Document:

Exhibit 10.13

 

Exhibit 10.13

LETTER OF CREDIT REIMBURSEMENT AGREEMENT

     THIS LETTER OF CREDIT REIMBURSEMENT AGREEMENT, dated as of September 5, 2007 (this
“Reimbursement Agreement”), is entered into among SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-2, a
Delaware statutory trust (the “Issuer”), WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as
indenture trustee (in such capacity, the “Indenture Trustee”), SANTANDER DRIVE AUTO RECEIVABLES
LLC, a Delaware limited liability company, as seller (the “Seller”), SANTANDER CONSUMER USA INC.,
an Illinois corporation (“Santander Consumer”), as servicer (in such capacity, the “Servicer”), and
BANCO SANTANDER, S.A., ACTING THROUGH ITS NEW YORK BRANCH,(“Banco Santander”), as letter of credit
issuer (in such capacity, the “Letter of Credit Issuer”).

RECITALS

     WHEREAS, the Seller, the Servicer, the Issuer and the Indenture Trustee are, concurrently
herewith, entering into a Sale and Servicing Agreement, dated as of September 5, 2007 (the “Sale
and Servicing Agreement”), pursuant to which the Issuer is acquiring from the Seller a pool of
retail installment sales contracts (the “Contracts”) secured by new and used automobiles, light
duty trucks, vans and mini-vans financed thereby;

     WHEREAS, the Issuer and the Indenture Trustee are, concurrently herewith, entering into an
indenture, dated as of September 5, 2007 (the “Indenture”), pursuant to which the Issuer is issuing
$600,000,000 aggregate principal amount of Class A Asset Backed Notes (the “Notes”);

     WHEREAS, Banco Santander, as administrative agent and as issuing bank, Drive Residual Holdings
LP, as borrower, Santander Consumer, as originator, the financial institutions signatory thereto
from time to time (the “Lenders”) and Santander Investment Securities Inc., as arranger, have
entered into a second amended and restated credit agreement, dated as of August 30, 2007 (the
“Credit Agreement”), pursuant to which Banco Santander, as Letter of Credit Issuer, may provide,
pursuant to the terms and conditions contained in the Credit Agreement, the Letter of Credit, in
substantially the form attached hereto as Exhibit A; and

     WHEREAS, the parties hereto wish to set forth certain terms and conditions relating to the
issuance of the Letter of Credit in connection with the Notes and the Reserve Amount.

     NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1. Definitions. As used in this Reimbursement Agreement and unless the
context requires a different meaning, capitalized terms defined in the recitals, the heading and
text hereof shall have their defined meanings when used herein, and capitalized terms not

 

 

otherwise defined herein shall have the meanings assigned to such terms in the Sale and Servicing
Agreement and the following terms shall have the following meanings:

     “Base Rate” shall mean, as of any date, a rate per annum equal to the greater of (i) the rate
announced by Banco Santander from time to time as its prime rate in the United States, such rate to
change as and when such designated rate changes, which rate is not intended to be the lowest rate
of interest charged by Banco Santander in connection with extensions of credit to debtors or (ii) a
fluctuating interest rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal for each day during such period to the rate determined, in the sole opinion of Banco
Santander, to be the rate at which federal funds are being offered for sale in the national federal
funds market at 9:00 a.m. (New York, New York time) on such day, plus 1.00%.

     “Cash Flow” means cash flow supporting the Notes, calculated in accordance with Item 1114 of
Regulation AB, as determined by the Issuer or the Servicer in its reasonable discretion.

     “Commission” means the United States Securities and Exchange Commission.

     “Eligible Letter of Credit Issuer” means an institution with a short-term debt or deposit
rating at least equal to A-1 or the equivalent from S&P and Prime-1 or the equivalent from Moody’s
and a long-term debt or deposit rating at least equal to A or the equivalent from S&P and A2 or the
equivalent from Moody’s.

     “Exchange Act” means the Securities Exchange Act of 1934, including, unless the context
otherwise requires, the rules and regulations thereunder.

     “Exchange Act Reports” means all Distribution Reports on Form 10-D, Current Reports on Form
8-K and Annual Reports on Form 10-K that are required to be filed by the Seller or the Issuer with
respect to the Notes pursuant to the Exchange Act.

     “Letter of Credit” means the Reserve Account Letter of Credit issued by the Letter of Credit
Issuer, substantially in the form of Exhibit A.

     “Letter of Credit Draw Amount” means any unreimbursed drawing under the Letter of Credit.

     “Rating Agency Condition” means written confirmation by each Rating Agency that its then
current rating of the Notes, without giving effect to the Note Policy, shall not be reduced or
withdrawn.

     “Repayment Amount” shall mean the sum of all amounts payable with respect to any outstanding
Letter of Credit Draw Amounts, fees, interest and expenses and all other amounts owing to the
Letter of Credit Issuer hereunder and to Banco Santander and the Lenders under the Credit
Agreement, with respect to the Letter of Credit.

     “Regulation AB” means Subpart 229.1100 — Asset Backed Securities (Regulation AB), 17 C.F.R. §
§ 229.1100-229.1123, and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities

 

 

Act Release no. 33-8518.70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time to time.

     Section 1.2. Interpretation. When used in this Reimbursement Agreement, unless a
contrary intention appears: (a) a term has the meaning assigned to it; (b) an accounting term not
otherwise defined has the meaning assigned to it in accordance with GAAP; (c) “or” is not
exclusive; (d) “including” means including without limitation; (e) words in the singular include
the plural and words in the plural include the singular; (f) any agreement, instrument or statute
defined or referred to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended, modified or supplemented
and includes (in the case of agreements or instruments) references to all attachments thereto and
instruments incorporated therein; (g) references to a Person are also to its successors and
permitted assigns; (h) the words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Reimbursement Agreement shall refer to this Reimbursement Agreement as a whole
and not to any particular provision hereof; (i) references contained herein to Section, Schedule
and Exhibit, as applicable, are references to Sections, Schedules and Exhibits in this
Reimbursement Agreement unless otherwise specified; (j) references to “writing” include printing,
typing, lithography and other means of reproducing words in a visible form; and (k) the term
“proceeds” has the meaning set forth in the applicable UCC.

ARTICLE II

LETTER OF CREDIT

     Section 2.1. Issuance. The Letter of Credit Issuer hereby agrees, upon the request of
the Servicer on the terms and subject to the conditions set forth in the Credit Agreement, to issue
to the Indenture Trustee the Letter of Credit. If a successor Indenture Trustee is appointed,
promptly following the appointment of such successor Indenture Trustee pursuant to the terms of the
Indenture and upon receipt of an Instruction to Transfer substantially in the form of Annex C to
the Letter of Credit, the Letter of Credit Issuer shall deliver to such successor Indenture
Trustee, in exchange for the outstanding Letter of Credit held by the predecessor Indenture
Trustee, a substitute Letter of Credit substantially in the form of Exhibit A hereto, having terms
identical to the then outstanding Letter of Credit but in favor of such successor Indenture
Trustee.

     Section 2.2. Terms and Payments.

     (a) Except as expressly provided herein or in any Transaction Document, all terms and
conditions with respect to the payment of the Repayment Amount and any other fees, interest and
expenses with respect to the Letter of Credit, shall not be determined in accordance with the
Transaction Documents, but shall be determined in accordance with the Letter of Credit and the
Credit Agreement.

     (b) Without the prior written consent of the Letter of Credit Issuer, at no time while the
Issuer is subject to the reporting requirements of the Exchange Act will the face amount of the
Letter of Credit be modified to exceed an amount equal to 9.50% of the Cash Flow, provided

 

 

that the foregoing shall not reduce or modify the Letter of Credit Issuer’s obligations under
the Letter of Credit.

     (c) To the extent the face amount of the Letter of Credit would exceed an amount equal to
9.50% of the Cash Flow, the Issuer and the Servicer shall (i) arrange for the issuance of an
additional letter or letters of credit and/or (ii) provide for deposits to be made to the Reserve
Account from Available Funds (as defined in the Sale and Servicing Agreement), other than any draws
on the Letter of Credit and otherwise to the extent available, so that at all times the Letter of
Credit Amount shall not exceed 9.50% of the Cash Flow.

     Section 2.3. Limited Recourse; Obligations Absolute.

     (a) Subject to Sections 2.3(b), (c) and (d) hereof, the obligation to repay any Repayment
Amount shall be without recourse to the Seller (or any Person acting on behalf of the Seller), the
Issuer, the Servicer, the Insurer, the Indenture Trustee or any holder of Notes or any Affiliate,
officer or director of any of them and the obligation to pay any Repayment Amount shall be limited
solely to the application of:

     (i) Available Funds (as defined in the Credit Agreement) and other amounts payable in
respect thereof required to be distributed to the Lenders, and only to the extent that such
amounts are available pursuant to the Credit Agreement for distribution to the Lenders with
respect to the Letter of Credit; and

     (ii) any remaining funds of the Issuer, after payment in full of the debt and all other
obligations of the Issuer, incurred in accordance with the Transaction Documents.

     (b) In the event of a failure by the Servicer to make any payments, deposits, transfers or
give any instructions to transfer, in each case as required by the Sale and Servicing Agreement,
which failure directly results in (i) a withdrawal from the Reserve Account or a drawing under the
Letter of Credit or (ii) a decreased amount required to be distributed to the Letter of Credit
Issuer under the Credit Agreement, the obligation to repay the portion of the Repayment Amount
resulting from such breach shall be a full recourse obligation of the Servicer, together with
interest on such amount at the Base Rate in effect from time to time plus 2.00% from the date such
payment, deposit or transfer was required to be received by the Issuer or, in the case of the
failure to furnish required instructions resulting in a withdrawal from the Reserve Account or a
drawing under the Letter of Credit, from the date of such withdrawal or drawing. Amounts payable
hereunder by the Servicer shall not include amounts that have the effect of recourse or which
constitute advances by the Servicer due to credit or payment problems of the related obligors;
provided that the foregoing shall not affect any obligations the Servicer may otherwise have
pursuant to the Credit Agreement.

     (c) The obligations of (i) the Seller and the Servicer under this Section are solely corporate
obligations of the Seller and the Servicer and (ii) the Issuer under this Section are solely trust
obligations of the Issuer, and shall be payable by such Person solely as provided in this Section.
No recourse shall be had for the payment of any amount owing hereunder or any other obligation of,
or claim against, the Seller or the Issuer or the Servicer, as the case may be,

 

 

arising out of or based upon Section 2.3 against any stockholder, employee, officer, agent,
trustee, director or authorized person of the Seller, the Issuer or the Servicer.

     (d) Nothing contained in this Section shall relieve the Seller (or any Person acting on behalf
of the Seller), the Issuer, the Servicer, the Insurer, the Indenture Trustee or any holder of Notes
or any Affiliate, officer or director of any of them, of any liability such Person might otherwise
have as a result of actions or omissions taken by them resulting from fraud, gross negligence or
willful misconduct.

     (e) The provisions of Section 2.3(a) shall constitute a subordination agreement for purposes
of Section 510(a) of the Bankruptcy Code. No amount owing by the Seller or the Issuer, as the case
may be, hereunder, in excess of the liabilities that it is required to pay in accordance with
Section 2.3(a) shall constitute a “claim” (as defined in Section 101(5) of the Bankruptcy Code)
against it.

     (f) The Letter of Credit Issuer agrees that it shall have no right of setoff or banker’s lien
against (i) the Seller, the Issuer, the Indenture Trustee, the Servicer, the Insurer, the Owner
Trustee any holder of a Note or any Affiliate, officer or director of any of them, (ii) the Trust
Estate or (iii) any amounts on deposit in any Trust Account (other than the Residual Interest
Account, to the extent applicable), in any such case with respect to the reimbursement of the
Repayment Amount or with respect to any amount owing to the Letter of Credit Issuer arising
hereunder or under the Letter of Credit.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 3.1. Representations and Warranties of the Issuer, the Seller and the
Servicer. To induce the Letter of Credit Issuer to enter into this Reimbursement Agreement and
to issue the Letter of Credit, each of the Issuer, the Seller and the Servicer hereby represents
and warrants, each as to itself only (which representations and warranties shall be deemed made on
the date of issuance of the Letter of Credit), to the Letter of Credit Issuer that:

     (a) Due Organization and Qualification. Such Person is: (i) duly formed and
validly existing as a Delaware statutory trust, Illinois corporation or Delaware limited
liability company, respectively, and is in good standing under the laws of the State of
Delaware or Illinois, as applicable; and (ii) duly qualified to do business and is in good
standing in each jurisdiction in which the failure to be so qualified would have a material
adverse effect upon such Person or their ability to perform their obligations under this
Reimbursement Agreement and any Transaction Document to which such Person is a party.

     (b) Power and Authority. Such Person has all power and authority and has
obtained all licenses, permits, charters, registrations and approvals, necessary: (i) for
the conduct of its business as presently conducted; and (ii) to execute, deliver and perform
its obligations under this Reimbursement Agreement and each Transaction Document to which
such Person is a party.

 

 

     (c) Approval. The execution, delivery and performance of this Reimbursement
Agreement have been duly authorized by all necessary action on the part of such Person.

     (d) Valid and Binding Obligation. This Reimbursement Agreement constitutes a
legal, valid and binding obligation of such Person, enforceable in accordance with its
terms, except as such enforceability may be limited by: (i) bankruptcy, insolvency,
reorganization, receivership or other similar laws affecting the enforcement of creditors’
rights generally; and (ii) general equitable principles, regardless of whether such
enforceability shall be considered a proceeding in equity or at law.

     (e) Noncontravention. The consummation of the transactions contemplated by
this Reimbursement Agreement and the fulfillment of the terms hereof shall not: (i) conflict
with, result in any breach of any of the terms and provisions of, nor constitute a default
(nor an event which, with the giving of notice or passage of time, or both, would constitute
a default) under the organizational documents of such Person, or any indenture, agreement or
other instrument to which such Person is a party or by which it shall be bound; (ii) result
in the creation or imposition of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement or other instrument (other than the Indenture); or (iii)
violate any law or any order, rule, or regulation applicable to such Person of any court or
of any federal or state regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over such Person or its properties.

     (f) No Consents. No consent, license, approval or authorization from, or
registration, or declaration with, any governmental authority, bureau or agency, nor any
consent, approval, waiver or notification of any creditor, lessor or other non-governmental
person, is required in connection with the execution, delivery and performance by the such
Person of this Reimbursement Agreement, except (in each case) such as have been obtained and
are in full force and effect.

     (g) Pending Litigation or Other Proceeding. To the knowledge of such Person,
there are no proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality having
jurisdiction over such Person or its properties: (i) asserting the invalidity of this
Reimbursement Agreement or any other Transaction Document to which such Person is a party;
or (ii) seeking any determination or ruling that might materially and adversely affect the
validity or enforceability of, this Reimbursement Agreement or any other Transaction
Document to which such Person is a party.

     Section 3.2. Affirmative Covenants.

     (a) Compliance with Transaction Documents. Each of the Issuer, the Seller and the
Servicer agrees for itself, that it will comply with all terms and conditions applicable to such
Person contained in this Reimbursement Agreement and each other Transaction Document to which such
Person is a party.

 

 

     (b) Amendments. Each of the Issuer, the Seller and the Servicer will give the Letter
of Credit Issuer prior written notice of any proposed amendment to or modification of any
Transaction Document. Unless the Letter of Credit Issuer shall have previously approved in writing
the form of such amendment or modification, none of the Issuer, the Seller or the Servicer will
cause or permit to become effective any amendment to or modification of any the Transaction
Document if such amendment or modification would materially and adversely affect the Letter of
Credit Issuer, including any amendment or modification that: (i) reduces the amount or changes the
timing of payments to the Letter of Credit Issuer or any Certificateholder; (ii) impairs or
adversely affects the value of the Collateral; (iii) permits the creation of any Lien ranking prior
to or on a parity with the Lien of the Indenture Trustee with respect to any of the Collateral; or
(iv) terminates the Lien of the Indenture Trustee with respect to the Collateral.

     (c) Optional Repurchase. Neither the Seller nor the Servicer will effect any optional
purchase of the Contracts pursuant to Article 8 of the Sale and Servicing Agreement, unless: (i)
the Letter of Credit Issuer has been, or simultaneously therewith will be, repaid the Repayment
Amount in full; and (ii) no amounts are owing to the Letter of Credit Issuer hereunder or under the
Credit Agreement with respect to the Letter of Credit.

     (d) Access to Records; Discussions with Officers and Accountants. The Issuer, the
Seller and the Servicer shall each, upon the reasonable request of the Letter of Credit Issuer,
permit any authorized representative or agent of the Letter of Credit Issuer at reasonable times
to: (i) inspect the books and records of the Issuer, the Seller or the Servicer that may relate to
the Notes, the Certificates and the obligations of such Person under this Reimbursement Agreement
and the other Transaction Documents to which such Person is a party; and (ii) discuss the affairs,
finances and accounts of such Person with any of its respective officers, directors and
representatives, including its independent certified public accountants; provided, however, that,
so long as no Trigger Event or Event of Default has occurred and is continuing, the Letter of
Credit Issuer shall not inspect such books and records more frequently than once every six months.

     (e) Letter of Credit Amount. Each of the Seller and the Servicer shall promptly
notify the Letter of Credit Issuer if the Letter of Credit Issuer is liable or contingently liable
to provide payments under the Letter of Credit representing more than 9.0% of the Cash Flow. The
Seller and the Servicer shall use commercially reasonable efforts to give notification pursuant to
this Section not fewer than 30 days prior to the date on which the Letter of Credit Issuer is
anticipated to be liable or contingently liable to provide payments under the Letter of Credit
representing more than 9.0% of the Cash Flow.

     Section 3.3. No Petition.

     (a) The Letter of Credit Issuer hereby covenants and agrees that prior to the date which is
one year and one day after the payment in full of the latest maturing:

     (i) Note and the expiration of the Note Policy and the Swap Policy, it will not
institute against, or join with any other Person in instituting against, the Issuer; and

 

 

     (ii) security issued by any securitization trust created by the Seller, it will not
institute against, or join with any other Person in instituting against, the Seller,

any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law; provided, however, that nothing
in this Section shall constitute a waiver of any claim for reimbursement or other payment from the
Seller or the Issuer pursuant to this Reimbursement Agreement in any such proceedings or limit in
any manner any of the rights of the Letter of Credit Issuer under the Credit Agreement. The
provisions of this Section shall survive the termination of this Reimbursement Agreement and the
replacement or removal of the Letter of Credit Issuer.

     (b) The Servicer hereby covenants and agrees that prior to the date which is one year and one
day after the payment in full of the latest maturing:

     (i) Note and the expiration of the Note Policy and the Swap Policy, it will not
institute against, or join with any other Person in instituting against, the Issuer; and

     (ii) security issued by any securitization trust created by the Seller, it will not
institute against, or join with any other Person in instituting against, the Seller,

any bankruptcy, reorganization, arrangement, conservatorship, receivership, insolvency or
liquidation proceedings, or other proceedings under any federal or state bankruptcy, receivership
or similar law, in connection with any amounts due the Servicer (or any Affiliate or parent
thereof) under any Transaction Document or otherwise without the prior written consent of the
Letter of Credit Issuer. The provisions of this Section shall survive termination of this
Reimbursement Agreement.

ARTICLE IV

MISCELLANEOUS

     Section 4.1. Third-Party Beneficiary. The Insurer is an intended third party
beneficiary of this Reimbursement Agreement.

     Section 4.2. Payments. All payments to the Letter of Credit Issuer hereunder shall be
made in lawful currency of the United States and in immediately available funds prior to 11:00 a.m.
(New York City time) on the date such payment is due by wire transfer to the Letter of Credit
Issuer, to Banco Santander, S.A., acting through its New York Branch, ABA 026007692, Account Number
107143001, or to such other office or account maintained by the Letter of Credit Issuer as the
Letter of Credit Issuer may direct.

     Section 4.3. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, facsimile transmission or similar writing) and
addressed, delivered or transmitted to such party at its address or telecopy number set forth
below, or at such other address or telecopy number, as the case may be, as such party may hereafter
specify for the purpose by notice to the other party (or as provided in the Transaction Documents).
Each such notice, request or communication shall be effective when received by the party to which
it is addressed.

 

 

	 	 	 
	If to the Servicer:

	 	Santander Consumer USA Inc.
	 

	 	8585 North Stemmons Freeway
	 

	 	Dallas, Texas 75247
	 

	 	Attention: Chief Financial Officer
	 

	 	Telephone: 214-237-3530
	 

	 	Telecopier: 214-630-0828
	 
	 	 
	If to the Seller:

	 	Santander Drive Auto Receivables LLC
	 

	 	8585 North Stemmons Freeway
	 

	 	Dallas, Texas 75247
	 

	 	Attention: Chief Financial Officer
	 

	 	Telephone: 214-237-3530
	 

	 	Telecopier: 214 237 3570
	 
	 	 
	If to the Issuer:

	 	Santander Drive Auto Receivables Trust 2007-2
	 

	 	c/o U.S. Bank Trust National Association,
	 

	 	as Owner Trustee
	 

	 	300 Delaware Avenue
	 

	 	9th Floor
	 

	 	Wilmington, Delaware 19801
	 

	 	Attention: Mildred F. Smith
	 

	 	Telephone: 302-576-3703
	 

	 	Telecopier: 302-576 3717
	 
	 	 
	If to the Indenture Trustee:

	 	Wells Fargo Bank, National Association
	 

	 	MAC N9311-161
	 

	 	Sixth Street & Marquette Avenue
	 

	 	Minneapolis, MN 55479
	 

	 	Attention: Corporate Trust Services- Asset Backed
	 

	 	Administration
	 

	 	Telephone: 612-667-8058
	 

	 	Telecopier: 612-667-3539
	 
	 	 
	If to the Letter of
Credit Issuer:

	 	Banco Santander, S.A., acting through its New
	 

	 	York Branch
	 

	 	45 East 53rd Street,
	 

	 	New York, NY 10022
	 

	 	Attention: Magda Mesegue
	 

	 	Telephone: (212) 350-3671
	 

	 	Telecopier: (212) 350-0630
	 

	 	E-mail: mmesegue@schny.com

 

 

	 	 	 
	If to the Insurer:

	 	MBIA Insurance Corporation
	 

	 	Attention: Insured Portfolio Management —
	 

	 	   Asset Backed (IPM-AB)
	 

	 	113 King Street
	 

	 	Armonk, NY 10504
	 

	 	Telecopier: (___) ___-___
	 

	 	Telephone: (___) ___-___
	 

	 	Email: ___________
	 
	 	 
	If to the Rating Agencies:

	 	Standard & Poor’s Ratings Services
	 

	 	55 Water Street
	 

	 	New York, New York 10041
	 

	 	Asset Backed Surveillance Department
	 
	 	 
	 

	 	Moody’s Investors Service, Inc.
	 

	 	99 Church Street
	 

	 	New York, New York 10007
	 

	 	ABS Monitoring Department

     Section 4.4. Amendments. No provision of this Reimbursement Agreement shall be
waived, amended or supplemented except (i) by a written instrument executed by the parties hereto
(ii) with the prior written consent of the Insurer and (iii) following prior written notice to each
Rating Agency.

     Section 4.5. Governing Law; Jurisdiction. THIS REIMBURSEMENT AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT
OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     Section 4.6. Waiver of Jury Trial. EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS REIMBURSEMENT AGREEMENT OR ANY
OTHER RELATED DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF ANY PARTY HERETO IN CONNECTION HEREWITH OR THEREWITH. EACH OF THE SELLER,
THE MASTER SERVICER AND THE ISSUER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LETTER OF
CREDIT ISSUER’S ENTERING INTO THIS REIMBURSEMENT AGREEMENT.

     Section 4.7. Waivers; Remedies Cumulative. Neither any failure nor any delay on the
part of the Letter of Credit Issuer in exercising any right, power or privilege hereunder or under
the Letter of Credit shall operate as a waiver thereof, nor shall a single or partial exercise
thereof

 

 

preclude any other or further exercise or the exercise of any other right, power or privilege.
The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

     Section 4.8. Severability. Any provision of this Reimbursement Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     Section 4.9. Term. This Reimbursement Agreement shall remain in full force and effect
until the payment of the Repayment Amount, notwithstanding the earlier termination of the Letter of
Credit.

     Section 4.10. Successors and Assigns.

     (a) This Reimbursement Agreement shall be binding upon the parties hereto and their respective
successors and assigns; provided, however, that none of the Seller, the Servicer or the Issuer may
transfer or assign any of its obligations, rights, or interests hereunder without (i) the prior
written consent of the Letter of Credit Issuer and MBIA Insurance Corporation (in its capacity as
issuer of the Note Policy) (the “Insurer”) and (ii) prior written notice to each Rating Agency.

     (b) The Letter of Credit Issuer may at any time:

     (i) assign all or a portion of its obligations under the Letter of Credit and its
rights under this Reimbursement Agreement to an Eligible Letter of Credit Issuer; provided,
however, that (A) the Rating Agency Condition shall have been satisfied with respect to such
assignment, (B) the Insurer shall have consented in writing to such assignment (which
consent shall not be unreasonably withheld), (C) such assignment shall be for an amount at
least equal to $1,000,000 and (D) such Eligible Letter of Credit Issuer agrees in writing to
be bound by Section 4.17 hereof. It is understood and agreed that in connection with
partial assignments by the Letter of Credit Issuer, such reasonable amendments to this
Reimbursement Agreement as the Letter of Credit Issuer may request shall be entered into by
the other parties hereto to accommodate such assignments, including without limitation, if
requested, customary “agency” and “syndication” provisions; and

     (ii) grant participations in minimum amounts of $1,000,000 to any other Person, in all
or part of its obligations under the Letter of Credit and its rights under this
Reimbursement Agreement (it being understood and agreed that no other party hereto shall
have any obligation to give notices to any such participant, that such participation will
not in any way reduce the Letter of Credit Issuer’s commitment to make disbursements under
the Letter of Credit, and that such participation shall not increase the obligations
(including with respect to costs and expenses) of any other party hereunder); provided that
the Letter of Credit Issuer shall be entitled to receive any increased costs or indemnities
payable hereunder incurred by the Letter of Credit Issuer or such participant to the extent
not in excess of such amounts calculated as if there were no participation.

 

 

     Section 4.11. Survival. All representations and warranties contained herein or made
in writing by any of the Seller, the Servicer or the Issuer in connection herewith shall survive
the execution and delivery of this Reimbursement Agreement, regardless of any investigation made by
the Letter of Credit Issuer or on its behalf and shall continue so long as and until such time as
all obligations hereunder and under the Transaction Documents and all Indebtedness under the Notes
shall have been paid in full. The obligations of each of the Seller, the Servicer and the Issuer
under this Section and Sections 3.3, 4.1, 4.5 — 4.8, 4.13 and 4.17(c) shall in each case survive
any termination of this Reimbursement Agreement, the payment in full of all obligations hereunder
and the termination of the Letter of Credit.

     Section 4.12. Counterparts. This Reimbursement Agreement may be executed in any
number of counterparts, and by the different parties hereto on the same or separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to be an original and
all of which counterparts, taken together, shall constitute one and the same agreement.

     Section 4.13. Further Assurances. Each of the Seller, the Servicer, the Issuer and
the Indenture Trustee agrees to do such further acts and things and to execute and deliver to the
Letter of Credit Issuer such additional assignments, agreements, powers and instruments as are
reasonably required by the Letter of Credit Issuer to carry into effect the purposes of this
Reimbursement Agreement and the Transaction Documents or to better assure and confirm to the Letter
of Credit Issuer its rights, powers and remedies hereunder.

     Section 4.14. Headings. Section headings in this Reimbursement Agreement are included
herein for convenience of reference only and shall not constitute a part of this Reimbursement
Agreement for any other purpose.

     Section 4.15. Limited Liability of U.S. Bank Trust National Association. It is
expressly understood and agreed by the parties hereto that: (a) this Reimbursement Agreement is
executed and delivered by U.S. Bank Trust National Association not individually or personally but
solely as Owner Trustee on behalf of the Issuer; (b) each of the representations, undertakings and
agreements herein made on the part of the Issuer is made and intended not as personal
representations, undertakings and agreements by U.S. Bank Trust National Association, but are made
and intended for the purpose of binding only the Issuer; (c) nothing herein contained shall be
construed as creating any liability on U.S. Bank Trust National Association, individually or
personally, to perform any covenant of the Issuer either expressed or implied contained herein, all
such liability, if any, being expressly waived by the parties hereto and by any person claiming by,
through or under such parties; and (d) under no circumstances shall U.S. Bank Trust National
Association be personally liable for the payment of any indebtedness or expenses of the Issuer or
be liable for the breach or failure of any obligation, representation, warranty or covenant made or
undertaken by the Issuer under this Reimbursement Agreement.

     Section 4.16. Non-Confidential Information. Notwithstanding any other statement
herein, the Issuer, the Indenture Trustee, the Seller, the Servicer and the Letter of Credit Issuer
each understands that it (and each of its employees, representatives or other agents) may disclose
to any and all persons, without limitations of any kind, the tax treatment and tax structure of the
transaction contemplated herein; provided, however, that it (and any of its employees,
representatives or other agents) will not disclose any information that is not necessary to

 

 

understand the tax treatment and tax structure of such transaction (including the identity of
any of the parties to the transaction and any information that could lead another to determine the
identity of any such parties), or any other information to the extent that such disclosure could
result in a violation of any federal or state securities law.

     Section 4.17. Regulation AB Compliance.

     (a) The Letter of Credit Issuer agrees to comply with commercially reasonable requests of the
Seller for the delivery of such information relating to the Letter of Credit Issuer as may be
necessary for the Seller to comply with Item 1114 of Regulation AB as it relates to the Letter of
Credit Issuer. The Letter of Credit Issuer agrees that such information may be incorporated by
reference or attached as an exhibit to any Exchange Act Report to the extent required under
Regulation AB or Item 7 on Form 10-D.

     (b) As of the date that any required information is provided to the Seller or the Issuer
pursuant to Section 4.17(a) to be attached as an exhibit to any Exchange Act Report, such
information will comply in all material respects with the requirements of Item 1114 of Regulation
AB.

     (c) Notwithstanding anything to the contrary, the Letter of Credit Issuer’s liability in the
case of a breach of this Section 4.17 which has the effect of imposing liability on any party
entitled to indemnification under this Reimbursement Agreement under Regulation AB, will be limited
to the actual damages incurred by Santander Consumer and the Seller as a direct result of a
determination by the Commission that the Seller is no longer eligible to file registration
statements on Form S-3, such determination being based solely on the Letter of Credit Issuer’s
breach of this Section 4.17.

 

 

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

	 	 	 	 	 
	 	BANCO SANTANDER, S.A., ACTING THROUGH ITS NEW YORK
BRANCH, as Letter of Credit Issuer

 	 
	 	By:  	/s/ Rodolfo E. Icasa
 	 
	 	 	Name:  	Rodolfo E. Icasa 	 
	 	 	Title:  	General Manager & Chief Operating Officer 	 
	 	 	 
	 	By:  	                                              /s/ Miguel Gonzalo
 	 
	 	 	Name:  	Miguel Gonzalo 	 
	 	 	Title:  	Vice-President 	 
	 
	 
	 	SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-2, as
Issuer

By: U.S. BANK TRUST NATIONAL ASSOCIATION, not in its
individual capacity, but solely in its capacity as
Owner Trustee under the Trust Agreement

 	 
	 	By:  	/s/ Nicole Poole
 	 
	 	 	Name:  	Nicole Poole 	 
	 	 	Title:  	Vice President 	 
	 
	 	SANTANDER DRIVE AUTO RECEIVABLES LLC, as Seller

 	 
	 	By:  	/s/ Jim W. Moore
 	 
	 	 	Name:  	Jim W. Moore 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	SANTANDER CONSUMER USA INC., as Servicer

 	 
	 	By:  	/s/ Jim W. Moore
 	 
	 	 	Name:  	Jim W. Moore 	 
	 	 	Title:  	Vice President 	 
	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Indenture
Trustee

 	 
	 	By:  	/s/ Marianna C. Stershic
 	 
	 	 	Name:  	Marianna C. Stershic 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

EXHIBIT A

TO THE LETTER OF CREDIT REIMBURSEMENT AGREEMENT

A-1EX-4.1

 

Exhibit 4.1

DATATRAK INTERNATIONAL, INC.

and

NATIONAL CITY BANK

as Rights Agent

Rights Agreement

Dated as of September 5, 2007

 

 

TABLE OF CONTENTS

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

 

 

	 	 	 	 	 
	 	 	PAGE
	 
	 	 	 	 
	Section 25. Notice of Certain Events
	 	 	16	 
	 
	 	 	 	 
	Section 26. Notices
	 	 	16	 
	 
	 	 	 	 
	Section 27. Supplements and Amendments
	 	 	17	 
	 
	 	 	 	 
	Section 28. Successors
	 	 	17	 
	 
	 	 	 	 
	Section 29. Benefits of this Agreement
	 	 	17	 
	 
	 	 	 	 
	Section 30. Severability
	 	 	17	 
	 
	 	 	 	 
	Section 31. Governing Law
	 	 	17	 
	 
	 	 	 	 
	Section 32. Counterparts
	 	 	17	 
	 
	 	 	 	 
	Section 33. Descriptive Headings
	 	 	17	 

 

 

     This Agreement, dated as of September 5, 2007, is between DATATRAK International,
Inc., an Ohio corporation (the “Company”), and National City Bank, as rights agent (the “Rights
Agent”).

     The Board of Directors of the Company (the “Board”) has authorized and declared a dividend of
one preferred share purchase right (a “Right”) for each Common Share (as hereinafter defined) of
the Company outstanding as of the close of business on September 17, 2007 (the “Record Date”). Each
Right initially represents the right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions herein set forth. The Board has
further authorized and directed the issuance of one Right with respect to each Common Share that
becomes outstanding between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (in each case, as hereinafter defined).

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

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

     (a) “Acquiring Person” means any Person (as hereinafter defined) who or which, together with
all Affiliates and Associates (in each case, as hereinafter defined) of such Person, shall be the
Beneficial Owner (as hereinafter defined) of 15% or more of the Common Shares of the Company then outstanding, but does not include the
Company, any subsidiary (as hereinafter defined) of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding Common Shares for or pursuant to
the terms of any such plan. Notwithstanding anything in the preceding sentence, no Person will
become an Acquiring Person as the result of an acquisition of Common Shares or other transaction by
the Company that reduces the number of Common Shares outstanding and, therefore increases the
aggregate percentage of Common Shares beneficially owned by such Person to 15% or more of the
Common Shares outstanding after the transaction by the Company. However, if the Person referred to
in the preceding sentence later becomes the Beneficial Owner of additional Common Shares (other
than as a result of a stock dividend, stock split or similar transaction in which all holders of
Common Shares are treated equally), then such Person will be an Acquiring Person. Upon (a) a
determination by the Board in good faith that such Person inadvertently became the Beneficial Owner
of the additional Common Shares and (b) the divestiture as promptly as possible by such Person of a
sufficient number of Common Shares so that such Person would no longer be an Acquiring Person
pursuant to the first sentence of this Section 1(a), then such Person will not be an Acquiring
Person for any purpose under this Agreement.

     (b) “Affiliate” and “Associate” 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 is deemed the “Beneficial Owner” of and is 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 is not 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 is not 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

1

 

rules and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor
report); or

          (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 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.

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

     (e) “close of business” on any given date means 5:00 P.M., Cleveland, Ohio time, on such date;
PROVIDED, HOWEVER, that if such date is not a Business Day, close of business means 5:00 P.M.,
Cleveland, Ohio time, on the next succeeding Business Day.

     (f) “Common Shares” when used with reference to the Company means the shares of common stock,
without par value, of the Company. “Common Shares” when used with reference to any Person other
than the Company means the capital stock (or 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
which ultimately control such first-mentioned Person.

     (g) “Distribution Date” has the meaning set forth in Section 3 hereof.

     (h) “Final Expiration Date” has the meaning set forth in Section 7 hereof.

     (i) “Person” means any individual, firm, corporation or other entity, and shall include any
successor (by merger or otherwise) of such entity.

     (j) “Preferred Shares” means shares of Series A Junior Participating Preferred Stock, without
par value, of the Company having the rights and preferences set forth in the Company’s Amended and
Restated Articles of Incorporation.

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

     (l) “Shares Acquisition Date” means the first date of public announcement by the Company or an
Acquiring Person that an Acquiring Person has become such.

     (m) “Subsidiary” of any Person means any corporation or other entity of which a majority of
the voting power of the voting equity securities or equity interest is owned, directly or
indirectly, by such Person.

     Section 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, are
also the holders of the Common Shares prior to the Distribution Date) 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 deems necessary or desirable, and will promptly
notify the Rights Agent of any such appointment. Any actions that may be taken by the Rights Agent
pursuant to the terms of this Agreement may also be taken by any such co-Rights Agent. To the
extent that any co-Rights Agent takes any action pursuant to this Agreement, such co-Rights Agent
will be entitled to all of the rights and protections of, and subject to all of the applicable
duties and obligations imposed upon, the Rights Agent pursuant to the terms of this Agreement. The
Rights Agent will have no duty to supervise, and in no event shall be liable for, the acts or
omissions of any co-Rights Agent.

2

 

     Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i) the close of business on
the tenth day after the Shares Acquisition Date or (ii) the close of business on the tenth business
day (or such later date as may be determined by action of the Board prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) to commence, a tender or exchange
offer the consummation of which would result in any Person becoming the Beneficial Owner of Common
Shares aggregating 15% or more of the then outstanding Common Shares (including any such date that
is after the date of this Agreement and prior to the issuance of the Rights, the earlier of such
dates being herein referred to as the “Distribution 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. The
Company shall give the Rights Agent prompt notice of the occurrence of the Distribution Date. As
soon as practicable after the Distribution Date, the Company shall prepare and execute, the Rights
Agent shall countersign, and the Company shall send or cause to be sent (or the Rights Agent shall,
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) On the Record Date, or as soon as practicable thereafter, the Company shall send a copy of
a Summary of Rights to Purchase Preferred Shares, in substantially the form of Exhibit B hereto
(the “Summary of Rights”), by first-class, postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Record Date, at the address of such holder shown on the records of the Company.
With respect to certificates for Common Shares outstanding as of the Record Date, the Rights will
be evidenced until the Distribution Date by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights attached thereto. Until
the Distribution Date (or the earlier of the Redemption Date or the 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.

     (c) Rights shall be issued (i) in respect of all Common Shares that are issued after the
Record Date but prior to the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date and (ii) in connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the redemption or expiration of the Rights (x) with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or under any employee
benefit plan or arrangement, or upon the exercise, conversion or exchange of securities, granted or
issued by the Company prior to the Distribution Date and (y) with respect to Common Shares so
issued or sold in any other case, if deemed necessary or appropriate by the Board of Directors of
the Company. Certificates for Common Shares which become outstanding (including, without
limitation, reacquired Common Shares referred to in the last sentence of this paragraph (c)) after
the Record Date but prior to the earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date will have impressed on, printed on, written on or otherwise affixed to them
the following legend:

     This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between DATATRAK
International, Inc. and National City Bank, as rights agent, dated as of
September 5, 2007, as it may be amended from time to time (the “Rights
Agreement”), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of DATATRAK International, Inc. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this certificate.
DATATRAK International, 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, as set forth in the Rights
Agreement, Rights issued to any

3

 

Person who becomes an Acquiring Person (as
defined in the Rights Agreement) may 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 are evidenced by such
certificates alone, and the surrender for transfer of any such certificate also constitutes 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 will be deemed cancelled and retired so that the Company would not be entitled
to exercise any Rights associated with the Common Shares that were no longer
outstanding. Notwithstanding this Section 3(c), the omission of a legend shall not affect the
enforceability of any part of this Agreement or the rights of any holder of the Rights.

     Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the forms of election to
purchase Preferred Shares and of assignment to be printed on the reverse thereof) will 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, and as do not affect the rights,
duties or responsibilities of the Rights Agent, 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 entitle the holders thereof to
purchase such number of one one-hundredths of a Preferred Share as are set forth therein at the
price per one one-hundredth of a Preferred Share set forth therein (the “Purchase Price”), but the
number of such one one-hundredths of a Preferred Share and the Purchase Price will be subject to
adjustment as provided herein.

     Section 5. COUNTERSIGNATURE AND REGISTRATION. The Company shall cause the Right Certificates
to be (i) executed on its behalf by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents, or its Treasurer, either manually or by facsimile signature,
(ii) affixed with the Company seal or a facsimile thereof, and (iii) attested by the Secretary or
an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Agent shall countersign the Right Certificates by manual or facsimile
signature, and such Rights Certificates shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who has signed any of the Right Certificates ceases to be such
officer of the Company before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued
and delivered by the Company with the same force and effect as though the person who signed such
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 person who, at the actual date of the execution of such
Right Certificate, would 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 person was not such an
officer.

     Following the Distribution Date, the Rights Agent shall keep or cause to be kept, at its
principal office, books for registration and transfer of the Right Certificates issued hereunder.
Such books will 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.

     SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED,
DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. 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 one one-hundredths of a Preferred
Share 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

4

 

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.

     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 the 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.

     Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE: EXPIRATION DATE OF RIGHTS. (a) 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 one one-hundredth of a Preferred Share as to
which the Rights are exercised, at or prior to the earliest of (i) the close of business on
September 5, 2017 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the “Redemption Date”), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.

     (b) The Purchase Price for each one one-hundredth of a Preferred Share purchasable pursuant to
the exercise of a Right is initially $11.70, subject to adjustment from time to time as provided in
Section 11 or 13 hereof, and is payable in lawful money of the United States of America in
accordance with paragraph (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 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 by certified check, cashier’s check
or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i)
(A) requisition from any transfer agent of the Preferred Shares certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) requisition from the depositary agent depositary receipts representing such number
of one one-hundredths of a Preferred Share as are to be purchased (in which case certificates for
the Preferred Shares represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of
such 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.

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

     Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. The Company shall deliver all
Right Certificates surrendered to the Company or to any of its agents for the purpose of exercise,
transfer, split up, combination or exchange for cancellation or in cancelled form to the Rights
Agent. The Rights Agent shall cancel (i) all such Right Certificates delivered to it by the Company
and (ii) all Right Certificates surrendered to the Rights Agent for the purposes enumerated in the
preceding sentence; no Right Certificate may be issued in lieu thereof except as expressly
permitted by 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. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.

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     Section 9. AVAILABILITY OF PREFERRED SHARES. The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and unissued Preferred Shares or any
Preferred Shares held in its treasury, the number of Preferred Shares that will be sufficient to permit the exercise in full of
all outstanding Rights in accordance with Section 7. The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all Preferred Shares delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such Preferred Shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.

     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 Preferred Shares upon the exercise of Rights. The Company is not, however, 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 or depositary receipts for the Preferred 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 or depositary receipts for Preferred 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.

     Section 10. PREFERRED SHARES RECORD DATE. Each person in whose name any certificate for
Preferred Shares is issued upon the exercise of Rights will be deemed for all purposes to have
become the holder of record of the Preferred 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
Preferred Shares transfer books of the Company are closed, such person will 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 Preferred Shares transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Right Certificate will not be
entitled to any rights of a holder of Preferred Shares for which the Rights are exercisable,
including, without limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and will not be entitled to receive any notice of any proceedings
of the Company, except as provided herein.

     Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS. The Purchase
Price, the number of Preferred 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) If at any time after the date of this Agreement, the Company (A) declares a dividend
on the Preferred Shares payable in Preferred Shares, (B) subdivides the outstanding Preferred
Shares, (C) combines the outstanding Preferred Shares into a smaller number of Preferred Shares, or (D) issues any shares of its capital
stock in a reclassification of the Preferred 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 Company shall proportionately adjust 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, so that the holder of any Right
exercised after such time will be entitled to receive the aggregate number and kind of shares of
capital stock that the holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification if such Right had been
exercised immediately prior to such date and at a time when the Preferred Shares transfer books of
the Company were open; PROVIDED, HOWEVER, that in no event will 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.

     (ii) Subject to Section 24 of this Agreement, in the event any Person becomes an Acquiring
Person, each holder of a Right will thereafter have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Company as then equal the result obtained by (x) multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (y) 50% of the

6

 

then current per share market price of the Company’s Common Shares (determined pursuant to Section
11(d) hereof) on the date of the occurrence of such event. In the event that any Person becomes an
Acquiring Person and the Rights are then outstanding, the Company shall not take any action which
would eliminate or diminish the benefits intended to be afforded by the Rights.

     From and after the occurrence of such event, any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
will be void and no holder of such Rights will thereafter have any right to exercise such Rights under any provision of this Agreement. No
Right Certificate will be issued pursuant to Section 3 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 will 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 will be cancelled.

     (iii) In the event that there are not sufficient Common Shares issued but not outstanding or
authorized but unissued to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall
take all such action as may be necessary to authorize additional Common Shares for issuance upon
exercise of the Rights. In the event the Company, is unable after good faith effort, to take all
such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that
would otherwise be issuable upon exercise of a Right, a number of Preferred Shares or fraction
thereof such that the current per share market price of one Preferred Share multiplied by such
number or fraction is equal to the current per share market price of one Common Share as of the
date of issuance of such Preferred Shares or fraction thereof.

     (b) In case the Company fixed a record date for the issuance of rights, options or warrants to
all holders of Preferred Shares entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for
or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the
Preferred Shares (“equivalent preferred shares”)) or securities convertible into Preferred Shares
or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or having a conversion price per share, if
a security convertible into Preferred Shares or equivalent preferred shares) less than the then
current per share market price of the Preferred Shares (as defined in Section 11(d)) on such record
date, the Purchase Price to be in effect after such record date will be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which is the number of Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred 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 is the number of Preferred Shares outstanding on such record date plus the
number of additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or
purchase (or into which the convertible securities so to be offered are initially convertible);
PROVIDED, however, that in no event will 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 is 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. Preferred Shares owned by or held for the account of the Company will not be deemed
outstanding for the purpose of any such computation. Such adjustment will be made successively
whenever such a record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Company shall adjust the Purchase Price to be the Purchase Price which would
then be in effect if such record date had not been fixed.

     (c) In case the Company fixes a record date for the making of a distribution to all holders of
the Preferred 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 or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date will be determined by
multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the
numerator of which is the then current per share market price of the Preferred Shares 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

7

 

evidences of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which is such current per share market
price of the Preferred Shares; PROVIDED, HOWEVER, that in no event will 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 will be made
successively whenever such a record date is fixed; and in the event that such distribution is not
so made, the Company shall again adjust the Purchase Price to be the Purchase Price which would then be in
effect if such record date had not been fixed.

     (d) (i) For the purpose of any computation hereunder, the “current per share market price” of
any security (a “Security” for the purpose of this Section 11(d)(i)) on any date means the average
of the daily closing prices per
share of such Security 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 Security is determined during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution on such Security payable in shares of such
Security or securities convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security 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
will be appropriately adjusted to reflect the current market price per share equivalent of such
Security. The closing price for each day means 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 New York Stock Exchange or, if the Security is not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System (“NASDAQ”) or such other system
then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security selected by the Board. The
term “Trading Day” means a day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national securities exchange, a
Business Day.

     (ii) For the purpose of any computation hereunder, the “current per share market price” of the
Preferred Shares will be determined in accordance with the method set forth in Section 11(d)(i). If
the Preferred Shares are not publicly traded, the “current per share market price” of the Preferred Shares will be conclusively
deemed to be the current per share market price of the Common Shares as determined pursuant to
Section 11(d)(i) (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof),
multiplied by one hundred. If neither the Common Shares nor the Preferred Shares are publicly held
or so listed or traded, “current per share market price” means the fair value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights Agent.

     (e) No adjustment in the Purchase Price will 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 will be carried
forward and taken into account in any subsequent adjustment. All calculations under this Section 11
will be made to the nearest cent or to the nearest one one-millionth of a Preferred
Share or one ten-thousandth of any other share or security as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11 will 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) hereof, the holder of any
Right thereafter exercised becomes entitled to receive any shares of capital stock of the Company
other than Preferred Shares, thereafter the number of such other shares so receivable upon exercise
of any Right will 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 Preferred Shares

8

 

contained in
Section 11(a) through (c), inclusive, and the provisions of Sections 7, 9, 10 and 13 with respect
to the Preferred Shares will 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 will evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.

     (h) Unless the Company has exercised its election as provided in Section 11(i), upon each
adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c),
each Right outstanding immediately
prior to the making of such adjustment will thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share 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 one one-hundredths
of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of
Rights will be exercisable for the number of one one-hundredths of a Preferred Share 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 will 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, should 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 would 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 would be entitled after such adjustment. Right
Certificates so to be distributed will be issued, executed and countersigned in the manner provided
for herein and will 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 one
one-hundredths of a Preferred Share 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 one one-hundredths of a Preferred Share
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
one one-hundredth of the then par value, if any, of the Preferred 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 Preferred Shares at such
adjusted Purchase Price.

     (l) In any case in which this Section 11 requires 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 issuing to
the holder of any Right exercised after such record date of the Preferred Shares and other capital
stock or securities of the Company, if any, issuable upon such exercise over and above the
Preferred 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

9

 

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 is 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 determines to be advisable in order that any consolidation or
subdivision of the Preferred Shares, issuance wholly for cash of any Preferred Shares at less than
the current market price, issuance wholly
for cash of Preferred Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, dividends on Preferred Shares payable in Preferred Shares or
issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company to holders of its Preferred Shares are
not taxable to such shareholders.

     (n) In the event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company (i) declares or pay any dividend on the Common Shares payable in
Common Shares or (ii) effects a subdivision,
combination or consolidation of the Common Shares (by reclassification or otherwise than by payment
of dividends in Common Shares) into a greater or lesser number of Common Shares, then in any such
case (A) the number of one one-hundredths of a Preferred Share purchasable after such event upon
proper exercise of each Right will be determined by multiplying the number of one one-hundredths of
a Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event and the denominator
of which is the number of Common Shares outstanding immediately after such event, and (B) each
Common Share outstanding immediately after such event will have issued with respect to it that
number of Rights which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments
provided for in this Section 11(n) will be made successively whenever such a dividend is declared
or paid or such a subdivision, combination or consolidation is effected.

     Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever an adjustment
is made as provided in Section 11 or 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 or
the Preferred Shares a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 26 hereof.

     Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER. In the
event, directly or indirectly, at any time after a Person has become an Acquiring Person, (a) the
Company consolidates with, or merges with and into, any other Person, (b) any Person consolidates
with the Company, or merges with and into the Company and the Company is the continuing or
surviving corporation of such merger and, in connection with such merger, all or part of the Common
Shares is changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property, or (c) the Company
sells or otherwise transfers (or one or more of its Subsidiaries sells or otherwise transfers), in
one or more transactions, assets or earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other Person other than the
Company or one or more of its wholly-owned Subsidiaries, then, and in each such case, the Company
shall make proper provision so that (i) each holder of a Right (except as otherwise provided
herein) thereafter has the right to receive, upon the exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of such other Person including the Company as
successor thereto or as the surviving corporation) as then equals the result obtained by (A)
multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such other Person (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares will thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term “Company” thereafter will be deemed to refer to such
issuer; and (iv) such issuer shall take such steps (including, but not limited to, the reservation
of a sufficient number of its Common Shares in accordance with Section 9 hereof) in connection with
such consummation as may be necessary to assure that the provisions hereof will thereafter be
applicable, as nearly as reasonably may be, in relation to the Common Shares thereafter deliverable
upon the exercise of the Rights. The Company must not consummate any such consolidation, merger,
sale or transfer

10

 

unless prior thereto the Company and such issuer must have executed and delivered
to the Rights Agent a supplemental agreement so providing. The Company must not enter into any
transaction of the kind referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights. The provisions of this
Section 13 will similarly apply to successive
mergers or consolidations or sales or other transfers.

     Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company is not required to issue
fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, the Company shall pay an amount in cash equal to the same fraction of
the current market value of a whole Right to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable. For the purposes of this
Section 14(a), the current market value of a whole Right means 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 means 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 New
York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to trading or, if the
Rights are not listed or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional
market maker making a market in the Rights selected by the Board. If on any such date no such
market maker is making a market in the Rights, the current market value of the Rights means the
fair value of the Rights on such date as
determined in good faith by the Board.

     (b) The Company is not be required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of
the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are integral multiples of
one one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it; PROVIDED, that such
agreement provides that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a Preferred Share, the Company shall pay an amount in
cash equal to the same fraction of the current market value of one Preferred Share to the
registered holders of Right Certificates at the time such Rights are exercised as herein provided.
For the purposes of this Section 14(b), the current market value of a Preferred Share means the
closing price of a Preferred Share (as determined pursuant to the second sentence of Section
11(d)(i) 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 the holder’s right
to receive any fractional Rights or any fractional shares upon exercise of a Right (except as
provided above).

     Section 15. RIGHTS OF ACTION. All rights of action in respect of this Agreement, excepting the
rights of action given to the Rights Agent hereunder, 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, on
behalf and the benefit of the holder, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, the holder’s 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 are 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.

11

 

     Section 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; and

     (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 will be affected by any notice to the contrary.

     Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder, as such, of any
Right Certificate is entitled to vote, receive dividends or be deemed for any purpose the holder of
the Preferred Shares or any other securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor should 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 have been exercised in accordance with the provisions hereof.

     Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, cost or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent (which gross negligence, bad faith or
willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling
of a court of competent jurisdiction), for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement and the performance of its
duties and responsibilities and the exercise of its rights hereunder, including the costs and
expenses of defending against any claim of liability in the premises. The costs and expenses of
enforcing this right of indemnification will also be paid by the Company. The provisions of this
Section 18 and of Section 20 shall survive the exercise, exchange, redemption or expiration of the
Rights, the termination of this Agreement and the resignation, replacement or removal of the Rights
Agent.

     The Rights Agent may conclusively rely on, and will be protected and will not incur any
liability for, or in respect of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement and the performance of its duties and responsibilities and the
exercise of its rights hereunder, in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company, or any 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.

     Notwithstanding anything in this Agreement to the contrary, in no event will the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind whatsoever (including
but not limited to lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage and regardless of the form of action.

12

 

     Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. 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 business of the Rights Agent or any
successor Rights Agent, will 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 succeeds
to the agency created by this Agreement, any of the Right Certificates 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 have not been countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right Certificates will have the full force
provided in the Right Certificates and in this Agreement.

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

     Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes to perform only the duties and
obligations expressly imposed by this Agreement (and no implied duties or obligations, other than
the duty of good faith, shall be read into this Agreement against the Rights Agent) only upon the
following terms and conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, are bound:

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

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

     (c) The Rights Agent is liable hereunder to the Company and any other Person only for its own
gross negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful
misconduct must be determined by a final, non-appealable court of competent jurisdiction).

     (d) The Rights Agent is not 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 deemed to have
been made by the Company only.

     (e) The Rights Agent will not have any liability for or be under any responsibility (i) in any
respect for the validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in any respect for the validity or execution of any Right
Certificate (except its countersignature thereof); (ii) for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate; or (iii) 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). The Rights Agent does not hereby make any representation or warranty as to (i) the
authorization or

13

 

reservation of any Preferred Shares to be issued pursuant to this Agreement or any
Right Certificate or (ii) as to whether any Preferred Shares 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 and the exercise of its rights hereunder from any person believed in
good faith by the Rights Agent to be the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it will 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 any of the Rights or other securities of the Company or become pecuniary
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 will 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, absent gross negligence, bad faith or willful misconduct in the selection
and continued employment thereof (which gross negligence, bad faith or willful misconduct must be
determined by a final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).

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

     Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights Agent may resign
and be discharged from its duties under this Agreement upon 30 days notice in writing mailed to the
Company and to each transfer agent of the Common Shares or Preferred Shares known to the Rights
Agent by registered or certified mail, and to the holders of the Right Certificates by first-class
mail. 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 or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent resigns or is removed or
otherwise becomes incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company fails to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with
such notice, submit his Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, must be a Person organized and doing business under the laws of the United States
or of the State of Ohio (or of any other state of the United States so long as such Person is
authorized to do business as a banking institution in the State of Ohio), in good standing, having
an office in the State of Ohio, which is authorized under such laws to exercise corporate trust or
stock transfer 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. After appointment, the successor Rights Agent will 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

14

 

with the predecessor Rights Agent and each transfer agent of the Common Shares or Preferred Shares,
and 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, will not affect
the legality or validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.

     Section 22. ISSUANCE OF NEW 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.

     Section 23. REDEMPTION. (a) 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 $.01 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.

     (b) Immediately upon the action of the Board ordering the redemption of the Rights pursuant to
paragraph (a) of this Section 23, 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 will 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 will not affect the validity of such redemption.
Within 10 days after such action of the Board ordering the redemption of the Rights, 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 that is mailed in
the manner herein provided will 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.

     Section 24. EXCHANGE. (a) The Board may, at its option, at any time after any Person becomes
an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which
would 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 sentence, the Board may not effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or any such Subsidiary, or any entity holding Common Shares for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.

     (b) Immediately upon the action of the Board ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and without any notice, the right
to exercise such Rights will terminate
and the only right thereafter of a holder of such Rights will be to receive that number of 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 will not affect the validity of such exchange. The Company
shall mail a notice of any such exchange promptly 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 that is
mailed in the manner herein provided will 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 will 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.

15

 

     (c) In the event that the number of Common Shares issued but not outstanding or authorized but
unissued is not sufficient 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 for issuance upon
exchange of the Rights. In the event the Company is unable, after good faith effort, to take all
such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each Common Share that
would otherwise be issuable upon exchange of a Right, a number of Preferred Shares or fraction
thereof such that the current per share
market price of one Preferred Share multiplied by such number or fraction is equal to the current
per share market price of one Common Share as of the date of issuance of such Preferred Shares or
fraction thereof.

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

     Section 25. NOTICE OF CERTAIN EVENTS. (a) If the Company proposes (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make any other
distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer to the holders of
its Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its Preferred Shares
(other than a reclassification involving only the subdivision of outstanding Preferred Shares),
(iv) to effect any consolidation or merger
into or 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, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise
than by payment of dividends in Common Shares), 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
specifies 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, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such date is to be
fixed. In the case of any action covered by clause (i) or (ii) above the Company shall give such
notice at least 10 days prior to the record
date for determining holders of the Preferred Shares for purposes of such action. In the case of
any other action covered by clauses (iii) through (iv) above, the Company shall give notice, 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 and/or Preferred Shares, whichever is earlier.

     (b) If the event set forth in Section 11(a)(ii) hereof occurs, then the Company shall give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event as soon as practicable thereafter, describing such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

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

DATATRAK International, Inc.

6150 Parkland Boulevard

Mayfield Heights, OH 44124

Attention: President

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 is sufficiently given or made if

16

 

sent by first-class mail, postage prepaid, addressed (until another address is filed in writing
with the Company) as follows:

National City Bank

Shareholder Services Administration

Suite 635  —  LOC 01-3116

629 Euclid Avenue

Cleveland, Ohio 44114

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 are 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.

     Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time supplement or amend
this Agreement without the approval of any holders of Right Certificates in order to cure any
ambiguity, to correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent; PROVIDED, HOWEVER, that from and
after such time as any Person becomes an Acquiring Person, this Agreement must not be amended in
any manner that would adversely affect the interests of the holders of Rights, and PROVIDED,
FURTHER, that the Rights Agent may, but will not be obligated to, enter into any supplement or
amendment that affects the Rights Agent’s rights, duties, responsibilities or immunities hereunder.
Without limiting the foregoing sentence, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower the thresholds set forth in
Sections 1(a) and 3(a) to not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Common Shares then known by the Company to be beneficially owned by
any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding Common Shares for or pursuant to
the terms of any such plan) and (ii) 10%.

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

     Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement should be construed to give
to any person or corporation 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 is 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).

     Section 30. 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 will remain in
full force and effect and shall in no way be affected, impaired or invalidated.

     Section 31. 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 Ohio and for all purposes shall be
governed by and construed in
accordance with the laws of such State applicable to contracts to be made and performed entirely
within such State.

     Section 32. COUNTERPARTS. This Agreement may be executed in any number of counterparts and
each of such counterparts should for all purposes be deemed to be an original, and all such
counterparts together constitute but one and the same instrument.

     Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections of this
Agreement are inserted for convenience only and should not control or affect the meaning or
construction of any of the provisions hereof.

17

 

     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.

	 	 	 	 	 
	 	DATATRAK INTERNATIONAL, INC.

 	 

Attest:

	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Terry C. Black	 	By:	 	/s/ Jeffrey A. Green	 
	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	Chief Operating Officer
and Assistant Secretary
	 	 	 	Title:
	 	President and
Chief Executive Officer	 
	 
	 	 	 	 	 	 	NATIONAL CITY BANK, as Rights Agent
 
	Attest: 	 	 	 	 	 	 	 
	 
	By:	 	/s/ Matthew R. Hostelley 	 	By:	 	/s/ Sherry L. Damore	 
	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	 Vice President	 	 	 	Title:	  Vice President	 

18

 

EXHIBIT A

Form of Right Certificate

Certificate No. R-                      Rights

     NOT EXERCISABLE AFTER SEPTEMBER 5, 2017 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE
RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

Right Certificate

DATATRAK INTERNATIONAL, 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 September 5, 2007 (the
“Rights Agreement”), between DATATRAK International, Inc., an Ohio corporation (the “Company”), and
National City Bank (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.,
Cleveland time, on September 5, 2017 at the principal office of the Rights Agent, or at the office
of its successor as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series
A Junior Participating Preferred Stock, without par value (the “Preferred Shares”), of the Company,
at a purchase price of $11.70 per one one-hundredth of a Preferred 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 one
one-hundredths of a Preferred Share 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 September 5, 2007,
based on the Preferred Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share 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.

          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 Preferred 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 $.01 per Right or (ii) may be exchanged
in whole or in part for Preferred Shares or shares of the Company’s Common Stock, without par value.

          No fractional Preferred Shares will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.

19

 

          No holder of this Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Preferred 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.

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

	 	 	 	 	 	 	 
	ATTEST: 
	 	 	DATATRAK INTERNATIONAL, INC. 

 	 
	 
	 	 	By 	 
	 
	
Countersigned: 	 	 	 
	 
	 	 	 	 	NATIONAL CITY BANK

 	 
	 	 	 	 	By 	 	 
	 	 	 	 	 	Authorized Signature 	 

20

 

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 member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States.

          The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	Signature
 	 

21

 

Form of Reverse Side of Right Certificate — continued

FORM OF ELECTION TO PURCHASE

 

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

To: DATATRAK INTERNATIONAL, INC.

          The undersigned hereby irrevocably elects to exercise                      Rights represented
by this Right Certificate to purchase the Preferred Shares issuable upon the exercise of such
Rights and requests that certificates for such Preferred 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 member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States.

22

 

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 an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).

	 	 	 	 	 
	 	 	 
	 	 	 	 	 
	 	 	 	Signature 	 
	 

NOTICE

 

          The signature in the Form of Assignment or Form of Election to Purchase, as the case may be,
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.

23

 

Exhibit B

 

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED SHARES

     Effective September 5, 2007, the Board of Directors of DATATRAK International, Inc. (the
“Company”) declared a dividend of one preferred share purchase right (a “Right”) for each
outstanding share of common stock, without par value (the “Common Shares”), of the Company. The dividend is payable on September 17,
2007 (the “Record Date”) to the shareholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, without par value (the “Preferred Shares”), of the Company at a
price of $11.70 per one one-hundredth of a Preferred Share (the “Purchase Price”), subject to
adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the
“Rights Agreement”) between the Company and National City Bank, as Rights Agent (the “Rights
Agent”).

     Until the earlier to occur of (i) the close of business 10 days following a public
announcement that a person or group of affiliated or associated persons (an “Acquiring Person”)
have acquired beneficial ownership of 15% or more of the outstanding Common Shares or (ii) the
close of business 10 business days (or such later date as may be determined by action of the Board
of Directors prior to such time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an intention to make, a tender offer or
exchange offer and- the consummation of such offer which would result in the beneficial ownership by an Acquiring Person of 15% or more of the 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 certificates with a copy of
this Summary of Rights attached thereto.

     The Rights Agreement provides that, until the Distribution Date (or earlier redemption or
expiration of the Rights), the Rights will be transferred 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,
with or without such notation or a copy of this Summary of Rights being attached thereto, 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.

     The Rights are not exercisable until the Distribution Date. The Rights will expire on
September 5, 2017 (the “Final Expiration Date”) unless the Final Expiration Date is extended or
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 Preferred 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 Preferred Shares,
(ii) upon the grant to holders of the Preferred Shares of certain rights or warrants to subscribe
for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price, less than the
then-current market price of the Preferred Shares, or (iii) upon the distribution to holders of the
Preferred Shares of evidences of indebtedness
or assets (excluding regular periodic cash dividends paid out of earnings or retained earnings or
dividends payable in Preferred Shares) or of subscription rights or warrants (other than those
referred to above).

     The number of outstanding Rights and the number of one one-hundredths of a Preferred Share
issuable upon exercise of each Right are also subject to adjustment in the event of a stock split
of the Common Shares or a stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.

24

 

     Preferred Shares purchasable upon exercise of the Rights will not be redeemable. Each
Preferred Share will be entitled to a minimum preferential quarterly dividend payment of $1.00 per
share but will be entitled to an aggregate dividend of 100 times the dividend declared per Common
Share. In the event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $100.00 per share but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each Preferred Share will have 1 vote,
voting together with the Common Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Preferred Share will be entitled to receive 100 times the amount
received per Common Share. These rights are protected by customary antidilution provisions.

     Because of the nature of the Preferred Shares’ dividend, and liquidation rights, the value of
the one one-hundredth interest in a Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share.

     In the event that the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold after a person or
group has become an Acquiring Person, proper provision will be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the Right, 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 exercise price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, proper provision shall be made so
that each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which
will thereafter be void), will thereafter have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise price of the Right.

     At any time after any person or group becomes an Acquiring Person and prior to the acquisition
by such person or group of 50% or more of the outstanding Common Shares, the Board of Directors of
the Company may exchange the Rights (other than Rights owned by such person or group which will have become void),
in whole or in part, at an exchange ratio of one Common Share, or one one-hundredth of a Preferred
Share (or of a share of a class or
series of the Company’s preferred stock having equivalent rights, preferences and privileges), per
Right (subject to adjustment).

     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 Preferred Shares will be issued (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Shares on the last trading day prior to the date of exercise.

     At any time prior to the acquisition by a person or group of affiliated or associated persons
of beneficial ownership of 15% or more of the outstanding Common Shares, the Board of Directors of
the Company may redeem the Rights in whole, but not in part, at a price of $0.01 per Right (the “Redemption Price”). The
redemption of the Rights may be made effective at such time on such basis 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.

     The terms of the Rights may be amended by the Board of Directors of the Company without the
consent of the holders of the Rights, including an amendment to lower certain thresholds described
above to not less than the greater of (i) the sum of 0.001% and the largest percentage of the outstanding Common
Shares then known to the Company to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10.0%, except
that from and after such time as any person or group of affiliated or associated persons 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.

25

 

     A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 8-A dated ________, 2007. A copy of the Rights
Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.

26

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