the Company may, and the Rights Agent shall if the Company so directs, supplement or amend any provision
of this Plan in any respect without the approval of any holders of Rights. At any time after the occurrence 

  
 20 

 
of a Distribution Date, the Company may, and the Rights Agent shall if the Company so directs, supplement or amend this Plan without the approval of any holders of Rights; provided,
however, that no such supplement or amendment may (a) adversely affect the interests of the holders of Rights as such (other than an Acquiring Person), (b) cause this Plan again to become amendable other than in accordance with this
sentence or (c) cause the Rights again to become redeemable. Upon the delivery of a certificate from the Chairman of the Board, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer
of the Company stating that the proposed supplement or amendment is in compliance with the terms of this Plan, the Rights Agent shall execute such supplement or amendment; provided, however, that the Rights Agent may, but shall not be required to,
execute any supplement or amendment that adversely affects its rights, duties or obligations under this Agreement. 

Section 24. Successors. All the covenants and provisions of this Plan by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 
 Section 25.
Determinations and Actions by the Board, etc. The Board shall have the exclusive power and authority to administer this Plan and to exercise all rights and powers specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Plan, including the right and power to (i) interpret the provisions of this Plan and (ii) make all determinations deemed necessary or advisable for the administration of this Plan (including a
determination to redeem or exchange or not to redeem or exchange the Rights or to amend the Plan). All such actions, calculations, interpretations and determinations which are done or made by the Board in good faith shall be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all other parties. 
 Section 26. Benefits of
This Plan. Nothing in this Plan shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to a Distribution Date, the certificates or ownership statements
representing the shares of Common Stock) any legal or equitable right, remedy or claim under this Plan; but this Plan shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to a Distribution Date, the certificates representing the shares of Common Stock). 
 Section 27.
Severability. If any term, provision, covenant or restriction of this Plan 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 Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 

Section 28. Governing Law. This Plan, each Right and each Right Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 

Section 29. Counterparts. This Plan may be executed in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. 

Section 30. Descriptive Headings. Descriptive headings of the several sections of this Plan are inserted for convenience only
and shall not control or affect the meaning or construction of any of the provisions hereof. 

  
 21 

 IN WITNESS WHEREOF, the parties hereto have caused this Plan to be duly executed by their
respective authorized officers as of the day and year first above written. 
  

			
	THE PMI GROUP, INC.
		
	By:	 	 /s/ Donald P. Lofe, Jr.

	Name:	 	Donald P. Lofe, Jr.
	Title:	 	Chief Financial Officer
	
	 AMERICAN STOCK TRANSFER &
 TRUST COMPANY, LLC

		
	By:	 	 /s/ David H. Brill

	Name:	 	David H. Brill
	Title:	 	General Counsel

  
 22 

 EXHIBIT A 
 FORM OF 
 CERTIFICATE OF DESIGNATIONS 

OF 

SERIES A PARTICIPATING PREFERRED STOCK 
 OF THE PMI GROUP, INC. 
 The PMI Group, Inc., a corporation organized and
existing under the laws of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware thereof, does hereby certify: 

The board of directors of the Corporation (the “Board of Directors”) or a duly authorized committee of the Board of
Directors, in accordance with the certificate of incorporation and bylaws of the Corporation and applicable law, adopted the following resolution on August 12, 2010, creating a series of preferred stock of the Corporation from its blank check
preferred stock authority designated as “Series A Preferred Stock”. 
 RESOLVED, that pursuant to the
provisions of the certificate of incorporation and the bylaws of the Corporation and applicable law, a series of preferred stock, created from its blank check preferred stock authority, par value $0.01 per share, of the Corporation be and hereby is
created, and that the designation and number of shares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, of the shares of
such series, are as follows: 
 Section 1. Designation and Number of Shares. The shares of such series shall be
designated as “Series A Participating Preferred Stock” (the “Series A Preferred Stock”), and the number of shares constituting such series shall be 14,000. Such number of shares of the Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors; provided that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares
issuable upon exercise or conversion of outstanding rights, options or other securities issued by the Corporation. 

Section 2. Dividends and Distributions. (a) Subject to the prior and superior rights of the holders of any shares of any
class or series of stock of the Corporation ranking prior and superior to the shares of Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, regular quarterly dividends payable on such dates each year as designated by the Board of Directors (each such date being referred to herein as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of any share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the Multiplier
Number times the aggregate per share amount of all cash dividends or other distributions and the Multiplier Number times the aggregate per share amount of all non-cash dividends or other distributions (other than (i) a dividend payable in
shares of Common Stock, par value $0.01 per share, of the Corporation (the “Common Stock”) or (ii) a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise)), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. As used herein, the
“Multiplier Number” shall be 1,000,000; provided that if, at any time after August 12, 2010, there shall be any change in the Common Stock, whether by reason of stock dividends, stock splits, reverse stock splits,
recapitalization, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin- offs, liquidations or other similar changes in capitalization, or any distribution or issuance of

  
 A-1

 
shares of its capital stock in a merger, share exchange, reclassification, or change of the outstanding shares of Common Stock, then in each such event the Board of Directors shall adjust the
Multiplier Number to the extent appropriate such that following such adjustment each share of Series A Preferred Stock shall be in the same economic position as prior to such event. 

(b) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in Section 2(a) immediately
after it declares a dividend or distribution on the Common Stock (other than as described in Sections 2(a)(i) and 2(a)(ii)). 
 (c) Dividends, to the extent payable as provided in Sections 2(a) and (b), shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date immediately preceding the date of issuance of such shares of Series A Preferred Stock, unless the date of issuance of such shares is on or before the record date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue and be cumulative from the date of issue of such shares, or unless the date of issue is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and on or before such Quarterly Dividend Payment Date, in which case dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid
on shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall not be more than 60
days prior to the date fixed for the payment thereof. 
 Section 3. Voting Rights. In addition to any other voting
rights required by law, the holders of shares of Series A Preferred Stock shall have the following voting rights: 
 (a) Each
share of Series A Preferred Stock shall entitle the holder thereof to a number of votes equal to the Multiplier Number on all matters submitted to a vote of stockholders of the Corporation. 

(b) Except as otherwise provided herein or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common
Stock shall vote together as a single class on all matters submitted to a vote of stockholders of the Corporation. 
 (c) The
certificate of incorporation of the Corporation shall not be amended in any manner (whether by merger or otherwise) so as to adversely affect the powers, preferences or special rights of the Series A Preferred Stock without the affirmative vote of
the holders of a majority of the outstanding shares of Series A Preferred Stock, voting separately as a class. 
 (d)
Except as otherwise expressly provided herein, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action. 
 Section 4. Certain Restrictions. (a) Whenever quarterly
dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on outstanding
shares of Series A Preferred Stock shall have been paid in full, the Corporation shall not: 
 (i) declare or pay dividends on,
or make any other distributions on, any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock; 

  
 A-2

 (ii) declare or pay dividends on, or make any other distributions on, any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding-up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such other parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; 
 (iii)
redeem, purchase or otherwise acquire for value any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock; provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in exchange for shares of stock of the Corporation ranking junior (as to dividends and upon dissolution, liquidation or winding-up) to the Series A Preferred Stock; or 

(iv) redeem, purchase or otherwise acquire for value any shares of Series A Preferred Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding-up) with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of
Series A Preferred Stock and all such other parity stock upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the respective series or classes. 
 (b) The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for value any shares of stock of the Corporation unless the Corporation could, under paragraph 4(a), purchase or otherwise acquire such shares at such
time and in such manner. 
 Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but unissued shares of Preferred Stock without designation as to
series and may be reissued as part of a new series of Preferred Stock to be created by the Board of Directors as permitted by the certificate of incorporation of the Corporation or as otherwise permitted under Delaware law. 

Section 6. Liquidation, Dissolution and Winding-up. Upon any liquidation, dissolution or winding-up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment; provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share equal to (x) the Multiplier Number times (y) the aggregate amount to be distributed per share to holders of Common Stock, or (b) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding-up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such other parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding-up. 

Section 7. Consolidation, Merger, etc. If the Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash or any other property, then in any such case the shares of Series A Preferred Stock shall at the same time be similarly exchanged for
or changed into an amount per share equal to (x) the Multiplier Number times (y) the aggregate amount of stock, securities, cash or any other property, as the case may be, into which or for which each share of Common Stock is
changed or exchanged. 
 Section 8. No Redemption. The Series A Preferred Stock shall not be redeemable. 

  
 A-3

 Section 9. Rank. The Series A Preferred Stock shall rank junior to all other
series of the Preferred Stock as to the payment of dividends and the distribution of assets upon liquidation, dissolution and winding-up, unless the terms of such series shall specifically provide otherwise, and shall rank senior to the Common Stock
as to such matters. 
 Section 10. Fractional Shares. Series A Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Preferred Stock.

  
 A-4

 IN WITNESS WHEREOF, this Certificate of Designations has been executed on behalf of the
Corporation by its Chief Financial Officer and countersigned by the Secretary this 12th day of August, 2010. 
  

			
	THE PMI GROUP, INC.
		
	By:	 	  

	Name:	 	Donald P. Lofe, Jr.
	Title:	 	Chief Financial Officer

  

			
	By:	 	  

	Name:	 	Andrew D. Cameron
	Title:	 	Secretary

  
 A-5

 EXHIBIT B 
 AS SET FORTH IN THE PLAN, RIGHTS ISSUED OR TRANSFERRED TO, OR 

BENEFICIALLY OWNED BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING 

PERSON (AS SUCH TERMS ARE DEFINED IN THE PLAN), WHETHER CURRENTLY 

BENEFICIALLY OWNED BY OR ON BEHALF OF SUCH PERSON OR BY ANY 
 SUBSEQUENT HOLDER, MAY BE NULL AND VOID. 
 SUMMARY OF TERMS

 THE PMI GROUP, INC. 
 AMENDED AND RESTATED TAX BENEFITS PRESERVATION PLAN 
  

			
	Purpose	  	The purpose of the Amended and Restated Tax Benefits Preservation Plan (“Plan”) described in this summary of terms is to help preserve the value of the deferred
tax assets (“Tax Benefits”) of The PMI Group, Inc. (the “Company”) for U.S. federal income tax purposes.
		
	Form of Security	  	The Board of Directors has declared a dividend of one preferred stock purchase right for each outstanding share of the Company’s Common Stock, payable to holders of record
as of the close of business on August 23, 2010 (each a “Right” and collectively, the “Rights”).
		
	Exercise	  	 Prior to a Distribution Date1, the Rights are not exercisable.
 After a Distribution Date, each Right is exercisable to purchase, for $15.00 (the “Purchase Price”), one one-millionth of a share of Series A Participating Preferred Stock, $0.01 par
value per share, of the Company (“Preferred Stock”).

		
	Flip-In	  	If any person or group (an “Acquiring Person”) becomes a “5-percent shareholder” (subject to certain exceptions described in the Plan), then on a
Distribution Date, each Right (other than Rights beneficially owned by any Acquiring Person) will entitle the holder to purchase, for the Purchase Price, a number of shares of Common Stock of the Company or in lieu thereof, in certain circumstances,
Preferred Stock with an equivalent current market price) equal to the quotient of (x) two times the Purchase Price divided by (y) the then-current market price of the Company’s Common Stock; provided that (i) none of the Company and its
subsidiaries, their employee benefit plans and compensation arrangements and entities and trustees holding securities for such employee, benefit plans and compensation arrangements shall be an Acquiring Person, (ii) none of certain existing
“5-percent shareholders” (including certain persons who are “5-percent shareholders” following specified exchange offers with the Company) shall be an Acquiring Person unless and until any such “5-percent shareholder”
acquires more than a specified number of additional shares of the Company’s securities, (iii) none of certain other “grandfathered persons” (as described in the Plan) shall be an

 
  

	1	 Distribution Date means the earlier of: 

	 	•	 	 the close of business on the 10th business day after public announcement that any person or group has become an Acquiring Person (the “Stock
Acquisition Date”; and 

  

	 	•	 	 the close of business on the 10th business day after the date of the commencement of a tender or exchange offer by any person which would or could, if
consummated, result in such person becoming an Acquiring Person, subject to extension by the Board of Directors of the Company prior to a Stock Acquisition Date. 

  
 B-1

					
	 	    	Acquiring Person so long as any such “grandfathered person” satisfies the applicable requirements set forth in the
Plan, (iv) no person or group who
or which the Board of Directors determines, in its sole discretion, has
inadvertently become a “5-percent shareholder” (or inadvertently failed to continue to qualify as a “grandfathered
person”) shall be an Acquiring
Person so long as such Person promptly enters into, and delivers to the Company, an
irrevocable commitment promptly to divest, and thereafter promptly divests (without exercising or retaining any
power, including voting, with respect to such
securities), sufficient securities of the Company so that such person’s
(or such group’s) percentage stock ownership in the Company is less than 5 percent (or, in the case of any person or
group that has inadvertently failed to
qualify as a “grandfathered person,” the securities of the Company that caused
such person or group to fail to qualify as a “grandfathered person”), (v) no person or group that has become a
“5-percent shareholder”
shall be an Acquiring Person if the Board of Directors in good faith determines that such
person’s or group’s attainment of “5-percent shareholder” status has not jeopardized or endangered the Company’s
utilization of
the Tax Benefits or is otherwise in the best interests of the Company so long as each such person or
group does not acquire any additional shares of the Company’s securities; provided that such a person or group shall
be an
“Acquiring Person” if the Board of Directors makes a contrary determination in good faith, and (vi) beneficial
ownership under certain U.S. tax rules by a person or group of at least a majority of the Company’s Common
Stock
following consummation of a “qualified offer” (as defined in the Plan) made by that person or group shall not result
in any person or group becoming an Acquiring Person.
		
	Exchange	    	At any time after a Stock Acquisition Date (but before an Acquiring Person becomes the beneficial owner under certain U.S. tax rules of 50% or more of the
Company’s Common Stock), the Board of Directors may elect to exchange all or part of the Rights (other than the Rights beneficially owned under certain U.S. tax rules by an Acquiring Person) for shares of Common Stock at an exchange ratio of
one share of Common Stock (or, at the option of the Board of Directors, fractional shares of Preferred Stock with an aggregate current market price that equals the current market price of one share of the Company’s Common Stock) per Right,
subject to adjustment.
		
	Redemption	    	The Board of Directors may, at its option, redeem all, but not less than all, of the then outstanding Rights at a redemption price of $0.00001 per Right at any time
prior to a Distribution Date.
		
	Expiration	    	The Rights will expire on the earliest of (i) the close of business on February 16, 2014, subject to extension, (ii) the time at which all Rights are redeemed or
exchanged, (iii) the first day of a taxable year of the Company as to which the Board of Directors determines that no Tax Benefits may be carried forward, (iv) a date prior to a Stock Acquisition Date on which the Board of Directors determines that
the Rights and the Plan are no longer necessary for the preservation or existence of the Tax Benefits or are no longer in the best interests of the Company and its shareholders, (v) the repeal or amendment of Section 382 or any successor statute, if
the Board of Directors determines

  
 B-2

					
		    	that the Plan is no longer necessary for the preservation of Tax Benefits, (vi) such time as the Board of Directors determines that a limitation on the use of the Tax
Benefits under Section 382 would no longer be material to the Company, which the Board of Directors has agreed to review annually, and (vii) August 11, 2011, if stockholder approval of this Plan has not been received before such
time.
		
	Amendments	    	 At any time on or prior to a Distribution Date, the Company may, and the Rights Agent shall if the Company so directs,
supplement or amend any provision of the Plan without the approval of any holders of Rights.
  
 After a Distribution Date, the Company may, and the Rights Agent shall if the Company so directs, supplement or amend the Plan without the approval of any holders of Rights; provided, however, that
no such supplement or amendment may (a) adversely affect the interests of the holders of Rights as such (other than an Acquiring Person), (b) cause the Plan again to become amendable other than in accordance with this sentence or (c) cause the
Rights again to become redeemable.

		
	Shareholder Rights	    	Until a Right is exercised or exchanged, Rights holders, in their capacity as such, have no rights as a shareholder of the Company, including the right to vote and to
receive dividends.
		
	Antidilution Provisions	    	The Plan includes antidilution provisions designed to prevent efforts to diminish the efficacy of the Rights.

 
  
 A copy of the Plan has been filed with the Securities and Exchange Commission as an Exhibit to a Current Report on Form 8-K. A copy of the Plan is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Plan, as amended from time to time, the complete terms of which are hereby incorporated by reference. 

 
  

  
 B-3

 EXHIBIT C 
 [FORM OF RIGHT CERTIFICATE] 
 No. R
-             [Number of] Rights 
 NOT EXERCISABLE AFTER THE EARLIER OF
            , 20     AND THE DATE ON WHICH THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH IN THE RIGHTS
PLAN. AS SET FORTH IN THE RIGHTS PLAN, RIGHTS ISSUED TO, OR BENEFICIALLY OWNED BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS PLAN), WHETHER CURRENTLY BENEFICIALLY OWNED BY OR ON BEHALF OF SUCH
PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID. 
 RIGHT CERTIFICATE 
 THE PMI GROUP, INC. 
 This Right Certificate certifies that
                            , or registered assigns, is the registered holder of the number of
Rights set forth above, each of which entitles the holder (upon the terms and subject to the conditions set forth in the Amended and Restated Tax Benefits Preservation Plan dated as of February 17, 2011 (the “Plan”) between The
PMI Group, Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC (the “Rights Agent”)) to purchase from the Company, at any time after a Distribution Date and prior
to the Expiration Date, one-millionth of a fully paid, nonassessable share of Series A Participating Preferred Stock (the “Preferred Stock”) of the Company at a purchase price of $15.00 per one one-millionth of a share (the
“Purchase Price”), payable in lawful money of the United States of America, upon surrender of this Right Certificate, with the form of election to purchase and related certificate duly executed, and payment of the Purchase Price at
an office of the Rights Agent designated for such purpose. 
 Terms used herein and not otherwise defined herein shall have the meanings given
to them in the Plan. 
 The number of Rights evidenced by this Right Certificate (and the number and kind of shares issuable upon exercise of
each Right) and the Purchase Price set forth above are as of August 12, 2010, and may have been or in the future be adjusted as a result of the occurrence of certain events, as more fully provided in the Plan. 

If the Rights evidenced by this Right Certificate are Beneficially Owned by an Acquiring Person after an Acquiring Person has become such, such Rights
shall become null and void without any further action, and no holder hereof shall have any rights whatsoever with respect to such Rights. If the Rights evidenced by this Right Certificate are beneficially owned by (a) a transferee of Rights
Beneficially Owned by such Acquiring Person who (i) becomes a transferee after a Stock Acquisition Date or (ii) becomes a transferee prior to or concurrently with a Stock Acquisition Date and receives such Rights (A) with actual
knowledge that the transferor is or was an Acquiring Person or (B) pursuant to either (I) 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 (II) a transfer which is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of
these transfer restrictions, such Rights shall become null and void without any further action, and no holder hereof shall have any rights whatsoever with respect to such Rights. 
 This Right Certificate is subject to all of the terms, provisions and conditions of the Plan, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and
to which Plan reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates, which limitations of rights
include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Plan. 

  
 C-1

 At any time after a Distribution Date and prior to the Expiration Date, any Right Certificate or
Certificates may, upon the terms and subject to the conditions set forth below in the Plan, be transferred or exchanged for another Right Certificate or Certificates evidencing a like number of Rights as the Right Certificate or Certificates
surrendered. Any registered holder desiring to transfer or exchange any Right Certificate or Certificates shall surrender such Right Certificate or Certificates (with, in the case of a transfer, the form of assignment and certificate on the reverse
side thereof duly executed) to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose. 
 Subject
to the provisions of the Plan, the Board of Directors of the Company may, at its option, 
 (a) at any time on or prior to a Distribution Date
redeem all but not less than all of the then outstanding Rights at a redemption price of $0.00001 per Right, as may be adjusted pursuant to the Plan; or 
 (b) at any time after a Distribution Date exchange all or part of the then outstanding Rights (which shall not include Rights that have become void pursuant to Section 6(e)) for shares of Common
Stock at an exchange ratio of one share of Common Stock (or, at the option of the Board, fractional shares of Preferred Stock with an aggregate current market price that equals the current market price of one share of Common Stock) per Right, as may
be adjusted pursuant to the Plan. If the Rights shall be exchanged in part, the holder of this Right Certificate shall be entitled to receive upon surrender hereof another Right Certificate or Certificates for the number of whole Rights not
exchanged. 
 The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are multiples of one
one-millionth of a share of Preferred Stock) upon the exercise of the Rights or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are multiples of one one-millionth of a share of Preferred
Stock which may, at the election of the Company, be evidenced by depositary receipts). In lieu of any such fractional shares of Preferred Stock, the Company shall pay to the registered holders of Right Certificates at the time such Rights are
exercised an amount in cash equal to the same fraction of the current market price of one one-millionth of a share of Preferred Stock. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Certificates for the number of whole Rights not exercised. 
 No holder of this Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of the shares of capital stock which may at any time be issuable on the exercise hereof, nor shall anything contained in the Plan or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company (including 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, to receive notice of meetings or other actions affecting stockholders (except as provided in the Plan), to receive dividends or subscription rights, or otherwise) until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Plan. 
 This Right Certificate shall not be valid or obligatory for any purpose until it shall have been
countersigned by the Rights Agent. 

  
 C-2

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal by
its authorized officers. 
 Dated as of             ,
20     
  

			
	THE PMI GROUP, INC.
		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

 [SEAL] 
  

			
	Attest:
		
	By:	 	  

	Name:	 	
	Title:	 	Secretary

 Countersigned: 

 

			
	 AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

as Rights Agent

		
	By:	 	  

	Name:	 	
	Title:	 	

  
 C-3

 Form of Reverse Side of Right Certificate 

FORM OF ASSIGNMENT 
 (To be executed if the registered holder desires to transfer the Right Certificate.) 

FOR VALUE RECEIVED                   
                                         
                                         
                                         
                            
 hereby sells, assigns and transfers unto                     
                                         
                                         
                                        

                         
                                         
                                         
                                         
                                         
                        
                                   
  (Please print name and address of transferee) 

                         
                                         
                                         
                                         
                                         
                        

this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint
                             Attorney, to transfer the within Right Certificate on the books of
the within named Company, with full power of substitution. 
 Dated:
             , 20     
  

	
	  
 Signature

 Medallion Signature Guaranteed: 

                         
                                         
                                         
                                         
                                         
                        

 CERTIFICATE 
 The undersigned hereby certifies by checking the appropriate boxes that: 
 (1) the
Rights evidenced by this Right Certificate are          are          not Beneficially Owned by an Acquiring Person and
         are are not being assigned by or on behalf of a Person who is or was an Acquiring Person (as such terms are defined in the Plan); and 

(2) after due inquiry and to the best knowledge of the undersigned, it          did
         did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or became an Acquiring Person. 
 Dated:              , 20     

 

	
	  
 Signature

  

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

 FORM OF ELECTION TO PURCHASE 

(To be executed if the registered holder desires to exercise Rights represented by the Right Certificate.) 

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

Please insert social security or other identifying number
                                         
                                         
                                         
  
   
  

(Please print name and address) 

  
  

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

Please insert social security or other identifying number        
                                         
                                         
                                  

  
  

(Please print name and address) 

  
  

  
  

Dated:             , 20     

 

	
	  
 Signature

 Medallion Signature Guaranteed: 

 
  

 CERTIFICATE 
 The undersigned hereby certifies by checking the appropriate boxes that: 
 (1) the
Rights evidenced by this Right 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 in the
Plan); and 
 (2) after due inquiry and to the best knowledge of the undersigned, it
         did          did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or became an Acquiring
Person. 
 Dated:             , 20    

  

	
	  
 Signature

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

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