Document:

exv10w1

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER

          This SECOND AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER, dated as of October 5, 2009
(this “Amendment”), modifies that certain Credit Agreement, dated as of September 30, 2008
(as amended, restated, amended and restated, extended, supplemented, modified and otherwise in
effect from time to time, the “Credit Agreement”), among ATHENAHEALTH, INC., a Delaware
corporation (the “Borrower”), each lender from time to time party thereto (the
“Lenders”), BANK OF AMERICA, N.A., as administrative agent (in such capacity, the
“Administrative Agent”) for itself and the other Lenders, the Swing Line Lender and the L/C
Issuer. Any capitalized term used herein and not defined shall have the meaning assigned to it in
the Credit Agreement.

RECITALS

          WHEREAS, the Borrower has informed the undersigned Lenders and the Administrative Agent of its
intention to purchase all of the Equity Interests in Anodyne Health Partners, Inc.
(“Anodyne”, and such purchase referred to hereinafter as the “Anodyne Purchase”)
and has requested that the undersigned Lenders and the Administrative Agent waive certain
provisions of Section 7.03(g) of the Credit Agreement in connection with such purchase;

          WHEREAS, the Borrower has requested that the undersigned Lenders and the Administrative Agent
agree to amend certain provisions of the Credit Agreement; and

          WHEREAS, the undersigned Lenders and the Administrative Agent are prepared to waive certain
provisions of and amend the Credit Agreement on the terms, subject to the conditions and in
reliance on the representations set forth herein;

          NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the
parties hereto hereby agree as follows:

          Section 1. Limited Waiver.

          (a) In connection with the Anodyne Purchase, the Borrower has advised the Administrative Agent
that it will not be able to comply with Section 7.03(g)(vi) of the Credit Agreement which requires
that the EBITDA set forth on the most recent income statement for the four fiscal quarter period
then ended with respect to the Person to be purchased be greater than $0.00. The Administrative
Agent and undersigned Lenders, solely with respect to the Anodyne Purchase, waive such requirement
set forth in Section 7.03(g)(vi).

          (b) In connection with the Anodyne Purchase, the Borrower has advised the Administrative Agent
that it will not be able to comply with Section 7.03(g)(ix) of the Credit Agreement which requires
the Borrower to deliver to the Administrative Agent and each Lender, at least 25 days prior to the
date of consummation of the Anodyne Purchase, (i) a description of such purchase, (ii) diligence
materials, (iii) a certificate of a Responsible Officer certifying that the Anodyne Purchase is in
compliance with Section 7.03(g)(vi) of the Credit Agreement, and (iv) calculations in support
thereof. The Administrative Agent and undersigned Lenders, solely with respect to the Anodyne
Purchase, waive such requirement set forth in Section 7.03(g)(ix).

          (c) The foregoing waivers in Sections 1(a) and 1(b) hereof are limited waivers
and the execution and delivery of this Amendment does not (a) constitute a waiver by the
Administrative Agent and the undersigned Lenders of any other term or condition under the Credit
Agreement or any other Loan Document, and of any right, power or remedy of the Lenders under any of
the Loan

 

 

Documents (all such rights, powers and remedies being expressly reserved), (b) establish a
custom or a course of dealing or conduct between the Lenders and the Borrower, or (c) prejudice any
rights which the Lenders now have or may have in the future under or in connection with the Loan
Documents.

          Section 2. Amendments to Credit Agreement.

          (a) Section 1.01 is hereby amended by inserting the following new definition in correct
alphabetical order:

“Anodyne” means Anodyne Health Partners, Inc.

“Anodyne Acquisition” means the acquisition by the Borrower of all of the
Equity Interests in Anodyne pursuant to the terms of the Anodyne Acquisition
Agreement.

“Anodyne Acquisition Agreement” means the Agreement and Plan of Merger,
dated as of October 5, 2009, by and among athenahealth, Inc., Aries Acquisition
Corporation, Anodyne, and Walter Beinecke and Richard Maclean as representatives of
the Securityholders (as defined therein).

          (b) Section 7.03(g)(v) of the Credit Agreement is hereby amended as follows:

          (i) “$30,000,000” is hereby replaced with “$50,000,000” in each
instance in which such number is included in such section; and ‘

          (ii) The following clause is inserted at the end of Section 7.03(g)(v):

“provided that, the Anodyne Acquisition shall not be
included in a calculation of the cumulative amount of acquisitions or
purchases calculated in clause (B) of this Section 7.03(g)(v);”

          Section 3. Conditions Precedent. This Amendment shall become effective as of the date
first written above (the “Effective Date”) upon the satisfaction of the following
conditions precedent:

          (a) Documentation. Administrative Agent shall have received all of the following, in
form and substance satisfactory to Administrative Agent:

          (i) fully-executed and effective Amendment by the Borrowers, the Administrative Agent
and the Required Lenders;

          (ii) such additional documents, instruments and information as Administrative Agent may
reasonably request to effect the transactions contemplated hereby.

          (b) No Default. On the Effective Date and after giving effect to this
Amendment, no event shall have occurred and be continuing that would constitute an Event of
Default or a Default.

          (c) Fees. The Administrative Agent, for the person entitled thereto, shall
have received payment by the Borrower of any fees and expenses that are due and payable on
or prior to the Effective Date.

          Section 4. Conditions Subsequent.

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               (a) Credit Agreement Schedules. The Borrower shall have delivered to the
Administrative Agent within twenty (20) days following the closing of the Anodyne Acquisition the
following revised Schedules to the Credit Agreement: (i) Schedule 5.05 (“Supplement to Interim
Financial Statements”), (ii) Schedule 5.06 (“Litigation”), (iii) Schedule 5.08(b) (“Existing
Liens”), (iv) Schedule 5.08(d)(i) (“Leased Real Property (Lessee)”), (v) Schedule 5.13
(“Subsidiaries, Equity Interests”), (vi) Schedule 5.17 (“Intellectual Property Matters”), (vii)
Schedule 6.12 (“Guarantors”), and (viii) Schedule 7.02 (“Existing Indebtedness”). The Borrower
agrees with the Administrative Agent and the Lenders that failure to provide the aforementioned
Schedules 5.05, 5.06, 5.08(b), 5.08(d)(i), 5.13, 5.17, 6.12, and 7.02 within such time period shall
constitute an Event of Default under the Credit Agreement.

               (b) Compliance with Section 6.12 of the Credit Agreement. The Borrower shall have
delivered to the Administrative Agent all applicable documentation required to be delivered
following the closing of the Anodyne Acquisition pursuant to the requirements and time periods set
forth in Section 6.12 of the Credit Agreement. The Borrower agrees with the Administrative Agent
and the Lenders that failure to provide such documentation as required by Section 6.12 of the
Credit Agreement shall constitute an Event of Default under the Credit Agreement.

          Section 5. Representations and Warranties; Reaffirmation of Grant. The Borrower
hereby represents and warrants, on behalf of itself and its Subsidiaries, to the Administrative
Agent and the Lenders that, as of the date hereof and after giving effect to this Amendment, (a)
all representations and warranties of the Borrower, on behalf of itself and its Subsidiaries, set
forth in the Credit Agreement and in any other Loan Document are true and correct in all material
respects on and as of the date hereof to the same extent as though made on and as of such date,
except to the extent such representations and warranties specifically relate to an earlier date, in
which case such representations and warranties shall have been true and correct in all material
respects on and as of such earlier date, (b) no Default or Event of Default has occurred and is
continuing, (c) the Credit Agreement and all other Loan Documents are and remain legally valid,
binding obligations of the Borrower, enforceable against the Borrower in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability and (d) each of the Collateral Documents to which the Borrower is a
party and all of the Collateral described therein do and shall continue to secure the payment of
all Obligations as set forth in such respective Collateral Documents. The Borrower, as a party to
the Security Agreement or any of the Collateral Documents, hereby reaffirms its grant of a security
interest in the Collateral to the Administrative Agent for the ratable benefit of the Secured
Parties, as collateral security for the prompt and complete payment and performance when due of the
Obligations.

          Section 6. Survival of Representations and Warranties. All representations and
warranties made in this Amendment or any other Loan Document shall survive the execution and
delivery of this Amendment, and no investigation by the Administrative Agent or the Lenders shall
affect the representations and warranties or the right of the Administrative Agent and the Lenders
to rely upon them.

          Section 7. Amendment as Loan Document. This Amendment constitutes a “Loan Document”
under the Credit Agreement. Accordingly, it shall be an Event of Default under the Credit
Agreement if the Borrower fails to perform, keep or observe any term, provision, condition,
covenant or agreement contained in this Amendment or if any representation or warranty made by the
Borrower, on behalf of itself and its Subsidiaries, under or in connection with this Amendment
shall have been untrue, false or misleading when made.

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          Section 8. Costs and Expenses. The Borrower shall pay on demand all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including the reasonable fees,
charges and disbursements of counsel to the Administrative Agent) incurred in connection with the
preparation, negotiation, execution and delivery of this Amendment.

          Section 9. Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR
RULE THAT WOULD CAUSE THE APPLICATION OF THE DOMESTIC SUBSTANTIVE LAWS OF ANY OTHER STATE).

          Section 10. Execution. This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, 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. Delivery of an executed counterpart of a signature page to this Amendment by
telecopier, facsimile or other electronic transmission shall be effective as delivery of a manually
executed counterpart of this Amendment.

          Section 11. Limited Effect. This Amendment relates only to the specific matters
expressly covered herein, shall not be considered to be an amendment of any rights or remedies any
Lender or the Administrative Agent may have under the Credit Agreement or under any other Loan
Document (except as expressly set forth herein), and shall not be considered to create a course of
dealing or to otherwise obligate in any respect any Lender or the Administrative Agent to execute
similar or other amendments or grant any amendments under the same or similar or other
circumstances in the future.

[Remainder of page intentionally blank.]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
as of the date first above written.

	 	 	 	 	 
	 	Borrower:

ATHENAHEALTH, INC.

 	 
	 	By:  	/s/ Carl Byers 	 
	 	 	Name:  	Carl Byers 	 
	 	 	Title:  	Chief Financial Officer 	 

 

	 	 	 	 	 
	Administrative Agent:

BANK OF AMERICA, N.A., as

Administrative Agent

 	 	 
	By:  	/s/ Linda Alto 	 	 
	 	Name:   	Linda Alto	 	 
	 	Title:  	SVP 	 	 
	 

	 	 	 	 	 
	Lenders:

BANK OF AMERICA, N.A., as

a Lender, Swing Line Lender and L/C Issuer

 	 
	By:  	/s/ Linda Alto 	 
	 	Name:  	Linda Alto 	 
	 	Title:  	SVPExhibit 4.1

Exhibit 4.1

 

TAX BENEFITS PRESERVATION PLAN

dated as of

October 5, 2009

between

ENERGY CONVERSION DEVICES, INC.

and

COMPUTERSHARE TRUST COMPANY, N.A.

as Rights Agent

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	Section 1 Certain Definitions
	 	 	1	 
	 
	 	 	 	 
	Section 2 Appointment of Rights Agent
	 	 	6	 
	 
	 	 	 	 
	Section 3 Issuance of Rights Certificates
	 	 	6	 
	 
	 	 	 	 
	Section 4 Form of Rights Certificates
	 	 	8	 
	 
	 	 	 	 
	Section 5 Countersignature and Registration
	 	 	8	 
	 
	 	 	 	 
	Section 6 Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates
	 	 	9	 
	 
	 	 	 	 
	Section 7 Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	10	 
	 
	 	 	 	 
	Section 8 Cancellation and Destruction of Rights Certificates
	 	 	11	 
	 
	 	 	 	 
	Section 9 Company Covenants Concerning Securities and Rights
	 	 	11	 
	 
	 	 	 	 
	Section 10 Common Shares Record Date
	 	 	13	 
	 
	 	 	 	 
	Section 11 Adjustment of Purchase Price, Redemption Price, Number and Kind of
Securities or Number of Rights
	 	 	13	 
	 
	 	 	 	 
	Section 12 Certificate of Adjusted Purchase Price or Number of Shares
	 	 	19	 
	 
	 	 	 	 
	Section 13 Fractional Rights and Fractional Shares
	 	 	20	 
	 
	 	 	 	 
	Section 14 Rights of Action
	 	 	20	 
	 
	 	 	 	 
	Section 15 Agreement of Rights Holders
	 	 	21	 
	 
	 	 	 	 
	Section 16 Rights Certificate Holder Not Deemed a Stockholder
	 	 	21	 
	 
	 	 	 	 
	Section 17 Concerning the Rights Agent
	 	 	22	 
	 
	 	 	 	 
	Section 18 Merger, Consolidation or Change of Name of Rights Agent
	 	 	22	 
	 
	 	 	 	 
	Section 19 Duties of Rights Agent
	 	 	23	 
	 
	 	 	 	 
	Section 20 Change of Rights Agent
	 	 	25	 
	 
	 	 	 	 
	Section 21 Issuance of New Rights Certificates
	 	 	26	 
	 
	 	 	 	 
	Section 22 Redemption
	 	 	26	 
	 
	 	 	 	 

 

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	 	 	Page	 
	 
	 	 	 	 
	Section 23 Exchange
	 	 	26	 
	 
	 	 	 	 
	Section 24 Notice of Certain Events
	 	 	28	 
	 
	 	 	 	 
	Section 25 Notices
	 	 	28	 
	 
	 	 	 	 
	Section 26 Supplements and Amendments
	 	 	29	 
	 
	 	 	 	 
	Section 27 Successors
	 	 	30	 
	 
	 	 	 	 
	Section 28 Determinations and Actions by the Board
	 	 	30	 
	 
	 	 	 	 
	Section 29 Benefits of this Agreement
	 	 	30	 
	 
	 	 	 	 
	Section 30 Severability
	 	 	30	 
	 
	 	 	 	 
	Section 31 Governing Law
	 	 	31	 
	 
	 	 	 	 
	Section 32 Counterparts
	 	 	31	 
	 
	 	 	 	 
	Section 33 Descriptive Headings; Interpretation
	 	 	31	 

EXHIBITS

Exhibit A: Form of Rights Certificate

Exhibit B: Summary of Rights

 

ii

 

TAX BENEFITS PRESERVATION PLAN

This TAX BENEFITS PRESERVATION PLAN, dated as of October 5, 2009 (this “Agreement”),
is between Energy Conversion Devices, Inc., a Delaware corporation (the “Company”), and
Computershare Trust Company, N.A., a federally chartered trust company (the “Rights
Agent”).

W I T N E S S E T H

WHEREAS, the Company has generated substantial Tax Benefits (as hereinafter defined), such Tax
Benefits potentially may be a valuable Company asset, the Company desires to avoid an “ownership
change” within the meaning of Section 382 of the Code (as hereinafter defined), thereby preserving
its ability to utilize fully such Tax Benefits and, in furtherance of such objective, the Company
desires to enter into this Agreement; and

WHEREAS, on September 30, 2009, the Board of Directors of the Company (the “Board”)
authorized and declared a dividend distribution of one right (a “Right”) for each share of
common stock, par value $0.01 per share, of the Company (each, a “Common Share”)
outstanding at the Close of Business (as hereinafter defined) on October 15, 2009 (the “Record
Date”), each Right initially representing the right to purchase one one-hundredth (1/100) of a
Common Share, upon the terms and subject to the conditions hereinafter set forth, and further
authorized and directed the issuance of one Right (subject to adjustment in accordance with Section
11(i) and Section 11(n)) with respect to each Common Share issued or delivered by the Company
(whether originally issued or delivered from the Company’s treasury) after the Record Date but,
subject to Section 21, prior to the earlier of the Distribution Date (as hereinafter defined) and
the Expiration Date (as hereinafter defined).

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

Section 1 Certain Definitions

For purposes of this Agreement, the following terms shall have the meanings indicated:

(a) “Acquiring Person” shall mean any Person (other than the Company, any Related
Person or any Exempt Person) that has become the Beneficial Owner of 4.9% or more of the Common
Shares then outstanding; provided, however, that a Person will not be deemed to
have become an Acquiring Person solely as a result of (i) a reduction in the number of Common
Shares outstanding, (ii) the exercise of, or lapse of restrictions on, any options, warrants,
rights or similar interests (including restricted stock) granted by the Company to its directors,
officers and employees, (iii) any unilateral grant of any security by the Company, or (iv) an
Exempt Transaction, in each case, unless and until such time as such Person increases its
Beneficial Ownership of Common Shares (other than due to the subsequent occurrence of any of the
events specified in the foregoing clauses (i) through (iv)). Notwithstanding the foregoing, if the
Board determines in good faith that a Person who would otherwise be an “Acquiring Person,” as
defined pursuant to the foregoing provisions of this Section 1(a), has become such inadvertently,
and such Person divests as promptly as practicable, or enters into and delivers to the Company an
irrevocable commitment to divest as promptly as practicable, and thereafter divests as promptly
as practicable, a sufficient number of Common Shares so that such Person would no longer be an
“Acquiring Person,” as defined pursuant to the foregoing provisions of this Section 1(a), then such
Person shall not be deemed to be an “Acquiring Person” for any purpose under this Agreement unless
and until such time as such Person is again the Beneficial Owner of 4.9% of the Common Shares then
outstanding. Additionally, notwithstanding the foregoing provisions of this Section 1(a), the
Board may, in its sole and absolute discretion, determine that any Person shall not be deemed to be
an “Acquiring Person” for any purposes of this Agreement.

 

 

 

(b) “Adjustment Shares” shall have the meaning set forth in Section 11(a)(ii).

(c) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement, and to the extent not included within the foregoing clause of this
Section 1(c), shall also include, with respect to any Person, any other Person (whether or not a
Related Person or an Exempt Person) whose Common Shares would be deemed constructively owned by
such first Person for purposes of Section 382 of the Code, owned by a single “entity” as defined in
Section 1.382-3(a)(1) of the Treasury Regulations, or otherwise aggregated with shares owned by
such first Person for purposes of Section 382 of the Code, or any successor provision or
replacement provision, and the Treasury Regulations thereunder; provided, however,
that a Person shall not be deemed to be the Affiliate or Associate of another Person solely because
either or both Persons are or were directors of the Company.

(d) “Agreement” shall have the meaning set forth in the preamble of this Agreement.

(e) “Authorized Officer” shall mean the Company’s President and Chief Executive
Officer, Vice President and Chief Financial Officer, Executive Vice President, General Counsel and
Chief Administrative Officer, and the Vice President and Treasurer.

(f) A Person shall be deemed the “Beneficial Owner” of, and to “Beneficially
Own” any securities:

(i) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has or shares the right to vote or dispose of, has Beneficial Ownership of (as defined
under Rule 13d-3 of the General Rules and Regulations under the Exchange Act), or is considered to
own for purposes of Section 382 of the Code;

(ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights, warrants, options, or other
rights that would be options treated as exercised under Section 1.382-4(d) of the Treasury
Regulations (in each case, other than upon exercise or exchange of the Rights); provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially
Own securities (including rights, options or warrants) which are convertible or exchangeable
into Common Shares until such time as the convertible or exchangeable securities are exercised and
converted or exchanged into Common Shares except to the extent the acquisition or transfer of
such rights, options or warrants would be treated as exercised on the date of its acquisition
or transfer under Section 1.382-4(d) of the Treasury Regulations; or

 

2

 

(iii) which any other Person is the Beneficial Owner, if such Person or any of such Person’s
Affiliates or Associates has any agreement, arrangement or understanding (whether or not in
writing) with such other Person (or any of such other Person’s Affiliates or Associates) with
respect to acquiring, holding, voting or disposing of any securities of the Company, but only if
the effect of such agreement, arrangement or understanding is to treat such Persons as an “entity”
under Section 1.382-3(a)(1) of the Treasury Regulations;

provided, however, that a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, any security (A) tendered pursuant to a tender or exchange offer made by such
Person or any of such Person’s Affiliates or Associates until such tendered security is accepted
for purchase or exchange; (B) if such Person has the right to vote such security pursuant to an
agreement, arrangement or understanding (whether or not in writing) which (1) arises solely from a
revocable proxy given to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or (C) if such Beneficial Ownership arises solely as a result of such Person’s
status as a “clearing agency,” as defined in Section 3(a)(23) of the Exchange Act; provided
further, however, that nothing in this Section 1(f) shall cause a Person engaged in
business as an underwriter of securities or member of a selling to group to be the Beneficial Owner
of, or to Beneficially Own, any securities acquired through such Person’s participation in good
faith in an underwriting syndicate until the expiration of 40 days after the date of such
acquisition, or such later date as the directors of the Company may determine in any specific case.

(g) “Board” shall have the meaning set forth in the recitals of this Agreement.

(h) “Book Entry” shall mean an uncertificated book entry for the Common Shares.

(i) “Business Day” shall mean any day other than a Saturday, Sunday or a day on which
banking institutions in the State of New York (or such other state in which the principal office of
the Rights Agent may be located) are authorized or obligated by law or executive order to close.

(j) “Close of Business” on any given date shall mean 5:00 P.M., New York City time, on
such date; provided, however, that if such date is not a Business Day, it shall
mean 5:00 P.M., New York City time, on the next succeeding Business Day.

(k) “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor
statute.

(l) “Common Share” shall have the meaning set forth in the recitals of this Agreement.

(m) “Common Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii).

 

3

 

(n) “Company” shall have the meaning set forth in the preamble of this Agreement.

(o) “Current Per Share Market Price” shall have the meaning set forth in Section
11(d).

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

(q) “Distribution Date” shall mean the earliest of (i) the Close of Business on the
tenth Business Day after the Stock Acquisition Date or (ii) the Close of Business on the tenth
Business Day (or, unless the Distribution Date shall have previously occurred, such later date as
may be specified by the Board) after the commencement of a tender or exchange offer by any Person
(other than the Company or any Related Person), if, upon the consummation thereof, such Person
would be the Beneficial Owner of 4.9% or more of the then-outstanding Common Shares.

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

(s) “Exchange Ratio” shall have the meaning set forth in Section 23(a).

(t) “Exempt Person” shall mean any Person (i) whose Beneficial Ownership of 4.9% or
more of the then-outstanding Common Shares would not, as determined by the Board in its sole and
absolute discretion, jeopardize or endanger in any material respect the availability to the Company
of its Tax Benefits, or (ii) who would qualify as an Acquiring Person as of the Close of Business
on the Record Date, unless and until such time as such Person acquires Beneficial Ownership of one
Common Share in excess of the number of Common Shares Beneficially Owned by such Person as of the
Close of Business on the Record Date (other than due to the occurrence of any of the events
specified in clauses (i) through (iv) of the definition of Acquiring Person); provided,
however, that any Person specified in clause (i) or (ii) above shall cease to be an Exempt
Person as of the date that such Person ceases to Beneficially Own 4.9% or more of the
then-outstanding Common Shares or if the Board, in its sole and absolute discretion, makes a
contrary determination based on the potential effect of such Person’s Beneficial Ownership with
respect to the availability to the Company of its Tax Benefits.

(u) “Exempt Transaction” shall mean any transaction that the Board determines, in its
sole and absolute discretion, is exempt, which determination shall be irrevocable.

(v) “Expiration Date” shall mean the earliest of (i) the Final Expiration Date, (ii)
the time at which the Rights are redeemed as provided in Section 22, (iii) the time at which the
Rights are exchanged as provided in Section 23, (iv) the repeal of Section 382 of the Code, or any
successor statute, if the Board determines that this Agreement is no longer necessary for the
preservation of Tax Benefits, and (v) the first day of a taxable year of the Company to which the
Board determines that no Tax Benefits may be carried forward.

(w) “Final Expiration Date” shall be October 15, 2019.

(x) “Person” shall mean any individual, firm, corporation, partnership, limited
liability company, limited liability partnership, trust, association or other legal entity, group
of persons having a formal or informal understanding among themselves to make a “coordinated
acquisition” of shares or otherwise treated as an “entity” within the meaning of Section 1.382-
3(a)(1) of the Treasury Regulations or otherwise, and includes any successor (by merger or
otherwise) of such individual, entity or group.

 

4

 

(y) “Purchase Price” shall mean initially $115.00 per one one-hundredth of a Common
Share, subject to adjustment from time to time in accordance with Section 11.

(z) “Record Date” shall have the meaning set forth in the recitals of this Agreement.

(aa) “Redemption Price” shall mean $0.0001 per Right, subject to adjustment by the
Company in accordance with Section 11(a)(i).

(bb) “Related Person” shall mean (i) any Subsidiary of the Company or (ii) any
employee benefit or stock ownership plan of the Company or of any Subsidiary of the Company, as the
case may be, or any entity holding Common Shares for or pursuant to the terms of any such plan.

(cc) “Right” shall have the meaning set forth in the recitals of this Agreement.

(dd) “Rights Agent” shall have the meaning set forth in the preamble of this
Agreement.

(ee) “Rights Certificates” shall mean certificates evidencing the Rights, in
substantially the form attached hereto as Exhibit A.

(ff) “Section 11(a)(ii) Event” shall have the meaning set forth in Section 11(a)(ii).

(gg) “Section 11(a)(ii) Trigger Date” shall have the meaning set forth in Section
11(a)(iii).

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

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

(jj) “Stock Acquisition Date” shall mean the first date of public announcement (which
for purposes of this definition shall include a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such or
such earlier date as a majority of the Board shall become aware of the existence of an Acquiring
Person; provided, that if a Person is determined to be an Exempt Person in accordance with
Section 1(t) (and as a result, such Person is not an Acquiring Person), then the Stock Acquisition
Date that otherwise shall have occurred shall be deemed not to have occurred.

(kk) “Subsidiary” shall mean, with reference to any Person, any corporation or other
legal entity of which a majority of the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person, or otherwise controlled by such Person.

(ll) “Substitution Period” shall have the meaning set forth in Section 11(a)(iii).

 

5

 

(mm) “Summary of Rights” shall mean a copy of a summary of the terms of the Rights, in
substantially the form attached hereto as Exhibit B.

(nn) “Tax Benefits” shall mean the net operating loss carry-overs, capital loss
carry-overs, general business credit carry-overs, alternative minimum tax credit carry-overs and
foreign tax credit carry-overs, as well as any net unrealized built-in loss within the meaning of
Section 382 of the Code, of the Company or any direct or indirect Subsidiary of the Company.

(oo) “Trading Day” shall mean a day on which the principal national securities
exchange on which the Common Shares are listed or admitted to trading is open for the transaction
of business.

(pp) “Treasury Regulations” shall mean final, temporary and proposed income tax
regulations promulgated under the Code, including any amendments thereto.

(qq) “Trust” shall have the meaning set forth in Section 23(d).

(rr) “Trust Agreement” shall have the meaning set forth in Section 23(d).

Section 2 Appointment of Rights Agent

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

Section 3 Issuance of Rights Certificates

(a) Until the Distribution Date, (i) the Rights shall be evidenced (subject to Section 3(b))
by certificates representing the Common Shares (or Book Entries, as applicable), registered in the
names of the record holders thereof (which certificates or Book Entries, as applicable,
representing such Common Shares shall also be deemed to be Rights Certificates), (ii) the Rights
shall be transferable only in connection with the transfer of the underlying Common Shares, and
(iii) the surrender for transfer of any certificates representing such Common Shares (or any
transfer recorded in a Book Entry for such Common Shares) in respect of which Rights have been
issued shall also constitute the transfer of the Rights associated with the Common Shares
represented by such certificates or Book Entries.

(b) Following the Record Date, the Company will make available, as promptly as practicable, a
copy of a Summary of Rights to any holder of Rights who may so request from time to time prior to
the Expiration Date.

 

6

 

(c) Rights shall be issued by the Company in respect of all Common Shares (other than any
Common Shares that may be issued upon the exercise or exchange of any Right) issued or delivered by
the Company (whether originally issued or delivered from the Company’s treasury) (i) after the
Record Date but prior to the earlier of the Distribution Date and the
Expiration Date and (ii) to the extent provided in Section 21, after the Distribution Date.
Certificates representing such Common Shares shall have stamped on, impressed on, printed on,
written on, or otherwise affixed to them a legend in substantially the following form or such
similar legend as the Company may deem appropriate and is not inconsistent with the provisions of
this Agreement and as do not affect the rights, duties or responsibilities of the Rights Agent, or
as may be required to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or transaction reporting system on
which the Common Shares may from time to time be listed or quoted:

This certificate also evidences and entitles the holder hereof to certain Rights as set
forth in the Tax Benefits Preservation Plan between Energy Conversion Devices, Inc. and
Computershare Trust Company, N.A., dated as of October 5, 2009 and as amended from time to
time (the “Rights Plan”), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of Energy
Conversion Devices, Inc. The Rights are not exercisable prior to the occurrence of certain
events specified in the Rights Plan. Under certain circumstances, as set forth in the Rights
Plan, such Rights may be redeemed, may be exchanged, may expire, may be amended, or may be
evidenced by separate certificates and no longer may be evidenced by this certificate.
Energy Conversion Devices, Inc. shall mail to the holder of this certificate a copy of the
Rights Plan, as in effect on the date of mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances as set forth in the Rights Plan,
Rights that are or were Beneficially Owned by an Acquiring Person (as such terms are defined
in the Rights Plan) may become null and void.

With respect to any Book Entry Common Shares, such legend shall be included in a notice to the
record holder of such Common Shares in accordance with applicable law. The absence of the foregoing
legend or such notice shall in no way affect any of the other provisions of this Agreement.

(d) Any Rights Certificate issued pursuant to this Section 3 or Section 21 that represents
Rights Beneficially Owned by an Acquiring Person and any Rights Certificate issued at any time upon
the transfer of any Rights to an Acquiring Person or to any nominee of such Acquiring Person, and
any Rights Certificate issued pursuant to Section 6 or Section 11 upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this sentence, shall be
subject to and contain a legend in substantially the following form or such similar legend as the
Company may deem appropriate and that is not inconsistent with the provisions of this Agreement or
as may be required to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights may from time to
time be listed:

The Rights represented by this Rights Certificate are or were Beneficially Owned by a Person
who was an Acquiring Person (as such terms are defined in the Rights Plan). This Rights
Certificate and the Rights represented hereby may become null and void in the circumstances
specified in Section 11(a)(ii) of the Rights Plan.

With respect to any Book Entry Common Shares, such legend shall be included in a notice to the
record holder of such Common Shares in accordance with applicable law. The absence of the
foregoing legend or such notice shall in no way affect any of the other provisions of this
Agreement.

 

7

 

(e) As promptly as practicable after the Distribution Date, the Company shall prepare and
execute, the Rights Agent shall countersign and the Company shall send or cause to be sent (and the
Rights Agent will, if requested, and if provided with all necessary information, send), by first
class, insured, postage prepaid mail, to each record holder of Common Shares, as of the Close of
Business on the Distribution Date (other than an Acquiring Person), at the address of such holder
shown on the records of the Company, a Rights Certificate representing one Right for each Common
Share so held, subject to adjustment in accordance with Section 11(i) and Section 11(n). As of and
after the Distribution Date, the Rights shall be represented solely by such Rights Certificates.
The Company shall promptly notify the Rights Agent in writing upon the occurrence of the
Distribution Date and, if such notification is given orally, the Company shall confirm same in
writing on or prior to the next Business Day. Until such notice is received by the Rights Agent,
the Rights Agent may presume conclusively that the Distribution Date has not occurred.

(f) In the event that the Company purchases or otherwise acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such Common Shares shall
be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares so purchased or acquired.

Section 4 Form of Rights Certificates

The Rights Certificates (and the form of election to purchase and the form of assignment to be
printed on the reverse thereof) shall each be substantially in the form attached hereto as Exhibit
A, with such changes and marks of identification or designation, and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange
or transaction reporting system on which the Rights may from time to time be listed or quoted, or
to conform to usage. Subject to the provisions of Section 21, the Rights Certificates, whenever
distributed, shall entitle the holders thereof to purchase such number of one one-hundredths of a
Common Share as is set forth therein at the Purchase Price; provided, however, that
the Purchase Price, the number and kind of securities issuable upon exercise of each Right and the
number of Rights outstanding shall be subject to adjustment in accordance with Section 11.

Section 5 Countersignature and Registration

(a) The Rights Certificates shall be executed on behalf of the Company by any Authorized
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 any Assistant Secretary of
the Company, either manually or by facsimile signature. The Rights Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be
valid for any purpose unless so countersigned. In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be
signed on behalf of the Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Agreement any such person was not such an officer.

 

8

 

(b) Following the Distribution Date, upon receipt by the Rights Agent of notice of the
occurrence of the Distribution Date pursuant to Section 3(e), the Rights Agent shall keep or cause
to be kept books for registration and transfer of the Rights Certificates issued hereunder at its
office or offices designated for such purposes 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. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates and the date of each of the Rights Certificates.

			
	Section 6	 	Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates

(a) Subject to the provisions of Section 7(d), Section 11 and Section 13, at any time after
the Close of Business on the Distribution Date and prior to the Expiration Date, any Rights
Certificate(s) (other than Rights Certificates representing Rights that have been exchanged
pursuant to Section 23) representing exercisable Rights may be transferred, split up, combined or
exchanged for another Rights Certificate(s), entitling the registered holder to purchase a like
number of one one-hundredths of a Common Share (or other securities, as the case may be) as the
Rights Certificate(s) 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 Rights Certificate(s) must make such request in writing delivered to the Rights Agent, and
must surrender the Rights Certificate(s) to be transferred, split up, combined or exchanged, with
the form of assignment and the certificate contained therein duly executed, at the office or
offices 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 Rights
Certificate until the registered holder thereof shall have (i) completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights Certificate, (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) as
the Company or the Rights Agent shall reasonably request and (iii) paid a sum sufficient to cover
any tax or charge that may be imposed in connection with any transfer, split up, combination or
exchange or Rights Certificates as required by Section 9(d). Thereupon, subject to Section 7(d),
Section 11, Section 13 and Section 23, the Rights Agent shall countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested
registered in such name or names as may be designated by the surrendering registered holder. The
Rights Agent shall promptly forward any such sum
collected by it to the Company or to such Person or Persons as the Company shall specify by
written notice.

 

9

 

(b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement
to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate, if mutilated, the Company
shall execute and deliver a new Rights Certificate of like tenor to the Rights Agent and the Rights
Agent will countersign and deliver such new Rights Certificate to the registered holder in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.

Section 7 Exercise of Rights; Purchase Price; Expiration Date of Rights

(a) Except as otherwise provided herein, the Rights shall become exercisable on the
Distribution Date and prior to the Expiration Date, and thereafter, the registered holder of any
Rights Certificate may, subject to Section 7(d), Section 11(a)(ii) and Section 23, exercise the
Rights evidenced thereby, in whole or in part, upon surrender of the Rights Certificate, with the
form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the
office or agency of the Rights Agent designated for such purpose, together with payment of the
Purchase Price (including any applicable tax or charge required to be paid by the holder of such
Rights Certificate in accordance with the provisions of Section 9(d)) for each one one-hundredth of
a Common Share (or other securities, cash or assets, as the case may be) as to which the Rights are
exercised.

(b) Upon receipt of a Rights Certificate representing exercisable Rights with the form of
election to purchase and the certificate properly completed and duly executed, accompanied by
payment of the Purchase Price for the Common Shares to be purchased and an amount equal to any
applicable tax or charge required to be paid under Section 9(d) by certified check, cashier’s
check, bank draft or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Common Shares (or make
available, if the Rights Agent is the transfer agent for such shares) certificates representing the
total number of one one-hundredths of a Common Share to be purchased (and the Company hereby
irrevocably authorizes and directs its transfer agent to comply with all such requests) or (B) if
the Company shall have elected to deposit any Common Shares issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Common Share as are to be purchased (and the
Company hereby irrevocably authorizes and directs such depositary agent to comply with all such
requests); (ii) after receipt of such certificates (or depositary receipts, as the case may be)
cause the same to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such holder; (iii) when
appropriate, requisition from the Company of the amount of cash to be paid in lieu of the issuance
of fractional shares in accordance with the provisions of Section 13; and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the registered holder of such Rights
Certificate.

 

10

 

(c) If the registered holder of any Rights Certificate shall exercise less than all of the
Rights evidenced thereby, subject to Section 13, the Rights Agent shall prepare, execute and
deliver to the registered holder of such Rights Certificate or to its duly authorized assigns a new
Rights Certificate evidencing the Rights remaining unexercised.

(d) 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 any purported transfer,
split up, combination or exchange of any Rights Certificate pursuant to Section 6 or exercise or
assignment of a Rights Certificate as set forth in this Section 7 unless the registered holder of
such Rights Certificate shall have (i) duly and properly completed and signed the certificate
following the form of assignment or the form of election to purchase, as applicable, set forth on
the reverse side of the Rights Certificate surrendered for such transfer, split up, combination,
exchange, exercise or assignment and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) thereof and of the Rights evidenced thereby as the
Company or the Rights Agent may reasonably request.

Section 8 Cancellation and Destruction of Rights Certificates

All Rights Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its agents, be delivered to
the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any
other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.

Section 9 Company Covenants Concerning Securities and Rights

(a) The Company covenants and agrees that it shall cause to be reserved, authorized for
issuance and kept available out of its authorized and unissued Common Shares, or other securities,
or any shares of any such security of the Company held in its treasury, a number of Common Shares
(or any other security of the Company as may be applicable at the time of exercise) that shall be
sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7.

(b) The Company covenants and agrees that, for so long as the Common Shares issuable upon the
exercise of the Rights may be listed on any national securities exchange, it shall endeavor to
cause, from and after such time as the Rights become exercisable, all securities reserved for
issuance upon the exercise of Rights to be listed on such exchange upon official notice of issuance
upon such exercise.

(c) The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of
the certificates or depositary receipts representing such shares (subject to payment
of the Purchase Price), be duly authorized, validly issued and fully paid and nonassessable
shares (except as otherwise provided by any corporation law applicable to the Company).

 

11

 

(d) The Company covenants and agrees that it will pay, when due and payable, any and all
federal or state taxes and charges that may be payable in respect of the issuance or delivery of
the Rights Certificates and of any certificates representing securities issued upon the exercise of
Rights; provided, however, that the Company shall not be required to pay any tax or
charge which may be payable in respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of certificates or depositary receipts representing
securities issued upon the exercise of Rights in a name other than that of, the registered holder
of the Rights 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 charge has been paid (any such tax or charge being payable by the holder of
such Rights Certificate at the time of surrender) or until it has been established to the Company’s
reasonable satisfaction that no such tax or charge is due.

(e) If the Company determines that registration under the Securities Act is required, then the
Company shall use commercially reasonable efforts (i) to file, as soon as practicable after the
Distribution Date, on an appropriate form, 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 shall 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 90 days, the exercisability of the Rights
in order to prepare and file such registration statement and to permit it to become effective or to
qualify the Rights, the exercise thereof or the issuance of Common Shares, or other securities
issuable upon the exercise thereof under state securities or “blue sky” laws. 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. In addition, if the Company determines that a registration
statement or other document should be filed under the Securities Act or any state securities laws
following the Distribution Date, the Company may temporarily suspend the exercisability of the
Rights, for a period of time not to exceed 90 days, in each relevant jurisdiction until such time
as a registration statement has been declared effective or any such other document filed and, if
required, approved, and, 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 anything in
this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite registration or qualification in such jurisdiction has not been effected or the exercise
of the Rights is not permitted under applicable law.

(f) In the event that the Company is obligated to issue other securities of the Company or pay
cash pursuant to Section 7, Section 11, Section 13 or Section 23, it shall make
all arrangements necessary so that such other securities or cash are available for
distribution by the Rights Agent, if and when necessary to comply with this Agreement.

 

12

 

Section 10 Common Shares Record Date

Each Person in whose name any certificate (or depositary receipt) for a number of one
one-hundredths of a Common Share is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such Common Shares, and such certificate (or
depositary receipt) shall be dated, the date upon which the Rights Certificate representing such
Rights was duly surrendered and payment of the Purchase Price (and all applicable taxes and
charges) was made; provided, however, that if the date of such surrender and
payment is a date upon which the transfer books of the Company for Common Shares are closed, such
Person shall be deemed to have become the record holder of such securities on, and such certificate
(or depositary receipt) shall be dated, the next succeeding Business Day on which the transfer
books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of
a Rights Certificate shall not be entitled to any rights of a holder of any security of the Company
with respect to Common Shares or other securities for which the Rights are or may 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, Redemption Price, Number and Kind of Securities or Number
of Rights

The Purchase Price, the Redemption Price, the Exchange Ratio, the number of Common Shares or
other securities or property purchasable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this Section 11.

(a) (i) In the event the Company shall at any time after the Record Date (A) declare a
dividend on the Common Shares payable in Common Shares, (B) split or subdivide the outstanding
Common Shares, (C) combine the outstanding Common Shares into a smaller number of Common Shares or
(D) issue any shares of its capital stock in a reclassification of the Common Shares (including any
such reclassification in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this Section 11(a), the
Purchase Price, the Redemption Price and the Exchange Ratio in effect at the time of the record
date for such dividend or of the effective date of such split, subdivision, combination or
reclassification, as the case may be, and the number and kind of shares of capital stock issuable
on such date, shall be adjusted so that following such adjustment such dividend, split,
subdivision, combination or reclassification shall not have had the effect of reducing or limiting
the benefits the holder of any Right would have had absent such dividend, split, subdivision,
combination or reclassification. If any event occurs that requires an adjustment under this
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall
be made prior to, and in addition to, any adjustment pursuant to Section 11(a)(ii).

 

13

 

(ii) Subject to Section 23 and except as otherwise provided in this Section 11(a)(ii) and
Section 11(a)(iii), in the event that any Person becomes an Acquiring Person, each
holder of a Right shall thereafter have the right to receive, upon exercise thereof at a price
equal to the then-current Purchase Price, in accordance with the terms of this Agreement, such
number of Common Shares as shall equal the result obtained by (x) multiplying the then-current
Purchase Price by the number of one one-hundredths of a Common Share for which a Right is then
exercisable and dividing that product by (y) 50% of the Current Per Share Market Price of the
Common Shares (determined pursuant to Section 11(d)) on the date of the occurrence of such event;
provided, however, that the Purchase Price (as so adjusted) and the number of
Common Shares so receivable upon exercise of a Right shall thereafter be subject to further
adjustment as appropriate in accordance with Section 11(f) (such number of shares, the
“Adjustment Shares”).

Notwithstanding anything in this Agreement to the contrary, however, from and after the time
when any Person first becomes an Acquiring Person (a “Section 11(a)(ii) Event”), any Rights
that are Beneficially Owned by (A) any Acquiring Person, (B) a transferee of any Acquiring Person
who becomes a transferee after the occurrence of a Section 11(a)(ii) Event or (C) a transferee of
any Acquiring Person who became a transferee prior to or concurrently with the occurrence of a
Section 11(a)(ii) Event pursuant to either (1) a transfer from the Acquiring Person to holders of
its equity securities or to any Person with whom it has any continuing agreement, arrangement or
understanding, written or otherwise, regarding the transferred Rights, the Common Shares or the
Company or (2) a transfer that the Board, in its sole and absolute discretion, has determined is
part of a plan, arrangement or understanding, written or otherwise, which has the purpose or effect
of avoiding the provisions of this paragraph, and (D) subsequent transferees of such Persons, shall
be null and void without any further action and any holder of such Rights shall thereafter have no
rights whatsoever with respect to such Rights under any provision of this Agreement or otherwise.
The Company will use commercially reasonable efforts to ensure that the provisions of this Section
11(a)(ii) are complied with, but shall have no liability to any holder of Rights Certificates or
other Person as a result of its failure to make any determinations with respect to an Acquiring
Person or its transferees hereunder. From and after such Section 11(a)(ii) Event, no Rights
Certificates shall be issued pursuant to Section 3 or Section 6 that represent Rights that are or
have become null and void pursuant to the provisions of this paragraph, and any Rights Certificates
delivered to the Rights Agent that represent Rights that are or have become null and void pursuant
to the provisions of this paragraph shall be cancelled.

(iii) In the event that there shall be an insufficient number of Common Shares authorized but
unissued (and unreserved) to permit the exercise in full of the Rights in accordance with the
foregoing paragraph (ii), the Board shall, with respect to such deficiency, to the extent permitted
by applicable law and any material agreements then in effect to which the Company is a party, (A)
determine the excess of (x) the value of the Adjustment Shares issuable upon the exercise of a
Right (the “Current Value”) over (y) the then-current Purchase Price multiplied by the
number of one one-hundredths of a Common Share for which a Right was exercisable immediately prior
to the time that the Acquiring Person became such (such excess, the “Spread”); and (B) with
respect to each Right (other than Rights which have become null and void pursuant to Section
11(a)(ii)), make adequate provision to substitute for the Adjustment Shares issuable upon exercise
of the Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in such
Purchase Price, (3) other equity securities of the Company (including, if then-provided for under
the Company’s certificate of incorporation, shares or fractions of shares of preferred stock)
which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the Common Shares, are deemed in good faith by the
Board to have substantially the same value as the Common Shares (such other equity securities of
the Company, the “Common Stock Equivalents”), (4) debt securities of the Company, (5) other
assets or (6) any combination of the foregoing, having a value which, when added to the value of
the Common Shares actually issued upon exercise of such Right, shall have an aggregate value equal
to the Current Value (less the amount of any reduction in such Purchase Price), where such

 

14

 

aggregate value has been determined by the Board (upon the advice of a nationally recognized
investment banking firm selected by the Board in good faith); provided, however, if
the Company shall not make adequate provision to deliver value pursuant to clause (B) above within
30 days following the later of (I) the date that the Acquiring Person became such and (II) the date
on which the Company’s right of redemption pursuant to Section 22 expires (the later of the dates
in clauses (I) and (II), the “Section 11(a)(ii) Trigger Date”), then the Company shall be
obligated to deliver, to the extent permitted by applicable law and any material agreements then in
effect to which the Company is a party, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares, and then, if necessary cash, which shares
or cash have an aggregate value equal to the Spread. If within the 30-day period referred to above
the Board shall determine in good faith that it is likely that sufficient additional Common Shares
could be authorized for issuance upon exercise in full of the Rights, then, if the Board so elects,
such 30-day period may be extended to the extent necessary, but not more than 90 days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares. Such 30-day period, as it may be extended, is hereinafter
called the “Substitution Period.” To the extent that the Company determines that some
action need be taken pursuant to the second or third sentence of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 11(a)(ii) and the last sentence of this Section
11(a)(iii), that such action shall apply uniformly to all outstanding Rights and (y) may suspend
the exercisability of the Rights until the expiration of the Substitution Period in order to seek
any authorization of additional shares or to decide the appropriate form of distribution to be made
pursuant to such second sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect.

(b) If the Company fixes a record date for the issuance of rights, options or warrants to all
holders of Common Shares entitling them (for a period expiring within 45 days after such record
date) to subscribe for or purchase Common Shares or securities convertible into Common Shares at a
price per Common Share (or having a conversion price per share, if a security convertible into
Common Shares) less than the Current Per Share Market Price of the Common Shares (determined
pursuant to Section 11(d)) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which is the number of Common Shares outstanding
on such record date plus the number of Common Shares which the aggregate offering price of the
total number of Common Shares to be offered (or the aggregate initial conversion price of the
convertible securities to be offered) would purchase at such Current Per Share Market Price, and
the denominator of which is the number of Common Shares outstanding on such record date plus the
number of additional Common Shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of capital stock
issuable upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which is in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board, whose determination shall be described in a
written statement filed with the Rights Agent. Common Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed, and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which 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
Common Shares (including any such distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash
(other than a regular periodic cash dividend), assets, stock (other than a dividend payable in
Common Shares) or subscription 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 is the Current Per Share Market Price of the Common Shares (as determined
pursuant to Section 11(d)) on such record date or, if earlier, the date on which Common Shares
begin to trade on an ex-dividend or when issued basis for such distribution, less the fair market
value (as determined in good faith by the Board, whose determination shall be described in a
written statement filed with the Rights Agent) of the portion of the evidences of indebtedness,
cash, assets or stock so to be distributed or of such subscription rights, options or warrants
applicable to one Common Share, and the denominator of which is such Current Per Share Market Price
of the Common Shares; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value of the shares of
capital stock issuable upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.

(d) For the purpose of any computation hereunder, the “Current Per Share Market Price”
of the Common Shares on any date shall be deemed to be the average of the daily closing prices per
Common Share for the 30 consecutive Trading Days immediately prior to, but not including, such
date; provided, however, that in the event that the Current Per Share Market Price
of the Common Shares is determined during a period following the announcement by the issuer of such
Common Shares of (i) a dividend or distribution on such Common Shares payable in Common Shares or
securities convertible into Common Shares (other than the Rights) or (ii) any split, subdivision,
combination or reclassification of the Common Shares, and prior to the expiration of 30 Trading
Days after, but not including, the ex-dividend date for such dividend or distribution, or the
record date for such split, subdivision, combination or reclassification, then, and in each such
case, the Current Per Share Market Price shall be appropriately adjusted to take into account
ex-dividend trading or to reflect the current per share market price per share equivalent of such
Common Shares. The closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and asked prices, regular
way, in either case, as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the principal national
securities exchange on which the Common Shares are listed or admitted to trading or, if the
Common Shares 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 OTC Bulletin Board or such other system then in use,
or, if on any such date the Common Shares 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 Shares selected by the Board. If the Common Shares are not publicly held or not so listed
or traded, or are not the subject of available bid and asked quotes, the Current Per Share Market
Price of such Common Shares shall mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed with the Rights Agent.

 

16

 

(e) No adjustment in the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least one percent (1%) in the pre-adjusted Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e) are
not required to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the
nearest one one-hundredth of a Common Share, as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires such adjustment and (ii)
the Expiration Date.

(f) If, as a result of an adjustment made pursuant to Section 11(a), the holder of any Right
thereafter exercised becomes entitled to receive any securities of the Company other than Common
Shares, the number or kind of such other securities so receivable upon exercise of any Right (or
the Purchase Price in respect thereof) thereafter 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
Common Shares (and the Purchase Price in respect thereof) contained in this Section 11, and the
provisions of Section 7, Section 9, Section 10 and Section 13 with respect to the Common Shares
(and the Purchase Price in respect thereof) shall apply on like terms to any such other securities
(and the Purchase Price in respect thereof).

(g) All Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price in accordance with this Section 11 shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-hundredths of a Common Share issuable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment as provided in this
Section 11.

(h) Unless the Company has exercised its election as provided in Section 11(i), upon each
adjustment of the Purchase Price pursuant to Section 11(b) or Section 11(c), each Right outstanding
immediately prior to the making of such adjustment shall evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of a Common Share (calculated to the
nearest one one-hundredth of a Common Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a Common Share issuable upon exercise of a Right immediately prior to such
adjustment of the Purchase Price 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.

 

17

 

(i) The Company may elect, on or after the date of any adjustment of the Purchase Price in
accordance with this Section 11, to adjust the number of Rights in lieu of any adjustment in the
number of one one-hundredths of a Common Share issuable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment in the number of Rights shall be exercisable for the
number of one one-hundredths of a Common Shares for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment in the number of Rights
shall become that number of Rights (calculated to the nearest one one-hundredth) 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. The
Company shall also, as promptly as practicable, notify the Rights Agent in writing of the same and
give the Rights Agent a copy of such announcement. Such record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but if the Rights Certificates have been issued,
such record date shall be at least 10 days later than the date of the public announcement. If
Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates evidencing, subject to the
provision of Section 13, the additional Rights to which such holders are entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders are entitled after such adjustment.
Rights Certificates so to be distributed shall be issued, executed, and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Rights Certificates on the record date
specified in the public announcement.

(j) Without respect to any adjustment or change in the Purchase Price or the number or kind of
securities issuable upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number and kind of securities
which were expressed in the initial Rights Certificates issued hereunder.

(k) Before taking any action that would cause an adjustment reducing the Purchase Price below
one one-hundredth of the then par value, if any, of the Common Shares or any other securities of
the Company issuable upon exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable (except as otherwise provided by any corporation law applicable
to the Company) Common Shares or other securities, as the case may be, at such adjusted Purchase
Price.

(l) In any case in which this Section 11 otherwise requires that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of any Right exercised after such
record date the number of one one-hundredths of a Common Share or other securities of the Company,
if any, issuable upon such exercise over and above the number of one one-hundredths of a Common
Share or other securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company delivers to such holder a due bill or other
appropriate instrument evidencing such holder’s right to receive such additional Common Shares or
other securities upon the occurrence of the event requiring such adjustment.

 

18

 

(m) Notwithstanding anything in this Agreement to the contrary, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that in its good faith judgment the Board determines to be
necessary or advisable in order that any (i) consolidation or subdivision of the Common Shares,
(ii) issuance wholly for cash of Common Shares at less than the Current Per Share Market Price
therefor, (iii) issuance wholly for cash of Common Shares or securities which by their terms are
convertible into or exchangeable for Common Shares, (iv) stock dividend or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the Company to holders of its
Common Shares is not taxable to such stockholders.

(n) Notwithstanding anything in this Agreement to the contrary, in the event that the Company
at any time after the Record Date and prior to the Distribution Date (i) pays a dividend on the
outstanding Common Shares payable in Common Shares, (ii) splits or subdivides the outstanding
Common Shares, (iii) combines the outstanding Common Shares into a smaller number of shares or (iv)
issues any shares of its capital stock in a reclassification of the outstanding Common Shares
(including any such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), the number of Rights associated with each
Common Share then outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter associated with
each Common Share following any such event equals the result obtained by multiplying the number of
Rights associated with each Common Share, immediately prior to such event by a fraction, the
numerator of which is the total number of Common Shares outstanding immediately prior to the
occurrence of the event and the denominator of which is the total number of Common Shares
outstanding immediately following the occurrence of such event. The adjustments provided for in
this Section 11(n) shall be made successively whenever such a dividend is paid or such a split,
subdivision, combination or reclassification is effected.

Section 12 Certificate of Adjusted Purchase Price or Number of Shares

Whenever an adjustment is made in accordance with Section 11, the Company shall promptly (a)
prepare a certificate setting forth such adjustment and a brief statement of the facts and
calculations accounting for such adjustment, (b) file with the Rights Agent, and with each transfer
agent for the Common Shares a copy of such certificate, and (c) if a Distribution Date has
occurred, mail a brief summary thereof to each holder of a Rights Certificate. The Rights Agent
shall be fully protected in relying on any such certificate and on any adjustment therein contained
and shall not be deemed to have knowledge of any such adjustment unless and until it shall have
received such certificate; provided, however, that the Rights Agent will not be
entitled to such protection in cases of bad faith or willful misconduct.

 

19

 

Section 13 Fractional Rights and Fractional Shares

(a) The Company shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional Rights, the Company shall
pay to the registered holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current
market value of one Right. For purposes of this Section 13(a), the current market value of one
Right is the closing price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing price for any Trading Day
shall be the last sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case, as reported in the
principal consolidated transaction reporting system with respect to securities listed or admitted
to trading on the principal national securities exchange 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 the OTC Bulletin Board 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, such market maker to be
selected by the Board. If the Rights are not publicly held or are not so listed or traded, or are
not the subject of available bid and asked quotes, the current market value of one Right shall mean
the fair value thereof as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent.

(b) The Company shall not be required to issue fractions of Common Shares (or other securities
issuable upon exercise of Rights) upon exercise of the Rights or to distribute certificates which
evidence fractional Common Shares (or other securities issuable upon exercise of Rights). In lieu
of issuing any such fractional securities, the Company may pay to any Person to whom or which such
fractional securities would otherwise be issuable an amount in cash equal to the same fraction of
the current market value of one such security. For purposes of this Section 13(b), the current
market value of one Common Share, or other security issuable upon the exercise or exchange of
Rights shall be the closing price thereof (as determined pursuant to Section 11(d)) on the Trading
Day immediately prior to the date of such exercise or exchange.

(c) The holder of a Right by the acceptance of the Rights expressly waives its right to
receive any fractional Rights or any fractional shares upon exercise or exchange of a Right, except
as permitted by this Section 13.

Section 14 Rights of Action

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

 

20

 

(b) 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, judgment, decree or ruling (whether interlocutory or final)
issued by a court of competent jurisdiction or by a governmental regulatory, self-regulatory or
administrative agency or commission, or any statute, rule, regulation, or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company shall use
commercially reasonable efforts to have any such injunction, order, judgment, decree or ruling
lifted or otherwise overturned as soon as possible.

Section 15 Agreement of Rights Holders

Every holder of a Right 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 shall be transferable only in connection with
the transfer of the Common Shares;

(b) after the Distribution Date, the Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed and accompanied by a properly executed instrument of
transfer with the appropriate forms and certificates fully executed; and

(c) the Company and the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Share certificate or Book
Entry) is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights Certificates or the associated
Common Share certificate (or notices provided to holders of Book Entry Common Shares) made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary.

Section 16 Rights Certificate Holder Not Deemed a Stockholder

No holder of any Rights Certificate, by means of such possession, shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Common Shares or any other
securities of the Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights Certificate be construed
to confer upon the holder of any Rights Certificate, by means of such possession, any of the rights
of a stockholder of the Company, including any right to vote on any matter
submitted to stockholders at any meeting thereof, including the election of directors, or to
give or withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 24), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate have been
exercised in accordance with the provisions of this Agreement.

 

21

 

Section 17 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 preparation,
execution, delivery and amendment of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or
expense incurred without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent for any action taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the reasonable costs and expenses of
defending against any claim of liability arising directly or indirectly therefrom.

(b) The Rights Agent shall be authorized and protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its acceptance or
administration of this Agreement in reliance upon any Rights Certificate or certificate for Common
Shares or for other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or
other paper or document 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 19.

Section 18 Merger, Consolidation or Change of Name of Rights Agent

(a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent is a party, will be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 20. If, at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and, if at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent; and in all such cases such
Rights Certificates shall have the full force provided in the Rights Certificates and in this
Agreement.

 

22

 

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

Section 19 Duties of Rights Agent

The Rights Agent undertakes only the duties and obligations expressly imposed by this
Agreement upon the following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall 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), 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 the identity of any Acquiring
Person and the determination of the Current Per Share Market Price) 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 any Authorized Officer and delivered
to the Rights Agent; and such certificate 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 to be taken by it in good faith 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 Rights Certificates or be required to verify the
same (except as to its countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.

(e) The Rights Agent will have no 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 Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of Section 11 or Section 23 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 Rights 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 Common Shares to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Common Shares will, when so issued, be duly authorized, validly
issued and fully paid and nonassessable.

 

23

 

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

(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from the Authorized Officers, and to apply to such
Authorized Officers for advice or instructions in connection with its duties, and it shall incur no
liability for or in respect of any action taken, suffered or omitted by it in good faith in
accordance with instructions of any such Authorized Officer. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights Agent under this Agreement and the
date on and/or after which such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date any Authorized
Officer of the Company actually receives such application unless any such Authorized Officer shall
have consented in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken or omitted.

(h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent
may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though the Rights Agent were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other Person.

(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company resulting from any such
act, omission, default, neglect or misconduct; provided that reasonable care was exercised
by the Rights Agent in the appointment of any such Person.

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

 

24

 

Section 20 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’ prior written notice mailed to the Company and, in the event
that such transfer agent is a Person other than the Rights Agent or an Affiliate of the Rights
Agent, to each transfer agent of the Common Shares known to the Rights Agent, by registered or
certified mail. In the event the transfer agency relationship in effect between the Company and
the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be
discharged from its duties under this Agreement as of the effective date of such termination, and
the Company shall be responsible for sending any notice required hereunder in connection with such
resignation. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’
prior written notice, mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Shares, by registered or certified mail, and, if such removal
occurs after the Distribution Date, to the holders of the Rights Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the
Company shall, in its sole and absolute discretion, 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 Rights Certificate (who shall, with
such notice, submit his Rights Certificate for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be (a) a legal business entity organized and doing business under the laws
of the United States or of any state of the United States, in good standing, which is authorized
under such laws to exercise corporate trust, stock transfer or shareholder services powers and
which has at the time of its appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an Affiliate of a legal business entity described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of
any such appointment, the Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares, and, if such appointment occurs after the
Distribution Date, mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 20, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

 

25

 

Section 21 Issuance of New Rights Certificates

Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be
approved by the Board to reflect any adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property purchasable under the Rights Certificates
made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale by the Company of Common Shares following the
Distribution Date and prior to the Expiration Date, the Company (a) shall, with respect to Common
Shares so issued or sold pursuant to the exercise, exchange or conversion of securities (other than
Rights) issued prior to the Distribution Date which are exercisable or exchangeable for, or
convertible into, Common Shares, and (b) may, in any other case, if deemed necessary or appropriate
by the Board, issue Rights Certificates representing the appropriate number of Rights as would have
been issued in respect of such Common Shares if they had been issued or sold prior to the
Distribution Date, as appropriately adjusted as provided herein as if they had been so issued or
sold; provided, however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, in its good faith judgment the Board determines that the issuance of such
Rights Certificate could have a material adverse tax consequence to the Company or to the Person to
whom or which such Rights Certificate otherwise would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.

Section 22 Redemption

(a) The Board may, at any time prior to the Distribution Date, redeem all, but not less than
all, of the then-outstanding Rights at the Redemption Price. The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as the Board in its sole and
absolute discretion may establish. The Company may, at its option, pay the Redemption Price in
cash, securities or any other form of consideration deemed appropriate by the Board.

(b) Immediately upon the action of the Board ordering the redemption of the Rights (or at such
later time as the Board may establish for the effectiveness of such redemption) and without any
further action and without any notice, the right to exercise the Rights shall terminate and the
only right thereafter of the holders of Rights shall be to receive the Redemption Price for each
Right so held without interest thereon. Promptly after the effectiveness of the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent and the holders of the
then-outstanding Rights by mailing such notice to all such holders at each holder’s last address as
it appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares; provided however, that
the failure to give, or any defect in, any such notice will not affect the validity of the
redemption of the Rights. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of redemption shall state
the method by which the payment of the Redemption Price shall be made.

Section 23 Exchange

(a) The Board may, at its option, at any time after the occurrence of a Section 11(a)(ii)
Event, exchange all or part of the then-outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to the provisions of Section 11(a)(ii)) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date hereof in accordance
with Section 11 (the “Exchange Ratio”). The exchange of the Rights by the Board may be made
effective at such time, on such basis and with such conditions as the Board in its sole and
absolute discretion may establish. Notwithstanding the foregoing, the Board shall
not be empowered to effect such exchange at any time after an Acquiring Person becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.

 

26

 

(b) Immediately upon the effectiveness of the action of the Board ordering the exchange of any
Rights pursuant to subsection (a) of this Section 23 (or at such later time as the Board may
establish) and without any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall be to receive that
number of Common Shares equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company shall promptly mail a notice of any such
exchange to all of the holders of the Rights so exchanged at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Shares for Rights shall be
effected and, in the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights
which have become null and void pursuant to Section 11(a)(ii)) held by each holder of Rights.

(c) In any exchange pursuant to this Section 23, the Company, at its option, may substitute
for any Common Share exchangeable for a Right (i) Common Stock Equivalents, (ii) cash, (iii) debt
securities of the Company, (iv) other assets or (v) any combination of the foregoing, in any event
having an aggregate value, as determined in good faith by the Board (whose determination will be
described in a statement filed with the Rights Agent), equal to the current market value of one
Common Share (determined pursuant to Section 11(d)) on the Trading Day immediately preceding the
date of the effectiveness of the exchange pursuant to this Section 23.

(d) Without limiting the Board’s discretion under Section 23(a), prior to effecting an
exchange pursuant to this Section 23, the Board may direct the Company to enter into a Trust
Agreement in such form and with such terms as the Board of Directors shall then approve (the
“Trust Agreement”). If the Board of Directors so directs, the Company shall enter into the
Trust Agreement and shall issue to the trust created by such agreement (the “Trust”) all of
the shares of Common Stock (or substitute cash, securities or assets pursuant to Section 23(c))
issuable pursuant to the exchange (or any portion thereof that have not theretofore been issued in
connection with the exchange). From and after the time at which such shares (or substitute cash,
securities or assets) are issued to the Trust, all Persons then entitled to receive shares pursuant
to the exchange shall be entitled to receive such shares (or substitute cash, securities or assets
pursuant to Section 23(c)) (and any dividends or distributions made thereon after the date on which
such shares are deposited in the Trust) only from the Trust and solely upon compliance with the
relevant terms and provisions of the Trust Agreement. Any shares of capital stock issued at the
direction of the Board in connection herewith shall be duly authorized, validly issued and fully
paid and nonassessable shares (except as otherwise provided by any corporation law applicable to
the Company), and the Company shall be deemed to have received as consideration for such issuance a
benefit having a value that is at least equal to the aggregate par value of the shares so issued.

 

27

 

Section 24 Notice of Certain Events

(a) If the Company proposes, after the Distribution Date, (i) to pay any dividend payable in
stock of any class to the holders of Common Shares or to make any other distribution to the holders
of Common Shares (other than a regular periodic cash dividend), (ii) to offer to the holders of
Common Shares rights, options, warrants or similar instruments to subscribe for or to purchase any
additional Common Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of Common Shares (other than a reclassification
involving only the subdivision of outstanding Common Shares), (iv) to effect any consolidation or
merger into or with (other than a merger of a Subsidiary into or with the Company), to effect any
share exchange with or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of
the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other
Person, 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 Rights Certificate, in accordance with
Section 25, a notice of such proposed action, which shall specify the record date for the purposes
of such stock dividend, distribution or offering of rights, warrants, options or other similar
instruments or the date on which such reclassification, consolidation, merger, share exchange,
sale, transfer, liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the Common Shares, if any such date is to be fixed. Each
such notice shall be so given in the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders of Common Shares for purposes of
such action, and in the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the holders of the Common
Shares, whichever is earlier.

(b) The Company shall as soon as practicable after a Stock Acquisition Date give to the Rights
Agent and each holder of a Rights Certificate, in accordance with Section 25, a notice of the
occurrence of such event, which notice shall include a brief summary of the circumstances giving
rise to the Stock Acquisition Date and the consequences thereof to holders of Rights.

(c) Failure to give notice required by this Section 24 or any defect therein shall not affect
the legality or validity of the action taken by the Company in respect of an event the occurrence
of which requires the giving of notice under this Section 24 or the vote on any such action.

Section 25 Notices

(a) Notices or demands authorized by this Agreement to be given or made by the Rights Agent or
by the holder of any Rights Certificate to or on the Company shall be in writing and shall be
sufficiently given or made on the day sent, if sent by overnight delivery service or first-class
mail, postage prepaid, or when transmitted, if sent by facsimile during normal business hours at
the place to which it is addressed (with receipt confirmed by the transmitting device), addressed
(until another address or facsimile number is filed in writing with the Rights Agent) as follows:

Energy Conversion Devices, Inc.

2956 Waterview Drive

Rochester Hills, Michigan 48309

Attention: General Counsel

Facsimile No.: (248) 844-1214

 

28

 

(b) Subject to the provisions of Section 20, any notice or demand authorized by this Agreement
to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights
Agent shall be in writing and shall be sufficiently given or made on the day sent, if sent by
overnight delivery service or first-class mail, postage prepaid, or when transmitted, if sent by
facsimile during normal business hours at the place to which it is addressed (with receipt
confirmed by the transmitting device), addressed (until another address or facsimile number is
filed in writing with the Company) as follows:

Computershare Trust Company, N.A.

250 Royall Street

Canton, Massachusetts 02021

Attention: Client Services

Facsimile No.: (781) 575-4210

(c) Except as otherwise expressly provided herein, notices or demands authorized by this
Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder of certificates representing
Common Shares) shall be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry books of the
Company.

Section 26 Supplements and Amendments

Prior to the Distribution Date, the Company may, in its sole and absolute discretion, 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 Rights, any such supplement or amendment to
be evidenced by writing signed by the Company and the Rights Agent. From and after the
Distribution Date, 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 in order to (a)
cure any ambiguity, (b) correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (c) shorten or lengthen any time period hereunder
or (d) amend or supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable; provided, however, that no such supplement or amendment
shall adversely affect the interests of the holders of Rights (other than an Acquiring Person), and
no such amendment may cause the Rights again to become redeemable or cause this Agreement again to
become amendable other than in accordance with this sentence. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section 26, the Rights Agent shall execute such supplement
or amendment. Notwithstanding anything herein to the contrary, the Rights Agent shall not be
obligated to enter into any supplement or amendment that affects the Rights Agent’s own rights,
duties, obligations or immunities under this Agreement.

 

29

 

Section 27 Successors

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

Section 28 Determinations and Actions by the Board

(a) The Board shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all determinations and calculations
deemed necessary or advisable for the administration of this Agreement (including a determination
to redeem or not redeem the Rights or amend this Agreement).

(b) All such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made
by the Board in good faith, shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (y) not subject the Board, or any of
the directors on the Board to any liability to any Person, including the Rights Agent and the
holders of the Rights. Unless otherwise notified, the Rights Agent shall always be entitled to
assume that the Board acted in good faith and the Rights Agent shall be fully protected and shall
incur no liability in reliance thereon.

Section 29 Benefits of this Agreement

Nothing in this Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of Common Shares), any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of Common Shares).

Section 30 Severability

If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided, however,
that nothing contained in this Section 30 will affect the ability of the Company to supplement or
amend this Agreement in accordance with Section 26 to replace such invalid, void or unenforceable
term, provision, covenant or restriction with a legal, valid and enforceable term, provision,
covenant or restriction.

 

30

 

Section 31 Governing Law

This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be
a contract made under the laws of the State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to contracts made and to be
performed entirely within such State.

Section 32 Counterparts

This Agreement may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile or other electronic transmission shall be effective as delivery
of a manually executed original counterpart of this Agreement.

Section 33 Descriptive Headings; Interpretation

Descriptive headings of the several sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the provisions hereof.
Except as otherwise expressly provided in this Agreement or as the context otherwise requires, (a)
the words “include,” “includes” or “including” shall be deemed to be followed by the words “without
limitation”; (b) the word “or” shall be deemed to mean “and/or”; (c) the words “herein,” “hereof,”
“hereby,” “hereto,” “hereunder” and words of similar import are references to this Agreement as a
whole and not to any particular Section or other provision hereof; and (d) references in this
Agreement to an Exhibit, Section, subsection or paragraph are to the referenced Exhibit, Section,
subsection or paragraph of this Agreement.

Section 34 Force Majeure

Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be
liable for any delays or failures in performance resulting from acts beyond its reasonable control,
including acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions,
interruptions or malfunction of computer facilities, or loss of data due to power failures or
mechanical difficulties with information storage or retrieval systems, labor difficulties, war or
civil unrest.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

31

 

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

	 	 	 	 	 
	 	ENERGY CONVERSION DEVICES, INC.

 	 
	 	By:  	/s/ Jay B. Knoll
 	 
	 	 	Name:  	Jay B. Knoll 	 
	 	 	Title:  	Executive Vice President, General Counsel
and
 Chief Administrative Officer 	 
	 
	 	COMPUTERSHARE TRUST COMPANY, N.A.

 	 
	 	By:  	/s/ Dennis V. Moccia
 	 
	 	 	Name:  	Dennis V. Moccia 	 
	 	 	Title:  	Manager, Contract Administration 	 
	 

 

 

 

Exhibit A

FORM OF RIGHTS CERTIFICATE

Certificate No. R-                     Rights

NOT EXERCISABLE AFTER OCTOBER 15, 2019 OR EARLIER IF REDEEMED, EXCHANGED OR AMENDED. THE RIGHTS ARE
SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH
IN THE TAX BENEFITS PRESERVATION PLAN. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE TAX BENEFITS
PRESERVATION PLAN, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE TAX BENEFITS PRESERVATION PLAN) OR A TRANSFEREE THEREOF SHALL BECOME NULL AND
VOID AND NO LONGER TRANSFERABLE.

RIGHTS CERTIFICATE

ENERGY CONVERSION DEVICES, INC.

This certifies that                     , or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Tax Benefits Preservation Plan (the “Rights Plan”), by and
between Energy Conversion Devices, Inc., a Delaware corporation (the “Company”), and
Computershare Trust Company, N.A., a federally chartered trust company (the “Rights
Agent”), dated as of October 5, 2009, to purchase from the Company at any time after the
Distribution Date and prior to 5:00 p.m. (New York time) on the Expiration Date at the office or
offices of the Rights Agent designated for such purpose, or at the office of its successor as
Rights Agent, one one-hundredth of a fully-paid nonassessable share of common stock, par value
$0.01 per share, of the Company (each, a “Common Share”), at a purchase price of $115.00
per one one-hundredth of a Common Share (the “Purchase Price”), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and related Certificates
duly executed. If this Rights Certificate is exercised in part, the holder will be entitled to
receive, upon surrender hereof, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised. The number of Rights evidenced by this Rights Certificate (and the
number of one one-hundredths of a Common Share which may be purchased upon exercise thereof) set
forth above, and the Purchase Price set forth above, are the number and Purchase Price as of
October 15, 2009, based on the Common Shares as constituted at such date.

As provided in the Rights Plan, the Purchase Price and the number of Common Shares (or other
securities, as the case may be) which may be purchased upon the exercise of the Rights evidenced by
this Rights Certificate are subject to adjustment upon the occurrence of certain events.

 

A-1

 

Capitalized terms used but not defined herein have the respective meanings ascribed thereto in
the Rights Plan.

This Rights Certificate is subject to all of the terms, provisions and conditions of the
Rights Plan, which terms, provisions and conditions are incorporated herein by reference and made a
part hereof and to which Rights Plan reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent, the Company and the
holders of the Rights Certificates, which limitations of rights include the temporary suspension of
the exercisability of the Rights under the circumstances specified in the Rights Plan. Copies of
the Rights Plan are on file at the principal executive offices of the Company and can be obtained
from the Company without charge upon written request therefor.

Pursuant to the Rights Plan, from and after the occurrence of a Section 11(a)(ii) Event, any
Rights that are Beneficially Owned by (A) any Acquiring Person, (B) a transferee of any Acquiring
Person who becomes a transferee after the occurrence of a Section 11(a)(ii) Event or (C) a
transferee of any Acquiring Person who became a transferee prior to or concurrently with a Section
11(a)(ii) Event pursuant to either (1) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement, arrangement or
understanding, written or otherwise, regarding the transferred Rights or (2) a transfer which the
Board has determined is part of a plan, arrangement or understanding, written or otherwise, which
has the purpose or effect of avoiding Section 11(a)(ii) of the Rights Plan, and (D) subsequent
transferees of any such Persons, shall be null and void without any further action and any holder
of such Rights shall thereafter have no rights whatsoever with respect to such Rights under any
provision of the Rights Plan. From and after the occurrence of a Section 11(a)(ii) Event, no Rights
Certificate shall be issued that represents Rights that are or have become null and void pursuant
to Section 11(a)(ii) of the Rights Plan, and any Rights Certificate delivered to the Rights Agent
that represents Rights that are or have become null and void pursuant to the provisions of the
Rights Plan will be canceled.

This Rights Certificate, with or without other Rights Certificates, may be transferred or
exchanged for another Rights Certificate(s), entitling the registered holder to purchase a like
number of one one-hundredths of a Common Share (or other securities, as the case may be) as the
Rights Certificate(s) surrendered then entitled such holder (or former holder, in the case of a
transfer) to purchase. To effect such transfer or exchange, the registered holder must make such
request in writing delivered to the Rights Agent and must surrender the Rights Certificate(s) to be
transferred or exchanged, with the Form of Assignment and the Certificate duly executed, at the
office or offices of the Rights Agent designated for such purpose

At any time prior to the Distribution Date, the Board 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
redemption price may be adjusted in accordance with the Rights Plan. At any time following a
Section 11(a)(ii) Event, the Board may, at its option, exchange all or part of the then-outstanding
Rights at an exchange ratio of one Common Share per Right, as such exchange ratio may be adjusted
in accordance with the Rights Plan. 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.

 

A-2

 

The Company is not required to issue fractions of Common Shares or other securities issuable,
as the case may be, upon the exercise of any Right or Rights evidenced hereby. In lieu of issuing
any such fractional securities, the Company may pay to any Person to whom or which such fractional
securities would otherwise be issuable an amount in cash equal to the same fraction of the current
market value, as determined in accordance with the Rights Plan, of one such security.

No holder of this Rights Certificate, as such, shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Common Shares or any other securities of the Company
which may at any time be issuable on the exercise of the Rights represented thereby, nor will
anything contained herein or in the Rights Plan be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Plan), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate
have been exercised in accordance with the Rights Plan.

The Rights Plan may be supplemented and amended by the Company, as provided therein.

This Rights Certificate will not be valid or obligatory for any purpose until it has been
countersigned by the Rights Agent.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

A-3

 

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

Dated as of October 15, 2009.

	 	 	 	 	 	 	 
	 	 	ENERGY CONVERSION DEVICES, INC.	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	COMPUTERSHARE TRUST COMPANY, N.A.	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

 

A-4

 

Form of Reverse Side of Rights Certificate 

FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the Rights Certificate)

FOR VALUE RECEIVED,                      hereby sells, assigns and transfers unto

 

(Please print name and address of transferee)

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

Dated :                     ,                                         

	 	 	 
	 

	 	 
	 	 	Signature

Signature(s) Guaranteed:

The signature must be guaranteed by an institution which is a member of one of the following
recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program
(STAMP); (ii) the New York Stock Exchange Medallion Program (MSP) or (iii) the Stock Exchange
Medallion Program (SEMP).

 

	 	 	 
	 

	 	 
	 	 	Signature

 

A-5

 

CERTIFICATE

The undersigned hereby certifies by checking the appropriate boxes that:

(1) the Rights evidenced
by this Rights Certificate o are o are not being sold,
assigned, transferred, split up, combined or exchanged by or on behalf of a Person who is or was an
Acquiring Person (as defined in the Rights Plan); and

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

Dated:                     ,                                         

	 	 	 
	 

	 	 
	 	 	Signature

 

A-6

 

Form of Reverse Side of Rights Certificate — continued

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise the Rights Certificate)

To Energy Conversion Devices, Inc.:

The undersigned hereby irrevocably elects to exercise                      Rights represented by this
Rights Certificate to purchase the one one-hundredth of a Common Share or other securities issuable
upon the exercise of such 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 is not all of the Rights evidenced by this Rights Certificate, a new
Rights Certificate for the balance remaining of such Rights will 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(s) Guaranteed:

The signature must be guaranteed by an institution which is a member of one of the following
recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program
(STAMP); (ii) the New York Stock Exchange Medallion Program (MSP) or (iii) the Stock Exchange
Medallion Program (SEMP).

 

	 	 	 	 	 
	 

	 	 

Signature
	 	 

 

A-7

 

CERTIFICATE

The undersigned hereby certifies by checking the appropriate boxes that:

(1) the Rights evidenced
by this Rights Certificate
o  are o  are not being
exercised by or on behalf of Person who is or was an Acquiring Person (as such term is defined in
the Rights Plan); and

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

Dated:                    ,                                         

	 	 	 	 	 
	 

	 	 

Signature
	 	 

 

A-8

 

NOTICE

The signature in the Form of Assignment or Form of Election to Purchase, as the case may be,
must conform to the name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.

In the event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, such Assignment or Election to Purchase
will not be honored.

 

A-9

 

Exhibit B

SUMMARY OF TERMS

ENERGY CONVERSION DEVICES, INC.

TAX BENEFITS PRESERVATION PLAN

UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE TAX BENEFITS PRESERVATION PLAN, RIGHTS THAT ARE OR
WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE TAX BENEFITS
PRESERVATION PLAN) OR A TRANSFEREE THEREOF SHALL BECOME NULL AND VOID AND NO LONGER TRANSFERABLE.

	 	 	 
	Purpose

	 	The purpose of the Tax Benefits Preservation Plan
(the “Rights Plan”) described in this summary is
to help preserve the value to Energy Conversion
Devices, Inc. (the “Company”) and its stockholders
of the Company’s tax assets, including the
Company’s net operating loss carryforwards (“Tax
Benefits”). The Board of Directors (the “Board”)
of the Company adopted the Rights Plan in an
effort to protect against a possible limitation on
the Company’s ability to use its Tax Benefits to
reduce the Company’s future federal income tax
obligations. The Company’s ability to use its Tax
Benefits may be limited if it experiences an
“ownership change,” as defined by Section 382 of
the Internal Revenue Code of 1986, as amended (the
“Code”). This would occur if stockholders who
beneficially own (or who are deemed under Section
382 to beneficially own) 5% or more of the
Company’s outstanding Common Shares (as defined
below) increase their aggregate beneficial
ownership of the outstanding Common Shares by more
than 50 percentage points over a rolling
three-year period. The Board adopted the Rights
Plan to reduce the likelihood that such an
ownership change occurs.
	 
	 	 
	 

	 	Whether a person or group is the “beneficial
owner” of any Common Shares, generally, is
determined by reference to the definitions of
“beneficial ownership” under Rule 13d-3 of the
General Rules and Regulations under the Securities
Exchange Act of 1934 and Section 382 of the Code
and the Treasury Regulations issued thereunder.
	 
	 	 
	The Rights

	 	The Board has declared a dividend of one common
stock purchase right (each a “Right”) for each
outstanding share of the Company’s common stock,
par value $0.01 per share (each, a “Common
Share”), payable to the Company’s stockholders of
record as of the close of business on October 15,
2009 (the “Record Date”). In addition, the Rights
will attach to all Common Shares issued by the
Company after the Record Date and prior to the
Rights becoming exercisable.

 

B-1

 

	 	 	 
	 

	 	Prior to the “Distribution
Date” referred to
below, the Rights will be represented only by the
stock certificates (or book entry records)
evidencing the Common Shares to which the Rights
are attached. Following the Distribution Date,
the Rights will be evidenced by separate
certificates, a form of which is included as
Exhibit A to the Rights Plan. Any transfer of
Common Shares prior to the Distribution Date also
will constitute a transfer of the accompanying
Rights.
	 
	 	 
	Exercise

	 	The Rights will not be exercisable until the
occurrence of a “Distribution Date.” A
“Distribution Date” is the earlier of: (i) the
10th business day after public announcement that
any person or group has become an “Acquiring
Person” and (ii) the 10th business day after the
commencement of a tender or exchange offer by a
person or group (other than the Company, any of
the Company’s subsidiaries or any of the Company’s
or its subsidiaries’ employee benefit or stock
ownership plans) for 4.9% or more of the Company’s
then-outstanding Common Shares.
	 
	 	 
	 

	 	An “Acquiring Person,” generally, is a person or
group (other than the Company, any of the
Company’s subsidiaries or any of the Company’s or
its subsidiaries’ employee benefit or stock
ownership plans) that has become the beneficial
owner of 4.9% or more of the Company’s
then-outstanding Common Shares. However, no such
person or group will be deemed an Acquiring Person
if:
	 
	 	 
	 

	 	•     the person or group beneficially owns 4.9%
or more of the then-outstanding Common Shares as
of the close of business on the Record Date and
does not acquire any additional Common Shares
(except in connection with any of the events
referred to in clauses (i) through (iv) below);

	 
	 	 
	 

	 	•     the person or group becomes the beneficial
owner of 4.9% or more of the Common Shares after
the Record Date solely as a result of (i) a
reduction in the number of outstanding Common
Shares, (ii) the exercise of, or lapse of
restrictions on, any options, warrants, rights or
similar interests granted by the Company to its
directors, officers or employees, (iii) any
unilateral grant of any security by the Company,
or (iv) a transaction that the Board determines
should not be subject to the Rights Plan, and, in
any such case does not acquire any additional
Common Shares (except through the subsequent
occurrence of any of the events referred to in the
preceding clauses (i) through (iv)); or

 

B-2

 

	 	 	 
	 

	 	•     the Board determines that (a) the person
or group has become an “Acquiring Person”
inadvertently and the person or group promptly
divests (or enters into an irrevocable commitment
to divest) enough common stock to reduce its
beneficial ownership percentage below 4.9%, (b)
the person or group’s beneficial ownership of 4.9%
or more of the then-outstanding common stock would
not jeopardize the Company’s ability to use its
Tax Benefits or (c) the person or group should not
be deemed to be an Acquiring Person.

	 
	 	 
	 

	 	After a Distribution Date, each Right will become
transferable apart from its related Common Share
and exercisable to purchase, for $115.00 (the
“Purchase Price”), one one-hundredth of a Common
Share. On or following such date, (i) any Rights
beneficially owned by an Acquiring Person (or any
transferee of the Acquiring Person) will become
null and void and may not be exercised and (ii)
all other Rights holders will have the right to
receive, upon exercise of their Rights and payment
of the Purchase Price, the number of Common Shares
having a market value, based on the market price
of the Common Shares as of the date of the
acquisition that resulted in a person or group
becoming an Acquiring Person, of twice the
Purchase Price.
	 
	 	 
	 

	 	The Rights may be exercised in whole or in part.
If the Company does not have sufficient authorized
Common Shares to permit the exercise in full of
the Rights, the Company may satisfy the shortfall
in cash, by issuing to exercising Rights holders
other equity or debt securities or assets of the
Company, or by reducing the Purchase Price. The
Company also may delay the exercise of Rights for
up to 90 days in order to seek stockholder
approval of an amendment to the Company’s
certificate of incorporation to increase the
number of authorized Common Shares.
	 
	 	 
	Exchange

	 	At any time after any person or group has become
an Acquiring Person (but before any person or
group becomes the beneficial owner of 50% or more
of the Common Shares), the Board may, at its
option, elect to exchange all or part of the
outstanding and exercisable Rights (other than the
Rights beneficially owned by the Acquiring Person
or any transferee of an Acquiring Person) at an
exchange ratio of one Common Share per Right,
subject to adjustment as described under
“Antidilution Provisions” below. The Rights
cannot be exercised following the Board’s
determination to effect a Rights exchange.

 

B-3

 

	 	 	 
	Redemption

	 	At any time prior to a Distribution Date, the
Board 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, subject to
adjustment as described “Antidilution Provisions”
below. The Rights cannot be exercised following
the Board’s determination to redeem the Rights.
	 
	 	 
	Expiration

	 	Unless earlier exercised, the Rights (and the
Rights Plan) will expire on the earliest of (i)
the tenth anniversary of the Record Date, (ii) the
redemption of the Rights, (iii) any exchange of
the Rights, (iv) the repeal of Code Section 382,
if the Board determines that the Rights Plan is no
longer necessary for the preservation of the
Company’s Tax Benefits, and (v) the first day of
the first taxable year of the Company to which the
Board determines that no such Tax Benefits may be
carried forward.
	 
	 	 
	Amendments

	 	The Board may amend or supplement the Rights Plan
without the consent of the Rights holders at any
time prior to the Distribution Date. After the
Distribution Date, without the consent of the
Rights holders, the Board may amend or supplement
the Rights Plan only to cure an ambiguity, alter
time period provisions, correct inconsistent
provisions or make other changes that do not
adversely affect any Rights holder.
	 
	 	 
	Stockholder Rights

	 	Rights holders have no rights as stockholders of
the Company, including the rights to vote and to
receive dividends.
	 
	 	 
	Antidilution Provisions

	 	The Board may adjust the Purchase Price, the
exchange ratio, the redemption price, the number
of Common Shares issuable upon exercise of the
Rights and the number of outstanding Rights to
prevent dilution that may occur as a result of
certain events, including among others, a stock
dividend, a stock split or a reclassification of
the Common Shares. Subject to certain limited
exceptions, no adjustments to the Purchase Price
of less than 1% will be made.

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

 

B-4

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