Document:

exv10w65

Exhibit 10.65

 

REGISTRATION RIGHTS AGREEMENT

Dated as of October 15, 2009

between

FINISAR CORPORATION

and

PIPER JAFFRAY & CO.

 

 

     REGISTRATION RIGHTS AGREEMENT, dated as of October 15, 2009 (the “Agreement”), between Finisar
Corporation, a Delaware corporation (the “Company”), and Piper Jaffray & Co (the “Initial
Purchaser”), who are parties to that certain Purchase Agreement, dated October 8, 2009 (the
“Purchase Agreement”). In order to induce the Initial Purchaser to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth in this Agreement.
The execution of this Agreement is a condition to the closing under the Purchase Agreement.

     The Company agrees with the Initial Purchaser, (i) for its benefit as Initial Purchaser and
(ii) for the benefit of the beneficial owners (including the Initial Purchaser) from time to time
of the Securities (as defined herein) and the beneficial owners from time to time of the Underlying
Common Stock (as defined herein) issued upon conversion of the Securities (each of the foregoing a
“Holder” and together the “Holders”), as follows:

     SECTION 1. Definitions. Capitalized terms used herein without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings:

     “Additional Interest Amount” has the meaning set forth in Section 2(e) hereof.

     “Affiliate” means with respect to any specified person, an “affiliate,” as defined in Rule
144, of such person.

     “Amendment Effectiveness Deadline” has the meaning set forth in Section 2(d) hereof.

     “Automatic Shelf Registration Filing Date” has the meaning set forth in Section 2(a).

     “Automatic Shelf Registration Statement” has the meaning set forth in Section 2(a).

     “Business Day” means any day, except a Saturday, Sunday or legal holiday on which banking
institutions in The City of New York are authorized or obligated by law or executive order to
close.

     “Common Stock” means the shares of common stock, $0.001 par value per share, of the Company,
together with the rights evidenced by such common stock to the extent provided in the Rights
Agreement, and any other common shares as may constitute “Common Stock” for purposes of the
Indenture, including the Underlying Common Stock.

     “Deferral Notice” has the meaning set forth in Section 3(h) hereof.

     “Deferral Period” has the meaning set forth in Section 3(h) hereof.

     “Effectiveness Deadline” has the meaning set forth in Section 2(a) hereof.

     “Effectiveness Period” means the period commencing on the first date that (i) a Shelf
Registration Statement is declared effective under the Securities Act or (ii) an Automatic Shelf
Registration Statement becomes effective and ending on the date that all Securities and the
Underlying Common Stock have ceased to be Registrable Securities.

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     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

     “Filing Deadline” has the meaning set forth in Section 2(a) hereof.

     “FINRA” has the meaning set forth in Section 3(p) hereof.

     “Holder” has the meaning set forth in the second paragraph of this Agreement.

     “Indenture” means the Indenture, dated as of October 15, 2009, between the Company and Wells
Fargo Bank, N.A., as trustee, pursuant to which the Securities are being issued.

     “Initial Purchaser” has the meaning set forth in the preamble hereof.

     “Interest Payment Date” means each April 15 and October 15.

     “Issue Date” means the first date of original issuance of the Securities.

     “Issuer Free Writing Prospectus” has the meaning set forth in Section 2(f) hereof.

     “Material Event” has the meaning set forth in Section 3(h) hereof.

     “Notice and Questionnaire” means a written notice delivered to the Company containing
substantially the information called for by the Selling Securityholder Notice and Questionnaire
attached as Annex A to the Offering Memorandum of the Company, dated October 8, 2009, relating to
the offer of the Securities.

     “Notice Holder” means, on any date, any Holder that has delivered a Notice and Questionnaire
to the Company on or prior to such date.

     “person” means an individual, partnership, corporation, trust or unincorporated organization,
or a government or agency or political subdivision thereof.

     “Purchase Agreement” has the meaning set forth in the preamble hereof.

     “Prospectus” means a prospectus included in a Shelf Registration Statement (including, without
limitation, an “issuer free writing prospectus,” as such term is defined in Rule 433 under the
Securities Act and a prospectus that discloses information previously omitted pursuant to Rule 430A
under the Securities Act), as amended or supplemented, and all materials incorporated by reference
in such prospectus or free writing prospectus.

     “Record Holder” means with respect to any Interest Payment Date relating to any Securities or
Underlying Common Stock as to which any Additional Interest Amount has accrued, the registered
holder of such Security or Underlying Common Stock on the April 1 or October 1 immediately
preceding the Interest Payment Date.

     “Registrable Securities” means the Securities until such Securities have been converted into
or exchanged for the Underlying Common Stock and, at all times subsequent to any such conversion,
the Underlying Common Stock and any securities into or for which such Underlying

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Common Stock has
been converted or exchanged, and any security issued with respect thereto upon any share dividend,
split or similar event until, in the case of any such security, (A) the earliest of (i) one year
from the latest date of original issuance of the Securities, (ii) its effective registration under
the Securities Act and resale in accordance with a Shelf Registration Statement, (iii) the
expiration of the holding period that would be applicable thereto for non-affiliates pursuant to
Rule 144 under the Securities Act (as in effect on the date of its transfer), or (iv) its cessation
of being outstanding, and (B) as a result of the event or circumstance described in any of the
foregoing clauses (i) through (iv), the legend with respect to transfer restrictions required under
the Indenture is removed or removable in accordance with the terms of the Indenture or such legend,
as the case may be.

     “Registration Default” has the meaning set forth in Section 2(e) hereof.

     “Registration Default Period” has the meaning set forth in Section 2(e) hereof.

     “Restricted Transfer Default” has the meaning set forth in Section 2(e) hereof.

     “Rights Agreement” means the Rights Agreement dated September 25, 2002 between the Company and
American Stock Transfer & Trust Company, as rights agent.

     “Rule 144” means Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the SEC.

     “Rule 144A” means Rule 144A under the Securities Act, as such Rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the SEC.

     “SEC” means the Securities and Exchange Commission.

     “Securities” means the 5.0% Convertible Senior Subordinated Notes due 2029 of the Company to
be purchased pursuant to the Purchase Agreement, including any securities purchased by the Initial
Purchaser upon exercise of its option to purchase additional securities.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the SEC thereunder.

     “Shelf Registration Statement” has the meaning set forth in Section 2(a) hereof, including
amendments to such registration statement, all exhibits and all materials incorporated by reference
in such registration statement.

     “Special Counsel” means Wilson Sonsini Goodrich & Rosati, Professional Corporation, or one
such other successor counsel as shall be specified by the Holders of a majority of the Registrable
Securities, but which may, with the written consent of the Initial Purchaser (which shall not be
unreasonably withheld), be another nationally recognized law firm experienced in securities law
matters designated by the Company. For purposes of determining Holders of a majority of the
Registrable Securities in this definition, Holders of Securities shall be deemed to
be the Holders of the number of shares of Underlying Common Stock into which such Securities
are or would be convertible as of the date the consent of the Initial Purchaser is requested.

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     “TIA” means the Trust Indenture Act of 1939, as amended.

     “Trustee” means Wells Fargo Bank, N.A., the Trustee under the Indenture.

     “Underlying Common Stock” means the Common Stock into which the Securities are convertible or
issued upon any such conversion.

     “WKSI” has the meaning set forth in Section 2(a) hereof.

     SECTION 2. Shelf Registration. (a) The Company shall prepare and file or cause to be
prepared and filed with the SEC, as soon as practicable but in any event no later than 90 days
after the Issue Date (the “Filing Deadline”), a registration statement for an offering to be made
on a delayed or continuous basis pursuant to Rule 415 of the Securities Act registering the resale
from time to time by Holders thereof of all of the Registrable Securities (a “Shelf Registration
Statement”). The Shelf Registration Statement shall be on Form S-3 or another appropriate form
permitting registration of the Registrable Securities for resale by the Holders in accordance with
the method or methods of distribution elected by the Holders and set forth in the Shelf
Registration Statement; provided, however that in no event shall such method of distribution take
the form of an underwritten offering of the Registrable Securities without the prior written
consent of the Company. The Company shall use its reasonable best efforts to cause a Shelf
Registration Statement to be declared effective under the Securities Act as promptly as is
practicable but in any event no later than 180 days after the Issue Date (the “Effectiveness
Deadline”), and to keep a Shelf Registration Statement continuously effective under the Securities
Act until the expiration of the Effectiveness Period. Each Holder that became a Notice Holder on
or prior to the date five Business Days prior to the date the initial Shelf Registration Statement
(other than an automatic shelf registration statement (an “Automatic Shelf Registration Statement”)
if the Company is a well-known seasoned issuer, as defined in Rule 405 under the Securities Act (a
“WKSI”)) is declared effective shall be named as a selling security holder in the initial Shelf
Registration Statement and the related Prospectus in such a manner as to permit such Holder to
deliver or make available the Prospectus to purchasers of Registrable Securities in accordance with
applicable law. In the case of an Automatic Shelf Registration Statement, the Company will issue a
press release soliciting completed Notice and Questionnaires in advance of the filing and
effectiveness of the registration statement, or promptly after the filing and effectiveness of the
registration statement, so long as Holders have at least twenty (20) days following the issuance of
such press release to furnish their written Notice and Questionnaires to the Company. Only
Registrable Securities shall be included in a Shelf Registration Statement. Notwithstanding the
foregoing, in the event the Company is eligible for, and elects to file, an Automatic Shelf
Registration Statement, the only obligation of the Company under this Section 2(a), except as
otherwise specified herein, shall be to file (and have become automatically effective) a Shelf
Registration Statement with the SEC no later than 120 days after the Issue Date (the “Automatic
Shelf Registration Filing Date”).

     (b) If a Shelf Registration Statement covering resales of the Registrable Securities ceases to
be effective for any reason at any time during the Effectiveness Period (other than because all
securities registered thereunder shall have been resold pursuant thereto or shall have otherwise
ceased to be Registrable Securities), the Company shall use its reasonable best efforts to obtain
the prompt withdrawal of any order suspending the effectiveness thereof, and in any

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event shall
within 30 days following such cessation of effectiveness amend the Shelf Registration Statement in
a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement, which may be an Automatic Shelf
Registration Statement if the Company is then a WKSI, so that all Registrable Securities
outstanding as of the date of such filing are covered by a Shelf Registration Statement. If a new
Shelf Registration Statement is filed pursuant to this Section 2(b), the Company shall use its
reasonable best efforts to cause the new Shelf Registration Statement to become effective as
promptly as is practicable after such filing and to keep the new Shelf Registration Statement
continuously effective under the Securities Act until the expiration of the Effectiveness Period.

     (c) The Company shall amend and supplement the Prospectus and/or amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement or file a new Shelf Registration
Statement, if required by the Securities Act or as necessary and reasonably requested by the
Initial Purchaser or by the Trustee on behalf of the Holders of the Registrable Securities covered
by such Shelf Registration Statement to correct any material misstatements or omissions with
respect to any Holder as necessary to name a Notice Holder as a selling securityholder pursuant to
Section 2(d) below.

     (d) Each Holder may sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus only in accordance with this Section 2(d) and Section 3(h). Each Holder wishing
to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus
shall deliver a Notice and Questionnaire to the Company at least eight Business Days prior to any
intended distribution of Registrable Securities under the Shelf Registration Statement. From and
after the date the initial Shelf Registration Statement is declared effective, the Company shall,
as promptly as practicable after the date a Notice and Questionnaire is delivered in accordance
with Section 8(c) hereof, and in any event on or before the later of (x) five Business Days after
such delivery date, (y) five Business Days after the expiration of any Deferral Period in effect
when the Notice and Questionnaire is delivered or (z) five Business Days after the expiration of
any Deferral Period that comes into effect within five Business Days of the date on which the
Notice and Questionnaire is delivered:

     (i) if required by applicable law, prepare and file with the SEC a post-effective
amendment to the Shelf Registration Statement or prepare and file a supplement to the
related Prospectus or a supplement or amendment to any document incorporated therein by
reference or file a new Shelf Registration Statement or any other required document so that
the Holder delivering such Notice and Questionnaire is named as a selling securityholder in
a Shelf Registration Statement and the related Prospectus in such a manner as to permit such
Holder to deliver or make available such Prospectus to purchasers of the Registrable
Securities in accordance with applicable law and, if the Company shall file a post-effective
amendment to a Shelf Registration Statement or shall
file a new Shelf Registration Statement, the Company shall use its reasonable best
efforts to cause such post-effective amendment or new Shelf Registration Statement to be
declared effective under the Securities Act as promptly as is practicable, but in any event
by the date (the “Amendment Effectiveness Deadline”) that is 45 days after the date such
post-effective amendment or new Shelf Registration Statement is required by this

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Section
2(d) to be filed; provided, however, that the Shelf Registration Statement shall include the
disclosure required by Rule 430B under the Securities Act in order to enable the Company to
add selling security holders to the Shelf Registration Statement pursuant to the filing of
supplements to the related Prospectus; and provided further, if the Company is then able to
name a selling security holder to the Shelf Registration Statement by means of either a
supplement to the related Prospectus or a post-effective amendment to the Shelf Registration
Statement, the Company shall file a supplement to the related Prospectus to name the Holder
as a selling security holder in the Shelf Registration Statement;

     (ii) provide such Holder copies of any documents filed pursuant to Section 2(d)(i); and

     (iii) notify such Holder as promptly as practicable after the effectiveness under the
Securities Act of any new Shelf Registration Statement or post-effective amendment filed
pursuant to Section 2(d)(i);

provided that if such Notice and Questionnaire is delivered during a Deferral Period, the Company
shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set
forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in accordance
with Section 3(h); and provided further that in no event shall the Company be required to file more
than one such amendment to the Shelf Registration Statement in any calendar quarter for all
Holders. Notwithstanding anything contained herein to the contrary, (i) the Company shall be under
no obligation to name any Holder that is not a Notice Holder as a selling securityholder in any
Shelf Registration Statement or related Prospectus and (ii) the Amendment Effectiveness Deadline
shall be extended to the date that is ten Business Days after the expiration of a Deferral Period.

     (e) The parties hereto agree that the Holders of Registrable Securities will suffer damages,
and that it would not be feasible to ascertain the extent of such damages with precision, if:

     (i) the Company is not a WKSI on the Filing Deadline and the initial Shelf Registration
Statement has not been filed on or prior to the Filing Deadline;

     (ii) the Company is not a WKSI on the Filing Deadline and the initial Shelf
Registration Statement has not been declared effective under the Securities Act on or prior
to the Effectiveness Deadline;

     (iii) in the case of an Automatic Shelf Registration Statement, the Shelf Registration
Statement has not been filed and become automatically effective on or prior to the Automatic
Shelf Registration Filing Date;

     (iv) the Company has failed to perform its obligations set forth in Section 2(d)(i)
within the time period required therein;

     (v) a post-effective amendment to a Shelf Registration Statement filed pursuant to
Section 2(d)(i) has not become effective under the Securities Act on or prior

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to the
Amendment Effectiveness Deadline, as extended, pursuant to Section 2(d), in the event of a
Deferral Period;

     (vi) the aggregate duration of Deferral Periods in any period exceeds the number of
days permitted in respect of such period pursuant to Section 3(h) hereof; or

     (vii) any Holder of Registrable Securities has, after the one-year anniversary of the
last date on which the Securities were originally issued, requested in writing the removal
of the legend on the Securities and the legend has not been removed within 14 calendar days
of the Company’s receipt of such request or the Securities are not otherwise freely tradable
by Holders other than affiliates of the Company (without restrictions pursuant to U.S.
securities law or the terms of the Indenture or the Securities) (a “Restricted Transfer
Default”).

Each event described in any of the foregoing clauses (i) through (vii) is individually referred to
herein as a “Registration Default.” For purposes of this Agreement, each Registration Default set
forth above shall begin and end on the dates set forth in the table set forth below:

	 	 	 	 	 
	Type of	 	 	 	 
	Registration	 	 	 	 
	Default by	 	 	 	 
	Clause	 	Beginning Date	 	Ending Date
	(i)

	 	Filing Deadline
	 	the date the initial
Shelf Registration
Statement is filed
	 
	 	 	 	 
	(ii)

	 	Effectiveness Deadline
	 	the date the initial Shelf Registration Statement becomes effective under the Securities Act
	 
	 	 	 	 
	(iii)

	 	Automatic Shelf
Registration Filing
Date
	 	the date the
Automatic Shelf
Registration Statement is filed and becomes
automatically
effective
	 
	 	 	 	 
	(iv)

	 	the date by which the
Company is required to
perform its obligations
under Section 2(d)(i)
	 	the date the Company
performs its
obligations set forth
in Section 2(d)(i)
	 
	 	 	 	 
	(v)

	 	the Amendment
Effectiveness Deadline
	 	the date the
applicable
post-effective
amendment to a Shelf
Registration
Statement becomes
effective under the
Securities Act
	 
	 	 	 	 
	(vi)

	 	the date on which the
aggregate duration of
Deferral Periods in any
period exceeds the
number of days
permitted by Section
3(h)
	 	termination of the
Deferral Period that
caused the limit on
the aggregate
duration of Deferral
Periods to be
exceeded
	 
	 	 	 	 
	(vii)

	 	the date on which the
Restricted Transfer
Default occurs
	 	the date the
Restricted Transfer
Default is cured or
waived

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For purposes of this Agreement, Registration Defaults shall begin on the dates set forth in the
table above and shall continue until the ending dates set forth in the table above.

     Commencing on (and including) the date on which any Registration Default has occurred and
ending on (but excluding) the date on which all such Registration Defaults have been cured (a
“Registration Default Period”), the Company shall pay, as liquidated damages and not as a penalty,
to Record Holders of Registrable Securities in respect of each day in the Registration Default
Period, additional interest in respect of any Security that is a Registrable Security that has not
been converted into Underlying Common Stock, at a rate per annum equal to 0.25% of the aggregate
principal amount of such Security (the “Initial Additional Interest Amount”) for the first 90 days
since the date that a Registration Default begins, and at a rate per annum equal to 0.50% of the
aggregate principal amount of such Security (the “Subsequent Additional Interest Amount”, and
together with the Initial Additional Interest Amount, the “Additional Interest Amount”) after the
first 90 days of such Registration Default Period; provided that the maximum Additional Interest
Amount shall not exceed the rate of 0.50% per annum; and provided further that in the case of a
Registration Default Period that is in effect solely as a result of a Registration Default of the
type described in clause (iv) or (v) of the preceding paragraph, such Additional Interest Amount
shall be paid only to the Holders (as set forth in the succeeding paragraph) that have delivered
Notices and Questionnaires that caused the Company to incur the obligations set forth in Section
2(d), the non-performance of which is the basis of such Registration Default. Notwithstanding the
foregoing, no Additional Interest Amount shall accrue as to any Registrable Security from and after
the earlier of (x) the date such security is no longer a Registrable Security and (y) the
expiration of the Effectiveness Period. The rates of accrual of the Additional Interest Amount
with respect to any period shall not exceed the rates provided for in this paragraph
notwithstanding the occurrence of multiple concurrent Registration Defaults.

     If a Holder has converted some or all of its Securities into Common Stock, the Holder will not
be entitled to receive any Additional Interest with respect to such Common Stock or the principal
amount of the Securities that have been so converted. In addition, in no event will Additional
Interest be payable in connection with a Registration Default relating to a failure to register the
Common Stock deliverable upon conversion of the Securities. For avoidance of doubt, if the Company
fails to register both the Securities and the Common Stock deliverable upon conversion of the
Securities, then Additional Interest will be payable solely in connection with the Registration
Default relating to the failure to register the Securities.

     The Additional Interest Amount shall be payable on each Interest Payment Date during the
Registration Default Period (and on the Interest Payment Date next succeeding the end of the
Registration Default Period if the Registration Default Period does not end on a Interest Payment
Date) to the Record Holders of the Registrable Securities entitled thereto pursuant to the terms of
the Indenture; provided that any Additional Interest Amount accrued with respect to any Security or
portion thereof redeemed by the Company on a redemption date, purchased by the Company on a
repurchase date or converted into Underlying Common Stock on a conversion date prior to the
Interest Payment Date, shall, in any such event, be paid instead to the Holder who submitted such
Security or portion thereof for redemption, purchase or conversion on the applicable redemption
date, repurchase date or conversion date, as the case may be, on such date (or promptly following
the conversion date, in the case of conversion), unless the redemption date or

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the repurchase date,
as the case may be, falls after April 1 or October 1 and on or prior to the corresponding Interest
Payment Date in which case such amounts shall be paid to the Holder entitled to receive payments of
interest in respect of such Securities pursuant to the terms of the Indenture; and provided
further, that, in the case of a Registration Default of the type described in clause (iv) or (v) of
the first paragraph of this Section 2(e), such Additional Interest Amount shall be paid only to the
Holders entitled thereto by check mailed to the address set forth in the Notice and Questionnaire
delivered by such Holder. The Trustee shall be entitled, on behalf of registered holders of
Securities or Underlying Common Stock, to seek any available remedy for the enforcement of this
Agreement, including for the payment of such Additional Interest Amount. Notwithstanding the
foregoing, the parties agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which additional interest or liquidated damages are expressly provided
shall be such Additional Interest Amount. Nothing shall preclude any Holder from pursuing or
obtaining specific performance or other equitable relief with respect to this Agreement.

     All of the Company’s payment obligations set forth in this Section 2(e) that have accrued with
respect to any Registrable Security at the time such security ceases to be a Registrable Security
shall survive until such time as all such payment obligations with respect to such security have
been satisfied in full (notwithstanding termination of this Agreement pursuant to Section 8(n)).

     The parties hereto agree that the additional interest provided for in this Section 2(e)
constitutes a reasonable estimate of the damages that may be incurred by Holders of Registrable
Securities by reason of the failure of a Shelf Registration Statement to be filed or declared
effective or available for effecting resales of Registrable Securities in accordance with the
provisions hereof.

     (f) The Company represents and agrees that any offer relating to the Securities that would
constitute an “issuer free writing prospectus,” as defined in Rule 433 (an “Issuer Free Writing
Prospectus”), or that would otherwise constitute a “free writing prospectus,” as defined in Rule
405, required to be filed with the SEC, will not include any information that conflicts with the
information contained in the Shelf Registration Statement or the Prospectus and, any Issuer Free
Writing Prospectus, when taken together with the information in the Shelf Registration Statement
and the Prospectus, will not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.

     SECTION 3. Registration Procedures. In connection with the registration obligations of the
Company under Section 2 hereof, the Company shall:

     (a) Before filing any Shelf Registration Statement or Prospectus or any amendments or
supplements thereto or any Issuer Free Writing Prospectus with the SEC, furnish to the Initial
Purchaser and the Special Counsel for such offering, if any, copies of all such documents proposed
to be filed at least three Business Days prior to the filing of such Shelf Registration Statement
or amendment thereto or Prospectus or supplement thereto (other than supplements or amendments that
do nothing other than name Notice Holders and provide information with respect thereto).

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     (b) Subject to Section 3(h) hereof, prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration Statement as may be necessary to keep such
Shelf Registration Statement continuously effective during the Effectiveness Period; cause the
related Prospectus included in each Shelf Registration Statement to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and use its best efforts to comply with the
provisions of the Securities Act applicable to it with respect to the disposition of all securities
covered by such Shelf Registration Statement during the Effectiveness Period in accordance with the
intended methods of disposition by the sellers thereof set forth in such Shelf Registration
Statement as so amended or such Prospectus as so supplemented.

     (c) As promptly as practicable give notice to the Notice Holders, the Initial Purchaser and
the Special Counsel, if any, (i) when any Prospectus, supplement to any Prospectus, Shelf
Registration Statement or post-effective amendment to a Shelf Registration Statement has been filed
with the SEC and, with respect to a Shelf Registration Statement or any post-effective amendment,
when the same has been declared effective (other than supplements or amendments that do nothing
other than name Notice Holders and provide information with respect thereto), (ii) of any request,
following the effectiveness of the initial Shelf Registration Statement under the Securities Act,
by the SEC or any other federal or state governmental authority for amendments or supplements to
any Shelf Registration Statement or related Prospectus or for additional information, (iii) of the
issuance by the SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of any Shelf Registration Statement or the initiation or threatening
of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, and (v) of the occurrence of, but not the nature of or details
concerning, a Material Event, which notice may, at the discretion of the Company (or as required
pursuant to Section 3(h)) state that it constitutes a Deferral Notice, in which event the
provisions of Section 3(h) shall apply.

     (d) Use its reasonable best efforts to obtain the withdrawal of any order suspending the
effectiveness of a Shelf Registration Statement or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction in which they have been qualified for sale, in either case as promptly as
practicable, and provide prompt notice to each Notice Holder and the Initial Purchaser of the
withdrawal of any such order.

     (e) As promptly as practicable furnish to each Notice Holder, the Special Counsel, if any, and
the Initial Purchaser, upon request and without charge, at least one conformed copy of each Shelf
Registration Statement and any amendment thereto, including exhibits and all documents incorporated
or deemed to be incorporated therein by reference.

     (f) During the Effectiveness Period, deliver to each Notice Holder, the Special Counsel, if
any, and the Initial Purchaser, in connection with any sale of Registrable Securities pursuant to a
Shelf Registration Statement, without charge, as many copies of the Prospectus relating to such
Registrable Securities (including each preliminary version of any Prospectus) and any amendment or
supplement thereto as any such person may reasonably request; and the

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Company hereby consents
(except during such periods that a Deferral Notice is outstanding and has not been revoked) to the
use of such Prospectus or each amendment or supplement thereto by each such person in connection
with any offering and sale of the Registrable Securities covered by such Prospectus or any
amendment or supplement thereto in the manner set forth therein on the terms set forth herein.

     (g) Prior to any public offering of the Registrable Securities pursuant to a Shelf
Registration Statement, use its reasonable best efforts to register or qualify or cooperate with
the Notice Holders and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such Registrable Securities
for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United
States as any Notice Holder reasonably requests in writing (which request may be included in the
Notice and Questionnaire); use its reasonable best efforts to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period in connection with
such Notice Holder’s offer and sale of Registrable Securities pursuant to such registration or
qualification (or exemption therefrom) and do any and all other acts or things reasonably necessary
or advisable to enable the disposition in such jurisdictions of such Registrable Securities in the
manner set forth in the Shelf Registration Statement and the related Prospectus; provided that the
Company will not be required to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to qualify but for this Agreement or
(ii) take any action that would subject it to general service of process in suits or to taxation in
any such jurisdiction where it is not then so subject.

     (h) Upon (A) the necessity to amend the Shelf Registration Statement or any Prospectus to
comply with the Securities Act, the Exchange Act or the respective rules and regulations
promulgated by the SEC thereunder or the issuance by the SEC of a stop order suspending the
effectiveness of a Shelf Registration Statement or the initiation of proceedings with respect to a
Shelf Registration Statement under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence
of any event or the existence of any fact (a “Material Event”) as a result of which a Shelf
Registration Statement shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein not
misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or (C) the
occurrence or existence of any pending corporate development with respect to the Company or a
public filing with the SEC that, in the reasonable discretion of the Company, makes it appropriate
to suspend the availability of a Shelf Registration Statement and the related Prospectus:

     (i) in the case of clause (B) above, as promptly as practicable prepare and file, if
necessary pursuant to applicable law, a post-effective amendment to such Shelf Registration
Statement or a supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document that would be incorporated by reference into
such Shelf Registration Statement and Prospectus so that such Shelf Registration Statement
does not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading,
and such Prospectus does not contain any untrue

11

 

statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, as
thereafter delivered to the purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to a Shelf Registration Statement, use its
reasonable best efforts to cause it to be declared effective as promptly as is practicable,
and

     (ii) give notice to the Notice Holders, and the Special Counsel, if any, that the
availability of a Shelf Registration Statement and any related Prospectus is suspended (a
“Deferral Notice”).

The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be
resumed (x) in the case of clause (A) above, as promptly as is practicable, (y) in the case of
clause (B) above, as soon as, in the sole judgment of the Company, public disclosure of such
Material Event would not be prejudicial to or contrary to the interests of the Company or, if
necessary to avoid unreasonable burden or expense, as soon as practicable thereafter and (z) in the
case of clause (C) above, as soon as in the reasonable discretion of the Company, such suspension
is no longer appropriate. The Company shall be entitled to exercise its right under this Section
3(h) to suspend the availability of a Shelf Registration Statement or any Prospectus, without
incurring or accruing any obligation to pay additional interest pursuant to Section 2(e), so long
as the aggregate duration of any periods during which the availability of the Shelf Registration
Statement and any Prospectus is suspended (each, a “Deferral Period”) does not exceed 60 days in
the aggregate in any consecutive 12-month period.

     (i) If requested in writing in connection with a disposition of Registrable Securities
pursuant to a Shelf Registration Statement, make reasonably available for inspection during normal
business hours by a representative for the Notice Holders of such Registrable Securities, any
broker dealers, attorneys and accountants retained by such Notice Holders, and any attorneys or
other agents retained by a broker-dealer engaged by such Notice Holders, all relevant financial and
other records, all relevant corporate documents and other relevant information as may be reasonably
requested by such representative for the Notice Holders, or any such broker dealers, attorneys or
accountants in connection with such disposition, in each case as is customary for similar “due
diligence” examinations; provided that such persons shall first agree in writing with the Company
that any non-public information that is reasonably and in good faith designated by
the Company as confidential at the time of delivery of such information shall be kept
confidential by such persons, unless (i) disclosure of such information is required by court or
administrative order or is necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of any Shelf Registration Statement or the
use of any Prospectus referred to in this Agreement), (iii) such information becomes generally
available to the public other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a source other than the
Company and such source is not bound by a confidentiality agreement; and provided further that the
foregoing inspection and information gathering shall, to the greatest extent possible, be
coordinated on behalf of all the Notice Holders and the other parties entitled thereto by the
Special Counsel. Any person legally compelled to disclose any such confidential information made
available for inspection shall, to the extent practicable,

12

 

provide the Company with prompt prior
written notice of such requirement so that the Company may seek a protective order, confidentiality
treatment or other appropriate remedy.

     (j) If requested by any Notice Holder, (i) promptly incorporate in the Shelf Registration
Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such
information regarding such Notice Holder as required by the rules and regulations of the SEC as
such Notice Holder may reasonably request to be included therein (unless the Company reasonably
objects to such inclusion and, in the opinion of counsel to the Company, such information is not
required to be so incorporated) and (ii) make all required filings of such supplement or such
post-effective amendment as soon as practicable after the Company has received notification of the
matters to be incorporated in such filing.

     (k) Comply with all applicable rules and regulations of the SEC and make generally available
to its securityholders earning statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) for a 12-month period commencing on the first day of the first fiscal quarter
of the Company commencing after the effective date of a Shelf Registration Statement, which
statements shall be made available no later than 45 days after the end of the 12-month period or 90
days if the 12-month period coincides with the fiscal year of the Company.

     (l) As applicable, cooperate with each Notice Holder to facilitate the timely preparation and
delivery of certificates representing Registrable Securities sold or to be sold pursuant to a Shelf
Registration Statement, which certificates shall not bear any restrictive legends, and cause such
Registrable Securities to be in such denominations as are permitted by the Indenture and registered
in such names as such Notice Holder may request in writing at least two Business Days prior to any
sale of such Registrable Securities.

     (m) In connection with any underwritten offering, obtain opinions of counsel to the Company
(which counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the
Holders and Special Counsel) addressed to each Notice Holder, covering the matters customarily
covered in opinions requested in underwritten offerings and obtain “cold comfort” letters from the
independent registered public accounting firm of the Company (and, if necessary, any other
registered public accounting firm of any subsidiary of the Company, or of any person or business
acquired by the Company for which financial statements and financial
data are or are required to be included or incorporated by reference in the Shelf Registration
Statement or the related Prospectus or in the documents incorporated or deemed to be incorporated
therein) addressed to the Company and each Notice Holder, such letters to be in customary form and
covering matters of the type customarily covered in “cold comfort” letters in connection with
underwritten offerings.

     (n) Provide a CUSIP number for all Registrable Securities covered by each Shelf Registration
Statement not later than the effective date of such Shelf Registration Statement and provide the
Trustee and the transfer agent for the Common Stock with certificates for the Registrable
Securities that are in a form eligible for deposit with The Depository Trust Company.

     (o) Not later than the effective date of the initial Shelf Registration Statement, cause the
Indenture to be qualified under the TIA, cooperate with the Trustee and the Holders to effect

13

 

such
changes, if any, to the Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and execute, and use its reasonable best efforts to cause the
Trustee to execute, all documents as may be required to effect such changes, if any, and all other
forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in
a timely manner.

     (p) Cooperate and assist in any filings required to be made with the Financial Industry
Regulatory Authority, Inc. (“FINRA”).

     (q) Cause the Underlying Common Stock covered by the Shelf Registration Statement to be listed
or quoted, as the case may be, on each securities exchange or automated quotation system on which
the Common Stock is then listed or quoted.

     SECTION 4. Holder’s Obligations. (a) Each Holder agrees, by acquisition of the Registrable
Securities, that no Holder shall be entitled to sell any of such Registrable Securities pursuant to
a Shelf Registration Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Notice and Questionnaire as required pursuant to Section 2(d) hereof
(including the information required to be included in such Notice and Questionnaire) and the
information set forth in the next sentence. Each Notice Holder agrees promptly to furnish to the
Company all information required to be disclosed in order to make the information previously
furnished to the Company by such Notice Holder not misleading and any other information regarding
such Notice Holder and the distribution by such Notice Holder of Registrable Securities as the
Company may from time to time reasonably request. Any sale of any Registrable Securities by any
Holder shall constitute a representation and warranty by such Holder that the information relating
to such Holder and its plan of distribution is as set forth in the Prospectus made available or
delivered by such Holder in connection with such disposition, that such Prospectus does not as of
the time of such sale contain any untrue statement of a material fact relating to or provided by
such Holder or its plan of distribution and that such Prospectus does not as of the time of such
sale omit to state any material fact relating to or provided by such Holder or its plan of
distribution necessary to make the statements in such Prospectus, in the light of the circumstances
under which they were made, not misleading. Each Holder further agrees not to sell any Registrable
Securities without delivering, or, if permitted by applicable securities law,
making available, to the purchaser thereof a Prospectus in accordance with the requirements of
applicable securities laws. Each Holder further agrees that such Holder will not make any offer
relating to the Registrable Securities that would constitute an Issuer Free Writing Prospectus or
that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 under the
Securities Act), unless it has obtained the prior written consent of the Company.

     (b) Upon receipt of any Deferral Notice, each Notice Holder agrees not to sell any Registrable
Securities pursuant to any Shelf Registration Statement until such Notice Holder’s receipt of
copies of the supplemented or amended Prospectus provided for in Section 3(h)(i), or until it is
advised in writing by the Company that the Prospectus may be used.

     SECTION 5. Registration Expenses. The Company shall bear all fees and expenses incurred in
connection with the performance by the Company of its obligations under Sections 2 and 3 of this
Agreement whether or not any Shelf Registration Statement is declared effective.

14

 

Such fees and
expenses shall include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be made with FINRA
and the SEC and (y) of compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the Special Counsel in connection with
Blue Sky qualifications of the Registrable Securities under the laws of such jurisdictions as
Notice Holders of a majority of the Registrable Securities being sold pursuant to a Shelf
Registration Statement may designate), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities in a form eligible for deposit with
The Depository Trust Company), (iii) all expenses of any persons in preparing or assisting in
preparing, word processing, printing and distributing any Shelf Registration Statement, any
Prospectus, any amendments or supplements thereto, any, securities sales agreements and other
documents relating to the performance of and compliance with this Agreement, (iv) all fees and
disbursements relating to the qualification of the Indenture under applicable securities laws, (v)
the fees and disbursements of counsel to the Company in connection with any Shelf Registration
Statement, (vi) fees and disbursements of the Trustee and its counsel and of the registrar and
transfer agent for the Common Stock, (vii) Securities Act liability insurance obtained by the
Company in its sole discretion, (vii) the reasonable fees and disbursements of the Special Counsel,
if any (other than fees and expenses in connection with any underwritten offerings), and (ix) the
fees and disbursements of the independent registered public accounting firm of the Company and of
any other person or business whose financial statements are included or incorporated or deemed to
be incorporated by reference in a Shelf Registration Statement, including the expenses of any “cold
comfort” or similar letters required by or incident to such performance and compliance. In
addition, the Company shall pay the internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees performing legal or accounting
duties), the expense of any annual audit, the fees and expenses incurred in connection with the
listing by the Company of the Registrable Securities on any securities exchange on which similar
securities of the Company are then listed and the fees and expenses of any person, including
special experts, retained by the Company. Notwithstanding the provisions of this Section 5, each
seller of Registrable Securities shall pay all fees and disbursements of its counsel (other than
the Special Counsel) and any broker’s commission,
agency fee, underwriter’s discount or commission or transfer taxes in connection with the sale
of the Registrable Securities under a Shelf Registration Statement.

     SECTION 6. Indemnification and Contribution.

     (a) The Company agrees to indemnify and hold harmless each Notice Holder, each person, if any,
who controls any Notice Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each affiliate of any Notice Holder within the meaning of Rule
405 under the Securities Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred by such Notice
Holder in connection with defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in any Shelf Registration
Statement or any amendment or supplement thereto, or any Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in the light of the circumstances under which they were
made, except insofar as such losses, claims, damages or

15

 

liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon information relating to
any Notice Holder furnished to the Company in writing by or on behalf of such Notice Holder
expressly for use therein; provided that the foregoing indemnity shall not inure to the benefit of
any Notice Holder (or to the benefit of any person controlling such Notice Holder) from whom the
person asserting such losses, claims, damages or liabilities purchased the Registrable Securities,
if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of such Notice Holder
to such person, if required by law so to have been delivered at or prior to the written
confirmation of the sale of the Registrable Securities to such person, and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by the Company with Section 2(c)
hereof.

     (b) Each Notice Holder agrees severally and not jointly to indemnify and hold harmless the
Company and the Company’s directors and officers who sign any Shelf Registration Statement and each
person, if any, who controls the Company (within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act) and any other Notice Holder, to the same extent as the
foregoing indemnity from the Company to such Notice Holder, but only with respect to information
relating to such Notice Holder furnished to the Company in writing by or on behalf of such Notice
Holder expressly for use in such Shelf Registration Statement or Prospectus or amendment or
supplement thereto. In no event shall the liability of any Notice Holder hereunder be greater than
the dollar amount of the proceeds received by such Notice Holder from the sale of the Registrable
Securities pursuant to the Shelf Registration Statement giving rise to such indemnification
obligation.

     (c) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to Section 6(a) or 6(b)
hereof, such person (the “indemnified party”) shall promptly notify the person
against whom such indemnity may be sought (the “indemnifying party”) in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable fees and
disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is understood that
the indemnifying party shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one firm (in addition to any local counsel) separate from its own
counsel for all such indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by, in the case of parties indemnified
pursuant to Section 6(a), the Notice Holders of a majority (with Holders of Securities deemed to be
the Holders, for purposes of determining such majority, of the number of shares of Underlying
Common Stock into which such Securities are or would be

16

 

convertible as of the date on which such
designation is made) of the Registrable Securities covered by the Shelf Registration Statement held
by Notice Holders that are indemnified parties pursuant to Section 6(a) and, in the case of parties
indemnified pursuant to Section 6(b), the Company. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason of such settlement
or judgment. No indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement (i) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such proceeding and
(ii) does not include a statement as to or an admission of fault, culpability or a failure to act
by or on behalf of such indemnified party.

     (d) To the extent that the indemnification provided for in Section 6(a) or 6(b) is unavailable
to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages
or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the indemnifying party or parties on
the one hand and of the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative benefits received by any Notice Holder
shall be deemed to be equal to the value of receiving registration rights under this Agreement for
the Registrable Securities. The relative fault of the Notice Holders on the one hand and the
Company on the other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Notice
Holders or by the Company, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Notice Holders’ respective
obligations to contribute pursuant to this Section 6(d) are several in proportion to the respective
number of Registrable Securities they have sold pursuant to a Shelf Registration Statement, and not
joint.

     The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 6(d) were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any such action or
claim. Notwithstanding this Section 6(d), no Notice Holder shall be required to contribute any
amount in excess of the amount by which proceeds received by such Notice Holder from the sale of
the Registrable Securities exceeds the amount of any damages that such Notice Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation

17

 

(within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

     (e) The remedies provided for in this Section 6 are not exclusive and shall not limit any
rights or remedies which may otherwise be available to an indemnified party at law or in equity,
hereunder, under the Purchase Agreement or otherwise.

     (f) The indemnity and contribution provisions contained in this Section 6 shall remain
operative and in full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Holder, any person controlling any Holder or any
affiliate of any Holder or by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) the sale of any Registrable Securities by any Holder.

     SECTION 7. Information Requirements. The Company shall file all reports required to be filed
by it under the Exchange Act and shall comply with all other requirements set forth in the
instructions to Form S-3. The Company covenants that, if at any time before the end of the
Effectiveness Period, the Company is not subject to Section 13 or 15(d) under the Exchange Act, it
will make available to any Holder or beneficial holder of Registrable Securities in connection with
any sale thereof and any prospective purchaser of Registrable Securities, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any Holder or beneficial
holder of Registrable Securities and it will take such further action as any Holder or beneficial
holder of Registrable Securities may reasonably request, all to the extent required from time to
time to enable such Holder or beneficial holder to sell Registrable Securities without registration
under the Securities Act within the limitations of the exemptions provided by Rule 144 and Rule
144A under the Securities Act, as such rules may be amended from time to time. Upon the request of
any Holder or any beneficial holder of Registrable Securities, the Company shall deliver to such
Holder or beneficial holder a written statement as to whether it has complied with such filing
requirements, unless such a statement has been included in the Company’s most recent report filed
pursuant to Section 13 or Section 15(d) under the Exchange Act.

     SECTION 8. Miscellaneous.

     (a) No Conflicting Agreements. The Company is not, as of the date hereof, a party to, nor
shall it, on or after the date of this Agreement, enter into, any agreement with respect to its
securities that conflicts with the rights granted to the Holders in this Agreement. In addition,
the Company shall not grant to the holders of the Company’s securities (other than the Holders in
such capacity) the right to include any of its securities (other than the Registrable Securities)
in the Shelf Registration Statement provided for under this Agreement. The Company represents and
warrants that the rights granted to the Holders hereunder do not in any way conflict with the
rights granted to the holders of the Company’s securities under any other agreements.

     (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the Company has obtained the written consent of
Holders of a majority of the then outstanding Underlying Common Stock constituting Registrable
Securities (with Holders of Securities deemed to be the Holders, for purposes of this Section 8(b),
of the number of outstanding shares of Underlying

18

 

Common Stock into which such Securities are or
would be convertible as of the date on which such consent is requested). Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose securities are being sold pursuant to a Shelf
Registration Statement and that does not directly or indirectly affect the rights of other Holders
may be given by Holders of at least a majority of the Registrable Securities being sold by such
Holders pursuant to such Shelf Registration Statement; provided that the provisions of this
sentence may not be amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. Notwithstanding the foregoing, this Agreement may be amended
by written agreement signed by the Company and the Initial Purchaser, without the consent of the
Holders of Registrable Securities, to cure any ambiguity or to correct or supplement any provision
contained herein that may be defective or inconsistent with any other provision contained herein,
or to make such other provisions in regard to matters or questions arising under this Agreement
that shall not adversely affect the interests of the Holders of Registrable Securities. Each
Holder of Registrable Securities outstanding at the time of any such amendment, modification,
supplement, waiver or consent or thereafter shall be bound by any such amendment, modification,
supplement, waiver or consent effected pursuant to this Section 8(b) whether or not any notice,
writing or marking indicating such amendment, modification, supplement, waiver or consent appears
on the Registrable Securities or is delivered to such Holder.

     (c) Notices. All notices and other communications provided for or permitted hereunder shall
be made in writing by hand delivery, by facsimile, by courier or by first class mail, return
receipt requested, and shall be deemed given (i) when made, if made by hand delivery, (ii) upon
confirmation, if made by facsimile, (iii) one Business Day after being
deposited with such courier, if made by a courier that guarantees overnight delivery or (iv)
on the date indicated on the notice of receipt, if made by first class mail, to the parties as
follows:

     (i) if to a Holder, at the most current address or facsimile number given by such
Holder to the Company in a Notice and Questionnaire or any amendment thereto;

     (ii) if to the Company, to:

Finisar Corporation

1389 Moffett Park Drive

Sunnyvale, CA 94089-1134

Attention: Chief Financial Officer

Facsimile No.: (408) 541-4154

with a copy to:

DLA Piper LLP (US)

2000 University Avenue

East Palo Alto, CA 94303-2215

Attention: Dennis C. Sullivan, Esq.

Facsimile No.: (650) 687-1200

19

 

     (iii) if to the Initial Purchaser, to:

Piper Jaffray & Co.

345 California Street, Suite 2400

San Francisco, California 94104

Attention: Martin Alvarez

Facsimile No.: (415) 984-5121

Piper Jaffray & Co.

800 Nicollet Mall

Minneapolis, MN 55402

Attention: James Martin

Facsimile No.: (612) 303-1410

with a copy to:

Wilson Sonsini Goodrich & Rosati, Professional Corporation

650 Page Mill Road

Palo Alto, California 94304

Attention: John A. Fore, Esq.

Facsimile No.: (650) 493-6811

or to such other address as such person may have furnished to the other persons identified in this
Section 8(c) in writing in accordance herewith.

     (d) Approval of Holders. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable Securities held by the
Company or its affiliates (as such term is defined in Rule 405 under the Securities Act)
(other than the Initial Purchaser or subsequent Holders if such subsequent Holders are deemed to be
such affiliates solely by reason of their holdings of such Registrable Securities) shall not be
counted in determining whether such consent or approval was given by the Holders of such required
percentage.

     (e) Successors and Assigns. Any person who purchases any Registrable Securities from the
Initial Purchaser shall be deemed, for purposes of this Agreement, to be an assignee of the Initial
Purchaser. This Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties and shall inure to the benefit of and be binding upon each Holder of
any Registrable Securities, provided that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Registrable Securities in violation of the terms of the Indenture.
If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities, such person shall
be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions
of this Agreement and such person shall be entitled to receive the benefits hereof.

     (f) Third Party Beneficiaries. The Initial Purchaser (even if the Initial Purchaser is not a
Holder of Registrable Securities) shall be a third party beneficiary to the agreements made

20

 

hereunder between the Company, on the one hand, and the Holders, on the other hand, and shall have
the right to enforce such agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder. Each Holder of Registrable
Securities shall be a third party beneficiary to the agreements made hereunder between the Company,
on the one hand, and the Initial Purchaser, on the other hand, and shall have the right to enforce
such agreements directly to the extent it deems such enforcement necessary or advisable to protect
its rights hereunder.

     (g) Adjustments Affecting Registrable Securities. The Company shall not, directly or
indirectly, intentionally take any action with respect to the Registrable Securities as a class
that would adversely affect the ability of the Holders of Registrable Securities to include such
Registrable Securities in a registration undertaken pursuant to this Agreement.

     (h) Specific Enforcement. Without limiting the remedies available to the Initial Purchaser
and the Holders, the Company acknowledges that any failure by the Company to comply with its
obligations under Section 2 hereof may result in material irreparable injury to the Initial
Purchaser or the Holders for which there is no adequate remedy at law, that it may not be possible
to measure damages for such injuries precisely and that, in the event of any such failure, the
Initial Purchaser or any Holder may seek such relief as may be required to specifically enforce the
Company’s obligations under Section 2 hereof.

     (i) Counterparts. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.

     (j) Headings. The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

     (k) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

     (l) Severability. If any term, provision, covenant or restriction of this Agreement is held
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants
and restrictions set forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, and the parties hereto shall use their reasonable best
efforts to find and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction, it being intended
that all of the rights and privileges of the parties shall be enforceable to the fullest extent
permitted by law.

     (m) Entire Agreement. This Agreement is intended by the parties as a final expression of
their agreement and is intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable Securities. Except as
provided in the Purchase Agreement, there are no restrictions, promises, warranties or

21

 

undertakings, other than those set forth or referred to herein, with respect to the registration
rights granted by the Company with respect to the Registrable Securities. This Agreement
supersedes all prior agreements and undertakings among the parties with respect to such
registration rights. No party hereto shall have any rights, duties or obligations other than those
specifically set forth in this Agreement.

     (n) Termination. This Agreement and the obligations of the parties hereunder shall terminate
upon the end of the Effectiveness Period, except for any liabilities or obligations under Section
4, 5 or 6 hereof, any confidentiality obligations under Section 3(i) hereof, and the obligations to
make payments of and provide for additional interest under Section 2(e) hereof to the extent such
damages accrue prior to the end of the Effectiveness Period, each of which shall remain in effect
in accordance with its terms.

[Remainder Of Page Intentionally Left Blank]

22

 

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

	 	 	 	 	 
	 	FINISAR CORPORATION

 	 
	 	By:  	/s/ Stephen K. Workman
 	 
	 	 	Name:  	Stephen K. Workman 	 
	 	 	Title:  	Senior Vice President, Finance
and 
Chief Financial Officer 	 
	 

Confirmed and accepted as of

the date first above written:

PIPER JAFFRAY & CO.

	 	 	 	 	 
	By:

	 	 /s/ Christie L. Christina	 	 
	 

	 	 

Name:  Christie L. Christina
	 	 
	 

	 	Title:    Managing Director	 	 

[Registration Rights Agreement]Exhibit 4.1

Exhibit 4.1

LADISH CO., INC.

and

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

Rights Agent

 

RIGHTS AGREEMENT

Dated as of October 9, 2009

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. Certain Definitions
	 	 	1	 
	2. Appointment of Rights Agent
	 	 	4	 
	3. Issue of Right Certificates
	 	 	5	 
	4. Form of Right Certificates
	 	 	6	 
	5. Countersignature and Registration
	 	 	7	 
	6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates
	 	 	7	 
	7. Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	8	 
	8. Cancellation and Destruction of Right Certificates
	 	 	9	 
	9. Reservation and Availability of Common Shares
	 	 	9	 
	10. Common Shares Record Date
	 	 	10	 
	11. Adjustment of Purchase Price, Number of Shares or Number of Rights
	 	 	11	 
	12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	17	 
	13. Consolidation, Merger, Share Exchange or Sale or Transfer of Assets or
Earning Power
	 	 	17	 
	14. Fractional Rights and Fractional Shares
	 	 	19	 
	15. Rights of Action
	 	 	20	 
	16. Agreement of Right Holders
	 	 	20	 
	17. Right Certificate Holder Not Deemed a Shareholder
	 	 	21	 
	18. Concerning the Rights Agent
	 	 	21	 
	19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	22	 
	20. Duties of Rights Agent
	 	 	22	 
	21. Change of Rights Agent
	 	 	24	 
	22. Issuance of New Right Certificates
	 	 	25	 
	23. Redemption
	 	 	25	 

 

-i-

 

	 	 	 	 	 
	24. Exchange
	 	 	26	 
	25. Notice of Certain Events
	 	 	27	 
	26. Notices
	 	 	28	 
	27. Supplements and Amendments
	 	 	28	 
	28. Determinations and Actions by the Board of Directors
	 	 	29	 
	29. Successors
	 	 	29	 
	30. Benefits of this Agreement
	 	 	29	 
	31. Severability
	 	 	29	 
	32. Governing Law
	 	 	30	 
	33. Counterparts
	 	 	30	 
	34. Descriptive Headings
	 	 	30	 
	35. Book Entry
	 	 	30	 

Exhibit A — Form of Right Certificate

Exhibit B — Summary of Common Share Purchase Rights

 

-ii-

 

RIGHTS AGREEMENT

THIS AGREEMENT (“Agreement”), dated as of October 9, 2009 between LADISH CO., INC., a
Wisconsin corporation (the “Company”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, a New York
limited liability trust company (the “Rights Agent”).

WHEREAS, the Board has authorized and declared a dividend of one common share purchase right
(a “Right”) for each Common Share (as hereinafter defined) outstanding upon the close of business
on October 20, 2009 (the “Record Date”) payable upon the close of business on 30, 2009 (the
“Payment Date”), and has authorized and directed the issuance of one Right for each Common Share
that shall become outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter defined), each
Right representing the right to purchase one Common Share 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:

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

(a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or
which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
Common Shares then outstanding, but shall not include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan of the Company or any Subsidiary of
the Company, any entity holding Common Shares for or pursuant to the terms of any such plan, or any
trustee, administrator or fiduciary of such a plan.

Notwithstanding the foregoing, no Person who, at the close of business on the date hereof,
shall be the Beneficial Owner of 15% or more of the Common Shares then outstanding shall be deemed
an “Acquiring Person”; provided, however, that if a Person is, at the close of business on the date
hereof, the Beneficial Owner of 15% or more of the Common Shares then outstanding and shall
thereafter become the Beneficial Owner of additional Common Shares at any time that the Person is
or thereby becomes the Beneficial Owner of 15% or more of the Common Shares then outstanding (other
than Common Shares acquired solely as a result of corporate action of the Company not caused,
directly or indirectly, by such Person), then such Person shall be deemed to be an “Acquiring
Person”; and no Person shall become an “Acquiring Person” as a result of an acquisition of Common
Shares by the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more of the Common
Shares then outstanding; provided, however, that if a Person would, but for the foregoing, become
an Acquiring Person by reason of share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any additional Common Shares at any time
that the Person is or thereby becomes the Beneficial Owner of 15% or more of the Common Shares then
outstanding (other
than Common Shares acquired solely as a result of corporate action of the Company not caused,
directly or indirectly, by such Person), then such Person shall be deemed to be an “Acquiring
Person.”

 

 

 

Notwithstanding the foregoing, 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 Section
1(a), has become such inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an “Acquiring Person,” as
defined pursuant to the foregoing provisions of this Section 1(a), then such Person shall not be
deemed to be an “Acquiring Person” for any purposes of this Agreement; provided that any such
Person shall cease to qualify for the exclusion from the definition of “Acquiring Person” contained
in this paragraph from and after such time (if any) as the Person shall subsequently become the
Beneficial Owner of any additional Common Shares at any time that the Person is or thereby becomes
the Beneficial Owner of 15% or more of the Common Shares then outstanding (other than Common Shares
acquired solely as a result of corporate action of the Company not caused, directly or indirectly,
by such Person), unless the Person independently meets the conditions set forth in this paragraph
with respect to the circumstances relating to the Person becoming the Beneficial Owner of 15% or
more of the Common Shares then outstanding.

(b) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), as in effect on the date of this Agreement.

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

(i) which such Person or any of such Person’s Affiliates or Associates beneficially owns,
directly or indirectly;

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

 

2

 

(iii) which are beneficially owned, directly or indirectly, by any other Person with which
such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the purpose of, or with
respect to, acquiring, holding, voting (except to the extent contemplated by the proviso to
Section 1(c)(ii)(B)) or disposing of any securities of the Company; or

(iv) which are beneficially owned, directly or indirectly, by a Counterparty under any
Derivatives Contract (without regard to any short or similar position under the same or any other
Derivatives Contract) to which such Person or any of such Person’s Affiliates or Associates is a
Receiving Party; provided that the number of Common Shares that a Person is deemed to beneficially
own pursuant to this Section 1(c)(iv) in connection with a particular Derivatives Contract shall
not exceed the number of Notional Common Shares that are subject to such Derivatives Contract;
provided, further, that the number of securities beneficially owned by each Counterparty
(“Counterparty A”) under a Derivatives Contract shall for purposes of this Section 1(c)(iv) be
deemed to include all securities that are beneficially owned, directly or indirectly, by a
Counterparty (“Counterparty B”) under any Derivatives Contract to which such Counterparty A is a
Receiving Party, this proviso being applied to successive Counterparties as appropriate.

A “Derivatives Contract” means a contract between two parties (the “Receiving Party” and the
“Counterparty”) that is designed to produce the economic benefits and risks to the Receiving Party
that correspond substantially to the ownership by the Receiving Party of a number of Common Shares
(the number corresponding to such economic benefits and risks, the “Notional Common Shares”),
regardless of whether obligations under such contract are settled through the delivery of cash,
Common Shares or other property, without regard to any short position under the same or any other
Derivative Contract. Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase “then outstanding,” when used with reference to a Person’s Beneficial
Ownership of securities of the Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then actually issued and outstanding
which such Person would be deemed to own beneficially hereunder.

Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the
phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.

(d) “Board” means the Board of Directors of the Company.

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

 

3

 

(f) “Close of business” on any given date shall mean 5:00 P.M., Milwaukee, Wisconsin time, on
such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M.,
Milwaukee, Wisconsin time, on the next succeeding Business Day.

(g) “Common Shares” shall mean the shares of common stock, $0.01 par value per share, of the
Company; except that “Common Shares” when used with reference to any Person other than the Company
shall mean the capital stock (or equivalent equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons that
ultimately control such first-mentioned Person.

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

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

(j) “Person” shall mean any individual, firm, corporation, partnership, trust, association,
limited liability company, limited liability partnership, governmental entity, or other entity, and
shall include any successor (by merger or otherwise) of any such entity.

(k) “Redemption Date” shall have the meaning set forth in Section 7 hereof.

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

(m) “Shares Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, 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.

(n) “Subsidiary” of any Person means any other Person of which securities or other ownership
interests having ordinary voting power, in the absence of contingencies, to elect a majority of the
board of directors or other Persons performing similar functions are at the time directly or
indirectly owned by such first Person.

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

 

4

 

3. Issue of Right Certificates.

(a) Until the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action of the Company’s Board prior to
such time as any Person becomes an Acquiring Person) after the date of the commencement of, or of
the first public announcement of the intention of any Person to commence, a tender or exchange
offer the consummation of which would result in 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, any
entity holding Common Shares for or pursuant to the terms of any such plan, or any trustee,
administrator, or fiduciary of such a plan) becoming the Beneficial Owner of Common Shares
aggregating 15% or more of the then outstanding Common Shares (including in either case any such
date which is after the date of this Agreement and prior to the Payment Date; the earlier of such
dates being herein referred to as the “Distribution Date”; provided, however, that if the tenth day
after the Acquisition Date or the tenth Business Day after the commencement or announcement, as the
case may be, occurs before the Record Date, “Distribution Date” shall mean the Record Date), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
for Common Shares registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the transfer of Common
Shares; provided, however, that if a tender or exchange offer is terminated prior to the occurrence
of Distribution Date, then no Distribution Date shall occur as a result of such tender or exchange
offer. As soon as practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Shares as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate, in substantially the form of
Exhibit A hereto (a “Right Certificate”), evidencing one Right for each Common Share so held. As
of the Distribution Date, the Rights will be evidenced solely by such Right Certificates.

(b) The Company has prepared a Summary of Common Share Purchase Rights, attached as Exhibit B
hereto (the “Summary of Rights”), a copy of which is available free of charge from the Company.
With respect to certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered in the names of the
holders thereof. Until the Distribution Date (or the earlier of the Redemption Date or Final
Expiration Date), the surrender for transfer of any certificate for Common Shares outstanding on
the Record Date, with or without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the Common Shares represented thereby.

 

5

 

(c) Certificates for Common Shares that become outstanding (including, without limitation,
certificates for reacquired Common Shares referred to in the last sentence of this Section 3(c) and
certificates issued on the transfer of Common Shares) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them a legend in substantially the
following form:

This certificate also evidences and entitles the holder hereof to certain rights as set
forth in a Rights Agreement between Ladish Co., Inc. and American Stock Transfer & Trust
Company, LLC, dated as of October 9, 2009, and as such agreement may be amended (the “Rights
Agreement”), the terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of Ladish Co., Inc. Under certain
circumstances set forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. Ladish Co., Inc. will
mail to the holder of this certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances set forth in the Rights
Agreement, such Rights issued to, or beneficially owned by, an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether
beneficially owned by such person or any subsequent holder, shall become null and void.

With respect to such certificates containing the foregoing legend, until the Distribution Date, the
Rights associated with the Common Shares represented by such certificates shall be evidenced by
such certificates alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such Common Shares shall be deemed cancelled
and retired so that the Company shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.

4. Form of Right Certificates. The Right Certificates (and the forms of election to purchase
Common Shares and of assignment to be printed on the reverse thereof) shall be substantially the
same as Exhibit A hereto and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of Common Shares as shall be set forth therein at the purchase
price per Common Share set forth therein, but the amount and type of securities purchasable upon
exercise of each Right and such purchase price shall be subject to adjustment as provided herein.

 

6

 

5. Countersignature and Registration.

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

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

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

(a) Subject to the provisions of 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 earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof or that
have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of Common Shares as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the principal office of the Rights Agent.
Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right Certificates.

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

 

7

 

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

(a) Each Right shall be exercisable to purchase one Common Share, subject to further
adjustment as provided herein. The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the principal office of
the Rights Agent, together with payment of the Purchase Price for each Common Share as to which the
Rights are exercised, at or prior to the earliest of (i) the close of business on October 9, 2019,
subject to extension (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed
as provided in Section 23 hereof (the “Redemption Date”), and (iii) the time at which such Rights
are exchanged as provided in Section 24 hereof; provided, however, that if the number of Rights
exercised would entitle the holder thereof to receive any fraction of a Common Share greater than
one-half of a Common Share, then the holder thereof shall not be entitled to exercise such Rights
unless such holder concurrently purchases from the Company (and in such event the Company shall
sell to such holder), at a price in proportion to the Purchase Price, an additional fraction of a
Common Share which, when added to the number of Common Shares to be received upon such exercise,
will equal an integral number of Common Shares.

(b) The Purchase Price for each Common Share pursuant to the exercise of a Right shall
initially be $75.00, shall be subject to adjustment from time to time as provided in Sections 11
and 13 hereof and shall be payable in lawful money of the United States of America in accordance
with Section 7(c) below.

(c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the Purchase Price for the Common
Shares to be purchased and an amount equal to any applicable transfer tax required to be paid by
the holder of such Right Certificate in accordance with Section 9 hereof, as set forth below, the
Rights Agent shall thereupon promptly (i) requisition from any transfer agent of the Common Shares
certificates for the number of Common Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance of fractional Common Shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates, cause the same to be
delivered to or upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such Right Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof)
shall be made by certified check, cashier’s check, bank draft or money order payable to the order
of the Company, except that, if so provided by the Board, the payment of the Purchase Price
following the occurrence of a Section 11(a)(ii) Event (as hereinafter defined) and until the first
occurrence of a Section 13 Event (as hereinafter defined) may be made wholly or in part by delivery
of a certificate or certificates (with appropriate stock powers executed in blank attached thereto)
evidencing a number of Common Shares equal to the then Purchase Price divided by the closing price
(as determined pursuant to Section 11(d) hereof) per Common Share on the Trading Day (as such term
is hereinafter defined) immediately preceding the date of such exercise. If the Company is
obligated to issue
other securities 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 appropriate.

 

8

 

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

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

8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for
the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by any of the provisions of this
Rights Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. Subject to applicable law and regulation,
the Rights Agent shall maintain in a retrievable database electronic records of all cancelled or
destroyed Right Certificates that have been cancelled or destroyed by the Rights Agent. The Rights
Agent shall maintain such electronic records or physical records for the time period required by
applicable law and regulation. Upon written request of the Company (and at the expense of the
Company), the Rights Agent shall provide to the Company or its designee copies of such electronic
records or physical records relating to Right Certificates cancelled or destroyed by the Rights
Agent.

9. Reservation and Availability of Common Shares.

(a) The Company covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Common Shares or any authorized and issued Common Shares held in its
treasury the number of Common Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7.

(b) So long as the Common Shares issuable upon the exercise of Rights may be listed on any
national securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all Common Shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon such exercise.

(c) The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares (except as otherwise provided by any
corporation law applicable to the Company).

 

9

 

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

(e) If the Company determines that registration under the Securities Act is required, the
Company shall use commercially reasonable efforts (i) to file, as soon as practicable after the
Distribution Date, a registration statement under the Securities Act with respect to the securities
issuable upon exercise of the Rights, (ii) to cause such registration statement to become effective
as soon as practicable after such filing and (iii) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Securities Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable for such securities and
(B) the earlier of the Redemption Date and the Final Expiration Date. The Company shall also take
such action as may be appropriate to ensure compliance with the securities or blue sky laws of the
various states in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed 90 days, the exercisability of the Rights to prepare
and file such registration statement and permit it to become effective or to qualify the rights,
the exercise thereof or the issuance of securities upon the exercise thereof under state securities
or blue sky laws. The Company shall issue a public announcement upon any such suspension stating
that the exercisability of the Rights has been temporarily suspended, as well as a public
announcement when the suspension is no longer in effect. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable for securities in any jurisdiction
if the requisite qualification in such jurisdiction has not been obtained, such exercise is not
permitted under applicable law or a registration statement in respect of such securities has not
been declared effective.

10. Common Shares Record Date. Each Person in whose name any certificate for Common Shares is
issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Common Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Shares 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 Shares transfer books of the
Company are open.

 

10

 

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

(a) (i) In the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Common Shares payable in Common Shares, (B) split or subdivide the
outstanding Common Shares, (C) combine the outstanding Common Shares into a smaller number of
Common Shares or (D) issue any shares of its capital stock in a reclassification of the Common
Shares (including any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), 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 and kind of
shares of capital 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 the aggregate number and kind
of shares of capital stock which, if such Right had been exercised immediately prior to such date
and at a time when the Common Shares 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; provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. If an event occurs which would require
an adjustment under both Section 11(a)(i) and Section 11(a)(ii), 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).

(ii) Subject to the following paragraph and Section 24, in the event any Person shall become
an Acquiring Person, other than pursuant to any transaction set forth in Section 13(a) (a “Section
11(a)(ii) Event”), each holder of a Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price per full Common Share multiplied by the
number of Common Shares for which a Right is exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event, in accordance with the terms of this Agreement, such number of Common
Shares as shall equal the result obtained by (x) multiplying the then current Purchase Price per
full Common Share by the number of Common Shares for which a Right is exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event and dividing that product by (y) 50% of the
then current per share market price of the Common Shares (determined pursuant to Section 11(d)) on
the date the Person became an Acquiring Person (such number of shares, the “Adjustment Shares”).

From and after a Section 11(a)(ii) Event, any Rights that are or were beneficially owned by
such Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) shall be void and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement. No Right Certificate shall be issued pursuant
to Section 3 or 6 that represents Rights beneficially owned by an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof
or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be cancelled. The Company shall use all reasonable
efforts to ensure that the provisions of this paragraph are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.

 

11

 

(iii) In the event that there shall not be sufficient Common Shares issued but not outstanding
or authorized but unissued (and not reserved for issuance for purposes other than upon exercise of
the Rights) to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the “Current Value”) over (2) the Purchase Price
payable with respect to such Right (such excess, the “Spread”), and (B) with respect to each Right,
make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) equity securities of the
Company (including, without limitation, shares, or units of shares, of preferred stock, if any,
which the Board has deemed to have the same value as Common Shares (such shares of preferred stock,
hereinafter referred to as “common stock equivalents”)), (4) debt securities of the Company, (5)
other assets or (6) any combination of the foregoing, having an aggregate value equal to the
Current Value, where such aggregate value has been determined by the Board based upon the advice of
a nationally recognized investment banking firm selected by the Board; provided, however, if the
Company shall not have made adequate provision to substitute for the Adjustment Shares pursuant to
clause (B) above within thirty (30) days following the occurrence of a Section 11(a)(ii) Event (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 any portion of the Purchase
Price, Common Shares (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 shall determine in good faith that
it is likely that sufficient additional Common Shares might be authorized for issuance for exercise
in full of the Rights, the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order
that the Company may seek shareholder approval for the authorization of such additional shares
(such period, as it may be extended, the “Substitution Period”). To the extent that the Company
determines that some action need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to the last paragraph of
Section 11(a)(ii) hereof, that such action shall apply uniformly to all outstanding Rights, and (y)
may suspend the exercisability of the Rights until the expiration of the Substitution Period to
seek any authorization of additional shares and/or to decide the appropriate form of distribution
to be made pursuant to such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the exercisability of
the Rights has been
temporarily suspended, as well as a public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be
the current per share market price (as determined pursuant to Section 11(d) hereof) of the Common
Shares on the Section 11(a)(ii) Trigger Date and the value of any “common stock equivalent” shall
be deemed to have the same value as the Common Shares on such date.

 

12

 

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

(c) In case the Company shall fix a record date for the making of a distribution to all
holders of the Common Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash dividend (it is understood
that without creating any implication that an increase of more than such amount would cause a
dividend to fail to satisfy such standard, an increase of not to exceed one cent per share,
appropriately adjusted to reflect any stock split, stock dividend of similar transaction occurring
after the date hereof, shall not cause a dividend not to be a regular quarterly cash dividend) or a
dividend payable in Common Shares) or subscription rights or warrants (excluding those referred to
in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price of the Common Shares (as
defined in Section 11(d)) 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 assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable to one Common Share
and the denominator of which shall be such current per share market price of the Common Shares;
provided, however, in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made successively whenever such a record date is
fixed. In the event that such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such record date had not been
fixed.

 

13

 

(d) For the purpose of any computation hereunder, the “current per share market price” of the
Common Shares on any date shall be deemed to be the average of the daily closing prices per Common
Share for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, that in the event that the current per share market price of the
Common Shares is determined during a period following the announcement by the issuer of such Common
Shares of (i) a dividend or distribution on such Common Shares payable in Common Shares or
securities convertible into Common Shares, or (ii) any subdivision, combination or reclassification
of Common Shares and prior to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination or reclassification,
then, and in each such case, the current per share market price shall be appropriately adjusted to
reflect the current market price per Common Share. 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 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 principal national securities exchange on which the Common Shares are listed or admitted to
trading or, if the Common Shares 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, or, if on any such date the Common Shares are not quoted,
the average of the closing bid and asked prices as furnished by a professional market maker making
a market in the Common Shares selected by the Board. The term “Trading Day” shall mean a day on
which the principal national securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, a Business Day.

(e) 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 which by reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a share as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of the expiration of the right to
exercise any Rights.

(f) If, as a result of an adjustment made pursuant to Section 11(a), the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital stock of the Company
other than Common Shares, thereafter the number of such other shares so receivable upon exercise of
any Right 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 Shares contained in this
Section 11, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Common Shares
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 Common Shares purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.

 

14

 

(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
(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 Common Shares
(calculated to the nearest ten-thousandth of a Common Share) obtained by (i) multiplying (x) the
number of Common Shares covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.

(i) The Company may elect on or after the date of any adjustment of the Purchase Price to
adjust the number of Rights, in substitution for any adjustment in the number of Common Shares
purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of Common Shares for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights (calculated to the nearest
one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Right 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 Right
Certificates on such record date Right 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 Right Certificates held by such holders prior to the date of adjustment,
and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided for herein and shall
be registered in the names of the holders of record of Right 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 Common
Shares issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of Common Shares which were
expressed in the initial Right Certificates issued hereunder.

(k) Before taking any action that would cause an adjustment reducing the Purchase Price below
the par value, if any, of the Common Shares issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable
(except as otherwise provided by any corporation law applicable to the Company) Common Shares
at such adjusted Purchase Price.

 

15

 

(l) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of any Right exercised after such
record date of the Common Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of Common Shares 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 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 it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Common Shares, issuance wholly for
cash of any Common Shares at less than the current market price, issuance wholly for cash of Common
Shares or securities which by their terms are convertible into or exchangeable for Common Shares,
dividends on Common Shares payable in Common Shares or issuance of rights, options or warrants
referred to in Section 11(b), hereafter made by the Company to holders of its Common Shares shall
not be taxable to such shareholders.

(n) The Company covenants and agrees that it shall not, at any time after the earlier of the
Distribution Date or the Shares Acquisition Date, (i) consolidate with any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof) or (iv) consummate a
share exchange with any other Person, if at the time of or immediately after such consolidation,
merger, sale or share exchange (A) there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights, (B) prior to, simultaneously with or
immediately after such consolidation, merger, sale or share exchange the shareholders of the Person
who constitute, or would constitute, the “Principal Party” for purposes of Section 13(b) hereof
shall have received a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates or (C) the form or nature of organization of the Principal Party would
preclude or limit the exercisability of the Rights.

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

 

16

 

12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made
as provided in Sections 11 and 13 hereof, the Company shall promptly (a) prepare a certificate
setting forth such adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common Shares a copy of such
certificate and (c) mail (or, if deemed appropriate by the Board, make available at no charge) a
brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof.

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

(a) In the event that, following the Shares Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or merger; (y) any Person
(other than a Subsidiary of the Company in a transaction that complies with Section 11(o) hereof)
shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing
or surviving corporation of such consolidation or merger, or any Person or Persons (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o) hereof) shall
consummate a share exchange with the Company, and, in connection with such consolidation, merger or
share exchange, all or part of the outstanding Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) 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 or earning
power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with Section 11(o) hereof), then in each
such case proper provision shall be made so that: (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price per full Common Share multiplied by the number of Common
Shares for which a Right is then exercisable (or, if a Section 11(a)(ii) Event has occurred prior
to the first occurrence of any of the events described in clauses (x), (y) or (z) above (a “Section
13 Event”), the Purchase Price per full Common Share in effect immediately prior to the first
occurrence of a Section 11(a)(ii) Event multiplied by the number of Common Shares for which a Right
was exercisable immediately prior to such first occurrence), in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid, nonassessable (except as
otherwise required by any corporation law applicable to the Principal Party (as such term is
hereinafter defined)) and freely tradeable Common Shares of the Principal Party, not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price per full Common Share by the
number of Common Shares 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 per full Common Share in effect immediately prior to
such first occurrence), and 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 (2) 50% of the current market price (determined pursuant to Section 11(d)
hereof) per Common Share of such Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply only to such Principal
Party following the first occurrence of a Section 13 Event; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient number of its Common
Shares) 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 Common Shares 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.

 

17

 

(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), the Person that is the issuer of any securities into which Common Shares are
converted in such merger, consolidation or share exchange, and if no securities are so issued, (A)
the Person that is the other party to the merger, consolidation or share exchange and that survives
such merger or consolidation, or, if there is more than one such Person, the Person the Common
Shares of which have the greatest aggregate market value of shares outstanding or (B) if the Person
that is the other party to the merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or consolidation (including the Company if
it survives); and

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

provided, however, that in any such case, (1) if the Common Shares of such Person are not at such
time and have not been continuously over the preceding twelve (12) month-period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Shares of which are and have been so registered, “Principal Party” shall refer to
such other Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Shares 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 Shares
having the greatest aggregate market value.

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

(i) prepare and file a registration statement under the Securities Act with respect to the
Rights and the securities purchasable upon exercise of the Rights on an appropriate form, 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 Securities Act) until the Final Expiration Date; and

(ii) deliver to holders of the Rights historical financial statements for the Principal Party
and each of its Affiliates which 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, consolidations,
share exchanges, sales or other transfers. In the event that a Section 13 Event shall occur at any
time after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in Section 13(b).

 

18

 

14. Fractional Rights and Fractional Shares.

(a) The Company shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Right Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14(a), the current market value of
a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The closing price 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 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, or, if on any such date the Rights are not quoted, 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 Common Shares upon exercise or
exchange of the Rights or to distribute certificates which evidence fractional Common Shares. In
lieu of issuing fractional Common Shares equal to one-half of a Common Share or less upon the
exercise of Rights, the Company shall pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Common Share. Any exercise of
Rights that would entitle the holder thereof to receive any fraction of a Common Share greater
than one-half of a Common Share shall be governed by Section 7(a) hereof. In lieu of issuing
fractional Common Shares upon the exchange of Rights, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exchanged as herein provided an amount in
cash equal to the same fraction of the current market value of one Common Share. For purposes of
this Section 14(b), the current market value of a Common Share shall be the closing price of a
Common Share (as determined pursuant to the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise.

(c) The holder of a Right by the acceptance of the Right expressly waives his right to receive
any fractional Rights or any fractional shares upon exercise of a Right (except as provided above).

 

19

 

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

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

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

(b) after the Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer;

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

 

20

 

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

17. Right Certificate Holder Not Deemed a Shareholder. No holder, as such, of any Right
Certificate shall be entitled to vote, receive dividends or other distributions or be deemed for
any purpose the holder of the Common Shares or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any Right 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 Right Certificate
shall have been exercised in accordance with the provisions hereof.

18. Concerning the Rights Agent.

(a) The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses incurred in the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability in the premises.

(b) The Rights Agent shall be protected and shall incur no liability for, or in respect of any
action taken, suffered or omitted by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or document 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.

 

21

 

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

(a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any Person resulting from any merger
or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or
any Person succeeding to the stock transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the parties hereto,
provided that 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 Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this Agreement.

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

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

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

(b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Financial Officer or any Vice President and by the Treasurer or any Assistant Treasurer
or the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such certificate.

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

 

22

 

(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 Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.

(e) The Rights Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due authorization, execution and
delivery hereof by the Rights Agent) or in respect of the validity or execution of any Right
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 Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any 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 Right Certificates after actual notice
that such change or adjustment is required); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any Common Shares or other
securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any
Common Shares or other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.

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

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

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

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

 

23

 

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 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Shares by registered or certified mail, and, if
separate Right Certificates have been issued as of the date of such notice as contemplated by
Section 3, to the holders of the Right Certificates by first-class mail. In the event the transfer
agency relationship in effect between the Company and the Rights Agent or any of the Rights Agent’s
affiliates terminates, the Rights Agent will be deemed to resign automatically on the effective
date of such termination; and any required notice will be sent by the Company. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares by registered or certified mail, and, if separate Right Certificates have been issued
as of the date of such notice as contemplated by Section 3, to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days after giving notice
of such removal or after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with
such notice, submit his Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be (a) a legal business entity organized and doing business under the laws
of the United States or of any state of the United States so long as such entity is authorized to
do business as a banking institution in the State of New York or the State of Wisconsin, in good
standing, having an office or agency in the State of Wisconsin or the State of New York, which is
authorized under such laws to exercise corporate trust, stock transfer or shareholder services
powers and is subject to supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million,
or (b) an Affiliate of a legal business entity described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Shares, and, if separate Right Certificates have been issued as
of the date of such notice as contemplated by Section 3, mail a notice thereof in writing to the
registered holders of the Right 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.

 

24

 

22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by 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 Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or sale by the Company
of Common Shares following the Distribution Date and prior to the Expiration Date, the Company (a)
will, with respect to Common Shares so issued or sold pursuant to the exercise, exchange or
conversion of securities (other than Rights) issued prior to the Distribution Date that are
exercisable or exchangeable for, or convertible into, Common Shares and (b) may, in any other case,
if deemed necessary, appropriate or desirable by the Board, issue Right Certificates representing
an equivalent number of Rights as would have been issued in respect of such Common Shares if they
had been issued or sold prior to the Distribution Date, as appropriately adjusted as provided
herein as if they had been so issued or sold; provided, however, that (i) no such Right Certificate
will be issued if, and to the extent that, in its good faith judgment the Board determines that the
issuance of such Right Certificate could have a material adverse tax consequence to the Company or
to the Person to whom or which such Right Certificate otherwise would be issued and (ii) no such
Right Certificate will be issued if, and to the extent that, appropriate adjustment otherwise has
been made in lieu of the issuance thereof.

23. Redemption.

(a) The Rights may be redeemed by action of the Board pursuant to Section 23(b) and shall not
be redeemed in any other manner.

(b) The Board may, at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then outstanding Rights at a redemption
price of $0.001 per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”). The redemption of the Rights by the Board may be made
effective at such time on such basis and with such conditions as the Board in its sole discretion
may establish. Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as
the Company’s right of redemption hereunder has expired.

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

 

25

 

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 void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at
an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board 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, any
entity holding Common Shares for or pursuant to the terms of any such plan, or any trustee,
administrator or fiduciary of such a plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding. The
exchange of the Rights by the Board may be made effective as such time, on such basis and with such
conditions as the Board in its sole discretion may establish. 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 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
the Trust Agreement (the “Trust”) all of the Common Shares or common stock equivalents, to the
extent applicable pursuant to Section 24(c), issuable pursuant to the exchange (and any cash in
lieu of fractional shares), and all Persons entitled to receive shares pursuant to the exchange
shall be entitled to receive such Common Shares or common stock equivalents (and any dividends or
distributions made thereon after the date on which such shares are deposited in the Trust and any
cash in lieu of fractional shares) only from the Trust and solely upon compliance with the relevant
terms and provisions of the Trust Agreement.

(b) Immediately upon the action of the Board ordering 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 Common Shares equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method by which the
exchange of the Common Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

 

26

 

(c) In any exchange pursuant to this Section 24, the Company, at its option, may substitute
common stock equivalents (as such term is defined in Section 11(a)(iii) hereof) for some or all of
the Common Shares exchangeable for Rights.

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

25. Notice of Certain Events.

(a) In case the Company shall propose, after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Common Shares or to make any other distribution to
the holders of Common Shares (other than a regular quarterly cash dividend), (ii) to offer to the
holders of Common Shares rights or warrants to subscribe for or to purchase any additional Common
Shares or shares of stock of any class or any other securities, rights or options, (iii) to effect
any reclassification of Common Shares (other than a reclassification involving only the subdivision
of outstanding Common Shares), (iv) to effect any consolidation or merger into or with (other than
a merger of a Subsidiary into or with the Company), to effect any share exchange with 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 or more transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall
give to each holder of a Right Certificate, 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, or
distribution of rights or warrants, or the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the Common Shares 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 10 days prior to the record date for determining holders of Common Shares for
purposes of such action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein by the holders of
the Common Shares, whichever shall be the earlier.

(b) In case any of Section 11(a)(ii) Event or Section 13 Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, which
notice shall include a brief summary of the Section 11(a)(ii) Event or Section 13 Event, as the
case may be, and the consequences thereof to holders of Rights.

 

27

 

26. Notices.

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

Ladish Company, Inc.

5481 South Packard Avenue

Cudahy, WI 53110-2244

Attention: Secretary

(b) 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 Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by overnight delivery service or
registered or certified mail, postage prepaid, addressed (until another address is filed in writing
with the Company) as follows:

American Stock Transfer & Trust Company, LLC

6201 — 15th Avenue

Brooklyn, NY 11219

Attention: Corporate Trust Department

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

27. Supplements and Amendments. Prior to the Distribution Date 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 any provision of this Agreement without the approval of any holders of
certificates representing Common Shares. From and after such time as any Person becomes an
Acquiring Person and subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to correct
or supplement any provision contained herein which may be defective or inconsistent with any other
provision herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem necessary or desirable
and which shall not adversely affect the interests of the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided, that from and
after such time as any Person becomes an Acquiring Person this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. Upon the delivery of a certificate from
an appropriate officer of the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Agreement to the contrary, no supplement or
amendment shall be made that reduces the then effective Redemption Price or moves to an earlier
date the then effective Final Expiration Date. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the holders of Common
Shares.

 

28

 

28. Determinations and Actions by the Board of Directors. 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, without limitation, the right and power to (a) interpret the
provisions of this Agreement, and (b) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not redeem the Rights or
to amend the Agreement and any determination as to whether actions or any Person shall be such as
to cause such Person to beneficially own Common Shares or to become an Acquiring Person). All such
actions, calculations, interpretations and determinations (including, for purposes of clause (ii)
below, all omissions with respect to the foregoing) which are done or made by the Board in good
faith, shall (i) be final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (ii) not subject the Board to any liability to the holders of
the Rights or to any other person.

29. 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.

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 Right
Certificates (and, prior to the Distribution Date, the Common Shares) 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 Right Certificates (and,
prior to the Distribution Date, the Common Shares).

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 that
nothing contained in this Section 31 will affect the ability of the Company under the provisions of
Section 27 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.

 

29

 

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

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

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

35. Book Entry. Reference in this Agreement to certificates for Common Shares includes, in the
case of uncertificated Common Shares, the balances indicated in the book-entry account system of
the transfer agent for the Common Shares, and prior to the Distribution Date, any uncertificated
Common Shares shall also evidence the associated Rights. Any legend required to be placed on any
certificate for Common Shares may instead be included on any book-entry confirmation or
notification to the registered holder of such Common Shares.

 

30

 

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

	 	 	 	 	 	 	 	 
	 	 	 	 	LADISH CO., INC.	 
	 
	 	 	 	 	 	 	 
	Attest:	 	/s/ Gary J. Vroman	 	/s/ Wayne E. Larsen	 
	 	 	 	 	 	 
	By:

	 	Gary J. Vroman
	 	By:
	 	Wayne E. Larsen	 
	Title:

	 	President & CEO
	 	Title:
	 	Vice President, Chief Financial Officer and 	 
	 

	 	 	 	 	 	Secretary	 
	 
	 	 	 	 	 	 	 
	 	 	 	 	AMERICAN STOCK TRANSFER &	 
	 	 	 	 	TRUST COMPANY, LLC	 
	 
	 	 	 	 	 	 	 
	Attest:	 	/s/ Susan Silber	 	/s/ Herbert J. Lemmer	 
	 	 	 	 	 	 
	By:

	 	Susan Silber
	 	By:
	 	Herbert J. Lemmer	 
	Title:

	 	Assistant Secretary
	 	Title:
	 	Vice President	 

 

31

 

EXHIBIT A

[Form of Right Certificate]

			
	 	 	 
	Certificate No. R-
	 	                     Rights

NOT EXERCISABLE AFTER OCTOBER 9, 2019 (SUBJECT TO EXTENSION) OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

Right Certificate

LADISH CO., INC.

This certifies that                                         , or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of October 9, 2009, and as such
agreement may be amended (the “Rights Agreement”), between Ladish Co., Inc., a Wisconsin
corporation (the “Company”), and American Stock Transfer & Trust Company, LLC (the “Rights Agent”),
to purchase from the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M., Milwaukee, Wisconsin time, on October 9, 2019,
subject to extension, at the principal office of the Rights Agent, or at the office of its
successor as Rights Agent, one-half of one fully paid nonassessable (except as otherwise provided
by any corporation law applicable to the Company) share of common stock, $0.01 par value per share
(“Common Shares”), of the Company, at a purchase price of $75 per Common Share (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number
of Common Shares which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of October 9, 2009, based on the Common
Shares as constituted at such date. As provided in the Rights Agreement, the Purchase Price and
the number of Common Shares which may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and adjustment upon the happening of certain
events.

This Right 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 Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the Company and the
above-mentioned offices of the Rights Agent.

 

A-1

 

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

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
(i) may be redeemed by the Company at a redemption price of $0.001 per Right or (ii) may be
exchanged in whole or in part for Common Shares. The Board may, at its option, at any time after
any Person becomes an Acquiring Person, but prior to such Person’s acquisition of 50% or more of
the outstanding Common Shares, exchange the Rights evidenced by this Certificate for Common Shares,
at an exchange ratio of one Common Share per Right, subject to adjustment, as provided in the
Rights Agreement.

No fractional Common Shares will be issued upon the exercise or exchange of any Right or
Rights evidenced hereby, but in lieu thereof and subject to the following sentence a cash payment
will be made, as provided in the Rights Agreement. No Rights may be exercised that would entitle
the holder to any fraction of a Common Share greater than one-half of a Common Share unless
concurrently therewith such holder purchases an additional fraction of a Common Share which, when
added to the number of Common Shares to be received upon such exercise, equals an integral number
of Common Shares, as provided in the Rights Agreement.

No holder of this Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Common Shares or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the
rights of a 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 the Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided
in the Rights Agreement.

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

 

A-2

 

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	LADISH CO., INC.
	 
	 	 	 	 	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	Title:

	 	 
	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 

Countersigned:

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signature	 	 

 

A-3

 

[Form of Reverse Side of Right Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)

FOR VALUE RECEIVED                                                              
                    hereby sells, assigns and transfers unto

                                                                    
                                                                              

(Please print name and address of transferee)

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

	 	 	 	 	 
	Dated:

	 	                    ,           	 	 
	 
	 	 	 	 
	 
	 	 	 	Signature

Signature Guaranteed:

Signatures must be guaranteed by a bank, trust company, broker, dealer or other eligible
institution participating in a recognized signature medallion program.

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by, were not acquired by the undersigned from, and are not being sold, assigned
or transferred to, an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).

	 	 	 	 	 
	 
	 	 	 	Signature

 

A-4

 

[Form of Reverse Side of Right Certificate — continued]

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to 

exercise the Right Certificate.)

To LADISH CO., INC.:

The undersigned hereby irrevocably elects to exercise                                                      
        Rights represented by
this Right Certificate to purchase the Common Shares issuable upon the exercise of such Rights and
requests that certificates for such Common Shares be issued in the name of:

Please insert social security

or other identifying number

 

(Please print name and address)

 

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

Please insert social security

or other identifying number

 

(Please print name and address)

 

	 	 	 	 	 
	Dated:

	 	                    ,           	 	 
	 
	 	 	 	 
	 

	 	 	 	Signature

Signature Guaranteed:

Signatures must be guaranteed by a bank, trust company, broker, dealer or other eligible
institution participating in a recognized signature medallion program.

 

A-5

 

[Form of Reverse Side of Right Certificate — continued]

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by, were not acquired by the undersigned from, and are not being sold, assigned
or transferred to, an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).

	 	 	 	 	 
	 

	 	 	 	Signature

NOTICE

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

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

 

A-6

 

EXHIBIT B

LADISH CO., INC.

SUMMARY OF COMMON SHARE PURCHASE RIGHTS

On October 9, 2009, the Board of Directors of Ladish Co., Inc. (the “Company”) declared a
dividend of one common share purchase right (a “Right”) for each outstanding share of common stock,
$0.01 par value per share (the “Common Shares”), of the Company. The dividend is payable on
October 30, 2009 to the shareholders of record on October 20, 2009 (the “Record Date”). Each Right
entitles the registered holder to purchase from the Company one Common Share, at a price of $75 per
Common Share, subject to adjustment (the “Purchase Price”). The description and terms of the
Rights are set forth in a Rights Agreement (the “Rights Agreement”) between the Company and
American Stock Transfer & Trust Company, LLC, as Rights Agent (the “Rights Agent”).

Until the earlier to occur of (i) 10 days following a public announcement that a person or
group of affiliated or associated persons (other than the Company, a subsidiary of the Company or
an employee benefit plan of the Company or a subsidiary) (an “Acquiring Person”) has acquired
beneficial ownership of 15% or more of the outstanding Common Shares (the “Shares Acquisition
Date”) or (ii) 10 business days (or such later date as may be determined by action of the Company’s
Board of Directors prior to such time as any person becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or group (other than the
Company, a subsidiary of the Company or an employee benefit plan of the Company or a subsidiary) of
15% or more of such outstanding Common Shares (the earlier of such dates being called the
“Distribution Date”), the Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share certificate.

The Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued after the Record
Date, upon transfer or new issuance of Common Shares, will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Shares, outstanding as of
the Record Date, even without such notation, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”)
will be mailed to holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the Rights.

 

B-1 

 

The Rights are not exercisable until the Distribution Date. The Rights will expire on October
9, 2019 (the “Final Expiration Date”), subject to extension, unless the Rights are earlier redeemed
or exchanged by the Company, in each case as described below.

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

In the event that any person becomes an Acquiring Person (a “Flip-In Event”), each holder of a
Right (except as otherwise provided in the Rights Agreement) will thereafter have the right to
receive upon exercise that number of Common Shares (or, in certain circumstances cash, property or
other securities of the Company or a reduction in the Purchase Price) having a market value of two
times the then current Purchase Price. Notwithstanding any of the foregoing, following the
occurrence of a Flip-In Event all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, or subsequently become beneficially owned by an Acquiring Person, related
persons and transferees will be null and void.

In the event that, at any time following the Shares Acquisition Date, (i) the Company is
acquired in a merger or other business combination transaction or (ii) 50% or more of its
consolidated assets or earning power are sold (the events described in clauses (i) and (ii) are
herein referred to as “Flip-Over Events”), proper provision will be made so that each holder of a
Right (except as otherwise provided in the Rights Agreement) will thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, that number of shares of
common stock of the acquiring company which at the time of such transaction will have a market
value of two times the then current Purchase Price.

With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional Common
Shares will be issued in connection with the exercise or exchange of Rights.

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

 

B-2

 

In lieu of fractional Common Shares equal to one-half of a Common Share or less, an adjustment
in cash will be made based on the market price of the Common Shares on the last trading day prior
to the date of exercise. No Rights may be exercised that would entitle the holder thereof to any
fractional Common Share greater than one-half of a Common Share unless
concurrently therewith such holder purchases an additional fraction of a Common Share which
when added to the number of Common Shares to be received upon such exercise, equals an integral
number of Common Shares.

The Purchase Price is payable by certified check, cashier’s check, bank draft or money order
or, if so provided by the Company, the Purchase Price following the occurrence of a Flip-In Event
and until the first occurrence of a Flip-Over Event may be paid in Common Shares having an
equivalent value.

At any time prior to a person becoming an Acquiring Person, the Board may redeem the Rights in
whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemption of
the Rights may be made effective at such time, on such basis and with such conditions as the Board
of Directors 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 Price.

Other than amendments that would reduce the Redemption Price or move to an earlier date the
Final Expiration Date, the terms of the Rights may be amended by the Board without the consent of
the holders of the Rights, with appropriate exceptions for any person then beneficially owning a
percentage of the number of Common Shares then outstanding equal to or in excess of the new
threshold, except that from and after such time as any Person becomes an Acquiring Person no such
amendment may adversely affect the interests of the holders of the Rights.

Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Company, including, without limitation, the right to vote or to receive dividends.

 

B-3

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