Document:

Exhibit 10.2 

 

CHINA HGS REAL ESTATE INC.

 

INDEPENDENT DIRECTOR AGREEMENT

 

 

 

This DIRECTOR AGREEMENT
(the “Agreement”) is made and entered into as of this 22nd day of August 2012, effective as of August 22, 2012 (the
“Effective Date”), by and between China HGS Real Estate Inc., a Florida corporation whose shares are publicly
traded (the “Company”), and Christy Y. Shue, a citizen of the United States with a permanent residence in the state
of New Jersey (the “Independent Director”).

 

WHEREAS, the Company
desires to engage the Independent Director, and the Independent Director desires to serve, as a non-employee director of the Company,
subject to the terms and conditions contained in this Agreement.

 

NOW, THEREFORE, in consideration
of the mutual promises and covenants contained herein, the receipt of which is hereby acknowledged, the Company and the Independent
Director, intending to be legally bound, hereby agree as follows:

 

1.DEFINITIONS.

 

(a)“Corporate
Status” describes the capacity of the Independent Director with respect to the Company and the services performed by the
Independent Director in that capacity.

 

(b)“Entity”
shall mean any corporation, partnership, limited liability company, joint venture, trust, foundation, association, organization
or other legal entity.

 

(c)“Proceeding”
shall mean any threatened, pending or completed claim, action, suit, arbitration, alternate dispute resolution process, investigation,
administrative hearing, appeal, or any other proceeding, whether civil, criminal, administrative or investigative, whether formal
or informal, including a proceeding initiated by the Independent Director pursuant to Section 12 of this Agreement to enforce the
Independent Director’s rights hereunder.

 

(d)“Expenses”
shall mean all reasonable fees, costs and expenses, approved by the Company in advance and reasonably incurred in connection with
any Proceeding, including, without limitation, attorneys’ fees, disbursements and retainers, fees and disbursements of expert
witnesses, private investigators, professional advisors (including, without limitation, accountants and investment bankers), court
costs, transcript costs, fees of experts, travel expenses, duplicating, printing and binding costs, telephone and fax transmission
charges, postage, delivery services, secretarial services, and other disbursements and expenses.

 

(e)“Liabilities”
shall mean judgments, damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in settlement.

 

    	 

    	 	

    
 

(f)“Parent”
shall mean any corporation or other entity (other than the Company) in any unbroken chain of corporations or other entities ending
with the Company, if each of the corporations or entities, other than the Company, owns stock or other interests possessing 50%
or more of the economic interest or the total combined voting power of all classes of stock or other interests in one of the other
corporations or entities in the chain.

 

(g)“Subsidiary”
shall mean any corporation or other entity (other than the Company) in any unbroken chain of corporations or other entities beginning
with the Company, if each of the corporations or entities, other than the last corporation or entity in the unbroken chain, owns
stock or other interests possessing 50% or more of the economic interest or the total combined voting power of all classes of stock
or other interests in one of the other corporations or entities in the chain.

 

2.SERVICES
OF INDEPENDENT DIRECTOR. While this Agreement is in effect, the Independent Director shall perform duties as an independent director
and/or a member of the committees of the Board, be compensated for such and be reimbursed expenses in accordance with the Schedule
A attached to this Agreement, subject to the following.

 

(a)The Independent
Director will perform services as is consistent with Independent Director’s position with the Company, as required and authorized
by the By-Laws and Articles of Incorporation of the Company, and in accordance with high professional and ethical standards and
all applicable laws and rules and regulations pertaining to the Independent Director’s performance hereunder, including without
limitation, laws, rules and regulations relating to a public company.

 

(b)The Independent
Director is solely responsible for taxes arising out of any compensation paid by the Company to the Independent Director under
this Agreement, and the Independent Director understands that she will be issued a U.S. Treasury Form 1099 for any compensation
paid to him by the Company. The Independent Director acknowledges and agrees that because she is not an employee of the Company,
the Company will not withhold any amounts for taxes from any of her payments under the Agreement.

 

(c)The Company
may offset any and all monies payable to the Independent Director to the extent of any monies owing to the Company from the Independent
Director.

 

(d)The rules
and regulations of the Company notified to the Independent Director, from time to time, apply to the Independent Director. Such
rules and regulations are subject to change by the Company in its sole discretion. Notwithstanding the foregoing, in the event
of any conflict or inconsistency between the terms and conditions of this Agreement and rules and regulations of the Company, the
terms of this Agreement control.

 

3.REQUIREMENTS
OF INDEPENDENT DIRECTOR. During the term of the Independent Director’s services to the Company hereunder, Independent Director
shall observe all applicable laws and regulations relating to independent directors of a public company as promulgated from time
to time, and shall not: (1) be an employee of the Company or any Parent or Subsidiary; (2) accept, directly or indirectly, any
consulting, advisory, or other compensatory fee from the Company other than as a director and/or a member of a committee of the
Board; (3) be an affiliated person of the Company or any Parent or Subsidiary, as the term “affiliate” is defined in
17 CFR 240.10A-3(e)(1), other than in her capacity as a director and/or a member of a committee of the Board; (4) possess an interest
in any transaction with the Company or any Parent or Subsidiary, for which disclosure would be required pursuant to 17 CFR 229.404(a),
other than in her capacity as a director and/or a member of a committee of the Board committees; (5) be engaged in a business relationship
with the Company or any Parent or Subsidiary, for which disclosure would be required pursuant to 17 CFR 229.404(b), except that
the required beneficial interest therein shall be modified to be 5% hereby.

 

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4.REPORT OBLIGATION.
While this Agreement is in effect, the Independent Director shall immediately report to the Company in the event: (1) the Independent
Director knows or has reason to know or should have known that any of the requirements specified in Section 3 hereof is not satisfied
or is not going to be satisfied; and (2) the Independent Director simultaneously serves on an audit committee of any other public
company.

 

5.TERM AND
TERMINATION. The term of this Agreement and the Independent Director’s services hereunder shall be for three (3) years from
the Effective Date, unless terminated as provided for in this Section 5. This Agreement and the Independent Director’s services
hereunder shall terminate upon the earlier of the following:

 

(a)Removal
of the Independent Director as a director of the Company, upon proper Board or stockholder action in accordance with the By-Laws
and Articles of Incorporation of the Company and applicable law;

 

(b)Resignation
of the Independent Director as a director of the Company upon written notice to the Board of Directors of the Company;

 

(c)Termination
of this Agreement by the Company, in the event any of the requirements specified in Section 3 hereof is not satisfied, as determined
by the Company in its sole discretion; or

 

(d)Failure of the stockholders of
the Company to re-elect the Independent Director at the Company’s annual shareholders’ meeting.

 

6.LIMITATION
OF LIABILITY. In no event shall the Independent Director be individually liable to the Company or its shareholders for any damages
for breach of fiduciary duty as an independent director of the Company, unless the Independent Director’s act or failure
to act involves intentional misconduct, fraud or a knowing violation of law.

 

7.AGREEMENT
OF INDEMNITY. The Company agrees to indemnify the Independent Director as follows:

 

(a)Subject
to the exceptions contained in Section 8(a) below, if the Independent Director was or is a party or is threatened to be made a
party to any Proceeding (other than an action by or in the right of the Company) by reason of the Independent Director’s
Corporate Status, the Independent Director shall be indemnified by the Company against all Expenses and Liabilities incurred or
paid by the Independent Director in connection with such Proceeding (referred to herein as “INDEMNIFIABLE EXPENSES”
and “INDEMNIFIABLE LIABILITIES,” respectively, and collectively as “INDEMNIFIABLE AMOUNTS”).

 

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(b)Subject
to the exceptions contained in Section 8(b) below, if the Independent Director was or is a party or is threatened to be made a
party to any Proceeding by or in the right of the Company, to procure a judgment in its favor by reason of the Independent Director’s
Corporate Status, the Independent Director shall be indemnified by the Company against all Indemnifiable Expenses.

 

(c)For purposes
of this Agreement, the Independent Director shall be deemed to have acted in good faith in conducting the Company’s affairs
as an independent director of the Company and/or a member of a committee of the Board of the Company, if the Independent Director:
(i) exercised or used the same degree of diligence, care, and skill as an ordinarily prudent man would have exercised or used under
the circumstances in the conduct of her own affairs; or (ii) took, or omitted to take, an action in reliance upon advise of counsels
or other professional advisors for the Company, or upon statements made or information furnished by other directors, officers or
employees of the Company, or upon a financial statement of the Company provided by a person in charge of its accounts or certified
by a public accountant or a firm of public accountants, which the Independent Director had reasonable grounds to believe to be
true.

 

8.EXCEPTIONS
TO INDEMNIFICATION. Director shall be entitled to indemnification under Sections 7(a) and 7(b) above in all circumstances other
than the following:

 

(a)If indemnification
is requested under Section 7(a) and it has been adjudicated finally by a court or arbitral body of competent jurisdiction that,
in connection with the subject of the Proceeding out of which the claim for indemnification has arisen, (i) the Independent Director
failed to act in good faith and in a manner the Independent Director reasonably believed to be in or not opposed to the best interests
of the Company, (ii) the Independent Director had reasonable cause to believe that the Independent Director’s conduct was
unlawful, or (iii) the Independent Director’s conduct constituted willful misconduct, fraud or knowing violation of law,
then the Independent Director shall not be entitled to payment of Indemnifiable Amounts hereunder.

 

(b)If indemnification
is requested under Section 7(b) and

 

(i)it has
been adjudicated finally by a court or arbitral body of competent jurisdiction that, in connection with the subject of the Proceeding
out of which the claim for indemnification has arisen, the Independent Director failed to act in good faith and in a manner the
Independent Director reasonably believed to be in or not opposed to the best interests of the Company, including without limitation,
the breach of Section 4 hereof by the Independent Director, the Independent Director shall not be entitled to payment of Indemnifiable
Expenses hereunder; or

 

(ii)it has
been adjudicated finally by a court or arbitral body of competent jurisdiction that the Independent Director is liable to the Company
with respect to any claim, issue or matter involved in the Proceeding out of which the claim for indemnification has arisen, including,
without limitation, a claim that the Independent Director received an improper benefit or improperly took advantage of a corporate
opportunity, the Independent Director shall not be entitled to payment of Indemnifiable Expenses hereunder with respect to such
claim, issue or matter.

 

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9.WHOLLY OR
PARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent
that the Independent Director is, by reason of the Independent Director’s Corporate Status, a party to and is successful,
on the merits or otherwise, in any Proceeding, the Independent Director shall be indemnified in connection therewith. If the Independent
Director is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less
than all claims, issues or matters in such Proceeding, the Company shall indemnify the Independent Director against those Expenses
reasonably incurred by the Independent Director or on the Independent Director’s behalf in connection with each successfully
resolved claim, issue or matter. For purposes of this section, the termination of any claim, issue or matter in such a Proceeding
by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

10.ADVANCES
AND INTERIM EXPENSES. The Company may pay to the Independent Director all Indemnifiable Expenses incurred by the Independent Director
in connection with any Proceeding, including a Proceeding by or in the right of the Company, in advance of the final disposition
of such Proceeding, if the Independent Director furnishes the Company with a written undertaking, to the satisfaction of the Company,
to repay the amount of such Indemnifiable Expenses advanced to the Independent Director in the event it is finally determined by
a court or arbitral body of competent jurisdiction that the Independent Director is not entitled under this Agreement to indemnification
with respect to such Indemnifiable Expenses.

 

11.PROCEDURE
FOR PAYMENT OF INDEMNIFIABLE AMOUNTS. The Independent Director shall submit to the Company a written request specifying the Indemnifiable
Amounts, for which the Independent Director seeks payment under Section 7 hereof and the Proceeding of which has been previously
notified to the Company and approved by the Company for indemnification hereunder. At the request of the Company, the Independent
Director shall furnish such documentation and information as are reasonably available to the Independent Director and necessary
to establish that the Independent Director is entitled to indemnification hereunder. The Company shall pay such Indeminfiable Amounts
within thirty (30) days of receipt of all required documents.

 

12.REMEDIES
OF INDEPENDENT DIRECTOR.

 

(a)RIGHT
TO PETITION COURT. In the event that the Independent Director makes a request for payment of Indemnifiable Amounts under Sections
7, 9-11 above, and the Company fails to make such payment or advancement in a timely manner pursuant to the terms of this Agreement,
the Independent Director may petition the appropriate judicial authority to enforce the Company’s obligations under this
Agreement.

 

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(b)BURDEN
OF PROOF. In any judicial proceeding brought under Section 12 (a) above, the Company shall have the burden of proving that the
Independent Director is not entitled to payment of Indemnifiable Amounts hereunder.

 

(c)EXPENSES.
The Company agrees to reimburse the Independent Director in full for any Expenses incurred by the Independent Director in connection
with investigating, preparing for, litigating, defending or settling any action brought by the Independent Director under Section
12 (a) above, or in connection with any claim or counterclaim brought by the Company in connection therewith.

 

(d)VALIDITY
OF AGREEMENT. The Company shall be precluded from asserting in any Proceeding, including, without limitation, an action under Section
12 (a) above, that the provisions of this Agreement are not valid, binding and enforceable or that there is insufficient consideration
for this Agreement and shall stipulate in court that the Company is bound by all the provisions of this Agreement.

 

(e)FAILURE
TO ACT NOT A DEFENSE. The failure of the Company (including its Board of Directors or any committee thereof, independent legal
counsel, or stockholders) to make a determination concerning the permissibility of the payment of Indemnifiable Amounts or the
advancement of Indemnifiable Expenses under this Agreement shall not be a defense in any action brought under Section 12 (a) above.

 

13.PROCEEDINGS
AGAINST COMPANY. Except as otherwise provided in this Agreement, the Independent Director shall not be entitled to payment of Indemnifiable
Amounts or advancement of Indemnifiable Expenses with respect to any Proceeding brought by the Independent Director against the
Company, any Entity which it controls, any director or officer thereof, or any third party, unless the Company has consented to
the initiation of such Proceeding. This section shall not apply to counterclaims or affirmative defenses asserted by the Independent
Director in an action brought against the Independent Director.

 

14.INSURANCE.
The Company will obtain and maintain a policy or policies of director and officer liability insurance, in an amount not less than
$2,000,000, of which the Independent Director will be named as an insured, providing the Independent Director with coverage for
Indemnifiable Amounts and/or Indemnifiable Expenses in accordance with said insurance policy or policies (“D&O INSURANCE”);
provided that:

 

(a)The Independent
Director agrees that, while the Company has valid and effective D&O Insurance, and except as provided in (c) of this section,
Sections 7-13 of this Agreement shall not apply, and the Company’s indemnification obligation to the Independent Director
under this Agreement shall be deemed fulfilled by virtue of purchasing and maintaining such insurance policy or policies, in accordance
with the terms and conditions thereof and subject to exclusions stated thereon. The Independent Director agrees that the Company
shall have no obligation to challenge the decisions made by the insurance carrier(s) (“INSURANCE CARRIER”) relating
to any claims made under such insurance policy or policies;

 

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(b)The Independent
Director agrees that the Company’s indemnification obligation to the Independent Director under (a) of this section shall
be deemed discharged and terminated, in the event the Insurance Carrier refused payment for any Proceedings against the Independent
Director due to the acts or omissions of the Independent Director;

 

(c)While
the D&O Insurance is valid and effective, the Company agrees that it shall indemnify the Independent Director for the Indemnifiable
Amounts and Indemnifiable Expenses, to the extent that any Proceedings are coverable by D&O Insurance, but in excess of the
policy amount, in accordance with Sections 7-13 of this Agreement; and

 

(d)While the D&O
Insurance is valid and effective, the Company agrees that it shall indemnify the Independent Director to the extent that the Independent
Director has liability that would be part of the D&O Insurance deductible, if there is any; and

 

(e)While
the D&O Insurance is valid and effective, this Section 14 states the entire and exclusive remedy of the Independent Director
with respect to the indemnification obligation of the Company to the Independent Director under this Agreement.

 

15.SUBROGATION.
In the event of any payment of Indemnifiable Amounts under this Agreement and/or the D&O Insurance, the Company or its Insurance
Carrier, as the case may be, shall be subrogated to the extent of such payment to all of the rights of contribution or recovery
of the Independent Director against other persons, and the Independent Director shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of such documents as are necessary to enable the Company
to bring suit to enforce such rights.

 

16.AUTHORITY.
Each party has all necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution,
delivery and performance of the undertakings contemplated by this Agreement have been duly authorized by each party hereto:

 

17.SUCCESSORS
AND ASSIGNMENT. This Agreement shall (a) be binding upon and inure to the benefit of all successors and assigns of the Company
(including any transferee of all or a substantial portion of the business, stock and/or assets of the Company and any direct or
indirect successor by merger or consolidation or otherwise by operation of law), and (b) be binding on and shall inure to the benefit
of the heirs, personal representatives, executors and administrators of the Independent Director. The Independent Director has
no power to assign this Agreement or any rights and obligations hereunder.

 

18.CHANGE
IN LAW. To the extent that a change in applicable law (whether by statute or judicial decision) shall mandate broader or narrower
indemnification than is provided hereunder, the Independent Director shall be subject to such broader or narrower indemnification
and this Agreement shall be deemed to be amended to such extent.

 

19.SEVERABILITY.
Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement, or any clause thereof, shall be determined by a court of competent jurisdiction to
be illegal, invalid or unenforceable, in whole or in part, such provision or clause shall be limited or modified in its application
to the minimum extent necessary to make such provision or clause valid, legal and enforceable, and the remaining provisions and
clauses of this Agreement shall remain fully enforceable and binding on the parties.

 

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20.MODIFICATIONS
AND WAIVER. Except as provided in Section 18 hereof with respect to changes in applicable law which broaden or narrow the right
of the Independent Director to be indemnified by the Company, no supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by each of the parties hereto. No delay in exercise or non-exercise by the Company of any
right under this Agreement shall operate as a current or future waiver by it as to its same or different rights under this Agreement
or otherwise.

 

21.NOTICES.
All notices, requests, demands and other communications hereunder shall be in writing in English and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed by express
mail with delivery confirmation with postage prepaid, on the 5th business day after the date on which it is so mailed:

 

If to Independent
Director, to: Christy Y. Shue, P.O. Box 1525, Englewood Cliffs, NJ 07632.

 

If to the Company,
to: 6 Xinghan Road, 19th Floor, Hanzhong City, Shaanxi Province, PRC 723000.

 

Or to such other
address as may have been furnished in the same manner by any party to the others.

 

22.GOVERNING
LAW. This Agreement shall be governed by and construed and enforced under the laws of the State of New York.

 

23.CONSENT
TO JURISDICTION. The parties hereby consent to the jurisdiction of the courts having jurisdiction over matters arising in New York
County, New York for any proceeding arising out of or relating to this Agreement. The parties agree that in any such proceeding,
each party shall waive, if applicable, inconvenience of forum and right to a jury.

 

24.AGREEMENT
GOVERNS. This Agreement is to be deemed consistent wherever possible with relevant provisions of the By-Laws and Articles of Incorporation
of the Company; however, in the event of a conflict between this Agreement and such provisions, the provisions of this Agreement
shall control.

 

25.INDEPENDENT
CONTRACTOR. The parties understand, acknowledge and agree that the Independent Director’s relationship with the Company is
that of an independent contractor and nothing in this Agreement is intended to or should be construed to create a relationship
other than that of independent contractor. Nothing in this Agreement shall be construed as a contract of employment/engagement
between the Independent Director and the Company or as a commitment on the part of the Company to retain the Independent Director
in any capacity, for any period of time or under any specific terms or conditions, or to continue the Independent Director’s
service to the Company beyond any period.

 

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26.ARBITRATION.
Any dispute, controversy or claim arising out of or relating to this Agreement or the breach thereof, shall be settled by arbitration,
before one arbitrator in accordance with the rules of the American Arbitration Association then in effect and judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction. The arbitrator will be selected, by the parties,
from a panel of attorney arbitrators. The parties agree that any arbitration shall be held in New York, New York. The language
of the arbitration shall be in English. The arbitrator will have no authority to make any relief, finding or award that does not
conform to the terms and conditions of this Agreement. Each party shall bear its own attorneys’ or expert fees and any and
all other party specific costs. Either party, before or during any arbitration, may apply to a court having jurisdiction for a
restraining order or injunction where such relief is necessary to protect its interests. Prior to initiation of arbitration, the
aggrieved party will give the other party written notice, in accordance with this Agreement, describing the claim as to which it
intends to initiate arbitration.

 

27.ENTIRE
AGREEMENT. This Agreement constitutes the entire agreement between the Company and the Independent Director with respect to the
subject matter hereof, and supersedes all prior understandings and agreements with respect to such subject matter.

 

IN WITNESS WHEREOF, the
parties hereto have executed this Independent Director Indemnification Agreement as of the day and year first above written.

 

 

	 	 
	AGREED	AGREED
	 	 
	China HGS Real Estate Inc.	Independent Director
	 	 
	 	 
	 	 
	/s/Xiaojun Zhu	/s/Christy Y. Shue
	Name:  Xiaojun Zhu	Name: Christy Y. Shue
	Title:   Chairman and CEO	 
	 	 

 

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SCHEDULE A

 

IPOSITION:

 

INDEPENDENT DIRECTOR.

 

II.COMPENSATION:

 

FEES. For all services
rendered by the Independent Director pursuant to this Agreement, both during and outside of normal working hours, including but
not limited to, attending all required meetings of the Board or applicable committees thereof, executive sessions of the independent
directors, reviewing filing reports and other corporate documents as requested by the Company, providing comments and opinions
as to business matters as requested by the Company, the Company agrees to pay to the Independent Director a fee in cash of Twenty-Four
Thousand Dollars ($24,000) per year during the Term (the “Base Fee”), or such greater (but not lesser) amount as shall
be approved from time to time by the Board. The Base Fee shall be paid in cash to the Independent Director on a quarterly basis
in equal installments 10 days prior to the last day of each calendar quarter.

 

STOCK. During the term
of the Independent Director’s service as a director or member of any committee of the Board, the Independent Director shall
be granted an option to purchase sixty thousand shares (60,000) shares of common stock of the Company on the date of execution
of this Agreement, with an exercise price equal to $2.37 per share. This Option shall become exercisable on a quarterly basis in
twelve (12) equal installments on the last day of each calendar quarter. The installments shall be cumulative (i.e., this option
may be exercised, as to any or all shares covered by an installment, at any time or times after an installment becomes exercisable
and until expiration or termination of this Option). Any such stock grant shall be in accordance with the Company’s securities
and incentive plan. The Independent Director’s rights in respect to any grant shall be determined solely by the Compensation
Committee of the Company and are subject to execution by Independent Director of the Non-Statutory Stock Option Agreement as established
and requested by the Company pursuant to the Company’s securities and incentive plan.

 

EXPENSES. During the
term of the Independent Director’s service as a director of the Company, the Company shall promptly reimburse the Independent
Director for all expenses approved by the Company in advance and incurred by her in connection with attending (a) all meetings
of the Board or applicable committees thereof, (b) executive sessions of the independent directors, and (c) stockholder meetings,
as a director or a member of any committee of the Board, which are approved by the Company in advance. In addition, the Independent
Director shall rely on the Company to arrange for all hotel accommodations in connection with any such meetings the Independent
Director must attend. The amount of such expenses eligible for reimbursement by the Company during a calendar year shall not affect
such expenses eligible for reimbursement by the Company in any other calendar year, and the reimbursement of any such eligible
expenses shall be made promptly, usually within 10 business days, after the expense report and original receipts are submitted.

 

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NO OTHER BENEFITS OR
COMPENSATION. The Independent Director acknowledges and agrees that she is not granted and is not entitled to any other benefits
or compensation from the Company for the services provided under this Agreement except expressly provided for in this Schedule
A or as determined from time to time by the Company in its sole discretion.

 

 

	 	 
	AGREED	AGREED
	 	 
	China HGS Real Estate Inc.	Independent Director
	 	 
	 	 
	 	 
	/s/Xiaojun Zhu______________________	/s/Christy Y. Shue_________________
	Name:  Xiaojun Zhu	Name:  Christy Y. Shue
	Title:   Chairman and CEO	 
	 	 

 

 

    	11EXHIBIT
4.1

 

RIGHTS AGReeMENT

 

THIS AGREEMENT (the “Agreement”)
dated as of August 22, 2012, is by and between Wits Basin Precious Minerals Inc., a Minnesota corporation (the “Company”),
and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company, as Rights Agent (the “Rights
Agent”).

 

WITNESSETH

 

WHEREAS, the Board of Directors of
the Company (the “Board of Directors”) authorized and declared a dividend of one preferred stock purchase right
(a “Right”) for each share of Common Stock (as hereinafter defined) outstanding at the close of business on
August 22, 2012 (the “Record Date”) and has authorized the issuance, upon the terms and subject to the conditions
hereinafter set forth, of one Right in respect of each share of Common Stock issued after the Record Date, each Right representing
the right to purchase, upon the terms and subject to the conditions hereinafter set forth, one ten-thousandth of a share of Preferred
Stock (as hereinafter defined);

 

NOW, THEREFORE, the parties hereto
agree as follows:

 

SECTION
1.        Definitions. The following terms, as used herein, have
the following meanings:

 

“Acquiring Person” means
any Person who or which, together with all Affiliates and Associates of such Person, is the Beneficial Owner of 10% or more of
the shares of Common Stock then outstanding, but shall not include:

 

(a)          Exempt
Persons; or

 

(b)          any
Person who or which, together with all Affiliates and Associates of such Person, is the Beneficial Owner of 10% or more of the
shares of Common Stock outstanding as of the date hereof (an “Existing Holder”), unless and until such time
as such Existing Holder becomes the Beneficial Owner of any additional shares of Common Stock of the Company (other than pursuant
to a dividend or distribution paid or made by the Company on the outstanding shares of Common Stock in shares of Common Stock or
pursuant to a split or subdivision of the outstanding shares of Common Stock) that would cause such Existing Holder’s percentage
ownership of shares of Common Stock outstanding to exceed by any amount such Existing Holder’s percentage ownership (rounded
up to the next whole percentage point) as of the date of this Agreement, in which case such Existing Holder will become an Acquiring
Person.

 

    	 

    	 

    

 

Notwithstanding the foregoing, no Person shall become an Acquiring
Person:

 

(i)          as
the result of an acquisition of Common Stock by the Company that, by reducing the number of shares of Common Stock outstanding,
increases the proportionate number of shares of Common Stock beneficially owned by such Person to 10% or more of the Common Stock
then outstanding; provided, however, that, if a Person becomes the Beneficial Owner of 10% or more of the Common Stock then outstanding
by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of
any additional shares of Common Stock, then such Person shall be deemed to be an Acquiring Person; or

 

(ii)         if
the Board of Directors expressly determines in good faith that such Person who would otherwise be an Acquiring Person has become
such inadvertently and such Person divests as promptly as practicable a sufficient number of shares of Common Stock so that such
Person would no longer be an Acquiring Person, then such Person shall not be deemed to be an Acquiring Person for any purposes
of this Agreement. For the avoidance of doubt, if any Person may avoid being an Acquiring Person by divesting shares of Common
Stock as described in this clause (ii), then such Person shall not be considered to become an Acquiring Person until the date that
the Board of Directors determines in good faith that such divestiture has not occurred as promptly as practicable.

 

“Affiliate” and “Associate”
have the respective meanings ascribed to such terms in Rule 12b-2 under the Exchange Act as in effect on the date hereof.

 

A Person shall be deemed the “Beneficial
Owner” of, and shall be deemed to have “Beneficial Ownership” of and to “beneficially own”,
any securities that:

 

(a)         such
Person or any of its Affiliates or Associates, directly or indirectly, beneficially owns (as determined pursuant to Rule 13d-3
under the Exchange Act as in effect on the date hereof);

 

(b)        such
Person or any of its Affiliates or Associates, directly or indirectly, has

 

(i)          the
right to acquire (whether such right is exercisable immediately or only upon the occurrence of certain events or the passage of
time or both) 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, warrants, options or otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, (A) securities tendered pursuant to a tender or exchange offer made by 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, (B)
securities that such Person has a right to acquire upon the exercise of Rights at any time prior to the time that any Person becomes
an Acquiring Person, (C) securities issuable upon the exercise of Rights from and after the time that any Person becomes an Acquiring
Person if such Rights were acquired by such Person or any of such Person’s Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) or Section 22 hereof (“Original Rights”) or pursuant to Section 11(a)(i) or
Section 11(p) with respect to an adjustment to Original Rights or (D) Common Stock issuable upon the exercise of options to purchase
Common Stock, if such options are issued pursuant to an employment or consulting agreement, arrangement or understanding or an
employee benefit plan of the Company or any Subsidiary of the Company and have an exercise price per share of Common Stock that
is greater than the closing price of the Common Stock as determined pursuant to Section 11(d)(i) on any Trading Day, until such
options are exercised in exchange for Common Stock, in which event the holder will be deemed to have beneficial ownership of such
Common Stock; or

 

    	2

    	 

    

 

(ii)         the
right to vote (whether such right is exercisable immediately or only upon the occurrence of certain events or the passage of time
or both) pursuant to any agreement, arrangement or understanding; provided that a Person shall not be deemed the “Beneficial
Owner” of or to “beneficially own” any security under this clause (ii) as a result of an agreement, arrangement
or understanding to vote such security if such agreement, arrangement or understanding (A) arises solely from a revocable proxy
or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (B) is not also then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report);

 

(c)          are
beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) and with respect to which
such Person or any of its Affiliates or Associates has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy or consent as described in clause (b)(ii) immediately above)
or disposing of any such securities;

 

(d)          are
in respect of any Synthetic Long Positions held by such Person or such Person’s Affiliates or Associates, which Synthetic
Long Positions are disclosed or required to be disclosed pursuant to a Schedule 13D under the Exchange Act; or

 

(e)          are
in respect of any Synthetic Long Positions held by such Person or such Person’s Affiliates or Associates, if such Synthetic
Long Positions are not disclosed pursuant to a Schedule 13D under the Exchange Act, if and only if the Board determines that such
Person shall be deemed to be the Beneficial Owner of, and to beneficially own, the Common Stock in respect of such Synthetic Long
Positions.

 

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

 

“Articles of Incorporation”
means the Amended and Restated Articles of Incorporation of the Company, as amended.

 

“Close of business” on
any given date means 5:00 P.M., Minnesota time, on such date; provided that if such date is not a Business Day “close of
business” means 5:00 P.M., Minnesota time, on the next succeeding Business Day.

 

    	3

    	 

    

 

“Common Stock” means
the Common Stock, par value $0.01 per share, of the Company, unless used with reference to another Person in which case, “Common
Stock” means (i) the capital stock of such Person with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person or (ii) if such Person is the subsidiary of another Person,
the capital stock with the greatest voting power or the equity securities or other equity interest having power to control or direct
the management, of the Person with ultimate control over such first Person.

 

“Distribution Date” means
the earlier of (a) the close of business on the tenth day after the Stock Acquisition Date and (b) the close of business on the
tenth Business Day (or such later day as may be designated prior to the occurrence of a Section 11(a)(ii) Event by action of the
Board of Directors) after the date of the commencement of, or first public announcement of the intent of any Person to commence,
a tender or exchange offer the consummation of which would result in such Person becoming an Acquiring Person, unless the tenth
day or tenth Business Day, as the case may be, referred to in clauses (a) and (b) above occurs after the date of public announcement
of this Agreement and before the Record Date, in which event the Distribution Date shall be the close of business on the tenth
day after the Record Date.

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended, unless otherwise specified.

 

“Exempt Person” shall
mean the Company or any Subsidiary of the Company, in each case including, without limitation, in its fiduciary capacity, or any
employee benefit plan of the Company or of any Subsidiary of the Company, or any Person holding Common Stock for or pursuant to
the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the
Company or of any Subsidiary of the Company.

 

“Expiration Date” means
the earlier of (a) the Final Expiration Date and (b) the time at which all Rights are redeemed as provided in Section 23 or exchanged
as provided in Section 24.

 

“Final Expiration Date”
means the close of business on August 21, 2022.

 

“Person” means an individual,
corporation, partnership, association, trust or any other entity or organization and shall include any successor (by merger or
otherwise) of such entity or organization.

 

“Preferred Stock” means
the Series A Junior Participating Preferred Stock, no par value per share, of the Company having the terms set forth in the form
of certificate of designation attached hereto as Exhibit A.

 

“Purchase Price” means
the price (subject to adjustment as provided herein) at which a holder of a Right may purchase one ten-thousandth of a share of
Preferred Stock (subject to adjustment as provided herein) upon exercise of a Right, which price shall initially be $1.00.

 

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

 

“Securities Act” means
the Securities Act of 1933, as amended, unless otherwise specified.

 

    	4

    	 

    

 

“Stock Acquisition Date”
means the date of the first public announcement (including the filing of a report pursuant to Section 13(d) of the Exchange Act),
by the Company or an Acquiring Person that an Acquiring Person has become such.

 

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

 

“Synthetic Long Position”
shall mean any option, warrant, convertible security, stock appreciation right or other contractual right or derivative, whether
or not presently exercisable, that has an exercise or conversion privilege or a settlement payment or mechanism at a price related
to Common Stock or a value determined in whole or part with reference to, or derived in whole or in part from, the market price
or value of Common Stock (without regard to whether (a) such right or derivative conveys any voting rights in such Common Stock
to such Person, (b) such right or derivative is subject to settlement in whole or in part in Common Stock or (c) such Person may
have entered into other transactions that hedge the economic effect of such right or derivative) and that increases in value as
the value of Common Stock increases or that provides to the holder of such right an opportunity, directly or indirectly, to profit
or share in any profit derived from any increase in the value of Common Stock, but shall not include:

 

(i)          rights
of a pledgee under a bona fide pledge of Common Stock;

 

(ii)         rights
of all holders of Common Stock to receive Common Stock pro rata, or obligations to dispose of Common Stock, as a result of a merger,
exchange offer or consolidation involving the Company;

 

(iii)        rights
or obligations to surrender Common Stock, or have Common Stock withheld, upon the receipt or exercise of a derivative security
or the receipt or vesting of equity securities, in order to satisfy the exercise price or the tax withholding consequences of receipt,
exercise or vesting;

 

(iv)        interests
in broad-based index options, broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading
by the appropriate federal governmental authority;

 

(v)         interests
or rights to participate in employee benefit plans of the Company held by employees or former employees of the Company; or

 

(vi)        options
granted to an underwriter in a registered public offering for the purpose of satisfying over-allotments in such offering.

 

The shares of Common Stock in respect of
which a Person has a Synthetic Long Position shall be the notional or other number of shares of Common Stock specified in a filing
by such Person or any of such Person’s Affiliates or Associates with the Securities and Exchange Commission in respect of
which shares of Common Stock are the “subject security” or in the documentation evidencing the Synthetic Long Position
as being subject to be acquired upon the exercise or settlement of the applicable right or derivative or as the basis upon which
the value or settlement amount of such right or derivative, or the opportunity of the holder of such right or derivative to profit
or share in any profit, is to be calculated in whole or in part or, if no such number of shares of Common Stock is specified in
any filing or documentation, as determined by the Board in good faith to be the number of shares of Common Stock to which the Synthetic
Long Position relates.

 

    	5

    	 

    

 

“Trading Day” means with
respect to the Common Stock or any other security a day on which the principal national securities exchange on which the shares
of Common Stock or such security are listed or admitted to trading is open for the transaction of business or, if the shares of
Common Stock or such security are not listed or admitted to trading on any national securities exchange, a Business Day.

 

“Triggering Event” means
any Section 11(a)(ii) Event or any Section 13 Event.

 

Each term listed below is defined in the
corresponding Section of this Agreement:

 

	Term	Section
	Adjustment Shares	11(a)(ii)
	Agreement	Preamble
	Board of Directors	Recital
	common stock equivalents	11(a)(iii)(B)
	Company	Preamble
	current market price	11(d)(i)(B)
	equivalent preferred stock	11(b)
	Exchange Ratio	24(a)
	Existing Holder	Definition of “Acquiring Person”
	Original Rights	Definition of “Beneficial Owner”
	Principal Party	13(b)
	Redemption Price	23(a)
	Right	Recital
	Rights Agent	Preamble
	Right Certificates	4(a)
	Record Date	Recital
	Section 11(a)(ii) Event	11(a)(ii)
	Substitution Period	11(a)(iii)(c)

 

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 in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-rights agents as it may
deem necessary or desirable. If the Company appoints one or more co-rights agents, the respective duties of the Rights Agent and
any co-rights agents shall be as the Company shall determine.

 

    	6

    	 

    

 

SECTION
3.         Issuance of Right Certificates.

 

(a)          Prior
to the Distribution Date, (i) the Rights will be evidenced (unless earlier expired, redeemed or terminated) by the certificates
for the Common Stock (or, in the case of uncertificated shares of Common Stock, by the book-entry account that evidences record
ownership of such shares) and not by separate Right Certificates and the registered holders of the Common Stock shall be deemed
to be the registered holders of the associated Rights, and (ii) the Rights will be transferable only in connection with the transfer
of the underlying Shares of Common Stock.

 

(b)          As
soon as practicable after the Company has notified the Rights Agent of the occurrence of the Distribution Date, the Rights Agent
will send, by first-class, insured, postage prepaid mail, to each record holder of the Common Stock as of the close of business
on the Distribution Date, at the address of such holder shown on the records of the Company, one or more Right Certificates evidencing
one Right (subject to adjustment as provided herein) for each share of Common Stock so held (or if the Common Stock is uncertificated,
by appropriate changes to the book-entry account that evidences record ownership of such Common Stock). If an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section 11(p), the Company shall, at the time of distribution
of the Right Certificates, make the necessary and appropriate rounding adjustments (in accordance with Section 14(a)) so that Right
Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. From
and after the Distribution Date, the Rights will be evidenced solely by such Right Certificates.

 

(c)          Rights
shall be issued in respect of all shares of Common Stock outstanding as of the Record Date or issued after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date. In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date and prior to the Expiration Date, the Company (i) shall, with respect to
shares of Common Stock so issued or sold (x) pursuant to the exercise of stock options or under any employee plan or arrangement
or (y) upon the exercise, conversion or exchange of other securities issued by the Company prior to the Distribution Date and (ii)
may, in any other case, if deemed necessary or appropriate by the Board of Directors, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided that no such Right Certificate shall be issued
if, and to the extent that, (i) the Company shall be advised by counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such Right Certificate would be issued or (ii) appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.

 

(d)          Certificates
for the Common Stock issued after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the following legend:

 

    	7

    	 

    

 

This certificate also evidences certain Rights as set
forth in a Rights Agreement between Wits Basin Precious Minerals Inc. and American Stock Transfer & Trust Company, LLC dated
as of August 22, 2012 (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 the Company. The Company will mail to the holder of this certificate
a copy of the Rights Agreement without charge promptly after receipt of a written request therefore. Under certain circumstances,
as set forth in the Rights Agreement, such Rights may be evidenced by separate certificates and no longer be evidenced by this
certificate, may be redeemed or exchanged or may expire. As set forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or an 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 be null and void.

 

The Company will furnish any shareholder upon request
and without charge, a copy of the articles of incorporation and a full statement of the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be issued, so far as they have been determined, and the
authority of the Company’s Board of Directors to determine the relative rights and preferences of subsequent classes or series.

 

SECTION
4.         Form of Right Certificates.

 

(a)          The
certificates evidencing the Rights (and the forms of assignment, election to purchase and certificates to be printed on the reverse
thereof) (the “Right Certificates”) 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, rule
or regulation or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform
to usage. The Right Certificates, whenever distributed, shall be dated as of the Record Date.

 

(b)          Any
Right Certificate representing Rights beneficially owned by any Person referred to in Section 7(d)(i), 7(d)(ii) or 7(d)(iii) shall
(to the extent feasible) contain the following legend:

 

The Rights represented by this Right 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). This Right Certificate and the Rights represented hereby may be or may become
null and void in the circumstances specified in Section 7(d) of such Agreement.

 

    	8

    	 

    

 

SECTION
5.         Countersignature and Registration.

 

(a)          The
Right Certificates shall be executed on behalf of the Company by its President and Chief Executive Officer, Chief Financial Officer
and Chief Operating Officer, either manually or by facsimile signature, and shall have affixed thereto the Company’s seal
or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be, either manually or by facsimile, countersigned by the Rights Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of the Company whose manual or facsimile signature is
affixed to the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates may, nevertheless, be countersigned by the Rights Agent and issued
and delivered with the same force and effect as though the Person who signed such Right Certificates had not ceased to be such
officer of the Company. Any Right Certificate may be signed on behalf of the Company by any Person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date
of the execution of this 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 principal office or offices designated as the place
for surrender of Right Certificates upon exercise, transfer or exchange, books for registration and transfer of the Right Certificates.
Such books shall show with respect to each Right Certificate the name and address of the registered holder thereof, the number
of Rights indicated on the certificate and the certificate number.

 

SECTION
6.          Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates.

 

(a)          At
any time after the Distribution Date and prior to the Expiration Date, any Right Certificate or Certificates may, upon the terms
and subject to the conditions set forth below in this Section 6(a), be transferred or exchanged for another Right Certificate or
Certificates evidencing a like number of Rights as the Right Certificate or Certificates surrendered. Any registered holder desiring
to transfer or exchange any Right Certificate or Certificates shall surrender such Right Certificate or Certificates (with, in
the case of a transfer, the form of assignment and certificate on the reverse side thereof duly executed) to the Rights Agent at
the principal office or offices 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 Right Certificate or Certificates
until the registered holder of the Rights has complied with the requirements of Section 7(e). Upon satisfaction of the foregoing
requirements, the Rights Agent shall, subject to Sections 4(b), 7(d), 14 and 24, countersign and deliver to the Person entitled
thereto a Right Certificate or Certificates as so requested. The Company may require payment of a sum sufficient to cover any transfer
tax or other governmental charge that may be imposed in connection with any transfer or exchange of any Right Certificate or Certificates.

 

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

 

    	9

    	 

    

 

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

 

(a)          The
registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein, including
Sections 7(d), 7(e), 9(c), 11(a) and 24) in whole or in part at any time after the Distribution Date and prior to the Expiration
Date upon surrender of the Right Certificate, with the form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together
with payment (in lawful money of the United States of America by certified check or bank draft payable to the order of the Company)
of the aggregate Purchase Price with respect to the Rights then to be exercised and an amount equal to any applicable transfer
tax or other governmental charge.

 

(b)          Upon
satisfaction of the requirements of Section 7(a) and subject to Section 20(k), the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Stock (or make available, if the Rights Agent is the transfer agent therefor)
certificates for the total number of one ten-thousandths of a share of Preferred Stock to be purchased (and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests) or (B) if the Company shall have elected to deposit
the shares of Preferred Stock issuable upon exercise of the Rights with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one ten-thousandths of a share of Preferred Stock as are to be purchased (in which
case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company will direct the depositary agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of issuance of fractional shares in accordance with Section 14 and (iii) after receipt
of such certificates or depositary receipts and cash, if any, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate (with such certificates or receipts registered in such name or names as may be designated by such
holder). If the Company is obligated to deliver Common Stock, other securities or assets pursuant to this Agreement, the Company
will make all arrangements necessary so that such other securities and assets are available for delivery by the Rights Agent, if
and when appropriate.

 

(c)          If
the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing the number of Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of,
the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder, subject
to the provisions of Section 14.

 

    	10

    	 

    

 

(d)          Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any Associate or Affiliate of an Acquiring Person) who becomes a transferee after the Acquiring Person becomes such or (iii)
a transferee of an Acquiring Person (or of any Associate or Affiliate of an Acquiring Person) 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 (or any Associate or Affiliate of an Acquiring Person) to holders of equity interests
in such Acquiring Person (or in any such Associate or Affiliate) or to any Person with whom such Acquiring Person (or any such
Associate or Affiliate) has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer
that the Board of Directors determines is part of a plan, arrangement or understanding that has as a primary purpose or effect
the avoidance of this Section 7(d), shall become null and void without any further action, and no holder of such Rights shall have
any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to insure that the provisions of this Section 7(d) and Section 4(b) are complied with, but shall have
no liability to any holder of Right Certificates or other Person as a result of its failure to make any determinations with respect
to an Acquiring Person or its Affiliates and Associates or any transferee of any of them hereunder.

 

(e)          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 of Rights upon the occurrence of any purported transfer pursuant to Section 6 or exercise pursuant
to this Section 7 unless such registered holder (i) shall have completed and signed the certificate contained in the form of assignment
or election to purchase, as the case may be, set forth on the reverse side of the Right Certificate surrendered for such transfer
or exercise, as the case may be, (ii) shall not have indicated an affirmative response to clause 1 or 2 thereof and (iii) 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.

 

SECTION
8.        Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for exercise, transfer 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 cancelled
by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation, and the Rights Agent shall cancel, any other Right Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the
Company, or shall, at the written request of the Company, destroy such cancelled Right Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.

 

SECTION
9.         Reservation and Availability of Capital Stock.

 

(a)          The
Company covenants and agrees that it will cause to be reserved and kept available a number of shares of Preferred Stock that are
authorized but not outstanding or otherwise reserved for issuance sufficient to permit the exercise in full of all outstanding
Rights as provided in this Agreement.

 

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

 

    	11

    	 

    

 

(c)          The
Company shall use its best efforts (i) to file, as soon as practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii), 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 issuable upon exercise of the Rights, (ii) to cause such registration
statement to become effective as soon as practicable after such filing and (iii) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of (A) the date as
of which the Rights are no longer exercisable for such securities and (B) the Expiration Date. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the securities or blue sky laws of the various states in connection
with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed 120 days after the
date set forth in Section 9(c)(i), the exercisability of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect.
Notwithstanding any such provision of this Agreement to the contrary, the Rights shall not be exercisable for securities in any
jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, such exercise therefore shall not
be permitted under applicable law or a registration statement in respect of such securities shall not have been declared effective.

 

(d)          The
Company covenants and agrees that it will take all such action as may be necessary to insure that all shares of Preferred Stock
issuable upon the exercise of Rights shall, at the time of delivery of the certificates for such securities (subject to payment
of the Purchase 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 other
governmental charges that may be payable in respect of the issuance or delivery of the Right Certificates and of any certificates
for Preferred Stock upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax or other governmental
charge that may be payable in respect of any transfer involved in the issuance or delivery of any Right Certificates or of any
certificates for Preferred Stock to a Person other than the registered holder of the applicable Right Certificate, and prior to
any such transfer, issuance or delivery, any such tax or other governmental charge shall have been paid by the holder of such Right
Certificate or it shall have been established to the Company’s satisfaction that no such tax or other governmental charge
is due.

 

    	12

    	 

    

 

SECTION
10.         Preferred Stock Record Date. Each Person (other than the
Company) in whose name any certificate for Preferred Stock (or Common Stock or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of such Preferred Stock (or Common
Stock or other securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any transfer taxes or
other governmental charges) was made; provided that if the date of such surrender and payment is a date upon which the transfer
books of the Company relating to the Preferred Stock (or Common Stock or other securities, as the case may be) are closed, such
Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the applicable transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to any rights of a shareholder of the Company with respect to shares for
which the Rights shall be exercisable, including the right to vote, to receive dividends or other distributions or to exercise
any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company except as provided herein.

 

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

 

(a)          (i)
If the Company shall at any time after the date of this Agreement (A) pay a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock into a greater number of shares, (C) combine the outstanding Preferred
Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or merger involving the Company), the Purchase Price in
effect immediately prior to the record date for such dividend or the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of Preferred Stock or other capital stock issuable on such date shall be proportionately adjusted
so that each holder of a Right shall (except as otherwise provided herein, including Section 7(d)) thereafter be entitled to receive,
upon exercise thereof at the Purchase Price in effect immediately prior to such date, the aggregate number and kind of shares of
Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date
and at a time when the applicable transfer books of the Company were open, such holder would have been entitled to receive upon
such exercise and by virtue of such dividend, subdivision, combination or reclassification. If an event occurs that requires an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).

 

(ii) At any time after the date
of this Agreement, upon any Person, alone or together with its Affiliates and Associates, becoming an Acquiring Person (a “Section
11(a)(ii) Event”), subject to Section 24 hereof, proper provision shall promptly be made so that each holder of a Right
shall (except as otherwise provided herein, including Section 7(d)) thereafter be entitled to receive, upon exercise thereof at
the Purchase Price in effect immediately prior to the first occurrence of a Section 11(a)(ii) Event, such number of duly authorized,
validly issued, fully paid and nonassessable shares of Preferred Stock of the Company (such shares being referred to herein as
the “Adjustment Shares”) as shall be equal to the result obtained by dividing

 

    	13

    	 

    

 

(x) the product obtained by multiplying
the Purchase Price in effect immediately prior to the first occurrence of a Section 11(a)(ii) Event by the number (which shall
initially be one (1)) of one ten-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior
to such first occurrence (such product being thereafter referred to as the “Purchase Price” for each Right and
for all purposes of this Agreement) by

 

(y) 50% of the current market price
(determined pursuant to Section 11(d)(i)) per share of Common Stock on the date of such first occurrence;

 

provided that if the transaction that would otherwise give rise
to the foregoing adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 shall apply
and no adjustment shall be made pursuant to this Section 11(a)(ii).

 

(iii) If the number of shares
of Preferred Stock that are authorized by the Company’s Articles of Incorporation but not outstanding or reserved for issuance
other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with Section
11(a)(ii), the Company shall, with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon
payment of the Purchase Price then in effect, (A) (to the extent available) Preferred Stock and then, (B) (to the extent available,
equivalent preferred stock (as defined in Section 11(b)), and then (C) (to the extent available) Common Stock, (D) (to the extent
available) other equity securities of the Company that are essentially equivalent to shares of Common Stock in respect to dividend,
liquidation and voting rights (such securities being referred to herein as “common stock equivalents”) and then,
if necessary, (E) other equity or debt securities of the Company, cash or other assets, a reduction in the Purchase Price or any
combination of the foregoing, having an aggregate value (determined by the Board of Directors based upon the advice of a nationally
recognized investment banking firm) equal to the value of the Adjustment Shares; provided that (x) the Company may, and (y) if
the Company shall not have made adequate provision as required above to deliver value within 30 days following the first occurrence
of a Section 11(a)(ii) Event (the “Substitution Period”), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the Purchase Price, (1) (to the extent available) Preferred
Stock, and then (2) (to the extent available) equivalent preferred stock, and then (c) (to the extent available) Common Stock,
and then (4) (to the extent available) common stock equivalents and then, if necessary, (5) other equity or debt securities of
the Company, cash or other assets or any combination of the foregoing, having an aggregate value (determined by the Board of Directors
based upon the advice of a nationally recognized investment banking firm) equal to the excess of the value of the Adjustment Shares
over the Purchase Price. To the extent that the Company determines that some action is to be taken pursuant to the preceding sentence,
the Company (X) shall provide, subject to Section 7(d), 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 decide the appropriate
form and value of any consideration to be delivered as referred to in the preceding sentence. If any such suspension occurs, 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 one ten-thousandth of a share of Preferred Stock and the value of the Common Stock shall be the current market price per share
of Common Stock (as determined pursuant to Section 11(d)) on the date of the first occurrence of a Section 11(a)(ii) Event; any
common stock equivalent shall be deemed to have the same value as the Common Stock on such date; and the value of other securities
or assets shall be determined pursuant to Section 11(d)(iii).

 

    	14

    	 

    

 

(b)          If
the Company fixes a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or securities
having the same rights, privileges and preferences as the shares of Preferred Stock (“equivalent preferred stock”))
or securities convertible into or exercisable for Preferred Stock (or equivalent preferred stock) at a price per share of Preferred
Stock (or equivalent preferred stock) (in each case, taking account of any conversion or exercise price) less than the current
market price (as determined pursuant to Section 11(d)) per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such date
by a fraction, the numerator of which shall be the sum of the number of shares of Preferred Stock outstanding on such record date,
plus the number of shares of Preferred Stock which the aggregate price (taking account of any conversion or exercise price) of
the total number of shares of Preferred Stock (and any equivalent preferred stock) so to be offered would purchase at such current
market price and the denominator of which shall be the sum of the number of shares of Preferred Stock outstanding on such record
date plus the number of additional shares of Preferred Stock (and any equivalent preferred stock) so to be offered. If such subscription
price may be paid by delivery of consideration part or all of which shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. Shares of Preferred Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such
a record date is fixed, and if such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price that would then be in effect if such record date had not been fixed.

 

    	15

    	 

    

 

(c)          If
the Company fixes a record date for the making of a distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger involving the Company) of evidences of indebtedness, equity securities other
than Preferred Stock, assets (other than a regular periodic cash dividend out of the earnings or retained earnings of the Company)
or rights, options or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator
of which shall be the current market price (as determined pursuant to Section 11(d)) per share of Preferred Stock on such record
date, less the value (as determined pursuant to Section 11(d)(iii)) of such evidences of indebtedness, equity securities, assets,
rights, options or warrants so to be distributed with respect to one share of Preferred Stock and the denominator of which shall
be such current market price per share of Preferred Stock. Such adjustment shall be made successively whenever such a record date
is fixed, and if such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price that would then
be in effect if such record date had not been fixed.

 

(d)          (i)
For the purpose of any computation hereunder other than computations made pursuant to Section 11(a)(iii) or 14, the “current
market price” per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share
of such Common Stock for the 30 consecutive Trading Days immediately prior to such date; for purposes of computations made pursuant
to Section 11(a)(iii), the “current market price” per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the ten consecutive Trading Days immediately following such date;
and for purposes of computations made pursuant to Section 14, the “current market price” per share of Common Stock
for any Trading Day shall be deemed to be the closing price per share of Common Stock for such Trading Day; provided that
if the “current market price” per share of the Common Stock is determined during a period following the announcement
by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock
or securities exercisable for or convertible into shares of such Common Stock (other than the Rights) or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or ten Trading Day period,
as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the “current market price” shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last sale price, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the Nasdaq Global Select Market or, if the shares
of Common Stock are not listed or admitted to trading on the Nasdaq Global Select Market, on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed
or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System (“NASDAQ”) or such other system then in use or, if on any such date the shares of Common Stock
are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market
maker making a market in the Common Stock selected by the Board of Directors. If on any such date no market maker is making a market
in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board of Directors (or, if at
the time of such determination there is an Acquiring Person, by a nationally recognized investment banking firm selected by the
Board of Directors), which determination shall be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.

 

    	16

    	 

    

 

(ii) For the purpose of any computation
hereunder, the “current market price” per share of Preferred Stock shall be determined in the same manner as set forth
above for the Common Stock in Section 11(d)(i) (other than the last sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in such manner, the “current market price” per share of Preferred Stock shall
be conclusively deemed to be an amount equal to 10,000 (as such number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Agreement) multiplied by
the current market price per share of Common Stock (as determined pursuant to Section 11(d)(i) (other than the last sentence thereof)).
If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, the “current market price”
per share of the Preferred Stock shall be determined in the same manner as set forth in the last sentence of Section 11(d)(i).
For all purposes of this Agreement, the “current market price” of one ten-thousandth of a share of Preferred Stock
shall be equal to the “current market price” of one share of Preferred Stock divided by 10,000.

 

(iii) For the purpose of any computation
hereunder, the value of any securities or assets other than Common Stock or Preferred Stock shall be the fair value as determined
in good faith by the Board of Directors, or, if at the time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board of Directors, which determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.

 

(e)          Anything
herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase Price; provided that any adjustments that by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share or
one-millionth of a share of Preferred Stock, as the case may be.

 

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

 

    	17

    	 

    

 

(g)          All
Rights originally issued by the Company subsequent to any adjustment made hereunder shall evidence the right to purchase, at the
Purchase Price then in effect, the then applicable number of one ten-thousandth of a share of Preferred Stock and other capital
stock of the Company issuable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided
herein.

 

(h)          Unless
the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Section 11(b) and 11(c), each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one ten-thousandths of a share
of Preferred Stock (calculated to the nearest one-millionth) obtained by (i) multiplying (x) the number of one ten-thousandths
of a share of Preferred Stock for which a Right was exercisable immediately prior to this adjustment by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.

 

(i)          The
Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one ten-thousandths of a share of Preferred Stock issuable 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 ten-thousandths of a share of Preferred
Stock for which such 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 ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued,
shall be at least ten days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed
to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14, the additional
Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights
to which such holders shall be entitled after such adjustment. Right Certificates 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 Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.

 

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

 

    	18

    	 

    

 

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

 

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

 

(m)          Anything
in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as and to the extent that it, in its sole discretion, shall
determine to be advisable in order that any consolidation or subdivision of the Preferred Stock, issuance wholly for cash of any
Preferred Stock at less than the current market price, issuance wholly for cash of Preferred Stock or securities that by their
terms are convertible into or exercisable for Preferred Stock, stock dividends or issuance of rights, options or warrants referred
to in this Section 11, hereafter made by the Company to the holders of its Preferred Stock, shall not be taxable to such shareholders.

 

(n)          The
Company covenants and agrees that it will not at any time after the Distribution Date (i) consolidate, merge or otherwise combine
with or (ii) sell or otherwise transfer (or permit any of its Subsidiaries to sell or otherwise transfer), in one transaction or
a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries, taken as a whole, to any other Person or Persons if (x) at the time of or immediately after such consolidation,
merger, combination or sale there are any rights, warrants or other instruments or securities outstanding or any agreements or
arrangements in effect that would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights
or (y) prior to, simultaneously with or immediately after such consolidation, merger, combination or sale, the shareholders of
a Person who constitutes, or would constitute, the “Principal Party” for the purposes of Section 13 shall have received
a distribution of Rights previously owned by such Person or any of its Affiliates and Associates.

 

    	19

    	 

    

 

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

 

(p)          Notwithstanding
anything in this Agreement to the contrary, if at any time after the date hereof and prior to the Distribution Date the Company
shall (i) pay a dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock into a larger number of shares or (iii) combine the outstanding Common Stock into a smaller number of shares, the
number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter as contemplated
by Section 3(c), shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common
Stock following any such event shall equal the result obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares
of Common Stock outstanding immediately following the occurrence of such event.

 

SECTION
12.         Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent
and with each transfer agent for the Preferred Stock and the Common Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate (or, if prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock) in the manner set forth in Section 26. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.

 

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

 

(a)          If,
after the occurrence of a Section 11(a)(ii) Event, directly or indirectly,

 

(x) the Company shall consolidate
with, merge into, or otherwise combine with, any other Person, and the Company shall not be the continuing or surviving corporation
of such consolidation, merger or combination;

 

(y) any Person shall merge into,
or otherwise combine with, the Company, and the Company shall be the continuing or surviving corporation of such merger or combination
and, in connection with such merger or combination, all or part of the outstanding shares of Common Stock shall be changed into
or exchanged for other stock or securities of the Company or any other Person, cash or any other property; or

 

    	20

    	 

    

 

(z) the Company or one or more of
its Subsidiaries shall sell or otherwise transfer, in one transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries, taken as a whole, to any other Person
or Persons (other than the Company or one or more wholly-owned Subsidiaries of the Company),

 

then, and in each such case, proper provision shall promptly
be made so that,

 

(i)          each
holder of a Right (except as otherwise provided herein, including pursuant to Section 7(d)) shall thereafter be entitled to receive,
upon exercise thereof at the Purchase Price in effect immediately before the first occurrence of any Triggering Event, such number
of duly authorized, validly issued, fully paid and nonassessable shares of freely tradable Common Stock of the Principal Party,
not subject to any rights of call or first refusal, liens, encumbrances or other claims, as shall be equal to the result obtained
by dividing:

 

(A) the product obtained by multiplying
the Purchase Price in effect immediately before the first occurrence of any Triggering Event by the number (which shall initially
be one (1)) of one ten-thousandths of a share of Preferred Stock for which a Right was exercisable immediately before the occurrence
of any Triggering Event (such product being thereafter referred to as the “Purchase Price” for each Right and
for all purposes of this Agreement), by

 

(B) 50% of the current market price
(determined pursuant to Section 11(d)(i)) per share of the Common Stock of such Principal Party on the date of consummation of
such consolidation, merger, combination, sale or transfer;

 

(ii)         the
Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, combination, sale or
transfer, all the obligations and duties of the Company pursuant to this Agreement;

 

(iii)        the
term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 shall apply only to such Principal Party following the first occurrence of a Section 13 Event; and

 

(iv)        such
Principal Party shall take such steps (including the authorization and reservation of a sufficient number of shares of its Common
Stock to permit exercise of all outstanding Rights in accordance with this Section 13(a)) in connection with the consummation of
any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the shares of its Common Stock thereafter deliverable upon the exercise of the Rights.

 

    	21

    	 

    

 

(b)          “Principal
Party” means,

 

(i)          in
the case of any transaction described in Sections 13(a)(x) or (y), (1) the Person that is the issuer of the securities into which
the shares of Common Stock are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer
of the shares of Common Stock of which have the greatest aggregate market value of shares outstanding, or (2) 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 Stock of which has 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 Section 13(a)(z), 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 each Person that is a party to such transaction
or transactions receives the same 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 Stock having the
greatest aggregate market value of shares outstanding; provided that in any such case, (A) if the Common Stock of such Person is
not at such time and has not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, “Principal
Party” shall refer to such other Person; (B) in case such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are and have been so registered, “Principal Party” shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value; or (C) if such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by
the same Person, the rules set forth in clauses (A) and (B) above shall apply to each of the owners having an interest in the venture
as if the Person owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in
each such case shall bear the obligations set forth in this Section 13 in the same ratio as its interest in such Person bears to
the total of such interests.

 

(c)          The
Company shall not consummate any such consolidation, merger, combination, sale or transfer unless the Principal Party shall have
a sufficient number of authorized shares of its Common Stock that are not outstanding or otherwise reserved for issuance to permit
the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in Sections 13(a)
and 13(b) and providing that, as soon as practicable after the date of any consolidation, merger, combination, sale or transfer
mentioned in Section 13(a), the Principal Party, at its own expense, shall:

 

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

 

    	22

    	 

    

 

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

 

The Company covenants and agrees that it
shall not enter into any transaction of the type described in clauses (x), (y) and (z) of Section 13(a) if at the time of or immediately
after such consolidation, merger, sale, transfer or other transaction there are any rights, warrants or other instruments or securities
outstanding or agreements in effect that would substantially diminish or otherwise eliminate the benefits intended to be afforded
by the Rights.

 

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

 

SECTION
14.       Fractional Rights and Fractional Shares.

 

(a)          The
Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(p),
or to distribute Right Certificates that evidence fractional Rights. In lieu of any such fractional Rights, the Company shall pay
to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable an
amount in cash equal to the same fraction of the current market price of a whole Right. For purposes of this Section 14(a), the
current market price of a whole Right shall be the closing price of a Right for the Trading Day immediately prior to the date on
which such fractional Rights would otherwise have been issuable. The closing price of a Right for any day shall be the last sale
price, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, in either case as reported
in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the Nasdaq
Global Select Market or, if the Rights are not listed or admitted to trading on the Nasdaq Global Select Market, on the principal
national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the
Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors. If on any such date no such market maker is making
a market in the Rights, the current market price of the Rights on such date shall be as determined in good faith by the Board of
Directors, or, if at the time of such determination there is an Acquiring Person, by a nationally recognized investment banking
firm selected by the Board of Directors), which determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.

 

    	23

    	 

    

 

(b)          The
Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions that are multiples of one ten-thousandths
of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates that evidence fractional shares of Preferred
Stock (other than fractions that are multiples of one ten-thousandth of a share of Preferred Stock). In lieu of any such fractional
shares of Preferred Stock, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current market price of one ten-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market price of one ten-thousandth of a share of Preferred Stock
shall be one ten-thousandth of the closing price of a share of Preferred Stock (as determined pursuant to Section 11(d)(ii)) for
the Trading Day immediately prior to the date of such exercise.

 

(c)          Following
the occurrence of any Triggering Event or upon any exchange pursuant to Section 24, the Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to distribute certificates that evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company shall pay to the registered holders of Right Certificates
at the time such Rights are exercised or exchanged as herein provided an amount in cash equal to the same fraction of the current
market price of a share of Common Stock. For purposes of this Section 14(c), the current market price of a share of Common Stock
shall be the closing price of a share of Common Stock (as determined pursuant to Section 11(d)(i)) for the Trading Day immediately
prior to the date of such exercise or exchange.

 

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

 

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

 

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

 

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

 

    	24

    	 

    

 

(b)          as
of and after the Distribution Date, the Right 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;

 

(c)          subject
to Sections 6 and 7, the Company and the Rights Agent may deem and treat the Person in whose name a Right Certificate (or, prior
to the Distribution Date, a certificate representing shares of Common Stock) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the certificate
representing shares of Common Stock made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of Section 7(d), shall be affected by any notice to the
contrary; and

 

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

 

SECTION
17.          Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the shares
of capital stock that may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 26), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof.

 

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 disbursements and other disbursements incurred in the
execution or administration 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 administration of this Agreement or the exercise or performance of its duties hereunder, including the costs and expenses
of defending against any claim of liability.

 

    	25

    	 

    

 

(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 the administration of this Agreement or the exercise or performance of its duties hereunder in reliance upon any
Right Certificate or certificate for Common Stock or for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, instruction, direction, consent, certificate, statement, or other paper
or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.

 

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 or stock transfer business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21. In case at the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

 

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

 

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 Right Certificates, by their acceptance thereof, shall be bound:

 

    	26

    	 

    

 

(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 the current market price of any security)
be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman, President and Chief Executive Officer and Chief Financial Officer of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken, suffered or omitted
in good faith by it under the provisions of this Agreement in reliance upon such certificate.

 

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

 

(e)          The
Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 7(d)) 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 adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation
of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Right Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when issued, be duly authorized, validly 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.

 

    	27

    	 

    

 

(g)          The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from
the Chairman, President and Chief Executive Officer, and Chief Financial Officer 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, suffered or omitted
to be taken by it in good faith in accordance with instructions of any such officer.

 

(h)          The
Rights Agent and any shareholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become 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 the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other
Person.

 

(i)          The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for any loss to the Company or to any holders of Rights resulting from any such
act, default, neglect or misconduct; provided that 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 repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

 

(k)          If,
with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the cases may be, has either not been completed or indicates an affirmative
response to clause 1 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.

 

    	28

    	 

    

 

SECTION
21.  Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days’ notice in writing to the Company pursuant to the requirements of Section 26
and to each transfer agent of the Common Stock and Preferred Stock by registered or certified mail, and, subsequent to the Distribution
Date, to the holders of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days’ notice in writing pursuant to the requirements of Section 26 and to each transfer agent of the Common
Stock and Preferred Stock by registered or certified mail, and, subsequent to the Distribution Date, to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall
be (a) a Person organized and doing business under the laws of the United States or of any state of the United States, in good
standing, having a principal office in the State of Minnesota, that is authorized under such laws to exercise stock transfer or
corporate trust powers and is subject to supervision or examination by federal or state authority and that has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $25,000,000 or (b) an Affiliate of such Person. 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. The predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and, subsequent to the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided
for in this Section 21, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

 

SECTION
22.  Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may
be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class
of shares of stock issuable upon exercise of the Rights made in accordance with the provisions of this Agreement.

 

SECTION
23.  Redemption.

 

(a)      At
any time before the occurrence of a Section 11(a)(ii) Event, the Board of Directors may, at its option, redeem all but not less
than all of the then outstanding Rights at a redemption price of $0.0001 per Right, as such amount may be appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the “Redemption Price”).

 

(b)      Immediately
upon the effectiveness of a redemption of Rights pursuant to Section 23(a) and without any further action and without any notice,
the right to exercise the Rights will terminate and thereafter the only right of the holders of Rights shall be to receive the
Redemption Price for each Right so held. The Company shall promptly thereafter give notice of such redemption to the Rights Agent
and the holders of the Rights in the manner set forth in Section 26; provided that the failure to give, or any defect in, such
notice shall not affect the validity of such redemption. Any notice that is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment
of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire, exchange
or purchase for value any Rights at any time in any manner other than that specifically set forth in Sections 23 or 24, and other
than in connection with the purchase, acquisition or redemption of shares of Common Stock prior to the Distribution Date.

 

    	29

    	 

    

 

SECTION
24.  Exchange.

 

(a)      At
any time on or after the occurrence of a Section 11(a)(ii) Event, the Board of Directors may, at its option, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to Section 7(d))
for shares of Preferred Stock at an exchange ratio of 0.00286 shares of Preferred Stock per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred
to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than an Exempt Person), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.

 

(b)      Immediately
upon the effectiveness of an exchange of any Rights pursuant to Section 24(a) and without any further action and without any notice,
the right to exercise such Rights will terminate and thereafter the only right of a holder of such Rights shall be to receive that
number of shares of Preferred Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly thereafter give notice of such exchange to the Rights Agent and the holders of the Rights to be exchanged
in the manner set forth in Section 26; provided that the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. Any notice that is mailed in the manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange will state the method by which the exchange of the shares of Preferred Stock for Rights
will be effected and, in the event of any partial exchange, the number of Rights that will be exchanged. Any partial exchange shall
be effected pro rata based on the number of Rights (other than Rights that have become void pursuant to Section 7(d)) held by each
holder of Rights.

 

(c)      In
any exchange pursuant to this Section 24, the Company, at its option, may substitute equivalent preferred stock (as defined in
Section 11(b)) for shares of Preferred Stock exchangeable for Rights, at the initial rate of one share of equivalent preferred
stock for each share of Preferred Stock, as appropriately adjusted to reflect adjustments in dividend, liquidation and voting rights
of equivalent preferred stock pursuant to the terms thereof, so that each share of equivalent preferred stock delivered in lieu
of each share of Preferred Stock shall have essentially the same dividend, liquidation and voting rights as one share of Preferred
Stock.

 

    	30

    	 

    

 

SECTION
25.  Notice of Proposed Actions.

 

(a)      If
the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular quarterly
cash dividend out of earnings or retained earnings of the Company), (ii) to offer to the holders of its Preferred Stock rights
or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision or combination of outstanding shares of Preferred Stock), (iv) to effect any consolidation or merger with
any other Person, or to effect or to permit one or more of its Subsidiaries to effect any sale or other transfer, in one transaction
or a series of related transactions, of assets or earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries, taken as a whole, to any other Person or Persons or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to each holder of a Right, to the extent feasible and
in accordance with Section 26, a notice of such proposed action, which shall specify the record date for the purposes of any such
dividend, distribution or offering of rights or warrants, or the date on which any such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up is to take place and the date of participation therein by the holders of
Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by Section
25(a)(i) or 25(a)(ii) above at least 20 days prior to the record date for determining holders of the Preferred Stock entitled to
participate in such dividend, distribution or offering, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein by the holders of Preferred Stock, whichever shall
be the earlier. The failure to give notice required by this section or any defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any such action.

 

(b)      Notwithstanding
anything in this Agreement to the contrary, prior to the Distribution Date, a public filing by the Company with the Securities
and Exchange Commission shall constitute sufficient notice to the holders of securities of the Company, including the Rights, for
purposes of this Agreement, and no other notice need be given to such holders.

 

(c)       If
a Triggering Event shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give to each holder
of a Right, in accordance with Section 26, a notice of the occurrence of such event, which shall specify the event and the consequences
of the event to holders of Rights under Sections 11(a)(ii) or 13, as the case may be, and (ii) all references in Section 25(a)
to Preferred Stock shall be deemed thereafter to refer to Common Stock or other capital stock, as the case may be.

 

SECTION
26.  Notices. Any notice, request, instruction or other communication under this Agreement shall be in
writing and delivered by hand, first-class mail (postage prepaid), overnight courier service or facsimile:

 

    	31

    	 

    

 

if to the Company to

 

Wits Basin Precious Minerals Inc.

80 South Eighth Street, Suite 900

Minneapolis, Minnesota 55402

 

Attention: Secretary

Facsimile: (612) 395-5276

 

if to the Rights Agent, to:

 

American Stock Transfer & Trust
Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

Facsimile: ______________

 

or such other person, address or facsimile number as such party
may hereafter specify for the purpose by notice to the other parties hereto. Each such communication shall be effective (a) if
delivered by hand, when such delivery is made at the address specified in this Section 26, (b) if delivered by overnight courier
service, the next Business Day after such communication is sent to the address specified in this Section 26, (c) if delivered by
first-class mail (postage prepaid), five days following the date on which such communication is sent to the address specified in
this Section 26 or (d) if delivered by facsimile, when such facsimile is transmitted to the facsimile number specified in this
Section 26 and confirmation of the receipt thereof is received. Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right Certificate (or, prior to the Distribution Date, to the holder
of any certificate representing shares of Common Stock) shall be sufficiently given or made if sent by first-class mail (postage
prepaid) to the address of such holder shown on the registry books of the Company.

 

SECTION
27.  Supplements and Amendments. For so long as the Rights are redeemable, the Company may, and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of this Agreement in any respect without the approval
of any holders of shares of Common Stock. At any time when the Rights are no longer redeemable, the Company may, and the Rights
Agent shall if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights; provided
that no such supplement or amendment may (a) adversely affect the interests of the holders of Rights as such (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person), (b) cause this Agreement again to become amendable other than in accordance
with this sentence or (c) cause the Rights again to become redeemable. 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.

 

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.

 

    	32

    	 

    

 

SECTION
29.   Determinations and Actions by the Board of Directors, etc. The Board of Directors shall have the
exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board
of Directors or to the Company, or as may be necessary or advisable in the administration of this Agreement, including the right
and power to (a) interpret the provisions of this Agreement and (b) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or exchange or not to redeem or exchange 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) that are done or made by the Board of Directors in good faith shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties and (y) not subject
the Board of Directors to any liability to the holders of the Common Stock or 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 Right Certificates (and, prior to the Distribution Date, the
Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).

 

SECTION
31.  Severability. If any term, provision, covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

SECTION
32.  Governing Law. This Agreement, each Right and each Right Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of New York 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 one and the same instrument.

 

SECTION
34.  Descriptive Headings. The captions herein are included for convenience of reference only, do not constitute
a part of this Agreement and shall be ignored in the construction and interpretation hereof.

 

[The remainder of this page has been left
blank intentionally.]

 

    	33

    	 

    

 

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

 

	 	COMPANY: 
	 	 
	 	WITS BASIN PRECIOUS MINERALS INC.
	 	 	 
	 	By:	/s/ Mark D. Dacko
	 	Name:	/s/ Mark D. Dacko
	 	Title:	CFO
	 	 	 
	 	RIGHTS AGENT:
	 	 
	 	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
	 	 	 
	 	By:	/s/ Paula Caroppoli
	 	Name:	/s/ Paula Caroppoli
	 	Title:	Senior Vice President

 

    	 

    	 

    

 

EXHIBIT
A

 

FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS

OF

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

OF

wits basin precious Minerals INC.

 

The following is a statement of the powers,
designations, preferences, limitations, restrictions and relative rights of a series of preferred stock of Wits Basin Precious
Minerals Inc., a Minnesota corporation (the “Corporation”), as authorized on August 7, 2012, by the board of directors
of the Corporation (the “Board”), for the purposes of establishing a series of the Corporation’s authorized preferred
stock, no par value per share (“Preferred Stock”), designated as Series A Junior Participating Preferred Stock, and
fixing the relative rights and preferences thereof:

 

1. Designation and Amount. A series
of Preferred Stock, designated as Series A Junior Participating Preferred Stock (“Series A Junior Participating Preferred
Stock”), is hereby established and the number of shares constituting such series shall be 100,000. Such number of shares
may be increased or decreased by resolution of the Board, provided, however that no such decrease shall reduce the number of shares
of the Series A Junior Participating Preferred Stock to a number less than the number of shares then outstanding, plus the number
reserved for issuance upon the exercise of options, rights or warrants, or upon conversion of any outstanding securities issued
by the Corporation convertible into Series A Junior Participating Preferred Stock.

 

2. Dividends and Distributions. (A)
Subject to the prior and superior rights of the holders of any shares of any series of preferred stock ranking prior and superior
to the Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating
Preferred Stock, in preference to the shares of Common Stock, par value $0.01 per share, of the Corporation (the “Common
Stock”), and any other stock of the Corporation ranking junior to the Series A Junior Participating Preferred Stock with
respect to dividends, shall be entitled to receive, when, as and if declared by the Board out of funds legally available for the
purpose, quarterly dividends payable in cash on March 15, June 15, September 15 and December 15 of 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 Junior Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $10,000 or (b) subject to the provision for adjustment hereinafter set
forth, 10,000 times the aggregate per share amount of all cash dividends, and 10,000 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 Junior Participating Preferred Stock. If the Corporation shall at any time after
August 22, 2012 (the “Rights Declaration Date”) (i) declare or pay any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock into a larger number of shares, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating
Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

    	A-1

    	 

    

 

(B) The Corporation shall declare a dividend
or distribution on the Series A Junior Participating Preferred Stock as provided in Section 2(A) above immediately after it declares
a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, if no
dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Junior Participating
Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

 

(C) Dividends shall begin to accrue and
be cumulative on each outstanding share of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issuance of such share of Series A Junior Participating Preferred Stock, unless the date of issuance
of such share is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such share
shall begin to accrue from the date of issuance of such share, 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 Junior 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 and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on shares of Series A Junior 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 may fix a record date for the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof.

 

3. Voting Rights. In addition to
any other voting rights required by law, the holders of shares of Series A Junior Participating Preferred Stock shall have only
the following voting rights:

 

(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 10,000 votes
on all matters submitted to a vote of the shareholders of the Corporation, and each fractional share of Series A Junior Participating
Preferred Stock shall entitle the holder thereof to a pro rata fractional vote. If the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock into a larger number of shares or (iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.

 

    	A-2

    	 

    

 

(B) Except as otherwise provided herein
or by law, the holders of shares of Series A Junior Participating Preferred Stock, the holders of shares of Common Stock and the
holders of any other class or series of capital stock of the Corporation entitled to vote generally with the Common Stock, shall
vote together as one class on all matters submitted to a vote of shareholders of the Corporation.

 

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

 

4. Certain Restrictions. (A) Whenever
quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared,
on shares of Series A Junior 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 Junior 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 Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior 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;

 

(iii) except as permitted in subsection
4(A)(iv) below, 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 Junior Participating Preferred Stock; provided that
the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock (a) 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 Junior Participating Preferred Stock or (b) held by employees of the Corporation or a subsidiary of the Corporation upon the
termination of their employment with the Corporation or a subsidiary of the Corporation; or

 

    	A-3

    	 

    

 

(iv) purchase or otherwise acquire
for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with
the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication
(as determined by the Board) to all holders of such shares upon such terms as the Board, 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.

 

(B) 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 Section 4(A), purchase or otherwise acquire such shares at such time and in such manner.

 

5. Reacquired Shares. Any shares
of Series A Junior 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, subject to the conditions and restrictions on issuance set forth herein, in the Corporation’s
Articles of Incorporation, or in any other Certificate of Designation creating series of Preferred Stock, or any similar stock,
or as otherwise restricted by law.

 

6. Liquidation, Dissolution or Winding
Up. Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made
(x) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to
the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, plus an amount equal to the greater of (1) $10,000 per share or (2) an aggregate amount
per share, subject to the provision for adjustment hereinafter set forth, equal to 10,000 times the aggregate amount to be distributed
per share to holders of common stock, or (y) to the holders of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating Preferred Stock, except distributions made ratably on the Series
A Junior Participating Preferred Stock and all other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding up.  In the event the Corporation shall
at any time after the Rights Declaration Date (i) declare or pay any dividend on common stock payable in shares of common
stock, or (ii) effect a subdivision or combination or consolidation of the outstanding shares of common stock (by reclassification
or otherwise than by payment of a dividend in shares of common stock) into a greater or lesser number of shares of common stock,
then in each such case the aggregate amount per share to which holders of shares of Series A Junior Participating Preferred Stock
were entitled immediately prior to such event under clause (x) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of common stock outstanding immediately after such event and
the denominator of which is the number of shares of common stock that were outstanding immediately prior to such event.

 

    	A-4

    	 

    

 

Neither the consolidation
of nor merging of the Corporation with or into any other corporation or corporations, nor the sale or other transfer of all or
substantially all of the assets of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation
within the meaning of this Section 6.

 

7. 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 Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 10,000 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, plus accrued and unpaid dividends, if any, payable with respect to the Series A Junior Participating Preferred Stock.
In the event the Corporation shall at any time after the Rights Declaration Date (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) effect a subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

8. No Redemption. The shares of Series
A Junior Participating Preferred Stock shall not be redeemable; provided, however, that the foregoing shall not limit the ability
of the Corporation to purchase or otherwise deal in such shares to the extent otherwise permitted hereby and by law.

 

9. Rank. Unless otherwise expressly
provided in the Articles of Incorporation of the Corporation or a Certificate of Designations relating to any other series of Preferred
Stock, the Series A Junior Participating Preferred Stock shall rank junior to every other series of Preferred Stock previously
or hereafter authorized, as to the payment of dividends and the distribution of assets on liquidation, dissolution or winding up
of the Corporation, and shall rank senior to the Common Stock as to the payment of dividends and the distribution of assets on
liquidation, dissolution or winding up of the Corporation.

 

10. Amendment. The Articles of Incorporation
of the Corporation and this Certificate of Designation shall not be amended in any manner that would materially alter or change
the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Junior Participating Preferred
Stock, voting separately as a class.

 

11. Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder’s
fractional shares, to exercise voting rights, to receive dividends thereon, and to participate in any distribution of assets and
to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock.

 

    	A-5

    	 

    

 

EXHIBIT
B

 

FORM OF
RIGHT CERTIFICATE

 

	No. R-	 _______ Rights

 

NOT EXERCISABLE AFTER THE
EARLIER OF [________], AND THE DATE ON WHICH THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH
IN THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES
AN ACQUIRING PERSON OR AN 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 BE NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BE OR
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(d) OF THE RIGHTS AGREEMENT.]1 

 

RIGHT CERTIFICATE

 

WITS BASIN
PRECIOUS MINERALS INC.

 

This Right Certificate certifies that ___________________________,
or registered assigns, is the registered holder of the number of Rights set forth above, each of which entitles the holder (upon
the terms and subject to the conditions set forth in the Rights Agreement dated as of August 22, 2012 (the “Rights Agreement”)
between Wits Basin Precious Minerals Inc., a Minnesota corporation (the “Company”), and American Stock Transfer
& Trust Company, LLC (the “Rights Agent”), to purchase from the Company, at any time after the Distribution
Date and prior to the Expiration Date, _______ one-ten thousandth[s] of a fully paid, nonassessable share of Series A Junior Participating
Preferred Stock (the “Preferred Stock”) of the Company at a purchase price of $1.00 per one ten-thousandths
of a share (the “Purchase Price”), payable in lawful money of the United States of America, upon surrender of
this Right Certificate, with the form of election to purchase and related certificate duly executed, and payment of the Purchase
Price at an office of the Rights Agent designated for such purpose.

 

Terms used herein and not otherwise defined
herein have the meanings assigned to them in the Rights Agreement.

 

The number of Rights evidenced by this Right
Certificate (and the number and kind of shares issuable upon exercise of each Right) and the Purchase Price set forth above are
as of ______________, 20__, and may have been or in the future be adjusted as a result of the occurrence of certain events, as
more fully provided in the Rights Agreement.

 

 

1
If applicable, insert this portion of the legend and delete the preceding sentence.

 

    	B-1

    	 

    

 

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

 

This Right Certificate is subject to all
of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated
herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.

 

Upon surrender at the principal office or
offices of the Rights Agent designated for such purpose and subject to the terms and conditions set forth in the Rights Agreement,
any Rights Certificate or Certificates may be transferred or exchanged for another Rights Certificate or Certificates evidencing
a like number of Rights as the Rights Certificate or Certificates surrendered.

 

Subject to the provisions of the Rights
Agreement, the Board of Directors may, at its option,

 

(a) at any time before the occurrence
of a Section 11(a)(ii) Event, redeem all but not less than all the then outstanding Rights at a redemption price of $.0001 per
Right, subject to adjustment pursuant to the terms of the Rights Agreement; or

 

(b) at any time on or after the
occurrence of a Section 11(a)(ii) Event (but before such Person becomes the Beneficial Owner of 50% or more of the shares of Common
Stock then outstanding), exchange all or part of the then outstanding Rights (other than Rights held by the Acquiring Person and
certain related Persons) for shares of Common Stock at an exchange ratio of one share of Common Stock per Right. If the Rights
shall be exchanged in part, the holder of this Right Certificate shall be entitled to receive upon surrender hereof another Right
Certificate or Certificates for the number of whole Rights not exchanged.

 

No fractional shares of Preferred Stock
are required to be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions that are multiples of
one ten-thousandth of a share of Preferred Stock, that may, at the election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Certificates for the number
of whole Rights not exercised.

 

    	B-2

    	 

    

 

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

 

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

 

IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed under its corporate seal by its authorized officers.

 

Dated as of _________________, ______

 

	 	WITS BASIN PRECIOUS MINERALS INC.
	 	 	 
	 	By: 	 
	 	Name:	 
	 	Title:	 

 

Attest:

 

	 	 
	Name:	 	 
	Title:	 	 

 

Countersigned:

 

AMERICAN STOCK TRANSFER & TRUST COMPANY,
LLC,

as Rights Agent

 

	By:	 	 
	Name:	 	 
	Title:	 	 

 

    	B-3

    	 

    

 

[Form of Reverse Side of Right Certificate]

 

FORM OF
ASSIGNMENT

 

(To be executed if the registered holder
desires to

transfer the Right Certificate.)

 

	FOR VALUE RECEIVED 	 

 

	hereby sells, assigns and transfers unto 	 
	 
	 

(Please print name and address of transferee)

	 

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

 

Dated: ____________, ____

 

	 	 	 
	 	Signature	 

 

Signature Guaranteed:

 

CERTIFICATE

 

The undersigned hereby certifies by checking
the appropriate boxes that:

 

(1) the Rights evidenced by this Right Certificate
r are / r are not being assigned by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement);

 

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

 

	Dated: ______________, _____	 	 
	 	Signature	 

 

______________________

 

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

 

    	B-4

    	 

    

 

FORM OF ELECTION
TO PURCHASE

 

(To be executed if the registered holder
desires to exercise

Rights represented by the Right Certificate.)

 

To: Wits Basin Precious Minerals Inc.

 

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

 

Please insert social security or other identifying number

	 

(Please print name and address)

	 
	 

 

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

 

Please insert social security or other identifying number

	 

(Please print name and address)

 

Dated: ________________, _____

 

	 	 
	 	Signature

 

Signature Guaranteed:

 

    	B-5

    	 

    

 

CERTIFICATE

 

The undersigned hereby certifies by checking
the appropriate boxes that:

 

(1) the Rights evidenced by this Right Certificate
r are / r 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 Acquiring Person (as such terms
are defined in the Rights Agreement);

 

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

 

Dated: _________________, _______

 

	 	 	 
	 	Signature	 

 

__________________________

 

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

 

    	B-6

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