Document:

Exhibit 10.1

 

 

 

 

NOTE

 

 

	SBA Loan #	6828888309
	SBA Loan Name	Technical
    Communications Corporation
	Date	January
28, 2021
	Loan Amount	474,404.60
	Interest Rate	1.00%
	Borrower	Technical
Communications Corporation
	Operating Company	n/a
	Lender	Hometown
Bank

 

		1.	PROMISE TO PAY:

 

In return for the Loan, Borrower promises to pay to the order of Lender the
amount of

	four hundred seventy four thousand four hundred four and 60/100	 	($ 474,404.60)

 

Dollars, interest on the unpaid principal balance, and all other amounts required
by this Note.

 

		2.	DEFINITIONS:

 

“Covered Period” means the period beginning on the date of disbursement
of the Loan and ending at any point between 8-weeks and 24 weeks after the date of disbursement of the Loan, as elected by Borrower.

 

“Deferral Period” means the period beginning on the date of
disbursement of the Loan and ending on the date on which the amount determined to be forgiven under this Note under the Program
Rules is remitted by the SBA to Lender; provided, however, that, in the event the Borrower has not submitted an application for
forgiveness to Lender on or before 10 months from the end of the Covered Period (the “Forgiveness Deadline”), the Deferral
Period shall end as of the day following the Forgiveness Deadline.

 

“Loan” means the loan evidenced by this Note.

 

“Loan Documents” means the documents related to this Loan signed
by Borrower.

 

“Program Rules” means all statutes applicable to the Paycheck Protection
Program of the Small Business Act (15 U.S.C. §636), as amended by the Coronavirus Aid, Relief, and Economic Security Act
(P.L. 116-136), the Paycheck Protection Program Flexibility Act of 2020 (P.L. 116-142), and the Economic Aid to Hard-Hit Small
Businesses, Nonprofits and Venues Act (Pub. L. 116-260), and all regulations, rules and guidance applicable to the Paycheck Protection
Program at any time issued by the United States Department of the Treasury or the SBA.

 

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“SBA” means the Small Business Administration, an Agency of the
United States of America.

 

		3.	PAYMENT TERMS:

 

Borrower must make all payments at the place Lender designates. The payment
terms for this Note are:

 

Compliance with Program Rules: This Note, and the Loan evidenced
hereby is subject to the Program Rules. If the terms of this Note conflict in any way with the Program Rules or fail to include
any term required under the Program Rules, this Note shall be deemed automatically amended to eliminate any such conflict and/or
to include such term. Promptly following request by Lender, Borrower shall execute and deliver to Lender any documentation deemed
necessary by Lender to ensure that this Note and the Loan evidenced hereby comply in all respect with the Program Rules.

 

Forgiveness. Borrower may apply to Lender for forgiveness of the
Loan in an amount equal to the sum of the following costs incurred by Borrower during the Covered Period:

 

		(a)	Payroll costs

		(b)	Any payment of interest on a covered mortgage obligation (which shall not include any prepayment
of or payment of principal on a covered mortgage obligation)

		(c)	Any payment on a covered rent obligation

		(d)	Any covered utility payment

		(e)	Any covered operations expenditures

		(f)	Any covered property damage

		(g)	Any covered supplier costs

		(h)	Any covered worker protection expenditures

 

The amount of loan forgiveness shall be calculated (and may be reduced)
in accordance with the requirements of the Program Rules. Not more than 40% of the amount forgiven can be attributable to non-payroll
costs.

 

Upon application of the Borrower, and provision by Borrower of the
documentation required under the Program Rules, SBA will make a determination of the principal and interest amounts to be forgiven.

 

Maturity: Any remaining balance of this Note that Lender determines
cannot be forgiven under the Program Rules shall be due and payable in full on January
28        , 2026. (5 years from the date of Note)

 

Interest: Interest on this Note shall begin to accrue on the
date hereof at the interest rate set forth above. The interest rate is fixed and will not change during the term of this Note.
Interest shall be computed on an actual / 365 simple interest basis; that is by multiplying the interest rate by the outstanding
principal balance, multiplying the resulting product by the actual number of days the principal balance is outstanding and dividing
the resulting product by 365.

 

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Deferral Period: No payments will be due during the Deferral Period,
provided that interest will continue to accrue during the Deferral Period. Such accrued interest shall be paid in consecutive monthly
installments along with the principal installments described below.

 

Payment Terms: Borrower shall repay the principal balance of
this Note in consecutive equal monthly installments, with the first such installment due on the day immediately following the expiration
of the Deferral Period and the remaining payments due on the same day of each month thereafter. Borrower shall pay all accrued
interest, and an installment of the interest accrued during the Deferral Period, on each day that a principal installment is due.
Lender will apply each payment first to pay applicable late charges, then to pay interest accrued to the day Lender received the
payment, then to interest accrued during the Deferral Period, then to bring principal current, and will apply any remaining balance
to reduce principal.

 

Payment Schedule: Lender will provide Borrower
with a schedule of payments once the amounts to be forgiven have been determined and the principal balance to be repaid becomes
known.

 

Prepayment: Borrower may prepay this Note at any time without penalty.
Borrower may prepay 20 percent or less of the unpaid principal balance of this Note at any time without notice. If Borrower prepays
more than 20 percent and the Loan has been sold on the secondary market, Borrower must:

 

		(a)	Give Lender prior written notice;

		(b)	Pay all accrued interest; and

		(c)	If the prepayment is received less than 21 days from the date Lender received the notice, pay
an amount equal to 21 days’ interest from the date Lender received the notice, less any interest accrued during the 21 days
and paid under clause (b) of this paragraph.

 

If Borrower does not prepay within 30 days from the date Lender received
the notice, Borrower must give Lender a new notice. All prepayments will be applied to principal installments in inverse order
of maturity.

 

Default Interest and Late Charges: Upon the occurrence of a default,
the interest rate on this Note shall be automatically increased to percent (6.0%) per annum. If payment due on this Note is not
paid within fifteen days of its due date, Borrower will pay to Lender a late charge equal to the greater of $15.00 and 5% of the
late payment. To the extent any increased interest and/or or late fee otherwise payable under this Note is prohibited or exceeds
any limit provided by applicable law, including the Program Rules, such increased interest and / or late fee shall be reduced to
the maximum amount allowed.

 

Non-Recourse. Lender and SBA shall have no recourse
against any individual shareholder, member or partner of Borrower for non-payment of the Loan, except to the extent that such shareholder,
member or partner uses the Loan proceeds for an unauthorized purpose.

 

Loan Program Modifications. Borrower understands and agrees that
the Program Rules may change, be altered or amended by acts of the United States or regulations of SBA or other agencies charged
with implementing the Paycheck Protection Program. Such acts and regulations are deemed to be automatically incorporated into this
Note, and Borrower agrees to be bound by such acts and regulations, without prior notification from Lender.

 

Business Day: If any installment of principal and interest is due
on a day other than a day on which Lender is open for the conduct of normal banking activities, such installment shall be due on
the next day for which Lender is open for the conduct of normal banking activities.

 

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Electronic Signatures; Counterparts. This Note and all documents
delivered in connection herewith (including Borrower’s application for the Loan) may be executed and/or transmitted electronically
or digitally (including, without limitation, via facsimile, electronic mail in .pdf, DocuSign, or similar platform) and shall be
considered originals and shall have the same legal effect, validity and enforceability as manually executed paper originals. This
Note and all such other documents may be executed in as many counterparts as necessary or convenient, including both paper and
electronic or digital counterparts, but all such counterparts are one and the same document. For the avoidance of doubt, the authorization
under this paragraph includes, without limitation, use or acceptance by the parties of a manually executed counterpart which has
been converted into electronic form (such as scanned into a .pdf file), or an electronically or digitally signed document converted
into another format, for transmission, delivery and/or retention. Upon request from Lender, and to the extent required by the Program
Rules, Borrower shall execute and deliver manually executed originals of this Note and such other documents.

 

Other Debt Owed to Lender: No collateral granted to Lender by Borrower
to secure other debt owed to Lender by Borrower shall secure this Note, notwithstanding any cross-collateralization provision or
similar provision in the documentation applicable to such other debt.

 

Right of Setoff: To the extent permitted
by applicable law, at any time following a default on this Note, Lender may set off any amounts owed by Lender to Borrower with
respect to any account maintained by Borrower with Lender against any amounts owed by Borrower under this Note.

 

		4.	DEFAULT:

 

Borrower is in default under this Note if Borrower does not make a payment
when due under this Note, or if Borrower or Operating Company:

 

		A.	Fails to do anything required by this Note and other Loan Documents;

		B.	Defaults on any other loan with Lender;

		C.	Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;

		D.	Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;

		E.	Defaults on any loan or agreement with another creditor, if Lender believes the default may
materially affect Borrower’s ability to pay this Note;

		F.	Fails to pay any taxes when due;

		G.	Becomes the subject of a proceeding under any bankruptcy or insolvency law;

		H.	Has a receiver or liquidator appointed for any part of their business or property;

		I.	Makes an assignment for the benefit of creditors;

		J.	Has any adverse change in financial condition or business operation that Lender believes may
materially affect Borrower’s ability to pay this Note;

		K.	Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without
Lender’s prior written consent; or

 

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		L.	Becomes the subject of a civil or criminal action that Lender believes may materially affect
Borrower’s ability to pay this Note.

 

		5.	LENDER’S RIGHTS IF THERE IS A DEFAULT:

 

Without notice or demand and without giving up any of its rights, Lender may:

 

		A.	Require immediate payment of all amounts owing under this Note;

		B.	Collect all amounts owing from Borrower; or

		C.	File suit and obtain judgment.

 

		6.	LENDER’S GENERAL POWERS:

 

Without notice and without Borrower’s consent, Lender may:

 

		A.	Incur expenses, including attorney fees, to collect amounts due under this Note or to enforce
the terms of this Note or any other Loan Document. Among other things, the expenses may include payments for reasonable attorney’s
fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal
balance;

		B.	Release anyone obligated to pay this Note; and

		C.	Take any action necessary collect amounts owing on this Note.

 

		7.	WHEN FEDERAL LAW APPLIES:

 

When SBA is the holder, this Note will be interpreted and enforced under
federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents,
giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state
or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state
law to deny any obligation, defeat any claim of SBA, or preempt federal law.

 

		8.	SUCCESSORS AND ASSIGNS:

 

Under this Note, Borrower and Operating Company include the successors
of each, and Lender includes its successors and assigns.

 

		9.	GENERAL PROVISIONS:

 

		A.	Borrower waives all suretyship defenses.

		B.	Borrower must sign all documents necessary at any time to comply with the Loan Documents.

		C.	Lender may exercise any of its rights separately or together, as many times and in any order
it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.

		D.	Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

		E.	If any part of this Note is unenforceable, all other parts remain in effect.

 

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		F.	To the extent allowed by law, Borrower waives all demands and notices in connection with this
Note, including presentment, demand, protest, and notice of dishonor.

		G.	Except as otherwise set forth herein, this Note and the rights and obligations of the parties
hereto shall be governed and interpreted according to the laws of the Commonwealth of Massachusetts.

		H.	This Note shall be binding upon the heirs, executors, administrators, successors and assigns
of the Borrower and shall inure to the benefit of Lender's successors and assigns.

		I.	TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY KNOWINGLY AND VOLUNTARILY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY DISPUTE, WHETHER IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, IN CONNECTION WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BY THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION WITH THIS NOTE.

 

		10.	STATE-SPECIFIC PROVISIONS:

 

Any legal action or proceeding arising out of or relating to this Note
shall be instituted in the state or federal courts located in the Commonwealth of Massachusetts, and Borrower hereby irrevocably
submits to the jurisdiction of each such court in any such action or proceeding. This Note shall take effect as a sealed instrument.

 

		11.	BORROWER’S NAME AND SIGNATURE:

 

By signing below, each individual or entity becomes obligated under this
Note as Borrower.

 

By signing below, Borrower additionally certifies to Lender that:

 

		A.	Borrower acknowledges that if Borrower defaults on the Loan, SBA may be required to pay Lender
under the SBA guarantee, and SBA may then seek recovery on the Loan (to the extent any balance remains after forgiveness of the
loan, as described in Paragraph 3 above);

		B.	Borrower will keep books and records in a manner satisfactory to Lender, furnish financial statements
as requested by Lender, and allow Lender and SBA to inspect and audit books, records and papers relating to Borrower’s financial
or business condition; and

		C.	Borrower will not, without Lender’s consent, change its ownership structure, make any distribution
of company assets that would adversely affect its financial condition or transfer (including by pledge) or dispose of any assets,
except in the ordinary course of business.

 

 

	Technical Communications Corporation	(Borrower Name)
	By:	E-SIGNED by Michael Malone on 2021-02-01 10:50:24 EST	 	Date: 	2021-02-01 10:50:24 EST
	 	 	 
	Name: 	Michael Malone	 	 
	 	 	 
	Title:	CFO	 	 

 

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Borrower Certifications and Agreements -- Paycheck
Protection Program Loan

 

 

The undersigned is the duly elected, qualified, and acting CFO of Technical
Communications Corporation (“Borrower”). In connection with Borrower’s submission of an
application (the “Application”) for a loan (the “Loan”) from Hometown
Bank (“Lender”) under the Paycheck Protection Program (“PPP”) of the Small Business Act
(15 U.S.C. § 636), Paycheck Protection Program of the Small Business Act (15 U.S.C. § 636), as amended by the
Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136), the Paycheck Protection Program Flexibility Act of 2020
(P.L. 116-142), and the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Pub. L. 116-260), and as
implemented and interpreted by all regulations, rules and guidance applicable to the PPP Program at any time issued by the
United States Department of the Treasury or the United States Small Business Administration (collectively, the “PPP
Program Rules”), the Borrower hereby certifies, attests, confirms to and agrees with Lender as follows:

 

	 	1.	Borrower acknowledges that neither Lender nor any of its officers, trustees, employees, affiliates or agents has provided
any assurance to Borrower that all or any portion of the Loan will be forgiven. Borrower also acknowledges that the PPP is subject
to change due to reasons outside Lender’s control, including as a result of changes in the PPP Program Rules, and such changes
may be effective retroactively to apply with respect to the Application, the Loan and the forgiveness of the Loan. Borrower further
acknowledges and agrees that Lender shall have no liability to Borrower as a result of any change in the PPP Program Rules.

 

		2.	Borrower acknowledges and agrees that (a) neither Lender nor any of its officers,
trustees, employees, affiliates or agents has provided any financial advice to Borrower or any of its owners, directors, officers
or affiliates in connection with the PPP, including the Application and the Loan or whether Borrower can reasonably expect that
some or all of the Loan may be forgiven, (b) neither Lender nor any of its officers, directors, trustees, employees, affiliates
or agents has recommended that the Borrower submit the Application or accept the Loan, (c) Borrower has calculated without relying
on any advice from Lender the amount of Borrower’s “average monthly payroll costs” as that term is used in the
Application, and (d) Borrower will calculate without relying on any advice from Lender the portion of the Loan that Borrower believes
should be forgiven under the PPP Program Rules.

		3.	The person whose name is set forth below is a duly elected, qualified, and
acting officer, manager, member or other representative of Borrower as of the date hereof and as of the date of the Application,
holding the position set forth opposite his/her name, and the signature set forth opposite his/her name is his/her true signature.

 

	Name	 	Office	 	Signature
	Michael Malone	 	CFO	 	E-SIGNED by Michael Malone on 2021-02-01 10:50:34 EST

 

		4.	The officer identified immediately above in paragraph 3 has been duly authorized
by all necessary action on the part of Borrower’s board of directors, managers or similar governing body to execute and deliver,
for and on behalf of Borrower, and to bind Borrower to perform under, the Application and all other agreements, instruments, certificates
and documents required by Lender in connection with the Loan. The undersigned person agrees that he or she will be liable personally
to indemnify and hold each an Indemnified Party harmless to the fullest extent permitted by law, from and against any and all losses,
claims, damages and liabilities, joint or several, to which such Indemnified Party may become subject under applicable law related
to or arising out of any false statement by the undersigned person in this paragraph.

 

	Signature:	E-SIGNED by Michael Malone on 2021-02-01 10:50:36 EST	 	Dated: 	2021-02-01 10:50:36 EST
	Printed Name: 	Michael Malone	 	 
	Printed Title:	CFOhxl-ex46_399.htm

 

Exhibit 4.6

DESCRIPTION OF THE SECURITIES OF HEXCEL CORPORATION

REGISTERED PURSUANT TO SECTION 12 OF
THE SECURITIES EXCHANGE ACT OF 1934

Updated as of February 9, 2021

The following summarizes the terms and provisions of the registered securities of Hexcel Corporation, a Delaware corporation (the “Company”). The Company has two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): (1) common stock, $0.01 par value per share (the “Common Stock”), and (2) the preferred share purchase rights (the “Rights”).  The following summary does not purport to be complete and is qualified in its entirety by reference to the Company’s Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) and Amended and Restated Bylaws (the “Bylaws”), which the Company has previously filed with the U.S. Securities and Exchange Commission, and applicable Delaware law.

Authorized Capital

The Company’s authorized capital stock consists of 200,000,000 shares of Common Stock, $0.01 par value per share, and 20,000,000 shares of preferred stock, no par value (the “Preferred Stock”).

Under Delaware law, the stockholders of a corporation are generally not personally liable for a corporation’s acts or debts.

Common Stock

Voting Rights

Holders of the Common Stock are entitled to one vote for each share of Common Stock held of record on each matter submitted to a vote of stockholders and to vote on all matters on which a vote of stockholders is taken, except as otherwise provided by statute. There is no cumulative voting with respect to the election of directors. The Company’s Bylaws provide for a majority voting standard for the election of directors in uncontested elections, and under this standard, directors are elected by a majority of the votes cast by holders of the Common Stock. If a nominee who currently is serving as a director is not re-elected, Delaware law provides that the director will continue to serve on the Board of Directors. However, each incumbent director nominee standing for re-election must submit an irrevocable resignation in advance of the stockholder vote regarding the election of directors. The resignation is contingent upon both the director not receiving the required vote for re-election and the Board of Directors’ acceptance of the resignation, which the Board of Directors, in its discretion, may reject if it deems such rejection to be in the best interest of the Company. In the case of contested elections (a situation in which the number of nominees exceeds the number of directors to be elected), directors are elected by a plurality of the votes cast by holders of the Common Stock. Except as otherwise required by law, all other matters brought to a vote of the holders of the Common Stock are determined by a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote and, except as may be provided with respect to any other outstanding class or series of the Company’s stock, the holders of shares of Common Stock possess the exclusive voting power.

Dividends

Subject to the preferential rights of the holders of any then-outstanding shares of any series of Preferred Stock, the holders of the Common Stock are entitled to receive dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available therefor.

Rights and Preferences

Holders of the Common Stock have no preemptive rights or other rights to subscribe for additional shares and no conversion rights. The Common Stock is not subject to redemption or to any sinking fund provisions, and all 

 

 

outstanding shares of Common Stock are fully paid and nonassessable. The rights, preferences and privileges of the holders of the Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of Preferred Stock that the Company may designate and issue in the future. 

Upon liquidation, dissolution or winding up of the Company, holders of the Common Stock are entitled to their pro rata share of the assets of the Company legally available for distribution to stockholders after the payment of all of the Company’s known debts and liabilities, subject to the preferential rights of the holders of shares of any series of Preferred Stock.

Exchange and Trading Symbol

The Common Stock is listed for trading on the New York Stock Exchange under the trading symbol “HXL.”

Preferred Stock

The Company may issue Preferred Stock from time to time upon the approval of the Board of Directors in one or more series without further stockholder approval. The Board of Directors may designate the number of shares to be issued in such series and the rights, preferences, privileges and restrictions granted to, or imposed on, the holders of such shares. If issued, such shares of Preferred Stock could have dividends and liquidation preferences and may otherwise affect the rights of holders of the Common Stock. As of the date hereof, the Company has no outstanding shares of Preferred Stock.

The rights of the holders of the Common Stock will generally be subject to the rights of the holders of any existing outstanding shares of Preferred Stock with respect to dividends, liquidation preferences and other matters.

Preferred Share Purchase Rights

The following summary of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement (as defined below), which the Company has previously filed with the U.S. Securities and Exchange Commission.

On April 6, 2020, the Board of Directors declared a dividend of Right for each outstanding share of Common Stock, and adopted a stockholder rights plan, as set forth in the Rights Agreement dated as of April 6, 2020 (the “Rights Agreement”), by and between the Company and American Stock Transfer & Trust Company, LLC, as rights agent. The dividend was paid on April 16, 2020 to Company stockholders of record as of the close of business on April 16, 2020.

In general terms, the Rights Agreement works by imposing a significant penalty upon any person or group which acquires 15% or more of the outstanding Common Stock without the approval of the Board of Directors. The Rights Agreement would not interfere with any merger or other business combination approved by the Board of Directors.

A summary of the terms of the Rights Agreement is as follows:

The Rights

The Rights will initially trade with, and will be inseparable from, the Common Stock. A Right will accompany any share of Common Stock issued after April 16, 2020 until the Distribution Date (as defined below) or the earlier expiration, exchange or redemption of the Rights.

Exercise Price

Each Right will allow its holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock (a “Series A Preferred Share”) for $150.00 (the “Exercise Price”), once the 

 

 

Rights become exercisable. This portion of a Series A Preferred Share will give the stockholder approximately the same dividend, voting and liquidation rights as would one share of Common Stock.

Exercisability

The Rights will not be exercisable until 10 days after the public announcement that a person or group has become an “Acquiring Person” (as defined in the Rights Agreement) by obtaining beneficial ownership of 15% or more of the outstanding Common Stock. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.

The date when the Rights become exercisable is the “Distribution Date.” Until the Distribution Date, the Common Stock certificates, or, in the case of uncertificated shares, notations in the book-entry account system, will also evidence the Rights, and any transfer of shares of Common Stock will constitute a transfer of the corresponding Rights. After the Distribution Date, the Rights will separate from the Common Stock and be evidenced by book-entry credits or by Rights certificates that the Company will mail to all eligible holders of Common Stock. Any Rights held by an Acquiring Person are null and void and may not be exercised.

Beneficial Ownership

Certain synthetic interests in securities created by derivative positions — whether or not such interests are considered to be ownership of the underlying Common Stock or are reportable for purposes of Regulation 13D of the Exchange Act — are treated as beneficial ownership of the number of shares of Common Stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of the Common Stock are directly or indirectly held by counterparties to the derivatives contracts. Swaps dealers unassociated with any control intent or intent to evade the purposes of the stockholder rights plan are excepted from such imputed beneficial ownership.

Expiration

The Rights will expire on April 6, 2021.

Redemption

The Board of Directors may redeem the Rights for $0.001 per Right at any time before any person or group becomes an Acquiring Person. If the Board redeems any Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of $0.001 per Right. The redemption price will be adjusted if there is a stock split of Common Stock or a dividend of Common Stock.

Anti-Dilution Provisions

The Board of Directors may adjust the purchase price of the Series A Preferred Shares, the number of Series A Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, or a reclassification of the Series A Preferred Shares or Common Stock. No adjustments to the Exercise Price of less than 1% will be made.

Amendments

The terms of the Rights Agreement may be amended by the Board of Directors without the consent of the holders of the Rights. After a person or group becomes an Acquiring Person, the Board of Directors may not amend the Rights Agreement in a way that adversely affects holders of the Rights.

Consequences of a Person or Group Becoming an Acquiring Person

	
 
	
•
	
Flip In. If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for the Exercise Price, purchase a number of shares of Common Stock with a market 

 

 

	
 
		
value of twice the Exercise Price, based on the market value of Common Stock prior to such acquisition.

	
 
	
•
	
Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of the outstanding shares of Common Stock, the Board may extinguish the Rights by exchanging one share of Common Stock or an equivalent security for each Right, other than Rights held by the Acquiring Person.

	
 
	
•
	
Flip Over. If the Company is later acquired in a merger or similar transaction after the Distribution Date, all holders of Rights except the Acquiring Person may, for the Exercise Price, purchase a number of shares of the acquiring corporation with a market value of twice the Exercise Price, based on the market value of the acquiring corporation’s stock prior to such transaction.

Series A Preferred Share Provisions

Each one one-hundredth of a Series A Preferred Share, if issued:

	
 
	
•
	
will not be redeemable;

	
 
	
•
	
will entitle its holder to quarterly dividend payments of $0.01 per share, or an amount equal to the dividend paid on one share of Common Stock, whichever is greater;

	
 
	
•
	
will entitle its holder upon liquidation either to receive $1.00 per share or an amount equal to the payment made on one share of Common Stock, whichever is greater;

	
 
	
•
	
will have the same voting power as one share of Common Stock; and

	
 
	
•
	
if shares of Common Stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of Common Stock.

The value of one one-hundredth interest in a Series A Preferred Share should approximate the value of one share of Common Stock.

Anti-Takeover Effects of Provisions of Delaware Law and the Company’s Certificate of Incorporation and Bylaws

Section 203 of the Delaware General Corporation Law

The Company is a Delaware corporation and is subject to Section 203 of the Delaware General Corporation Law (the “DGCL”). In general, Section 203 of the DGCL prevents a public Delaware corporation from engaging in any “business combination” (as defined below) with an “interested stockholder” (defined as a person who, together with affiliates and associates, beneficially owns (or within the preceding three years, did beneficially own) 15% or more of a corporation’s outstanding voting stock) for a period of three years following the time that such person became an interested stockholder, unless (i) before such person became an interested stockholder, the board of directors of the corporation approved either the transaction in which the interested stockholder became an interested stockholder or the business combination; (ii) upon consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding shares owned by persons who are both officers and directors of the corporation and shares held by certain employee stock plans); or (iii) on or after such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of the holders of at least 66 2/3% of the outstanding voting stock of the corporation that is not owned by the interested stockholder. A “business combination” generally includes mergers, stock or asset sales involving 10% or more of the market value of the corporation’s assets or stock, certain stock transactions and other transactions resulting in a financial benefit to the interested stockholder or an increase in the interested stockholder’s proportionate share of any class or series of a corporation.

Certificate of Incorporation and Bylaws

The Company’s Certificate of Incorporation and Bylaws include anti-takeover provisions that:

 

 

 

	
 
	
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prohibit stockholders from taking action by written consent and do not permit stockholders to call a special meeting;

	
 
	
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authorize the Board of Directors, without further action by the stockholders, to issue shares of Preferred Stock in one or more series, and with respect to each series, to fix the number of shares constituting that series, and establish the rights and terms of that series;

	
 
	
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establish advance notice procedures for stockholders to submit proposals and nominations of candidates for election to the Board of Directors to be brought before a stockholders meeting;

	
 
	
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allow the Company’s directors to establish the size of the Board of Directors (so long as the Board of Directors consists of at least three and no more than fifteen directors) and fill vacancies on the Board of Directors created by an increase in the number of directors (subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances);

	
 
	
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do not provide stockholders cumulative voting rights with respect to director elections; and

	
 
	
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provide that the Company’s Bylaws may be amended by the Board of Directors without stockholder approval, to the extent permitted by law.

 

Certain provisions of the Company’s Certificate of Incorporation and Bylaws may delay or discourage transactions involving an actual or potential change in the Company’s control or change in the Company’s Board of Directors or management, including transactions in which stockholders might otherwise receive a premium for their shares of Common Stock or transactions that the Company’s stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of the Common Stock.

 

In addition, the Bylaws provide that unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder, employee or agent of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim against the Company or any director, officer, stockholder, employee or agent of the Company arising out of or relating to any provision of the DGCL or the Certificate of Incorporation or Bylaws, or (iv) any action asserting a claim against the Company or any director, officer, stockholder, employee or agent of the Company governed by the internal affairs doctrine of the State of Delaware; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, subject to the court having personal jurisdiction over the indispensable parties named as defendants.

 

Under the Bylaws, to the fullest extent permitted by law, this exclusive forum provision will apply to state and federal law claims, including claims under the Exchange Act, or the Securities Act of 1933, as amended, or the respective rules and regulations promulgated thereunder; provided, however, that the Company’s stockholders will not be deemed to have waived the Company’s compliance with the federal securities laws and the rules and regulations thereunder. The enforceability of similar choice of forum provisions in other companies’ bylaws has been challenged in legal proceedings, and it is possible that, in connection with claims arising under federal securities laws, a court could find the choice of forum provisions contained in the Company’s Bylaws to be inapplicable or unenforceable. Although we believe this provision benefits the Company by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, this provision may have the effect of discouraging lawsuits against the Company’s directors and officers.

Authorized and Unissued Shares

The Company’s authorized and unissued shares of Common Stock are available for future issuance without stockholder approval except as may otherwise be required by applicable stock exchange rules or Delaware law. The Company may issue additional shares for a variety of purposes, including future offerings to raise additional capital, to fund acquisitions, and as employee and consultant compensation. The existence of authorized but unissued shares of Common Stock could render more difficult, or discourage an attempt, to obtain control of the Company by means of a proxy contest, tender offer, merger or otherwise.

The issuance of shares of Preferred Stock by the Company could have certain anti-takeover effects under certain circumstances, and could enable the Board of Directors to render more difficult or discourage an attempt to 

 

 

obtain control of the Company by means of a merger, tender offer, or other business combination transaction directed at the Company by, among other things, placing shares of Preferred Stock with investors who might align themselves with the Board of Directors.

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