Document:

EX-4.1

 Exhibit 4.1 

HARVEST NATURAL RESOURCES, INC. 

AND 
 WELLS FARGO BANK, N.A., as
Rights Agent 
 RIGHTS AGREEMENT 

dated as of 
 February 17,
2017 

							
	 TABLE OF CONTENTS

 
	  
 

		  		  	 	Page	 
			
	 Section 1
	  	 Certain Definitions
	  	 	1	 
			
	 Section 2
	  	 Appointment of Rights Agent
	  	 	9	 
			
	 Section 3
	  	 Evidence of Rights; Legends
	  	 	9	 
			
	 Section 4
	  	 Form of Right Certificates
	  	 	11	 
			
	 Section 5
	  	 Countersignature and Registration
	  	 	12	 
			
	 Section 6
	  	 Transfer and Replacement of Right Certificates
	  	 	12	 
			
	 Section 7
	  	 Exercise of Rights: Purchase Price; Expiration of Rights
	  	 	13	 
			
	 Section 8
	  	 Cancellation and Destruction of Right Certificates
	  	 	14	 
			
	 Section 9
	  	 Covenants of the Company
	  	 	14	 
			
	 Section 10
	  	 Record Date
	  	 	16	 
			
	 Section 11
	  	 Adjustment of Purchase Price, Number of Shares or Number of Rights
	  	 	16	 
			
	 Section 12
	  	 Certificate of Adjusted Purchase Price or Number of Shares
	  	 	23	 
			
	 Section 13
	  	 Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	  	 	24	 
			
	 Section 14
	  	 Fractional Rights and Fractional Shares
	  	 	26	 
			
	 Section 15
	  	 Rights of Action
	  	 	27	 
			
	 Section 16
	  	 Agreement of Right Holders
	  	 	28	 
			
	 Section 17
	  	 Right Holder Not Deemed a Stockholder
	  	 	28	 
			
	 Section 18
	  	 Concerning the Rights Agent
	  	 	29	 
			
	 Section 19
	  	 Merger or Consolidation or Change of Name of Rights Agent
	  	 	29	 
			
	 Section 20
	  	 Duties of Rights Agent
	  	 	30	 
			
	 Section 21
	  	 Change of Rights Agent
	  	 	32	 
			
	 Section 22
	  	 Issuance of New Right Certificates
	  	 	33	 
			
	 Section 23
	  	 Redemption
	  	 	33	 

							
	 Section 24
	  	 Exchange
	  	 	34	 
			
	 Section 25
	  	 Exemptions
	  	 	35	 
			
	 Section 26
	  	 Notice of Certain Events
	  	 	36	 
			
	 Section 27
	  	 Notices
	  	 	37	 
			
	 Section 28
	  	 Supplements and Amendments
	  	 	37	 
			
	 Section 29
	  	 Successors
	  	 	38	 
			
	 Section 30
	  	 Benefits of this Agreement
	  	 	38	 
			
	 Section 31
	  	 Determinations and Actions by the Board
	  	 	38	 
			
	 Section 32
	  	 Severability
	  	 	38	 
			
	 Section 33
	  	 Governing Law
	  	 	38	 
			
	 Section 34
	  	 Descriptive Headings; References; Calculation of Time Periods
	  	 	39	 
			
	 Section 35
	  	 Counterparts
	  	 	39	 
			
	 Exhibit A
	  		  			
	 Form of Certificate of Designations for Series D Preferred Stock
	  			
			
	 Exhibit B
	  		  			
	 Form of Right Certificate

Form of Assignment
 Form
of Election to Purchase
	  	 	B-1	 
			
	 Exhibit C
	  		  			
	 Summary of Rights to Purchase Preferred Stock
	  	 	C-1	 

 RIGHTS AGREEMENT 

This Rights Agreement, dated as of February 17, 2017 (this “Agreement”), is between HARVEST NATURAL RESOURCES, INC., a
Delaware corporation (the “Company”), and WELLS FARGO BANK, N.A. (the “Rights Agent”). 
 W I T N E S S
E T H: 
 WHEREAS, under the Internal Revenue Code of 1986, as amended (the “Code”), and the rules promulgated
by the Internal Revenue Service thereunder, the Company may use available Tax Benefits (as defined below) in certain circumstances to offset future earnings, and thus reduce the Company’s federal income tax liability (subject to certain
requirements and restrictions); 
 WHEREAS, if the Company experiences an “Ownership Change” (as defined in
Section 382 of the Code), its ability to use its Tax Benefits could be substantially limited; 
 WHEREAS, the Company desires to
preserve the Company’s utilization of its Tax Benefits on the terms and conditions set forth herein; and 
 WHEREAS, the Board
of Directors of the Company (the “Board”) has authorized and declared a dividend distribution of one preferred share purchase right (a “Right”) for each share of the common stock, $0.01 par value, of the Company
(“Common Stock”) outstanding as of the close of business on February 17, 2017 (the “Record Date”) and has authorized the issuance of one Right in respect of each share of Common Stock issued by the Company
after the close of business on the Record Date (except as otherwise provided in Section 3(g)), all upon the terms and subject to the conditions hereinafter set forth; 

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

Section 1.    Certain Definitions. For purposes of this Agreement, the following terms have the meanings
indicated: 
 (a)    “Acquiring Person” shall mean any Person (other than a Company Entity) who or that
shall be or become the Beneficial Owner of 5% or more of the shares of Common Stock then outstanding. Notwithstanding the foregoing: 

(i)    a Person who or that becomes the Beneficial Owner of 5% or more of the shares of Common Stock then outstanding as
the result of an acquisition of Common Stock by a Company Entity (which, by reducing the number of shares then outstanding, increases the proportion of the shares of Common Stock then outstanding that are beneficially owned by such Person) shall not
be an “Acquiring Person” for purposes of this Agreement (such that, for the avoidance of doubt, no Shares Acquisition Time, Redemption Deadline or Distribution Time shall occur as a result thereof and no adjustment pursuant to
Section 11(a)(ii) or Section 13 shall be made in respect thereof); provided, however, that if, at any time after such acquisition of Common Stock by a Company Entity, such Person becomes the Beneficial
Owner of one or more additional shares of Common Stock (other than pursuant to a dividend or distribution paid 

 
in shares of Common Stock or pursuant to a split or subdivision of the outstanding Common Stock) and, upon becoming the Beneficial Owner of such additional share or shares of Common Stock, such
Person is the Beneficial Owner of 5% or more of the shares of Common Stock then outstanding, then such Person shall, as of such time, become an “Acquiring Person” (unless subject to another exception pursuant to this Section
1(a)); 
 (ii)    if (A) the Board determines in good faith that a Person who or that has satisfied the
conditions for being or becoming an “Acquiring Person” pursuant to the other provisions of this Section 1(a) did so inadvertently (including, without limitation, because (1) such Person was unaware that such Person was
or had become the Beneficial Owner of 5% or more of the shares of Common Stock then outstanding or (2) such Person was aware of the extent of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement), (B) such Person (and/or its Affiliates and Associates) divests Beneficial Ownership of a sufficient number of shares of Common Stock so that such Person would no longer satisfy the conditions for being an
“Acquiring Person” pursuant to the other provisions of this Section 1(a) and (C) such determination by the Board is made and such divestment by such Person (and/or its Affiliates and Associates) is completed prior to the
time when any Right is first distributed by the Rights Agent pursuant to Section 3(e), then such Person shall not be an “Acquiring Person” and shall be deemed to have not previously been an “Acquiring Person”
for purposes of this Agreement (such that, for the avoidance of doubt, no Shares Acquisition Time, Redemption Deadline or Distribution Time shall occur, or be deemed to have occurred, as a result thereof and no adjustment pursuant to Section
11(a)(ii) or Section 13 shall be made in respect thereof); provided, however, that if, at any time after such determination and divestment, such Person becomes the Beneficial Owner of one or more
additional shares of Common Stock (other than pursuant to a dividend or distribution paid in shares of Common Stock or pursuant to a split or subdivision of the outstanding Common Stock) and, upon becoming the Beneficial Owner of such additional
share or shares of Common Stock, such Person is the Beneficial Owner of 5% or more of the shares of Common Stock then outstanding, then such Person shall, as of such time, become an “Acquiring Person” (unless a subsequent
determination and divestment is made pursuant to this Section 1(a)(ii) or unless subject to another exception pursuant to this Section 1(a)); 

(iii)    a Person who or that, at the time of the first public announcement of the adoption of this Agreement, is the
Beneficial Owner of 5% or more of the shares of Common Stock then outstanding shall not be an “Acquiring Person” and shall be deemed to have not previously been an “Acquiring Person” for purposes of this Agreement
(such that, for the avoidance of doubt, no Shares Acquisition Time, Redemption Deadline or Distribution Time shall occur, or be deemed to have occurred, as a result thereof and no adjustment pursuant to Section 11(a)(ii) or
Section 13 shall be made in respect thereof); provided, however, that if, at any time after the first public announcement of the adoption of this Agreement, such Person becomes the Beneficial Owner of one or
more additional shares of Common Stock (other than pursuant to a dividend or distribution paid in shares of Common Stock or pursuant to a split or subdivision of the outstanding Common Stock) and, upon becoming the Beneficial Owner of such
additional share or shares of Common Stock, such Person is the Beneficial Owner of 5% or more of the shares of Common Stock then outstanding, then such Person shall, as of such time, become an “Acquiring Person” (unless subject to
another exception pursuant to this Section 1(a)); 

  
 2 

 (iv)    A Person shall not become an “Acquiring Person” for
purposes of this Agreement (such that, for the avoidance of doubt, no Shares Acquisition Time, Redemption Deadline or Distribution Time shall occur as a result thereof and no adjustment pursuant to Section 11(a)(ii) or
Section 13 shall be made in respect thereof) as a result of the consummation of an Exempt Transaction in accordance with conditions and limitations of the exemption granted by the Board to such Person in connection
therewith pursuant to Section 25(c); provided, however, that if, at any time after the consummation of such Exempt Transaction, such Person becomes the Beneficial Owner of one or more additional shares of Common Stock (other
than pursuant to a dividend or distribution paid in shares of Common Stock or pursuant to a split or subdivision of the outstanding Common Stock) and, upon becoming the Beneficial Owner of such additional share or shares of Common Stock, such Person
is the Beneficial Owner of 5% or more of the shares of Common Stock then outstanding, then such Person shall, as of such time, become an “Acquiring Person” (unless subject to another exception pursuant to this Section 1(a));
and 
 (v)    (A) a Person shall not be an “Acquiring Person” for purposes of this Agreement (such
that, for the avoidance of doubt, no Shares Acquisition Time, Redemption Deadline or Distribution Time shall occur, or be deemed to have occurred, as a result thereof and no adjustment pursuant to Section 11(a)(ii) or
Section 13 shall be made in respect thereof) for so long as such Person is an Exempt Person and (B) a Person who or that ceases to be an Exempt Person as a result of the revocation of such Person’s exemption by
the Board pursuant to Section 25(d) shall not be an “Acquiring Person” for purposes of this Agreement (such that, for the avoidance of doubt, no Shares Acquisition Time, Redemption Deadline or Distribution Time shall occur,
or be deemed to have occurred, as a result thereof and no adjustment pursuant to Section 11(a)(ii) or Section 13 shall be made in respect thereof) from and after the effective time of such revocation;
provided, however, that if, at any time at or after the effective time of such revocation, such Person becomes the Beneficial Owner of one or more additional shares of Common Stock (other than pursuant to a dividend or distribution
paid in shares of Common Stock or pursuant to a split or subdivision of the outstanding Common Stock) and, upon becoming the Beneficial Owner of such additional share or shares of Common Stock, such Person is the Beneficial Owner of 5% or more of
the shares of Common Stock then outstanding, then such Person shall, as of such time, become an “Acquiring Person” (unless subject to another exception pursuant to this Section 1(a)). For the purpose of clarity, a Person who
or that ceases to be an Exempt Person pursuant to Section 1(u)(ii) shall become an “Acquiring Person” as of such time if such Person is then the Beneficial Owner of 5% or more of the shares of Common Stock then outstanding (unless
subject to another exception pursuant to this Section 1(a)). 
 (b)    “Affiliate” shall have
the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Agreement. 

(c)    “Agreement” shall have the meaning set forth in the preamble hereto. 

  
 3 

 (d)    “Associate,” when used to indicate a relationship
with any Person, shall mean each, any and all of the following: 
 (i)    any firm, corporation, limited liability
company, partnership, joint venture, bank, trust or other entity of which such Person is a director, officer, manager or general partner; 

(ii)    any firm, corporation, limited liability company, partnership, joint venture, bank, trust or other entity of which
such Person is, directly or indirectly, the Beneficial Owner of 10% or more of any class of equity securities; provided, however, that any such firm, corporation, limited liability company, partnership, joint venture, bank, trust or
other entity shall not be an “Associate” of a Person if, and only for so long as, such Person (A) satisfies the criteria set forth in both Rule 13d-1(b)(1)(i) and Rule 13d-1(b)(1)(ii) of the General Rules and Regulations under the Exchange Act, (B) has reported Beneficial Ownership of the equity securities of such firm, corporation, limited liability company, partnership,
joint venture, bank, trust or other entity on Schedule 13G under the Exchange Act and is not required to report its ownership of such equity securities on Schedule 13D under the Exchange Act, (C) is the Beneficial Owner of less than 5% of the
shares of Common Stock then outstanding (including any such shares that are beneficially owned by such Person’s Affiliates and Associates after giving effect to this proviso) and (D) has not reported and is not required to report its
ownership of Common Stock on Schedule 13D under the Exchange Act; 
 (iii)    any trust or other estate in which such
Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; 

(iv)    any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person; and

 (v)    any other Person (whether or not a Company Entity or an Exempt Person) whose shares of Common Stock
(A) would be deemed constructively owned by such Person pursuant to Section 382 (without regard to the rule that treats stock of an entity as to which the constructive ownership rules apply as no longer owned by that entity), (B) would be
deemed owned by a single “entity” (as defined in Section 1.382-3(a)(1) of the Treasury Regulations) in which both such Person and such other Person are included or (C) otherwise would be
aggregated with the Common Stock owned by such Person pursuant to Section 382. 
 (e)    A Person shall be deemed
the “Beneficial Owner” of and shall be deemed to “beneficially own” any securities: 

(i)    that such Person, or any of such Person’s Affiliates or Associates, beneficially owns, directly or indirectly,
within the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement; 

(ii)    that 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 or the satisfaction of other conditions) 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), written or otherwise, or upon the exercise of conversion rights, exchange rights, warrants, options or other rights; 

  
 4 

 
provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” (1) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange or (2) securities that such Person or any of such Person’s Affiliates
or Associates has a right to acquire upon the exercise of Rights; or (B) the right to vote pursuant to any agreement, arrangement or understanding, written or otherwise but only if the effect of such agreement, arrangement or understanding is
to treat such Persons as an “entity” under Section 1.382-3(a)(1) of the Treasury Regulations”; provided, however, that a Person shall not be deemed the
“Beneficial Owner” of, or to “beneficially own,” any security under this clause (B) if the agreement, arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations of the Exchange Act and (2) is not then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report); 
 (iii)    that 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 (whether or not in writing) for acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso to Section 1(e)(ii)(B)) or disposing of any securities of the Company but only if the effect of such agreement, arrangement or understanding is to treat such Persons as an “entity” under Section 1.382-3(a)(1) of the Treasury Regulations”; provided, however, that (A) nothing in this Section 1(e) shall cause a Person engaged in business as an underwriter of securities to be the
“Beneficial Owner” of, or to “beneficially own,” any securities acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty
(40) days after the date of such acquisition, and then only if such securities continue to be owned by such Person at the expiration of such forty (40) day period, (B) a Person who is a director, officer or employee of a Company
Entity shall not, solely by reason of such Person’s status or authority as such, be deemed to be the “Beneficial Owner” of, or to “beneficially own,” any securities (including, without
limitation, in a fiduciary capacity) beneficially owned by such Company Entity or by any other director, officer or employee of such Company Entity, (C) a Person shall not be deemed to be the
“Beneficial Owner” of, or to “beneficially own,” any securities held by such Person in trust accounts, managed accounts and the like, or otherwise held in a fiduciary capacity, that are
beneficially owned by third Persons who are not Affiliates or Associates of such Person and (D) a Person shall not be deemed to be the Beneficial Owner of, or to beneficially own, any security on account of such Person’s status as a
“clearing agency” (as defined in Section 3(a)(23) of the Exchange Act); or 
 (iv)    that such Person would
be deemed to constructively own pursuant to Section 382 or that otherwise would be aggregated with the securities owned by such Person pursuant to Section 382. 

For all purposes of this Agreement, any calculation of the number of shares of Common Stock or any other class of capital stock outstanding at
any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the provisions of Section 382.
Notwithstanding anything in this Section 1(e) to the contrary, to the greatest extent 

  
 5 

 
permitted by Section 382, the phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Company, shall mean the number
of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding that such Person would be deemed to own beneficially hereunder. 

(f)    “Board” shall have the meaning set forth in the recitals hereof. 

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

(h)    “close of business” on any given day shall mean 5:00 p.m., Central Time, on such day;
provided, however, that if such day is not a Business Day, “close of business” shall mean 5:00 p.m., Central Time, on the next succeeding Business Day. 

(i)    “Code” shall have the meaning set forth in the recitals hereof. 

(j)    “Common Stock” shall have the meaning set forth in the recitals hereof. 

(k)    “Common Stock Equivalents” shall mean shares or fractions of shares of Preferred Stock or other
equity securities of the Company that, by virtue of having dividend, voting and liquidation rights substantially comparable to those of the shares of Common Stock, are deemed in good faith by the Board to have substantially the same value as the
shares of Common Stock. Except as otherwise provided in Section 11(d)(ii) with respect to Preferred Stock, the value of a Common Stock Equivalent on any date shall be deemed to equal the current market price per share of the Common Stock on
such date. 
 (l)    “Company” shall have the meaning set forth in the preamble hereto. 

(m)    “Company Entity” shall mean (i) the Company, (ii) any subsidiary of the Company,
(iii) any employee benefit plan of the Company or of any subsidiary of the Company or (iv) any entity organized, appointed or established pursuant to the terms of any such employee benefit plan. 

(n)    “current market price per share” shall have the meaning set forth in Section 11(d). 

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

(p)    “Distribution Time” shall mean the close of business on the tenth (10th) Business Day after the Redemption Deadline. 

(q)    “Equivalent Preferred Stock” shall have the meaning set forth in Section 11(b). 

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

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

(t)    “Exemption Request” shall have the meaning set forth in Section 25(a). 

  
 6 

 (u)    “Exempt Person” shall mean any Requesting Person with
respect to which an exemption is granted by the Board pursuant to Section 25(c) from and after the effective time of such exemption until the first to occur of (i) the effective time of the revocation of such exemption by the Board
pursuant to Section 25(d) or (ii) the effective time of any violation, breach or other failure to comply with or satisfy, in any material respect, any condition or limitation of such exemption (where the acquisition of Beneficial
Ownership of any one or more shares of Common Stock in excess of a maximum number of shares or percentage of outstanding shares specified by the Board shall be deemed “material”). 

(v)    “Exempt Transaction” shall mean a transaction with respect to which an exemption is granted by the
Board pursuant to Section 25(c). 
 (w)    “Exercise Period” shall mean the period from and
after the Distribution Time until the first to occur of (i) the time at which the Rights are redeemed as provided in Section 23, (ii) the time at which the Rights are exchanged as provided in Section 24(a)
and (iii) the close of business on the Expiration Date. 
 (x)    “Expiration Date” shall mean the
earliest to occur of the following: (i) February 17, 2020, (ii) the time at which the Rights are redeemed in full as provided in Section 23 or exchanged in full as provided in Section 24 hereof, (iii) the effective
date of the repeal of Section 382, or any successor provisions or replacement provisions, if the Board determines that this Agreement is no longer necessary for the preservation of Tax Benefits, (iv) the beginning of a taxable year of the
Company for which the Board determines that the Company has no Tax Benefits that may be carried forward, and (v) the date of the dissolution of the Company. 

(y)    “Person” shall mean any individual, firm, corporation, limited liability company, partnership,
joint venture, bank, trust or other entity, or any group of persons making a “coordinated acquisition” of shares or otherwise treated as an entity within the meaning of Section 1.382-3(a)(1) of the
Treasury Regulations or otherwise for purposes of Section 382, and shall include any successor (by merger or otherwise) of such entity. 

(z)    “Pre-Exercise Period” shall mean the period of time
following the close of business on the Record Date and prior to the first to occur of (i) the Distribution Time, (ii) the time at which the Rights are redeemed as provided in Section 23, (iii) the time at which
the Rights are exchanged as provided in Section 24(a) and (iv) the close of business on the Expiration Date. 

(aa)    “Preferred Stock” shall mean the Series D Preferred Stock of the Company having the rights and
preferences set forth in the form of Certificate of Designations of Series D Preferred Stock, attached hereto as Exhibit A. 

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

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

(dd)    “Record Date” shall have the meaning set forth in the recitals hereof. 

  
 7 

 (ee)    “Redemption Deadline” shall mean the earlier to
occur of (i) the first public announcement (which for purposes of this definition shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that a Person has become an
“Acquiring Person” for purposes of this Agreement and (ii) the time when a majority of the members of the Board then in office has actual knowledge that a Person has become an “Acquiring Person” for purposes of
this Agreement. 
 (ff)    “Redemption Price” shall have the meaning set forth in Section 23(a).

 (gg)    “Requesting Person” shall have the meaning set forth in Section 25(a). 

(hh)    “Right” shall have the meaning set forth in the recitals hereof. 

(ii)    “Right Certificate” shall mean a Right Certificate, in substantially the form of Exhibit B
hereto, evidencing one or more of the Rights. 
 (jj)    “Rights Agent” shall have the meaning set
forth in the preamble hereto. 
 (kk)    “Section 382” means Section 382 of the
Code, or any successor provision or replacement provision, and the Treasury Regulations promulgated thereunder. 

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

(mm)    “Security” shall have the meaning set forth in Section 11(d)(i). 

(nn)    “Senior Voting Stock” shall have the meaning set forth in Section 13(b). 

(oo)    “Shares Acquisition Time” shall mean the time when any Person first becomes an Acquiring Person.

 (pp)    “Spread” shall have the meaning set forth in Section 11(a)(iii). 

(qq)    “subsidiary” of a Person shall mean any firm, corporation, limited liability company,
partnership, joint venture, bank, trust or other entity of which such Person (or any other subsidiary of such Person) beneficially owns, directly or indirectly, (i) equity securities or equity interests having ordinary voting power sufficient
to elect a majority of the board of directors or similar governing body of such entity or (ii) if such entity does not have any such governing body, equity securities or equity interests having a majority of the voting power of the outstanding
equity securities or equity interests of such entity. 
 (rr)    “Substitution Period” shall have the
meaning set forth in Section 11(a)(iii). 
 (ss)    “Summary of Rights” shall have the meaning
set forth in Section 3(a). 
 (tt)    “Tax Benefits” shall mean the net operating loss, capital
loss, general business credit, alternative minimum tax credit and foreign tax credit carry-overs, any “net unrealized built-in loss” (within the meaning of Section 382 and Section 383 of
the Code) and any other tax attribute the benefit of which is subject to possible limitation under Section 382, of the Company or any direct or indirect subsidiary of the Company. 

  
 8 

 (uu)    “Trading Day” shall have the meaning set forth in
Section 11(d)(i). 
 (vv)    “Treasury Regulations” shall mean final, temporary and proposed
income tax regulations promulgated under the Code, including any amendments thereto. 

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

(a)    As soon as practicable after the Record Date, the Company will send a copy of a Summary of Rights to Purchase
Preferred Stock, in substantially the form attached hereto as Exhibit C (the “Summary of Rights”), to each record holder of Common Stock as of the close of business on the Record Date. 

(b)    During the Pre-Exercise Period, (i) the Rights shall not be evidenced
by separate Right Certificates, (ii) (A) if the Common Stock is evidenced by physical stock certificates, the Rights will be evidenced by the certificates for the Common Stock registered in the names of the holders thereof and (B) if the
Common Stock is not evidenced by physical stock certificates, the Rights will be evidenced by the registration of shares of Common Stock in the book entry ownership records of the transfer agent for the Common Stock, (iii) the record holders of
Common Stock represented by such certificates or book entry ownership records shall be the record holders of the Rights represented thereby and (iv) the interests of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock. 
 (c)    Certificates issued for Common Stock during the
Pre-Exercise Period (including, without limitation, certificates issued upon the transfer of outstanding Common Stock, the disposition by the Company of Common Stock out of treasury stock or the issuance or
reissuance of Common Stock by the Company out of authorized but unissued shares) shall have impressed on, printed on, written on or otherwise affixed to them a legend substantially as follows: 

This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between
Harvest Natural Resources, Inc. and Wells Fargo Bank, N.A., as Rights Agent, dated as of February 17, 2017, as the same may be supplemented or 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 Harvest Natural Resources, 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. Wells Fargo Bank, N.A. will mail to the holder of this certificate a copy of the Rights Agreement without charge after 

  
 9 

 
receipt of a written request therefor. Under certain circumstances, as set forth in the Rights Agreement, Rights acquired or beneficially owned by any Person who or that becomes an Acquiring
Person or any Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement) and their transferees will become null and void and will no longer be transferable. 

Notwithstanding this Section 3(c), the omission of a legend from any certificate representing Common Stock shall not affect the enforceability of any
part of this Agreement or the rights of any holder of the Rights. 
 (d)    Each account statement and each issuance or
transfer confirmation that is sent during the Pre-Exercise Period to a record holder of shares of Common Stock registered only in book entry form shall include a notice substantially as follows: 

Each share of Common Stock, par value $0.01 per share, of Harvest Natural Resources, Inc. entitles the holder thereof to
certain Rights as set forth in the Rights Agreement between Harvest Natural Resources, Inc. and Wells Fargo Bank, N.A., as Rights Agent, dated as of February 17, 2017, as the same may be supplemented or 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 Harvest Natural Resources, 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 the book entry registration of shares of Common Stock. Wells Fargo Bank, N.A. will mail to each registered holder of shares of Common
Stock 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 acquired or beneficially owned by any Person who or that becomes an Acquiring
Person or any Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement) and their transferees will become null and void and will no longer be transferable. 

Notwithstanding this Section 3(d), the omission of such notice shall not affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights. 
 (e)    During the Exercise Period, the Rights will be evidenced solely by Right Certificates.
As soon as practicable after the Distribution Time, (i) the Company shall promptly notify the Rights Agent in writing that the Distribution Time has occurred, (ii) the Company shall prepare and execute (and the Rights Agent shall
countersign) a Right Certificate in the name of each record holder of Common Stock as of the Distribution Time evidencing one Right (subject to adjustment as provided herein) for each share of Common Stock held of record by each such holder and
(iii) the Company shall deliver each such Right Certificate to the record holder of Common Stock named thereon (or such delivery shall be made by the Rights Agent if the Company so requests in writing and if the Company provides the Rights
Agent with a list of the record holders of Common Stock entitled to receive a Right Certificate, their respective addresses shown on the records of the Company and such other relevant information as the Rights Agent may reasonably request).
Notwithstanding the foregoing, no Right Certificate shall 

  
 10 

 
be prepared in the name of an Acquiring Person or any Affiliate or Associate of an Acquiring Person, or delivered to any such Person, and no Right Certificate shall be prepared or delivered that
evidences Rights that have become null and void pursuant to Section 11(a)(ii)). Until the Rights Agent receives notice pursuant to Section 3(e)(i), the Rights Agent may presume conclusively for all purposes that the Distribution Time
has not occurred. Notwithstanding any other provision of this Agreement to the contrary, the Company and the Rights Agent may amend this Agreement to provide for uncertificated Rights in addition to or in place of Rights evidenced by Right
Certificates. 
 (f)    During the Pre-Exercise Period, the Rights will be
transferable only in connection with the transfer of the shares of Common Stock and the transfer of any shares of Common Stock shall also constitute the transfer of the Rights associated with such shares of Common Stock. During the Exercise Period,
the Right Certificates (and the Rights evidenced thereby) shall trade separately from the shares of Common Stock and the Rights will be transferable only by the transfer of the Right Certificate(s) evidencing such Right(s) and subject to the
requirements and limitations set forth in Section 6(a). 
 (g)    Rights shall be issued in respect of all shares
of Common Stock issued by the Company after the close of business on the Record Date and prior to the Distribution Time (including, without limitation, upon disposition by the Company of Common Stock out of treasury stock or the issuance or
reissuance of Common Stock by the Company out of authorized but unissued shares). Rights shall not be issued in respect of any shares of Common Stock issued by the Company after the Distribution Time, except that Rights shall be issued in respect of
shares of Common Stock issued by the Company after the Distribution Time pursuant to (i) the exercise of stock options, (ii) any employee plan or arrangement, (iii) the exercise, conversion or exchange of securities, notes or
debentures issued by the Company or (iv) a contractual obligation of the Company, in each case that exist prior to the Distribution Time. Notwithstanding the foregoing, Rights shall not be issued in respect of any shares of Common Stock issued
by the Company after the Shares Acquisition Time if such Rights, upon such issuance, would become null and void pursuant to Section 11(a)(ii). 

(h)    If the Company purchases or acquires any shares of Common Stock during the
Pre-Exercise Period, any Rights associated with such shares of Common Stock shall be deemed cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with the shares of
Common Stock that are no longer outstanding. 
 Section 4.    Form of Right Certificates. The Right
Certificates (and the forms of election to purchase shares and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate (but that do not affect the rights, duties or obligations of the Rights Agent as set forth in this Agreement) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or automated quotation system on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Section 22, the Right Certificates, in each case, on their face shall entitle the holders thereof to purchase such number of shares (or fraction of a share) of
Preferred Stock as 

  
 11 

 
shall be set forth therein at the price per share (or fraction of a share) set forth therein (the “Purchase Price”), but the number of such shares (and the type of securities or
other property issuable upon exercise of the Rights) and the Purchase Price shall be subject to adjustment as provided herein. 

Section 5.    Countersignature and Registration. 

(a)    The Right Certificates shall be executed on behalf of the Company in the manner provided in the bylaws of the
Company (as amended from time to time) for Common Stock certificates. The Right Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be valid for any purpose unless so countersigned. 

(b)    In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered 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,
shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement any such person was not such an officer. 

(c)    Following the Distribution Time, and receipt by the Rights Agent of (i) written notice of the Distribution
Time pursuant to Section 3(e), and (ii) a stockholder list and all relevant information reasonably requested by the Rights Agent pursuant to Section 3(e), the Rights Agent will keep or cause to be kept, at its office designated
for such purposes, books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each
of the Right Certificates and the date of each of the Right Certificates. 
 Section 6.    Transfer and
Replacement of Right Certificates. 
 (a)    Subject to the provisions of Section 14, at
any time during the Exercise Period, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become null and void pursuant to Section 11(a)(ii)) 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 share of Preferred Stock (or number of shares of Common Stock
or other securities, or amount of cash or other property, as the case may be) as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. As a condition to any transfer, split up, combination or exchange of any
Right Certificate pursuant to this Section 6, the registered holder of such Right Certificate must (i) deliver to the Rights Agent a written request therefor setting forth the requested action in reasonable detail,
(ii) in the case of a transfer, properly complete and duly execute the form of assignment set forth on the reverse side of such Right Certificate, (iii) provide such additional evidence of the identity of the Beneficial Owner (or any
former or proposed Beneficial Owner) thereof and the Affiliates and Associates of such Beneficial Owner (or any former or proposed Beneficial Owner) as the 

  
 12 

 
Company or the Rights Agent shall reasonably request, (iv) have paid any tax or charge that may be imposed in connection with such transfer, split up, combination or exchange as required by
Section 9(d) and (v) surrender such Right Certificate to the Rights Agent at the office of the Rights Agent designated for such purpose. Upon the satisfaction of the foregoing conditions, the Company shall execute and deliver to the
Rights Agent, and the Rights Agent shall countersign and deliver to the Person entitled thereto, a Right Certificate or Right Certificates, as the case may be, as so requested. 

(b)    Upon receipt by the Company and the Rights Agent of (i) evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, (ii) in the case of loss, theft or destruction, indemnity or security satisfactory to them, (iii) in the case of mutilation, the original Right Certificate and (iv) at the
Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, the Company shall execute and deliver to the Rights Agent, and the Rights Agent shall countersign and deliver to the Person
entitled thereto, a new Right Certificate of like tenor in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 

Section 7.    Exercise of Rights: Purchase Price; Expiration 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 during the Exercise Period upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof properly completed and duly executed, to the Rights Agent at the
office of the Rights Agent designated for such purposes together with payment of the Purchase Price for each one one-hundredth of a share of Preferred Stock (or Common Stock, other securities, cash or other
property, as the case may be) as to which the Rights are exercised. 
 (b)    The Purchase Price for each one one-hundredth of a share of Preferred Stock pursuant to the exercise of a Right shall initially be $26.00, shall be subject to adjustment from time to time as provided in Section 11 and
Section 13, and shall be payable in lawful money of the United States of America in accordance with Section 7(c). 

(c)    Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase properly
completed and duly executed, accompanied by payment of the aggregate Purchase Price for the Rights so exercised and an amount equal to any applicable tax or charge required to be paid by the holder of such Right Certificate in accordance with
Section 6(a) in cash, or by certified check or cashier’s check payable to the order of the Company, the Rights Agent shall thereupon (i) (A) promptly requisition from any transfer agent of the Preferred Stock of the Company (or, if
the Rights Agent is the transfer agent of the Preferred Stock, make available) certificates for the number of one one-hundredths of a share of Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) promptly requisition from the depositary agent depositary receipts representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs the depositary agent
to comply with such request, (ii) after receipt of such certificates or depositary receipts, promptly cause the same to be delivered to or upon the order 

  
 13 

 
of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder, (iii) promptly requisition from the Company the amount of any cash
to be paid in lieu of issuance of fractional shares in accordance with Section 14 and (iv) after receipt, promptly deliver any 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, a
new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to such holder’s duly authorized assigns, subject to the provisions
of Section 14. 
 (e)    Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the purported exercise of Rights pursuant to this Section 7 unless and until the registered holder thereof shall have
(i) properly completed and duly executed the form of election to purchase set forth on the reverse side of the Right Certificate surrendered for such exercise and (ii) provided such additional evidence of the identity of the Beneficial
Owner (or any former Beneficial Owner) thereof and the Affiliates and Associates of such Beneficial Owner (or former Beneficial Owner) as the Company or the Rights Agent shall reasonably request. 

Section 8.    Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination, replacement, redemption or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the
Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this 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. 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. Subject to applicable law and regulation, the Rights Agent shall maintain (i) in a retrievable database
electronic records of all cancelled or destroyed right certificates which have been canceled or destroyed by the Rights Agent. The Rights Agent shall maintain such electronic records or physical records for the time period required by applicable law
and regulation. Upon written request of the Company (and at the expense of the Company), the Rights Agent shall provide to the Company or its designee copies of such electronic records or physical records relating to right certificates cancelled or
destroyed by the Rights Agent. 
 Section 9.    Covenants of the Company. 

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

  
 14 

 (b)    So long as the shares of Preferred Stock (and, following the time that
a Person becomes an Acquiring Person, shares of Common Stock or other securities) issuable upon the exercise of Rights are listed or admitted to trading on any national securities exchange or automated quotation system, the Company shall use its
best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted for trading on such exchange or automated quotation system upon official notice of issuance upon such
exercise. 
 (c)    The Company covenants and agrees that it will take all such action as may be necessary to ensure
that all shares of Preferred Stock (and, following the time that a Person becomes an Acquiring Person, shares of Common Stock or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price and compliance with all other provisions of this Agreement), be duly and validly authorized and issued and fully paid and non-assessable shares. 

(d)    The Company covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes
and charges that may be payable in respect of the issuance or delivery of the Right Certificates or of any shares of Preferred Stock (or shares of Common Stock or other securities) upon the exercise of Rights. Notwithstanding the foregoing, neither
the Company nor the Rights Agent shall have any duty or obligation to (i) pay any tax or charge that may be payable in respect of (A) any transfer, split up, combination or exchange of Right Certificates pursuant to Section 6(a) or
(B) the issuance or delivery of certificates for shares of Preferred Stock (or Common Stock or other securities) in a name other than that of the registered holder of the Right Certificate evidencing the Rights surrendered for exercise or
(ii) take any of the foregoing actions or any other action under this Agreement that requires the payment by a Right holder of applicable taxes and/or charges unless and until any such tax or charge shall have been paid by such Right holder or
until it has been established to the Company’s and the Rights Agent’s satisfaction that no such tax or charge is due. 

(e)    The Company shall, if legally required, (i) prepare and file, as soon as reasonably possible following the
Distribution Time, a registration statement under the Securities Act with respect to the securities purchasable upon exercise of or exchangeable for the Rights on an appropriate form, (ii) cause such registration statement to become effective
as soon as reasonably possible after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the end of the Exercise Period. The Company
also shall take all such action as may be required or as is appropriate under the securities or blue sky laws of such jurisdictions as may be necessary with respect to the securities purchasable upon the exercise of or exchangeable for the Rights.
The Company may temporarily suspend, for a period not to exceed one hundred twenty (120) days (or, if the Company is not then eligible to file a registration statement on Form S-3, one hundred eighty
(180) days) following the Distribution Time, the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. Upon any such suspension of exercisability of Rights referred to in this
paragraph, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. The Company shall notify
the Rights Agent whenever it makes a public announcement pursuant to this Section 9 and give the Rights Agent a copy of any such announcement. 

  
 15 

 
Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite qualification or exemption in such jurisdiction shall
have been obtained and until a registration statement under the Securities Act (if required) shall have been declared effective. 

Section 10.    Record Date. Each Person in whose name any certificate for shares of Preferred Stock (or Common
Stock or other securities) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Stock (or Common Stock or other securities) represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights, together with the form of election to purchase properly completed and duly executed, was duly surrendered and payment of the Purchase Price (and any applicable taxes or
charges) was made; provided, however, that if the date of such surrender and payment is a date upon which the applicable transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day on which the applicable transfer books of the Company are open. 

Section 11.    Adjustment of Purchase Price, Number of Shares or Number of Rights. The Purchase Price, the
number and kind or class of shares of stock of the Company purchasable upon exercise of 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 shall (A) declare or
pay any dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine or consolidate the outstanding Preferred Stock into a smaller number of shares of Preferred Stock or
(D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination, consolidation or reclassification, and the number of shares of
Preferred Stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number of shares of Preferred Stock that, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination,
consolidation or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of Preferred Stock issuable upon exercise of one Right. The
adjustments provided for in this Section 11(a)(i) shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination, consolidation or reclassification is effected. If an event occurs that would require
an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii). 
 (ii)    Subject to Section 24, from and after the Shares Acquisition Time,
and except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii), each holder of a 

  
 16 

 
Right shall have a right to receive, upon exercise thereof at a price equal to the Purchase Price in effect immediately prior to the Shares Acquisition Time multiplied by the number of one one-hundredths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of Common Stock as
shall equal the result obtained by (A) multiplying such Purchase Price by the number of one one-hundredths of a share of Preferred Stock for which a Right is then exercisable and dividing that product by
(B) 50% of the current market price per share of the Common Stock on the date on which the Shares Acquisition Time occurs; provided, however, that if the transaction that would otherwise give rise to the adjustment is also subject to
the provisions of Section 13, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). Notwithstanding
anything in this Agreement to the contrary, however, from and after the Shares Acquisition Time, any Rights that are or were acquired or beneficially owned by any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), including,
without limitation, any such Rights when held by (1) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the Shares Acquisition Time, (2) a transferee of any Acquiring Person (or any
such Affiliate or Associate) who became a transferee prior to or concurrently with the Shares Acquisition Time pursuant to either (x) a transfer from the Acquiring Person to holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding, written or otherwise, regarding the transferred Rights or (y) a transfer that the Board determines is part of a plan, arrangement or understanding, written or otherwise, that has the purpose
or effect of avoiding the provisions of this Section 11(a)(ii), or (3) a subsequent transferee of any Person described in the foregoing clauses (1) or (2), shall be null and void without any further action and any holder of
such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement. The Company shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have
no liability to any holder of Rights or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. No Right Certificate shall be issued pursuant to
Section 3, Section 6 or Section 7(d) that represents Rights that have become null and void pursuant to the preceding sentence. No Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person (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 (or
any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate) shall be cancelled. 

(iii)    To the extent permitted by applicable law and any material agreements then in effect to which the Company is a
party, the Company may, at its option, substitute for each share of Common Stock that is issuable upon the exercise of Rights in accordance with Section 11(a)(ii) (and the payment of the applicable Purchase Price therefor), but that is not so
issued, an amount of cash, a reduction in Purchase Price, a number of Common Stock Equivalents, debt securities of the Company or other assets, or any combination of the foregoing, having an aggregate value that is equal to the current market price
per share of the Common Stock on the date of the Redemption Deadline, where such aggregate value has been determined by the Board upon the advice of a nationally recognized investment banking firm selected in good faith by the Board. To the extent
permitted by applicable law and any material agreements then in effect to which the Company is a party, if there are not sufficient shares of Common 

  
 17 

 
Stock issued but not outstanding or authorized but unissued and unreserved to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Company shall substitute
for each share of Common Stock that is issuable upon the exercise of Rights in accordance with Section 11(a)(ii) (and the payment of the applicable Purchase Price therefor), but that is not so issued, an amount of cash, a reduction in
Purchase Price, a number of Common Stock Equivalents, debt securities of the Company or other assets, or any combination of the foregoing, having an aggregate value that is equal to the current market price per share of the Common Stock on the date
of the Redemption Deadline, where such aggregate value has been determined by the Board upon the advice of a nationally recognized investment banking firm selected in good faith by the Board; provided, however, that, if the Company
does not make adequate provision to deliver such consideration within thirty (30) days following the Redemption Deadline, then (A) the Board shall determine the excess (such excess, the “Spread”) of (1) the value of
the shares of Common Stock issuable upon the exercise of a Right in accordance with Section 11(a)(ii) based on the current market price per share of the Common Stock on the date of the Redemption Deadline (the “Current
Value”) over (2) the Purchase Price in effect immediately prior to the Shares Acquisition Time and (B) the Company shall deliver to each holder of a Right, upon the surrender for exercise of a Right and without requiring payment
of the Purchase Price therefor, shares of Common Stock (to the extent available), and then, if necessary, such number of shares (or fractions of a share) of Preferred Stock (to the extent available), and then, if necessary, such number of other
Common Stock Equivalents (to the extent available), and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If, upon any Person becoming an Acquiring Person, the Board shall determine in good faith that it
is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, then, if the Board so elects, the thirty (30) day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Redemption Deadline, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called
the “Substitution Period”). To the extent that the Company determines that some action needs to be taken pursuant to the second and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 11(a)(ii) and the last sentence of this Section 11(a)(iii), that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights until the expiration of
the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such second sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. The Board may, but shall
not be required to, establish procedures to allocate the right to receive shares of Common Stock or other consideration upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii). 

(b)    In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within forty-five (45) calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having economically equivalent rights, privileges and preferences as the
Preferred Stock (“Equivalent Preferred Stock”)) or securities convertible into Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or Equivalent Preferred Stock (or having a

  
 18 

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

(c)    In case the Company shall fix a record date for the making of a distribution to all holders of Preferred Stock
(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 (i) a regular periodic cash dividend, the
record date for which occurs at a time when there is no Acquiring Person, or (ii) a regular periodic cash dividend, the record date for which occurs at a time when there is an Acquiring Person, at a rate not in excess of 125% of the rate of the
last cash dividend theretofore paid or (iii) a dividend payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price per share of the Preferred Stock on such record date, less the fair market value (as
determined in good faith by the Board, whose determination shall be described in a written statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one share of Preferred Stock and the denominator of which shall be such current market price per share of the Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of Preferred Stock issuable upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and if such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed. 

(d)    (i) Except as otherwise provided in Section 11(d)(ii) and Section 14(a), for the purpose of any
computation hereunder, the “current market price per share” of any security (a 

  
 19 

 
“Security”) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the thirty (30) consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date; provided, however, that if the current market price per share of the Security is determined during the 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 shares of such Security or (B) any subdivision, combination or reclassification of such Security, and prior to the expiration
of thirty (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
market price per share shall be appropriately adjusted to reflect the current market price per share equivalent of such security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and ask prices, regular way, in either case (1) as reported by the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange
or the NASDAQ Stock Market, or (2) if the Security is not listed or admitted to trading on the New York Stock Exchange or the NASDAQ Stock Market, as reported by 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 (3) 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 ask prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc., Automated
Quotations System or any other system then in use, or (4) if on any such date the Security is not quoted by any such organization, the average of the closing bid and ask prices as furnished by a professional market maker making a market in the
Security selected by the Board or (5) if on any such date, no such market maker is making a market in such Security, the fair market value per share of the Security on such date as determined in good faith by the Board, whose determination
shall be described in a written statement filed with the Rights Agent; provided, however, that if the principal market for such Security is a non-U.S. securities exchange, the closing price for
each day shall be determined by using the customary convention for determining the closing price of a security on such exchange as determined by the Board (in which event the exchange rate of the relevant currency into U.S. dollars for each Trading
Day shall be determined by the Board). The term “Trading Day” shall mean 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, if the Preferred Stock is publicly traded, the “current market price per share” of Preferred Stock shall be determined in the same manner as set forth above for Common Stock in Section 11(d)(i), other
than clause (5) thereof. If the Preferred Stock is not publicly traded or if the current market price per share of Preferred Stock cannot be determined in the manner provided above but the Common Stock is publicly traded, the “current
market price per share” of Preferred Stock shall be conclusively deemed to be the current market price per share of Common Stock (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the
date of this Agreement), multiplied by one hundred (100). If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, the “current market price per share” of Preferred Stock shall mean the fair
market value per share of the Preferred Stock on such date as determined in good faith by the Board, whose determination shall be described in a written statement filed with the Rights Agent. 

  
 20 

 (e)    No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments that by reason of this Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one-hundredth of a share of Common Stock or other
security (other than Preferred Stock) or one ten-thousandth of a share of Preferred Stock, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the Business Day immediately preceding the end of the Pre-Exercise Period or, if such adjustment arises during the Exercise Period, no later
than the Business Day immediately preceding the end of the Exercise Period. 
 (f)    If as a result of an adjustment
made pursuant to Section 11(a), the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company or of any Principal Party other than shares of Preferred Stock, thereafter the Purchase
Price and the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of
Preferred Stock contained in Section 11(a), Section 11(b), Section 11(c), Section 11(e), Section 11(h), Section 11(i) and Section 11(m), and the provisions of Section 7,
Section 9, Section 10, Section 13 and Section 14 with respect to the shares of Preferred Stock shall apply on like terms to any such other
shares. 
 (g)    All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths of a share of Preferred Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein. 
 (h)    Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Section 11(b) and Section 11(c), each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted Purchase Price per one one-hundredth of a share of Preferred Stock, that number of one one-hundredths of
a share of Preferred Stock (calculated to the nearest ten-thousandth) obtained by (i) multiplying (A) the number of one one-hundredths of a share of Preferred Stock
purchasable upon exercise of a Right immediately prior to this adjustment by (B) 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 share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such adjustment of the 

  
 21 

 
number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after the adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights (with prompt written notice thereof to the Rights
Agent), indicating the record date for the adjustment to be made and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least ten (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, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates to be so distributed shall be executed and
delivered by the Company, and countersigned and delivered by the Rights Agent, in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public
announcement. 
 (j)    Irrespective of any adjustment or change in the Purchase Price or the number of one one-hundredths of a share of Preferred Stock issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price per one one-hundredth of a share of Preferred Stock and the number of one one-hundredths of a share that 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 shares of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action that may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and non-assessable shares of such Preferred Stock at such adjusted Purchase Price. 

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

(m)    Notwithstanding anything in this Agreement to the contrary, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it, in its sole discretion, shall 

  
 22 

 
determine to be advisable in order that any subdivision, combination or reclassification of the Preferred Stock, issuance wholly for cash of any shares of Preferred Stock at less than the current
market price per share, issuance wholly for cash of any shares of Preferred Stock or securities that by their terms are convertible into or exchangeable for Preferred Stock, dividends on the Preferred Stock payable in Preferred Stock or issuance of
rights, options or warrants referred to hereinabove in this Section 11, hereafter made by the Company to holders of its Preferred Stock shall not reasonably be expected to be taxable to such stockholders. 

(n)    If, at any time after the date of this Agreement and prior to the Distribution Time, the Company shall
(i) declare or pay any dividend on the Common Stock payable in shares of Common Stock or (ii) effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of dividends in Common
Stock) into a greater or lesser number of shares of Common Stock, then in any such case (A) the number of one one-hundredths of a share of Preferred Stock purchasable after such event upon proper exercise
of each Right shall be determined by multiplying the number of one one-hundredths of a share of Preferred Stock so purchasable immediately prior to such event by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately before such event and the denominator of which is the number of shares of Common Stock outstanding immediately after such event, and (B) each share of Common Stock outstanding immediately
after such event shall have issued with respect to it that number of Rights that each share of Common Stock outstanding immediately prior to such event had issued with respect to it. The adjustments provided for in this
Section 11(n) shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected. If an event occurs that would require an adjustment under Section
11(a)(ii) and this Section 11(n), the adjustments provided for in this Section 11(n) shall be in addition and prior to any adjustment required pursuant to Section 11(a)(ii). 

(o)    The Company agrees that, after the Redemption Deadline, it will not, except as permitted by
Section 23, Section 24 or Section 28, take (or permit any subsidiary to take) any action if, at the time such action is taken, it is reasonably foreseeable that such
action will diminish substantially or eliminate the benefits intended to be afforded by the Rights. 

Section 12.    Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as
provided in Section 11 and Section 13, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief written statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent for the Common Stock and the Preferred Stock a copy of such certificate and (c) as soon as practicable thereafter, provide to each holder of a Right a notice
of the occurrence of such event, specifying the event and the consequences of the event to holders of Rights under Section 11 or Section 13, as applicable. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment or statement contained therein and shall have no duty or liability with respect to and shall not be deemed to have knowledge of such adjustment or event unless and until it shall have received
such certificate. 

  
 23 

 Section 13.    Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. 
 (a)    If, following the Shares Acquisition Time, (i) the Company shall consolidate with, or
merge with and into, any other Person (other than one or more of its wholly-owned subsidiaries), (ii) any Person (other than one or more of its wholly-owned subsidiaries) shall consolidate with or merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any
other property, or (iii) the Company shall sell or otherwise transfer (or one or more of its subsidiaries shall sell or otherwise transfer), 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, proper provision shall be made so that (A) each holder of a
Right (other than Rights that have become null and void pursuant to Section 11(a)(ii)) shall thereafter have the right to receive, upon the exercise thereof at the Purchase Price in effect immediately prior to the Shares Acquisition Date
multiplied by the number of one one-hundredths of a share of Preferred Stock for which a Right would then be exercisable (whether or not such Right was then exercisable), in accordance with the terms of this
Agreement and in lieu of shares of Preferred Stock, such number of shares of validly issued, fully paid, non-assessable and freely tradable Senior Voting Stock (as hereinafter defined) of the Principal Party
(as hereinafter defined) (including the Company as successor thereto or as the surviving corporation), not subject to any liens, encumbrances, rights of call or first refusal or other adverse claims, as shall be equal to the result obtained by
(1) multiplying such Purchase Price by the then number of one one-hundredths of share of Preferred Stock for which a Right would then be exercisable (whether or not such Right was then exercisable) and
dividing that product by (2) 50% of the current market price per share of the Senior Voting Stock of such Principal Party (determined in the manner described in Section 11(d)) on the date of consummation of such consolidation, merger, sale or
transfer; provided that the Purchase Price and the number of shares of Senior Voting Stock of such Principal Party issuable upon exercise of each Right shall be further adjusted as provided in Section 11(f) to reflect any events
occurring in respect of such Principal Party after the date of such consolidation, merger, sale or transfer; (B) the Principal Party shall 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; (C) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of
Section 11 shall apply to such Principal Party following the occurrence of such consolidation, merger, sale or transfer; and (D) such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Senior Voting Stock in accordance with Section 9, with each reference to Preferred Stock in Section 9 being deemed to be a reference to the
shares of its Senior Voting Stock) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares of its Senior Voting Stock
thereafter deliverable upon the exercise of the Rights; provided that, upon the subsequent occurrence of any consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect of such Principal Party, each holder
of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided in this Section 13(a), such cash, shares, rights, warrants and other property that such holder would have been entitled
to receive had such holder, at the time of such transaction, 

  
 24 

 
owned the Senior Voting Stock of the Principal Party receivable upon the exercise of a Right pursuant to this Section 13(a), and such Principal Party shall take such steps (including, but
not limited to, reservation of shares of stock) as may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other property. 

(b)    “Principal Party” shall mean (i) in the case of any transaction described in Section
13(a)(i) or Section 13(a)(ii), (A) the Person that is the issuer of any securities into which shares of Common Stock are converted in such merger or consolidation (or, if there is more than one such issuer, the issuer of such securities
that has the greatest aggregate market value of securities outstanding), or (B) if no securities are so issued, (1) the Person that is the other party to the merger if such Person survives said merger (or, if there is more than one such
Person, such Person that has the greatest aggregate market value of securities outstanding) or (2) if the Person that is the other party to the merger does not survive the merger, the Person that does survive the merger (including the Company
if it survives) or (3) the Person resulting from the consolidation and (ii) in the case of any transaction described in Section 13(a)(iii), the Person that is the other party to such transaction or, if more than one, the Person that
is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction; provided, however, that in any such case, if the Senior Voting Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, then (A) if such Person is a direct or indirect subsidiary of another Person the Senior Voting
Stock of which is and has been so registered, the term “Principal Party” shall refer to such other Person; or (B) if such Person is a subsidiary, directly or indirectly, of more than one Person and the Senior Voting Stock of
any two or more of such Persons is and has been so registered, the term “Principal Party” shall refer to whichever of such Persons is the issuer of the Senior Voting Stock having the greatest aggregate market value of shares
outstanding; or (C) if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in clauses (A) and (B) above shall
apply to each of the owners having an interest in such joint venture as if such joint venture were a subsidiary of both or all of such joint venturers and the Principal Party in each such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect interests in such joint venture bear to the total of such interests. “Senior Voting Stock” shall mean the capital stock (or equity interest) of the
Principal Party with the greatest voting power. 
 (c)    The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such Principal Party or Parties shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in Section 13(a) and Section
13(b) and further providing that, as soon as practicable after the date of any consolidation, merger or sale or transfer of assets mentioned in Section 13(a), the Principal Party or Parties will (i) prepare and file a registration
statement under the Securities Act with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, will use its best efforts (A) to cause such registration statement to become effective as soon as
practicable after such filing, (B) to cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the end of the Exercise Period, and (C) to similarly comply
with applicable state securities laws, and use its best efforts to list (or continue the listing of) the Rights and the securities 

  
 25 

 
purchasable upon exercise of the Rights on a national securities exchange, (ii) deliver to holders of the Rights historical financial statements for the Principal Party or Parties and each
of its Affiliates that comply in all respects with the requirements for registration on Form 10 (or any successor form) under the Exchange Act and (iii) obtain waivers of any rights of first refusal or preemptive rights in respect of the Senior
Voting Stock of the Principal Party subject to purchase upon exercise of outstanding Rights, and further providing that, at all times from and after the effective time of such consolidation, merger, sale or transfer, the Principal Party or Parties
shall take all necessary action to cause a sufficient number of shares of Senior Voting Stock of the Principal Party to be authorized and reserved solely for issuance upon exercise of the Rights to effect the exercise of all outstanding Rights on
the terms and conditions provided for herein. 
 (d)    If the Principal Party has a provision in any of its authorized
securities or in its certificate of incorporation or bylaws or other instrument governing its affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders of Rights pursuant to this
Section 13), in connection with, or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of Senior Voting Stock or Senior Voting Stock equivalents of such
Principal Party at less than the then-current market price per share thereof or securities exercisable for, or convertible into, Senior Voting Stock or Senior Voting Stock equivalents of such Principal Party at less than such then-current market
price or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the Senior Voting Stock of such Principal Party pursuant to the provisions of this Section 13, then, in such
event, the Company hereby covenants and agrees with each holder of Rights that it shall not consummate any such transaction unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such Principal Party shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in
connection with, or as a consequence of, the consummation of the proposed transaction. 
 (e)    The Company covenants
and agrees that it shall not, at any time after a Person first becomes an Acquiring Person, enter into any transaction of the kind referred to in this Section 13 if (i) at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any agreements or arrangements that, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights,
(ii) prior to, simultaneously with or immediately after such transaction, the stockholders of the Person that constitutes, or would constitute, the Principal Party for purposes of Section 13(b) shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates or Associates or (iii) the form or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. 

Section 14.    Fractional Rights and Fractional Shares. 

(a)    The Company shall not be required to issue fractions of Rights or to distribute Right Certificates that evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of such fractional Rights that would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole
Right. For 

  
 26 

 
purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for each day shall be determined in the same manner as the “current market price per share” of a Security is determined pursuant to Section 11(d)(i).

 (b)    The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions that
are integral multiples of one one-hundredth of a share of Preferred Stock), Common Stock or other Securities upon exercise or exchange of the Rights or to distribute certificates that evidence fractional
shares of Preferred Stock (other than fractions that are integral multiples of one one-hundredth of a share of Preferred Stock), Common Stock or other Securities. Fractions of shares of Preferred Stock in
integral multiples of one one-hundredth of a share of Preferred Stock may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of shares of Preferred
Stock. In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-hundredth of a share of Preferred Stock or fractional shares of Common Stock or other Securities, the Company
shall pay to the registered holders of Right Certificates with regard to which such fractional shares would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole share of Preferred Stock, Common
Stock or other Securities, as applicable. For purposes of this Section 14(b), the current market value of a whole share of a Security shall be the closing price of a share of such Security (as determined pursuant to the second sentence of
Section 11(d)(i)) for the Trading Day immediately prior to the date of such exercise or exchange). 
 (c)    The
holder of a Right by the acceptance of the Right expressly waives such holder’s right to receive any fractional Rights or any fractional Securities upon exercise of a Right (except as above provided). 

(d)    Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent, the Company shall
(i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payments and the prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient
monies to the Rights Agent in the form of fully collected funds to make such payments. 
 Section 15.    Rights
of Action. 
 (a)    All rights of action in respect of this Agreement are vested in the registered holders of the
Rights and any registered holder of one or more Rights (without the consent of the Rights Agent or any other registered holder of Rights) may, in such holder’s own name and for such holder’s own benefit, institute and maintain any suit,
action or proceeding against the Company to enforce this Agreement or otherwise act in respect of such holder’s right to exercise such holder’s Rights in accordance with this Agreement. Without limiting the foregoing or any remedies
available to the registered holders of Rights, it is specifically acknowledged that the registered holders of Rights would not have an adequate remedy at law for any breach of this Agreement by any Person and will be entitled to an order of specific
performance of any Person’s obligations under this Agreement and injunctive relief against any actual or threatened violation of the obligations of any Person under this Agreement. 

  
 27 

 (b)    Notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any registered holder of one or more Rights or any other Person as a result of the Company’s or the Rights Agent’s inability to perform any of their respective obligations under
this Agreement by reason of any preliminary or permanent injunction or other order, judgment, decree or ruling (whether interlocutory or final) issued by a court or by a governmental, regulatory, self-regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation. 

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
Time, the Rights will be transferable only in connection with the transfer of the Common Stock; 
 (b)    after the
Distribution Time, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer
and with the appropriate forms and certificates properly completed and duly executed; 
 (c)    the Company and the
Rights Agent may deem and treat the Person in whose name any Right is registered as the absolute owner thereof (notwithstanding any notations of ownership or writing on any Right Certificates or any Common Stock certificates made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary; 

(d)    this Agreement may be supplemented or amended from time to time in accordance with its terms; and 

(e)    the power and authority delegated to the Board pursuant to this Agreement shall be exclusive and shall be as set
forth in Section 31. 
 Section 17.    Right Holder Not Deemed a Stockholder. No
holder, as such, of any Right shall be entitled to vote, receive dividends or distributions, exercise preemptive rights or be deemed for any purpose the holder of the Preferred Stock or any other securities of the Company that may at any time be
issuable on the exercise of such Right, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right, as such, any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in
Section 12, Section 23, Section 24 or Section 26), or to receive dividends or subscription rights, or otherwise, until such Right shall have been
exercised in accordance with the provisions hereof. 

  
 28 

 Section 18.    Concerning the Rights Agent. 

(a)    The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder
and, 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. 

(b)    The Company agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense (including, without limitation, the reasonable fees and expenses of legal counsel), incurred without gross negligence or willful misconduct on the part of the Rights Agent for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance, administration and performance of its duties under this Agreement, including the costs and expenses of defending against any claim of liability in the premises and the enforcement of this indemnification. This
indemnification shall survive the termination of this Agreement, the exercise of or expiration of the Rights and the resignation, replacement or removal of the Rights Agent. 

(c)    The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this Agreement in reliance upon any Right Certificate or certificate for Preferred Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons or
otherwise upon the advice of counsel as set forth in Section 20. The Rights Agent shall not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without
limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval
systems, labor difficulties, war, or civil unrest. 
 Section 19.    Merger or Consolidation or Change of Name
of Rights Agent. 
 (a)    Any Person into which the Rights Agent or any successor Rights Agent may be merged or
with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the appropriate business of the Rights Agent or any
successor Rights Agent shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. 
 (b)    In case
at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement. 

  
 29 

 (c)    In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement. 
 Section 20.    Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations expressly imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Rights, by their acceptance thereof, shall be bound: 

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

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

(c)    The Rights Agent shall be liable hereunder for only its own gross negligence or willful misconduct. Anything to the
contrary notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect, consequential or incidental 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. 
 (d)    The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by
the Company only. 
 (e)    The Rights Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of Rights (including any Rights becoming null

  
 30 

 
and void pursuant to Section 11(a)(ii)) or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Section 3,
Section 11, Section 13, Section 23 or Section 24, or the ascertaining of the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates after actual notice that such change or adjustment is required); nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock to be issued pursuant to this Agreement or any Right Certificate or as to whether any shares of Preferred Stock will, when issued, be validly authorized and issued, fully paid and non-assessable. 
 (f)    The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement. 
 (g)    The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary or the Treasurer of the Company, and such instructions shall be full
authorization and protection to the Rights Agent and the Rights Agent shall not be liable for or in respect of any action taken, suffered or omitted by it in accordance with instructions of any such officer or for any delay in acting while waiting
for those instructions. The Rights Agent shall be fully authorized and protected in relying upon the most recent instructions received from any such officer. Any application by the Rights Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action proposed to be taken, suffered or omitted by the Rights Agent under this Agreement and the date on and/or after which such action shall be taken or suffered or such omission shall be
effective. The Rights Agent shall not be liable for any action taken or suffered by, or omission of, the Rights Agent in accordance with a proposal included in any such application on or after the date specified in such application (which date shall
not be less than five (5) Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received written instructions in response to such application specifying the action to be taken, suffered or omitted. 

(h)    The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not
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 Person. 

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

  
 31 

 (j)    If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been properly completed or duly executed or indicates that the Rights are beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company. 

(k)    The Rights Agent shall have no responsibility to the Company, any holders of Rights or any holders of shares of
Preferred Stock or other securities for interest or earnings on any monies held by the Rights Agent pursuant to this Agreement, except as otherwise specifically agreed in a separate writing by the Company and the Rights Agent. 

(l)    The Rights Agent shall not be required to take notice or be deemed to have notice of any event or condition
hereunder, including, but not limited to, a Distribution Time, any adjustment of the Purchase Price, the existence of an Acquiring Person or any other event or condition that may require action by the Rights Agent, unless the Rights Agent shall be
specifically notified in writing of such event or condition by the Company, and all notices or other instruments required by this Agreement to be delivered to the Rights Agent must, in order to be effective, be received by the Rights Agent as
specified in Section 27(b), and in the absence of such notice so delivered, the Rights Agent may conclusively assume no such event or condition exists. 

Section 21.    Change of Rights Agent. 

(a)    The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days’ notice in writing mailed to the Company and, if the Rights Agent or one of its Affiliates is not also the transfer agent for the Common Stock and the Preferred Stock, to each transfer agent of the Common Stock and
the Preferred Stock by registered or certified mail. If the transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its duties
under this Agreement as of the effective date of such termination. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (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 Stock and the Preferred Stock by registered or certified mail. The Company will provide notice of any resignation (including any automatic resignation) or removal of any Rights Agent to the
registered holders of the Rights by public announcement or as provided in Section 27(c) as soon as practicable after such event. 

(b)    If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (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 any Rights, then the registered holder of any 

  
 32 

 
Rights may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a
Person (or an Affiliate of a Person) organized and doing business under the laws of the United States or any state of the United States, in good standing, that is authorized under such laws to exercise corporate trust powers or stock transfer powers
and is subject to supervision or examination by federal or state authority and that has, together with its Affiliates, at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock or Preferred Stock, and provide notice thereof to the registered holders of the Rights by public announcement or as provided in Section
27(c) as soon as practicable after such event. 
 (c)    Failure to give any notice provided for in this
Section 21, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 

Section 22.    Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or
of the Rights to the contrary, the Company, at its option, may 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 the Redemption Deadline (or as otherwise provided in
Section 32), redeem all but not less than all of the then outstanding Rights at a redemption price of $0.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after
the date of this Agreement (such redemption price being hereinafter referred to as the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its
sole discretion may establish. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the current market price per share of the Common Stock at the time of redemption as determined pursuant to Section
11(d)(i)) or any other form of consideration deemed appropriate by the Board, or any combination thereof. 

(b)    Immediately upon the action of the Board ordering the redemption of the Rights pursuant to Section 23(a),
without any further action and without any notice, the right to exercise the Rights will terminate and each Right will thereafter represent only the right to receive the Redemption Price. The Company shall promptly give public notice of any such
redemption and, within ten (10) days after such action causing a redemption of the Rights pursuant to Section 23(a), the Company shall mail a notice of redemption to all the holders of the then outstanding

  
 33 

 
Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Time, on the registry books of the transfer agent for the Common Stock. Any
notice that is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. Notwithstanding
the foregoing, the failure to give, or any defect in, any notice required to be made or given pursuant to this Section 23(b) shall not affect the validity of the redemption of the Rights. 

(c)    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, and other than in connection with the repurchase of Common Stock prior to the Distribution Time.

 Section 24.    Exchange. 

(a)    The Board may, at its option, at any time after the Redemption Deadline, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 11(a)(ii)) for shares of Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date of this Agreement (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the
foregoing, the Board shall not be empowered to effect such exchange at any time after any Acquiring Person becomes the Beneficial Owner of 50% or more of the voting power of the shares of Common Stock then outstanding. From and after the occurrence
of an event specified in Section 13(a), any Rights that theretofore have not been exchanged pursuant to this Section 24(a) shall thereafter be only exercisable in accordance with Section 13 and may not be
exchanged pursuant to this Section 24(a). The exchange of the Rights by the Board may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. 

(b)    Immediately upon the effectiveness of the action of the Board ordering the exchange of any Rights pursuant to
Section 24(a) and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange by first class mail 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 shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights that will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights that have become null and void pursuant to the provisions of Section
11(a)(ii)) held by each holder of Rights. 

  
 34 

 (c)    To the extent permitted by applicable law and any material agreements
then in effect to which the Company is a party, the Company may (at its option) and shall (if there are not sufficient shares of Common Stock issued but not outstanding or authorized but unissued and unreserved to permit the exchange in full of the
Rights in accordance with Section 24(a)) substitute for each share of Common Stock that is issuable upon the exchange of Rights in accordance with Section 24(a), but that is not so issued, an amount of cash, a number of Common Stock
Equivalents, debt securities of the Company or other assets, or any combination of the foregoing, having an aggregate value that is equal to the current market price per share of Common Stock on the date of such exchange, where such aggregate value
has been determined by the Board upon the advice of a nationally recognized investment banking firm selected in good faith by the Board. 

Section 25.    Exemptions. 

(a)    Prior to the Redemption Deadline, any Person (other than an Acquiring Person) who or that desires to effect any
transaction that would, if consummated, result in such Person becoming an Acquiring Person (a “Requesting Person”) may submit to the Company a written request that the Board grant an exemption under this Agreement with respect to
such Requesting Person or such transaction (an “Exemption Request”). 
 (b)    An Exemption Request
shall be in proper form and shall be delivered by registered mail, return receipt requested, to the Secretary of the Company at the principal executive office of the Company. To be in proper form, an Exemption Request shall set forth (i) the
name and address of the Requesting Person, (ii) the number of shares of Common Stock (and the percentage of the shares of Common Stock then outstanding) that are then beneficially owned by the Requesting Person and all of its Affiliates and
Associates, (iii) a reasonably detailed description of the transaction or transactions by which the Requesting Person proposes to acquire Beneficial Ownership of additional shares of Common Stock and (iv) the maximum number of shares of
Common Stock (and the percentage of the shares of Common Stock then outstanding) that the Requesting Person proposes to acquire. An Exemption Request may be submitted on a confidential basis and, except to the extent required by applicable law, the
Company shall maintain the confidentiality of each Exemption Request and the Board’s determination with respect thereto. The Requesting Person shall promptly respond to any requests for additional information from the Company or its advisors to
assist the Board in making a determination with respect to the Exemption Request. 
 (c)    The Board shall have sole
discretion with respect to (i) the grant or denial of an Exemption Request, (ii) if an exemption is granted, whether to grant the exemption with respect to the Requesting Person or the proposed transaction and (iii) if an exemption is
granted, whether the exemption will be granted in whole or in part and whether the exemption will be subject to any conditions or limitations (including a requirement that the Requesting Person not acquire Beneficial Ownership of shares of Common
Stock in excess of a maximum number of shares or percentage of outstanding shares specified by the Board); provided, however, that the Board may not grant an exemption in response to an Exemption Request unless the Board reasonably
determines that the acquisition of Beneficial Ownership of Common Stock by the Requesting Person within the terms of the exemption will not jeopardize or endanger the availability to the Company of the Tax Benefits. The grant of an exemption (and
any conditions or limitations 

  
 35 

 
thereof) shall be set forth in a written notice delivered by the Company to the Requesting Person and shall set forth the effective time of the exemption (which may not precede such delivery).
The Board shall make a determination whether to grant an exemption in response to an Exemption Request as promptly as practicable after receipt of the Exemption Request and all additional information reasonably requested by the Company or its
advisors, provided that the failure of the Board to make a determination within ten (10) Business Days after receipt of the Exemption Request shall be deemed to constitute the denial by the Board of the Exemption Request. 

(d)    At any time after the grant of an exemption with respect to a Requesting Person, the Board may revoke such
exemption, or may modify the conditions or limitations thereof (or subject the exemption to new conditions or limitations) on a prospective basis, by causing the Company to deliver written notice thereof to the Requesting Person, which notice shall
set forth the effective time thereof (which may not precede the calendar day immediately following such delivery). The grant of an exemption with respect to a transaction shall be irrevocable. 

Section 26.    Notice of Certain Events. If the Company shall propose at any time following the Distribution
Time to: 
 (a)    pay any dividend payable in stock of any class to the holders of its Preferred Stock or to make any
other distribution to the holders of its Preferred Stock (other than a regular periodic cash dividend at a rate not in excess of 125% of the rate of the last cash dividend theretofore paid); 

(b)    offer to the holders of its Preferred Stock rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any other securities, rights or options; 
 (c)    effect
any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision or combination of outstanding Preferred Stock); 

(d)    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 more than 50% of the assets or earning power of the Company and its subsidiaries (taken as a whole) to, any other Person; 

(e)    effect the liquidation, dissolution or winding up of the Company; or 

(f)    declare or pay any dividend on the shares of Common Stock payable in shares of Common Stock or to effect a
subdivision, combination or consolidation of the shares of Common Stock (by reclassification or otherwise than by payment of dividends in shares of Common Stock), 

then the Company shall give to each holder of a Right a notice of such proposed action, which shall specify the record date for the purposes of such stock
dividend, 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 Common
Stock and/or Preferred Stock, if any such date is to be fixed. Such notice 

  
 36 

 
shall be so given in the case of any action covered by clause (a) or (b) above at least ten (10) days prior to the record date for determining the holders of Preferred Stock for
purposes of such action, and in the case of any such other action, at least ten (10) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of Common Stock and/or Preferred Stock,
whichever shall be the earlier. 
 Section 27.    Notices. 

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

Harvest Natural Resources, Inc. 

1177 Enclave Parkway, Suite 300 

Houston, Texas 77077 
 Attention:
President 
 (b)    Subject to the provisions of Section 21, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any Right to or on the Rights Agent shall be sufficiently given or made if sent by overnight delivery service or first class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows: 
 Wells Fargo Shareowner Services 

1110 Centre Pointe Curve, Suite 101 

Mendota Heights, MN 55120 

Attention: Account Management Team 

(c)    Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the
holder of any Right shall be sufficiently given or made if sent by overnight delivery service or first class mail, postage prepaid, or by such other means used by the Company to deliver proxy statements to its stockholders, addressed to such holder
at the address of such holder as shown on the registry books of the Company. 
 Section 28.    Supplements and
Amendments. At any time when the Rights are redeemable, the Company may from time to time, in its sole and absolute discretion, supplement or amend any provision of this Agreement in any respect without the approval of any holders of the Rights.
At any time when the Rights are not redeemable, the Company may supplement or amend this Agreement without the approval of any holders of Rights in order to (a) cure any ambiguity, (b) correct or supplement any provision contained herein
that may be defective or inconsistent with any other provisions herein, (c) shorten or lengthen any time period hereunder or (d) change or supplement the provisions hereunder in any manner that the Company may deem necessary or desirable,
provided that, in each such case, such supplement or amendment does not (i) in any manner adversely affect the interests of the holders of Rights (which shall not include Rights that have become null and void pursuant to the provisions
of Section 11(a)(ii)) as such, (ii) cause this Agreement to become amendable other than in accordance with this Section 28 or (iii) cause the Rights to again become redeemable. 

  
 37 

 Upon the delivery of a certificate from an appropriate officer of the Company that states that a
proposed supplement or amendment is in compliance with the terms of this Section 28, the Rights Agent shall execute such supplement or amendment; provided, however, that the Rights Agent may, but shall not be
obligated to, execute any such supplement or amendment that adversely affects the Rights Agent’s rights, duties, obligations or immunities under this Agreement. 

Section 29.    Successors. All the covenants and provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 

Section 30.    Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered holders of the Rights any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Rights. 
 Section 31.    Determinations and Actions by the Board. The Board
shall have the exclusive power and authority to administer this Agreement and to exercise the rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (a) interpret the provisions of this Agreement and (b) make all determinations deemed necessary or advisable for the administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights, to exchange or not exchange the Rights, or to amend this Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (ii) below, all
omissions with respect to the foregoing) that are done or made by the Board in good faith, shall (i) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as such, and all other Persons and (ii) not
subject the Board or any member of the Board to any liability to the holders of the Rights or any other Person. 

Section 32.    Severability. If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated; provided, however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable
and the Board determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23
shall be reinstated (with prompt notice to the Rights Agent) and shall not expire until the close of business on the tenth (10th) Business Day following the date of such determination by the
Board. 
 Section 33.    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 Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state.

  
 38 

 Section 34.    Descriptive Headings; References; Calculation of Time
Periods. Descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Except as otherwise specifically provided, any
reference to any section or exhibit will be deemed to refer to such section of or exhibit to this Agreement.    Each reference in this Agreement to a period of time following or after a specified date or event shall be calculated
without including such specified date or the day on which such specified event occurs. 

Section 35.    Counterparts. This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Agreement transmitted electronically shall have the same authority, effect and
enforceability as an original signature. 
 {Remainder of Page Left Intentionally Blank} 

  
 39 

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

			
	HARVEST NATURAL RESOURCES, INC.
		
	By:	 	 /s/ Keith L. Head

	Name:	 	Keith L. Head
	Title:	 	Vice President & General Counsel
	
	WELLS FARGO BANK, N.A.
		
	By:	 	 /s/ Andrea Severson

	Name:	 	Andrea Severson
	Title:	 	AVP – Client Services

 Signature Page to Rights Agreement 

 Exhibit A 

Form of Certificate of Designations for Series D Preferred Stock 

CERTIFICATE OF DESIGNATIONS 
 of

 SERIES D PREFERRED STOCK 
 of

 HARVEST NATURAL RESOURCES, INC. 
  

 
 Pursuant to
Section 151 of the 
 General Corporation Law of the State of Delaware 

 
  

The undersigned, Keith L. Head, DOES HEREBY CERTIFY that: 

(A)    he is the duly elected Vice President and General Counsel of Harvest Natural Resources, Inc., a Delaware
corporation (the “Company”); 
 (B)    the Amended and Restated Certificate of Incorporation of the
Company (as amended from time to time, the “Certificate of Incorporation”), as amended, authorizes the Company to issue five million (5,000,000) shares of Preferred Stock, and authorizes the Board of Directors of the Company to
(1) provide for the issuance of the Preferred Stock from time to time in one or more series, each of said series to be distinctly designated and all shares of any one series to be alike in every particular and (2) fix or alter the number
of shares constituting each series and the designation thereof, and the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), the redemption price or prices and the
liquidation preferences of each such series; and 
 (C)    the Board of Directors of the Company adopted the following
resolution adopted by the Board of Directors of the Company by unanimous written consent on February 16, 2017, and such resolution has not been rescinded or amended and is in full force and effect as of the date hereof: 

RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Company by the provisions of
the Company’s Amended and Restated Certificate of Incorporation, as amended, there hereby is created out of the 5,000,000 shares of Preferred Stock authorized, a series of Preferred Stock of the Company to be called “Series D Preferred
Stock”, consisting of 2,000,000 authorized shares, and the Board of Directors hereby adopts and establishes the designations, preferences, voting power and other rights, and the restrictions and limitations thereof, of the shares of the Series
D Preferred Stock as follows: 

 SERIES D PREFERRED STOCK 

 

	I.	Designation and Amount. The shares of such series shall be designated as “Series D Preferred Stock” (the “Series D Preferred Stock”) and the number of shares constituting such series
shall be two million (2,000,000). Such number of shares may be increased or decreased by resolution of the Board of Directors, provided that no decrease shall reduce the number of shares of Series D Preferred Stock to a number less than that of the
shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Company convertible into Series D Preferred
Stock. 

  

	II.	Dividends and Distributions. 

  

	 	(A)	Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series D Preferred Stock and with respect to dividends, the holders of
shares of Series D Preferred Stock, in preference to the holders of Common Stock, par value $0.01 per share (or as such par value may be changed from time to time), of the Company (the “Common Stock”) and of any other junior stock,
shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of January, April, July and October in each year (each such date
being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series D Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (i) $10.00 or (ii) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series D
Preferred Stock. If the Company shall at any time on or after the Distribution Time (as such term is defined in the Rights Agreement dated as of February 17, 2017, between the Company and Wells Fargo Bank, N.A., as Rights Agent, as such
agreement may be amended from time to time) declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series D Preferred Stock were entitled immediately prior to
such event under clause (ii) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

  
 2 

	 	(B)	The Company shall declare a dividend or distribution on the Series D Preferred Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock); provided that, if no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $10.00 per share on the Series D Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. 

  

	 	(C)	Dividends shall begin to accrue and be cumulative on outstanding shares of Series D Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series D Preferred Stock,
unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series D Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series D Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series D Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof. 

  

	III.	Voting Rights. The holders of shares of Series D Preferred Stock shall have the following voting rights: 

  

	 	(A)	Subject to the provision for adjustment hereinafter set forth, each share of Series D Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Company.
If the Company shall at any time on or after the Distribution Time declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series D Preferred
Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to such event. 

  
 3 

	 	(B)	Except as otherwise provided herein, in the Certificate of Incorporation, in any other Certificate of Designations creating a series of Preferred Stock, or by law, the holders of shares of Series D Preferred Stock and
the holders of shares of Common Stock and any other capital stock of the Company having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Company. 

 

	 	(C)	Except as set forth herein, holders of Series D Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action. 

  

	IV.	Certain Restrictions. 

  

	 	(A)	Whenever quarterly dividends or other dividends or distributions payable on the Series D Preferred Stock as provided in Section II are in arrears, thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series D Preferred Stock outstanding shall have been paid in full, the Company shall not: 

  

	 	(i)	declare or pay dividends on or make any other distributions on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series D Preferred Stock;

  

	 	(ii)	declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series D Preferred Stock, except
dividends paid ratably on the Series D Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; 

 

	 	(iii)	redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series D Preferred Stock, provided that the
Company may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Company ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series D
Preferred Stock; or 

  

	 	(iv)	redeem or purchase or otherwise acquire for consideration any shares of Series D Preferred Stock, or any shares of stock ranking on a parity with the Series D Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. 

  
 4 

	 	(B)	The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company unless the Company could, under paragraph (A) of this Section IV,
purchase or otherwise acquire such shares at such time and in such manner. 

  

	V.	Reacquired Shares. Any shares of Series D Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate
of Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law. 

  

	VI.	Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company, no distribution shall be made: 

 

	 	(A)	to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series D Preferred Stock unless, prior thereto, the holders of shares of Series D Preferred
Stock shall have received $100.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series D Preferred Stock shall
be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to holders of Common Stock, or 

 

	 	(B)	to the holders of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series D Preferred Stock, except distributions made ratably on the Series D Preferred Stock
and all other such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. 

If the Company shall at any time declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series D Preferred Stock were entitled immediately prior to such event under the proviso in clause (A) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

 

	VII.	 Consolidation, Merger, etc. In case the Company shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series D Preferred Stock shall at the same time be

  
 5 

	 	
similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. If the Company shall at any time declare or pay any dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series D Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

 

	VIII.	No Redemption. The shares of Series D Preferred Stock shall not be redeemable. 

  

	IX.	Rank. The Series D Preferred Stock shall rank pari passu with the Series B Preferred Stock, par value $0.01 per share (“Series B Preferred Stock”), with respect to the payment of dividends and the
distribution of assets, junior to all other series of Preferred Stock, other than the Series B Preferred Stock, whether designated or issued before or after the date of this Certificate of Designations, unless the terms of any such series shall
provide otherwise. 

  

	X.	Fractional Shares. The Series D Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive
dividends, participate in distributions and have the benefit of all other rights of holders of the Series D Preferred Stock. 

  

	XI.	Amendment. The Certificate of Incorporation shall not be amended in any manner that would materially alter or change the powers, preferences or special rights of the Series D Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of two-thirds of the outstanding shares of Series D Preferred Stock, voting together as a single series. 

{Remainder of Page Left Intentionally Blank} 

  
 6 

 IN WITNESS WHEREOF, the Company has caused this Certificate of Designations of Series D Preferred
Stock of Harvest Natural Resources, Inc. to be signed by its Vice President and General Counsel on this          day of
                     , 2017. 
  

			
	 HARVEST NATURAL RESOURCES, INC.

		
	 By:
	 	 /s/ Keith L. Head

	 Name:
	 	 Keith L. Head

	Title:	 	Vice President and General Counsel

  
 7 

 Exhibit B 

Form of Right Certificate 
  

			
	Certificate No.            	 	                                    
    Rights

 THE RIGHTS EVIDENCED HEREBY ARE
SUBJECT TO THE TERMS AND CONDITIONS OF THE RIGHTS AGREEMENT DESCRIBED
BELOW. THE RIGHTS ARE NOT EXERCISABLE AFTER FEBRUARY 17, 2020 (OR SUCH EARLIER
DATE AS PROVIDED IN THE RIGHTS AGREEMENT). THE RIGHTS ARE SUBJECT, AT
THE OPTION OF THE COMPANY, TO REDEMPTION AT $0.01 PER RIGHT OR TO
EXCHANGE, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. AS PROVIDED
IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(OR ANY AFFILIATE OR ASSOCIATE THEREOF) SHALL BECOME NULL AND VOID. 

Right Certificate 
 HARVEST
NATURAL RESOURCES, 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 February 17, 2017 (the “Rights Agreement”), between Harvest
Natural Resources, Inc., a Delaware corporation (the “Company”), and Wells Fargo Bank, N.A. (the “Rights Agent”), to purchase from the Company at any time during the Exercise Period at the office of the Rights
Agent, or its successors as Rights Agent, designated for such purposes, one one-hundredth of one fully paid and non-assessable share of the Series D Preferred Stock, par
value $0.01 per share, of the Company (the “Preferred Stock”), at a purchase price of $26.00 per one hundredth of a share of Preferred Stock (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 share of Preferred Stock that may be
purchased upon exercise thereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of February 17, 2017, based on the shares of Preferred Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price, the number and kind or class of shares of stock of the Company or other property that 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. 
 As provided in the Rights Agreement, from and after the time when any Person first becomes an Acquiring
Person, any Rights that are acquired or beneficially owned by any Acquiring Person (or any Affiliate or Associate of any Acquiring Person) shall be null and void without any further action and any holder of such Rights (including any successor
holder thereof) shall thereafter have no right to exercise such Rights or receive any consideration therefor under any provision of the Rights Agreement. 

  
 B-1 

 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 reference is hereby made to such Rights Agreement 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 office of the Rights Agent, and are
available free of charge from the Rights Agent. 
 This Right Certificate, with or without other Right Certificates, upon surrender at the
office of the Rights Agent designated for such purposes, 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 shares of Preferred
Stock (or other securities or property as provided pursuant to any adjustment made in accordance with the Rights Agreement) as the Rights evidenced by the Right Certificate or Right Certificates surrendered 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
Board may, but is not required to, exchange the Rights evidenced by this Certificate, in whole or in part, for shares of Common Stock of the Company at an exchange ratio of one share of Common Stock per Right (subject to adjustment as provided in
the Rights Agreement), or for shares of Preferred Stock or other consideration having an equivalent value. 
 If any term, provision,
covenant or restriction of the Rights Agreement is held by any court or authority to be invalid, void or unenforceable and the Board determines in good faith that severing the invalid language from the Rights Agreement would adversely affect the
purpose or effect of the Rights Agreement, the Board may, but is not required to, redeem the Rights evidenced by this Certificate, in whole but not in part, at a price of $0.01 per Right (subject to adjustment) until the close of business on the
tenth (10th) Business Day following the date of such determination by the Board. The Company may, at its option, pay the redemption price in cash, shares of Common Stock or other form of
consideration, or any combination thereof. 
 No fractional shares of Preferred Stock (or other securities for which a Right may be
exercisable) will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions of a share of Preferred Stock that are integral multiples of one one-hundredth of a 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. 

No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of Preferred Stock
(or of any other securities that 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 stockholder of the
Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to receive notice of meetings or other actions affecting 

  
 B-2 

 
stockholders (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 herein and 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. 
 All capitalized terms used but not defined in this Right Certificate shall
have the meaning ascribed thereto in the Rights Agreement. 

  
 B-3 

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

 Dated as of                     ,
20     . 
  

			
	HARVEST NATURAL RESOURCES, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	Countersigned:
	
	WELLS FARGO BANK, N.A.
		
	By:	 	  

		 	Authorized Signature

  
 B-4 

 [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, with respect to
                                     Rights represented by
this Right Certificate, and does hereby irrevocably constitute and appoint
                                         
            Attorney, to transfer said Rights on the books of the within-named Company, with full power of substitution. 

Dated:                  ,
20     
  

	
	  

	Signature

 (Signature must conform in all respects to the name of holder as written upon the face 

of this Right Certificate, without alteration or enlargement or any change whatsoever.) 

Signature Guaranteed: 
 Signatures must be
guaranteed by an “eligible guarantor institution” as defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended. 

 
  
  

(to be completed if applicable) 

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 (each, as defined in the Rights Agreement). 
  

	
	  

	Signature

 FORM OF ELECTION TO PURCHASE 

(To be executed by the registered holder if such holder desires to exercise the Right Certificate) 

TO: HARVEST NATURAL RESOURCES, INC. 
 The
undersigned hereby irrevocably elects to exercise
                                        
Rights represented by this Right Certificate to purchase the shares of Preferred Stock (or other securities or property) issuable upon the exercise of such Rights and requests that certificates for such 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:                  ,
20     
  

	
	  

	Signature

 (Signature must conform in all respects to the name of holder as written upon the face 

of this Right Certificate, without alteration or enlargement or any change whatsoever.) 

Signature Guaranteed: 
 Signatures must be
guaranteed by an “eligible guarantor institution” as defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended. 

 
  
  

(to be completed if applicable) 

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 Medallion Guaranteed

 Exhibit C 

HARVEST NATURAL RESOURCES, INC. 

SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK 

On February 16, 2017, the Board of Directors (the “Board”) of Harvest Natural Resources, Inc. (the
“Company”) declared a dividend distribution of one preferred stock purchase right (a “Right”) for each outstanding share of common stock, $0.01 par value, of the Company (the “Common Stock”). The
distribution is payable on February 17, 2017 to the stockholders of record at the close of business on February 17, 2017. Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of the Series D Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”), at a price of $26.00 per one
one-hundredth of a share of Preferred Stock (the “Purchase Price”), subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement dated February 17,
2017 (the “Rights Agreement”), between the Company and Wells Fargo Bank, N.A., as Rights Agent (the “Rights Agent”). 

The Rights Agreement was adopted to protect stockholder value by attempting to diminish the risk that the Company’s ability to use its
net operating losses, capital losses, general business credits, alternative minimum tax credits, foreign tax credits and certain “built-in losses” and other tax attributes (collectively, the
“Tax Benefits”) to reduce potential future federal income tax obligations may become substantially limited. The Company has substantial Tax Benefits. Under the Internal Revenue Code and regulations promulgated by the U.S. Treasury
Department, the Company may carry forward or otherwise utilize these Tax Benefits in certain circumstances to offset any current and future taxable income and thus reduce the Company’s federal income tax liability, subject to certain
requirements and restrictions. To the extent that the Tax Benefits do not otherwise become limited, the Company believes that it will have available a significant amount of Tax Benefits in future years, and therefore these Tax Benefits could be a
substantial asset to the Company. However, if the Company experiences an “ownership change” (as defined in Section 382 of the Internal Revenue Code), its ability to use the Tax Benefits may be substantially limited, and the timing of
the usage of the Tax Benefits could be substantially delayed, which could significantly impair the value of the Tax Benefits. Generally, a company experiences an “ownership change” for tax purposes if the percentage of stock owned by its
5% stockholders (as defined for tax purposes) increases by more than 50 percentage points over a rolling three-year period. The Rights Agreement is intended to act as a deterrent to any person acquiring beneficial ownership of 5% or more of the
outstanding Common Stock without the approval of the Board. 
 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 [    ], 2017. Copies of the Rights Agreement are available free of charge from the Rights Agent. The
following 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. 

Until the Distribution Time (as defined below), the Rights will be evidenced by the certificates for the Common Stock registered in the names
of the holders thereof (if the Common 

  
 C-1 

 
Stock is certificated) or the registration of shares of Common Stock in the book entry ownership records of the transfer agent for the Common Stock (if the Common Stock is uncertificated). Until
the Distribution Time, the Rights will be transferable only in connection with the transfer of the Common Stock and the transfer of any shares of Common Stock will also constitute the transfer of the Rights associated with such shares of Common
Stock. 
 The “Distribution Time” will be the close of business on the tenth (10th) business day after the Redemption Deadline. The “Redemption Deadline” will be the earlier to occur of (i) the first public announcement (by the Company or an Acquiring Person)
that a person or entity has become an Acquiring Person and (ii) the time when a majority of the members of the Board then in office has actual knowledge that a person or entity has become an Acquiring Person. An “Acquiring
Person” is a person or entity that has acquired beneficial ownership of 5% or more of the outstanding shares of the Common Stock. A person or entity that, at the time of the first public announcement of the Rights Agreement, was already the
beneficial owner of 5% or more of the outstanding Common Stock, will not be considered an Acquiring Person unless that person or entity acquires one or more additional shares of Common Stock after such time (subject to specified exceptions). The
Board may exempt certain transactions, persons or entities from the operation of the Rights Agreement (subject to such conditions or limitations as may be specified by the Board) if the Board reasonably determines that the acquisition of Common
Stock within the terms of the exemption will not jeopardize or endanger the availability to the Company of the Tax Benefits. 
 As soon as
practicable following the Distribution Time, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Time and,
following the Distribution Time, such separate Right Certificates alone will evidence the Rights. 
 The Rights are not exercisable until
the Distribution Time. The Rights will expire on the earliest to occur of (i) {anniversary date}, 2020, (ii) the time at which the Rights are redeemed in full as provided in Section 23 or exchanged in full as provided in Section 24
of the Rights Agreement, (iii) the effective date of the repeal of Section 382 of the Internal Revenue Code, or any successor provisions or replacement provisions, if the Board determines that this Agreement is no longer necessary for the
preservation of the Tax Benefits, (iv) the beginning of a taxable year of the Company for which the Board determines that the Company has no Tax Benefits that may be carried forward, and (v) the date of dissolution of the Company, unless
the expiration date is extended or the Rights are earlier redeemed or exchanged by the Company, in each case as described below. 
 Each
share of Preferred Stock purchasable upon exercise of the Rights will have a preferential quarterly dividend rate equal to the greater of $10.00 per share and 100 times the dividend declared on one share of the Common Stock. In the event of
liquidation, the holders of Preferred Stock will receive a preferential liquidation payment of $100.00 per share plus accrued and unpaid dividends thereon, but will be entitled to receive an aggregate liquidation payment equal to 100 times the
payment made on one share of Common Stock. Each share of Preferred Stock will have 100 votes voting together with the Common Stock. Finally, in the event of any merger, consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 100 times the amount received per one 

  
 C-2 

 
share of Common Stock. Because of the nature of the Preferred Stock’s dividend, liquidation and voting rights, the value of one hundredth of a share of Preferred Stock purchasable upon
exercise of each Right should approximate the value of one share of Common Stock. 
 The Purchase Price payable, and the number of shares of
Preferred Stock 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 Stock, (ii) upon the grant to holders of Preferred Stock of certain rights or warrants to subscribe for shares of Preferred Stock or convertible securities at less than the current market price per share of the Preferred Stock or
(iii) upon the distribution to holders of Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends out of earnings or retained earnings at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid or dividends payable in Preferred Stock) 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 share of Preferred Stock issuable upon exercise of each Right are also subject to adjustment in the event of a stock split of the Common Stock or a stock dividend on the Common Stock
payable in shares of Common Stock or subdivisions, consolidations or combinations as of the Common Stock occurring, in any such case, prior to the Distribution Time. 

From and after the time when any party first becomes an Acquiring Person (the “Shares Acquisition Time”), any Rights that are
acquired or beneficially owned by any Acquiring Person (or any affiliate or associate of any Acquiring Person) shall be null and void without any further action and any holder of such Rights (including any successor holder thereof) shall thereafter
have no right to exercise such Rights or receive any consideration therefor under any provision of the Rights Agreement (including any cash, securities or other property delivered by the Company upon the redemption or exchange of the Rights). 

From and after the Shares Acquisition Time, each holder of a Right will thereafter have the right to receive, upon exercise of a Right and
payment of the Purchase Price, a number of shares of the Common Stock equal to the Purchase Price divided by 50% of the current market price for a shares of Common Stock (that is, Common Stock having a market value of two times the Purchase Price).

 If, after the Shares Acquisition Time, the Company is party to a merger or consolidation in which the Company does not survive or in
which its Common Stock is exchanged for cash or the securities of another entity or the Company sells assets aggregating 50% or more of the assets or earning power of the Company and its subsidiaries (taken as a whole) (a
“Section 13 Transaction”), 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 Purchase Price, a number of shares of the senior
voting stock of the principal acquiring party equal to the Purchase Price divided by 50% of the market price (as of the date of the Section 13 Transaction) for a share of such senior voting stock (that is, such senior voting stock having a
market value of two times the Purchase Price). 
 With certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares of Preferred Stock, Common Stock or other securities for which a Right may be 

  
 C-3 

 
exercisable will be issued upon the exercise of any Right or Rights (other than fractions that are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts) and, in lieu thereof, a cash payment will be made based on the market price of the Preferred Stock, Common Stock or such other securities, as
applicable, on the last trading date prior to the date of exercise. 
 At any time prior to the Redemption Deadline, the Board may, but is
not required to, redeem the Rights in whole, but not in part, at a price of $0.01 per Right (subject to adjustment) (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with
such conditions as the Board in its sole discretion may establish. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock, any other form of consideration or any combination thereof. In addition, if any term,
provision, covenant or restriction of the Rights Agreement is held by any court or authority to be invalid, void or unenforceable and the Board determines in good faith that severing the invalid language from the Rights Agreement would adversely
affect the purpose or effect of the Rights Agreement, the Board may, but is not required to, redeem the Rights, in whole but not in part, for the Redemption Price until the close of business on the tenth (10th) Business Day following the date of such determination by the Board (even if after the Redemption Deadline). 

At any time after the Redemption Deadline, the Board may, at its option, exchange the Rights, in whole or in part, for shares of Common Stock
at an exchange ratio of one share of Common Stock per Right (subject to adjustment), or for shares of Preferred Stock or other consideration having an equivalent value. The Board’s exchange right may not be exercised after an Acquiring Person
becomes the beneficial owner of 50% or more of the voting power of the shares of Common Stock then outstanding or after a Section 13 Transaction. 

Immediately upon the action of the Board to redeem or exchange the Rights, the Company shall make announcement thereof, and upon such action,
the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price, or the shares of Common Stock (or Preferred Stock or other consideration) exchangeable for the Rights, as
applicable. 
 Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends. 

  
 C-4Exhibit 4.2

 

 

PROTOKINETIX, INCORPORATED

2017 STOCK OPTION AND STOCK BONUS PLAN

1. Purposes of and Benefits Under the Plan.  This 2017 Stock Option and Stock Bonus Plan (the "Plan") is intended to encourage stock ownership by employees, consultants, officers and directors of ProtoKinetix, Incorporated and its controlled, affiliated and subsidiary entities (collectively, the "Corporation"), so that they may acquire or increase their proprietary interest in the Corporation, and is intended to facilitate the Corporation's efforts to:  (i) induce qualified persons to become employees, officers and directors (whether or not they are employees) and consultants to the Corporation; (ii) compensate employees, officers, directors and consultants for services to the Corporation; and (iii) encourage such persons to remain in the employ of or associated with the Corporation and to put forth maximum efforts for the success of the Corporation.  It is further intended that options granted by the Committee pursuant to Section 6 of this Plan shall constitute "incentive stock options" ("Incentive Stock Options") within the meaning of Section 422 of the Code, and the regulations issued thereunder, and options granted by the Committee pursuant to Section 7 of this Plan shall constitute "non-qualified stock options" ("Non-qualified Stock Options").  "Options" means options granted pursuant to the provisions of this Plan, whether Incentive Stock Options or Non-qualified Stock Options.

2. Definitions.  As used in this Plan, the following words and phrases shall have the meanings indicated:

(a)   "Award" shall mean any Bonus or Option issued pursuant to the Plan.

(b)   "Award Agreement" shall mean any written agreement, contract or other instrument or document evidencing any Award granted under the Plan.  Each Award Agreement shall be subject to the applicable terms and conditions of the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Committee.  In the event that any provision of an Award Agreement conflicts with or is inconsistent in any respect with the terms of the Plan, the terms of the Plan shall control.

(c)   "Board" shall mean the Board of Directors of the Corporation.

(d)   "Bonus" means any Common Stock bonus issued pursuant to the Plan.

(e)   "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.

(f)   "Committee" shall mean any Committee appointed by the Board to administer the Plan, if one has been appointed.  If no Committee has been appointed, the term "Committee" shall mean the Board.

(g)  "Common Stock" shall mean the Corporation's $.0000053 par value common stock.

 

 

1

 

(h)   "Disability" shall mean a Recipient's inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months.  If the Recipient has a disability insurance policy, the term "Disability" shall be as defined therein.

(i)   "Fair Market Value" per share as of a particular date shall mean the last sale price of the Corporation's Common Stock as reported on a national securities exchange, or if not listed on a national securities exchange, then the closing price of the Corporation's Common Stock as so reported on the over-the-counter markets on the day of determination, or, if such quotations are unavailable, the value determined by the Committee in accordance with its discretion in making a bona fide, good faith determination of fair market value.  Fair Market Value shall be determined without regard to any restriction other than a restriction which, by its terms, never will lapse.  In the case of Awards granted at a time when the Corporation does not have a registration statement in effect relating to the shares issuable hereunder, the value at which the Bonus shares are issued may be determined by the Committee at a reasonable discount from Fair Market Value to reflect the restricted nature of the shares to be issued and the inability of the Recipient to sell those shares promptly.

(j)   "Recipient" means any person granted an Option or awarded a Bonus pursuant to the Plan.

3. Administration.

(a)   The Plan shall be administered by the Committee.  The Committee shall have the authority in its discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically conferred under the Plan or necessary or advisable in the administration of the Plan, including the authority:  to grant Awards; to determine the vesting schedule and other restrictions, if any, relating to Awards; to determine the purchase price of the shares of Common Stock covered by each Option (the "Option Price"); to determine the persons to whom, and the time or times at which, Awards shall be granted; to determine the number of shares to be covered by each Awards; to determine Fair Market Value per share; to interpret the Plan; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the Award Agreements (which need not be identical) entered into in connection with Awards granted under the Plan; and to make all other determinations deemed necessary or advisable for the administration of the Plan.  The Committee may delegate to one or more of its members or to one or more agents such administrative duties as it may deem advisable, and the Committee or any person to whom it has delegated duties as aforesaid may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan.

(b)   Awards granted under the Plan shall be evidenced by duly adopted resolutions of the Committee included in the minutes of the meeting at which they are adopted or in a written consent in accordance with Section 78.315 of the Nevada Revised Statutes.

(c)   The Committee shall endeavor to administer the Plan and grant Awards hereunder in a manner that is compatible with the obligations of persons subject to Section 16 of the U.S. Securities Exchange Act of 1934 (the "1934 Act"), although compliance with Section 16 is the obligation of the Recipient, not the Corporation.  Neither the Committee, the Board nor the Corporation can assume any legal responsibility for a Recipient's compliance with his obligations under Section 16 of the 1934 Act.

 

2

 

(d)   The Company intends that Awards under the Plan shall avoid application of Section 409A of the Code and thereby avoid any adverse tax results thereunder.  The Committee shall administer and interpret the Plan and all Award Agreements in a manner consistent with this intent.  In this regard, if any provision of the Plan or an Award Agreement would result in adverse tax consequences under Section 409A of the Code, the Committee may amend that provision (or take any other action reasonably necessary) to avoid any adverse tax results and no action taken to comply with Section 409A of the Code shall be deemed to impair or otherwise adversely affect the rights of any holder of an Award or beneficiary thereof.

(e)   The Committee shall administer the Plan in such a manner as to cause the Plan to comply with the requirements of Section 162(m) of the Code.

(f)   No member of the Committee or the Board shall be liable for any action taken or determination made in good faith with respect to the Plan or any Awards granted hereunder.

(g)  No Recipient will have rights under an Award granted to such Recipient unless and until an Award Agreement shall have been duly executed on behalf of the Company and, if requested by the Company, signed by the Recipient, or until such Award Agreement is delivered and, if required by the Committee, accepted through any electronic medium in accordance with procedures established by the Committee.

4. Eligibility.

(a)   Subject to certain limitations hereinafter set forth, Awards may be granted to employees (including officers), consultants to, and directors (whether or not they are employees) of the Corporation or its present or future divisions, affiliates and subsidiaries.  In determining the persons to whom Awards shall be granted and the number of shares to be covered by each Award, the Committee shall take into account the duties of the respective persons, their present and potential contributions to the success of the Corporation, and such other factors as the Committee shall deem relevant to accomplish the purposes of the Plan.

(b)   A Recipient shall be eligible to receive more than one grant of an Award during the term of the Plan, on the terms and subject to the restrictions herein set forth.

 

3

 

5. Stock Reserved.

(a)   The stock subject to Awards hereunder shall be shares of Common Stock.  Such shares, in whole or in part, may be authorized but unissued shares or shares that shall have been or that may be reacquired by the Corporation.  The aggregate number of shares of Common Stock that may be issued under the Plan is 30,000,000, subject to adjustment as provided in Section 8(i) hereof.  No adjustment shall decrease the number of shares issuable pursuant to the Plan below the number of shares of Common Stock that have been issued pursuant to the Plan plus the number of shares of Common Stock underlying outstanding awards.  

(b)   If any Option outstanding under the Plan for any reason expires or is terminated without having been exercised in full, or if any Bonus granted is forfeited because of vesting or other restrictions imposed at the time of grant, the shares of Common Stock allocable to the unexercised portion of such Option or the forfeited portion of the Bonus shall become available for subsequent grants of Awards under the Plan.

6. Incentive Stock Options.

(a)   Options granted pursuant to this Section 6 are intended to constitute Incentive Stock Options and shall be subject to the following special terms and conditions, in addition to the general terms and conditions specified in Section 8 hereof.  Only employees of the Corporation shall be entitled to receive Incentive Stock Options.

(b)   The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the shares of Common Stock with respect to which Incentive Stock Options granted under this and any other plan of the Corporation or any parent or subsidiary of the Corporation are exercisable for the first time by a Recipient during any calendar year may not exceed the amount set forth in Section 422(d) of the Code.

(c)   Incentive Stock Options granted under this Plan are intended to satisfy all requirements for incentive stock options under Section 422 of the Code and the Treasury Regulations promulgated thereunder and, notwithstanding any other provision of this Plan, the Plan and all Incentive Stock Options granted under it shall be so construed, and all contrary provisions shall be so limited in scope and effect and, to the extent they cannot be so limited, they shall be void.

7. Non-qualified Stock Options.  Options granted pursuant to this Section 7 are intended to constitute Non-qualified Stock Options and shall be subject only to the general terms and conditions specified in Section 8 hereof.

8. Terms and Conditions of Options.  Each Option granted pursuant to the Plan shall be evidenced by a written Option agreement between the Corporation and the Recipient, which agreement shall be substantially in the form of Exhibit A hereto as modified from time to time by the Committee in its discretion, and which shall comply with and be subject to the following terms and conditions:

 

4

 

(a)   Number of Shares.  Each Option agreement shall state the number of shares of Common Stock covered by the Option.

(b)   Type of Option.  Each Option agreement shall specifically identify the portion, if any, of the Option which constitutes an Incentive Stock Option and the portion, if any, which constitutes a Non-qualified Stock Option.

(c)   Option Price.  Subject to adjustment as provided in Section 8(i) hereof, each Option agreement shall state the Option Price, which shall be determined by the Committee subject only to the following restrictions:

(1)   Each Option agreement shall state the Option Price, which (except as otherwise set forth in Section 8(c)(2) hereof) shall not be less than 100% of the Fair Market Value per share on the date of grant of the Option.

(2)   Any Incentive Stock Option granted under the Plan to a person owning more than ten percent of the total combined voting power of the Common Stock shall be at a price of no less than 110% of the Fair Market Value per share on the date of grant of the Incentive Stock Option.

(3)   The date on which the Committee adopts a resolution expressly granting an Option shall be considered the day on which such option is granted, unless a future date is specified in the resolution.

(d)   Term of Option.  Each Option agreement shall state the period during and times at which the Option shall be exercisable, in accordance with the following limitations:

(1)   The date on which the Committee adopts a resolution expressly granting an Option shall be considered the day on which such Option is granted, unless a future date is specified in the resolution, although any such grant shall not be effective until the Recipient has executed an Option agreement with respect to such Option.

(2)   The exercise period of any Option shall not exceed ten years from the date of grant of the Option.

(3)   Incentive Stock Options granted to a person owning more than ten percent of the total combined voting power of the Common Stock of the Corporation shall be for no more than five years.

(4)   The Committee shall have the authority to accelerate or extend the exercisability of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate (including accelerating any option immediately prior to a change of control), provided, however, that the Committee shall not extend the exercise period of any outstanding Option held by an insider (as that term is defined or commonly used in applicable securities laws) without first obtaining the approval of disinterested stockholders of such extension.  Notwithstanding anything in this Plan, no exercise period may be so extended to increase the term of the Option beyond ten years from the date of the grant nor shall the Committee authorize any acceleration or extension of any outstanding Option that would cause the application of Section 409A of the Code.

 

5

 

(5)   The exercise period shall be subject to earlier termination as provided in Sections 8(f) and 8(g) hereof, and, furthermore, shall be terminated upon surrender of the Option by the holder thereof if such surrender has been authorized in advance by the Committee.

(6)   The exercise period of an Option granted to an insider (as that term is defined or common used in applicable securities laws) shall be automatically extended if the termination date falls in a blackout period prescribed by a Company policy regarding stock trading by directors, executive officers, and/or other members of management.  Such an extension shall not be subject to stockholder approval as set forth in Section 8(d)(4) hereof.

(e)   Method of Exercise and Medium and Time of Payment.

(1)   An Option may be exercised as to any or all whole shares of Common Stock as to which it then is exercisable, provided, however, that no Option may be exercised as to less than 100 shares (or such number of shares as to which the Option is then exercisable if such number of shares is less than 100).

(2)   Each exercise of an Option granted hereunder, whether in whole or in part, shall be effected by written notice to the Secretary of the Corporation designating the number of shares as to which the Option is being exercised, and shall be accompanied by payment in full of the Option Price for the number of shares so designated, together with any written statements required by, or deemed by the Corporation's counsel to be advisable pursuant to, any applicable securities laws, and in substantially the Notice of Exercise form attached hereto as Exhibit C.

(3)   The Committee shall have the sole and absolute discretion to determine whether or not the Option Price may be paid in property other than cash or in shares of Common Stock having a Fair Market Value equal to such Option Price, and, if so, to determine the form of payment of the Option Price (including but not limited to cash, Common Stock, other securities, other Options or other property, or any combination thereof) and the value of the property received.

(4)   The Recipient shall make provision for the withholding of taxes as required by Section 10 hereof.

6

(f)   Termination.

(1)   Unless otherwise provided in the Option Agreement or other Award Agreement by and between the Corporation and the Recipient, if the Recipient ceases to be an employee, officer, director or consultant of the Corporation (other than by reason of death, Disability or retirement), the Recipient may at any time within a period of three months after such termination exercise the Option to the extent the Option was exercisable by the Recipient on the date of the termination of the Recipient's service.

(2)   Nothing in the Plan or in any Option or Bonus granted hereunder shall confer upon an individual or consultant any right to continue in the employ of or other relationship with the Corporation or interfere in any way with the right of the Corporation to terminate such employment or other relationship between the individual or consultant and the Corporation.

(g)   Death, Disability or Retirement of Recipient.  Unless otherwise provided in the Option Agreement or other Award Agreement by and between the Corporation and the Recipient, if a Recipient shall die while an employee, officer, director or consultant of the Corporation or if the Recipient's relationship with the Corporation shall terminate by reason of Disability or retirement, the Recipient (or by the Recipient's estate or by a person who acquired the right to exercise such Options by bequest or inheritance or otherwise by reason of the death or Disability of the Recipient) may at any time within a period of one year after the date of death, Disability or retirement of the Recipient exercise the Option to the extent the Option was exercisable by the Recipient on the date of the termination of the Recipient's service; provided, however, that in the case of Incentive Stock Options such one-year period shall be limited to three months in the case of retirement.

(h)   Transferability Restriction.

(1)   Options granted under the Plan shall not be transferable other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, or the rules thereunder.  Options may be exercised during the lifetime of the Recipient only by the Recipient and thereafter only by his legal representative.

(2)   Any attempted sale, pledge, assignment, hypothecation or other transfer of an Option contrary to the provisions hereof and/or the levy of any execution, attachment or similar process upon an Option, shall be null and void and without force or effect and shall result in a termination of the Option.

(3)   As a condition to the transfer of any shares of Common Stock issued upon exercise of an Option granted under this Plan, the Corporation:

		(A)	
May require an opinion of counsel, satisfactory to the Corporation, to the effect that such transfer will not be in violation of the U.S. Securities Act of 1933, as amended (the "1933 Act") or any other applicable securities laws or that such transfer has been registered under federal and all applicable state securities laws;

 

 

 

7

  

		(B)	
Shall be authorized to refrain from delivering or transferring shares of Common Stock issued under this Plan until the Committee determines that such delivery or transfer will not violate applicable securities laws and the Recipient has tendered to the Corporation any federal, state or local tax owed by the Recipient as a result of exercising the Option or disposing of any Common Stock when the Corporation has a legal liability to satisfy such tax;

		(C)	
Shall not be liable for damages due to delay in the delivery or issuance of any stock certificate for any reason whatsoever, including, but not limited to, a delay caused by listing requirements of any securities exchange or any registration requirements under the 1933 Act, the 1934 Act, or under any other state, federal or provincial law, rule or regulation;

		(D)	
Is under no obligation to take any action or incur any expense in order to register or qualify the delivery or transfer of shares of Common Stock under applicable securities laws or to perfect any exemption from such registration or qualification; and

		(E)	
Will not be liable to any Recipient for failure to deliver or transfer shares of Common Stock if such failure is based upon the provisions of this Section 8(h)(3).

(i)   Effect of Certain Changes.

(1)   If there is any change in the number of shares of outstanding Common Stock through the declaration of stock dividends, or through a recapitalization resulting in stock splits or combinations or exchanges of such shares, the number of shares of Common Stock available for Options and the number of such shares covered by outstanding Options, and the exercise price per share of the outstanding Options, shall be proportionately adjusted by the Committee to reflect any increase or decrease in the number of issued shares of Common Stock; provided, however, that any fractional shares resulting from such adjustment shall be eliminated.

(2)   In the event of the proposed dissolution or liquidation of the Corporation, or any corporate separation or division, including, but not limited to, split-up, split-off or spin-off, or a merger or consolidation of the Corporation with another corporation, the Committee may provide that the holder of each Option then exercisable shall have the right to exercise such Option (at its then current Option Price) solely for the kind and amount of shares of stock and other securities, property, cash or any combination thereof receivable upon such dissolution, liquidation, corporate separation or division, or merger or consolidation by a holder of the number of shares of Common Stock for which such Option might have been exercised immediately prior to such dissolution, liquidation, corporate separation or division, or merger or consolidation; or, in the alternative the Committee may provide that each Option granted under the Plan shall terminate as of a date fixed by the Committee; provided, however, that not less than 30 days' written notice of the date so fixed shall be given to each Recipient, who shall have the right, during the period of 30 days preceding such termination, to exercise the Option as to all or any part of the shares of Common Stock covered thereby, including shares as to which such Option would not otherwise be exercisable.

 

8

 

 

(3)   Section 8(i)(2) shall not apply to a merger or consolidation in which the Corporation is the surviving corporation and shares of Common Stock are not converted into or exchanged for stock, securities of any other corporation, cash or any other thing of value.  Notwithstanding the preceding sentence, in case of any consolidation or merger of another corporation into the Corporation in which the Corporation is the surviving corporation and in which there is a reclassification or change (including a change to the right to receive cash or other property) of the shares of Common Stock (excluding a change in par value, or from no par value to par value, or any change as a result of a subdivision or combination, but including any change in such shares into two or more classes or series of shares), the Committee may provide that the holder of each Option then exercisable shall have the right to exercise such Option solely for the kind and amount of shares of stock and other securities (including those of any new direct or indirect parent of the Corporation), property, cash or any combination thereof receivable upon such reclassification, change, consolidation or merger by the holder of the number of shares of Common Stock for which such Option might have been exercised.

(4)   In the event of a change in the Common Stock of the Corporation as presently constituted into the same number of shares with a different par value, the shares resulting from any such change shall be deemed to be the Common Stock of the Corporation within the meaning of the Plan.

(5)   To the extent that the foregoing adjustments relate to stock or securities of the Corporation, such adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive, provided that each Incentive Stock Option granted pursuant to this Plan shall not be adjusted in a manner that causes such option to fail to continue to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code.

(6)   Except as expressly provided in Section 8(i) of the Plan, the Recipient shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, or by reason of any dissolution, liquidation, merger, or consolidation or spin-off of assets or stock of another corporation; and any issue by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option.  The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations or changes of its capital or business structures, or to merge or consolidate, or to dissolve, liquidate, or sell or transfer all or any part of its business or assets.

 

 

9

(j)   No Rights as Stockholder—Non-Distributive Intent.

(1)   Neither a Recipient of an Option nor such Recipient's legal representative, heir, legatee or distributee, shall be deemed to be the holder of, or to have any rights of a holder with respect to, any shares subject to such Option until after the Option is exercised and the shares are issued.

(2)   No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as provided in Section 8(i) hereof.

(3)   Upon exercise of an Option at a time when there is no registration statement in effect under the 1933 Act relating to the shares issuable upon exercise, shares may be issued to the Recipient only if the Recipient represents and warrants in writing to the Corporation that the shares purchased are being acquired for investment and not with a view to the distribution thereof and provides the Corporation with sufficient information to establish an exemption from the registration requirements of the 1933 Act.  A form of subscription agreement containing representations and warranties deemed sufficient as of the date of adoption of this Plan is attached hereto as Exhibit B.

(4)   No shares shall be issued upon the exercise of an Option unless and until there shall have been compliance with any then applicable requirements of the U.S. Securities and Exchange Commission or any other regulatory agencies having jurisdiction over the Corporation.

(k)   Other Provisions.  Option Agreements authorized under the Plan may contain such other provisions, including, without limitation, (i) the imposition of restrictions upon the exercise, and (ii) in the case of an Incentive Stock Option, the inclusion of any condition not inconsistent with such Option qualifying as an Incentive Stock Option, as the Committee shall deem advisable.

9. Grant of Stock Bonuses.  In addition to, or in lieu of, the grant of an Option, the Committee may grant Bonuses.

(a)   At the time of grant of a Bonus, the Committee may impose a vesting period of up to ten years, and such other restrictions which it deems appropriate.  Unless otherwise directed by the Committee at the time of grant of a Bonus, the Recipient shall be considered a stockholder of the Corporation as to the Bonus shares which have vested in the Recipient at any time regardless of any forfeiture provisions which have not yet arisen.

(b)   The grant of a Bonus and the issuance and delivery of shares of Common Stock pursuant thereto shall be subject to approval by the Corporation's counsel of all legal matters in connection therewith, including compliance with the requirements of the 1933 Act, the 1934 Act, other applicable securities laws, rules and regulations, and the requirements of any stock exchanges upon which the Common Stock then may be listed.  Any certificates prepared to evidence Common Stock issued pursuant to a Bonus grant shall bear legends as the Corporation's counsel may deem necessary or advisable.  Included among the foregoing requirements, but without limitation, any Recipient of a Bonus at a time when a registration statement relating thereto is not effective under the 1933 Act shall execute a Subscription Agreement substantially in the form of Exhibit B.

 

10

 

10. Agreement by Recipient Regarding Withholding Taxes.  Each Recipient agrees that the Corporation, to the extent permitted or required by law, shall deduct a sufficient number of shares due to the Recipient upon exercise of the Option or the grant of a Bonus to allow the Corporation to pay federal, provincial, state and local taxes of any kind required by law to be withheld upon the exercise of such Option or payment of such Bonus from any payment of any kind otherwise due to the Recipient.  The Corporation shall not be obligated to advise any Recipient of the existence of any tax or the amount which the Corporation will be so required to withhold.

11. Term of Plan.  Awards may be granted under this Plan from time to time within a period of ten years from the date the Plan is adopted by the Board.

12. Amendment and Termination of the Plan.

(a)  (1)   Subject to the policies, rules and regulations of any lawful authority having jurisdiction (including any exchange with which the shares of the Corporation are listed for trading), the Board may at any time, without further action by the stockholders, amend the Plan or any Option granted hereunder in such respects as it may consider advisable and, without limiting the generality of the foregoing, it may do so to ensure that Options granted hereunder will comply with any provisions respecting stock options in the income tax and other laws in force in any country or jurisdiction of which any Option holders may from time to time be a resident or citizen, or it may at any time without action by stockholders terminate the Plan.

(2)   Provided, however, that any amendment that would require stockholder approval under applicable state law, the rules and regulations of any national securities exchange on which the Corporation's securities then may be listed, the Code or any other applicable law, shall be subject to the approval of the stockholders of the Corporation.

(3)   Provided further that any such increase or modification that may result from adjustments authorized by Section 8(i) hereof or which are required for compliance with the 1934 Act, the Code, the Employee Retirement Income Security Act of 1974, their rules or other laws or judicial order, shall not require approval of the stockholders.

(c)   Notwithstanding anything in the Plan to the contrary, the Plan and Awards granted under the Plan are intended to be eligible for certain regulatory exceptions to the limitations of, or to comply with, the requirements of Section 409A of the Code.  The Committee, in the exercise of its sole discretion and without the consent of the Recipient, may amend or modify the terms of an Award in any manner and delay the payment of any amounts payable pursuant to an Award to the minimum extent necessary to reasonably comply with the requirements of Section 409A of the Code, provided that the Company shall not be required to assume any increased economic burden.  No action taken by the Committee with respect to the requirements of Section 409A of the Code shall be deemed to adversely affect a Recipient's rights with respect to an Award or to require the consent of such Recipient.  The Committee reserves the right to make additional changes to the Plan and Awards from time to time to the extent it deems necessary with respect to Section 409A of the Code.

 

 

11

 

(d)   Except as provided in Section 8 hereof, no suspension, termination, modification or amendment of the Plan may adversely affect any Award previously granted, unless the written consent of the Recipient is obtained.

(e)   The exhibits attached hereto (being the Stock Option Agreement, the Subscription Agreement, and the Notice of Exercise) are intended to be forms for use in connection with the Plan.  The Committee may amend the forms as the Committee believes necessary or appropriate to comply with the Plan and the legal requirements associated with the grant or exercise of Awards.

13. Termination of Right of Action.  Every right of action arising out of or in connection with the Plan by or on behalf of the Corporation or any of its subsidiaries, or by any stockholder of the Corporation or any of its subsidiaries against any past, present or future member of the Board, or against any employee, or by an employee (past, present or future) against the Corporation or any of its subsidiaries, will, irrespective of the place where an action may be brought and irrespective of the place of residence of any such stockholder, director or employee, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action is alleged to have risen.

14. Tax Litigation.  The Corporation shall have the right, but not the obligation, to contest, at its expense, any tax ruling or decision, administrative or judicial, on any issue which is related to the Plan and which the Board believes to be important to holders of Awards issued under the Plan and to conduct any such contest or any litigation arising therefrom to a final decision.

15. Adoption.

(a)   This Plan was approved by resolution of the Board on December 30, 2016.

(b)   If this Plan is not approved by the stockholders of the Corporation within 12 months of the date the Plan was approved by the Board as required by Section 422(b)(1) of the Code, this Plan and any Options granted hereunder to Recipients shall be and remain effective, but the reference to Incentive Stock Options herein shall be deleted and all Options granted hereunder shall be Non-qualified Stock Options pursuant to Section 7 hereof.

16. Governing Law, Consent to Personal Jurisdiction.  This Plan will be governed by the internal laws of the State of Colorado without regard to rules regarding conflicts of laws.  All disputes arising out of or relating to the Plan and all actions to enforce the Plan shall be adjudicated in the state or federal courts located in Denver, Colorado.  The parties hereto irrevocably submit to the jurisdiction of such courts in any suit, action or proceeding relating to any such dispute.  So far as is permitted under applicable law, this consent to personal jurisdiction shall be self-operative and no further instrument or action, other than service of process or as permitted by law, shall be necessary in order to confer jurisdiction upon the undersigned in any such court.

[End of Plan]

 

 

12

Exhibit A

FORM OF STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT made as of this ___ day of ____________, ______, by and between ProtoKinetix, Incorporated, a Nevada corporation (the "Corporation"), and ________________ __________________________ (the "Recipient").

In accordance with the Corporation's 2017 Stock Option and Stock Bonus Plan (the "Plan"), the provisions of which are incorporated herein by reference, the Corporation desires, in connection with the services of the Recipient, to provide the Recipient with an opportunity to acquire shares of the Corporation's $.0000053 par value common stock ("Common Stock") on favorable terms and thereby increase the Recipient's proprietary interest in the Corporation and incentive to put forth maximum efforts for the success of the business of the Corporation.  Capitalized terms used but not defined herein are used as defined in the Plan.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein set forth and other good and valuable consideration, the Corporation and the Recipient agree as follows:

1. Confirmation of Grant of Option.  Pursuant to a determination of the Committee or, in the absence of a Committee, by the Board of Directors of the Corporation made on ___________, _____ (the "Date of Grant"), the Corporation, subject to the terms of the Plan and of this Agreement, confirms that the Recipient has been irrevocably granted on the Date of Grant, as a matter of separate inducement and agreement, and in addition to and not in lieu of salary or other compensation for services, a Stock Option (the "Option") exercisable to purchase an aggregate of ______ shares of Common Stock on the terms and conditions herein set forth, subject to adjustment as provided in Section 8 hereof.

2. Option Price.  The Option Price of shares of Common Stock covered by the Option will be $_____ per share (the "Option Price") subject to adjustment as provided in Section 8 hereof.

3. Vesting and Exercise of Option.

(a) Except as otherwise provided herein or in Section 8 of the Plan, the Option [shall vest and become exercisable as follows:  (insert vesting schedule).]

(b) The Option may not be exercised at any one time as to fewer than 100 shares (or such number of shares as to which the Option is then exercisable if such number of shares is less than 100).

(c) The Option may be exercised by written notice to the Secretary of the Corporation accompanied by payment in full of the Option Price as provided in Section 8 of the Plan.

 

1

 

4. Term of Option.  The term of the Option will be through __________, ____, subject to earlier termination or cancellation as provided in this Agreement.  The holder of the Option will not have any rights to dividends or any other rights of a stockholder with respect to any shares of Common Stock subject to the Option until such shares shall have been issued (as evidenced by the appropriate transfer agent of the Corporation) upon purchase of such shares through exercise of the Option.

5. Transferability Restriction.  The Option may not be assigned, transferred or otherwise disposed of, or pledged or hypothecated in any way (whether by operation of law or otherwise) except in strict compliance with Section 8 of the Plan.  Any assignment, transfer, pledge, hypothecation or other disposition of the Option or any attempt to make any levy of execution, attachment or other process will cause the Option to terminate immediately upon the happening of any such event; provided, however, that any such termination of the Option under the provisions of this Section 5 will not prejudice any rights or remedies which the Corporation may have under this Agreement or otherwise.

6. Exercise Upon Termination.  The Recipient's rights to exercise this Option upon termination of employment or cessation of service as an officer, director or consultant shall be as set forth in Section 8(f) of the Plan.

7. Death, Disability or Retirement of Recipient.  The exercisability of this Option upon the death, Disability or retirement of the Recipient shall be as set forth in Section 8(g) of the Plan.

8. Adjustments.  The Option shall be subject to adjustment upon the occurrence of certain events as set forth in Section 8(i) of the Plan.

9. No Registration Obligation.  The Recipient understands that the Option is not registered under the 1933 Act and, unless by separate written agreement, the Corporation has no obligation to so register the Option or any of the shares of Common Stock subject to and issuable upon the exercise of the Option, although it may from time to time register under the 1933 Act the shares issuable upon exercise of Options granted pursuant to the Plan.  The Recipient represents that the Option is being acquired for the Recipient's own account and that unless registered by the Corporation, the shares of Common Stock issued on exercise of the Option will be acquired by the Recipient for investment.  The Recipient understands that the Option is, and the underlying securities may be, issued to the Recipient in reliance upon exemptions from the 1933 Act, and acknowledges and agrees that all certificates for the shares issued upon exercise of the Option may bear the following legend unless such shares are registered under the 1933 Act prior to their issuance:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"), AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE 1933 ACT.  THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

 

 

2

 

[Non-US persons only]

[THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE 1933 ACT".]

The Recipient further understands and agrees that the Option may be exercised only if at the time of such exercise the underlying shares are registered and/or the Recipient and the Corporation are able to establish the existence of an exemption from registration under the 1933 Act and applicable state or other laws.

10. Notices.  Each notice relating to this Agreement will be in writing and delivered in person or by certified mail to the proper address.  Notices to the Corporation shall be addressed to the Corporation, attention:  Clarence E. Smith, President & CEO, at such address as may constitute the Corporation's principal place of business at the time, with a copy to: Victoria B. Bantz, Esq., Burns Figa & Will PC, 6400 S. Fiddlers Green Circle, Suite 1000, Greenwood Village, Colorado  80111.  Notices to the Recipient or other person or persons then entitled to exercise the Option shall be addressed to the Recipient or such other person or persons at the Recipient's address below specified.  Anyone to whom a notice may be given under this Agreement may designate a new address by notice to that effect given pursuant to this Section 10.

11. Approval of Counsel.  The exercise of the Option and the issuance and delivery of shares of Common Stock pursuant thereto shall be subject to approval by the Corporation's counsel of all legal matters in connection therewith, including compliance with the requirements of the 1933 Act, the Securities Exchange Act of 1934, as amended, applicable state and other securities laws, the rules and regulations thereunder, and the requirements of any national securities exchange(s) upon which the Common Stock then may be listed.

12. Benefits of Agreement.  This Agreement will inure to the benefit of and be binding upon each successor and assignee of the Corporation.  All obligations imposed upon the Recipient and all rights granted to the Corporation under this Agreement will be binding upon the Recipient's heirs, legal representatives and successors.

13. Effect of Governmental and Other Regulations.  The exercise of the Option and the Corporation's obligation to sell and deliver shares upon the exercise of the Option are subject to all applicable federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency which may, in the opinion of counsel for the Corporation, be required.

14. Plan Governs.  In the event that any provision in this Agreement conflicts with a provision in the Plan, the provision of the Plan shall govern.

 

 

3

 

15. Governing Law, Consent to Personal Jurisdiction.  This Agreement will be governed by the internal laws of the State of Colorado without regard to rules regarding conflicts of laws.  All disputes arising out of or relating to this Agreement and all actions to enforce the Agreement shall be adjudicated in the state or federal courts located in Denver, Colorado.  The parties hereto irrevocably submit to the jurisdiction of such courts in any suit, action or proceeding relating to any such dispute.  So far as is permitted under applicable law, this consent to personal jurisdiction shall be self-operative and no further instrument or action, other than service of process or as permitted by law, shall be necessary in order to confer jurisdiction upon the undersigned in any such court.

Executed in the name and on behalf of the Corporation by one of its duly authorized officers and by the Recipient all as of the date first above written.

PROTOKINETIX, INCORPORATED

Date ______________, _______                                    By:  ________________________________________

    Clarence E. Smith, President & CEO

The undersigned Recipient has read and understands the terms of this Option Agreement and the attached Plan and hereby agrees to comply therewith.

 

	
Date ______________, _______   

	
 

	
 

	
 

	
 

	
Signature of Recipient

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Tax ID Number:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Address:

	
 

	
 

	
 

	
 

 

	
 

	
 

4

U.S. ACCREDITED INVESTOR CERTIFICATE

Subscriber Name: 

**Please initial on the appropriate line**

	_______	
An employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Employee Retirement Income Security Act, which is either a bank, savings and loan association, insurance company or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are otherwise accredited investors.

	
_______

 

 

_______

	
A trust with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of an investment in the Shares.

 

A bank as defined in Section 3(a)(2) of the Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity.

	
_______

 

	
A private business development company as defined in Section 202(a)(22) of the Invest-ment Advisors Act of 1940.

	_______	
A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.

	
_______

	
An organization described in Section 501(c)(3) of the Internal Revenue Code, or a corporation, Massachusetts or similar business trust, or a partnership (in each case not formed for the specific purpose of acquiring the Shares) with total assets in excess of $5,000,000.

	
_______

 

_______

	
An insurance company as defined in Section 2(13) of the Act.

 

An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of the Investment Company Act of 1940.

	_______	
A natural person whose net worth, individually or jointly with spouse, exceeds $1,000,000 at this time (excluding the value of that person's primary residence and excluding any debt up to (and not exceeding) the value of the residence, but adding back any debt incurred within 60 days of this subscription unless incurred in connection with the purchase of the primary residence).

	
_______

 

 

_______

	
A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

 

A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000.

	_______	
A natural person who had an individual income in excess of $200,000 in each of the two most recent calendar years or joint income with spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same level of income in the current calendar year.

	
_______

 

 _______

	
Any entity in which all the equity owners are accredited investors (i.e., by virtue of their meeting any of the other tests for an "accredited investor").

 

Any director or executive officer of the Company.

5

CANADIAN ACCREDITED INVESTOR CERTIFICATE

**Please initial on the appropriate line**

"accredited investor" means:

	       _______	
(a)

	
a Canadian financial institution, or a Schedule III bank;

 

	       _______	
(b)

	
the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada);

 

	       _______	
(c)

	
a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary;

 

	       _______	
(d)

	
a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador);

 

	       _______	
(e)

	
an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d);

 

	       _______	
(f)

	
the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada;

 

	       _______	
(g)

	
a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l'île de Montréal or an intermunicipal management board in Québec;

 

	       _______	
(h)

	
any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government;

 

	       _______	
(i)

	
a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada;

 

	       _______	
(j)

	
an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000;

 

	       _______	
(k)

	
an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;

 

	       _______	
(l)

	
an individual who, either alone or with a spouse, has net assets of at least $5,000,000;

 

 

 

 

6

 

 

	
      _______

	
(m)

	
a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements;

 

	       _______	
(n)

	
an investment fund that distributes or has distributed its securities only to

 

(i)      a person that is or was an accredited investor at the time of the distribution,

 

(ii)     a person that acquires or acquired securities in the circumstances referred to in section 2.10 [Minimum amount investment], or 2.19 [Additional investment in investment funds] of NI 45-106, or

 

(iii)    a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 [Investment fund reinvestment] of NI 45-106;

 

	       _______	
(o)

	
an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt;

 

	       _______	
(p)

	
a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be;

 

	       _______	
(q)

	
a person acting on behalf of a fully managed account managed by that person, if that person:

 

(i) is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction, and

 

(ii) in Ontario, is purchasing a security that is not a security of an investment fund;

 

	       _______	
(r)

	
a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded;

 

	       _______	
(s)

	
an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function;

 

	       _______	
(t)

	
a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors;

 

	       _______	
(u)

	
an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser; or

 

	       _______	
(v)

	
a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor.

7

Definitions:

"Canadian financial institution" means

(a) an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act, or

(b) a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada;

"financial assets" means

(a) cash,

(b) securities, or

(c) a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation;

"fully managed account" means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client's express consent to a transaction;

"investment fund" has the same meaning as National Instrument 81-106 Investment Fund Continuous Disclosure;

"person" includes

(a) an individual,

(b) a corporation,

(c) a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and

(d) an individual or other person in that person's capacity as a trustee, executor, administrator or personal or other legal representative;

"related liabilities" means

(a) liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or

(b) liabilities that are secured by financial assets;

"Schedule III bank" means an authorized foreign bank named in Schedule III of the Bank Act (Canada);

"spouse" means, an individual who,

(a) is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual, or

(b) is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender; or

(c) in Alberta, is an individual referred to in paragraph (a) or (b), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and

"subsidiary" means in issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary.

8

Exhibit B

 

SUBSCRIPTION AGREEMENT

THE SECURITIES BEING ACQUIRED BY THE UNDERSIGNED HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR ANY OTHER LAWS AND ARE OFFERED UNDER EXEMPTIONS FROM THE REGISTRATION PROVISIONS OF SUCH LAWS.  THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER CONTAINED IN THIS STOCK SUBSCRIPTION AGREEMENT AND APPLICABLE SECURITIES LAWS.

THE SECURITIES ISSUED HEREUNDER ARE SUBJECT TO RESTRICTIONS ON RESALE UNDER MULTILATERAL INSTRUMENT 51-105 ("MI 51-105"), AND WILL BEAR A RESTRICTIVE LEGEND. THERE ARE ADDITIONAL LEGENDING REQUIREMENTS APPLICABLE ON RESALE OF SUCH SECURITIES.

This Subscription Agreement is entered for the purpose of the undersigned acquiring _____________ shares of the $.0000053 par value common stock (the "Securities") of ProtoKinetix, Incorporated, a Nevada corporation (the "Corporation") from the Corporation as a Bonus or pursuant to exercise of an Option granted pursuant to the Corporation's 2017 Stock Option and Stock Bonus Plan (the "Plan").  All capitalized terms not otherwise defined herein shall be as defined in the Plan.

It is understood that no grant of any Bonus or exercise of any Option at a time when no registration statement relating thereto is effective under the U.S. Securities Act of 1933, as amended (the "1933 Act") can be completed until the undersigned executes this Subscription Agreement and delivers it to the Corporation, and that such grant or exercise is effective only in accordance with the terms of the Plan and this Subscription Agreement.

In connection with the undersigned's acquisition of the Securities, the undersigned represents and warrants to the Corporation as follows:

1. The undersigned has been provided with, and has reviewed the Plan, and such other information as the undersigned may have requested of the Corporation regarding its business, operations, management, and financial condition (all of which is referred to herein as the "Available Information").

2. The Corporation has given the undersigned the opportunity to ask questions of and to receive answers from persons acting on the Corporation's behalf concerning the terms and conditions of this transaction and the opportunity to obtain any additional information regarding the Corporation, its business and financial condition or to verify the accuracy of the Available Information which the Corporation possesses or can acquire without unreasonable effort or expense.

3. The Securities are being acquired by the undersigned for the undersigned's own account and not on behalf of any other person or entity.

4. The undersigned understands that the Securities being acquired hereby have not been registered under the 1933 Act or any state or foreign securities laws, and are, and unless registered will continue to be, restricted securities within the meaning of Rule 144 of the General Rules and Regulations under the 1933 Act and other statutes, and the undersigned consents to the placement of appropriate restrictive legends on any certificates evidencing the Securities and any certificates issued in replacement or exchange therefor and acknowledges that the Corporation will cause its stock transfer records to note such restrictions.

 

1

 

5. By the undersigned's execution below, it is acknowledged and understood that the Corporation is relying upon the accuracy and completeness hereof in complying with certain obligations under applicable securities laws.

6. This Agreement binds and inures to the benefit of the representatives, successors and permitted assigns of the respective parties hereto.

7. The undersigned acknowledges that the grant of any Bonus or Option and the issuance and delivery of shares of Common Stock pursuant thereto shall be subject to prior approval by the Corporation's counsel of all legal matters in connection therewith, including compliance with the requirements of the 1933 Act and other applicable securities laws, the rules and regulations thereunder, and the requirements of any national securities exchange(s) upon which the Common Stock then may be listed.

8. The undersigned acknowledges and agrees that the Corporation has withheld ___________ shares for the payment of taxes as a result of the grant of the Bonus or the exercise of an Option.

9. The undersigned acknowledges and represents that there has been no change in the undersigned's status as an accredited investor under U.S. or Canadian laws as first represented on the accredited investor certificates as of the date of execution of the Option Agreement.

10. The Plan is incorporated herein by reference.  In the event that any provision in this Agreement conflicts with ANY provision in the Plan, the provisions of the Plan shall govern.

 

 

	
Date ______________, _______   

	
 

	
 

	
 

	
 

	
Signature of Recipient

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Tax ID Number:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Address:

	
 

	
 

	
 

	
 

 

	
 

	
 

  

 

 

 

 

  

2

Exhibit C

NOTICE OF EXERCISE OF OPTION

The undersigned hereby irrevocably elects to exercise the right, represented by the Option Agreement dated as of ______________, 20__ to purchase _________________ shares of the Common Stock of PROTOKINETIX, INCORPORATED at an exercise price of $_________ per share, and tenders herewith payment in the amount of $________ (Exercise Price x Number of Options Exercised) in accordance with said Option Agreement.

I understand that I may only exercise this Option if there is a registration statement relating to the exercise of this Option that is effective under federal, applicable state law and applicable non-U.S. law, or alternatively, if there is an exemption from registration available under federal, applicable state law, and applicable non-U.S. law (which exemption must be established to the satisfaction of ProtoKinetix, Incorporated).

I understand that ProtoKinetix, Incorporated may require that I provide it information regarding my financial status, state of residence, and other information necessary to determine whether the exercise is subject to an effective registration statement or to determine whether an applicable exemption is available.  To the extent required by the Company to establish an exemption from registration, I will provide the Company information as to my status as an accredited investor and execute a subscription agreement in the form requested by the Company.  Alternatively, I understand that I may deliver a legal opinion regarding the availability of an exemption from such registration, which legal opinion must be acceptable to ProtoKinetix, Incorporated in its reasonable discretion.

I understand that ProtoKinetix, Incorporated will issue the shares subject to this exercise in electronic form only and I will not receive a physical stock certificate.

Signed:________________________

Date:__________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}]]