Document:

Exhibit 4.1

Exhibit 4.1

RIGHTS AGREEMENT

INTERPHASE CORPORATION

and

COMPUTERSHARE TRUST COMPANY, N.A.,

as Rights Agent

Dated as of July 29, 2011

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 1. Certain Definitions
	 	 	1	 
	 
	 	 	 	 
	Section 2. Appointment of Rights Agent
	 	 	5	 
	 
	 	 	 	 
	Section 3. Issuance of Rights Certificates
	 	 	6	 
	 
	 	 	 	 
	Section 4. Form of Rights Certificates
	 	 	7	 
	 
	 	 	 	 
	Section 5. Countersignature and Registration
	 	 	8	 
	 
	 	 	 	 
	Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates
	 	 	9	 
	 
	 	 	 	 
	Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	10	 
	 
	 	 	 	 
	Section 8. Cancellation and Destruction of Rights Certificates
	 	 	12	 
	 
	 	 	 	 
	Section 9. Reservation and Availability of Capital Stock
	 	 	12	 
	 
	 	 	 	 
	Section 10. Record Date
	 	 	13	 
	 
	 	 	 	 
	Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
	 	 	14	 
	 
	 	 	 	 
	Section 12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	21	 
	 
	 	 	 	 
	Section 13. Merger or Sale or Transfer of Assets, Cash Flow or Earning Power
	 	 	21	 
	 
	 	 	 	 
	Section 14. Fractional Rights and Fractional Shares
	 	 	24	 
	 
	 	 	 	 
	Section 15. Rights of Action
	 	 	25	 
	 
	 	 	 	 
	Section 16. Agreement of Rights Holders
	 	 	25	 
	 
	 	 	 	 
	Section 17. Rights Certificate Holder Not Deemed a Shareholder
	 	 	26	 
	 
	 	 	 	 
	Section 18. Concerning the Rights Agent
	 	 	26	 
	 
	 	 	 	 
	Section 19. Merger or Change of Name of Rights Agent
	 	 	27	 
	 
	 	 	 	 
	Section 20. Duties of Rights Agent
	 	 	27	 
	 
	 	 	 	 
	Section 21. Change of Rights Agent
	 	 	29	 

 

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	 	 	Page	 
	 
	 	 	 	 
	Section 22. Issuance of New Rights Certificates
	 	 	30	 
	 
	 	 	 	 
	Section 23. Redemption and Termination
	 	 	31	 
	 
	 	 	 	 
	Section 24. Exchange
	 	 	31	 
	 
	 	 	 	 
	Section 25. Notice of Certain Events
	 	 	33	 
	 
	 	 	 	 
	Section 26. Notices
	 	 	34	 
	 
	 	 	 	 
	Section 27. Supplements and Amendments
	 	 	35	 
	 
	 	 	 	 
	Section 28. Successors
	 	 	35	 
	 
	 	 	 	 
	Section 29. Determinations and Actions by the Board of Directors, etc
	 	 	35	 
	 
	 	 	 	 
	Section 30. Benefits of this Agreement
	 	 	36	 
	 
	 	 	 	 
	Section 31. Severability
	 	 	36	 
	 
	 	 	 	 
	Section 32. Governing Law
	 	 	36	 
	 
	 	 	 	 
	Section 33. Counterparts
	 	 	36	 
	 
	 	 	 	 
	Section 34. Interpretation
	 	 	36	 
	 
	 	 	 	 
	Section 35. Force Majeure
	 	 	37	 
	 
	 	 	 	 

 

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RIGHTS AGREEMENT

RIGHTS AGREEMENT, dated as of July 29, 2011 (this “Agreement”), between Interphase
Corporation, a Texas corporation (the “Company”), and Computershare Trust Company, N.A., as
Rights Agent (the “Rights Agent”). Capitalized terms, and certain other terms, used herein
have the meanings assigned to them in Section 1 hereof.

WHEREAS, the Board of Directors of the Company has authorized and declared a dividend
distribution of one right (a “Right”) for each share of Common Stock outstanding (it being
understood that shares held by direct or indirect wholly owned Subsidiaries of the Company shall
not be considered as outstanding) at the Close of Business on August 9, 2011 (the “Record
Date”), and has authorized the issuance of one Right (as such number may hereinafter be
adjusted pursuant to the provisions of Section 11 hereof) for each share of Common Stock
issued between the Record Date (whether originally issued or delivered from the Company’s treasury)
and the Distribution Date, each Right initially representing the right to purchase one share of
Common Stock upon the terms and subject to the conditions hereinafter set forth.

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

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

(a) “Acquiring Person” shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the
Common Stock then outstanding, but shall not include:

(i) the Company;

(ii) any Subsidiary of the Company;

(iii) any employee benefit plan of the Company, or of any Subsidiary of the Company, or any
Person organized, appointed or established by the Company for or pursuant to the terms of any such
plan; or

(iv) any Person who becomes the Beneficial Owner of 15% or more of the Common Stock then
outstanding as a result of a reduction in the number of shares of Common Stock outstanding due to
the repurchase of shares of Common Stock by the Company unless and until such Person, after
becoming aware that such Person has become the Beneficial Owner of 15% or more of the then
outstanding Common Stock, acquires beneficial ownership of additional shares of Common Stock
representing 1% or more of the Common Stock then outstanding;

 

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provided, however, that if the Board determines in good faith that a Person who would otherwise be
an “Acquiring Person” as defined pursuant to the foregoing provisions of this subsection
(a) has become such inadvertently, and such Person promptly (and in any event within five Business
Days after being so requested by the Company) divests or enters into an irrevocable commitment
satisfactory to the Board promptly (and in any event within five Business Days or such shorter
period as shall be determined by the Board) to divest, and thereafter divests as required by such
commitment, a sufficient number of shares of Common Stock so that such Person would no longer be an
“Acquiring Person” as defined pursuant to the foregoing provisions of this subsection (a),
then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this
Agreement.

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

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

(d) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

(e) A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to
“beneficially own,” any securities:

(i) that such Person or any of such Person’s Affiliates or Associates, directly or indirectly,
has the right to acquire (whether such right is exercisable immediately or only after the passage
of time or upon the satisfaction of one or more conditions (whether or not within the control of
such Person)) pursuant to any agreement, arrangement or understanding (whether or not in writing)
or upon the exercise of conversion rights, exchange rights, other rights, warrants or options, or
otherwise, and including any securities of the Company represented by “when-issued” trading
thereof; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or
to “beneficially own,” (A) securities tendered pursuant to a tender or exchange offer made
by such Person or any of such Person’s Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, (B) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (C) securities issuable upon exercise of Rights
from and after the occurrence of a Triggering Event which Rights were acquired by such Person or
any of such Person’s Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof (the “Original Rights”) or pursuant to
Section 11(i) hereof in connection with an adjustment made with respect to any Original
Rights;

(ii) that such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the “Beneficial Owner” of, or to
“beneficially own,” any security under this clause (ii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or successor report); or

 

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(iii) that are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates or
Associates) has any agreement, arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the
proviso to clause (ii) of this subsection (e)) or disposing of any voting securities of the
Company;

provided, however, that nothing in this subsection (e) shall cause a Person engaged in business as
an underwriter of securities to be the “Beneficial Owner” of, or to “beneficially
own,” any securities acquired through such Person’s participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of such acquisition, and
then only if such securities continue to be owned by such Person at such expiration of 40 days.

(f) “Board” shall mean the Board of Directors of the Company or any authorized
committee thereof.

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

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

(i) “Common Stock” shall mean the common stock, par value $0.10 per share, of the
Company at the date hereof or any other stock resulting from successive changes or
reclassifications of the common stock. When used with reference to any Person other than the
Company, however, the term “Common Stock” shall mean the capital stock of such Person with
the greatest voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person.

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

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

(l) “Current Market Price” shall have the meaning determined in accordance with
Section 11(d) hereof.

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

(n) “Distribution Date” shall have the meaning set forth in Section 3(a)
hereof.

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

 

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

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

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

(s) “hereof,” “herein” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement.

(t) “including,” “include” or “includes” in this Agreement shall be
deemed to be followed by the words “without limitation.”

(u) “Merge” or “Merger” means any transaction constituting a merger,
consolidation or statutory interest exchange under the Texas Business Organizations Code or other
applicable corporate or other entity statute.

(v) “Nasdaq” means the National Association of Securities Dealers, Inc. Automated
Quotation System.

(w) “Person” shall mean any individual, firm, corporation, limited liability company,
partnership, trust or other entity, and shall include any successor (by Merger or otherwise)
thereof or thereto.

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

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

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

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

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

(cc) “Rights Announcement Date” shall mean the date on which the Company files a
Current Report on Form 8-K that contains this Agreement as an exhibit.

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

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

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

 

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

(hh) “Spread” shall mean the excess of the Current Value over the Purchase Price.

(ii) “Stock Acquisition Date” shall mean the first date of public announcement (which,
for purposes of this definition, shall include a report filed or amended pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become
such; provided, that if such Person is determined not to be or to have become an Acquiring Person,
then no Stock Acquisition Date shall be deemed to have occurred.

(jj) “Subsidiary” shall mean, with reference to any Person, any other Person of which
an amount of voting securities sufficient to elect at least a majority of the directors (or Persons
exercising similar functions for a Person other than a corporation) of such other Person is
beneficially owned, directly or indirectly, by such first Person, or otherwise controlled by such
first Person.

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

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

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

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

(oo) “Trust” shall have the meaning set forth in Section 24(e) hereof.

(pp) “Trust Agreement” shall have the meaning set forth in Section 24(e)
hereof.

Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent
to act as rights 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 days’ prior written notice to the
Rights Agent. The Rights Agent shall have no duty to supervise, and in no event shall be liable
for, the acts or omissions of any such co-Rights Agent.

 

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Section 3. Issuance of Rights Certificates.

(a) Until the earlier of (i) the Close of Business on the tenth Business Day after the Stock
Acquisition Date, and (ii) the Close of Business on the tenth Business Day (or such later date as
the Board shall determine) after the date that a tender or exchange offer by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any Person organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if, upon consummation thereof, such Person would become an Acquiring Person (the
earlier of (i) and (ii) being herein referred to as the “Distribution Date”), (x) the
Rights will be evidenced (subject to the provisions of subsection (b) of this Section 3) by
the certificates for the Common Stock registered in the names of the holders of the Common Stock
(which certificates for Common Stock shall be deemed also to be certificates for Rights), and (y)
the Rights will be transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested and provided with all necessary
information, 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, at the address of such holder
shown on the records of the Company or the transfer agent or registrar for the shares of Common
Stock, one or more Rights certificates, in substantially the form of Exhibit A hereto (the
“Rights Certificates”), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. If an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at the time of distribution of
the Rights Certificates, the Company shall make the necessary and appropriate rounding adjustments
(in accordance with Section 14(a) hereof) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates,
and the Rights will be transferable separately from the transfer of Common Stock. If any tender or
exchange offer referred to in clause (ii) of the first sentence of this subsection (a) is
cancelled, terminated or otherwise withdrawn before the ten-Business-Day (or longer) period
referred to in such clause (ii) without the acquisition of any shares of Common Stock pursuant
thereto, such tender or exchange offer shall be deemed, for purposes of this sub-section (a), never
to have been made. The Company shall promptly notify the Rights Agent upon the occurrence of the
Distribution Date and, if such notification is given orally, the Company shall confirm the notice
in writing on or before the next Business Day. Until such notice is received (orally or in
writing) by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the
Distribution Date has not occurred.

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

 

6

 

(c) Rights shall be issued in respect of all shares of Common Stock which are issued (whether
originally issued or from the Company’s treasury, and including any delivered to
third parties by wholly owned Subsidiaries of the Company) after the Record Date but prior to
the earlier of the Distribution Date and the Expiration Date. Certificates representing such
shares of Common Stock shall also be deemed to be certificates for Rights, and shall bear a legend
in substantially the following form if such certificates are issued after the Record Date but prior
to the earlier of the Distribution Date and the Expiration Date:

This certificate also evidences and entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between Interphase Corporation (the
“Company”) and Computershare Trust Company, N.A., as Rights Agent, dated as
of July 29, 2011, as it may be amended from time to time (the “Rights
Agreement”), the terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy of the Rights Agreement,
as in effect on the date of mailing, without charge, promptly after receipt of a
written request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf of such Person or by
any subsequent holder, may become null and void.

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

Section 4. Form of Rights Certificates.

(a) The Rights Certificates (and the forms of election to purchase and of assignment to be
printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit
A hereto and may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to usage (but which
shall not, in any case, affect the rights, duties or responsibilities of the Rights Agent).
Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase such number of shares of Common Stock as shall be set forth
therein at the price per share set forth therein (the “Purchase Price”), but the number of
shares, or (under certain circumstances) the type and amount of other securities, purchasable upon
the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.

 

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(b) Any Rights Certificate issued pursuant to Section 3(a), Section 11(i) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer that the Board has determined is part of a plan, arrangement
or understanding that has as a primary purpose or effect the avoidance of Section 7(e)
hereof, and any Rights Certificate issued pursuant to Section 6, Section 11 or
Section 22 hereof upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent feasible, and only if the
Company has provided specific written instructions to the Rights Agent) a legend in substantially
the following form:

The Rights represented by this Rights Certificate are or were beneficially owned by
a Person who was or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of the Rights Agreement.

The provisions of Section 7(e) hereof shall be operative whether or not the foregoing
legend is contained on any Rights Certificate.

Section 5. Countersignature and Registration.

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

(b) Following the Distribution Date, upon receipt by the Rights Agent of notice to that effect
and all other relevant information referred to in Section 3(a) hereof, the Rights Agent
will keep, or cause to be kept, at its office designated for such purpose, books for
registration and transfer of the Rights Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of each of the Rights
Certificates.

 

8

 

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

(a) Subject to the provisions of Section 4(b), Section 7(e) and Section
14 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the Expiration Date, any Rights Certificate or Certificates (other than
Rights Certificates representing Rights that may have been exchanged pursuant to Section 24
hereof) may be transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of shares of Common Stock
(or, following a Triggering Event, Common Stock, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered then entitles such holder (or
former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates
to be transferred, split up, combined or exchanged at the office of the Rights Agent designated for
such purpose. The Right Certificates are transferable only on the registry books of the Rights
Agent. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Rights Certificate until the registered holder
shall have completed and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate, shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) thereof and of the Rights evidenced thereby and
the Affiliates and Associates of such Beneficial Owner (or former Beneficial Owner) as the Company
or the Rights Agent shall reasonably request and shall have paid a sum sufficient to cover any tax
or charge that may be imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e), Section 14 and Section 24 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so
requested, registered in such name or names as may be designated by the surrendering registered
holder. The Rights Agent shall promptly forward any such sum collected by it to the Company or to
such Persons as the Company shall specify by written notice. The Rights Agent shall have no duty
or obligation under any Section of this Agreement which requires the payment of taxes or charges
unless and until it is satisfied that all such taxes and/or charges have been paid or provided for.

(b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Rights Certificate and, in case of loss,
theft or destruction, of indemnity or security satisfactory to them, and reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Rights Certificate, if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.

 

9

 

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

(a) Subject to Section 7(e) hereof, at any time after the Distribution Date, the
registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein, including the restrictions on exercisability set forth in Section
9(c), Section 11(a)(iii), Section 23(b) and Section 24(b) hereof) in
whole or in part upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof properly completed and duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of shares of Common Stock (or other
securities, cash or other assets, as the case may be) as to which such surrendered Rights are then
exercisable, and an amount equal to any tax or charge required to be paid under Section
9(e) hereof, at or prior to the earlier of (i) 5:00 p.m., Eastern time, on July 29, 2021, or
such earlier or later date as may be established by the Board prior to the expiration of the Rights
(such date, as it may be extended by the Board, the “Final Expiration Date”), and (ii) the
time at which the Rights are redeemed or exchanged as provided in Section 23 or Section
24 hereof (the earlier of (i) and (ii) being herein referred to as the “Expiration
Date”). Except for those provisions herein which expressly survive the termination of this
Agreement, this Agreement shall terminate upon the earlier of the Expiration Date and such time as
all outstanding Rights have been exercised hereunder (other than Rights which have become null and
void pursuant to the provisions of Section 7(e) hereof).

(b) The Purchase Price for each share of Common Stock pursuant to the exercise of a Right
initially shall be $39.00, and shall be subject to adjustment from time to time as provided in
Section 11 and Section 13(a) hereof and shall be payable in lawful money of the
United States of America in accordance with subsection (c) below.

(c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase and the certificate properly completed and duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price for each of the shares to
be purchased as set forth below and an amount equal to any applicable tax or charge required to be
paid under Section 9(e) hereof, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) (A) requisition from any transfer agent of the shares of Common
Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates
for the total number of shares of Common Stock to be purchased, and the Company hereby irrevocably
authorizes each such transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of Common Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts
representing such number of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent), and the Company hereby directs each such depositary
agent to comply with such request, (ii) when necessary to comply with this Rights Agreement,
requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or, upon the order of the registered holder
of such Rights Certificate, registered in such name or names as may be designated by such holder,
and (iv) when necessary to comply with

 

10

 

this Rights Agreement, after receipt thereof, deliver such
cash to or upon the order of the registered holder of such Rights Certificate. The payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) and any taxes or charges required to be paid under Section
9(e) hereof shall be made in cash or by certified check, cashier’s check, bank draft or money
order payable to the order of the Company. If the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the Rights Agent, if and
when necessary to comply with this Agreement. The Company reserves the right to require prior to
the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Common Stock would be issued.

(d) In case the registered holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, subject to the provisions of Section
14 hereof.

(e) Notwithstanding anything in this Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person
or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board has determined is part of a plan, arrangement
or understanding that has as a primary purpose or effect the avoidance of this Section
7(e), shall become null and void without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to insure that the provisions
of this Section 7(e) and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or any other Person as a result of the Company’s
failure to make any determinations with respect to an Acquiring Person or any of its Affiliates,
Associates or transferees hereunder.

(f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to any purported transfer,
split up, combination or exchange of any Rights Certificate pursuant to Section 6 hereof or
any purported exercise as set forth in this Section 7 unless the registered holder of such
Rights Certificate shall have (i) properly completed and duly executed the certificate contained in
the form of assignment or the form of election to purchase, as applicable, set forth on the reverse
side of the Rights Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof and of the
Rights evidenced thereby and of the Affiliates and Associates of such Beneficial Owner (or former
Beneficial Owner) as the Company or the Rights Agent shall reasonably request.

 

11

 

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

Section 9. Reservation and Availability of Capital Stock.

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

(b) So long as the shares of Common Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange, the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon such exercise.

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

 

12

 

(d) The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all shares of Common Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price and compliance with all
other applicable provisions of this Agreement), be duly and validly authorized and issued and fully
paid and nonassessable.

(e) The Company further covenants and agrees that it will pay when due and payable any and all
taxes and charges which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of shares of Common Stock (or Common Stock and/or
other securities, as the case may be) upon the exercise of Rights. The Company shall not, however,
be required to (i) pay any transfer tax that may be payable in respect of any transfer or delivery
of Rights Certificates or the issuance or delivery of certificates for Common Stock (or Common
Stock and/or other securities, as the case may be) in respect of a name other than that of the
registered holder of the Rights Certificates evidencing Rights surrendered for exercise or (ii)
issue or deliver any certificates for shares of Common Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered holder upon the
exercise of any Rights until any such tax or charge shall have been paid (any such tax or charge
being payable by the holder of such Rights Certificates at the time of surrender) or until it has
been established to the Company’s and the Rights Agent’s satisfaction that no such tax or charge is
due.

Section 10. Record Date. Each Person in whose name any certificate for shares of
Common Stock (or Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of record of such
shares of Common Stock (or Common Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable
taxes or charges) was duly made; provided, however, that if the date of such surrender and payment
is a date upon which the Common Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on
which the Common Stock (or Common Stock and/or other securities, as the case may be) transfer books
of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a shareholder 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.

 

13

 

Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights.

(a) The Purchase Price, the number and kind of shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in this Section
11.

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

(ii) Subject to Section 24 hereof, in the event any Person shall, at any time after
the Rights Announcement Date, become an Acquiring Person, unless the event causing such Person to
become an Acquiring Person is a transaction set forth in Section 13(a) hereof, then proper
provision shall be made so that each holder of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of shares of Common Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that
product (which, following such first occurrence, shall thereafter be referred to as the
“Purchase Price” for each such Right and for all purposes of this Agreement) by 50% of the
Current Market Price (determined pursuant to Section 11(d) hereof) per share of Common
Stock on the date of such first occurrence (such number of shares, the “Adjustment
Shares”); provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of capital stock issuable
upon exercise of one Right. The Company shall give the Rights Agent written notice of the identity
of any such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing. The
Company will use all reasonable efforts to ensure that the provisions of this Section
11(a)(ii) are complied with, but will have no liability to any holder of Right Certificates or
any other Person as a result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates,
Associates or transferees hereunder. Upon the occurrence of a Section 13 Event, any Rights
that shall not have been previously exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only pursuant to Section 13 and not pursuant to this Section
11(a)(ii).

 

14

 

(iii) In the event that the number of treasury shares plus the number of shares of Common
Stock that are authorized by the Company’s Articles of Incorporation or Certificate of Formation,
in either case as amended, but not outstanding or reserved for issuance for purposes other than
upon exercise of the Rights, is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing clause (ii) of this Section 11(a), the Company shall (A)
determine the value of the Adjustment Shares issuable upon the exercise of a Right (the
“Current Value”), and (B) with respect to each Right (subject to Section 7(e)
hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a
Right and payment of the applicable Purchase Price, (1) cash (to the extent permitted by applicable
law and any agreements or instruments to which the Company is a party in effect immediately prior
to the Stock Acquisition Date), (2) a reduction in the Purchase Price, (3) to the extent available,
Common Stock or other equity securities of the Company (including rights to purchase stock, or
shares, or units of shares, of preferred stock that the Board has deemed to have essentially the
same value or economic rights as shares of Common Stock (such shares of preferred stock being
referred to as “Common Stock Equivalents”)), (4) debt securities of the Company (to the
extent available), (5) other assets (to the extent available), or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction
in the Purchase Price), where such aggregate value has been determined by the Board based upon the
advice of an investment banking firm selected by the Board; provided, however, if the
Company shall not have made adequate provision to deliver the Current Value pursuant to clause (B)
above within 30 days following the later of (x) the occurrence of the Section 11(a)(ii) Event and
(y) the date on which the Company’s right of redemption pursuant to Section 23(a) hereof
expires (the later of (x) and (y) being referred to herein as the “Section 11(a)(ii) Trigger
Date”), then the Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board determines in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the
30-day period set forth above may be extended to the extent necessary, but not more than 90 days
after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval
for the authorization of such additional shares (such 30-day period, as it may be extended, is
herein called the “Substitution Period”). To the extent that the Company determines that
action should be taken pursuant to the first and/or third sentences of this Section
11(a)(iii), the Company (1) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and (2) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek such shareholder
approval for such authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. The Company shall notify the Rights Agent
whenever it makes a public announcement pursuant to this Section 11(a)(iii) and give the
Rights Agent a copy of such announcement. For purposes of this Section 11(a)(iii), the
value of each Adjustment Share shall
be the Current Market Price per share of the Common Stock on the Section 11(a)(ii) Trigger
Date and the per share or per unit value of any Common Stock Equivalent shall be deemed to equal
the Current Market Price per share of the Common Stock on such date.

 

15

 

(b) If the Company shall fix a record date for the issuance of rights (other than the Rights),
options or warrants to all holders of Common Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such record date) shares of Common
Stock (or shares having the same rights, privileges and preferences as the shares of Common Stock
(or equivalent common stock)) or securities convertible into Common Stock or equivalent common
stock at a price per share of Common Stock or per share of equivalent common stock (or having a
conversion price per share, if a security convertible into Common Stock or equivalent common stock)
less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of
Common Stock on such record date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to such record date by
a fraction, (i) the numerator of which shall be the number of shares of Common Stock outstanding on
such record date, plus the number of shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock and/or equivalent common stock so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and (ii) the denominator of which shall be the number of
shares of Common Stock outstanding on such record date, plus the number of additional shares of
Common Stock and/or equivalent common stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock issuable upon exercise of one Right. In case
such subscription price may be paid by delivery of consideration part or all of which may be in a
form other than cash, the value of such consideration shall be as determined in good faith by the
Board, whose determination shall be described in a statement filed with the Rights Agent and shall
be binding on the Rights Agent and the holders of the Rights. Shares of Common Stock owned by or
held for the account of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record date is fixed, and
in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had not been fixed.

(c) If the Company shall fix a record date for a distribution to all holders of Common Stock
(including any such distribution made in connection with a Merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular
periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than
a dividend payable in Common Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to such record date by
a fraction, (i) the numerator of which shall be the Current Market Price (as determined pursuant to
Section 11(d) hereof) per share of Common Stock on such record date, less the fair market
value (as determined in good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets or evidences of

 

16

 

indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Common Stock and (ii) the denominator of which shall be such Current
Market Price (as determined pursuant to Section 11(d) hereof) per share of Common Stock;
provided, however, that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock issuable upon exercise of
one Right. Such adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been fixed.

(d) The Current Market Price per share of Common Stock on any date shall be deemed to be (i)
for the purpose of any computation hereunder, other than computations made pursuant to Section
11(a)(iii) hereof, the average of the daily closing prices per share of such Common Stock for
the 30 consecutive Trading Days immediately prior to, but not including, such date, and (ii) for
purposes of computations made pursuant to Section 11(a)(iii) hereof, the average of the
daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately
following, but not including, such date; provided, however, that if the Current Market Price per
share of the Common Stock is determined during a period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or
(B) any subdivision, combination or reclassification of such Common Stock, and the ex-dividend date
for such dividend or distribution, or the record date for such subdivision, combination or
reclassification shall not have occurred prior to, but not including, the commencement of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above, then, and in each such case,
the Current Market Price shall be properly adjusted to take into account ex-dividend trading. The
closing price for each Trading Day shall be the last sale price, regular way, or, in case no such
sale takes place on such Trading Day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the Nasdaq Global Market or, if the shares of Common
Stock are not listed or admitted to trading on the Nasdaq Global Market, as reported in the
principal consolidated transaction reporting system with respect to securities listed 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 Nasdaq 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. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on such date as determined in good
faith by the Board shall be used. The term “Trading Day” shall mean a day on which the
principal national securities exchange on which the shares of Common Stock are listed 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, a Business Day. If the Common Stock is
not publicly held or not so listed or traded, Current Market Price per share shall mean the fair
value per share as determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all purposes.

 

17

 

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

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

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

(h) Unless the Company shall have exercised its election as provided in Section 11(i),
upon each adjustment of the Purchase Price as a result of the calculations made in Section
11(b) and Section 11(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of shares of Common Stock (calculated to the nearest one ten-thousandth) obtained by (i)
multiplying (x) the number of shares covered by a Right immediately prior to such adjustment, by
(y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price; provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock issuable upon exercise of one Right.

(i) The Company may elect, on or after the date of any adjustment of the Purchase Price, to
adjust the number of Rights in lieu of any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights (calculated to the nearest
one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement (with prompt written notice
thereof to the Rights Agent) of its

 

18

 

election to adjust the number of Rights, indicating the record
date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be
at least 10 days later than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed and delivered by
the Company, and countersigned and delivered by the Rights Agent, in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on the record date specified in the
public announcement.

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

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

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

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

 

19

 

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

(o) The Company covenants and agrees that, after the Distribution Date, it will not, subject
to Section 7(e) hereof and except as permitted by Section 23, Section 24 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.

(p) Anything in this Agreement to the contrary notwithstanding, in the event that the Company
shall at any time after the Record Date and prior to the Distribution Date (i) declare or pay a
dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the outstanding shares of Common
Stock into a smaller number of shares, the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date, shall
be proportionately adjusted so that the number of Rights thereafter associated with each share of
Common Stock following any such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Common Stock immediately prior to such event by a fraction (i)
the numerator of which shall be the total number of shares of Common Stock outstanding immediately
prior to the occurrence of the event and (ii) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately following the occurrence of such event. The
adjustments provided for in this Section 11(p) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or reclassification is effected.

 

20

 

Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made or an event affecting the Rights or their exercisability (including an event
which causes Rights to become null and void) occurs as provided in Section 11 or
Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment or describing such event, and a brief, reasonably detailed statement of the facts,
computations and methodology accounting for such adjustment, (b) promptly file with the Rights
Agent, and with
each transfer agent for the Common Stock, a copy of such certificate, and (c) if a
Distribution Date has occurred, mail a brief summary thereof to each holder of a Rights Certificate
(or, if prior to the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 25 and Section 26 hereof. The Rights
Agent shall be fully protected in relying on any such certificate and on any adjustment or
statement therein contained and shall have no duty or liability with respect to, and shall not be
deemed to have knowledge of, any adjustment or any such event unless and until it shall have
received such a certificate.

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

(a) In the event that any Person shall become an Acquiring Person and, directly or indirectly,
(x) the Company shall Merge with any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such Merger, (y) any Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof) shall Merge with the
Company, and the Company shall be the continuing or surviving corporation of such Merger and, in
connection with such Merger, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash or any other property,
or (z) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related transactions, assets, cash flow
or earning power aggregating more than 50% of the assets, cash flow or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of that complies with Section
11(o) hereof), then, and in each such case, proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by (A) multiplying the then current
Purchase Price by the number of shares of Common Stock for which a Right is exercisable immediately
prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of such shares for
which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first occurrence of a Section
11(a)(ii) Event), and (B) dividing that product (which, following the first occurrence of a Section
13 Event, shall be referred to as the “Purchase Price” for each Right and for all purposes
of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d)
hereof) per share of the Common Stock of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including the reservation of a sufficient number of shares
of its Common Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any
Section 13 Event.

 

21

 

(b) “Principal Party” shall mean:

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

(ii) in the case of any transaction described in clause (z) of the first sentence of
Section 13(a) hereof, the Person that is the party receiving the greatest portion of the
assets, cash flow or earning power transferred pursuant to such transaction or transactions;

provided, however, that in any such case described in clause (i) or (ii), (1) if the Common Stock
of such Person is not at such time or has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary
of another Person the Common Stock of which is and has been so registered, “Principal
Party” shall refer to such other Person; and (2) if such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stock of two or more of which are and have been so
registered, “Principal Party” shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value. Notwithstanding the foregoing, if the
Principal Party in any of the transactions listed in Section 13(a) is not a corporation or
other legal entity having outstanding equity securities, then, and in each such case, (x) if the
Principal Party is directly or indirectly wholly owned by a corporation or other legal entity
having outstanding equity securities, then all references to Common Stock of the Principal Party
will be deemed to be references to the Common Stock of the corporation or other legal entity having
outstanding equity securities which ultimately controls the Principal Party, and (y) if there is no
such corporation or other legal entity having outstanding equity securities, (A) proper provision
will be made so that the Principal Party creates or otherwise makes available for purposes of the
exercise of the Rights in accordance with the terms of this Agreement, a kind or kinds of security
or securities having a fair market value at least equal to the economic value of the Common Stock
which each holder of a Right would have been entitled to receive if the Principal Party had been a
corporation or other legal entity having outstanding equity securities; and (B) all other
provisions of this Agreement will apply to the issuer of such securities as if such securities were
Common Stock.

 

22

 

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

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

(ii) take all such other action as may be necessary to enable the Principal Party to issue the
securities purchasable upon exercise of the Rights, including the registration or qualification of
such securities under all requisite securities laws of jurisdictions of the various states and the
listing of such securities on such exchanges and trading markets as may be necessary or
appropriate; and

(iii) deliver to holders of the Rights historical financial statements for the Principal Party
and each of its Affiliates that comply in all respects with the requirements for registration on
Form 10 under the Exchange Act.

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

(d) In case the Principal Party which is to be a party to a transaction referred to in this
Section 13 has a provision in any of its authorized securities, or in its corporate or
other entity governing documents, that would have the effect of (i) causing such Principal Party to
issue, in connection with, or as a consequence of, the consummation of a transaction referred to in
this Section 13, shares of Common Stock of such Principal Party at less than the then
Current Market Price per share (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at less than such then
Current Market Price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection with the issuance of the
Common Stock of such Principal Party pursuant to the provisions of Section 13, then, in any
such event, the Company shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such Principal Party shall have been
cancelled, waived or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.

 

23

 

Section 14. Fractional Rights and Fractional Shares.

(a) The Company shall not be required to issue fractions of Rights, except before the
Distribution Date as provided in Section 11(p) hereof, or to distribute Rights Certificates
that evidence fractional Rights. In lieu of such fractional Rights, the Company shall pay to the
registered holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been otherwise issuable.
The closing price of the Rights for any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the Nasdaq Global Market or, if the Rights are not
listed or admitted to trading on the Nasdaq Global Market, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to trading, or if the
Rights 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 Nasdaq or such other system then in use or, if on any such
date the Rights 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 Rights, selected by the
Board. If on any such date no such market maker is making a market in the Rights, the fair value
of the Rights on such date as determined in good faith by the Board shall be used.

(b) The Company shall not be required to issue fractions of a share of Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of fractional shares of Common Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one share of Common Stock. For purposes
of this Section 14(b), the current market value of one share of Common Stock shall be the
closing price of a share of Common Stock (as determined pursuant to the second sentence of
Section 11(d) hereof) for the Trading Day immediately prior to the date of such exercise.

(c) As an alternative to the cash payment described in Section 14(b) hereof, fractions
of a share of Common Stock may, at the election of the Company, be evidenced by depository
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
the rights, privileges and preferences to which they are entitled as beneficial owners of the
Common Stock represented by such depositary receipts.

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

(e) Whenever a payment for fractional Rights or fractional shares is to be made by the Rights
Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting
forth in reasonable detail the facts related to such payments and the prices and/or formulas
utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in
the form of fully collected funds to make such payments. The Rights Agent shall be fully protected
in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed
to have knowledge of, any payment for fractional Rights or fractional
shares under any Section of this Agreement relating to the payment of fractional Rights or
fractional shares unless and until the Rights Agent shall have received such a certificate and
sufficient monies.

 

24

 

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

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

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

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

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

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

 

25

 

Section 17. Rights Certificate Holder Not Deemed a Shareholder. No holder, as such,
of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares of Common Stock or any other securities of the Company that may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof or exchanged
pursuant to the provisions of Section 24.

Section 18. Concerning the Rights Agent.

(a) The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and to reimburse the Rights Agent for all reasonable expenses, counsel
fees and disbursements and other disbursements incurred in the preparation, delivery, amendment,
administration and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, judgment, fine, penalty, claim, demand, settlement, damage, cost, liability or
expense, including the reasonable fees and expenses of legal counsel, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for any action taken,
suffered or omitted by the Rights Agent pursuant to this Agreement or in connection with the
acceptance, administration, exercise and performance of its duties under this Agreement, including
the costs and expenses of defending against any claim of liability in the premises. The costs and
expenses incurred in enforcing this right of indemnification shall be paid by the Company. The
provisions of this Section 18 and Section 20 hereof shall survive the termination
of this Agreement, the exercise or expiration of the Rights, and the resignation, replacement or
removal of the Rights Agent.

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

 

26

 

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

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

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

Section 20. Duties of Rights Agent. The Rights Agent undertakes to perform only the
duties and obligations expressly imposed by this Agreement (and no implied duties), upon the
following terms and conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:

(a) The Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the advice or opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of
any action taken, suffered or omitted by it in good faith and in accordance with such advice or
opinion.

(b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter (including the identity of any Acquiring Person
or 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 Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be full and complete
authorization and protection to the Rights Agent, and the Rights Agent shall incur no liability for
or in respect of any action taken, suffered or omitted by it under the provisions of this Agreement
in reliance upon such certificate.

 

27

 

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

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

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

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

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

 

28

 

(h) The Rights Agent and any shareholder, affiliate, 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 the
Rights Agent were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent or any such shareholder, affiliate, director, officer or employee of 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 any other Person resulting from any
such act, default, neglect or misconduct, absent gross negligence, bad faith or willful misconduct
in the selection and continued employment thereof (which gross negligence, bad faith or willful
misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction).

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

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

Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Agreement upon at least 30 days’ notice in
writing mailed to the Company, and (if the Rights Agent or one of its affiliates is not also the
transfer agent of the Company) to each transfer agent of the Common Stock known to the Rights
Agent, by registered or certified mail. In the event that the transfer agency relationship in
effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have
resigned automatically and be discharged from its duties under this Agreement as of the effective
date of such termination, and the Company shall be responsible for sending any required notice.
The Company may remove the Rights Agent or any successor Rights Agent upon at least 30 days’ notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and (if the
Rights Agent or one of its affiliates is not also the transfer agent of the Company) to each
transfer agent of the Common Stock, by registered or certified mail, and, if such removal occurs
after the Distribution Date, to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall

 

29

 

 otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered holder of any Rights Certificate
may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a Person
organized and doing business under the laws of the United States or any State thereof, in good
standing, which is authorized under such laws to exercise corporate trust, stock transfer or
shareholder services powers and which at the time of its appointment as Rights Agent has, or with
its parent has, a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a
Person described in clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent under this Agreement without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock, and, if such appointment occurs after the Distribution Date, mail a
notice thereof in writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.

Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the Expiration Date, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise, exchange
or conversion of securities (including compensatory stock options, but excluding Rights) issued by
the Company before the Distribution Date which are exercisable or exchangeable for, or convertible
into, shares of Common Stock, and (b) may, in any other case, if deemed necessary or appropriate by
the Board, issue Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such issuance would create
a significant risk of material adverse tax consequences to the Company or the Person to whom or
which such Rights Certificate would otherwise be issued, and (ii) no such Rights Certificate shall
be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.

 

30

 

Section 23. Redemption and Termination.

(a) The Board may, at its option, at any time prior to the earlier of (i) the Close of
Business on the Stock Acquisition Date and (ii) the Close of Business on the Expiration
Date, (A) redeem all but not less than all of the then outstanding Rights at a redemption
price of $0.001 per Right (rounded up to the nearest whole $0.001 in the case of any holder whose
holdings are not in a multiple of ten), as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the “Redemption Price”) or (B) amend this Agreement
to change the Final Expiration Date to another date, including an earlier date. Any redemption
made according to this Section 23(a) will be effective immediately upon the action of the
Board ordering it, unless such action of the Board expressly provides that such redemption will be
effective at a subsequent time or upon the occurrence or nonoccurrence of one or more specified
events (in which case such redemption will be effective in accordance with the provisions of such
action of the Board). The Company may, at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the Current Market Price, as defined in Section 11(d) hereof, of the
Common Stock at the time of redemption) or any other form of consideration deemed appropriate (and
valued in good faith) by the Board.

(b) Immediately upon the effectiveness of the redemption of the Rights as provided in
Section 23(a) hereof, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price for each Right so held. Promptly after the effectiveness of the
redemption of the Rights, the Company shall publicly announce such redemption and give notice of
such redemption to the Rights Agent, and within ten days thereafter, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing such notice to all such
holders at each holder’s last address as it appears upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock.
Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the failure to give nor any defect in any
such notice shall effect the legality or validity of the redemption. The Company may, at its
option, combine the payment of the Redemption Price with any other payment being made concurrently
to holders of Common Stock. If legal or contractual restrictions prevent the Company from paying
the Redemption Price (in the form of consideration deemed appropriate by the Board of Directors) at
the time of redemption, the Company will pay the Redemption Price, without interest, promptly after
such time as the Company ceases to be so prevented from paying the Redemption Price.

Section 24. Exchange.

(a) The Board may, at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights
that have become null and void pursuant to the provisions of Section 7(e) hereof) for
Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Any such
exchange will be effective immediately upon the action of the Board ordering it, unless such action
of the Board expressly provides that such exchange will be effective at a subsequent time or upon
the occurrence or nonoccurrence of one or more specified events (in which case such exchange will
be effective in accordance with the provisions of such action of the Board).
Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any Person holding Common Stock for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.

 

31

 

(b) Immediately upon the effectiveness of the exchange of any Rights pursuant to Section
24(a) and without any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. Promptly after the effectiveness of the exchange of the Rights, the Company
shall give public notice of any such exchange (with prompt written notice thereof to the Rights
Agent), and within ten days thereafter, the Company shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they appear upon the registry books of the
Rights Agent; provided, however, that the failure to give, or any defect in, such notice shall not
affect the legality or 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 the Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights
which have become null and void pursuant to the provisions of Section 7(e) hereof) held by
each holder of Rights.

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

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

(e) Prior to effecting an exchange pursuant to this Section 24, the Board may direct
the Company to enter into a trust agreement in such form and with such terms as the Board shall
then approve (the “Trust Agreement”). If the Board so directs, the Company shall enter
into the Trust Agreement and shall issue to the trust created by such agreement (the
“Trust”) all of the Common Stock or other securities, if any, issuable pursuant to the
exchange, and all Persons 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)
shall be entitled to receive such only from the Trust and solely upon compliance with the
relevant terms and provisions of the Trust Agreement.

 

32

 

(f) In any exchange pursuant to this Section 24, the Company, at its option, may
substitute for any shares of Common Stock exchangeable for a Right (i) Common Stock Equivalents,
(ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v) any combination of the
foregoing, in any event having an aggregate value, as determined by the Board (whose determination
will be described in a statement filed with the Rights Agent), equal to the current market value of
one share of Common Stock (determined pursuant to the second sentence of Section 11(d)
hereof) on the Trading Day immediately preceding the date of the effectiveness of the exchange
pursuant to this Section 24. The Common Shares or other securities issued at the direction
of the Board connection herewith shall be validly issued, fully paid, and nonassessable shares of
Common Stock or of such other securities (as the case may be), and the Company shall be deemed to
have received as consideration for such issuance a benefit having a value that is at least equal to
the aggregate par value of the shares so issued.

(g) Prior to effecting an exchange and registering shares of Common Stock (or other such
securities) in any Person’s name, including any nominee or transferee of a Person, the Company may
require (or cause the trustee of the Trust to require), as a condition thereof, that any holder of
Rights provide evidence, including the identity of the Beneficial Owners thereof and their
Affiliates and Associates (or former Beneficial Owners thereof and their Affiliates and Associates)
as the Company shall reasonably request in order to determine if such Rights are null and void. If
any Person shall fail to comply with such request, the Company shall be entitled conclusively to
deem the Rights formerly held by such Person to be null and void
pursuant to Section 7(e)
and not transferable or exercisable or exchangeable in connection herewith.

Section 25. Notice of Certain Events.

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

 

33

 

(b) In case any of the events set forth in Section 11(a)(ii) hereof shall occur, then,
in any such case, the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, and to
the Rights Agent in accordance with Section 26 hereof, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.

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

Interphase Corporation

2901 Dallas Parkway, Suite 200

Dallas, Texas 75093-5982

Attention: Chief Executive Officer

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

Computershare Trust Company, N.A.

2 North LaSalle Street

Chicago, IL 60602

Attn: Client Services

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

 

34

 

Section 27. Supplements and Amendments. Prior to the time at which the Rights cease
to be redeemable pursuant to Section 23 hereof, and subject to the penultimate sentence of
this Section 27, the Company may in its sole and absolute discretion, and the Rights Agent
will if the
Company so directs, supplement or amend any provision of this Agreement in any respect without
the approval of any holders of Rights or Common Stock. From and after the time at which the Rights
cease to be redeemable pursuant to Section 23 hereof, and subject to the penultimate
sentence of this Section 27, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend this Agreement without the approval of any holders of Rights or Common
Stock in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder, or (iv) to supplement or amend the provisions hereunder in any
manner which the Company may deem necessary or desirable; provided, however, that no such
supplement or amendment shall adversely affect the interests of the holders of Rights as such
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no such
supplement or amendment shall cause the Rights again to become redeemable or cause this Agreement
again to become supplementable or amendable otherwise than in accordance with the provisions of
this sentence. Without limiting the generality or effect of the foregoing, this Agreement may be
supplemented or amended to provide for such procedures for the exercise of the Rights, if any, as
the Board may determine to be appropriate. Upon the delivery of a certificate from an officer of
the Company which states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent will promptly execute such supplement or amendment.
Notwithstanding anything in this Agreement to the contrary, the Rights Agent may, but shall not be
obligated to, enter into any supplement or amendment that affects the Rights Agent’s own rights,
duties, obligations or immunities under this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests of the holders of
Common Stock.

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

Section 29. Determinations and Actions by the Board of Directors, etc. For all
purposes of this Agreement, any calculation of the number of shares of Common Stock or any other
class of capital stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board shall have the exclusive power and
authority to administer this Agreement 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
Agreement, including the right and power to (i) interpret the provisions of this Agreement and (ii)
make all determinations deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights, or to exchange or not exchange the
Rights or to amend this Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all other parties, and (y)
not subject the Board, or any of the directors on the Board, to any liability to the holders of the
Rights. The Rights Agent is entitled always to assume that the Board acted in good faith and shall
be fully protected and incur no liability in reliance thereon.

 

35

 

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

Section 31. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or authority to be invalid, void or
unenforceable and the Board determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire
until the Close of Business on the tenth Business Day following the date of such determination by
the Board; and provided further, that that if any such excluded term, provision, covenant or
restriction shall adversely affect the rights, immunities, duties or obligations of the Rights
Agent, the Rights Agent shall be entitled to resign immediately. Nothing in this Section
31 will affect the ability of the Company under the provisions of Section 27 hereof to
supplement or amend this Agreement to replace such invalid, void or unenforceable term, provision,
covenant or restriction with a legal, valid and enforceable term, provision, covenant or
restriction.

Section 32. Governing Law. This Agreement, each Right and each Rights Certificate
issued hereunder shall be deemed to be a contract made under the laws of the State of Texas and for
all purposes shall be governed by, enforced under and construed in accordance with the laws of such
State applicable to contracts made and to be performed entirely within such State; except that the
rights, duties and obligations of the Rights Agent shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.

Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute one, and the same, document. A signature to this
Agreement transmitted electronically shall have the same authority, effect, and enforceability as
an original signature.

Section 34. Interpretation. Descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof. The meaning assigned to each term defined herein
shall be equally applicable to both the singular and the plural forms of such term, and words
denoting any gender shall include all genders. Where a word or phrase is defined herein, each of
its other grammatical forms shall have a corresponding meaning.

 

36

 

Section 35. Force Majeure. Notwithstanding anything to the contrary contained herein,
the Rights Agent shall not be liable for any delays or failures in performance resulting from acts
beyond its reasonable control, including acts of God, terrorist acts, shortage of supply,
breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data
due to power failures or mechanical difficulties with information storage or retrieval systems,
labor difficulties, war, or civil unrest.

[Signature page follows.]

 

37

 

Signature Page to Rights Agreement

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

	 	 	 	 	 
	 	INTERPHASE CORPORATION

 	 
	 	By:  	/S/ Thomas N Tipton Jr
 	 
	 	 	Name:  	Tom Tipton 	 
	 	 	Title:  	CFO 	 
	 
	 	COMPUTERSHARE TRUST COMPANY, N.A.,

as Rights Agent

 	 
	 	By:  	/S/ Ian Yewer
 	 
	 	 	Name:  	Ian Yewer 	 
	 	 	Title:  	Branch President 	 

 

38

 

EXHIBIT A

FORM OF RIGHTS CERTIFICATE

			
	 	 	 
	Certificate No. R-_____
	 	_____ Rights

NOT EXERCISABLE AFTER JULY 29, 2021, UNLESS EXTENDED PRIOR THERETO BY THE BOARD OF DIRECTORS OF THE
COMPANY, OR EARLIER IF REDEEMED, EXCHANGED OR AMENDED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.]1

Rights Certificate

INTERPHASE CORPORATION

This certifies that _____, or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement dated as of July 29, 2011 (the “Rights
Agreement”), by and between Interphase Corporation, a Texas corporation (the
“Company”), and Computershare Trust Company, N.A., as Rights Agent (the “Rights
Agent”), to purchase from the Company at any time after the Distribution Date and at or prior
to 5:00 p.m. (Eastern time) on July 29, 2021 (unless such date is extended prior thereto by the
Board of Directors of the Company), at the office or offices of the Rights Agent designated for
such purpose, or its successor as Rights Agent, one fully paid, non-assessable share of Common
Stock (the “Common Stock”) of the Company, at a purchase price of $39.00 per share (the
“Purchase Price”), upon presentation and surrender of this Rights Certificate with the Form
of Election to Purchase and related Certificate properly completed and duly executed. The number
of Rights evidenced by this Rights Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the
number and Purchase Price as of July 29, 2011, based on the Common Stock as constituted at such
date.

 

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

 

Exhibit A — Page 1

 

As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of
Common Stock or other securities which may be purchased upon the exercise of the Rights evidenced
by this Rights Certificate are subject to modification and adjustment upon the happening of certain
events, including the Triggering Events.

This Rights Certificate is subject to all of the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of
rights include the temporary suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written request to the
Rights Agent. Terms used herein with initial capital letters and not defined herein are used
herein with the meanings ascribed thereto in the Rights Agreement.

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

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

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at its option at a redemption price of $0.001 per Right at any time
before the earlier of (i) the Close of Business on the Stock Acquisition Date and (ii) the close of
Business on the Expiration Date. In addition, under certain circumstances after any Person becomes
an Acquiring Person, the Rights may be exchanged, in whole or in part, for shares of the Common
Stock, or other property of or from the Company having essentially the same value or economic
rights as such shares.

The Company shall not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company may pay to the registered holder of this
Rights Certificate at the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of a share of Common Stock (determined as provided
in the Rights Agreement). The Company reserves the right to require prior to the occurrence of a
Triggering Event that a number of Rights be exercised so that only whole shares of Common Stock
will be issued.

 

Exhibit A — Page 2

 

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

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

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

Dated as of _____, 20_____

	 	 	 	 	 	 	 	 

	ATTEST:	 	INTERPHASE CORPORATION	 
	 
	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 
	 	 	 	 	 
	Secretary	 	 	 	Title:	 
	 
	 	 	 	 	 	 	 
	Countersigned:	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	COMPUTERSHARE TRUST COMPANY, N.A.,
as Rights Agent	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 

	 	Authorized Signature	 	 	 	 	 

 

Exhibit A — Page 3

 

[Form of Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if

such holder desires to transfer the

Rights Certificate.)

FOR VALUE RECEIVED, ____________________________________ hereby sells, assigns and
transfers unto _______________________________________________________________________________________________________

 

(Please print name and address of transferee)

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

Dated: _____, 20_____

_____________________________________________

              
                     
        Signature

Signature Guaranteed:

 

Exhibit A —  Page 4

 

Certificate

The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated: _____, 20_____

_________________________________________

Signature

Signature Guaranteed:

NOTICE

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

Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved medallion signature
program) pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.

 

Exhibit A — Page 5

 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise Rights

represented by the Rights Certificate.)

To: INTERPHASE CORPORATION:

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

Please insert social security

or other identifying number

 

(Please print name and address)

 

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

Please insert social security

or other identifying number

 

(Please print name and address)

 

 

Dated: _____, 20_____

_______________________________________

Signature

Signature Guaranteed:

 

Exhibit A — Page 6

 

EXHIBIT B

SUMMARY OF RIGHTS TO PURCHASE

COMMON SHARES

The Board of Directors (the “Board”) of Interphase Corporation (the “Company”)
has declared a dividend of one common share purchase right (a “Right”) for each outstanding
share of common stock, par value $0.10 per share (the “Common Stock”), of the Company. The
dividend is payable on August 9, 2011 (the “Record Date”), to the shareholders of the
Company of record at the close of business on the Record Date. Each Right entitles the shareholder
to purchase from the Company one share of Common Stock at a price of $39.00 per share (the
“Purchase Price”), subject to adjustment under the terms of the Rights Agreement (as
defined below). The complete description and terms of the Rights are set forth in a Rights
Agreement, dated as of July 29, 2011, as it may be amended from time to time (the “Rights
Agreement”), between the Company and Computershare Trust Company, N.A., as the rights agent
thereunder (the “Rights Agent”).

The Rights Agreement is intended to preserve for the Company’s shareholders the long-term
value of the Company in event of a potential takeover of the Company or other action which appears
to the Board to be coercive, unfair or otherwise not in the best interests of the Company and its
shareholders. The Rights are intended to deter such a takeover or other action by a person or
group not approved by the Board by causing substantial dilution to such person or group. The
Rights are not intended to, and should not, interfere with any business combination transaction
approved by the Board.

Upon and after the Record Date, the Rights will be attached to all outstanding shares of
Common Stock and will be represented by the certificates representing such shares. No separate
certificates evidencing the Rights (the “Rights Certificates”) will be distributed before
the Distribution Date (as defined below). The Rights will separate from the Common Stock, and the
“Distribution Date” will occur, upon the earlier of:

(1) ten business days following the date of the first public announcement (the
“Stock Acquisition Date”) that a Person (as defined in the Rights Agreement) or
group of affiliated or associated Persons has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock (an
“Acquiring Person”), or

(2) ten business days (or such later date as the Board shall determine) following the
commencement of a tender or exchange offer that, if consummated, would result in a Person
becoming an Acquiring Person.

 

 

 

Until the Distribution Date:

(a) the Rights may be transferred only with the shares of Common Stock, and will be
evidenced solely by the certificates representing shares of Common Stock and will be
transferred with, and only with, such certificates;

(b) the certificates representing shares of Common Stock issued after the Record Date,
but before the earlier of the Distribution Date and the Expiration Date (as defined below),
will contain a legend evidencing the Rights and incorporating the Rights Agreement by
reference; and

(c) the transfer of any certificates representing shares of Common Stock in respect of
which Rights have been issued will also constitute the transfer of the Rights associated
with such shares of the Common Stock represented by such certificates.

The Rights are not exercisable until the Distribution Date (if one occurs) and will expire at
the close of business on July 29, 2021 (the “Final Expiration Date”), or such earlier or
later date as the Board establishes under certain circumstances, unless redeemed or exchanged
earlier by the Company as described below. The date on which the Rights cease to exist because
they expire (on the Final Expiration Date) or because they are either redeemed or exchanged by the
Company before the Final Expiration Date is the “Expiration Date.” From and after the
Distribution Date, Rights (other than those that are void, as described below) will be exercisable
upon payment of the then-applicable Purchase Price in cash and satisfaction of the other exercise
conditions set forth in the Rights Agreement. Before the occurrence of a Triggering Event (as
defined below), the Company may require that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Common Stock will be issued.

As soon as practicable after the Distribution Date, the Rights Certificates will be mailed to
holders of record of Common Stock as of the close of business on the Distribution Date; and
thereafter the Rights will be represented or evidenced only by the separate Rights Certificates.
Except as otherwise determined by the Board, only shares of Common Stock outstanding before the
Distribution Date will be issued with Rights.

Upon a Stock Acquisition Date, each holder of a Right (other than an Acquiring Person, certain
related parties and transferees) will thereafter have the right to receive, upon exercise of the
Right, shares of Common Stock (or, in certain circumstances, cash, property or other securities of
the Company) having a value equal to two times the Purchase Price. For example, at the Purchase
Price of $39.00 per Right, each Right not owned by an Acquiring Person (or certain related parties
or transferees) on or after the Stock Acquisition Date would entitle its holder to purchase $78.00
worth of shares of Common Stock (or other consideration, as noted above) for $39.00. Assuming that
the average market price per share of Common Stock for the preceding 30 Trading Days (as defined in
the Rights Agreement) was $9.75 at such time, the
holder of each valid Right would be entitled to purchase eight shares of Common Stock for $39.00.
On and after the Stock Acquisition Date, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring Person (and certain
related parties and transferees) will be void.

 

Exhibit B — Page 2

 

If at any time following a Stock Acquisition Date:

(1) the Company is acquired in a merger or business combination transaction in which it
is not the surviving corporation,

(2) the Company is the surviving corporation in a business combination transaction, but
all or part of the outstanding shares of Common Stock are changed or exchanged for stock or
other securities of any Person or cash or any other property, or

(3) more than 50% of the Company’s combined assets, cash flow or earning power is sold
or transferred,

in each case other than certain business combination transactions with, or sales of assets or
earning power by or to, subsidiaries of the Company as specified in the Rights Agreement, then each
holder of a Right (except Rights that are void as described above) shall thereafter have the right
to receive, upon exercise thereof, common stock of the acquiring company (or, in certain
circumstances, an economically equivalent security or securities) having a value equal to two times
the exercise price of the Right. The Stock Acquisition Date and the events described above in this
paragraph are collectively referred to in this Summary as the “Triggering Events.”

To prevent dilution, the Purchase Price payable, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time to time:

(1) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock,

(2) if all holders of the Common Stock are granted certain rights, options or warrants
to subscribe for Common Stock or securities convertible into Common Stock at less than the
current market price of the Common Stock, or

(3) upon the distribution to all holders of the Common Stock of evidences of
indebtedness, cash (excluding any regular periodic cash dividends), assets (other than
dividends payable in Common Stock) or subscription rights or warrants (other than those
referred to in clause (2) above).

 

Exhibit B — Page 3

 

With certain exceptions, no adjustments to the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price. The Company is not obligated to
issue any fractional shares of Common Stock; in lieu of issuing a fractional share, the Company may
make a payment in cash based on the market price of the Common Stock on the Trading Day immediately
preceding the date of exercise.

At any time before the earlier of the Stock Acquisition Date and the Expiration Date, the
Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right, subject to
adjustment as described in the Rights Agreement. The redemption amount may be paid in cash, shares
of Common Stock or other consideration deemed appropriate by the Board. The redemption of the
Rights may be made effective at such time, on such basis and subject to conditions as the Board, in
its sole discretion, may establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate, and the only right of the holders of Rights will be to receive
the redemption amount.

At any time after any Person becomes an Acquiring Person, and before any Person or group of
affiliated or associated Persons has become the beneficial owner of 50% of more of the outstanding
shares of Common Stock, the Company (by action of the Board) may exchange all or part of the then
outstanding and exercisable Rights (excluding certain Rights that have become void under the
Rights Agreement) for Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar transaction that
occurred after the date of the Rights Agreement (such applicable exchange ratio, the “Exchange
Ratio”). Immediately upon the action of the Board ordering the exchange of any Rights, without
any further action and without any prior notice, the right to exercise such Rights will terminate,
and the only right thereafter of a holder of such Rights will be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company will promptly give public notice of any such exchange. In any such exchange,
the Company, at its option, may substitute for any shares of Common Stock exchangeable for a Right
(1) Common Stock Equivalents (as defined in the Rights Agreement), (2) cash, (3) debt securities of
the Company, (4) other assets, or (5) any combination of the foregoing, in any event having an
aggregate value, as determined by the Board, equal to the current market value of one share of
Common Stock on the Trading Day immediately preceding the date of the effectiveness of such
exchange.

Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Company, including the right to vote or to receive dividends.

Any of the provisions of the Rights Agreement may be amended or supplemented by the Board,
without the consent or approval of any holders of Rights, at any time while the Rights are
redeemable. After the Rights are no longer redeemable, the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to correct or supplement any provision of the Rights
Agreement which may be defective or inconsistent with any other provision, to shorten or lengthen
any time period or to amend or supplement the Rights Agreement as deemed necessary
or desirable; except that no such amendment or supplement may adversely affect the interests of the
holders of Rights as such (other than an Acquiring Person) or cause the Rights again to become
redeemable.

 

Exhibit B — Page 4

 

The Board will have the exclusive power and authority to administer the Rights Agreement and
to exercise all rights and powers specifically granted to the Board or to the Company therein, or
as may be necessary or advisable in the administration of the Rights Agreement, including the right
and power to interpret the provisions of the Rights Agreement and to make all determinations deemed
necessary or advisable for the administration of the Rights Agreement (including any determination
to redeem or not redeem the Rights or to amend or not amend the Rights Agreement). All such
actions, calculations, interpretations and determinations (including any omission with respect to
any of the foregoing) which are done or made by the Board in good faith will be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights and all other parties and
will not subject the Board to any liability to any person, including the Rights Agent and the
holders of the Rights.

THIS SUMMARY DESCRIPTION DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS HEREBY INCORPORATED BY REFERENCE.

The Company has filed a copy of the Rights Agreement with the Securities and Exchange
Commission as an Exhibit to a Current Report on Form 8-K with a report date of July 29, 2011. A
copy of the Rights Agreement is also available free of charge from the Company.

 

Exhibit B — Page 5Exhibit 4.1

Exhibit 4.1

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE
STATE SECURITIES LAWS.

WARRANT TO PURCHASE

COMMON STOCK OF PROSPECT GLOBAL RESOURCES INC.

PROSPECT GLOBAL RESOURCES INC., a Nevada corporation (the “Company”), HEREBY CERTIFIES THAT,
for value received, COR Capital LLC, as investment advisor on behalf of the COR US Equity Income
Fund, or registered assigns, is entitled to purchase up to a number of shares of Common Stock
(adjusted as below provided) calculated by dividing $200,000 by the Warrant Price. As used herein,
the term “Common Stock” means the Company’s Common Stock, par value $0.001 per share, as
constituted on the date of original issue of this Warrant, and any shares of capital stock or other
property into which such shares of Common Stock may thereafter be changed or that may be issued in
respect of, in exchange for, or in substitution of such Common Stock by reason of any transaction
described in Section 8.1(a) or 8.3. As used herein, the term “Warrant Price” means the lower of
(i) $3.00 and (ii) $500,000 divided by the total number of shares of Common Stock issued upon
conversion of the Convertible Note (including pursuant to Section 6.1 thereof). As used herein,
the term “Convertible Note” means the Convertible Secured Promissory Note dated March 11, 2011, in
the amount of $500,000 issued by the Company to COR Capital LLC, as investment advisor on behalf of
the COR US Equity Income Fund. As used herein, the term “Warrants” means this Warrant and all
warrants delivered in substitution or exchange for such warrants. The term “Warrant” means one of
the Warrants.

Section 1. Term of Warrants; Exercise of Warrants. Subject to the terms hereof, the holder
of this Warrant shall have the right, at any time hereafter until 5:00 p.m., Denver, Colorado time,
on April 20, 2012 (the “Termination Date”), to purchase from the Company up to the number of shares
of Common Stock which such holder may at the time be entitled to purchase pursuant to this Warrant,
upon surrender to the Company, at its address for receipt of notices pursuant to Section 11 hereof,
of this Warrant, together with the election to purchase form at the end hereof duly completed and
signed, accompanied by payment to the Company of the Warrant Price (as defined in and determined in
accordance with the provisions of Sections 7 and 8) for the number of shares with respect to which
this Warrant is then exercisable. Payment of the aggregate Warrant Price shall be made either by
(i) certified or cashier’s check or wire transfer or (ii) tendering Warrant Shares (as defined
below) having a Fair Market Value (as defined below) equal to the Warrant Price. As used herein,
the term “Business Day” means any day other than a Saturday or Sunday or a day on which commercial
banks are required or authorized by law to be closed in either New York, New York or Denver,
Colorado.

 

 

 

Notwithstanding any provisions herein to the contrary, if the fair market value of one share
of Common Stock is greater than the Warrant Price for one share of Common Stock (at the date of
calculation, as set forth below), in lieu of exercising this Warrant for cash, the holder may elect
to receive shares of Common Stock equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled), computed using the following formula:

WS = WCS (FMV-WP)

FMV

WHERE:

	 	WS	 	equals the number of Warrant Shares to be issued to the Holder;

	 
	 	WCS	 	 equals the number of shares of Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being canceled (at the date of such calculation);

	 
	 	FMV	 	 equals the Fair Market Value (as defined below) of one share of
Common Stock (at the date of such calculation); and

	 
	 	WP	 	 equals the per share Warrant Price (as adjusted to the date of
such calculation) of the Warrant.

As used in this Section, the term “Fair Market Value” of each Warrant Share as of any date
shall be (i) if the Common Stock is not then listed on a national securities exchange the volume
weighted average price per share of Common Stock (as reported on the exchange, market or quotation
system on which shares of Common Stock are admitted to trading or listed) for the five consecutive
trading days ending on the Business Day prior to such exercise, (ii) if the Common Stock is then
listed on a national securities exchange, the last sale price in respect of the Common Stock on the
Nasdaq Global Market or any national securities exchange on which the Common Stock is then listed
at the close of trading on the Business Day prior to such exercise or (iii) if not so available,
Fair Market Value shall be determined as follows: (A) if the parties hereto can agree on the Fair
Market Value, such agreed upon value shall constitute the Fair Market Value; (B) if the parties
cannot reach an agreement as to the Fair Market Value within five (5) Business Days from the onset
of negotiations, then the Appraised Value (as defined below) shall constitute the Fair Market
Value. “Appraised Value” per Warrant Share as of a date specified herein shall mean the value of
such a share as of such date as determined by a nationally recognized valuation or appraisal firm
(an “Appraiser”) selected jointly by the holder of this Warrant and the Company. If the Company
and the holder of this Warrant cannot agree on a mutually acceptable Appraiser, then the Company
and the holder of this Warrant shall each choose one such Appraiser and the respective chosen firms
shall jointly select a third Appraiser, which shall make the determination. The Company and the
Warrant Holders shall each pay half of the costs and fees of each such Appraiser, and the decision
of the Appraiser making such determination of Appraised Value shall be final and binding on the
Company and all affected holders of Warrants. No discount shall be applied on account of any lack
of liquidity of the Common Stock, the Warrant or the Warrant Shares, including the fact that the
Warrants or Warrant Shares may constitute “restricted securities” for securities law purposes.

 

2

 

Upon such surrender of this Warrant and payment of such Warrant Price as aforesaid, the
Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written
order of the holder of this Warrant and in such name or names as such holder may designate, a
certificate or certificates for the number of full shares of Common Stock so purchased, together
with cash, as provided in Section 8, with respect to any fractional shares of Common Stock
otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have
been issued and any person so designated to be named therein shall be deemed to have become a
holder of such shares of Common Stock as of the close of business on the date of the surrender of
this Warrant and, if applicable, payment of the Warrant Price as aforesaid, notwithstanding that
the certificates representing such shares shall not actually have been delivered or that the stock
transfer books of the Company shall then be closed.

This Warrant shall be exercisable, at the election of the holder of this Warrant, either in
full or from time to time in part. In the event that this Warrant is exercised with respect to
less than the aggregate number of shares of Common Stock this Warrant then entitles such holder to
purchase, the Company shall deliver to or upon the order of such holder hereof a new Warrant
evidencing the rights of such holder to purchase the unpurchased shares of Common Stock then called
for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
In the alternative, at the request of the holder upon any partial exercise of this Warrant,
appropriate notation may be made on this Warrant and the same shall be returned to such holder.

Section 2. Payment of Taxes. The Company shall pay all documentary stamp taxes, if any,
attributable to the initial issuance of the shares of Common Stock upon exercise of this Warrant,
provided that the Company shall not be required to pay any tax or taxes which may be payable with
respect to any secondary transfer of a Warrant or the shares of Common Stock issued upon exercise
of any Warrant, and in such case the Company shall not be required to issue or deliver any
certificates for shares of Common Stock, until the person requesting the same has paid to the
Company the amount of such tax or has established to the Company’s reasonable satisfaction that
such tax has been paid or that no such tax is due.

Section 3. Transferability.

Section 3.1 Registration. The Warrants shall be numbered and shall be registered on the
books of the Company maintained for such purpose (the “Warrant Register”).

Section 3.2 Transfer. Subject to compliance with Section 3.3, this Warrant and all rights
hereunder are transferable upon delivery hereof together with the assignment form at the end hereof
duly completed and signed by the holder hereof or such holder’s duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or authority to
transfer, provided that any transferee of this Warrant shall expressly agree to be bound by the
terms and conditions hereof. Upon any registration of transfer of this Warrant, the Company shall
execute and deliver a new Warrant or Warrants as may be requested by such holder for the same
aggregate number of shares of Common Stock as this Warrant. As used herein, the term “Warrant
Shares” shall mean, collectively, the shares of Common Stock that may be acquired pursuant to the
exercise of this Warrant and any securities issued as a dividend on or other distribution with
respect to or in exchange or replacement for or upon any subdivision of any of said shares of
Common Stock.

 

3

 

Section 3.3 Limitations on Transfer of the Warrants and the Warrant Shares. If, at the time
of any transfer of this Warrant or any Warrant Shares, this Warrant or such Warrant Shares, as the
case may be, are not registered under the United States Securities Act of 1933, as amended (the
“Securities Act”), the Company may require as a condition precedent to allowing such transfer that
the holder or transferee of this Warrant or such Warrant Shares furnish to the Company such
information as, in the reasonable opinion of counsel to the Company, is necessary in order to
establish that such transfer or exchange may be made without registration under the Securities Act,
including a written statement that such holder or transferee will not sell or otherwise dispose of
this Warrant or such Warrant Shares purchased or acquired by him in any transaction which would
violate the Securities Act or any other securities laws.

Section 3.4 Legend on Warrant Shares. Each certificate for shares of Common Stock initially
issued upon exercise of this Warrant, unless at the time of exercise such shares are registered
under the Securities Act, shall bear the following legend:

	 	 	“The securities represented by this Certificate have not been registered or
qualified under the Securities Act of 1933 or the securities laws of any other
jurisdiction and may not be sold, exchanged, hypothecated or transferred in any
manner except in compliance with said Act and other applicable laws.”

Any certificate issued at any time in exchange or substitution for any certificate bearing such
legend (except a new certificate issued upon completion of a sale or transfer pursuant to a
registration statement under the Securities Act of the securities represented thereby or pursuant
to rule 144 under the Securities Act) shall also bear the above legend unless counsel for the
Company renders a written legal opinion to the Company that the securities represented thereby need
no longer be subject to such restriction.

Section 4. Exchange of Warrant Certificate. Any Warrant certificate may be exchanged for
another certificate or certificates entitling the holder thereof to purchase a like aggregate
number of shares of Common Stock as this certificate then entitles such holder to purchase. Any
holder of a Warrant desiring to exchange such Warrant certificate shall make such request in
writing delivered to the Company, and shall surrender, properly endorsed, the certificate
evidencing the Warrant to be so exchanged. Thereupon, the Company shall execute and deliver one or
more new Warrant certificates as so requested.

Section 5. Mutilated or Missing Warrant. In case any Warrant certificate shall be mutilated,
lost, stolen or destroyed, the Company shall, at the request of the holder thereof, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated certificate or
certificates, or in lieu of and substitution for the certificate or certificates lost, stolen or
destroyed, a new Warrant certificate or certificates of like tenor and representing an equivalent
right or interest, but only upon receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Warrant and indemnity, if requested, satisfactory to the Company. In
the case of the initial Purchaser, the initial Purchaser’s unsecured agreement of indemnity shall
be deemed satisfactory to the Company.

 

4

 

Section 6. Requirement of Availability of Shares of Common Stock. There are authorized and
available for issuance, and so long as any Warrant remains outstanding the Company shall at all
times keep authorized and available for issuance, such number of shares of
the Company’s authorized but unissued Common Stock as will be sufficient to permit the exercise in
full of all outstanding Warrants so as to ensure that the authorized capital of the Company
comprises sufficient unissued shares of Common Stock for issuance upon the exercise in full of all
outstanding Warrants and that such Common Stock may be issued by the Board of Directors of the
Company without any further authorization by the shareholders of the Company. Every transfer agent
for the Common Stock and other securities of the Company issuable upon the exercise of the Warrants
shall be irrevocably authorized and directed at all times to keep available such number of
authorized shares and other securities as will be sufficient for such purpose. The Company shall
supply any such transfer agent with duly executed stock and other certificates for such purpose and
shall provide or otherwise make available any cash which may be payable as provided in Section 9.

Section 7. Adjustment of Warrant Price and Number of Shares. The number and kind of
securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to
adjustment from time to time upon the happening of certain events, as follows:

Section 7.1 Adjustments. The number of shares purchasable upon the exercise of this Warrant
and the Warrant Price shall be subject to adjustment as follows:

(a) In case the Company shall (i) pay a dividend in Common Stock or make a distribution in
Common Stock, (ii) pay a liquidating cash dividend as so denominated in accordance with generally
accepted accounting principles, (iii) subdivide its outstanding Common Stock, (iv) combine its
outstanding Common Stock into a smaller number of shares of Common Stock, or (v) issue by
reclassification of its Common Stock, spin-off, split-up, recapitalization, merger, consolidation
or any similar corporate event or arrangement other securities of the Company, the number of shares
of Common Stock purchasable upon exercise of this Warrant immediately prior thereto shall be
adjusted so that the holder of this Warrant shall be entitled to receive the kind and number of
shares or other securities of the Company which it would have owned or would have been entitled to
receive after the happening of any of the events described above had this Warrant been exercised
immediately prior to the happening of such event and any record date with respect thereto. Any
adjustment made pursuant to this subsection (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such event.

(b) No adjustment in the number of shares of Common Stock purchasable hereunder shall be
required unless such adjustment would require an increase or decrease of at least one percent in
the number of shares of Common Stock then purchasable upon the exercise of this Warrant, provided
that any adjustments which by reason of this subsection (d) are not required to be made immediately
shall be carried forward and taken into account in any subsequent adjustment.

(c) Whenever the number of shares of Common Stock purchasable upon the exercise of this
Warrant is increased or decreased as provided in this Section 8, the Warrant Price payable upon
exercise of this Warrant shall be adjusted by multiplying the Warrant Price in effect immediately
prior to such adjustment by a fraction, the numerator of which shall be the number of shares of
Common Stock purchasable upon exercise of this Warrant immediately prior to such adjustment, and
the denominator of which shall be the number of shares so purchasable immediately after such
adjustment.

 

5

 

(d) Whenever the number of shares of Common Stock purchasable upon the exercise of this
Warrant or the Warrant Price is adjusted as herein provided, the Company shall cause to be promptly
mailed to the holder by first-class mail, postage prepaid, notice of such adjustment or adjustments
and a certificate of an executive officer of the Company setting forth the number of shares of
Common Stock purchasable upon the exercise of this Warrant and the Warrant Price after such
adjustment, a brief statement of the facts requiring such adjustment and the computation by which
such adjustment was made.

(e) If, as a result of an adjustment made pursuant to this Section 8, the holder of this
Warrant shall become entitled to purchase any shares of the Company other than Common Stock,
thereafter the number of such other shares so purchasable upon exercise of this Warrant and the
Warrant Price of such shares shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions of this Section 8 with respect to the
shares of Common Stock.

Section 7.2 No Adjustment in Certain Cases. No adjustments to the number of shares of Common
Stock issuable upon the exercise of this Warrant or the Warrant Price shall be made in connection
with the issuance of (a) Common Stock upon exercise of any of the Warrants or (b) stock options
granted to employees and directors of the Company for the purchase of a number of shares of Common
Stock as may from time to time be duly authorized by the Board of Directors.

Section 7.3 Statement on Warrants. This Warrant shall entitle the holder hereof to purchase
such number of shares of Common Stock at such Warrant Price as may be determined in accordance with
the terms hereof after giving effect to any adjustments in the number or kind of shares purchasable
upon the exercise hereof or the Warrant Price, as the case may be, notwithstanding that this
Warrant certificate may continue to express the same price and number and kind of shares as are
initially stated herein.

Section 7.4 No Dilution or Impairment. The Company will not, through any reorganization,
transfer of assets, consolidation, merger, dissolution or otherwise, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed hereunder by the Company,
but will at all times in good faith assist in carrying out all of the provisions of this Section 8.

Section 8. Fractional Interests. The Company shall not be required to issue fractional
shares of Common Stock on the exercise of any Warrant. If any fraction of a Share would, except
for the provisions of this Section 9, be issuable on the exercise of this Warrant (or specified
portions thereof), the Company at its election (i) shall pay an amount in cash equal to the then
current market price of a share of Common Stock (as determined in good faith by the Board of
Directors of the Company) multiplied by such fraction, or (ii) shall issue a full share of Common
Stock in lieu of such fractional share.

Section 9. No Rights as Shareholder; Notices. Nothing contained in this Warrant shall be
construed as conferring upon the holder or its transferees any rights as a shareholder of the
Company, including the right to vote, receive dividends, consent or receive notices as a
shareholder with respect to any meeting of shareholders for the election of directors of the
Company or any other matter.

 

6

 

Section 10. Notices. Any notice by the Company or the holder of this Warrant shall be in
writing and shall be deemed to have been duly given if hand delivered on the date of such delivery,
or on the Business Day after timely delivery to a recognized overnight courier that guarantees
overnight delivery, (a) if to the Company, at 600 17th Street, Suite 2800-South, Denver,
CO 80202, Attention: President, or at such other address as the Company may designate by notice to
each holder of Warrants at the time outstanding, with a copy to Jeff Knetsch, Brownstein Hyatt
Farber Schreck, LLP, Suite 2100, 410 17th Street, Denver, Colorado 80202, and (b) if to
any holder of Warrants, at the address of such holder as it appears on the Warrant Register.

Section 11. Successors. This Warrant shall bind and inure to the benefit of the Company and
its permitted successors and assigns hereunder and, in addition, shall inure to the benefit of and
be enforceable by all holders from time to time of the Warrants.

Section 12. Applicable Law. This Warrant shall be enforced in accordance with, and the
rights of the Company and the holder of this Warrant shall be governed by, the laws of the State of
Colorado (without regard to conflicts of laws principles thereof).

Section 13. Benefits of this Agreement. Nothing in this Warrant shall be construed to give
to any person or corporation other than the Company and the holder of this Warrant any legal or
equitable right, remedy or claim under this Warrant and this Warrant shall be for the sole and
exclusive benefit of the Company and the holder hereof.

Section 14. Availability of Information. As long as the Company is required to comply with
the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will use it
reasonable best efforts to comply with all public information reporting requirements of the SEC
(including Rule 144 promulgated under the Securities Act) from time to time in effect and relating
to the availability of an exemption from the Securities Act for the sale of any such securities.
The Company will also cooperate with each holder of any Warrants in supplying such information as
may be necessary for such holder to complete and file any information reporting forms presently or
hereafter required by the SEC as a condition to the availability of an exemption from the
Securities Act for the sale of restricted securities.

Section 15. Amendment. This Warrant may be amended by the Company in any respect at any time
or from time to time upon the written consent of the holder of this Warrant.

IN WITNESS WHEREOF, the Company has executed this Warrant.

	 	 	 	 	 
	 	PROSPECT GLOBAL RESOURCES INC.

 	 
	 	By:  	 	 
	 	 	Patrick Avery 	 
	 	 	Chief Executive Officer 	 
	 

 

7

 

PROSPECT GLOBAL RESOURCES INC.

ELECTION TO PURCHASE

PROSPECT GLOBAL RESOURCES INC.

600 17th Street, Suite 2800-South

Denver, CO 80202

Attn: Chief Executive Officer

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the
Warrant to which this Election to Purchase is attached for, and to purchase thereunder,
_____ shares of Common Stock (or other securities) of the Company provided for therein, and
herewith makes payment for the Warrant Price by (check one of the following):

o certified or cashiers check or wire transfer; or

o tendering Warrant Shares having a Fair Market Value equal to the Warrant Price;

all at the price and on the terms specified in this Warrant and requests that certificates for said
shares (or other securities) be issued in the name of:

 

 

(Please Print Name and Address)

and, if said number of shares shall not be all the shares of Common Stock purchasable hereunder,
that a new Warrant certificate for the balance of said shares purchasable under the said Warrant be
registered in the name of the undersigned holder or its nominee as below indicated and delivered to
the address stated below:

Dated: __________, _____

Name of holder or

Nominee (Please Print): ____________________________________

Address: ____________________________________

Signature: ____________________________________

Signature Guaranteed:

 

8

 

(To be signed only upon assignment of Warrant)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

 

(Name and Address of Assignee must be Printed or Typewritten)

the within Warrant, hereby irrevocably constituting and appointing _____________
Attorney to transfer said Warrant on the books of Prospect Global Resources Inc. with full power of
substitution in the premises.

Dated: __________, _____

 

Signature of Registered Holder

Signature Guaranteed:

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