Document:

EX-4.1

Exhibit 4.1

EXECUTION COPY

September 16, 2008

National City Bank

1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Corporate Trust Department

Mellon Investor Services LLC

MCSC AIM 154-0690, 500 Ross Street
Pittsburgh, Pennsylvania 15262
Attention: Mitzi Brinkman

			
	     Re:	 	Notice of Removal of Rights Agent and Appointment of Successor Rights Agent
and Amendment No. 1 to the Rights Agreement (this “Notice and Amendment”) 

Ladies and Gentlemen:

     1. Pursuant to Section 21 of the Rights Agreement, dated as of January 31, 2000, by and
between Olympic Steel, Inc. (the “Company”) and National City Bank (“National City”), the Company
hereby provides notice of National City’s removal as Rights Agent pursuant to the Rights Agreement,
and National City hereby accepts and agrees to such removal and waives the time periods, notice and
other delivery or similar requirements for its removal as Rights Agent pursuant to the Rights
Agreement by its countersignature to this Notice and Amendment in the space provided below.

     2. Pursuant to Section 21 of the Rights Agreement, the Company hereby appoints
Mellon
Investor Services LLC (“Mellon”) as successor Rights Agent pursuant to the Rights Agreement, to act
as agent for the Company in accordance with the terms and conditions of the Rights Agreement, and
Mellon hereby accepts such appointment, effective immediately, and hereby certifies that it
complies with the requirements of a successor Rights Agent set forth in Section 21 of the Rights
Agreement, by its countersignature to this Notice and Amendment in the space provided below.

     3. Pursuant to Section 27 of the Rights Agreement, prior to the time at which the Rights cease
to be redeemable, and subject to the last two sentences of Section 27 of the Rights Agreement, the
Company may in its sole and absolute discretion, and the Rights Agent will if the Company so
directs, supplement or amend any provision of the Rights Agreement in any respect without the
approval of any holders of Rights or Common Shares. Accordingly, pursuant to Section 27 of the
Rights Agreement, the Company, by resolution adopted by its Board of Directors, and Mellon hereby
amend the Rights Agreement as follows:

          (a) Section 1(d) of the Rights Agreement is hereby amended and restated in its entirety to
read as follows:

 

     “(d) “BUSINESS DAY” means any day other than a Saturday, Sunday or a day on which
banking institutions in the State of Ohio, the State of New York or the State of New Jersey
(or such other state in which the principal office of the Rights Agent is located) are
authorized or obligated by law or executive order to close.”

          (b) Section 1(q) of the Rights Agreement is hereby amended and restated in its entirety to
read as follows:

     “(q) “PERSON” means any individual, firm, corporation, limited liability
company, partnership, trust or other legal entity, and includes any successor (by
merger or otherwise) of such entity.”

          (c) Section 1(s) of the Rights Agreement is hereby amended and restated in its entirety to
read as follows:

          “(s) “PURCHASE PRICE” means initially $170 per one one-hundredth of a Preferred Share,
subject to adjustment from time to time as provided in this Agreement.”

          (d) Section 1(bb) of the Rights Agreement is hereby amended by deleting the phrase
“corporation or other legal entity” and replacing it with the word “Person” on the second and fifth
lines.

          (e) Section 2 of the Rights Agreement is hereby amended and restated in its entirety to read
as follows:

     “2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment and hereby certifies that it complies with the
requirements of a successor Rights Agent set forth in Section 21. The Company may from time
to time act as co-rights agent or appoint such co-rights agents as it may deem necessary or
desirable. Any actions which may be taken by the Rights Agent pursuant to the terms of this
Agreement may be taken by any such co-rights agent. To the extent that any co-rights agent
takes any action pursuant to this Agreement, such co-rights agent will be entitled to all
of the rights and protections of, and subject to all of the applicable duties and
obligations imposed upon, the Rights Agent pursuant to the terms of this Agreement.
Notwithstanding the foregoing, the Rights Agent will have no duty to supervise, and shall
in no event be liable for, the acts or omissions of any co-rights agent.”

          (f) Section 3(d) of the Rights Agreement is hereby amended by inserting the phrase “and
provided with all necessary information,” after the phrase “and the Rights Agent will, if
requested,”.

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          (g) Section 4 of the Rights Agreement is hereby amended by inserting the phrase “(but which do
not affect the rights, duties or responsibilities of the Rights Agent)” after the phrase “as the
Company may deem appropriate”.

          (h) Section 5(b) of the Rights Agreement is hereby amended and restated in its entirety to
read as follows:

     “(b) Following the Distribution Date, and receipt by the Rights Agent of notice to
that effect and all other necessary information, the Rights Agent will keep or cause to be
kept, at the principal office of the Rights Agent designated for such purpose and at such
other offices as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock exchange or
any transaction reporting system on which the Rights may from time to time be listed or
quoted, books for registration and transfer of the Right Certificates issued hereunder.
Such books will show the names and addresses of the respective holders of the Right
Certificates and the number of Rights evidenced on its face by each of the Right
Certificates.”

          (i) Section 6(a) of the Rights Agreement is hereby amended and restated in its entirety to
read as follows:

     “(a) Subject to the provisions of Sections 7(d) and 14, at any time after the Close of
Business on the Distribution Date and prior to the Expiration Date, any Right Certificate
or Right Certificates representing exercisable Rights may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a Preferred Share (or
other securities, as the case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or exchange any
such Right Certificate or Rights Certificates must make such request in a writing delivered
to the Rights Agent and must surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the Rights Agent
designated for such purpose. The Rights Certificates are transferable only on the registry
books of the Rights Agent. 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 until the registered holder shall (i) have completed and signed the certificate
contained in the form of assignment on the reverse side of such Right Certificate, (ii)
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 and (iii) paid a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or exchange of
Right Certificates. Thereupon or as promptly as practicable thereafter, subject to the
provisions of Sections 7(d) and 14, the Company will prepare, execute and deliver to the
Rights Agent, and the Rights Agent will countersign and deliver, a Right Certificate or
Right Certificates, as the case may be, as so

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requested. The Rights Agent shall have no duty or obligation under any Section of this
Agreement requiring the payment of taxes and/or governmental charges unless and until it is
satisfied that all such taxes and/or governmental charges have been paid.”

          (j) Section 6(b) of the Rights Agreement is hereby amended and restated in its entirety to
read as follows:

     “(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 satisfactory to them,
and, if requested by the Company or the Rights Agent, 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
prepare, execute and deliver a new Right Certificate of like tenor to the Rights Agent and
the Rights Agent will countersign and deliver such new Right Certificate to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.”

          (k) Section 7(a) of the Rights Agreement is hereby amended and restated in its entirety to
read as follows:

     “(a) The registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time after the
Distribution Date and prior to the Expiration Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof duly
executed and properly completed, to the Rights Agent at the office or offices of the Rights
Agent designated for such purpose, together with payment in cash, in lawful money of the
United States of America by certified check or bank draft payable to the order of the
Company, equal to the sum of (i) the exercise price for the total number of securities as
to which such surrendered Rights are exercised and (ii) an amount equal to any applicable
tax or governmental charge required to be paid by the holder of such Right Certificate in
accordance with the provisions of Section 9(d).”

          (l) Section 7(b) of the Rights Agreement is hereby amended by inserting the phrase “and
properly completed,” after the phrase “purchase duly executed”.

          (m) Section 7(b) of the Rights Agreement is hereby further amended by inserting the phrase
“subject to Section 20(k) hereof,” after the phrase “accompanied by payment as described above,”.

          (n) Section 7(b) of the Rights Agreement is hereby further amended so that any and all
references to “appropriate” are hereby deleted and substituted therefor “required”.

          (o) Section 7(d) of the Rights Agreement is hereby amended by inserting the phrase “the Rights
Agent or” after the phrase “or Affiliates or Associates thereof as”.

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          (p) Section 9(d) of the Rights Agreement is hereby amended and restated in its entirety to
read as follows:

     “(d) It will pay when due and payable any and all taxes and governmental charges that
may be payable in respect of the issuance or delivery of the Right Certificates and of any
certificates representing securities issued upon the exercise of Rights; PROVIDED, HOWEVER,
that the Company will not be required to pay any tax or governmental charge which may be
payable in respect of any transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or depositary receipts representing
securities issued upon the exercise of Rights in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise, or to issue or
deliver any certificates or depositary receipts representing securities issued upon the
exercise of any Rights until any such tax or governmental charge has been paid (any such
tax or governmental charge being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company’s or the Right Agent’s
reasonable satisfaction that no such tax or governmental charge is due.”

          (q) Section 9(e) of the Rights Agreement is hereby amended by inserting the following as the
last sentence:

     “The Rights Agent may assume at any time, prior to the time that the Rights Agent
receives notice stating that the exercisability of the Rights has been suspended or after
the Rights Agent receives notice stating that a suspension is no longer in effect, that any
Right exercised under any provision of this Agreement is permitted to be exercised
hereunder and shall have no liability for acting in reliance upon such assumption.”

          (r) Section 10 of the Rights Agreement is hereby amended by deleting the phrase “(and all
applicable transfer taxes) was made” and substituting the phrase “(and all applicable taxes and
governmental charges) was duly made” in its place.

          (s) Section 11(a)(ii)(C) of the Rights Agreement is hereby amended by deleting the third
sentence in its entirety and substituting therefor the following:

     “The Company will use all reasonable efforts to ensure that the provisions of this
Section 11(a)(ii) are complied with, but neither the Company nor the Rights Agent will have
any liability to any holder of Right Certificates or any other Person as a result of the
Company’s failure to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.”

          (t) Section 11(l) of the Rights Agreement is hereby amended by inserting the phrase “(with
prompt notice thereof to the Rights Agent)” after the phrase “the Company may elect to defer”.

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          (u) Section 12 of the Rights Agreement is hereby amended and restated in its entirety to read
as follows:

     “12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SECURITIES. Whenever
an adjustment is made or any event affecting the Rights or their exercisability (including,
without limitation, an event which causes Rights to become null and void) occurs as
provided in Section 11 or Section 13, the Company will promptly (a) prepare a certificate
setting forth such adjustment or describing such event and a brief, reasonably detailed
statement of the facts, computations and methodology accounting for such adjustment, (b)
file with the Rights Agent and with each transfer agent for the Preferred Shares and the
Common Shares a copy of such certificate, and (c) if such adjustment is made after the
Distribution Date, mail a brief summary of such adjustment to each holder of a Right
Certificate in accordance with Section 26. Notwithstanding the foregoing sentence, the
failure of the Company to give such notice shall not affect the validity of or the force or
effect of or the requirement for such adjustment. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment or statement therein contained and
shall have no duty or liability with respect to, and shall not be obligated or responsible
for calculating any adjustment nor shall it be deemed to have knowledge of any such
adjustment or any such event unless and until it shall have received such a certificate.
Any adjustment to be made pursuant to Sections 11 and 13 of this Agreement shall be
effective as of the date of the event giving rise to such adjustment. Failure to give any
notice or filing provided for in this Section 12 to any transfer agent or holder of a
Right, or any defect therein, will not affect the legality of the adjustment.”

          (v) Section 14 of the Rights Agreement is hereby amended by inserting the following after
Section 14(c):

     “(d) Whenever a payment for fractional Rights or fractional shares is to be made by
the Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a
certificate setting forth in reasonable detail the facts related to such payment and the
prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient
monies to the Rights Agent in the form of fully collected funds to make such payments. The
Rights Agent shall be fully protected in relying upon such a certificate and shall have no
duty with respect to, and shall not be deemed to have knowledge of any payment for
fractional Rights or fractional shares under any Section of this Agreement relating to the
payment of fractional Rights or fractional shares unless and until the Rights Agent shall
have received such a certificate and sufficient monies.”

          (w) Section 15 of the Rights Agreement is hereby amended by deleting the phrase “under Section
18,” and substituting the phrase “under Section 18 and Section 20,” in its place.

          (x) Section 15 of the Rights Agreement is hereby further amended by deleting the last sentence
in its entirety and substituting therefor with the following:

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     “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 by the Company and will be entitled to specific
performance of the obligations under this Agreement, and injunctive relief against actual
or threatened violations by the Company of the obligations of any Person subject to this
Agreement.”

          (y) Sections 18(a) and (b) of the Rights Agreement are hereby amended and restated in their
entirety to read as follows:

     “(a) The Company will pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties hereunder.
The Company will also indemnify the Rights Agent for, and hold it harmless against, any and
all loss, liability, claim, damage, judgment, fine, penalty, demand, settlement, cost or
expense (including, without limitation, the reasonable fees and expenses of counsel)
incurred without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (which gross negligence, bad faith or willful misconduct must be determined by
a final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction), for any action taken, suffered or omitted to be taken by the Rights Agent in
connection with the acceptance, administration, exercise and performance of its duties
under this Agreement, including, without limitation, the costs and expenses (including,
without limitation, the reasonable fees and expenses of counsel) of defending against any
claim of liability arising therefrom, directly or indirectly. The costs and expenses
incurred in enforcing this right of indemnification shall be paid by the Company.

     (b) The Rights Agent may conclusively rely upon and will be authorized and protected
and will incur no liability for or in respect of any action taken, suffered, or omitted by
it in connection with its acceptance and administration of this Agreement and the exercise
and performance of its duties hereunder, in reliance upon any written instruction from the
Company, Right Certificate or certificate evidencing Preferred Shares or Common Shares or
other securities of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate, statement or
other paper or document believed by it to be genuine and to be signed, executed, and,
where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise
upon the advice of counsel as set forth in Section 20.

     (c) The provisions of this Section 18 and Section 20 shall survive the expiration of
the Rights and the termination of this Agreement, the exercise or expiration of the Rights
and the designation, replacement or removal of the Rights Agent.”

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          (z) Section 19(a) of the Rights Agreement is hereby amended so that any and all references to
“corporation” are hereby deleted and substituted therefor with “Person”.

          (aa) Section 20 of the Rights Agreement is hereby amended and restated in its entirety to read
as follows:

     “20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes only the duties and
obligations expressly imposed by this Agreement (and no implied duties or obligations)
upon the following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, will be bound:

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

          (b) Whenever in the performance of its duties under this Agreement the Rights Agent
deems it necessary or desirable that any fact or matter (including, without limitation, the
identity of an Acquiring Person and the determination of the current per share 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, the President, any Vice President,
the Secretary or the Treasurer of the Company and delivered to the Rights Agent, and such
certificate will be full and complete authorization and protection to the Rights Agent for,
and the Rights Agent shall incur no liability for or in respect of, any action taken,
suffered or omitted to be taken by it under the provisions of this Agreement in reliance
upon such certificate.

          (c) The Rights Agent will be liable hereunder to the Company and any other Person
only for its own gross negligence, bad faith or willful misconduct (which gross
negligence, bad faith or willful misconduct must be determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction). Anything to the
contrary notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been advised of
the likelihood of such loss or damage. Any liability of the Rights Agent under this
Agreement will be limited to the amount of annual fees paid by the Company to the Rights
Agent.

          (d) The Rights Agent will 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,

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but all such statements and recitals are and will be deemed to have been made by the
Company only.

          (e) The Rights Agent will not be under any responsibility or have any liability in
respect of the validity of this Agreement or the execution and delivery hereof (except the
due execution and delivery hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor will it be
responsible for any breach by the Company of any covenant contained in this Agreement or in
any Right Certificate; nor will it be responsible for any adjustment required under the
provisions of Sections 11 or 13 (including any adjustment which results in Rights becoming
null and void) or responsible for the manner, method or amount of any such adjustment 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, upon which the Rights Agent may rely); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization or reservation of any
shares of stock or other securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of stock or other securities will, when issued, be
duly authorized, validly issued, fully paid and nonassessable.

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

          (g) The Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any person believed in good faith
by the Rights Agent to be one of the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer, any Vice President, the Secretary or the
Treasurer of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and such instructions shall be full authorization and
protection to the Rights Agent, and the Rights Agent shall incur no liability for or in
respect of any action taken, suffered or omitted by it in accordance with instructions of
any such officer or for any delay in acting while waiting for those instructions. The
Rights Agent shall be fully authorized and protected in relying upon the most recent
instructions received by any such officer, unless it has received notice from the Company
to cease its reliance thereon.

          (h) The Rights Agent and any shareholder, affiliate, 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 the Rights Agent were not Rights Agent under this Agreement. Nothing
herein will preclude

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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 (through its directors, officers
and employees) or by or through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company or any other Person resulting from any such act,
default, neglect or misconduct, absent gross negligence, bad faith, or willful misconduct
in the selection and continued employment thereof (which gross negligence, bad faith or
willful misconduct must be determined by a final, non-appealable order, judgment decree or
ruling of a court of competent jurisdiction). The Rights Agent will not be under any duty
or responsibility to ensure compliance with any applicable federal or state securities laws
in connection with the issuance, transfer or exchange of Right Certificates.

          (j) If, with respect to any Right Certificate surrendered to the Rights Agent for
exercise, transfer, split up, combination or exchange, either (i) the certificate
attached to the form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response to clause 1 or 2
thereof, or (ii) any other actual or suspected irregularity exists, the Rights Agent will
not take any further action with respect to such requested exercise, transfer, split up,
combination or exchange without first consulting with the Company, and will thereafter
take further action with respect thereto only in accordance with the Company’s written
instructions.

          (k) 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.

          (l) The Company will promptly notify the Rights Agent of (i) any public announcement
or determination made by the Company pursuant to this Agreement, (ii) any event or
ownership that would prohibit the exercise or transfer of the Rights Certificates pursuant
to this Agreement, and (iii) any date or event defined in this Agreement (including
without limitation a Distribution Date, Expiration Date, Share Acquisition Date or
Triggering Event). The Rights Agent shall not be required to take notice or be deemed to
have any notice of any fact, event or determination (including, without limitation, any
dates or events defined in this Agreement or the designation of any Person as an Acquiring
Person, or an Affiliate or Associate thereof ) under this Agreement unless and until the
Rights Agent shall be specifically notified by the Company of such fact, event or
determination in accordance with Section 26, and the Rights Agent shall be fully

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protected and shall incur no liability for failing to take any action in connection
therewith unless and until it has received such notice.

          (m) The Company agrees to give the Rights Agent prompt written notice of any
event or ownership which would prohibit the exercise or transfer of the Rights
Certificates.”

          (bb) Section 21 of the Rights Agreement is hereby amended by inserting the phrase “known to
the Rights Agent, as applicable,” after “each transfer agent of the Preferred Shares or the Common
Shares”.

          (cc) Section 21 of the Rights Agreement is hereby amended by deleting the fifth sentence in
its entirety and substituting therefor with the following:

     “Any successor Rights Agent, whether appointed by the Company or by such a court, will
be (i) a Person organized and doing business under the laws of the United States or of any
state of the United States so long as such corporation is authorized to do business as a
banking institution in such state, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million or (ii) an Affiliate of
such Person.”

          (dd) Section 26 of the Rights Agreement is hereby amended and restated in its entirety as
follows:

     “(a) Notices or demands authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the Rights Agent will be
sufficiently given or made if made in writing and sent by first class mail, postage
prepaid, and the Rights Agent recommends that any notice or demand authorized by this
Agreement to be given or made by any holder of a Rights Certificate or the Company on the
Rights Agent shall be sent or given by registered or certified mail, and shall be deemed
given or made on receipt. The holders of Rights Certificates and the Company agree to
assume the risk of giving notice or demand on the Rights Agent if given by any other means.
Any such notice or demand shall be addressed (until another address is filed in writing
with the Rights Agent) as follows:

	 	 	 
	 

	 	Mellon Investor Services LLC
	 

	 	MCSC AIM 154-0690, 500 Ross Street
	 

	 	Pittsburgh, Pennsylvania 15262
	 

	 	Attention: Mitzi Brinkman
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	Mellon Investor Services LLC 480
	 

	 	Washington Blvd, 29th Floor
	 
	 	Jersey City, New Jersey 07310

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	 	Attention: Legal Department”

     (b) Subject to the provisions of Section 21 hereof, any notice or demand authorized by
this Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company will be sufficiently given or made if made in writing and
sent by first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:

	 	 	 
	 

	 	Olympic Steel, Inc.
	 

	 	5096 Richmond Road
	 

	 	Cleveland, Ohio 44146-1393
	 

	 	Attention:      Michael D. Siegal,
	 

	 	                     Chairman & Chief Executive Officer
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	Jones Day
	 

	 	901 Lakeside Avenue
	 

	 	Cleveland, Ohio 44114
	 

	 	Attention:      Christopher M. Kelly

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

          (ee) Section 27 of the Rights Agreement is hereby amended by inserting the phrase “, but
subject to the other provisions of this Section,” after each instance of the phrase “and the Rights
Agent will if the Company so directs”.

          (ff) Section 30 of the Rights Agreement is hereby amended and restated in its entirety to read
as follows:

     “30. GOVERNING LAW. This Agreement, each Right and each Right Certificate issued
hereunder will be deemed to be a contract made under the internal substantive laws of the
State of Ohio and for all purposes will be governed by and construed in accordance with
the internal substantive laws of such State applicable to contracts to be made and
performed entirely within such State; PROVIDED, HOWEVER, that all provisions regarding the
rights, duties and obligations of the Rights Agent will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.”

          (gg) Section 31 of the Rights Agreement is hereby amended by inserting the following as the
last sentence:

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     “Notwithstanding anything in this Agreement to the contrary, if such excluded
provisions shall adversely affect the rights, immunities, duties or obligations of
the Rights Agent, the Rights Agent shall be entitled to resign immediately upon
notice to the Company.”

          (hh) Section 33 of the Rights Agreement is hereby amended by inserting the following as the
last sentence:

     “The Rights Agent is entitled always to assume that the Board acted in good faith
and shall be fully protected and incur no liability in reliance thereon.”

          (ii) Exhibits B and C to the Rights Agreement shall be deemed amended in a manner consistent
with this Notice and Amendment.

     4. Capitalized terms used without other definition in this Notice and Amendment shall be used
as defined in the Rights Agreement.

     5. This Notice and Amendment will be deemed to be a contract made under the internal
substantive laws of the State of Ohio and for all purposes shall be governed by and construed in
accordance with the internal substantive laws of such State applicable to contracts to be made and
performed entirely within such State, except that all provisions regarding the rights, duties and
obligations of the Rights Agent will be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed entirely within such State.

     6. The Rights Agreement shall not otherwise be supplemented or amended by virtue of this
Notice and Amendment, but shall remain in full force and effect.

     7. This Notice and Amendment may be executed in any number of counterparts and each of such
counterparts will for all purposes be deemed to be an original, and all such counterparts will
together constitute but one and the same instrument.

     8. The undersigned officer of the Company, being duly authorized on behalf of
the
Company, hereby certifies in his or her capacity as an officer on behalf of the Company to National
City and to Mellon that this Notice and Amendment is in compliance with the terms of Section 27 of
the Rights Agreement.

[Signature page follows]

13

 

     IN WITNESS WHEREOF, this Notice and Amendment has been duly executed by the Company, National
City and Mellon.

	 	 	 	 	 	 	 
	 	 	OLYMPIC STEEL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Richard T. Marabito
 

Name: Richard T. Marabito	 	 
	 
	 	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	NATIONAL CITY BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Sharon R. Boughter
 

Name: Sharon R. Boughter	 	 
	 
	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	MELLON INVESTOR SERVICES LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mitzi Brinkman
 

Name: Mitzi Brinkman	 	 
	 

	 	 	 	Title: Relationship Manager	 	 

14EX-10.1

Exhibit 10.1

AGREEMENT

     THIS AGREEMENT (“Agreement”), dated as of September 17, 2008, is made by and among
Sparton Corporation, an Ohio corporation (“Sparton”), Lawndale Capital Management, LLC, a
limited liability company, Diamond A Partners, L.P., a California limited partnership and Diamond A
Investors, L.P., a California limited partnership, (collectively, the “Lawndale Parties”).
From time to time in this Agreement, Sparton and the Lawndale Parties are referred to individually
as a “Party” and together as the “Parties.”

     WHEREAS, the Lawndale Parties are the beneficial owners of shares of common stock, $1.25 par
value per share, of Sparton (the “Common Stock”) totaling, in the aggregate, 967,536
shares, or approximately 9.9% of the Common Stock issued and outstanding; and

     WHEREAS, Sparton and the Lawndale Parties have agreed that it is in their mutual interests to
enter into this Agreement.

     NOW, THEREFORE, in consideration of the premises and the representations, warranties, and
agreements contained herein, and other good and valuable consideration, the Parties mutually agree
as follows:

     1. Representations and Warranties of the Lawndale Parties. Each of the Lawndale Parties
represents and warrants to Sparton that (a) this Agreement has been duly authorized, executed and
delivered by such Lawndale Party, and is a valid and binding obligation of such Lawndale Party,
enforceable against such Lawndale Party in accordance with its terms, except as enforcement thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws generally affecting the rights of creditors and subject to general
equity principles; (b) neither the execution of this Agreement nor the consummation of any of the
transactions contemplated hereby nor the fulfillment of the terms hereof, in each case in
accordance with the terms hereof, will conflict with, result in a breach or violation or imposition
of any lien, charge or encumbrance upon any property or assets of such Lawndale Party or any of its
subsidiaries pursuant to any law, any order of any court or other agency of government, the
organizational documents of such Lawndale Party as currently in effect, or the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which such Lawndale Party is a party or
bound or to which its or its property is subject; and (c) as of the date of this Agreement, the
Lawndale Parties beneficially own in the aggregate 967,536 shares of Common Stock.

     2. Representations and Warranties of Sparton. Sparton hereby represents and warrants to the
Lawndale Parties that (a) this Agreement has been duly authorized, executed and delivered by
Sparton, and is a valid and binding obligation of Sparton, enforceable against Sparton in
accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting
the rights of creditors and subject to general equity principles; and (b) neither the execution of
this Agreement nor the consummation of any of the transactions contemplated hereby nor the
fulfillment of the terms hereof, in each case in accordance with the terms hereof, will conflict
with, result in a breach or violation or imposition of any lien, charge or encumbrance upon any
property or assets of Sparton or any of its subsidiaries pursuant to any law, any order of any
court or other agency of government, Sparton’s Amended and Restated

 

 

Articles of Incorporation, Amended Code of Regulations or Amended Bylaws, or the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which Sparton is a party or bound or to
which its or its property is subject.

     3. Directorships.

          (a) Prior to the time that Sparton mails its definitive proxy statement for its 2008 annual
meeting of shareholders, but in any event no later than 14 days from the date hereof, Sparton shall
increase the size of its board of directors (the “Board”) from nine directors to eleven and
appoint Mr. Joseph J. Hartnett and Mr. James R. Swartwout (the “New Appointees”).

          (b) Mr. Hartnett will be appointed as part of the class having a term expiring at Sparton’s
2008 annual meeting of shareholders (the “2008 Appointee”) and Mr. Swartwout will be
appointed as part of the class having a term expiring at Sparton’s 2009 annual meeting of
shareholders (the “2009 Appointee”).

          (c) Sparton agrees that the Board will:

               (1) nominate the 2008 Appointee and the 2009 Appointee as directors at the 2008 and 2009
annual meeting of shareholders, respectively (other than in the case of such person’s refusal to
serve or if such person has committed an act that would be grounds for removal from the Board for
cause in which case the Lawndale Parties will have the right to designate and substitute a person
or persons subject to evaluation and determination by the Nominating and Corporate Governance
Committee of the Board (the “Nominating Committee”) in good faith after exercising its
fiduciary duties that such candidate has business experience in such areas as would reasonably be
expected to enhance the Board, consistent with Sparton’s guidelines relating to director
qualifications and Board composition), together with the other persons included in Sparton’s slate
of nominees for director, as a director of Sparton, with a term expiring at Sparton’s 2011 and 2012
annual meeting of shareholders, respectively;

               (2) recommend that the shareholders of Sparton vote to elect the 2008 Appointee and the 2009
Appointee as directors of Sparton at the 2008 and 2009 annual meetings of shareholders,
respectively;

               (3) use all reasonable efforts consistent with the efforts used to obtain proxies for the
other candidates nominated by the Board to obtain proxies in favor of the election of the 2008
Appointee and 2009 Appointee at the 2008 and 2009 annual meeting of shareholders, respectively;

               (4) Sparton shall ensure that for all times that either the 2008 Appointee or 2009 Appointee
remains in office that one of such appointees will serve on the Executive Committee of Sparton (or
any substitute therefor); and

               (5) if, on the date of Sparton’s 2008 annual meeting of shareholders, Sparton does not have a
new Chief Executive Officer, then Sparton shall ensure that, for all times after the date of such
annual meeting, either the 2008 Appointee or 2009 Appointee will serve on the Board’s CEO search
committee.

          Sparton agrees that during the term of this Agreement if a New Appointee resigns as a director
or is removed for cause as a director, the Lawndale Parties will have the right to designate and
substitute a person or persons for appointment to the Board as a replacement

 

 

director, subject to evaluation and determination by the Nominating Committee using the
standards described in Section 3(c)(1).

          (d) Sparton agrees that by no later than the conclusion of the 2009 annual meeting of
shareholders, Sparton shall decrease the size of the Board from eleven to ten directors and will
cause a director other than the 2008 Appointee and the 2009 Appointee to resign or not stand for
re-election to affect such decrease.

          (e) Each of the New Appointees, upon appointment or election to the Board, will serve as an
integral member of the Board and be governed by the same protections and obligations regarding
confidentiality, conflicts of interests, fiduciary duties, trading and disclosure policies and
other governance guidelines, and shall have the same rights and benefits, including (but not
limited to) with respect to insurance, indemnification, compensation and fees, as are generally
applicable to nonemployee directors of Sparton.

     4. Standstill Restrictions. Subject to applicable law, including Section 13(d) and (g) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Lawndale Parties
shall not, and shall cause their respective officers, directors, employees and agents not to, in
any manner, directly or indirectly:

          (a) solicit (as such term is used in the proxy rules of the SEC) proxies or written consents
of shareholders, or conduct any nonbinding referendum with respect to Common Stock, or make, or in
any way participate in, any “solicitation” of any “proxy” within the meaning of Rule 14a-1
promulgated by the SEC under the Exchange Act, but without regard to the exclusion set forth in
Rule 14a-1(l)(2)(iv) from the definition of “solicitation,” to vote any shares of Common Stock with
respect to any matter, or become a “participant” in any “contested solicitation” for the election
of directors with respect to Sparton (as such terms are defined or used in the Exchange Act and the
rules promulgated thereunder), other than solicitations or acting as a participant in support of
all of Sparton’s nominees;

          (b) purchase or cause to be purchased or otherwise acquire or agree to acquire beneficial
ownership (as determined under Rule 13d-3 promulgated under the Exchange Act) of, any Common Stock
or other securities issued by Sparton, if in any such case, immediately after the taking of such
action the Lawndale Parties, together with their respective affiliates, would, in the aggregate,
beneficially own more than 9.9% of the then outstanding shares of Common Stock;

          (c) make or be the proponent of any shareholder proposal, whether pursuant to Rule 14a-8 of
the Exchange Act or otherwise;

          (d) form, join or in any way participate in any “group” (within the meaning of Section
13(d)(3) of the Exchange Act) with respect to the Common Stock (other than a group comprised solely
of the Lawndale Parties);

          (e) deposit any Common Stock in any voting trust or subject any Common Stock to any
arrangement or agreement with respect to the voting of any Common Stock, other than any such voting
trust, arrangement or agreement solely among the Lawndale Parties;

 

 

          (f) execute any written consent as a shareholder with respect to Sparton or its Common Stock,
except as set forth herein;

          (g) otherwise act, alone or in concert with others, to (i) make any public statement critical
of Sparton, its directors or management or (ii) control or seek to control the Board, other than
through non-public communications with the officers and directors of Sparton (which may, but need
not, be at a meeting of the Board); provided, however, that subject to complying with Section 4(a)
of this Agreement, the foregoing shall not prohibit the Lawndale Parties from making public
statements (including statements contemplated by Rule 14a-1(l)(2)(iv) under the Exchange Act) or
engaging in discussions with other stockholders with respect to (i) any transaction that has been
publicly announced by Sparton or any third party involving a recapitalization of Sparton, an
acquisition, disposition or sale of assets or a business by Sparton with respect to a transaction
or series of transactions, or a change of control of Sparton or (ii) any matter for which Sparton
seeks or is required to seek the approval of Sparton shareholders;

          (h) seek, alone or in concert with others, (i) to call a meeting of shareholders, (ii)
representation on the Board, except as set forth herein, or (iii) the removal of any member of the
Board;

          (i) make any proposal regarding any of the foregoing;

          (j) publicly disclose any request to amend, waive or terminate any provision of this
Agreement; or

          (k) take or seek to take, or cause or seek to cause others to take, directly or indirectly,
any action inconsistent with any of the foregoing.

     5. Actions by the Lawndale Parties.

          (a) At the 2008 and 2009 annual meetings of Sparton’s shareholders, the Lawndale Parties shall
vote, and cause their respective officers, directors, employees and agents to vote, all of the
shares of Common Stock beneficially owned by him or them for each of Sparton’s nominees for
election to the Board and for the ratification of the appointment of Sparton’s independent
auditors.

          (b) (1) Upon the execution of this Agreement by the Parties, no further action will be taken
by the Lawndale Parties with respect to the letters from Lawndale Capital, LLC and Diamond A
Partners, L.P., each dated August 22, 2008, recommending the nomination of candidates for positions
on the Board and notifying Sparton that, absent such nomination, of its intent to itself nominate
such candidates to the Board (collectively, the “Nomination Letters”) and such Nomination
Letters will be stayed.

               (2) Upon appointment of the New Appointees as directors of Sparton and the selection by the
Board of the 2008 Appointee as one of Sparton’s nominees for election at the 2008 annual meeting of
shareholders in accordance with Section 3(c) of this Agreement, the Nomination Letters will
each, without any further action necessary on the part of any person, be automatically and
irrevocably withdrawn.

     6. Termination. This Agreement will be terminated and the obligations of the Parties under
this Agreement shall cease:

 

 

          (a) at the option of Sparton upon the earlier of (i) a material breach by any of the Lawndale
Parties of any obligation hereunder which has not been cured within 14 days after receiving notice
of such breach from Sparton, (ii) the Lawndale Parties having, in the aggregate, beneficial
ownership of less than five percent of the outstanding shares of Common Stock; or (iii) any person
becoming the beneficial owner of more than 50% of Sparton’s voting stock, including by merger,
acquisition, tender offer, exchange offer or other type of business combination;

          (b) at the option of the Lawndale Parties upon the earlier of (i) a material breach by Sparton
of any obligation hereunder which has not been cured within 14 days after receiving notice of such
breach from the Lawndale Parties, (ii) (A) the public announcement by Sparton of its intention to
enter into a definitive agreement to transfer all or substantially all of the assets of Sparton or
more than 50% of the voting power of Sparton, whether by merger, acquisition, tender offer,
exchange offer or other type of business combination or (B) any person publicly announcing their
intent to become the beneficial owner of more than 50% of Sparton’s voting stock, including any
merger, acquisition, tender offer, exchange offer or other type of business combination, (iii)
Sparton’s failure to list its Common Stock on the New York Stock Exchange or the Nasdaq Stock
Market or (iv) at any time on or after the day immediately following the date of Sparton’s 2009
annual meeting of shareholders (the “Termination Date”); provided, however, that the
Termination Date shall be the 90th day before Sparton’s 2009 annual meeting of
shareholders (the “Target Date”) if, as of such date, any of the following is not true:

               (1) Sparton has a Chief Executive Officer who was not employed by Sparton at any time prior to
April 2006;

               (2) the average closing price per share of Sparton’s Common Stock for the 40 trading days when
at least one round lot of Sparton Common Stock has been traded that immediately precede and end on
the Target Date exceeds the greater of (i) $4.00 or (ii) 50% of Sparton’s total book value per
share as of the last day of the most recently completed fiscal quarter as reported and filed with
the SEC in a quarterly filing on Form 10-Q or annual report on Form 10-K, as applicable, in each
case subject to appropriate adjustment in the event of a stock split, stock dividend or similar
event (for the avoidance of doubt, the total book value per share as such term is used in this
Section 6(b)(2) would be $8.57 based on stockholders equity of $84,071,556 and shares outstanding
of 9,811,507 as disclosed in Sparton’s Quarterly Report on Form 10-Q for the period ended March 31,
2008); and

               (3) Sparton has delivered to the Lawndale Parties notice that it intends to nominate the 2009
Appointee as a director at the 2009 annual meeting of shareholders; or

          (c) at any time, upon the written consent of all of the Parties.

     7. Public Announcement. Sparton and the Lawndale Parties shall promptly disclose the
existence of this Agreement after its execution pursuant to a joint press release that is mutually
acceptable to the parties. Subject to applicable law, none of the Parties shall disclose the
existence of this Agreement until the press release is issued.

     8. Nonpublic Information.

          (a) In connection with discussions between the Lawndale Parties and their representatives and
Sparton and its representatives, or otherwise during the term of this

 

 

Agreement, the Lawndale Parties or their representatives may obtain information about Sparton
or its securities that is confidential. Each of the Lawndale Parties agrees, as set forth below,
to treat confidentially all such information (whether written or oral and whether or not identified
as confidential) furnished to or otherwise obtained by such Lawndale Party or his or its
representatives from Sparton or on its behalf together with those portions of analyses, summaries,
notes or other documents prepared by a Lawndale Party or any of their representatives which contain
or otherwise reflect such information (herein collectively referred to as the “Confidential
Information”). Each Lawndale Party agrees that, except with Sparton’s prior written consent,
neither such party nor such party’s representatives will disclose any Confidential Information to
any other person or use any of the Confidential Information for any purpose other than on Sparton’s
behalf. For purposes of this Agreement, the phrase “Confidential Information” shall not include
information which (i) becomes lawfully available to the public other than as a result of a
disclosure by a Lawndale Party or his or its representatives, (ii) was lawfully available to the
Lawndale Parties on a nonconfidential basis prior to its disclosure to the Lawndale Parties or
their representatives by Sparton or on its behalf or (iii) lawfully becomes available to the
Lawndale Parties on a nonconfidential basis from a source other than Sparton or Sparton’s
representatives or agents, provided that such source is not bound by a confidentiality agreement
with Sparton of which the Lawndale Parties have been made aware. Sparton has no obligation to
furnish Confidential Information to the Lawndale Parties or their representatives by virtue of this
Agreement.

          (b) In connection with this Agreement and the Lawndale Parties’ ongoing relationship with
Sparton, there may be instances in which material nonpublic information concerning Sparton will be
divulged to the Lawndale Parties by Sparton or its representatives or agents. Each of the Lawndale
Parties expressly acknowledges, on behalf of himself or itself and his or its representatives and
agents, that Federal and state securities laws prohibit any person who misappropriates material
nonpublic information about a company from purchasing or selling securities of such company, or
from communicating such information to any other person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell such securities.

     9. Remedies.

          (a) Each of the Parties acknowledges and agrees that a breach or threatened breach by any
Party may give rise to irreparable injury inadequately compensable in damages, and accordingly each
Party shall be entitled to injunctive relief to prevent a breach of the provisions hereof and to
enforce specifically the terms and provisions hereof in any state or Federal court having
jurisdiction, in addition to any other remedy to which such aggrieved Party may be entitled to at
law or in equity.

          (b) In the event a Party institutes any legal action to enforce such Party’s rights under, or
recover damages for breach of, this Agreement, the prevailing party or parties in such action shall
be entitled to recover from the other party or parties all costs and expenses, including but not
limited to reasonable attorneys’ fees, court costs, witness fees, disbursements and any other
expenses of litigation or negotiation incurred by such prevailing party or parties.

     10. Notices. Any notice or other communication required or permitted to be given under this
Agreement will be sufficient if it is in writing, sent to the applicable address set forth below
(or as otherwise specified by a party by notice to the other parties in accordance with this
Section) and delivered personally, mailed by certified or registered first-class mail or sent by

 

 

recognized overnight courier, postage prepaid, and will be deemed given (a) when so delivered
personally, (b) if mailed by certified or registered first-class mail, three business days after
the date of mailing, or (c) if sent by recognized overnight courier, one day after the date of
sending.

If to Sparton:

Sparton Corporation

2400 East Ganson Street

Jackson, Michigan 49202

Attention: President & Chief Executive Officer

Telephone: 517-787-8600

Facsimile: 517-787-1822

with a copy to:

Dykema Gossett PLLC

39577 Woodward Avenue, Suite 300

Bloomfield Hills, Michigan 48304

Attention: Douglas S. Parker

Telephone: 248-203-0703

Facsimile: 248-203-0763

and with a copy to:

Marcoux, Allen, Schomer, Bower, Nichols, Kendall & Lindsey, P.C.

145 South Jackson Street

Jackson, Michigan 49204

Attention: Robert T. Kendall III

Telephone: 517-787-4100

Facsimile: 517-787-9455

If to the Lawndale Parties:

Lawndale Capital Management, LLC

591 Redwood Highway #2345

Mill Valley, California 94941

Attention: Andrew Shapiro, Managing Member

Telephone: 415-389-8258

Facsimile: 415-389-0180

with a copy to:

Wilson Sonsini Goodrich & Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, California 94304

Attention: David J. Berger, Esq.

                Bradley L. Finkelstein, Esq.

 

 

     11. Entire Agreement. This Agreement constitutes the entire agreement between the Parties
pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions of the Parties in connection with the subject matter
hereof.

     12. Counterparts; Facsimile. This Agreement may be executed in any number of counterparts and
by the Parties in separate counterparts, and signature pages may be delivered by facsimile, each of
which when so executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

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

     14. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Ohio, without regard to choice of law principles that
would compel the application of the laws of any other jurisdiction.

     15. Severability. In the event one or more of the provisions of this Agreement should, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this Agreement, and this
Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been
contained herein.

     16. Successors and Assigns. This Agreement shall not be assignable by any of the Parties.
This Agreement, however, shall be binding on successors of the Parties.

     17. Amendments. This Agreement may not be modified, amended, altered or supplemented except
upon the execution and delivery of a written agreement executed by all of the Parties.

     18. Further Action. Each Party agrees to execute any and all documents, and to do and perform
any and all acts and things necessary or proper to effectuate or further evidence the terms and
provisions of this Agreement.

     19. Consent to Jurisdiction. Each of the Parties hereby irrevocably submits to the exclusive
jurisdiction of any United States Federal court in the federal district encompassing Cleveland,
Ohio or state court sitting in the State of Ohio in any action or proceeding arising out of or
relating to this Agreement and each of the Parties hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in any such court.

     20. Waiver of Jury Trial. Each of the Parties hereby irrevocably waives all right to trial by
jury and any action, proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the actions of any Party hereto in negotiation,
administration, performance or enforcement hereof.

     21. Expenses. Each Party will pay such Party’s own expenses in connection with the
negotiation, execution and performance of this Agreement, the transactions contemplated by this
Agreement and all things required to be done in connection with this Agreement.

[Signatures are on the following page.]

 

 

     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 	 	 	 	 
	Sparton Corporation	 	 	 	Lawndale Capital Management, LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Richard Langley
	 	 	 	By:
	 	/s/ Andrew Shapiro
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	Richard Langley
	 	 	 	Name:
	 	Andrew Shapiro
	 
	 	 	 	 	 	 	 	 
	Title:

	 	President
	 	 	 	Title:
	 	Managing Member

	 	 	 	 	 	 	 
	 	 	Diamond A Partners, L.P.
	 
	 	 	 	 	 	 
	 	 	By:	 	Lawndale Capital Management, LLC
	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Andrew Shapiro
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Andrew Shapiro
	 
	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	Managing Member
	 
	 	 	 	 	 	 
	 	 	Diamond A Investors, L.P.
	 
	 	 	 	 	 	 
	 	 	By:	 	Lawndale Capital
Management, LLC
	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Andrew Shapiro
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Andrew Shapiro
	 
	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	Managing Member

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