Document:

Prepared by R.R. Donnelley Financial -- Preferred Stock Rights Agreement

 Exhibit 4.1 
  
 NATUS MEDICAL INCORPORATED 
  
 and 
  
 EQUISERVE TRUST COMPANY, N.A. 
  
 PREFERRED
STOCK RIGHTS AGREEMENT 
  
 Dated as of September 4, 2002 
  

 TABLE OF CONTENTS 
  
 
	  	  	  	  	 Page
 

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

 
 

 i 

  
 TABLE OF CONTENTS 
 (continued) 
  
 
	  	  	  	  	 Page
 

	 
	 Section 22.
 	  	 Issuance of New Rights Certificates
 	  	 29
 
	 
	 Section 23.
 	  	 Redemption
 	  	 30
 
	 
	 Section 24.
 	  	 Exchange
 	  	 31
 
	 
	 Section 25.
 	  	 Notice of Certain Events
 	  	 32
 
	 
	 Section 26.
 	  	 Notices
 	  	 33
 
	 
	 Section 27.
 	  	 Supplements and Amendments
 	  	 33
 
	 
	 Section 28.
 	  	 Successors
 	  	 34
 
	 
	 Section 29.
 	  	 Determinations and Actions by the Board of Directors, etc
 	  	 34
 
	 
	 Section 30.
 	  	 Benefits of this Agreement
 	  	 34
 
	 
	 Section 31.
 	  	 Severability
 	  	 34
 
	 
	 Section 32.
 	  	 Governing Law
 	  	 35
 
	 
	 Section 33.
 	  	 Counterparts
 	  	 35
 
	 
	 Section 34.
 	  	 Descriptive Headings
 	  	 35
 
	 
	 EXHIBITS
 	  	  	  	  
	 
	 Exhibit A
 	  	 Form of Certificate of Designation
 	  	  
	 
	 Exhibit B
 	  	 Form of Rights Certificate
 	  	  
	 
	 Exhibit C
 	  	 Summary of Rights
 	  	  

 
 

 ii 

 PREFERRED STOCK RIGHTS AGREEMENT 
  
 This Preferred Stock Rights Agreement is dated as of September 4, 2002, between Natus Medical Incorporated, a Delaware corporation, (the “Company”), and EquiServe Trust Company, N.A. (the
“Rights Agent”). 
  
 On September 4, 2002, (the “Rights Dividend Declaration Date”), the Board of
Directors of the Company authorized and declared a dividend of one Preferred Share Purchase Right (a “Right”) for each Common Share (as hereinafter defined) of the Company outstanding as of the Close of Business (as hereinafter defined) on
October 11, 2002 (the “Record Date”), each Right representing the right to purchase one one-thousandth (0.001) of a share of Series A Participating Preferred Stock (as such number may be adjusted pursuant to the provisions of this
Agreement), having the rights, preferences and privileges set forth in the form of Certificate of Designations of Rights, Preferences and Privileges of Series A Participating Preferred Stock attached hereto as Exhibit A, upon the terms and
subject to the conditions herein set forth, and further authorized and directed the issuance of one Right (as such number may be adjusted pursuant to the provisions of this Agreement) with respect to each Common Share that shall become outstanding
between the Record Date and the earlier of the Distribution Date and the Expiration Date (as such terms are hereinafter defined), and in certain circumstances after the Distribution Date. 
  
 NOW, THEREFORE, in consideration of the promises and the mutual agreements herein set forth, the parties hereby agree as follows: 
  
 Section 1.    Certain Definitions.    For purposes of this Agreement, the following terms
have the meanings indicated: 
  
 (a)  “Acquiring Person” shall mean any Person,
who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the Common Shares then outstanding, but shall not include the Company, any Subsidiary of the Company or any employee benefit
plan of the Company or of any Subsidiary of the Company, or any entity holding Common Shares for or pursuant to the terms of any such plan; provided, however, that Perry Corp. (“Perry”) shall not be deemed an “Acquiring
Person” until such time as Perry shall be the Beneficial Owner of more than 29% of the Common Shares then outstanding or until such time as Perry shall be required to file a report of beneficial ownership on Schedule 13D with respect to its
holdings of the Company’s Common Shares (the “Limitations”). Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring Person as the result of an acquisition of Common Shares by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 15% or more of the Common Shares of the Company then outstanding or with respect to Perry, Perry is not in compliance with the applicable
Limitations; provided, however, that if a Person shall become the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding or, with respect to Perry, Perry shall fail to comply with the applicable Limitations, by
reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional Common Shares of the Company (other than pursuant to a dividend or distribution paid or made by the Company
on the outstanding Common Shares in Common Shares or pursuant to a split or subdivision of the outstanding Common Shares), then such Person shall be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of 
 

 1 

 such additional Common Shares of the Company such Person does not beneficially own 15% or more of the Common Shares of
the Company then outstanding or, with respect to Perry, Perry is in compliance with the applicable Limitations. Notwithstanding the foregoing, (i) if the Company’s Board of Directors determines in good faith that a Person who would otherwise be
an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently (including, without limitation, because (A) such Person was unaware that it beneficially owned a percentage of the
Common Shares that would otherwise cause such Person to be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), or (B) such Person was aware of the extent of the Common Shares it beneficially owned
but had no actual knowledge of the consequences of such beneficial ownership under this Agreement) and without any intention of changing or influencing control of the Company, and if such Person divested or divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be or to have become an
“Acquiring Person” for any purposes of this Agreement including, without limitation Section 1(gg) hereof; and (ii) if, as of the date hereof, any Person is the Beneficial Owner of 15% or more of the Common Shares outstanding, or, with
respect to Perry, Perry is in compliance with the applicable Limitations, such Person shall not be or become an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), unless and until such time as such
Person shall become the Beneficial Owner of additional Common Shares (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Shares in Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), unless, upon becoming the Beneficial Owner of such additional Common Shares, such Person is not then the Beneficial Owner of 15% or more of the Common Shares then outstanding or, with respect to Perry, Perry is not in
compliance with the applicable Limitations. 
  
 (b)  “Adjustment Fraction” shall
have the meaning set forth in Section 11(a)(i) hereof. 
  
 (c)  “Affiliate” and
“Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Agreement. 
  
 (d)  A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially
own” any securities: 
  
 (i)  which such Person or any of such Person’s
Affiliates or Associates beneficially owns, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or any comparable or successor law or regulation); 
  

(ii)  which such Person or any of such Person’s Affiliates or Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed pursuant to this Section 1(d)(ii)(A) to be
the Beneficial Owner of, or to beneficially own, 
 

 2 

 
(1) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, or (2) securities which a Person or any of such Person’s Affiliates or Associates may be deemed to have the right to acquire pursuant to any merger or other acquisition agreement between the Company and such
Person (or one or more of its Affiliates or Associates) if such agreement has been approved by the Board of Directors of the Company prior to there being an Acquiring Person; or (B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security under this Section 1(d)(ii)(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 also then
reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or 
  
 (iii)  which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding, whether or not in writing (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to Section 1(d)(ii)(B)) or disposing of any securities of the Company; provided, however, that in no case shall an officer or director of the Company be deemed (x) the Beneficial Owner
of any securities beneficially owned by another officer or director of the Company solely by reason of actions undertaken by such persons in their capacity as officers or directors of the Company or (y) the Beneficial Owner of securities held of
record by the trustee of any employee benefit plan of the Company or any Subsidiary of the Company for the benefit of any employee of the Company or any Subsidiary of the Company, other than the officer or director, by reason of any influence that
such officer or director may have over the voting of the securities held in the plan. 
  
 (e)  “Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking institutions in New York are authorized or obligated by law or executive order to close. 
  
 (f)  “Close of Business” on any given date shall mean 5:00 p.m., New York time, on such date;
provided, however, that if such date is not a Business Day it shall mean 5:00 p.m., New York time, on the next succeeding Business Day. 
  
 (g)  “Common Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii) hereof. “Common Shares” when used with
reference to the Company shall mean the shares of Common Stock of the Company, par value at $0.001 per share. Common Shares when used with reference to any Person other than the Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person. 
  
 (h)  “Company” shall mean Natus Medical Incorporated, a Delaware corporation, subject to the terms of Section 13(a)(iii)(C) hereof.

 

 3 

  
 (i)  “Current Per Share Market Price” of any
security (a “Security” for purposes of this definition), for all computations other than those made pursuant to Section 11(a)(iii) hereof, shall mean the average of the daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price of any Security on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the ten (10) consecutive Trading Days immediately prior to such date; provided, however, that in the event that the Current Per Share Market Price of the Security is determined during a
period following the announcement by the issuer of such Security of (i) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of the applicable thirty (30) Trading Day or ten (10) Trading Day period, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per Share Market Price shall be appropriately adjusted to reflect the current market price per 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 asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last sale price or, if such last
sale price is not reported, the average of the high bid and low asked prices in the over-the-counter market, as reported by Nasdaq or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Security, the
fair value of such shares on such date as determined in good faith by the Board of Directors of the Company shall be used. If the Preferred Shares are not publicly traded, the Current Per Share Market Price of the Preferred Shares shall be
conclusively deemed to be (x) the Current Per Share Market Price of the Common Shares as determined pursuant to this Section 1(j), as appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date
hereof, multiplied by (y) 1,000. If the Security is not publicly held or so listed or traded, Current Per Share Market Price shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. 
  
 (j)  “Current Value” shall have the meaning set forth in Section 11(a)(iii) hereof. 
  
 (k)  “Distribution Date” shall mean the earlier of (i) the Close of Business on the tenth (10th) Business Day (or such later date as may be determined by action of the
Company’s Board of Directors) after the Shares Acquisition Date (or, if the tenth (10th) Business Day after the Shares Acquisition Date occurs before the Record Date, the Close of Business on the Record Date) or (ii) the Close of Business on
the tenth (10th) Business Day (or such later date as may be determined by action of the Company’s Board of Directors) after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, 
 

 4 

 appointed or established by the Company for or pursuant to the terms of any such plan) is first published or sent or
given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if, assuming the successful consummation thereof, such Person would be an Acquiring Person. 
  

(l)  “Equivalent Shares” shall mean Preferred Shares and any other class or series of capital stock of the Company which is
entitled to the same rights, privileges and preferences as the Preferred Shares. 
  
 (m)  “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
  
 (n)  “Exchange Ratio” shall have the meaning set forth in Section 24(a) hereof. 
  
 (o)  “Exercise Price” shall have the meaning set forth in Section 4(a) hereof. 
  
 (p)  “Expiration Date” shall mean the earliest to occur of: (i) the Close of Business on the Final Expiration Date, (ii) the Redemption
Date, or (iii) the time at which the Board of Directors orders the exchange of the Rights as provided in Section 24 hereof. 
  
 (q)  “Final Expiration Date” shall mean October 11, 2012. 
  
 (r)  “Nasdaq” shall mean The Nasdaq Stock Market, Inc. 
  
 (s)  “Person” shall mean any individual, firm, corporation or other entity, and shall include any successor (by merger or otherwise) of such entity. 
  

(t)  “Post-Event Transferee” shall have the meaning set forth in Section 7(e) hereof. 
  
 (u)  “Preferred Shares” shall mean shares of Series A Participating Preferred Stock, par value $0. 001
per share, of the Company. 
  
 (v)  “Pre-Event Transferee” shall have the meaning
set forth in Section 7(e) hereof. 
  
 (w)  “Principal Party” shall have the
meaning set forth in Section 13(b) hereof. 
  
 (x)  “Record Date” shall have the
meaning set forth in the recitals at the beginning of this Agreement. 
  
 (y)  “Redemption Date” shall have the meaning set forth in Section 23(a) hereof. 
  
 (z)  “Redemption Price” shall have the meaning set forth in Section 23(a) hereof. 
  
 (aa)  “Rights Agent” shall mean (i) EquiServe Trust Company, N.A., (ii) its successor or replacement as provided in Sections 19 and 21 hereof or (iii) any additional Person
appointed pursuant to Section 2 hereof. 
 

 5 

 (bb)  “Rights Certificate” shall mean a certificate substantially in the form
attached hereto as Exhibit B. 
  
 (cc)  “Rights Dividend Declaration Date”
shall have the meaning set forth in the recitals at the beginning of this Agreement. 
  
 (dd)  “Section 11(a)(ii) Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof. 
  
 (ee)  “Section 13 Event” shall mean any event described in clause (i), (ii) or (iii) of Section 13(a) hereof. 
  
 (ff)  “Securities Act” shall mean the Securities Act of 1933, as amended. 
  
 (gg)  “Shares Acquisition Date” shall mean the first date of 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 an Acquiring Person has become such; provided, however, that if such Person is determined not to have become
an Acquiring Person pursuant to Section 1(a) hereof, then no Shares Acquisition Date shall be deemed to have occurred by virtue of such event and no Distribution Date shall be deemed to have occurred by virtue of such event. 
  
 (hh)  “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof. 
  
 (ii)  “Subsidiary” of any Person shall mean any corporation or other entity of which an amount of
voting securities sufficient to elect a majority of the directors or Persons having similar authority of such corporation or other entity is beneficially owned, directly or indirectly, by such Person, or any corporation or other entity otherwise
controlled by such Person. 
  
 (jj)  “Substitution Period” shall have the meaning
set forth in Section 11(a)(iii) hereof. 
  
 (kk)  “Summary of Rights” shall mean
a summary of this Agreement substantially in the form attached hereto as Exhibit C. 
  
 (ll)  “Total Exercise Price” shall have the meaning set forth in Section 4(a) hereof. 
  
 (mm)  “Trading Day” shall mean a day on which the principal national securities exchange on which a referenced security is listed or admitted to trading is open for the transaction of business or, if a
referenced security is not listed or admitted to trading on any national securities exchange, a Business Day. 
  
 (nn)  A “Triggering Event” shall be deemed to have occurred upon any Person becoming an Acquiring Person. 
  
 Section 2.    Appointment of Rights Agent.    The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Shares) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such co-Rights Agents as it may deem
 
 

 6 

 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 co-Rights Agent. 
  
 Section
3.    Issuance of Rights Certificates. 
  
 (a)  Until the Distribution Date, (i) the Rights will be evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by the certificates for Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Rights Certificates) and not by separate Rights Certificates and (ii) the right to receive Rights Certificates will be transferable only in connection with the transfer of Common Shares. Until the earlier of
the Distribution Date or the Expiration Date, the surrender for transfer of certificates for Common Shares shall also constitute the surrender for transfer of the Rights associated with the Common Shares represented thereby. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Company, a Rights Certificate evidencing one Right for each Common Share so held, subject to adjustment as
provided herein. In the event that an adjustment in the number of Rights per Common Share has been made pursuant to Section 11 hereof, then at the time of distribution of the Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights (in accordance with Section 14(a) hereof). As of
the Distribution Date, the Rights will be evidenced solely by such Rights Certificates and may be transferred by the transfer of the Rights Certificates as permitted hereby, separately and apart from any transfer of Common Shares, and the holders of
such Rights Certificates as listed in the records of the Company or any transfer agent or registrar for the Rights shall be the record holders thereof. 
  
 (b)  On the Record Date or as soon as practicable thereafter, the Company will send a copy of the Summary of Rights by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the Record Date, at the address of such holder shown on the records of the Company’s transfer agent and registrar. With respect to certificates for
Common Shares outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with the Summary of Rights. 
  
 (c)  Unless the Board of Directors by resolution adopted at or before the time of the issuance of any Common
Shares after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date (or, in certain circumstances provided in Section 22 hereof, after the Distribution Date) specifies to the contrary, Rights shall be issued in
respect of all Common Shares that are so issued, and Certificates representing such Common Shares shall also be deemed to be certificates for Rights, and shall bear the following legend: 
  
 THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN NATUS MEDICAL INCORPORATED AND EQUISERVE TRUST

 

 7 

 COMPANY, N.A., AS THE RIGHTS AGENT, DATED AS OF SEPTEMBER 4, 2002 (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 NATUS MEDICAL INCORPORATED. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE
CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF
SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID. 
  
 With respect to such certificates containing the foregoing legend,
until the earlier of the Distribution Date or the Expiration Date, the Rights associated with the Common Shares represented by such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the Common Shares represented thereby. 
  
 (d)  In the event that the Company purchases or acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with the Common Shares which are no longer outstanding. 
  
 Section 4.    Form of Rights Certificates. 
  
 (a)  The Rights Certificates (and the forms of election to purchase Common Shares and of assignment to be printed on the reverse thereof) shall be substantially in the form of 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 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 a national market system, on which the Rights may from time to time be listed or included, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as of the Record Date (or in the case of Rights issued with respect to Common Shares issued by the Company after the Record Date, as of the
date of issuance of such Common Shares) and on their face shall entitle the holders thereof to purchase such number of one-thousandths (0.001) of a Preferred Share as shall be set forth therein at the price set forth therein (such exercise price per
one one-thousandth (0.001) of a Preferred Share being hereinafter referred to as the “Exercise Price” and the aggregate Exercise Price of all Preferred Shares issuable upon exercise of one Right being hereinafter referred to as the
“Total Exercise Price”), but the number and type of securities purchasable upon the exercise of each Right and the Exercise Price shall be subject to adjustment as provided herein. 
 

 8 

  
 (b)  Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a Post-Event Transferee, (iii) a Pre-Event Transferee or (iv) any subsequent transferee
receiving transferred Rights from a Post-Event Transferee or a Pre-Event Transferee, either directly or through one or more intermediate transferees, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain (to the extent feasible) the following legend: 
  
 THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT. 
  
 Section 5.    Countersignature and Registration. 
  
 (a)  The Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its Chief
Financial Officer, its President or any Vice President, either manually or by facsimile signature, and by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature, and shall have affixed thereto the
Company’s seal (if any) or a facsimile thereof. The Rights Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless countersigned. In case any officer of the Company who shall have signed
any of the Rights Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent and
issued and delivered by the Company with the same force and effect as though the person who signed such Rights Certificates on behalf of the Company had not ceased to be such officer of the Company; and any Rights Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Rights Agreement any such
person was not such an officer. 
  
 (b)  Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its office designated for such purposes, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights Certificates and the date of each of the Rights Certificates. 
 

 9 

  
 Section 6.    Transfer, Split Up,
Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. 
  
 (a)  Subject to the provisions of Sections 7(e), 14 and 24 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the Close of Business on the Expiration
Date, any Rights Certificate or Rights Certificates may be transferred, split up, combined or exchanged for another Rights Certificate or Rights Certificates, entitling the registered holder to purchase a like number of one-thousandths (0.001) of a
Preferred Share (or, following a Triggering Event, other securities, cash or other assets, as the case may be) as the Rights Certificate or Rights Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Rights Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate
until the registered holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall, subject to Sections 7(e), 14 and 24 hereof, countersign and deliver to the person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The Company may require payment from the registered holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates. 
  
 (b)  Upon receipt by the
Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Company will
make and deliver a new Rights Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated. 
  
 Section 7.    Exercise of Rights; Exercise Price; Expiration Date of Rights. 
  
 (a)  Subject to Sections 7(e), 23(b) and 24(b) hereof, the registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in whole or in part at any time after the Distribution Date and prior to the Close of Business on the Expiration Date by surrender of the Rights Certificate, with the form
of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the Exercise Price for each one-thousandth (0.001) of a Preferred Share
(or, following a Triggering Event, other securities, cash or other assets as the case may be) as to which the Rights are exercised. 
 

 10 

  
 (b)  The Exercise Price for each one-thousandth (0.001)
of a Preferred Share issuable pursuant to the exercise of a Right shall initially be $23.00, shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below. 
  
 (c)  Upon receipt of a Rights
Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by payment of the Exercise Price for the number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Rights Certificate in accordance with Section 9(e) hereof, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares (or make available, if the Rights Agent is the transfer agent for the Preferred Shares) a certificate or certificates for the
number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the case may be) to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests or (B) if the Company shall have elected to deposit the total number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the case may be) issuable upon exercise
of the Rights hereunder with a depository agent, requisition from the depository agent depository receipts representing such number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other
assets as the case may be) as are to be purchased (in which case certificates for the Preferred Shares (or, following a Triggering Event, other securities, cash or other assets as the case may be) represented by such receipts shall be deposited by
the transfer agent with the depository agent) and the Company hereby directs the depository agent to comply with such request, (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such certificates or depository receipts, cause the same to be delivered to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may
be designated by such holder and (iv) when appropriate, after receipt thereof, deliver such cash to or upon the order of the registered holder of such Rights Certificate. The payment of the Exercise Price (as such amount may be reduced (including to
zero) pursuant to Section 11(a)(iii) hereof) and an amount equal to any applicable transfer tax required to be paid by the holder of such Rights Certificate in accordance with Section 9(e) hereof, may be made in cash or by certified bank check,
cashier’s check or bank draft payable to the order of the Company. In the event that the Company is obligated to issue securities of the Company other than Preferred Shares, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when appropriate. 
  

(d)  In case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Rights Certificate or to his or her duly authorized assigns, subject to the provisions of Section 14
hereof. 
  
 (e)  Notwithstanding anything in this Agreement to the contrary, from and after
the first occurrence of a Triggering Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of 
 

 11 

  
 any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such (a “Post-Event Transferee”), (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (B) a transfer which the Company’s Board of Directors has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section
7(e) (a “Pre-Event Transferee”) or (iv) any subsequent transferee receiving transferred Rights from a Post-Event Transferee or a Pre-Event Transferee, either directly or through one or more intermediate transferees, shall become null and
void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but shall have no liability to any holder of Rights Certificates or to any other Person as a result of its failure to make any determinations with respect to an Acquiring
Person or any of such Acquiring Person’s Affiliates, Associates or transferees hereunder. 
  
 (f)  Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in Section 7 unless such registered holder shall, in addition to having complied with the requirements of subsection 7(a), have (i) completed and signed the certificate contained in the form of election to purchase set forth on
the reverse side of the Rights Certificate surrendered for such exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. 
  
 Section 8.    Cancellation and Destruction of Rights
Certificates.    All Rights Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any Rights Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Rights Certificates, and in such case shall deliver a certificate evidencing the destruction thereof to the Company. 

 
 Section 9.    Reservation and Availability of Preferred Shares. 
  
 (a)  The Company covenants and agrees that it will use its best efforts to cause to be reserved and kept
available out of its authorized and unissued Preferred Shares not reserved for another purpose (and, following the occurrence of a Triggering Event, out of its authorized and unissued Common Shares and/or other securities), the number of Preferred
Shares (and, following the occurrence of the Triggering Event, Common Shares and/or other securities) that will be sufficient to permit the exercise in full of all outstanding Rights. 
 

 12 

  
 (b)  If the Company shall hereafter list any of its
Preferred Shares on a national securities exchange, then so long as the Preferred Shares (and, following the occurrence of a Triggering Event, Common Shares and/or other securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable (but only to the extent that it is reasonably likely that the Rights will be exercised), all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon such exercise. 
  
 (c)  The Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of a Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights is described in Section 11(a)(ii) or Section 11(a)(iii) hereof, or as soon as is required by law following the Distribution Date, as the case may be, a registration statement under the Securities Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable after such filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities and (B) the date of expiration of the Rights. The Company may temporarily
suspend, for a period not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public announcement stating, and notify the Rights Agent, that the exercisability of the Rights has been temporarily suspended, as well as a public announcement and notification to the
Rights Agent at such time as the suspension is no longer in effect. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various states in connection
with the exercisability of the Rights. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction, unless the requisite qualification in such jurisdiction shall have been obtained, or an
exemption therefrom shall be available, and until a registration statement has been declared and remains effective. 
  
 (d)  The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preferred Shares (or other securities of the Company) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such securities (subject to payment of the Exercise Price), be duly and validly authorized and issued and fully paid and nonassessable. 
  
 (e)  The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the original issuance or delivery of the Rights Certificates or of any Preferred Shares (or other securities of the Company) upon the exercise of Rights. The Company shall not, however, be required to pay any transfer
tax which may be payable in respect of any transfer or delivery of Rights Certificates to a person other than, or the issuance or delivery of certificates or depository receipts for the Preferred Shares (or other securities of the Company) in a name
other than that of, the registered holder of the Rights Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depository receipts for Preferred Shares (or other securities of the Company) upon the
exercise of any Rights until any such tax shall have been paid (any such tax 
 

 13 

  
 being payable by the holder of such Rights Certificate at the time of surrender)
or until it has been established to the Company’s satisfaction that no such tax is due. 
  
 Section
10.    Record Date.    Each Person in whose name any certificate for a number of one-thousandths (0.001) of a Preferred Share (or other securities of the Company) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of Preferred Shares (or other securities of the Company) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Total Exercise Price with respect to which the Rights have been exercised (and any applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is
a date upon which the 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 transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a holder of Preferred Shares (or other securities of the Company) for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided
herein. 
  
 Section 11.    Adjustment of Exercise Price, Number of Shares or Number of
Rights.    The Exercise Price, the number and kind of shares or other property covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

  
 (a)  (i)  Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares (by
reverse stock split or otherwise) into a smaller number of Preferred Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation), then, in each such event, except as otherwise provided in this Section 11 and Section 7(e) hereof: (1) the Exercise Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification shall be adjusted so that the Exercise Price thereafter shall equal the result obtained by dividing the Exercise Price in effect immediately prior to such time by a fraction
(the “Adjustment Fraction”), the numerator of which shall be the total number of Preferred Shares (or shares of capital stock issued in such reclassification of the Preferred Shares) outstanding immediately following such time and the
denominator of which shall be the total number of Preferred Shares outstanding immediately prior to such time; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Right; and (2) the number of one-thousandths (0.001) of a Preferred Share (or share of such other capital stock) issuable upon the exercise of each
Right shall equal the number of one-thousandths (0.001) of a Preferred Share (or share of such other capital stock) as was issuable upon exercise of a Right immediately prior to the occurrence of the event described in clauses (A)-(D) of this
Section 11(a)(i), multiplied by the Adjustment Fraction; provided, however, that, no such adjustment shall be made pursuant to this Section 11(a)(i) to the extent that there shall have simultaneously occurred an event 
 

 14 

 
described in clause (A), (B), (C) or (D) of Section 11(n) with a proportionate adjustment being made thereunder. Each Common Share that shall become outstanding after an adjustment has been made
pursuant to this Section 11(a)(i) shall have associated with it the number of Rights, exercisable at the Exercise Price and for the number of one-thousandths (0.001) of a Preferred Share (or shares of such other capital stock) as one Common Share
has associated with it immediately following the adjustment made pursuant to this Section 11(a)(i). 
  
 (ii)  Subject to Section 24 of this Agreement, in the event that a Triggering Event shall have occurred, then promptly following such Triggering Event each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive for each Right, upon exercise thereof in accordance with the terms of this Agreement and payment of the Exercise Price in effect immediately prior to the occurrence of the Triggering Event, in lieu of a number of
one-thousandths (0.001) of a Preferred Share, such number of Common Shares of the Company as shall equal the quotient obtained by dividing (A) the product obtained by multiplying (1) the Exercise Price in effect immediately prior to the occurrence
of the Triggering Event by (2) the number of one-thousandths (0.001) of a Preferred Share for which a Right was exercisable (or would have been exercisable if the Distribution Date had occurred) immediately prior to the first occurrence of a
Triggering Event, by (B) fifty percent (50%) of the Current Per Share Market Price for Common Shares on the date of occurrence of the Triggering Event; provided, however, that the Exercise Price and the number of Common Shares of the Company so
receivable upon exercise of a Right shall be subject to further adjustment as appropriate in accordance with Section 11(e) hereof to reflect any events occurring in respect of the Common Shares of the Company after the occurrence of the Triggering
Event. 
  
 (iii)  In lieu of issuing Common Shares in accordance with Section 11(a)(ii)
hereof, the Company may, if the Company’s Board of Directors determines that such action is necessary or appropriate and not contrary to the interest of holders of Rights and, in the event that the number of Common Shares which are authorized
by the Company’s Certificate of Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights, or if any necessary regulatory
approval for such issuance has not been obtained by the Company, the Company shall: (A) determine the excess of (1) the value of the Common Shares issuable upon the exercise of a Right (the “Current Value”) over (2) the Exercise Price
(such excess, the “Spread”) and (B) with respect to each Right, make adequate provision to substitute for such Common Shares, upon exercise of the Rights, (1) cash, (2) a reduction in the Exercise Price, (3) other equity securities of the
Company (including, without limitation, shares or units of shares of any series of preferred stock which the Company’s Board of Directors has deemed to have the same value as Common Shares (such shares or units of shares of preferred stock are
herein called “Common Stock Equivalents”)), except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the
Company has not obtained any necessary stockholder or regulatory approval for such issuance, (5) other assets or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been
determined by the Company’s Board of Directors based upon the advice of a nationally recognized investment banking firm selected by the Company’s Board of Directors; provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Triggering Event and (y) the date on which the Company’s right of redemption pursuant to
 
 

 15 

 
Section 23(a) expires (the later of (x) and (y) being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Exercise Price, Common Shares (to the extent available), except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Company’s Board of Directors shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance
upon exercise in full of the Rights or that any necessary regulatory approval for such issuance will be obtained, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the “Substitution
Period”). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required
regulatory approval and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Per
Share Market Price of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Shares on such date. 
  
 (b)  In case the Company shall, at any time after the date of this Agreement, fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling such holders (for a period expiring within forty-five (45) calendar days after such record date) to subscribe for or purchase Preferred Shares or Equivalent Shares or
securities convertible into Preferred Shares or Equivalent Shares at a price per share (or having a conversion price per share, if a security convertible into Preferred Shares or Equivalent Shares) less than the then Current Per Share Market Price
of the Preferred Shares or Equivalent Shares on such record date, then, in each such case, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number of Preferred Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of Preferred Shares or Equivalent Shares, as the case may be, which the aggregate
offering price of the total number of Preferred Shares or Equivalent Shares, as the case may be, to be offered or issued (and/or the aggregate initial conversion price of the convertible securities to be offered or issued) would purchase at such
current market price, and the denominator of which shall be the number of Preferred Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of additional Preferred Shares or Equivalent Shares, as the case may be, to be
offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Company’s Board of Directors, whose determination 
 

 16 

 
shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Preferred Shares and Equivalent Shares owned by or held for
the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights, options or warrants are not so
issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed. 
  
 (c)  In case the Company shall, at any time after the date of this Agreement, fix a record date for the making of a distribution to all holders of the Preferred Shares or of any class or
series of Equivalent Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly
cash dividend, if any, or a dividend payable in Preferred Shares) or subscription rights, options or warrants (excluding those referred to in Section 11(b)), then, in each such case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price of a Preferred Share or an Equivalent Share on such record date, less the
fair market value per Preferred Share or Equivalent Share (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a Preferred Share or Equivalent Share, as the case may be, and the denominator of which shall be such Current Per Share Market Price of a
Preferred Share or Equivalent Share on such record date; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price
which would have been in effect if such record date had not been fixed. 
  
 (d)  Anything
herein to the contrary notwithstanding, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) of the Exercise Price; provided, however, that any
adjustments which by reason of this Section 11(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth (0.0001) of a Common Share or other share or one hundred-thousandth (0.00001) of a Preferred Share, as the case may be. Notwithstanding the first sentence of this Section 11(d), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three (3) years from the date of the transaction which requires such adjustment or (ii) the Expiration Date. 
  
 (e)  If as a result of an adjustment made pursuant to Section 11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of
capital stock other than Preferred Shares, thereafter the number of such other shares so receivable upon exercise of any Right and, if required, the Exercise Price thereof, shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Sections 11(a), 11(b), 11(c), 11(d), 11(g), 11(h), 11(i), 
 

 17 

  
 11(j), 11(k) and 11(l), and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Preferred Shares shall apply on like terms to any such other shares. 
  
 (f)  All Rights originally issued by the Company subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of one-thousandths (0.001)
of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. 
  
 (g)  Unless the Company shall have exercised its election as provided in Section 11(h), upon each adjustment of the Exercise Price as a result of the calculations made in Section 11(b) and
(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Preferred Shares (calculated to the nearest one hundred-thousandth
(0.00001) of a share) obtained by (i) multiplying (x) the number of Preferred Shares covered by a Right immediately prior to this adjustment, by (y) the Exercise Price in effect immediately prior to such adjustment of the Exercise Price, and (ii)
dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price. 
  
 (h)  The Company may elect on or after the date of any adjustment of the Exercise Price as a result of the calculations made in Section 11(b) or (c) to adjust the number of Rights, in substitution for any
adjustment in the number of Preferred Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one-thousandths (0.001) of a Preferred Share
for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one hundred-thousandth (0.00001))
obtained by dividing the Exercise Price in effect immediately prior to adjustment of the Exercise Price by the Exercise Price in effect immediately after adjustment of the Exercise Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Exercise Price is adjusted or any day thereafter, but,
if any Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(h), the
Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed and countersigned
in the manner provided for herein (and may bear, at the option of the Company, the adjusted Exercise Price) and shall be registered in the names of the holders of record of Rights Certificates on the record date specified in the public announcement.

  
 (i)  Irrespective of any adjustment or change in the Exercise Price or the number of
Preferred Shares issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Exercise Price per one one-thousandth (0.001) of a 
 

 18 

 
Preferred Share and the number of one-thousandths (0.001) of a Preferred Share which were expressed in the initial Rights Certificates issued hereunder. 
  
 (j)  Before taking any action that would cause an adjustment reducing the Exercise Price below the par or stated
value, if any, of the number of one-thousandths (0.001) of a Preferred Share issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue as fully paid and nonassessable shares such number of one-thousandths (0.001) of a Preferred Share at such adjusted Exercise Price. 
  
 (k)  In any case in which this Section 11 shall require that an adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the number of one-thousandths (0.001) of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above the number of one-thousandths (0.001) of a Preferred Share and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares
(fractional or otherwise) upon the occurrence of the event requiring such adjustment. 
  
 (l)  Anything in this Section 11 to the contrary notwithstanding, prior to the Distribution Date, the Company shall be entitled to make such reductions in the Exercise Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred or Common Shares, (ii) issuance wholly for cash of any Preferred or
Common Shares at less than the current market price, (iii) issuance wholly for cash of Preferred or Common Shares or securities which by their terms are convertible into or exchangeable for Preferred or Common Shares, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred or Common Shares shall not be taxable to such stockholders. 
  
 (m)  The Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take
(or permit to be taken) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights. 
  
 (n)  In the event that the Company shall at any time after the date of this Agreement (A) declare a dividend on
the Common Shares payable in Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the outstanding Common Shares (by reverse stock split or otherwise) into a smaller number of Common Shares, or (D) issue any shares of its capital
stock in a reclassification of the Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11(a) and Section 7(e) hereof: (1) each Common Share (or shares of capital stock issued in such reclassification of the Common Shares) outstanding immediately following such time shall have associated with it the number of
Rights as were associated with one Common Share immediately
 
 

 19 

  
 prior to the occurrence of the event described in clauses (A)-(D) above; (2) the
Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification shall be adjusted so that the Exercise Price thereafter shall equal the result obtained by
multiplying the Exercise Price in effect immediately prior to such time by a fraction, the numerator of which shall be the total number of Common Shares outstanding immediately prior to the event described in clauses (A)-(D) above, and the
denominator of which shall be the total number of Common Shares outstanding immediately after such event; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate
par value of the shares of capital stock of the Company issuable upon exercise of such Right; and (3) the number of one-thousandths (0.001) of a Preferred Share (or shares of such other capital stock) issuable upon the exercise of each Right
outstanding after such event shall equal the number of one-thousandths (0.001) of a Preferred Share (or shares of such other capital stock) as were issuable with respect to one Right immediately prior to such event. Each Common Share that shall
become outstanding after an adjustment has been made pursuant to this Section 11(n) shall have associated with it the number of Rights, exercisable at the Exercise Price and for the number of one-thousandths (0.001) of a Preferred Share (or shares
of such other capital stock) as one Common Share has associated with it immediately following the adjustment made pursuant to this Section 11(n). If an event occurs which would require an adjustment under both this Section 11(n) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(n) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof. 
  
 Section 12.    Certificate of Adjusted Exercise Price or Number of Shares.    Whenever an adjustment is made as provided in
Sections 11 and 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof to each holder of a Rights Certificate in accordance with Section 26 hereof. Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or give such notice shall not affect the validity of such adjustment or the force or effect of the requirement for such adjustment. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment
contained therein and shall not be deemed to have knowledge of such adjustment unless and until it shall have received such certificate. 
  
 Section 13.    Consolidation, Merger or Sale or Transfer of Assets or Earning Power. 
  
 (a)  In the event that, following a Triggering Event, directly or indirectly: 
  
 (i)  the Company shall consolidate with, or merge with and into, any other Person (other than a wholly-owned Subsidiary of the Company in a transaction the principal purpose of which is to
change the state of incorporation of the Company and which complies with Section 11(m) hereof); 
  
 (ii)  any Person shall consolidate with the Company, or merge with and into the Company and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such merger,
all or part of the Common Shares shall be changed into or exchanged for stock or other securities of any other person (or the Company); or 
 

 20 

  
 (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 fifty percent (50%) or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company or one or more of its wholly owned Subsidiaries in one or more transactions, each of which individually (and together) complies with Section 11(m) hereof), then, concurrent with and in each such
case, 
  
 (A)  each holder of a Right (except as provided in Section 7(e) hereof) shall
thereafter have the right to receive, upon the exercise thereof at a price equal to the Total Exercise Price applicable immediately prior to the occurrence of the Section 13 Event in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, nonassessable and freely tradeable Common Shares of the Principal Party (as hereinafter defined), free of any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the
result obtained by dividing such Total Exercise Price by an amount equal to fifty percent (50%) of the Current Per Share Market Price of the Common Shares of such Principal Party on the date of consummation of such Section 13 Event, provided,
however, that the Exercise Price and the number of Common Shares of such Principal Party so receivable upon exercise of a Right shall be subject to further adjustment as appropriate in accordance with Section 11(e) hereof; 

 
 (B)  such Principal Party shall thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement; 
  
 (C)  the term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; 
  
 (D)  such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of its Common Shares) in connection with the consummation of any such transaction as may be necessary to ensure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its Common Shares thereafter deliverable upon the exercise of the Rights; and 
  
 (E)  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 Total Exercise Price as provided in this Section 13(a), such cash, shares, rights, warrants and other property which such holder would have been entitled to receive
had such holder, at the time of such transaction, owned the Common Shares of the Principal Party receivable upon the exercise of such 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. 
 

 21 

  
 (F)  For purposes hereof, the “earning
power” of the Company and its Subsidiaries shall be determined in good faith by the Company’s Board of Directors on the basis of the operating income of each business operated by the Company and its Subsidiaries during the three fiscal
years preceding the date of such determination (or, in the case of any business not operated by the Company or any Subsidiary during three full fiscal years preceding such date, during the period such business was operated by the Company or any
Subsidiary). 
  
 (b)  For purposes of this Agreement, the term “Principal Party”
shall mean: 
  
 (i)  in the case of any transaction described in clause (i) or (ii) of
Section 13(a) hereof: (A) the Person that is the issuer of the securities into which the Common Shares are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer the Common Shares of which have the greatest
aggregate market value of shares outstanding, or (B) if no securities are so issued, (x) 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, the Person the Common Shares
of which have the greatest aggregate market value of shares outstanding or (y) 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 (z) the
Person resulting from the consolidation; and 
  
 (ii)  in the case of any transaction
described in clause (iii) of Section 13(a) hereof, the Person that is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if more than one Person that is a party to
such transaction or transactions receives the same portion of the assets or earning power so transferred and each such portion would, were it not for the other equal portions, constitute the greatest portion of the assets or earning power so
transferred, or if the Person receiving the greatest portion of the assets or earning power cannot be determined, whichever of such Persons is the issuer of Common Shares having the greatest aggregate market value of shares outstanding;
provided that in any such case described in the foregoing clause (b)(i) or (b)(ii), if the Common Shares of such Person are not at such time or have not been continuously over the preceding 12-month period registered under Section 12 of the
Exchange Act, then (1) if such Person is a direct or indirect Subsidiary of another Person the Common Shares of which are and have been so registered, the term “Principal Party” shall refer to such other Person, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Shares of which are and have been so registered, the term “Principal Party” shall refer to whichever of such Persons is the issuer of Common Shares having the greatest
aggregate market value of shares outstanding, or (3) 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 (1)
and (2) above shall apply to each of the owners having an interest in the venture as if the Person owned by the joint venture was a Subsidiary of both or all of such joint ventures, and the Principal Party in each such case shall bear the
obligations set forth in this Section 13 in the same ration as its interest in such Person bears to the total of such interests. 
  
 (c)  The Company shall not consummate any Section 13 Event unless the Principal Party shall have a sufficient number of authorized Common Shares that have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement confirming that such
Principal Party shall, upon
 
 

 22 

  
 consummation of such Section 13 Event, assume this Agreement in accordance with
Sections 13(a) and 13(b) hereof, that all rights of first refusal or preemptive rights in respect of the issuance of Common Shares of such Principal Party upon exercise of outstanding Rights have been waived, that there are no rights, warrants,
instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights and that such
transaction shall not result in a default by such Principal Party under this Agreement, and further providing that, as soon as practicable after the date of such Section 13 Event, such Principal Party will: 
  
 (i)  prepare and file a registration statement under the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form, use its best efforts to cause such registration statement to become effective as soon as practicable after such filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date, and similarly comply with applicable state securities laws; 
  
 (ii)  use its best efforts to list (or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange or to meet the eligibility requirements for quotation on Nasdaq and list (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights on Nasdaq; and

  
 (iii)  deliver to holders of the Rights historical financial statements for such
Principal Party which comply in all respects with the requirements for registration on Form 10 (or any successor form) under the Exchange Act. 
  
 In the event that at any time after the occurrence of a Triggering Event some or all of the Rights shall not have been exercised at the time of a transaction described in this Section 13, the Rights
which have not theretofore been exercised shall thereafter be exercisable in the manner described in Section 13(a) (without taking into account any prior adjustment required by Section 11(a)(ii)). 
  
 (d)  In case the “Principal Party” for purposes of Section 13(b) hereof has provision in any of its
authorized securities or in its certificate of incorporation or by-laws or other instrument governing its corporate affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders of Rights pursuant
to Section 13 hereof), in connection with, or as a consequence of, the consummation of a Section 13 Event, Common Shares or Equivalent Shares of such Principal Party at less than the then Current Per Share Market Price thereof or securities
exercisable for, or convertible into, Common Shares or Equivalent Shares of such Principal Party at less than such then Current Per Share Market Price, or (ii) providing for any special payment, tax or similar provision in connection with the
issuance of the Common Shares of such Principal Party pursuant to the provisions of Section 13 hereof, then, in such event, the Company hereby 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. 
 

 23 

  
 (e)  The Company covenants and agrees that it shall
not, at any time after the Distribution Date, effect or permit to occur any Section 13 Event, if (i) at the time or immediately after such Section 13 Event there are any rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (ii) prior to, simultaneously with or immediately after such Section 13 Event, the stockholders of the Person who constitutes, or
would constitute, the “Principal Party” for purposes of Section 13(b) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates or Associates or (iii) the form or nature of organization of
the Principal Party would preclude or limit the exercisability of the Rights. 
  
 (f)  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 Rights Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable, as determined pursuant to the second sentence of Section 1(j)
hereof. 
  
 (b)  The Company shall not be required to issue fractions of Preferred Shares
(other than fractions that are integral multiples of one one-thousandth (0.001) of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions that are integral
multiples of one one-thousandth (0.001) of a Preferred Share). Interests in fractions of Preferred Shares in integral multiples of one one-thousandth (0.001) of a Preferred Share may, at the election of the Company, be evidenced by depository
receipts, pursuant to an appropriate agreement between the Company and a depository selected by it; provided, that such agreement shall provide that the holders of such depository receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares represented by such depository receipts. In lieu of fractional Preferred Shares that are not integral multiples of one one-thousandth (0.001) of a Preferred Share, the Company
shall pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of a Preferred Share. For purposes of this Section 14(b),
the current market value of a Preferred Share shall be (x) one thousand multiplied by (y) the closing price of a Common Share (as determined pursuant to the second sentence of Section 1(j) hereof) for the Trading Day immediately prior to the date of
such exercise. 
  
 (c)  The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares upon the exercise or exchange of Rights. In lieu of such fractional Common Shares, the Company shall pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of a Common Share. For purposes of this
 
 

 24 

  
 Section 14(c), the current market value of a Common Share shall be the closing
price of a Common Share (as determined pursuant to the second sentence of Section 1(j) hereof) for the Trading Day immediately prior to the date of such exercise. 
  
 (d)  The holder of a Right by the acceptance of the Right expressly waives his or her right to receive any fractional Rights or any fractional
shares (other than fractions that are integral multiples of one one-thousandth (0.001) of a Preferred Share) upon exercise of a Right. 
  
 Section 15.    Rights of Action.    All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent pursuant to Section 18 hereof,
are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered holder of any Rights Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, of the Common Shares), may, in his or her own behalf and for his or her own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his or her right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate
and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will
be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of, the obligations of any Person subject to this Agreement. 
  
 Section 16.    Agreement of Rights Holders.    Every holder of a Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a Right that: 
  
 (a)  prior to
the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares; 
  
 (b)  after the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office or offices 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 fully executed; and 
  
 (c)  subject to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent may deem and treat the person in whose name the Rights Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates or the associated Common Shares certificate made
by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary. 
  
 Section 17.    Rights Certificate Holder Not Deemed a Stockholder.    No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose to be the holder of the Preferred Shares or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in 
 

 25 

  
 any Rights Certificate be construed to confer upon the holder of any Rights Certificate, 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 specifically provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof. 
  
 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. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability or expense, incurred without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability in the premises. In no event will the
Rights Agent be liable for special, indirect, incidental or consequential loss or damage of any kind whatsoever, even if the Rights Agent has been advised of the possibility of such loss or damage. 
  
 (b)  The Rights Agent shall be protected and shall incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with, its administration of this Agreement in reliance upon any Rights Certificate or certificate for the Preferred Shares or Common Shares or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document reasonably believed by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. 
  
 Section 19.    Merger or Consolidation or Change of Name of Rights Agent. 
  
 (a)  Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the corporate trust business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the parties hereto; provided, however, that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the 
 

 26 

  
 name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 
  
 (b)  In case at any time the name of the Rights Agent shall be changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under
its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 
  
 Section 20.    Duties of Rights Agent.    The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound: 
  
 (a)  The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. 
  
 (b)  Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the
determination of Current Per Share Market Price) 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 Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

  
 (c)  The Rights Agent shall be liable hereunder to the Company and any other Person
only for its own gross negligence, bad faith or willful misconduct. 
  
 (d)  The Rights
Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates (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 Rights Certificate
(except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for any change in the exercisability
of the Rights or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts that would require any such change or adjustment
(except with 
 

 27 

  
 respect to the exercise of Rights evidenced by Rights Certificates after receipt
by the Rights Agent of a certificate furnished pursuant to Section 12 describing such change or adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred
Shares to be issued pursuant to this Agreement or any Rights Certificate or as to whether any Preferred Shares will, when issued, be validly authorized and issued, fully paid and nonassessable. 
  

(f)  The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 
  
 (g)  The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Secretary or any Assistant Secretary of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting for those
instructions. 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 or omitted by the Rights Agent under this Rights Agreement and
the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent shall not be liable for any action taken 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 on which 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 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 legal entity. 
  
 (i)  The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting
from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof. 
  
 (j)  No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds for believing that 
 

 28 

  
 repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it. 
  
 (k)  If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company. 
  
 Section 21.    Change of Rights Agent.    The Rights Agent or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon thirty (30) days’ notice in writing mailed to the Company and to each transfer agent of the Preferred Shares and the Common Shares by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. In the event the Transfer Agency and Services Agreement terminates, the Rights Agent will be deemed to resign automatically on the effective date of such termination; and any required notice pursuant to this
Agreement will be sent by the Company. 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 Preferred Shares and the Common Shares by registered or certified mail, and to the holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 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 a Rights Certificate (who shall, with such notice, submit his or her Rights Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under
the laws of the United States or of any state of the United States, in good standing, which is authorized under such laws to exercise corporate trust or stockholder services powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $100 million. 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
Preferred Shares and the Common Shares, and mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 
  
 Section 22.    Issuance of New Rights Certificates.    Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price and the number or kind or class of shares or other

 

 29 

 
securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the redemption or expiration of the Rights, the Company (a) shall, with respect to Common Shares so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement or
upon the exercise, conversion or exchange of other securities of the Company outstanding at the date hereof or upon the exercise, conversion or exchange of securities hereinafter issued by the Company and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued and this sentence shall be null and void ab initio if, and to the extent that, such issuance or this sentence would create a significant risk of or result in material adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued or would create a significant risk of or result in such options’ or employee plans’ or arrangements’ failing to qualify for otherwise available special tax treatment and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof. 
  
 Section 23.    Redemption. 
  
 (a)  The Company may, at its option and with the approval of the Board of Directors, at any time prior to the Close of Business on the earlier of (i) the fifth day following the Shares Acquisition Date (or such later date
as may be determined by action of the Company’s Board of Directors and publicly announced by the Company) and (ii) the Final Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption price of $0.001 per
Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being herein referred to as the “Redemption Price”) and the Company may, at its option,
pay the Redemption Price either in Common Shares (based on the Current Per Share Market Price thereof at the time of redemption) or cash. Such redemption of the Rights by the Company may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish. The date on which the Board of Directors elects to make the redemption effective shall be referred to as the “Redemption Date.” 
  
 (b)  Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent, and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within ten (10)
days after the action of the Board of Directors ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this 
 

 30 

  
 Section 23 or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date. 
  
 Section
24.    Exchange. 
  
 (a)  Subject to applicable
laws, rules and regulations, and subject to subsection 24(c) below, the Company may, at its option, by action of the Board of Directors, at any time after the occurrence of a Triggering Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 7(e) hereof) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding. 
  
 (b)  Immediately upon the action of the Board of Directors ordering the exchange of any Rights pursuant to subsection 24(a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall 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
shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights. 
  
 (c)  In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with Section 24(a), the Company shall either take such action as may be necessary to authorize additional Common Shares for issuance upon exchange of the Rights or
alternatively, at the option of a majority of the Board of Directors, with respect to each Right (i) pay cash in an amount equal to the Current Value (as hereinafter defined), in lieu of issuing Common Shares in exchange therefor, or (ii) issue debt
or equity securities or a combination thereof, having a value equal to the Current Value, in lieu of issuing Common Shares in exchange for each such Right, where the value of such securities shall be determined by a nationally recognized investment
banking firm selected by majority vote of the Board of Directors, or (iii) deliver any combination of cash, property, Common Shares and/or other securities having a value equal to the Current Value in exchange for each Right. For purposes of this
Section 24(c) only, the Current Value shall mean the product of the Current Per Share Market Price of Common Shares on the date of the occurrence of 
 

 31 

 the event described above in subsection (a), multiplied by the number of Common Shares for which the Right otherwise
would be exchangeable if there were sufficient shares available. To the extent that the Company determines that some action need be taken pursuant to clauses (i), (ii) or (iii) of this Section 24(c), the Board of Directors may temporarily suspend
the exercisability of the Rights for a period of up to sixty (60) days following the date on which the event described in Section 24(a) shall have occurred, in order to seek any authorization of additional Common Shares and/or to decide the
appropriate form of distribution to be made pursuant to the above provision 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. 
  
 (d)  The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common Shares. In lieu of such fractional Common Shares, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional Common
Shares would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Common Share (as determined pursuant to the second sentence of Section 1(j) hereof). 
  
 (e)  The Company may, at its option, by majority vote of the Board of Directors, at any time before any Person
has become an Acquiring Person, exchange all or part of the then outstanding Rights for rights of substantially equivalent value, as determined reasonably and with good faith by the Board of Directors based upon the advice of one or more nationally
recognized investment banking firms. 
  
 (f)  Immediately upon the action of the Board of
Directors ordering the exchange of any Rights pursuant to subsection 24(e) of this Section 24 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 rights in exchange therefor as has been determined by the Board of Directors in accordance with subsection 24(e) above. The Company shall 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 shall mail a notice of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the transfer agent for the Common Shares of the Company. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the Rights will be effected. 
  
 Section
25.    Notice of Certain Events. 
  
 (a)  In case
the Company shall propose to effect or permit to occur any Triggering Event or Section 13 Event, the Company shall give notice thereof to each holder of Rights in accordance with Section 26 hereof at least twenty (20) days prior to occurrence of
such Triggering Event or such Section 13 Event. 
  
 (b)  In case any Triggering Event or
Section 13 Event shall occur, then, in any such case, the Company shall as soon as practicable thereafter give to each holder of a Rights Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, which

 

 32 

  
 shall specify the event and the consequences of the event to holders of Rights
under Sections 11(a)(ii) and 13 hereof. 
  
 Section
26.    Notices.    Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: 
  
 Natus Medical Incorporated 
 1501 Industrial Road 
 San Carlos, California 94070 
 Attention: Chief Executive Officer 
  
 with a copy to: 
  
 Wilson Sonsini Goodrich & Rosati

 Professional Corporation 
 650 Page Mill Road 
 Palo Alto, California 94304-1050 
 Attention: Robert P. Latta, Esq. 
  
 Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows: 

 
 EquiServe Trust Company, N.A. 
 150 Royall Street

 Canton, MA 02021 
 Attn: Client Administration 
  
 Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. 
  
 Section 27.    Supplements and Amendments.    Prior to the occurrence of a Distribution Date, the Company may
supplement or amend this Agreement in any respect without the approval of any holders of Rights and the Rights Agent shall, if the Company so directs, execute such supplement or amendment. From and after the occurrence of a Distribution Date, the
Company and the Rights Agent may from time to time supplement or amend this Agreement without the approval of any holders of Rights in order to (i) cure any ambiguity, (ii) correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) shorten or lengthen any time period hereunder or (iv) to change or supplement the provisions hereunder in any manner that the Company may deem necessary or desirable and that shall not
adversely affect the interests of the holders of Rights (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided, this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) a time period relating to when the 
 

 33 

 Rights may be redeemed at such time as the Rights are not then redeemable or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company that states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders of Common Shares. 
  
 Section
28.    Successors.    All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder. 
  
 Section 29.    Determinations and Actions by the
Board of Directors, etc.    For all purposes of this Agreement, any calculation of the number of Common Shares outstanding at any particular time, including for purposes of determining the particular percentage of such
outstanding Common Shares of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board of Directors of the Company shall
have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board, or the Company, or as may be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power (i) to interpret the provisions of this Agreement and (ii) to make all determinations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem
the Rights or to amend the Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights Certificates and all other parties and (y) with respect to claims specifically arising from the Agreement, not subject the Board to any liability
to the holders of the Rights. 
  
 Section 30.    Benefits of this
Agreement.    Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, the
Common Shares) any legal or equitable right, remedy or claim pursuant to this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, the Common Shares). 
  
 Section
31.    Severability.    If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the Close of Business on the tenth day following the date of such determination by the Board of Directors. 
 

 34 

  
 Section 32.    Governing
Law.    This Agreement and each Right and each Rights 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. 
  
 Section 33.    Counterparts.    This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the same instrument. 
  
 Section
34.    Descriptive Headings.    Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof. 
  
 [Remainder of Page Left Blank Intentionally] 
  
 

 35 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above
written. 
  
 
	 “COMPANY”
 	 	  	 	 NATUS MEDICAL INCORPORATED
 
	 
	  	 	  	 	  	 	 By:
 	 	 

	  	 	  	 	  	 	  	 	 Tim C. Johnson
 President,
Chief Executive Officer and
 Chief Operating Officer 
 

 
  
 
	 “RIGHTS AGENT” 
 	 	  	 	 EQUISERVE TRUST COMPANY, N.A.
 
	 
	  	 	  	 	  	 	 By:
 	 	 

	 
	  	 	  	 	  	 	 Name:
 	 	 

	 
	  	 	  	 	  	 	 Title:
 	 	 

	  	 	  	 	  	 	  	 	  

 
  
 

  
 EXHIBIT A 
  
 CERTIFICATE OF DESIGNATION 
 OF RIGHTS, PREFERENCES AND PRIVILEGES OF

 SERIES A PARTICIPATING PREFERRED STOCK 
 OF NATUS MEDICAL
INCORPORATED 
  
 The undersigned, Tim C. Johnson, does hereby certify: 
  
 1.    That he is the duly elected and acting President, Chief Executive Officer and Chief Operating
Officer of Natus Medical Incorporated, a Delaware corporation (the“Corporation”). 
  
 2.    That pursuant to the authority conferred upon the Board of Directors by the Amended and Restated Certificate of Incorporation of the said Corporation, the said Board of Directors of the Corporation on
September 4, 2002 adopted the resolutions attached hereto as Exhibit A-1 creating a series of 120,000 shares of Preferred Stock designated as Series A Participating Preferred Stock as set forth on Exhibit A-2 hereto. 
  
 I further declare under penalty of perjury that the matters set forth in the foregoing Certificate of Designation are true and correct of
my own knowledge. 
  
 Executed at San Carlos, California on September     , 2002. 

 
 
	  
	 
	 	 	 

	  	 	 Tim C. Johnson
 President, Chief Executive Officer and
 Chief Operating Officer
 

 
  
  
 

 EXHIBIT A-1 
 (to Certificate of
Designation) 
  
 Resolutions of the Board of Directors of Natus Medical Incorporated 
  
 Creation of Series A Participating Preferred Stock 
  
 RESOLVED:    That pursuant to the authority vested in the Board of Directors of Natus Medical Incorporated (the “Corporation”) by the Amended and Restated
Certificate of Incorporation, the Board of Directors does hereby provide for the issue of a series of Preferred Stock of the Corporation and does hereby fix and herein state and express the designations, powers, preferences and relative and other
special rights and the qualifications, limitations and restrictions of such series of Preferred Stock as set forth on Exhibit A-2 to the Certificate of Designation. 
  
 RESOLVED FURTHER.    That the President, Chief Executive Officer or any Vice President and the Secretary or any Assistant Secretary of
this corporation be, and they hereby are, authorized and directed to prepare and file a Certificate of Designation of Rights, Preferences and Privileges in accordance with the foregoing resolution and the provisions of Delaware law and to take such
actions as they may deem necessary or appropriate to carry out the intent of the foregoing resolution. 
  
 Declaration of Rights
Dividend 
  
 RESOLVED:    That the Board of Directors hereby declares that
a dividend of one Right for each share of Common Stock be paid on October 11, 2002 to stockholders of record of the Common Stock issued and outstanding at the close of business on such date, each Right representing the right to purchase one
one-thousandth of a share of Preferred Stock upon the terms and subject to the conditions set forth in the form of the Preferred Stock Rights Agreement presented to this meeting, a copy of which is attached as Exhibit B to the Preferred Stock Rights
Agreement (the “Rights Agreement”), which agreement is hereby approved in all respects. 
  
 RESOLVED
FURTHER:    That the exercise price of the Rights shall be $23.00 per Right, and that the redemption price therefor shall be $0.001 per Right. 
  
 RESOLVED FURTHER:    That the proper officers of the Corporation are hereby authorized in the name and on behalf of the Corporation to
execute the Rights Agreement, with such modifications as the officers executing the same shall approve, and to deliver the same to the Rights Agent thereunder, such execution and delivery conclusively to evidence the due authorization and approval
thereof by the Corporation. 
 

  
 Rights Certificates 
  
 RESOLVED:    That certificates evidencing the Rights (the “Rights Certificates”) shall be substantially in the form set forth in
the Rights Agreement and shall be issued and delivered as provided therein. 
  
 RESOLVED
FURTHER:    That the Rights Certificates shall be signed by the Chairman of the Board, the Chief Executive Officer, the President or any Vice President and by the Secretary or an Assistant Secretary of the Corporation
under its corporate seal (which may be in the form of a facsimile of the seal of the Corporation), provided that the signature of any of said officers of the Corporation may, but need not be, a facsimile signature imprinted or otherwise reproduced
on the Rights Certificates, and that the Corporation hereby adopts for such purpose the facsimile signature of the present or any future Chairman of the Board, Chief Executive Officer, President, Vice President, Secretary, and Assistant Secretary,
of the Corporation, notwithstanding the fact that at the time the Rights Certificates shall be authenticated and delivered or disposed of he or she shall have ceased to be such officer. 
  
 RESOLVED FURTHER:    That the proper officers of the Corporation are hereby authorized to execute on behalf of the Corporation and under
its corporate seal (which may be in the form of a facsimile of the seal of the Corporation) Rights Certificates issued to replace lost, stolen, mutilated or destroyed Rights Certificates, and such Rights Certificates as may be required for exchange,
substitution or transfer as provided in the Rights Agreement in the manner and form to be required in, or contemplated by, the Rights Agreement. 
  
 RESOLVED FURTHER:    That the Rights Certificates shall be manually countersigned by the Rights Agent under the Rights Agreement and books for the registration and
transfer of the Rights Certificates shall be maintained by such Rights Agent at its principal offices. 
  
 Authorization and
Reservation of Shares of Preferred Stock 
  
 RESOLVED:    That the minimum
number of shares of Preferred Stock sufficient to permit the exercise in full of all outstanding Rights at any time is hereby reserved for issuance upon exercise of the Rights, such number to be subject to adjustment from time to time in accordance
with the Rights Agreement, and subject to the limitation that in no event shall the number of shares of Preferred Stock reserved hereunder, when added to the number of shares of Preferred Stock then otherwise reserved for issuance by the
Corporation, exceed the total number of authorized but unissued shares of Preferred Stock of the Corporation at any time. 
  
 Appointment of Rights Agent 
  
 RESOLVED:    That
EquiServe Trust Corporation, N.A. (the “Rights Agent”) is hereby appointed Rights Agent under the Rights Agreement, and that upon presentation to it of Rights Certificates for exercise in accordance with the Rights Agreement, the Rights
Agent is authorized, as Transfer Agent and Registrar for the Common Stock, to issue originally, countersign, register and deliver the shares of Preferred Stock issuable upon such exercise of the Rights. 
 

 2 

  
 Registration and Listing 
  
 RESOLVED:    That the proper officers of the Corporation are authorized for and on behalf of the Corporation to execute personally or by
attorney-in-fact and to cause to be filed with the Securities and Exchange Commission a registration statement under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for the registration of the Rights, and thereafter
to execute and cause to be filed any amended registration statement or registration statements, and to cause such registration statement and any amendments thereto to become effective in accordance with the Exchange Act and the General Rules and
Regulations of the Securities and Exchange Commission thereunder. 
  
 RESOLVED
FURTHER:    That the proper officers of the Corporation are hereby authorized, jointly and severally, in the name and on behalf of the Corporation, to take all such further actions and to execute all such documents as
they may deem necessary or appropriate in connection with the issuance of the Rights and the shares of Preferred Stock issuable upon exercise of the Rights in order to comply with the Securities Act of 1933, as amended, and the Exchange Act, as
amended. 
  
 RESOLVED FURTHER:    That the proper officers of the Corporation are
hereby authorized, jointly and severally, in the name and on behalf of the Corporation, to execute and file such application or applications, and amendments and supplements thereto, and take such other action as may be necessary to list the Rights
(and, if in the judgment of such officers it is appropriate to do so, the shares of Common Stock or Preferred Stock issuable upon exercise thereof) on the Nasdaq National Market, and that the proper officers of the Corporation are hereby authorized
to appear before the Securities and Exchange Commission and the Nasdaq Stock Market, Inc. (the “Nasdaq”), and to execute such papers and agreements as may be necessary to conform with the requirements of the Securities and Exchange
Commission and the Nasdaq, and to effectuate such listing and registration. 
  
 Subsequent Issuance of Rights 

 
 RESOLVED:    That so long as the Rights are attached to the Common Stock as provided in the
Rights Agreement and subject to the other provisions of the Rights Agreement, one additional Right shall be delivered with each share of Common Stock issued after October 11, 2002 including but not limited to the shares of Common Stock issued upon
conversion of any convertible securities of the Corporation and the exercise of options or warrants to purchase shares of Common Stock granted by the Corporation. 
  
 General Resolutions 
  
 RESOLVED:    That the Board of Directors hereby adopts, as if expressly set forth herein, the form of any resolution required by the Rights Agent or by any authority in connection with any
applications, consents to service, issuer’s covenants or other documents if (i) in the opinion of the officers of the Corporation executing the same, the adoption of such resolutions is necessary or desirable and (ii) the Secretary of the
Corporation evidences such adoption by inserting in the minutes of this meeting copies of such resolutions, which will 
 

 3 

  
 thereupon be deemed to be adopted by the Board of Directors with the same force and effect as if
presented at this meeting. 
  
 RESOLVED FURTHER:    That the proper officers of the
Corporation be, and each of them hereby is, authorized and directed, jointly and severally, for and on behalf of the Corporation, to execute and deliver all certificates, agreements and other documents, take all steps and do all things which they
may deem necessary or advisable in order to effectuate the purposes of the foregoing resolutions. 
  
 

 4 

 EXHIBIT A-2 
 (to Certificate of
Designation) 
  
 Rights and Limitations of Series A Participating Preferred Stock 
  
 Section 1.    Designation and Amount.    The shares of such series shall be designated as
“Series A Participating Preferred Stock.” The Series A Participating Preferred Stock shall have a par value of $0.001 per share, and the number of shares constituting such series shall be 120,000. 
  
 Section 2.    Proportional Adjustment.    In the event that the Corporation shall at any
time after the issuance of any share or shares of Series A Participating Preferred Stock (i) declare any dividend on Common Stock of the Corporation (“Common Stock”) payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Corporation shall simultaneously effect a proportional adjustment to the number of outstanding shares of Series A Participating Preferred
Stock. 
  
 Section 3.    Dividends and Distributions. 
  
 (a)  Subject to the prior and superior right of the holders of any shares of any series of Preferred Stock
ranking prior and superior to the shares of Series A Participating Preferred Stock with respect to dividends, the holders of shares of Series A Participating Preferred 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 A Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 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 A Participating Preferred Stock. 
  
 (b)  The Corporation shall declare a dividend or distribution on the Series A Participating Preferred Stock as provided in paragraph (a) above immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock). 
  
 (c)  Dividends shall begin
to accrue on outstanding shares of Series A Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Participating 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 A Participating 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 from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Participating 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 A Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. 
  
 Section 4.    Voting Rights.    The holders of shares of Series A Participating Preferred Stock shall have the following
voting rights: 
  
 (a)  Each share of Series A Participating Preferred Stock shall entitle
the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. 
  
 (b)  Except as otherwise provided herein or by law, the holders of shares of Series A Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation. 
  
 (c)  Except as required by law, the holders of
Series A Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent that they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate
action. 
  
 Section 5.    Certain Restrictions. 
  
 (a)  The Corporation shall not declare any dividend on, make any distribution on, or redeem or purchase or
otherwise acquire for consideration any shares of Common Stock after the first issuance of a share or fraction of a share of Series A Participating Preferred Stock unless concurrently therewith it shall declare a dividend on the Series A
Participating Preferred Stock as required by Section 3 hereof. 
  
 (b)  Whenever quarterly
dividends or other dividends or distributions payable on the Series A Participating Preferred Stock as provided in Section 3 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares
of Series A Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not 
  
 (i)  declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Participating 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 A Participating Preferred Stock, except dividends paid ratably on the
Series A Participating 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; 
 

 2 

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

  
 (iv)  purchase or otherwise acquire for consideration any shares of Series A
Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Participating 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. 
  
 (c)  The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (a) of this Section 5, purchase or otherwise
acquire such shares at such time and in such manner. 
  
 Section 6.    Reacquired
Shares.    Any shares of Series A Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled 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 to be created by resolution or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein and in the Amended and Restated Certificate of Incorporation, as then amended. 
  
 Section 7.    Liquidation, Dissolution or Winding Up.    Upon any liquidation, dissolution or winding up of the Corporation, the holders of shares of Series A Participating Preferred
Stock shall be entitled to receive an aggregate amount per share equal to 1,000 times the aggregate amount to be distributed per share to holders of shares of Common Stock plus an amount equal to any accrued and unpaid dividends on such shares of
Series A Participating Preferred Stock. 
  
 Section 8.    Consolidation, Merger,
etc.    In case the Corporation 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 A Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to 1,000 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. 
  
 Section 9.    No Redemption.    The shares of Series A Participating Preferred Stock shall not be redeemable. 
 

 3 

  
 Section 10.    Ranking.    The
Series A Participating Preferred Stock shall rank junior to all other series of the Corporation’s Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.

  
 Section 11.    Amendment.    The Amended and Restated Certificate
of Incorporation of the Corporation shall not be further amended in any manner which would materially alter or change the powers, preference or special rights of the Series A Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority of the outstanding shares of Series A Participating Preferred Stock, voting separately as a series. 
  
 Section 12.    Fractional Shares.    Series A Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Participating Preferred Stock. 
 

 4 

 EXHIBIT B 
  
 FORM OF RIGHTS CERTIFICATE 
  
 
	 Certificate No. R-
 	 	                     
  Rights
 

 
  
 NOT EXERCISABLE AFTER THE EARLIER OF (i) OCTOBER 11, 2012, (ii) THE
DATE TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES THE RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH RIGHTS AGREEMENT.]* 
  
 RIGHTS
CERTIFICATE 
  
 NATUS MEDICAL INCORPORATED 
  
 This certifies that
                                        
    , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement dated as of September
4, 2002, (the “Rights Agreement”), between Natus Medical Incorporated, a Delaware corporation (the “Company”), and EquiServe Trust Company, N.A. (the “Rights Agent”), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 p.m., New York time, on October 11, 2012 at the office of the Rights Agent designated for such purpose, or at the office of its successor as Rights Agent, one
one-thousandth (0.001) of a fully paid and non-assessable share of Series A Participating Preferred Stock, par value $0.001 per share (the “Preferred Shares”), of the Company, at an Exercise Price of $23.00 per one-thousandth (0.001) of a
Preferred Share (the “Exercise Price”), upon presentation and surrender of 
  
 

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

  
 this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of one-thousandths (0.001) of a Preferred Share which may be purchased upon exercise hereof) set forth above are the number and Exercise Price as of October 11, 2002 based on the
Preferred Shares as constituted at such date. As provided in the Rights Agreement, the Exercise Price and the number and kind of Preferred Shares or other securities which may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of certain events. 
  
 This Rights
Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the above-mentioned office of the
Rights Agent. 
  
 Subject to the provisions of the Rights Agreement, the Rights evidenced by this Rights Certificate
(i) may be redeemed by the Company, at its option, at a redemption price of $0.001 per Right or (ii) may be exchanged by the Company in whole or in part for Common Shares, substantially equivalent rights or other consideration as determined by the
Company. 
  
 This Rights Certificate, with or without other Rights Certificates, upon surrender at the office of the
Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate amount of securities as the Rights evidenced
by the Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised. 
  
 No fractional portion of less than one
one-thousandth (0.001) of a Preferred Share will be issued upon the exercise of any Right or Rights evidenced hereby but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. 
  
 No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of
the rights of a 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 the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement. 
 

 2 

  
 This Rights Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent. 
  
 WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of                     ,             .

  
 
	 ATTEST: 
 	 	  	 	 NATUS MEDICAL INCORPORATED 
 
	 
	  	 	 
	 	  	 	 By:
 	 	 

	  	 	 Secretary
 	 	  	 	 Its:
 	 	 

 
  
 Countersigned: 
  
 
	 EquiServe Trust Company, N.A.
 as Rights Agent
 
	 
	 By:
 	 	 

	 Its:
 	 	 

 
  
 

 3 

  
 Form of Reverse Side of Rights Certificate 
  
 FORM OF ASSIGNMENT 
  
 (To be executed by the registered holder if such holder desires to transfer the Rights Certificate) 
  
 FOR VALUE RECEIVED
                                      hereby sells, assigns
and transfers unto 
  
                                      
                                        
                                        
                                        
                                        
                                        
                     
 (Please print name and address of
transferee) 
  
                                      
                                        
                                        
                                        
                                        
                                        
                     
 this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
                                 Attorney, to transfer the within Rights Certificate on
the books of the within-named Company, with full power of substitution. 
  
 Dated:
                ,                       
  
                                      
                                        
                                        
                           
 Signature 
  
 Signature Guaranteed: 
  
 Signatures must be guaranteed by an “Eligible Guarantor Institution” (with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. 

  
 CERTIFICATE 
  
 The undersigned hereby certifies by checking the appropriate boxes that: 
  
 (1)  this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person,
or an Affiliate or Associate of any such Person (as such terms are defined in the Rights Agreement); 
  
 (2)  after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became an Acquiring Person or
an Affiliate or Associate of any such Person. 
  
 Dated:
                ,              
  
                                      
                                        
                                        
                           
 Signature 
  
 Signature Guaranteed: 
  
 Signatures must be guaranteed by an “Eligible Guarantor Institution” (with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. 
  

  
 Form of Reverse Side of Rights Certificate — continued 

 
 FORM OF ELECTION TO PURCHASE 
  
 (To be executed if holder desires to exercise the Rights Certificate) 
  
 To:                                     
            
  
 The undersigned hereby irrevocably elects
to exercise
                                        
                                        
Rights represented by this Rights Certificate to purchase the number of one-thousandths (0.001) of a Preferred Share issuable upon the exercise of such Rights and requests that certificates for such number of one-thousandths (0.001) of a Preferred
Share 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 Rights Certificate, a new Rights Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to: 
  

Please insert social security 
 or
other identifying number 
  
 
(Please print name and address) 
 
 
 Dated:
                                    ,
             
  
                                      
                                        
                                        
                           
 Signature 
  
 Signature Guaranteed: 
  
 Signatures must be guaranteed by an “Eligible Guarantor Institution” (with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. 

  
 CERTIFICATE 
  
 The undersigned hereby certifies by checking the appropriate boxes that: 
  
 (1)  the Rights evidenced by this Rights Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are defined in the Rights Agreement); 
  
 (2)  after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became an Acquiring Person or
an Affiliate or Associate of any such Person. 
  
 Dated:
                                    ,
             
  
                                      
                                        
                                        
                           
 Signature 
  
 Signature Guaranteed: 
  
 Signatures must be guaranteed by an “Eligible Guarantor Institution” (with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. 

  
 Form of Reverse Side of Rights Certificate — continued 

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

 EXHIBIT C 
  
 STOCKHOLDER RIGHTS PLAN 
 NATUS MEDICAL INCORPORATED 
  
 Summary of Rights 
  
 
	 Distribution and Transfer of Rights; Rights Certificate:
 	    	 The Board of Directors has declared a dividend of one Right for each share of Common Stock of Natus Medical Incorporated (the “Company”) outstanding.
Prior to the Distribution Date referred to below, the Rights will be evidenced by and trade with the certificates for the Common Stock. After the Distribution Date, the Company will mail Rights certificates to the Company’s stockholders and the
Rights will become transferable apart from the Common Stock.
 
	 
	 Distribution Date:
 	    	 Rights will separate from the Common Stock and become exercisable following (a) the tenth business day (or such later date as may be determined by the
Company’s Board of Directors) after public announcement that a person or group has acquired beneficial ownership of 15% or more of the Company’s Common Stock (the “Shares Acquisition Date”) or (b) the tenth business day (or such
later date as may be determined by the Company’s Board of Directors) after a person or group announces a tender or exchange offer, the consummation of which would result in ownership by a person or group of 15% or more of the Company’s
Common Stock. However, with respect to Perry Corp. (“Perry”), no distribution date will occur until such time as Perry acquires beneficial ownership of 29% or more of the Company’s Common Stock, Perry announces a tender offer to
acquire 29% or more of the Company’s Common Stock or until such time as Perry shall be required to file a report of beneficial ownership on Schedule 13D with the Securities an Exchange Commission with respect to its holdings of the
Company’s Common Stock (collectively, the “Limitations”).
 
	 
	 Preferred Stock Purchasable Upon Exercise of Rights:
 	    	 After the Distribution Date, each Right will entitle the holder to purchase for $23.00 (the “Exercise Price”), one one-thousandth of a share of the
Company’s Series A Preferred Stock with economic terms similar to that of one share of the Company’s Common Stock.
 
	 
	 Flip-In:
 	    	 If an acquirer (an “Acquiring Person”) obtains 15% or more of the Company’s Common Stock (or with respect to Perry, Perry fails to comply with
the Applicable Limitations), then each Right (other than Rights owned by an Acquiring Person or its affiliates) will entitle the holder thereof to purchase, for the
 

 
 

 
	  	    	 Exercise Price, a number of shares of the Company’s Common Stock having a then-current market value of twice the Exercise Price.
 
	 
	 Flip-Over:
 	    	 If, after an Acquiring Person obtains 15% or more of the Company’s Common Stock (or with respect to Perry, Perry fails to comply with the Applicable
Limitations), (a) the Company merges into another entity, (b) an acquiring entity merges into the Company or (c) the Company sells more than 50% of the Company’s assets or earning power, then each Right (other than Rights owned by an
Acquiring Person or its affiliates) will entitle the holder thereof to purchase, for the Exercise Price, a number of shares of Common Stock of the person engaging in the transaction having a then current market value of twice the Exercise
Price.
 
	 
	 Exchange Provision:
 	    	 At any time after the date on which an Acquiring Person obtains 15% or more of the Company’s Common Stock (or with respect to Perry, Perry fails to comply
with the Applicable Limitations) and prior to the acquisition by the Acquiring Person of 50% of the outstanding Common Stock, a majority of the Board of Directors of the Company may exchange the Rights (other than Rights owned by the Acquiring
Person or its affiliates), 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).
 
	 
	 Redemption of the Rights:
 	    	 Rights will be redeemable at the Company’s option for $0.001 per Right at any time on or prior to the fifth day (or such later date as may be determined
by the Company’s Board of Directors) after public announcement that a Person has acquired beneficial ownership of 15% or more of the Company’s Common Stock (or with respect to Perry, Perry fails to comply with the Applicable
Limitations).
 
	 
	 Expiration of the Rights:
 	    	 The Rights expire on the earliest of (a) October 11, 2012 or (b) exchange or redemption of the Rights as described above.
 
	 
	 Amendment of Terms of Rights:
 	    	 The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the Rights holders on or prior to the Distribution Date;
thereafter, the terms of the Rights and the Rights Agreement may be amended without the consent of the Rights holders in order to cure any ambiguities or to make changes which do not adversely affect the interests of Rights holders (other than the
Acquiring Person).
 
	 
	 Voting Rights:
 	    	 Rights will not have any voting rights.
 

 
 

 2 

 
	 Anti-Dilution Provisions:
 	    	 Rights will have the benefit of certain customary anti-dilution provisions.
 
	 
	 Taxes:
 	    	 The Rights distribution should not be taxable for federal income tax purposes. However, following an event which renders the Rights exercisable or upon
redemption of the Rights, stockholders may recognize taxable income.
 

 
  
 The foregoing is a summary of certain principal terms of the Stockholder Rights Plan only
and is qualified in its entirety by reference to the Preferred Stock Rights Agreement dated as of September 4, 2002 between the Company and EquiServe Trust Company, N.A. as Rights Agent (the “Rights Agreement”). The Rights Agreement may be
amended from time to time. A copy of the Rights Agreement was filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated September 6, 2002. A copy of the Rights Agreement is available free of charge
from the Company. 
 

 3EXHIBIT 10.2
                UNIVERSAL BROADBAND COMMUNICATIONS, INC.
                           EMPLOYMENT AGREEMENT

             For WILLIAM D. SAVAGE, Chief Operations Officer

     This Agreement is entered into on this 5th day of August 2002, in
the City of Irvine, California, by and between UNIVERSAL BROADBAND
COMMUNICATIONS, INC., a Nevada Corporation  (hereinafter referred to as
"COMPANY") and WILLIAM D. SAVAGE (hereinafter referred to as "EMPLOYEE")
and collectively called the "Parties".  As of the date of the signing of
this Agreement, William D. Savage is serving as Chief Operations Officer
for the Company, referred to in this Agreement as "COO".

     WITNESSETH:

     WHEREAS, Employer is desirous of employing Executive in the capacity
hereinafter stated, and Executive is desirous of continuing in the employ
of Employer in such capacity, for the period and on the terms and
conditions set forth herein;

     NOW THEREFORE, in consideration of the premises and of the mutual
covenants and conditions herein contained, the parties hereto, intending
to be legally bound, do hereby agree as follow:

1.   EMPLOYMENT
     ----------

     Employer hereby employs Executive as its Chief Operations Officer,
and Executive accepts those duties that are customarily performed by the
President and Chief Operations Officer of a telecommunications company
and accepts all other duties described herein, and agrees to discharge
the same faithfully and to the best of his ability and consistent with
past performances and the highest and best standards of the
telecommunications industry, in accordance with the policies of
Employer's Board of Directors as established, and in compliance with all
laws and Employer's Articles of Incorporation, Bylaws, Policies and
Procedures. Executive shall devote his full business time and attention
to the business and affairs of Employer for which he is employed and
shall perform the duties thereof to the best of his ability. Executive
shall not directly or indirectly render any services of a business,
commercial or professional nature to any other person, firm or
corporation, whether for compensation or otherwise, which are in conflict
with Employer's interests. Executive shall perform such other duties as
shall be from time to time prescribed by Employer's CEO and Board of
Directors.

     Executive shall have such responsibility and duties and such
authority to transact business on behalf of Employer, as are customarily
incident to the office of Chief Operations Officer of a
telecommunications company.

2.   TERM
     ----

     Employer hereby employs Executive, and Executive hereby accepts
employment with Employer for the period of two (2) years (the "Term"),
commencing August 5, 2002, terminating

<PAGE>
August 4, 2004, with such Term being subject to prior termination as
hereinafter provided. Where used herein, "Term" shall refer to the
entire period of employment of Executive by Employer, whether for the
period provided above, or whether terminated earlier as hereinafter
provided, or extended, or extended by mutual agreement in writing
by Employer and Executive.

3.   COMPENSATION
     ------------

     In consideration for all services to be rendered by Executive to
Employer, Employer agrees to pay Executive a starting base salary of One
Hundred and Twenty Thousand Dollars ($120,000) for the first year of this
Employment Agreement commencing the 5th day of August 2002, through the
4th day of August 2003. For the second year of this Employment Agreement,
commencing the 5th day of August 2003, through the 4th day of August
2004, the Executive's base salary shall be One Hundred and Fifty Thousand
Dollars ($150,000). Executive shall be awarded One Hundred and Fifty
Thousand (150,000) shares of Common Stock as a bonus, upon signing on
with the Company.  Stock options of seventy five thousand (75,000) of
common stock to be granted with vesting over a twelve (12) month period
and vesting over price to be $1.50 for each option for the purchase of
one share of common stock of Universal Broadband Communications, Inc.
Employer's Board of Directors may award, at any time, by way of bonus or
otherwise, as a portion of the base salary or by way of bonus stock
options in favor of Executive. Employer's Board of Directors agrees to
act in good faith (with the Executive abstaining from any decision
relating to Executive salary in the event the Executive shall be a member
of the Board of Directors) and shall set the Executive's salary and/or
stock option awards for ensuing years based upon performance of the
Executive, taking into account consideration compensation paid to
Executives of other similar sized entities and businesses within the same
or similar industries. Nothing herein contained shall be deemed to limit,
to any extent, the right of the Employer's Board of Directors to award,
in their sole and absolute discretion, bonuses in addition to the base
salary or any stock options granted with such bonus to be paid in either
salary, accrued or otherwise, and/or stock option, provided herein, which
bonuses may from time to time be granted in favor of Executive.
Executive's salary, to the extent payable in money, shall be paid
semi-monthly.

     Executive shall be entitled to participate in any and all other
employee benefits and plans that may be developed and adopted by Employer
to which Executive is eligible to participate.

4.   PERFORMANCE EVALUATION
     ----------------------

     Employee's performance shall be reviewed for the first 90 days of
employment and on an annual basis by COMPANY.  Annual basis shall be
deemed as the anniversary date, which is August 5th of each year.

5.   INSURANCE
     ---------

     Employer agrees to provide Executive with health benefits, to
include medical and dental insurance, which policy is now or may
hereinafter be in effect for all other full-time employees of Employer.

<PAGE>
6.   VACATION
     --------

     Executive shall be entitled to accrue up to three (3) weeks vacation
during each year of the Term of this Agreement, with at least two (2)
weeks to be taken in a consecutive period. Vacation benefits shall not
accrue above three (3) weeks at any time. Employer's Board of Directors,
in its discretion, may waive the provision with respect to unused
vacation time.

     Executive shall receive five (5) days of paid Personal Time per
year.  Unused accrued Personal Time has no cash value.

7.   AGREEMENT NOT TO COMPETE/
     -------------------------
     TRADE SECRETS AND CONFIDENTIAL INFORMATION
     ------------------------------------------

     Executive recognizes that he may occupy a position of trust with
respect to business and technical information of Employer, which
information shall be the property of Employer and/or its affiliates.
Executive further acknowledges that Employer's agreement to pay the
compensation provided hereunder shall be based upon Executive's agreement
that he shall not render consulting services or otherwise provide
benefits to any entity or individual who shall directly or indirectly be
in competition with Employer. Executive therefore agrees that:

     (a)  During the term of this Agreement, and for any additional
period which Employer may be providing benefits, under the Terms of this
Agreement, Executive will not engage in nor have any material interest in
any business, person, firm, corporation or any other entity whether as an
advisor, principal, employee, independent contractor, agent, partner,
officer, director, stockholder or member of any association or otherwise
that engages in any activity within any of the states, United States or
any foreign country in which the Employer conducts its business which
activity is the same as or materially similar to or directly competitive
with any activity engaged in by the Employer; or any affiliate, parent or
entity associated with Employer.

          Ownership of less than two and one-half percent (2.5%) of the
outstanding shares of capital stock or beneficial interest in an entity
shall not constitute a breach of this section. Exception granted to Get
Savage Consulting, LLC ("GSC, LLC") and Wholesale Telecommunication
Services, Inc. ("WTS"), so long as COO does not actively participate in
either company.

     (b)  Executive shall not, directly or indirectly, without the prior
written consent of the Employer (which may be withheld at the sole
discretion of Employer), disclose to any person other than employees of
Employer or any affiliate, parent or entity associated with Employer, any
Confidential Information.

     (c)  Executive shall not, directly or indirectly, without the prior
written consent of the Employer, which may be withheld at its sole
discretion, use any Confidential Information for Executive's own use
independent of Employer or any affiliate, parent or entity associated
with Employer.

     (d)  Executive shall return promptly upon the termination of this
Agreement, or otherwise upon the request of Employer, any and all
originals and copies of any documentation or materials containing any
Confidential Information.

<PAGE>
     (e)  For purposes of this Agreement, the term "Confidential
Information" shall include information of the nature and in the form
specified below which is owned by or in the possession of Employer which
is disclosed to the Employer in connection with the business of the
Employer, which information relates to (i) potential or existing
acquisitions of Employer, (ii) the Employer's financial data, (iii) the
Employer's employee compensation or performance data, and (iv) any other
information identified to the Executive as confidential by the Employer,
an executive officer thereof; provided, however, that this provision
shall not apply to any information which is publicly available, or become
available to Executive from any third party who is not breaching, to the
knowledge of Executive, any obligation of confidentiality to Employer, or
to any disclosures which are required to be made under legal process, by
subpoena or other court order.

8.   TERMINATION
     -----------

     Employer shall have the right to terminate this Agreement for any of
the following reasons by serving written notice upon Executive:

     (a)  willful breach of, habitual neglect of, willful failure to
perform, or inability to perform, Executive's duties and obligations as
Chief Operations Officer;

     (b)  illegal conduct, constituting a crime involving moral
turpitude, conviction of a felony, or any conduct detrimental to the
interests of Employer;

     (c)  physical or mental disability rendering Executive incapable of
performing his duties for a consecutive period of 180 days, or by death.
In the event of such disability, Employer will provide salary
continuation for 180 days, less accrued sick leave. Accrued sick leave is
to be utilized until exhausted PRIOR to salary continuation provided
herein; or

     (d)  determination by Employer's Board of Directors that the
continued employment of Executive is detrimental to the best interests of
Employer, or for any reason whatsoever as determined by Employer's Board
of Directors and in the sole and absolute discretion of Employer's Board
of Directors.

     In the event this Agreement is terminated for any of the reasons
specified in the paragraphs (a), (b) or (d) above, Executive will be paid
two (2) weeks' salary calculated as of the date of Executive's
termination, plus any pay in lieu of vacation accrued to, but not taken
as of the date of termination. Such termination pay shall be considered
to be in full and complete satisfaction of any and all rights, which
Executive may enjoy under the Terms of this Agreement other than rights,
if any, to exercise any of the stock options vested prior to such
termination. The insurance benefits provided herein shall be extended at
Employer's sole cost until the end of the month in which Executive is
terminated.

     Executive shall give thirty (30) days prior notice, in writing, to
Employer in the event Executive resigns or voluntarily terminates
employment.

9.   INDEMNIFICATION
     ---------------

     To the extent permitted by law, Employer shall indemnify Executive
if he was or is a party of is threatened to be made a party in any action
brought by a third party against Executive

<PAGE>
(whether or not Employer is joined as a party defendant) against
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with said action of Executive acted in
good faith and in a manner Executive reasonably believed to be in the
best interest of Employer (and with respect to a criminal proceeding if
Executive had no reasonable cause to believe his conduct was unlawful),
provided that the alleged conduct of Executive arose out of and was
within the course and scope of his employment as an officer or employee
of Employer.

10.  ARBITRATION
     -----------

     Any dispute related to the interpretation of enforcement of this
Employment Agreement shall be enforceable only by arbitration in the
County of Orange, California (or such other metropolitan area to which
the Employer's principal executive offices may be relocated), in
accordance with the commercial arbitration rules then in effect of the
American Arbitration Association, before a panel of three arbitrators,
one of whom shall be selected by the Employer, the second of whom shall
be selected by the Executive and the third party of whom shall be
selected by the other two arbitrators. In the absence of the American
Arbitration Association, or if for any reason arbitration under the
arbitration rules of the American Arbitration Association cannot be
initiated, or if one of the parties shall fail or refuses to select an
arbitrator, or if the parties failed or refused to select an arbitrator,
or if the arbitrators selected by the Employer and the Executive cannot
agree on the selection of the third arbitrator within seven (7) days
after such time as the Employer and the Executive have each been notified
of the selection of the other's arbitrator, the necessary arbitrator or
arbitrators shall be selected by the presiding judge of the court of
general jurisdiction in the metropolitan area where arbitration under
this section would otherwise have been conducted. Each arbitrator
selected as provided herein is required to be or have been a director or
an executive officer for a corporation whose shares of common stock were
listed during at least one year of such service on the New York Stock
Exchange or the American Stock Exchange or quoted on the National
Association if Securities Dealers Automated Quotations System. The
arbitrators shall award to the Employer its legal fees and expenses
incurred in connection with any arbitration proceeding is commenced by
the Executive and the Executive has no reasonable basis for initiating
such proceeding. Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by any
party in accordance with applicable law in any court or competent
jurisdiction except to the extent an Arbitration award is appealable
under applicable law. This arbitration provision shall be specifically
enforceable.

11.  RETURN OF DOCUMENTS
     -------------------

     Executive expressly agrees that all manuals, documents, files,
reports, studies, instruments or other materials used or developed by
Executive during the Term are solely the property of Employer, and
Executive has no right, title of interest therein. Upon termination of
this Agreement, Executive or Executive's representatives shall promptly
deliver possession of all of said property to Employer in good condition.

12.  NOTICES
     -------

     All notices, requests, demands, claims and other communications
hereunder shall be in writing. Any notice, request, demand, claim or
other communication hereunder shall be deemed duly given (i) if
personally delivered against written receipt, when so delivered, (ii) if
mailed by

<PAGE>
registered or certified mail, return receipt requested, postage prepaid
and addressed to the intended recipient as set forth below, five (5)
business days after being so mailed, (iii) if given by telefax or
telecopier, once such notice or other communication is transmitted to the
telex or telecopier number specified below and the appropriate answer
back or telephonic confirmation is received, provided that such notice or
other communication is promptly thereafter delivered in accordance with
the provision of clause (i), (ii), or (iii) hereof, or (iii) if sent
through a nationally recognized overnight service which guarantees next
day delivery, on (1) business day after being so sent:

     If to the Executive:

     WILLIAM D. SAVAGE

     _____________________________

     _____________________________

     If to the Employer:

     UNIVERSAL BROADBAND COMMUNICATIONS, INC.
     18200 Von Karman Avenue, 10th Floor
     Irvine, California 92612

     Any party may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party
may change the address to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the other
parties notice in manner herein set forth.

13.  SUCCESSORS AND ASSIGNS
     ----------------------

     (a)  OF THE EMPLOYER. The Employer shall require any successor
(whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business
and/or assets of the Employer expressly to assume and to agree to perform
this Agreement in the same manner and to the same extent to the Employer
would be required to perform if no such succession had taken place. This
Agreement shall be binding upon the Employer and any successor of or to
the Employer, including without limitation any person acquiring directly
or indirectly all or substantially all of the business and/or assets of
the Employer whether by sale, merger, consolidation, reorganization or
otherwise (and such successor shall thereafter be deemed the "Employer"
for the purposes of this Agreement), but shall not otherwise be
assignable or delegable by the Employer without the written consent of
the Employee which may be withheld or granted in the sole discretion of
the Employee.

     (b)  OF THE EXECUTIVE. This Agreement shall inure to the benefit of
and be enforceable by the personal or legal representatives, executors,
administrators, successors, assigns, heirs, distributes and/or legatees
of the Executive, although duties of Executive are not assignable.

<PAGE>
     (c)  SEVERABILITY. Any provision of this Agreement which is deemed
invalid, illegal, or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this paragraph be ineffective to the extent
of such invalidity, illegality, or unenforceability, without affecting in
any way the remaining provisions hereof in such jurisdiction or rendering
that or any other provisions of this Agreement invalid, illegal, or
unenforceable in any other jurisdiction, provided that by reason thereof
the obligations of Executive hereunder are not increased or expanded. If
any covenant should be deemed invalid, illegal or unenforceable because
its scope is considered excessive, such covenant shall be modified so
that the scope of the covenant is reduced only to the minimum extent
necessary to render the modified covenant valid, legal and enforceable.

     (d)  ENTIRE AGREEMENT. This document constitutes the final,
complete, and exclusive embodiment of the entire agreement and
understanding among the parties related to the subject matter hereof and
supersedes and preempts any prior or contemporaneous understandings,
agreements, or representations by or between the parties, written or
oral.

     (e)  COUNTERPARTS. This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than
one party, but all of which taken together with constitute one and the
same agreement.

     (f)  AMENDMENTS. No amendments or other modifications to this
Agreement may be made except by writing signed by all parties. No
amendment or waiver of this Agreement requires the consent of any
individual, partnership, corporation or other entity not a party to this
Agreement. Nothing in this Agreement, expressed or implied, is intended
to confer upon any third person any rights or remedies under or by reason
of this Agreement.

     (g)  CHOICE OF FORUM. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the
internal law, and not the law of conflicts, of the Sate of California.

14.  BENEFIT OF AGREEMENT
     --------------------

     This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective executors, administrators, successors
and assigns.

15.  APPLICABLE LAW
     --------------

     This Agreement is made and entered into in the State of California,
and the laws of said State shall govern the validity and interpretation
hereof, and the performance of the parties hereto and their respective
duties and obligations hereunder.

16.  CAPTIONS AND PARAGRAPH HEADINGS
     --------------------------------

     Captions and paragraph headings used herein are for convenience only
and are not a part of this Agreement and shall not be used in construing
it.

17.  INVALID PROVISIONS
     ------------------

     Should any provision of this Agreement for any reason be declared
invalid, void, or unenforceable by a court of competent jurisdiction, the
validity and binding effect of any

<PAGE>
remaining portions shall not be affected and the remaining portions of
this Agreement shall remain in full force and effect as if this Agreement
had been executed with said provision eliminated.

18.  ENTIRE AGREEMENT
     ----------------

     This Agreement contains the entire agreement of the parties and it
supersedes any and all other agreements, either oral or in writing,
between the parties hereto with respect to the employment of Executive by
Employer, except to the extent that it is contemplated that Executive and
Employer may enter into a stock option agreement and/or salary
continuation agreement. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, oral of otherwise,
have been made by any party, or anyone acting on behalf of any party,
which are not embodied herein, and that no other agreement, statement, or
promise not contained in this Agreement shall be valid or binding. This
Agreement may not be modified or amended by oral agreement, but only by
an agreement in writing signed by Employer and Executive.

19.  CONFIDENTIALITY
     ---------------

     This Agreement is to be held confidential. Willful breach of such
confidentiality by Executive will be subject to termination under the
provisions of 8(a) of this Agreement.

20.  LEGAL COSTS
     -----------

     If either Executive or Employer commences an action against the
other arising out of or in connection with this Agreement, the prevailing
party shall be entitled to have and recover from the losing party
reasonable attorney fees and costs of suit.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and years first above written.

EMPLOYER:                               EXECUTIVE:

UNIVERSAL BROADBAND COMMUNICATIONS, INC.
a Nevada Corporation

By: /s/ MARK ELLIS                      /s/ WILLIAM SAVAGE
   ----------------------------         ----------------------------
   MARK ELLIS                           WILLIAM SAVAGE

Its: President
   ----------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]