Document:

Amended and Restated Rights

 Exhibit 4.2 
  

RIGHTS AGREEMENT 
  
 FLOW INTERNATIONAL CORPORATION 
  
 and 
  
 CHASEMELLON SHAREHOLDER SERVICES, L.L.C., 
  
 as Rights Agent 
  
 Dated as of September 1, 1999 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	 Section 1.
	  	 Certain Definitions
	  	2
			
	 Section 2.
	  	 Appointment of Rights Agent
	  	4
			
	 Section 3.
	  	 Issue of Right Certificates
	  	5
			
	 Section 4.
	  	 Form of Right Certificates
	  	6
			
	 Section 5.
	  	 Countersignature and Registration
	  	6
			
	 Section 6.
	  	Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates	  	7
			
	 Section 7.
	  	 Exercise of Rights, Purchase Price; Expiration Date of Rights
	  	8
			
	 Section 8.
	  	 Cancellation and Destruction of Right Certificates
	  	9
			
	 Section 9.
	  	 Availability of Preferred Shares
	  	9
			
	 Section 10.
	  	 Preferred Shares Record Date
	  	10
			
	 Section 11.
	  	 Adjustment of Purchase Price, Number of Shares and Number of Rights
	  	11
			
	 Section 12.
	  	 Certificate of Adjusted Purchase Price or Number of Shares
	  	17
			
	 Section 13.
	  	 Consolidation, Merger or Sale or Transfer of Assets or Earnings Power
	  	17
			
	 Section 14.
	  	 Fractional Rights and Fractional Shares
	  	21
			
	 Section 15.
	  	 Rights of Action
	  	22
			
	 Section 16.
	  	 Agreement of Right Holders
	  	22
			
	 Section 17.
	  	 Right Certificate Holder Not Deemed a Shareholder
	  	23
			
	 Section 18.
	  	 Concerning the Rights Agent
	  	23
			
	 Section 19.
	  	 Merger or Consolidation or Change of Name of Rights Agent
	  	24
			
	 Section 20.
	  	 Duties of Rights Agent
	  	24
			
	 Section 21.
	  	 Change of Rights Agent
	  	26
			
	 Section 22.
	  	 Issuance of New Right Certificates
	  	27
			
	 Section 23.
	  	 Redemption
	  	27
			
	 Section 24.
	  	 Exchange
	  	28
			
	 Section 25.
	  	 Notice of Certain Events
	  	29
			
	 Section 26.
	  	 Notices
	  	30
			
	 Section 27.
	  	 Supplements and Amendments
	  	31
			
	 Section 28.
	  	 Successors
	  	31

  

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	 Section 29.
	  	 Benefits of this Amendment
	  	31
			
	 Section 30.
	  	 Severability
	  	31
			
	 Section 31.
	  	 Governing Law
	  	32
			
	 Section 32.
	  	 Counterparts
	  	32
			
	 Section 33.
	  	 Descriptive Headings
	  	32

  
 EXHIBITS

  

			
	 Exhibit A
	  	Form of Articles of Amendment
	 Exhibit B
	  	Form of Right Certificate
	 Exhibit C
	  	Form of Summary of Rights

  

 -ii- 

 AMENDED AND RESTATED RIGHTS AGREEMENT 
  
 THIS AMENDED AND RESTATED RIGHTS AGREEMENT (the “Amendment”), dated as of September 1, 1999, between Flow
International Corporation, a Washington corporation (the “Company”), and ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability company (the “Rights Agent”). 
  
 RECITALS 
  
 WHEREAS, the Company and First Interstate Bank, Ltd. (the predecessor in interest to the Rights Agent) are parties to a
certain Rights Agreement dated as of June 7, 1990 (the “Agreement”). 
  
 WHEREAS, the Company and the Rights Agent have heretofore entered into a Rights Agreement dated as of June 7, 1990 (as amended; the “Agreement”). In connection therewith, the Board of Directors of the
Company authorized and declared a dividend of one common share purchase right (the “Original Right”) for each share of Common Stock (as hereinafter defined) of the Company outstanding as of the close of business on June 7, 1990 (the
“Record Date”), and the Board of Directors further authorized and directed the issuance of one Original Right (subject to adjustment) with respect to each share of Common Stock that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms were defined in the Agreement), with each Original Right having the rights assigned to it under the Agreement. Pursuant to Section 27 of the Original
Rights Agreement, the parties hereto hereby amend and restate the Original Rights Agreement to read in its entirety in the form hereof. The Board of Directors of the Company has approved the amendment and restatement such that as of September 1,
1999, each Original Right shall be deemed to be a common share purchase right (a “Right”) having the rights assigned to it pursuant to this Amendment. As used herein the term “adoption of this Amendment” shall refer to the
adoption of the Amended and Restated Rights Agreement and the term “after the date of this Agreement” or “after the date hereof shall mean after September 1, 1999. The Board of Directors has also authorized the issuance of one Right
(as such number may be adjusted hereafter pursuant to the terms of this Agreement) with respect to each share of Common Stock that shall become outstanding between the date of this Agreement and the earliest to occur of the Distribution Date, the
Redemption Date or the Final Expiration Date (as such terms are hereinafter defined). Each Right shall represent the right to purchase one share of Common Stock. 
  

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 AGREEMENT 
  

In consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: 
  
 Section 1. Certain Definitions. 
  
 For purposes of this Amendment, the following terms have the meaning
indicated: 
  
 “Acquiring Person” shall mean any
Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of the Threshold Percentage or more of the Common Stock then outstanding other than as a result of a Permitted Offer, but shall not
include any Exempt Person. Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition of Common Stock by the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to the Threshold Percentage or more of the Common Stock of the Company then outstanding; provided, however, that if a Person shall become the Beneficial Owner of the
Threshold Percentage or more of the Common Stock of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, increase the number of Common Stock of the Company beneficially owned
by such Person above the number of Common Stock of the Company beneficially owned by such Person at the time of the last such share purchase by the Company, then such Person shall be deemed to be an “Acquiring Person.”
Notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that Person who would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), has
become such inadvertently, and such Person divests as promptly as practicable a sufficient number of Common Stock so that such Person would no longer be an “Acquiring Person”, as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this Amendment. 
  
 “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on the date of this Amendment. 
  
 A Person shall be deemed the “Beneficial Owner” of, shall be deemed to have “Beneficial Ownership” of and shall be
deemed to “beneficially own” any securities: 
  
 (i) which such Person or any of such Person’s Affiliates or Associates is deemed to beneficially own, directly or indirectly, within the meaning of Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Amendment; 
  
 (ii) which such Person or any of such Person’s Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, (1) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase, (2) securities which such Person has a right to acquire on the exercise of Rights at any time prior to the time a Person 

  

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becomes an Acquiring Person, or (3) securities issuable upon exercise of Rights from and after the time a Person becomes an Acquiring Person if such Rights
were acquired by such Person or any of such Person’s Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (“original Rights”) or pursuant to Section 11(i) or
Section 11(n) with respect to an adjustment to original Rights; or (B) the right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security by reason of such agreement, arrangement or understanding if the agreement, arrangement or understanding to vote such security arises solely from a revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or

  
 (iii) which are beneficially owned,
directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to subparagraph (ii)(B) above) or disposing of any
securities of the Company. 
  
 “Business Day”
shall mean any day other than a Saturday, a Sunday, or a day on which banking or trust institutions in the State of Washington, or the State in which the principal office of the Rights Agent is located, are authorized or obligated by law or
executive order to close. 
  
 “close of business”
on any given date shall mean 5:00 P.M., Seattle time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., Seattle time, on the next succeeding Business Day. 
  
 “Common Stock” when used with reference to the Company shall
mean the common stock, $.01 par value, of the Company. “Common Stock” when used with reference to any Person other than the Company shall mean the capital stock (or, in the case of an unincorporated entity, the equivalent equity interest)
with the greatest voting power of such other Person or, if such other Person is a subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person. 
  
 “Distribution Date” shall have the meaning set forth in Section 3 hereof. 
  
 “Exempt Person” shall mean (i) the Company, (ii) any
Subsidiary (as such term is hereinafter denned) of the Company, (iii) any employee benefit plan of the Company or of any Subsidiary of the Company, and (iv) any entity or trustee holding Common Stock for or pursuant to the terms of any such plan or
for the purpose of funding any such plan or funding other employee benefits for employees of the Company or of any Subsidiary of the Company. 
  
 “Final Expiration Date” shall have the meaning set forth in Section 7 hereof. 
  

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 “Nasdaq Stock Market” shall mean the stock market operated by The Nasdaq Stock Market,
Inc. 
  
 “Person” shall mean any individual,
firm, corporation or other entity, and shall include any successor (by merger or otherwise) of such entity. 
  
 “Permitted Offer” shall mean a tender offer or an exchange offer for all outstanding shares of Common Stock of the Company at a price and
on terms determined by the Board of Directors of the Company, after receiving advice from one or more investment banking firms, to be (a) fair to shareholders (taking into account all factors which the Board of Directors deems relevant) and (b)
otherwise in the best interests of the Company and its shareholders and which the Board of Directors determines to recommend to the shareholders of the Company. 
  

“Preferred Shares” shall mean shares of a Series B Junior Participating Preferred Stock, no par value per share, of the Company having
the rights and preferences set forth in the form of Articles of Amendment attached to this Amendment as Exhibit A. 
  
 “Redemption Date” shall have the meaning set forth in Section 7 hereof. 
  
 “Securities Act” shall mean the Securities Act of 1933, as amended. 
  
 “Stock Acquisition Date” shall mean the first date of public
announcement (which for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such or such earner date
as a majority of the Board of Directors shall become aware of the existence of an Acquiring Person. 
  
 “Subsidiary” of any Person shall mean any corporation or other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or other persons performing similar functions are beneficially owned, directly or indirectly, by such Person, and any corporation or other entity that is otherwise controlled by
such Person. 
  
 “Threshold Percentage” shall
mean 10%. 
  
 Section 2. Appointment of Rights Agent.

  
 The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable. 
  

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 Section 3. Issue of Right Certificates. 
  
 (a) Until the earlier of (i) the tenth day after the Stock
Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than
an Exempt Person) of, or of the first public announcement of the intention of such Person (other than an Exempt Person) to commence, a tender or exchange offer the consummation of which would result in any Person becoming, or after the consummation
of which any Person would be, an Acquiring Person (including any such date which is after the date of this Amendment and prior to the issuance of the Rights; the earlier of such dates being herein referred to as the “Distribution
Date”), (1) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Stock registered in the names of the holders thereof and not by separate Right Certificates, and (2) the Rights and
the right to receive Right Certificates will be transferable only in connection with the transfer of Common Stock. As soon as practicable after the Distribution Date, the Company will promptly notify the Rights Agent thereof, will prepare and
execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent, if requested and provided with a shareholder list by the transfer agent of the Common Stock, will send) by first-class, postage-prepaid
mail, to each record holder of Common Stock as of the close of business on the Distribution Date (other than any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit B hereto (a “Right Certificate”), evidencing one Right (subject to adjustment as provided herein) for each share of Common Stock so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right Certificates. 
  
 (b) On the Record Date, the date of this Amendment, or as soon as practicable thereafter, the Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in substantially the form of
Exhibit C hereto (the “Summary of Rights”)* by first-class, postage-prepaid mail, to each record holder of Common Stock as of the close of business on the Record Date (other than any Acquiring Person or any Associate or
Affiliate of any Acquiring Person), at the address of such holder shown on the records of the Company. With respect to certificates for Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof. Until the Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the surrender for transfer of any certificate for Common Stock outstanding on the Record
Date, also shall constitute the transfer of the Rights associated with the Common Stock represented thereby. 
  
 (c) Certificates issued for Common Stock (including, without limitation, upon transfer of outstanding Common Stock, disposition of Common Stock out
of treasury stock or issuance or reissuance of Common Stock out of authorized but unissued shares) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following legend: 
  
 This certificate also evidences and entitles the holder hereof to certain rights as set forth in a an Amended and Restated Rights Agreement, dated as of September 1, 1999, between Flow International Corporation and
ChaseMellon Shareholder Services, L.L.C., may be amended from time to time (the “Rights Agreement”), the 

  

 - 5 - 

 
terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of Flow International
Corporation. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. Flow International Corporation will mail to the holder of
this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, as set forth in the Rights Agreement, Rights owned by or issued or transferred to any Person who becomes an
Acquiring Person or an Associate or Affiliate thereof (as defined in the Rights Agreement) and certain transferees thereof may become null and void. 
  
 With respect to such certificates containing the foregoing legend, until the Distribution Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate, except as otherwise provided herein, shall also constitute the transfer of the Rights associated with the Common Stock represented
thereby. In the event that the Company purchases or otherwise acquires any Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such Common Stock shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Stock which are no longer outstanding. 
  
 Notwithstanding this paragraph (c), the omission of a legend shall not affect the enforceability of any part of this Amendment or the rights of any holder
of the Rights. 
  
 Section 4. Form of Right Certificates.

  
 The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof) shall be substantially in the form set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and which do not increase the duties or responsibilities of the Rights Agent and as are not inconsistent with the provisions of this Amendment, 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 the Nasdaq Stock Market or of any other stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions
of Sections 11 and 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one one-hundredths of a Preferred Share as shall be set forth therein at the price per one one-hundredth of a Preferred Share set forth
therein (the “Purchase Price”), but the number of such one one-hundredths of a Preferred Share and the Purchase Price shall be subject to adjustment as provided herein. 
  
 Section 5. Countersignature and Registration. 
  
 (a) The Right Certificates shall be executed on behalf of the Company by its Chairman of the Board, its President,
any of its Vice Presidents or its Treasurer either manually or by facsimile signature and shall be attested by the Secretary or an Assistant Secretary of the 

  

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Company, either manually or by facsimile signature. The Right Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any
purpose unless countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of the Company by any Person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date
of the execution of this Amendment any such Person was not such an officer. 
  
 (b) Following the Distribution Date and receipt by the Rights Agent of the list of record holders of the Rights, the Rights Agent will keep or cause to be kept, at an office or agency designated for such
purpose, books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates. 
  
 Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. 
  
 (a) Subject to the provisions of Sections 7(e), 11(a)(ii) and 14 hereof, at any time after the close of business on the Distribution Date, and at
or prior to the close of business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate or Right Certificates may be transferred, split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one one-hundredths of a Preferred Share as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office or agency of the Rights Agent designated for such purpose. Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as
so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. The Rights Agent shall have no
duty or obligation under this Section unless and until it is satisfied that all such taxes and/or charges have been paid. 
  
 (b) Subject to the provisions of Section 11(a)(ii) hereof, at any time after the Distribution Date and prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security satisfactory to them, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses 

  

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incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right 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 thereafter the registered holder of any Right Certificate may, subject to Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced thereby in whole or in part upon
surrender of the Right 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 for each one one-hundredth of a Preferred Share as to which the Rights are exercised, at any time which is both after the Distribution Date and prior to the earliest of (i) the close of business on September 1, 2009 (the “Final
Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the “Redemption Date”) or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof. 

 
 (b) The Purchase Price for each one one-hundredth of a Preferred
Share purchasable pursuant to the exercise of a Right shall initially be $45.00, shall be payable in lawful money of the United States of America in accordance with paragraph (c) of this Section 7. 
  
 (c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by payment of the aggregate Purchase Price for the Preferred Shares to be purchased and an amount equal to any applicable tax or
governmental charge required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof, in cash or by certified check, cashier’s check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from (A) any transfer agent for the Preferred Shares certificates for the number of shares of Preferred Shares to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) the Company or the depositary agent, as the case may be, scrip or depositary receipts representing interests in such number of Preferred Shares as are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs the depositary agent to comply with such request, (ii) promptly after receipt of such certificates, scrip or depositary
receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder and (iii) when appropriate, after receipt, promptly deliver such
cash to or upon the order of the registered holder of such Right Certificate. 
  
 (d) Except as otherwise provided herein, in case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to
the exercisable Rights remaining unexercised shall be issued by 

  

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the Rights Agent to the registered holder of such Right Certificate or to his duly authorized assigns, subject to the provisions of Section 14 hereof.

  
 (e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder of Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6 hereof or this
Section 7 unless such registered holder shall have (i) properly completed and signed the certificate contained in the form of assignment or election to purchase set forth on the reverse side of the Rights Certificate surrendered for such transfer or
exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof as the Company or Rights Agent shall reasonably request. 
  
 Section 8. Cancellation and Destruction of Right Certificates. 
  
 All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Amendment. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company. 
  
 Section 9. Availability of Preferred Shares. 
  
 (a) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or
any Preferred Shares held in its treasury, the number of Preferred Shares (to the extent available and subject to Section 11(a)(iii) herein) that will be sufficient to permit the exercise in full of all outstanding Rights. 
  
 (b) At such time, if any, as the Preferred Shares issuable upon the
exercise of Rights may be listed or admitted to trading on the Nasdaq Stock Market or listed on any national securities exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable (but only to
the extent that the Board of Directors determines that it is reasonably likely that the Rights will be exercised), all shares reserved for such issuance to be listed or admitted to trading on the Nasdaq Stock Market or listed on any other exchange
upon official notice of issuance upon such exercise. 
  
 (c) The Company may prepare and file, as soon as practicable after the Distribution Date, a registration statement under the Securities Act of 1933, as amended (the “Act”), with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and use its best efforts to cause such registration statement to (i) become effective as soon as practicable after such filing and (ii) remain effective (with a prospectus at all times
meeting the 

  

 - 9 - 

 
requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities or (B) the Final Expiration
Date. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various states in connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the exercisability of the Rights in order to prepare and file a registration statement under the Securities Act and permit it to become effective. Upon any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. The Company shall provide promptly a copy of all
such announcements to the Rights Agent. Notwithstanding any provision of this Amendment to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite qualification in such jurisdiction shall have been obtained and
until a registration statement under the Securities Act (if required) shall have been declared effective. 
  
 (d) The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preferred Shares (and, following the
time that a Person becomes an Acquiring Person, other securities, as the case may be) delivered upon exercise of Rights shall, at the time of delivery of the certificates therefor (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares. 
  
 (e) The Company further covenants and agrees that it will pay when due and payable any and all taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Preferred Shares (or
other securities) upon the exercise of Rights. The Company shall not, however, be required to pay any tax or charge which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery
of certificates or depositary receipts for the Preferred Shares (or other securities) in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or deliver any certificates,
scrip or depositary receipts for Preferred Shares (or other securities) upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by that holder of such Right Certificate at the time of surrender) or until
it has been established to the Company’s reasonable satisfaction that no such tax is due. 
  
 Section 10. Preferred Shares Record Date. 
  
 Each Person in whose name any certificate for Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Shares represented thereby on,
and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable taxes or charges) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Share transfer books of the Company are dosed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Share transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred Shares for which 

  

 - 10 - 

 
the Rights shall be exercisable, including, without limitation, the right to vote or to receive dividends or other distributions, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided herein. 
  
 Section 11. Adjustment of Purchase Price, Number of Shares and Number of Rights. 
  
 The Purchase Price, the number of Preferred 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 date of this Amendment (A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares,
(C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Share transfer books of the Company were open, the holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(ii) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). 
  
 (ii) Subject to Section 24 and except as otherwise provided in this Section 11(a)(ii), in the event 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 multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Amendment, and, in lieu of Preferred Shares, such number of shares of Common Stock as shall equal the result obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Company’s Common Stock (determined pursuant to Section 11(d) hereof) on the date of
the occurrence of such event. Notwithstanding anything in this Amendment to the contrary, however, from and after the time (the “invalidation time”) when any Person first becomes an Acquiring Person, any Rights that are beneficially
owned by (C) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (D) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the invalidation time or (E) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or concurrently with the invalidation time pursuant to either 

  

 - 11 - 

 
(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 regarding the transferred Rights or (2) a transfer which the Board of Directors has determined is part of a plan, arrangement or understanding which has the purpose or effect of avoiding the provisions of this paragraph, and 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 Amendment. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but neither the Company nor the Rights Agent shall have any liability to any holder of Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. From and after the invalidation time, no Right Certificate shall be issued pursuant to Section 3 or Section 6 hereof that represents
Rights that are or have become null and void pursuant to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent that represents Rights that are or have become null and void pursuant to the provisions of this
paragraph (and of which the Rights Agent has been notified) shall be canceled. From and after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not been exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only in accordance with Section 13 and not pursuant to this Section 11(a)(ii). 
  
 (iii) In the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued
to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) the Company shall take all such action as may be necessary to authorize additional shares of Common Stock for issuance upon exercise of the Rights. In
the event the Company shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional shares of Common Stock, the Company shall substitute, for each share of Common Stock that would otherwise be
issuable upon exercise of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one share
of Common Stock as of the date of issuance of such Preferred Shares or fraction thereof 
  
 (b) In case the Company shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Common Stock (“preferred share equivalents”)) or securities convertible into
Preferred Shares or preferred share equivalents at a price per Preferred Share or preferred share equivalent (or having a conversion price per share, if a security convertible into Preferred Shares or preferred share equivalents) less than the then
current per share market price of the Preferred Shares (determined pursuant to Section 11(d) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which shall be the number of Preferred Shares and preferred share equivalents outstanding on such record date plus the number of Preferred Shares and preferred share equivalents
which the aggregate offering price of the total number of 

  

 - 12 - 

 
Preferred Shares and/or preferred share equivalents so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of which shall be the number of Preferred Shares and preferred share equivalents outstanding on such record date plus the number of additional Preferred Shares and/or
preferred share equivalents to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which shall
be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of the Rights. Preferred Shares and preferred share equivalents 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. 
  
 (c) In case the Company shall fix a record date
for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price of the Preferred Shares (determined pursuant to Section
11(d) hereof) on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company whose determination shall be described in a statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one Preferred Share, and the denominator of which shall be such current per Preferred Share market price (determined pursuant to Section 11(d)
hereof), 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) Except as
otherwise provided herein, for the purpose of any computation hereunder, the “current per share market price” of any security (a “Security” for the purpose of this Section 11(d)) on any date shall be deemed to be
the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to but not including such date; provided, however, that in the event that the current per
share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such
shares, or (B) any subdivision, combination or reclassification of such Security, 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 subdivision,
combination or reclassification, then, and in each such case, the 

  

 - 13 - 

 
current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price
for each day shall be the last gale 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 by the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the Nasdaq Stock Market or, if the Security is not listed or admitted to trading on the Nasdaq Stock Market, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last 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 Nasdaq Stock Market or such other system then in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. The term “Trading Day” shall mean a day on which
the Nasdaq Stock Market or the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on the Nasdaq Stock Market
or any national securities exchange, a Business Day. If the Common Stock is not publicly traded, “current per share market price” shall mean the fair value per share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights Agent. 
  
 For the purposes of any computation hereunder, the “current per share market price” of the Preferred Shares shall be determined in accordance with the method set forth in this Section 11(d). If the Preferred
Shares are not publicly traded, the “current per share market price” of the Preferred Shares shall be conclusively deemed to be the current per share market price of the Common Stock as determined pursuant to this Section 11(d)
(appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one hundred. If neither the Common Stock nor the Preferred Shares are publicly held or so listed or traded,
“current per share market price” of the Preferred Shares shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Bights
Agent. 
  
 (e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments 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-millionth of a Preferred Share or one ten-thousandth of any share or other security 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 or (ii) the date of the
expiration of the right to exercise any Rights. 
  
 (f) If
as a result of an adjustment made pursuant to Section 11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than the Preferred Shares, thereafter
the number of such other 

  

 - 14 - 

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

  

 - 15 - 

 
countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date
specified in the public announcement. 
  
 (j) Irrespective
of any adjustment or change in the Purchase Price or the number of one one-hundredths of a Preferred Share issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price
and the number of one one-hundredths of a Preferred Share which were expressed in the initial Right Certificates issued hereunder. 
  
 (k) Before taking any action that would cause an adjustment reducing the Purchase Price below one one-hundredth of the then par value, if any, of
the Preferred Shares or other shares of capital stock 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 Preferred Shares or other such shares at such adjusted Purchase Price. 
  
 (l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect (and shall provide the Rights Agent with notice of such election) to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event
requiring such adjustment. 
  
 (m) Anything in this Section
11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision of the Preferred Shares, issuance wholly for cash of any Preferred Shares at less than the current market price, issuance wholly for cash or Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares, dividends on Preferred Shares payable in Preferred Shares or issuance of rights, options or warrants referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Shares Stock shall not be taxable to such shareholders. 
  
 (n) Anything in this Amendment to the contrary notwithstanding, in the event that at any time after the date of this Amendment and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Stock payable in Common Stock or (ii) effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of a dividend payable in Common Stock) into a greater or lesser
number of shares of Common Stock, then in any such case, (i) the number of one one-hundredths of a Preferred Share purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of one one-hundredths of
a Preferred Share so purchasable 

  

 - 16 - 

 
immediately prior to such event by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately before such event and
the denominator of which is the number of shares of Common Stock outstanding immediately after such event, and (ii) each share of Common Stock outstanding immediately after such event shall have issued with respect to it that number of Rights which
each share of Common Stock outstanding immediately prior to such event had issued with respect to it. The adjustments provided for in this Section 11(n) shall be made successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected. If an event occurs which would require an adjustment under Section 11(a)(ii) and this Section 11(n), the adjustments provided for in this Section 11(n) shall be in addition and prior to any adjustment
required pursuant to Section 11(a)(ii). 
  
 (o) The Company
agrees that, after the earlier of the Distribution Date or the Stock Acquisition Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights, unless such action is approved by the Board of Directors. 
  
 Section 12. Certificate of Adjusted Purchase Price or Number of Shares.

  
 Whenever an adjustment is made as provided in Section 11
or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment, and a brief statement of the facts and computation accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the
Common Stock or the Preferred Shares a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof (if so required under Section 25 hereof). The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein contained and shall neither have any duty with respect to nor be deemed to have knowledge of any such adjustment unless and until it shall have received such certificate.

  
 Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earnings Power. 
  
 (a) In the event,
directly or indirectly, at any time after any Person has become an Acquiring Person, (i) the Company shall consolidate with, or merge with and into any other Person and the Company shall not be the continuing or surviving corporation of such
consolidation or merger; (ii) any Person shall consolidate with the Company, or any Person shall merge with and into the Company and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with
such consolidation or merger, all or part of the Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or of the Company) or cash or any other property; (iii) the Company shall effect a statutory share
exchange with the outstanding shares of Common Stock of the Company being exchanged for stock or other securities of any other Person, cash or property, or (iv) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person (other than the Company or one or
more of its wholly owned Subsidiaries); or, if 

  

 - 17 - 

 
upon the consummation of any of the events set forth in the preceding clauses (i) through (iv) there is an Acquiring Person, then upon the first occurrence
of any such event (a “Section 13 Event”), proper provision shall be made so that: (1) each holder of record of a Right (other than Rights which have become void pursuant to Section 11(a)(ii)) shall thereafter have the right to receive,
upon the exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Amendment and in lieu of
Preferred Shares, such number of validly issued, fully paid and non-assessable and freely tradable shares of Common Stock of the Principal Party (as defined herein) not subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 13
Event and (B) dividing that product by 50% of the then current per share market price of the Common Stock of such Principal Party (determined pursuant to Section 11(d) hereof) on the date of consummation of such Section 13 Event; provided, however,
that the Purchase Price and the number of shares of Common Stock of such Principal Party issuable upon exercise of each Right shall be further adjusted as provided in Section 11(f) of this Amendment to reflect any events occurring in respect of such
Principal Party after the date of such Section 13 Event; (2) such Principal Party shall thereafter, be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to
this Amendment; (3) the term “Company” shall thereafter be deemed to refer to such Principal Party; and (4) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares
of its Common Stock in accordance with Section 9 hereof) in connection with such consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to the shares of its Common Stock thereafter deliverable upon the exercise of the Rights, provided that, upon the subsequent occurrence of any consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided in this Section 13 (a), such cash, shares, rights, warrants and other property which such
holder would have been entitled to receive had such holder, at the time of such transaction, owned the Common Stock of the Principal Party receivable upon the exercise of a Right pursuant to this Section 13 (a), and such Principal Party shall take
such steps (including, but not limited to, reservation of shares of stock) as may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other property.

  
 (b) “Principal Party” shall
mean 
  
 (i) in the case of any
transaction described in (i), (ii) or (iii) of the first sentence of Section 13(a) hereof: (A) the Person that is the issuer of the securities into which the shares of Common Stock of the Company are converted in such merger, consolidation or
exchange, or, if there is more than one such issuer, the issuer the shares of Common Stock of which have the greatest aggregate market value of shares outstanding, or (B) if no securities are so issued, (1) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one such Person, the Person the shares of Common Stock of which have 

  

 - 18 - 

 
the greatest aggregate market value of shares outstanding or (2) if the Person that is the other party to the merger does not survive the merger, the Person
that does survive the merger (including the Company if it survives) or (3) the Person resulting from the consolidation; and 
  
 (ii) in the case of any transaction described in clause (iv) of the first sentence in Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each Person that is a party to such transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the assets or earning power cannot be determined, whichever of such Persons as is the issuer of Common Stock having the greatest aggregate market value of shares outstanding;
provided, however, that in any such case described in the foregoing clause (b)(i) or (b)(ii), (1) if the Common Stock of such Person is not at such time or has not been continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act, and if such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, the term “Principal Party” shall refer to such other Person, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stock of all of which is and has been so registered, the term “Principal Party” shall refer to whichever of such Persons is the issuer of Common Stock having the
greatest aggregate market value, or (3) if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in clauses (1) and (2)
above shall apply to each of the owners having an interest in the venture as if the Person owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in each such case shall bear the obligations set
forth in this Section 13 in the same ratio as its interest in such Person bears to the total of such interests. 
  
 (c) The Company shall not consummate any Section 13 Event unless prior thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the requirements of Sections 13(a) and (b) hereof shall promptly be performed in accordance with their terms and that such consolidation, merger, exchange, sale or transfer of
assets shall not result in a default by the Principal Party under this Amendment as the same shall have been assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof and providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will: 
  
 (i) prepare and file a registration statement under the Securities Act, if necessary, with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as practicable after such filing and use its best efforts to cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the earlier of the close of business on the Redemption Date or the Final Expiration Date, and similarly comply with applicable state securities laws; 
  
 (ii) use its best efforts, if the Common Stock of the Principal Party shall be listed or admitted to
trading on the Nasdaq Stock Market or on a national securities exchange, to 

  

 - 19 - 

 
list or admit to trading (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights on the Nasdaq Stock Market or
such securities exchange or, if the Common Stock of the Principal Party shall not be listed or admitted to trading on the Nasdaq Stock Market or a national securities exchange, to cause the Rights and the securities receivable upon exercise of the
Rights to be reported by such other system then in use; 
  
 (iii) deliver to holders of the Rights historical financial statements for the Principal Party which comply in all respects with the requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and 
  
 (iv) obtain waivers
of any rights of first refusal or preemptive rights in respect of the Common Stock of the Principal Party subject to purchase upon exercise of outstanding Rights. 
  
 (d) In case the Principal Party which is to be a party to a transaction referred to in this Section 13 has a
provision in any of its authorized securities or in its articles or certificate of incorporation or by-laws or other instrument governing its corporate affairs, which provision would have the effect of (i) causing such Principal Party to issue
(other than to holders of Rights pursuant to this Section 13), in connection with, or as a consequence of the consummation of a transaction referred to in this Section 13, shares of Common Stock of such Principal Party at less than the then current
market price per share thereof (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Stock of such Principal Party at less than such then current market price, or (ii) providing for any special
payment, tax or similar provision in connection with the issuance of the Common Stock of such Principal Party pursuant to the provisions of Section 13, then, in such event, the Company hereby agrees with each holder of Rights that it shall not
consummate any such transaction unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of such Principal Party shall have been
canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection with, or as a consequence of, the consummation of the proposed transaction. 
  
 (e) The Company covenants and agrees that it shall not, at any time
after a Person first becomes an Acquiring Person, enter into any transaction of the type contemplated by clauses (i) - (iv) of Section 13(a) hereof if (i) at the time of or immediately after such consolidation, merger, exchange, sale, transfer or
other transaction there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such consolidation, merger, sale, transfer of other transaction, the shareholders of the Person who constitutes, or would constitute, the Principal Party for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of its Affiliates or Associates or (iii) the form or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights. 
  

 - 20 - 

 (f) The provisions of this Section 13 shall similarly apply to successive mergers, consolidations,
statutory share exchanges or sale or other transfers. 
  
 Section 14. Fractional Rights and Fractional Shares. 
  
 (a) The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any 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 Nasdaq Stock Market or, if the Rights are not listed or admitted to trading on the Nasdaq Stock Market, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the Nasdaq Stock Market or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be used. 
  
 (b) The Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Company, be evidenced by depositary receipts pursuant to an appropriate agreement between the Company and a depositary selected by it, or by scrip; provided, however, that (i) if the Company issues such scrip, then
such scrip shall not confer upon the holder any voting or other rights of a shareholder of the Company, but the Company shall from time to time, upon demand of any holder of such scrip and the surrender of scrip for fractional Preferred Shares
aggregating one whole Preferred Share, issue one whole Preferred Share to such holder and (ii) if the Company issues depositary receipts pursuant to any such agreement, such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In lieu of fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one
Preferred Share. For the purposes of this 

  

 - 21 - 

 
Section 14(b), the current market value of a Preferred Share shall be the closing price of a Preferred Share (as determined pursuant to Section 11(d)) for
the Trading Day immediately prior to the date of such exercise. 
  
 (c) The holder of a Right by the acceptance of the Right expressly waives his right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as provided above). 
  
 Section 15. Rights of Action. 
  
 All rights of action in respect of this Amendment, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Stock), on his own behalf and for
his own benefit, may enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Right Certificate in the manner provided
therein and in this Amendment. 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 Amendment
and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of, the obligations of any Person subject to this Amendment. 
  
 Section 16. Agreement of Right Holders. 
  
 Every holder of a Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a Right that: 
  
 (a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Stock; 
  
 (b) after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights
Agent if surrendered at the office or agency of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer; and 
  
 (c) the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to
the Distribution Date, the Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary. 
  

 - 22 - 

 Section 17. Right Certificate Holder Not Deemed a Shareholder. 
  
 No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred Shares or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in
any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in this Amendment), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof. 
  
 Section 18. Concerning the Rights Agent. 
  
 (a) The Company agrees to pay in a timely manner to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the preparation, delivery, administration, execution and any amendment of this Amendment and the exercise and performance of
its duties hereunder, which shall include, but not be limited to, reasonable compensation for services rendered by officers and employees of the Rights Agent which are in addition to the ministerial and administrative services performed by the
Rights Agent under this Amendment. The Company also agrees to indemnify the Rights Agent, its officers, employees, agents and directors for, and to hold them 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 Amendment, including without limitation the costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly against the Rights Agent, its officers, employees, agents and directors. Anything to the
contrary notwithstanding, in no event shall the Rights Agent be liable for special, indirect, consequential or incidental loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of
the likelihood of such loss or damage. 
  
 (b) The Rights
Agent shall be authorized and protected by the Company and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its acceptance and administration of this Amendment in reliance upon any Right
Certificate or certificate for the Preferred Shares (or for scrip or depositary receipts evidencing fractional interests in Preferred Shares) or Common Stock or for other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or
Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. The Rights Agent shall not be deemed to have notice of any action or event unless such notice was given as provided above. 
  

 - 23 - 

 Section 19. Merger or Consolidation or Change of Name of Rights Agent. 
  
 (a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer or corporate
trust powers of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Amendment without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided, that
such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Amendment, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in this Amendment. 
  
 (b) In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned
but not delivered the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in cue at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Amendment. 
  
 Section 20. Duties of Rights Agent. 
  
 The Rights Agent undertakes only the duties and obligations expressly
imposed by this Amendment upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: 
  
 (a) The Rights Agent may consult with legal counsel of its choice (who may be legal counsel for the Company), and the
advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it in good faith and in
accordance with such advice or opinion. 
  
 (b) Whenever in
the performance of its duties under this Amendment the Rights Agent shall deem it necessary or desirable that any fact or matter (including without limitation the identity of any Acquiring Person and the determination of current market price) be
proved or established by the Company prior to taking, suffering or omitting any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the 

  

 - 24 - 

 
Chairman of the Board, the President, any Vice President, the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full 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 in good faith by it under the provisions of this Amendment in
reliance upon such certificate. 
  
 (c) The Rights Agent
shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith or willful misconduct. 
  
 (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Amendment or in the Right
Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. 
  
 (e) The Rights Agent shall not have any liability for, nor be under any responsibility in respect of, the validity of
this Amendment or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Amendment or in any Right Certificate; nor shall it be responsible for any transfer to an Acquiring Person (unless the Company has delivered written notice of such Acquiring Person
prior to such transfer) or any change in the exercisability of the Rights (including the Rights becoming null and void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13, 23 and 24, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt of a
certificate furnished pursuant to Section 12, describing such change or adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Preferred Shares or other
securities to be issued pursuant to this Amendment or any Right Certificate or as to whether any Preferred Shares or other securities will, when issued, be validly authorized and issued, fully paid and nonassessable. 
  
 (f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Amendment. 
  
 (g) The Rights Agent is
hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any person reasonably believed by the Rights Agent to be one of the Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken, suffered or omitted by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for those instructions. 
  

 - 25 - 

 (h) The Rights Agent and any shareholder, affiliate, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Rights Agent under this Amendment. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person or legal entity. 
  
 (i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents
or for any loss to the Company or any other Person resulting from any such act, default, neglect or misconduct absent gross negligence, bad faith or willful misconduct. 
  
 (j) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the
certificate contained in the form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has not been completed to certify the holder is not an Acquiring Person (or an Affiliate or Associate thereof),
the Rights Agent shall not take any further action with respect to such requested exercise of transfer without first consulting with the Company. 
  
 Section 21. Change of Rights Agent. 
  
 The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Amendment upon 30 days’ notice in writing
mailed to the Company and to each transfer agent of the Common Stock and Preferred Shares by registered or certified mail, and, following the Distribution Date, to the holders of the Right Certificates by United States mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock by registered or certified mail, and
following the Distribution Date, to the holders of the Right Certificates by United States mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a
new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be either (a) a corporation or other entity organized and doing business under the laws of the United States or the State of Washington or New
York (or of any other state of the United States so long as such corporation is authorized to do business in the State of Washington or New York), in good standing, having an office or depositary drop in the State of Washington or New York, which is
authorized to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and which has or is a subsidiary of a corporation which has at the time of 

  

 - 26 - 

 
its appointment as Rights Agent a combined capital and surplus of at least $50 million, or (b) an Affiliate of a corporation or other 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 Stock and Preferred Shares, and, following the Distribution Date, mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be. 
  
 Section 22. Issuance of New Right Certificates. 
  
 Notwithstanding any of the provisions of this Amendment or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such forms as may be approved by its Board of Directors to reflect
any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Amendment. In addition, in connection
with the issuance or sale of Common Stock following the Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date, the Company may with respect to shares of Common Stock so issued or sold pursuant to (i) the
exercise of stock options, (ii) under any employee plan or arrangement, (iii) upon the exercise, conversion or exchange of securities notes or debentures issued by the Company or (iv) a contractual obligation of the Company in each case existing
prior to the Distribution Date, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale. 
  
 Section 23. Redemption. 
  
 (a) The Board of Directors of the Company may, at any time prior to the earlier of (i) the close of business on the tenth day following the Stock
Acquisition Date, subject to extension by the Board of Directors as provided in Section 27 hereof, or (ii) the close of business on the Final Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption price of
$0.0001 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the redemption price being hereinafter referred to as the “Redemption Price”). The
redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. The Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the current market price of the Common Stock at the time of redemption) or any other form of consideration deemed appropriate by the Board of Directors. 
  
 (b) Immediately upon the action of the Board of Directors ordering the redemption of the Rights pursuant to paragraph
(a) of this Section 23 (or at such later time as the Board of 

  

 - 27 - 

 
Directors may establish for the effectiveness of such redemption), and without any further action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice (including prompt notice thereof to the Rights Agent) of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors ordering the redemption of the Rights (or such later time as the Board
of Directors may establish for the effectiveness of such redemption), the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock. 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 will be made. 
  
 Section 24. Exchange. 
  
 (a) The Board of Directors of the Company may, at its option, at any time after any Person first becomes an Acquiring Person, 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) hereof) for shares of Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof and subject to adjustment as set forth in clause (c) below (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any Person (other than an Exempt Person), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of shares of Common Stock aggregating 50%
or more of the shares of Common Stock then outstanding. 
  
 (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange (and prompt notice thereof to the Rights Agent); 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 the Rights Agent and to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the shares of Common Stock for Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

  

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 (c) In the event that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company may, in its discretion, take such action as may be necessary to authorize additional shares of Common Stock for
issuance upon exchange of the Rights. In the event that the Company shall determine not to take such action or shall, after good faith effort, be unable to take such action as may be necessary to authorize such additional shares of Common Stock, the
Board of Directors, at its option shall (i) adjust the Exchange Ratio to permit the Company to use all of its issued but not outstanding and its authorized but unissued Common Stock to effectuate a full exchange of all of the then outstanding and
exercisable Rights or (ii) substitute, for each Common Share that would otherwise be issuable upon exchange of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied
by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such Preferred Shares or fraction thereof. 
  
 (d) The Company shall not, in connection with any exchange pursuant to this Section 24, be required to issue
fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock. In lieu of such fractional shares of Common Stock, there shall be paid to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Common Share. For the purposes of this paragraph (d), the current market value of
a whole Common Share shall be the closing price of a Common Share (as determined pursuant to the second sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. 
  
 Section 25. Notice of Certain Events. 
  
 (a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend payable in stock of any class to the holders of its Preferred Shares or to make any other distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares) or (iv) to effect any consolidation or merger into or with, or to effect any sale or other transfer
(or 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, (v) to effect
any statutory share exchange with the outstanding Common Stock of the Company being exchanged for stock or other securities of any other corporation or cash or other property, (vi) to effect the liquidation, dissolution or winding up of the Company
or (vii) to declare or pay any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of dividends in Common Stock), then,
in each such case, the Company shall give to the Rights Agent and to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which 

  

 - 29 - 

 
shall specify the record date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on which such liquidation,
dissolution or winding up is to take place and the date of participation therein by the holders of the Common Stock and/or Preferred Shares, if any such date is to be fixed, and 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 the Preferred 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 Stock and/or Preferred Shares, whichever shall be the earlier. 
  
 (b) In case any event described in Section 11(a)(ii) or Section 13 shall occur then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate (or if occurring prior to the Distribution Date, the holders of the Common Stock) in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) and Section 13 hereof. 
  
 Section 26. Notices. 
  
 Notices or demands authorized by this Amendment to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as follows: 
  
 Flow International Corporation 
 23500 – 64th Avenue South 
 Kent, Washington 98032 

Attention: Secretary 
  
 Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Amendment to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows: 
  
 ChaseMellon Shareholder Services, L.L.C. 
 Seattle Administration 
 520 Pike Street,
Suite 1220 
 Seattle, Washington 98101 
 Attention: Ms. Ardis Dee Henderson 
  
 Notices or demands authorized by
this Amendment to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by United States mail, postage prepaid, addressed to such holder at the address of such holder
as shown on the registry books of the Company. 
  

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 Section 27. Supplements and Amendments. 
  
 The Company may from time to time supplement or amend this Amendment without
the approval of the Rights Agent or any holders of Right Certificates in order (i) to extend the Final Expiration Date or, provided that at the time of such amendment no Person has become an Acquiring Person, the period during which the Rights may
be redeemed, (ii) to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions of this Amendment, (iii) prior to the time that any Person becomes an Acquiring Person,
to otherwise change or supplement any provision in this Amendment in any manner which the Company may deem necessary or desirable, or (iv) subject to clause (i) of this Section 27, from and after the time that any Person become an Acquiring Person,
to otherwise change or supplement any provision in this Amendment in any manner which the Company may deem necessary or desirable and which shall not adversely affect the interests of the Rights Agent or holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon the delivery of a certificate from an appropriate officer of the Company and, if requested by the Rights Agent, an opinion of counsel, which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment. 
  
 Section 28. Successors. 
  
 All the covenants and provisions of this Amendment by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder. 
  
 Section 29.
Benefits of this Amendment. 
  
 Nothing in this Amendment
shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock) any legal or equitable right, remedy or claim under this
Amendment; but this Amendment shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock). 
  
 Section 30. Severability. 
  
 If any term, provision, covenant or restriction of this Amendment or
applicable to this Amendment 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 Amendment shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. In the event the Amendment to the Original Rights is deemed to be invalid, this Amendment shall be deemed to create a new right (the “New Right”). Such New Rights
shall be deemed to have been issued as set forth herein and shall possess all of the rights and preferences set forth herein. 
  

 - 31 - 

 Section 31. Governing Law. 
  
 This Amendment and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State
of Washington and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State; provided, however, that the effect of any provision on the
rights, duties and obligations of the Rights Agent shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts to be made and performed entirely within such State. 
  
 Section 32. Counterparts. 
  
 This Amendment may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 
  
 Section 33. Descriptive Headings. 
  
 Descriptive headings of the several Sections of this Amendment are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof. 
  
 [the remainder of
this page intentionally left blank] 
  

 - 32 - 

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

			
	FLOW INTERNATIONAL CORPORATION
		
	By:	 	/s/    RONALD W. TARRANT        
	 Name:
	 	Ronald W. Tarrant
	 Title:
	 	Chairman, President and CEO
	
	CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
		
	By:	 	/s/    THOMAS L. COOPER        
	 Name:
	 	Thomas L. Cooper
	 Title:
	 	Assistant Vice President

  

 - 33 - 

 Exhibit A 
  
 FORM 
 of

 CERTIFICATE OF DESIGNATIONS 
 of

 SERIES B JUNIOR PARTICIPATING PREFERRED STOCK 
 of 
 FLOW INTERNATIONAL CORPORATION 
  
 Flow International Corporation, a corporation organized and existing under the laws of the state of Washington (hereinafter called the
“Corporation”), hereby certifies that the following was adopted by the Board of Directors of the Corporation: 
  
 Series B Junior Participating Preferred Stock: 
  
 Section 1. Designation and Amount. The shares of such series shall be designated as “Series B Junior Participating Preferred Stock” (the
“Series B Preferred Stock”), and the number of shares constituting the Series B Preferred Stock shall be 200,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided that no decrease shall
reduce the number of shares of Series B Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Corporation convertible into Series B Preferred Stock. 
  
 Section 2. Dividends and Distributions. 
  
 (A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior
to the Series B Preferred Stock with respect to dividends, the holders of shares of Series B Preferred Stock, in preference to the holders of Common Stock, par value $.01 per share (the “Common Stock”), of the Corporation and of any other
junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year
(each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (i) $1 or (ii) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends and 100 times the aggregate per share amount
(payable in kind) of all noncash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock 

  

 A-1 

 
(by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event under clause (ii) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 
  
 (B) The Corporation shall declare a dividend or distribution
on the Series B Preferred Stock as provided in paragraph (A) of this Section 2 immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series B Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. 
  
 (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series B Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders of shares of Series B Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof. 
  
 Section 3. Voting
Rights. The holders of shares of Series B Preferred Stock shall have the following voting rights: 
  
 (A) Subject to the provision for adjustment hereinafter set forth, each share of Series B Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which 

  

 A-2 

 
is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event. 
  
 (B) Except as otherwise provided herein, in any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series B Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. 
  
 (C) Except as set forth herein, or as otherwise provided by law, holders of Series B Preferred Stock shall
have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. 
  
 Section 4. Certain Restrictions. 
  
 (A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B Preferred Stock outstanding shall
have been paid in full, the Corporation shall not: (i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred
Stock; (ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Preferred Stock, except dividends paid
ratably on the Series B Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock; or (iv) redeem or purchase or otherwise
acquire for consideration any shares of Series B Preferred Stock, or any shares of stock ranking on a parity with the Series B Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the respective series or classes. 
  
 (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. 
  

 A-3 

 Section 5. Reacquired Shares. Any shares of Series B Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar
stock or as otherwise required by law. 
  
 Section 6.
Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (i) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock unless, prior thereto, the holders of shares of Series B Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that the holders of shares of Series B Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (ii) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except distributions made ratably on the Series B Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under the proviso in clause (i) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 
  
 Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series B Preferred Stock shall at the same time be similarly exchanged or changed into
an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding

  

 A-4 

 
sentence with respect to the exchange or change of shares of Series B Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 
  
 Section 8. No Redemption. The shares of Series B Preferred Stock shall
not be redeemable. 
  
 Section 9. Rank. The Series B
Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Corporation’s Preferred Stock. 
  
 Section 10. Amendment. The Articles of Incorporation of the Corporation shall not be amended in any manner which
would materially alter or change the powers, preferences or special rights of the Series B Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series B
Preferred Stock, voting together as a single class 
  
 IN WITNESS WHEREOF, this
Certificate of Designations is executed on behalf of the Corporation by its Chairman of the Board and attested by its Secretary this 1st day of September, 1999 
  
 Chairman of the Board 
  
 Attest: 
  
 Secretary 
  

 A-5 

 Exhibit B 
  
 Form of Right Certificate 
  

			
	 Certificate No.
R-                    
	 	                    Rights

  
 NOT EXERCISABLE AFTER
SEPTEMBER 1, 2009 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AS $.0001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. 
  
 Right Certificate 
  
 FLOW INTERNATIONAL CORPORATION 
  
 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 Amended and Restated Rights Agreement, dated as of September 1,
1999 (the “Rights Agreement”), between Flow International Corporation, a Washington corporation (the “Company”), and ChaseMellon Shareholder Services, L.L.C. (the “Rights Agent”), to purchase from the Company at
any time after the Distribution Date (such term is defined in the Rights Agreement) and prior to 5:00 p.m., Pacific Standard time, on September 1, 2009, at the principal office of the Rights Agent, or at the office of its successor as Rights Agent,
one one-hundredth of a fully paid nonassessable share of Series B Junior Participating Preferred Stock, par value $.01 per share (the “Preferred Shares”), of the Company, at a purchase price of $45 per one one-hundredth of a Preferred
Share (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of
a Preferred Share which may be purchased upon exercise hereof) set forth above and the Purchase Price as of September 1, 1999, based on the Preferred Shares as constituted at such date. As provided in the Rights Agreement, the Purchase Price and the
number of one one-hundredths of a Preferred Share which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events. 
  

 B-1 

 This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement,
which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the above-mentioned offices of the Rights Agent.

  
 This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised. 
  
 Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of
$.0001 per Right or (ii) may be exchanged in whole or in part for Preferred Shares or shares of the Company’s Common Stock, par value $.01 per share. 
  
 No fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples
of one one-hundredth of a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. 
  
 No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed
to confer upon the holder hereof as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement. 
  
 This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. 
  

 B-2 

 WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of
the              day of September, 1999. 
  

									
	ATTEST:	 	 	 	FLOW INTERNATIONAL CORPORATION
				
	 	 	 	 	 By:
	 	 
	 	 	 	 	 	 	 Name:
	 	Ronald W. Tarrant
	 	 	 	 	 	 	 Title:
	 	Chairman, President and CEO

  
 Countersigned; 
  

			
	CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 B-3 

 Form of Reverse Side of Right Certificate  
  
 FORM OF ASSIGNMENT 
  
 (To be executed by the registered holder if such holder desires to transfer the Right
Certificate.) 
  

			
	 FOR VALUE RECEIVED ___________________________________________________________________________

	 hereby sells, assigns and transfers unto
_________________________________________________________________________

	 _________________________________________________________________________________________________________

	(Please print name and address of transferee.)
	 _________________________________________________________________________________________________________

  
 this Right Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute and appoint
                                        
Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution. 
  
 Dated:
                                        ,
1999. 
  

	
	
	 
	Signature

  
 Signature Guaranteed:

  
 Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States. 
  
 The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). 
  

	
	
	 
	Signature

  

 B-4 

 Form of Reverse Side of Right Certificate - continued 
  
 FORM OF ELECTION TO PURCHASE 
  
 (To be executed if holder desires to exercise the Rights represented by the Right
Certificate.) 
  

	To:	FLOW INTERNATIONAL CORPORATION 

  
 The undersigned hereby irrevocably elects to exercise
                             Rights represented by this Right Certificate to purchase the Preferred
Shares issuable upon the exercise of such Rights and requests that certificates for such Preferred Shares be issued in the name of: 
  
 Please insert social security 
 or other identifying number. 
  

 (Please print name and
address.) 
  

  
 If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be
registered in the name of and delivered to. 
  
 Please insert social security

 or other identifying number. 
  

 (Please print name and address.) 
  

  
 Dated:
                                        
                    , 19     
  

	
	
	 
	Signature

  

 B-5 

 Signature Guaranteed: 
  
 Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in the United States. 
  
 Form of Reverse Side of Right Certificate - continued 
  
 The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement). 
  

	
	
	 
	Signature

  
 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 Right 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, the Company and the Rights Agent will deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement) and such Assignment or Election to Purchase will not be honored. 
  

 B-6 

 Exhibit C 
  

FLOW INTERNATIONAL CORPORATION 
  
 UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT AMENDMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS AGREEMENT AMENDMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE. 
  
 SUMMARY OF RIGHTS TO PURCHASE 
 PREFERRED SHARES 
  
 On June 7, 1990, the Board of
Directors of Flow International Corporation (the “Company”) adopted a Preferred Share Purchase Rights Plan which was designated to maximize stockholder value, and declared a dividend of one preferred share purchase right (the
“Original Rights”) for each outstanding share of common stock, no par value per share, of the Company (the “Common Stock”). The Original Rights contain provisions to protect stockholders in the event of an unsolicited attempt to
acquire the Company, including a gradual accumulation of shares in the open market, a partial or two-tier tender offer that does not treat all stockholders equally, or a squeeze-out merger and other abusive takeover tactics which the Board believes
are not in the best interests of our stockholders. 
  
 By their
terms, the Original Rights expire June 17, 2000. The term of the Original Rights has been extended, however, for another ten year period, expiring September 1, 2009 (the “Rights”). In addition, the Board has authorized other changes to the
Original Rights. Such changes are set forth in an Amended and Restated Rights Agreement (the “Rights Agreement Amendment”) between the Company and ChaseMellon Shareholder Services, LLC, as Rights Agent (the “Rights Agent”).

  
 Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series B Junior Participating Preferred Stock, no par value per share, of the Company (the “Preferred Stock”) at a price of $45.00 per one one-hundredth of a share of Preferred Stock (the
“Purchase Price”), subject to adjustment. This amount differs from the initial “strike” price of $15.00 for the Original Right. The difference represents proportional increase in the Company’s common stock price over the
past eight years and, in the opinion of the Board, represents the fair and proper price for which the Rights may be exercised. 
  
 Until the earlier to occur of (i) 10 days following a public announcement or awareness by the Board of Directors that a person or group of affiliated or
associated persons (an “Acquiring Person”) have acquired beneficial ownership of 10% or more of the outstanding shares of Common Stock, other than pursuant to a Permitted Offer (as defined below) or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to such time as any person or group of affiliated persons becomes an Acquiring Person) following the commencement of, or announcement of an intention to make., a tender offer or
exchange offer the 

  

 C-1 

 
consummation of which would result in the beneficial ownership by a person or group of 10% or more of the outstanding shares of Common Stock, other than
pursuant to a Permitted Offer (the earlier of such dates being called the “Distribution Date”), the Rights will be evidenced, with respect to any of the Common Stock certificates outstanding as of the Record Date, by such Common Stock
certificate. The Original Rights provided for a 20% threshold as opposed to a 10% threshold for the Right. The Board of Directors feels that because of the Company’s current capitalization (and lack of large shareholder), it is reasonable to
allow the Board to take action at the 10% level. 
  
 A
“Permitted Offer” is a tender offer or an exchange offer for all outstanding shares of Common Stock of the Company at a price and on terms determined by the Board of Directors of the Company, after receiving advice from one or more
investment banking firms, to be (i) fair to shareholders (taking into account all factors which the Board of Directors deems relevant) and (ii) otherwise in the best interests of the Company and its shareholders and which the Board of Directors
determines to recommend to the shareholders of the Company. 
  
 The Rights Agreement Amendment provides that, until the Distribution Date (or earlier redemption or expiration of the Rights), the Rights will be transferred with and only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued after the Record Date upon transfer or new issuances of Common Stock will contain a notation incorporating the Rights Agreement Amendment by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer of any certificates for shares of Common Stock outstanding as of the Record Date, will also constitute the transfer of the Rights associated with the
shares of Common Stock represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the Common Stock as
of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the Rights. 
  
 The Rights are not exercisable until the Distribution Date. The Rights will expire on September 1, 2009 (the “Final Expiration Date”) unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or exchanged by the Company, in each case as described below. 
  
 The Purchase Price payable, and the number of shares of Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights or
warrants to subscribe for or purchase Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than the then-current market price of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends or dividends payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above). With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in the Purchase Price. 
  

 C-2 

 No fraction of a share of Preferred Stock (other than fractions in integral multiples of one
one-hundredth of a share) will be issued and, in lieu thereof an adjustment in cash will be nude based on the closing price on the last trading date prior to the date of exercise. 
  
 The number of outstanding Rights and the number of one one-hundredths of a share of Preferred Stock issuable upon exercise
of each Right are also subject to adjustment in the event of a stock split of the Common Stock or a stock dividend on the Common Stock payable in shares of Common Stock or subdivisions, consolidations or combinations of the Common Stock occurring,
in any such case, prior to the Distribution Date. 
  
 Shares of
Preferred Stock purchasable upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will be entitled to a minimum preferential quarterly dividend payment of $1.00 per share but will be entitled to an aggregate dividend of
100 times the dividend declared per share of Common Stock. In the event of liquidation, the holder of shares of Preferred Stock will be entitled to a minimum preferential liquidation payment of $100.00 per share but will entitled to an aggregate
payment of 100 times the payment made per share of Common Stock. Each share of Preferred Stock will have 100 votes, voting together with the shares of Common Stock. Finally, in the event of any merger, consolidation or other transaction in which
shares of Common Stock are exchanged, each share of Preferred Stock will be entitled to receive 100 times the amount received per share of Common Stock. These rights are subject to adjustment in the event of a stock dividend on the shares of Common
Stock or a subdivision, combination or consolidation of the shares of Common Stock. 
  
 In the event that any person or group of affiliated or associated persons becomes an Acquiring Person, each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which will thereupon become
void), will thereafter have the right to receive upon exercise of a Right at the then current exercise price of the Right, that number of shares of Common Stock (or, in lieu of Common Stock, such number or fraction of shares of Preferred Stock
equivalent in value to such number of shares of Common Stock) having a market value of two times the exercise price of the Right. 
  
 In the event that, after a person or group has become an Acquiring Person, the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, proper provision will be made so that each holder of a Right (other than Rights beneficially owned by an Acquiring Person which will have become void) will thereafter have the
right to receive, upon the exercise of the Right at the then current exercise price of the Right, that number of shares of common stock of the person with whom the Company has engaged in the foregoing transaction which number of shares at the time
of such transaction will have a market value of two times the exercise price of the Right. 
  
 At any time after any person or group becomes an Acquiring Person and prior to the acquisition by such person or group of 50% or more of the outstanding shares of Common Stock or the occurrence of an event described
in the prior paragraph, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which will 

  

 C-3 

 
have become void), in whole or in part, at an exchange ratio of one share of Common Stock par Right (subject to adjustment). 
  
 At any time prior to the close of business on the day 10 days after an
Acquiring Person becomes such, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $.0001 per Right (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 of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be
to receive the Redemption Price. 
  
 For so long as no person has
become an Acquiring Person, the Company may amend the Rights in any manner. After a person has become an Acquiring Person, the Company may amend the Rights in any manner that does not adversely affect the interests of holders of the Rights.

  
 Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. 
  
 A copy of the Rights Agreement Amendment 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 Agreement Amendment is available free of charge from the Company. 
  
 FLOW INTERNATIONAL CORPORATION 
 23500 - 64th Avenue South 
 Kent, Washington 98032 
 Attn:
Secretary 
 (253) 850-3500 
  
 This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement Amendment, as the same may be
amended from time to time, which is hereby incorporated herein by reference. 
  

 C-4 

 AMENDMENT NO. 1 TO 
 AMENDED AND RESTATED RIGHTS AGREEMENT 
  
 This AMENDMENT NO. 1 (the “Amendment No. 1”) dated as of October 29, 2003, is to the AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of September 1, 1999, between Flow International Corporation, a Washington corporation
(the “Company”), and Mellon Investor Services LLC (formerly known as ChaseMellon Shareholder Services, L.L.C.), a New Jersey limited liability company (the “Rights Agent”). 
  
 RECITALS 
  
 WHEREAS, the Company and First Interstate Bank, Ltd. (the predecessor in interest to the Rights Agent) are parties to a
certain Rights Agreement dated as of June 7, 1990 (the “Original Rights Agreement”). 
  
 WHEREAS, pursuant to Section 27 of the Original Rights Agreement, the Company and the Rights Agent have heretofore entered into an Amended and Restated
Rights Agreement dated as of September 1, 1999 (as amended, the “Amendment”), whereby the parties hereto amended and restated the Original Rights Agreement to read in its entirety in the form of the Amendment. 
  
 WHEREAS, pursuant to Section 27 of the Amendment, the Company has determined
that it is desirable to amend the Amendment as set forth herein, and the Rights Agent is willing to amend the Amendment as set forth herein. 
  
 AGREEMENT 
  
 In consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: 
  
 SECTION 1. AMENDMENT OF CERTAIN DEFINITIONS. 
  
 The following defined terms are hereby amended and restated to read in their
entirely as follows: 
  
 “ACQUIRING PERSON” shall mean
any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of the Threshold Percentage or more of the Common Stock then outstanding other than as a result of a Permitted Offer, but shall not
include any Exempt Person. Notwithstanding the foregoing, no Person shall become an “ACQUIRING PERSON” as the result of an acquisition of Common Stock by the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to the Threshold Percentage or more of the Common Stock of the Company then outstanding; PROVIDED, HOWEVER, that if a Person shall become the Beneficial 

  

 - 1 - 

 
Owner of the Threshold Percentage or more of the Common Stock of the Company then outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company, increase the number of shares of Common Stock of the Company beneficially owned by such Person above the number of shares of Common Stock of the Company beneficially owned by such Person at the time of the last
such share purchase by the Company, then such Person shall be deemed to be an “ACQUIRING PERSON.” Notwithstanding the foregoing, (1) if the Board of Directors of the Company determines in good faith that Person who would otherwise be an
“ACQUIRING PERSON,” as defined pursuant to the preceding sentences of this definition, has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an “ACQUIRING PERSON”, as defined pursuant to the preceding sentences of this definition, then such Person shall not be deemed to be an “ACQUIRING PERSON” for any purposes of this Amendment or (2) if the Board
of Directors of the Company determines in good faith that Person who would otherwise be an “ACQUIRING PERSON,” as defined pursuant to the preceding sentences of this definition, has become such inadvertently, and such Person (a) prior to
the applicable Distribution Date enters into a standstill agreement in form and substance satisfactory to the Company and (b) agrees to divest a sufficient number of shares of Common Stock so that such Person would no longer be an “ACQUIRING
PERSON”, as defined pursuant to the preceding sentences of this definition within no more than one year from the date of such agreement, then such Person shall not be deemed to be an “ACQUIRING PERSON” for any purposes of this
Amendment; PROVIDED that such person shall become an “ACQUIRING PERSON” if such Person (x) materially breaches such standstill agreement (as determined by the Board of Directors of the Company) and either (i) such breach is not waived in
writing by the Company or (ii) such Person fails to cure such breach within five Business Days after receipt of notice of such breach from the Company or (y) fails to divest such Common Stock within the time period agreed. 
  
 “STOCK ACQUISITION DATE” shall mean the first date of public
announcement (which for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such or such earlier date
as a majority of the Board of Directors shall become aware of the existence of an Acquiring Person. Notwithstanding the foregoing, the “STOCK ACQUISITION DATE” with respect to a Person who would have been an “ACQUIRING PERSON”
but for the application of clause (2) of the last sentence of the definition of “ACQUIRING PERSON” shall be deemed to be (x) the day immediately following the end of the five Business Day cure period specified in subclause (x) of clause
(2) of the last sentence of the definition of “ACQUIRING PERSON” in the event such breach has not been waived in writing by the Company or such Person shall have failed to cure such breach or (y) the last day of the time period agreed with
the Company for such Person to divest Common Stock if such Person shall have failed to divest such stock pursuant to subclause (y) of clause (2) of the last sentence of the definition of “ACQUIRING PERSON”. 
  

 - 2 - 

 SECTION 2. FULL FORCE AND EFFECT. 
  
 Except as amended hereby, the Amendment shall remain unchanged and shall remain in full force and effect. 
  
 SECTION 3. COUNTERPARTS. 
  
 This Amendment No. 1 may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 
  
 SECTION 4. DESCRIPTIVE HEADINGS. 
  
 Descriptive headings of the several Sections of this Amendment No. 1 are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof. 
  
 [the remainder of
this page intentionally left blank] 
  

 - 3 - 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and attested, all as of the
day and year first above written. 
  

			
	FLOW INTERNATIONAL CORPORATION
		
	By:	 	/s/    STEPHEN R. LIGHT        
	 Name:
	 	Stephen R. Light
	 Title:
	 	President and CEO
	
	MELLON INVESTOR SERVICES LLC
		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 - 4 - 

 AMENDMENT NO. 2 TO AMENDED AND RESTATED RIGHTS AGREEMENT 
  
 This Amendment No. 2 to the Amended and Restated Rights Agreement, dated as
of October 19, 2004 (this “Amendment”), is entered into by and between Flow International Corporation, a Washington corporation (the “Company”), and Mellon Investor Services LLC (formerly known as ChaseMellon
Shareholder Services, L.L.C.), a New Jersey limited liability company (the “Rights Agent”). 
  
 WHEREAS, the Company and the Rights Agent are party to that certain Amended and Restated Rights Agreement dated as of September 1, 1999, as amended as of
October 29, 2003 (as so amended, the “Rights Agreement”); 
  
 WHEREAS, the Board of Directors of the Company has approved and adopted this Amendment at a meeting of the directors duly called and held; and 
  
 WHEREAS, pursuant to and in accordance with Section 27 of the Rights Agreement, the parties desire to further amend the
Rights Agreement as set forth in this Amendment. 
  
 NOW,
THEREFORE, in consideration of the premises and the mutual agreement set forth herein and in the Rights Agreement, the parties hereto agree as follows: 
  
 1. Amendment. Each of the following sections of the Rights Agreement are hereby amended such that each reference to 10% in such section
shall be changed to 15%: 
  
 (a) the definition of “Threshold
Percentage” in Section 1 of the Rights Agreement; and 
  
 (b)
page one and page two of Exhibit C to the Rights Agreement. 
  
 2. Full Force and Effect. Except as amended hereby, the Rights Agreement shall remain unchanged and shall remain in full force and effect. In the event of any conflict between this Amendment and the Rights Agreement or any part of
either of them, the terms of this Amendment shall control. 
  
 3. Counterparts. This Amendment 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. 
  
 4. Descriptive Headings. Descriptive
headings of the several Sections of this Amendment are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 
  
 (the remainder of this page is intentionally blank) 
  

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly executed and attested,
all as of the day and year first above written. 
  

			
	FLOW INTERNATIONAL CORPORATION
		
	By:	 	/s/    STEPHEN D.
REICHENBACH        
	 Name:
	 	Stephen D. Reichenbach
	 Title:
	 	Chief Financial Officer
	
	MELLON INVESTOR SERVICES LLC
		
	By:	 	/s/    THOMAS L. COOPER        
	 Name:
	 	Thomas L. Cooper
	 Title:
	 	Client Services ManagerWarrants to Purchase Shares of Common Stock

 Exhibit 4.4 

  
 THIS WARRANT AND THE
COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT,
AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR
ANY SUCH STATE SECURITIES LAWS WHICH MAY BE APPLICABLE. 
  

			
	No. WR-        	 	[5.25% of fully diluted common stock] SHARES

  
 WARRANT
TO PURCHASE 
  
 SHARES
OF COMMON STOCK 
  
 OF 
  
 FLOW
INTERNATIONAL CORPORATION 
  

  

 TABLE OF CONTENTS 
  

					
	 SECTION

	  	 HEADING

	  	PAGE

	 SECTION 1.
	  	 EXERCISE OF WARRANT
	  	1
			
	 SECTION 2.
	  	 RESERVATION
	  	2
			
	 SECTION 3.
	  	 PROTECTION AGAINST DILUTION
	  	3
			
	 Section 3.1.
	  	 Stock Dividends, Subdivisions and Combinations
	  	3
	 Section 3.2.
	  	 Issuance of Additional Shares of Common Stock
	  	3
	 Section 3.3.
	  	 Issuance of Warrants or Other Rights, Convertible Securities
	  	4
	 Section 3.4.
	  	 Other Provisions Applicable to Adjustments
	  	5
	 Section 3.5.
	  	 Extraordinary Dividends
	  	6
	 Section 3.6.
	  	 Adjustment of Number of Shares Purchasable
	  	6
	 Section 3.7.
	  	 Minimum Adjustment
	  	7
	 Section 3.8.
	  	 Notice of Adjustments
	  	7
			
	 SECTION 4.
	  	 MERGERS, CONSOLIDATIONS, SALES
	  	8
			
	 Section 4.1.
	  	 Mergers, Consolidations, Sales
	  	8
	 Section 4.2.
	  	 Change of Control
	  	8
			
	 SECTION 5.
	  	 DISSOLUTION OR LIQUIDATION
	  	10
			
	 SECTION 6.
	  	 NOTICE OF EXTRAORDINARY DIVIDENDS
	  	10
			
	 SECTION 7.
	  	 FRACTIONAL SHARES
	  	10
			
	 SECTION 8.
	  	 FULLY PAID STOCK; TAXES
	  	10
			
	 SECTION 9.
	  	 RESTRICTIONS ON TRANSFERABILITY
	  	11
			
	 Section 9.1.
	  	 In General
	  	11
	 Section 9.2.
	  	 Restrictive Legends
	  	11
			
	 SECTION 10.
	  	 REGISTRATION RIGHTS
	  	12
			
	 Section 10.1.
	  	 Demand Registration
	  	12
	 Section 10.2.
	  	 Participation in Registered Offerings (Piggyback Rights)
	  	14
	 Section 10.3.
	  	 Obligations of Holders
	  	14
	 Section 10.4.
	  	 Registration Proceedings
	  	15
	 Section 10.5.
	  	 Expenses
	  	19
	 Section 10.6.
	  	 Indemnification of Holders
	  	19
	 Section 10.7.
	  	 Indemnification of Company
	  	21

  

 -i- 

					
	 Section 10.8.
	  	 Contribution
	  	21
	 Section 10.9.
	  	 Additional Registration Rights
	  	22
	 Section 10.10.
	  	 Reporting Requirements under Securities Exchange Act of 1934
	  	23
	 Section 10.11.
	  	 Termination of Registration Obligations
	  	23
			
	 SECTION 11.
	  	 PARTIAL EXERCISE AND PARTIAL ASSIGNMENT
	  	23
			
	 Section 11.1.
	  	 Partial Exercise.
	  	23
	 Section 11.2.
	  	 Assignment
	  	23
			
	 SECTION 12.
	  	 WARRANT DENOMINATIONS
	  	24
			
	 SECTION 13.
	  	 DEFINITIONS
	  	24
			
	 SECTION 14.
	  	 LOST, STOLEN WARRANTS, ETC.
	  	27
			
	 SECTION 15.
	  	 WARRANT HOLDER NOT SHAREHOLDER
	  	27
			
	 SECTION 16.
	  	 EXERCISE OF REMEDIES
	  	28
			
	 SECTION 17.
	  	 NOTICES
	  	28
			
	 SECTION 18.
	  	 SEVERABILITY
	  	28
			
	 SECTION 19.
	  	 CLOSING OF TRANSFER BOOKS
	  	28
			
	 SECTION 20.
	  	 FINANCIAL STATEMENTS
	  	29
			
	 SECTION 21.
	  	 RIGHT TO ATTEND BOARD OF DIRECTORS
MEETINGS AND RECEIVE RELATED INFORMATION
	  	29
			
	 SECTION 22.
	  	 CONFIDENTIAL INFORMATION
	  	29
			
	 SECTION 23.
	  	 RESTRICTIONS ON CAPITAL STRUCTURE
	  	30
			
	 SECTION 24.
	  	 SUCCESSORS AND ASSIGNS
	  	31
			
	 SECTION 25.
	  	 INDEX AND CAPTIONS
	  	31

  

 -ii- 

					
	 SECTION 26.
	  	 GOVERNING LAW
	  	31
			
	 Signature
	  	 	  	32

  

 -iii- 

			
	No. WR- ____	  	[5.25% of fully diluted common stock] SHARES

  
 WARRANT TO PURCHASE 
  
 SHARES OF COMMON STOCK 
  
 OF 
  
 FLOW INTERNATIONAL CORPORATION 
  
 THIS IS TO CERTIFY that, for value received and subject to the
provisions hereinafter set forth, 
  

  
 or assigns, 
  
 is entitled to purchase from Flow International Corporation, a Washington corporation (the “Company”), at any time on or before 5:00 P.M. (Kent,
Washington time) April 30, 2008 (the “Expiration Date”),                             
shares of Common Stock, $0.01 par value, of the Company, subject to the terms, provisions and conditions hereinafter set forth at a price equal to $0.01 per share. 
  
 The aggregate price of the Common Stock shall be equal to the price per share multiplied by the number of shares initially
purchasable hereunder. The aggregate price is herein sometimes referred to as the “Aggregate Warrant Price” and is not subject to adjustment. The price per share is, however, subject to adjustment as hereinafter provided (such
price, or such price as last adjusted, as the case may be, being herein referred to as the “per share Warrant Price “). The said number of shares purchasable hereunder is likewise subject to adjustment as hereinafter
provided. 
  
 The terms which are capitalized herein shall have
the meanings specified in Section 13 hereof, unless the context shall otherwise require. 
  

	SECTION I.	EXERCISE OF WARRANT. 

  
 Subject to the conditions hereinafter set forth, this Warrant may be exercised in whole at any time and in part from time to time prior to the Expiration
Date. Any exercise of this Warrant, whether in whole or in part, shall be made by the surrender of this Warrant (with the subscription form at the end hereof duly completed and executed) at the principal office of the Company in Kent, Washington and
upon payment of the Aggregate Warrant Price (or, if exercised in part, upon payment of a proportionate part thereof) for the shares so purchased, 

  

 
which payment shall be made by the wire transfer or other delivery to the Company of one or more types of Permitted Consideration. 
  
 In the event that Notes shall be delivered to the Company as payment of all
or any portion of the Warrant Price, the amount of the Warrant Price to be paid by means of such delivery shall equal the principal amount of Notes so delivered (or such lesser principal amount as shall be designated by the Holder hereof).

  
 In the event that Notes shall be delivered to the Company as
payment of all or any portion of the Warrant Price and the principal amount of said Notes shall be in excess of the amount of principal sought to be applied by the Holder of this Warrant in respect of the Warrant Price, said Holder shall provide the
Company with notice to such effect and the Company shall issue to said Holder a new Note or Notes in an aggregate principal amount equal to such excess and dated as provided in Section 14.2 of the Note Purchase Agreement. 
  
 In the event that Warrants shall be delivered to the Company as payment of
all or any portion of the Warrant Price, the amount of the Warrant Price deemed to be paid by means of such delivery shall equal (a) the aggregate number of shares of Underlying Common Stock related to any Warrants so delivered as payment of all or
a portion of the purchase price, multiplied by (b) the result, not less than zero, equal to (i) the Current Market Price then in effect (with the date of the exercise of the Warrant being deemed to be the “Issuance Date” for
purposes of making determinations under the definition of “Current Market Price”) minus (ii) the per share Warrant Price then in effect. 
  
 If this Warrant is exercised in respect of less than all of the shares of Common Stock at the time purchasable hereunder, the Holder hereof shall be
entitled to receive a new Warrant covering the number of shares in respect of which this Warrant shall not have been exercised and setting forth the Aggregate Warrant Price applicable to such shares. 
  
 This Warrant and all rights and options hereunder shall expire on the
Expiration Date, and shall be wholly null and void to the extent this Warrant is not exercised before it expires. 
  
 The Company shall pay all reasonable expenses, taxes and other charges payable in connection with the preparation, execution and delivery of stock
certificates pursuant to this Section, regardless of the name or names in which such stock certificates shall be registered. 
  

	SECTION 2.	RESERVATION. 

  
 The Company will at all times prior to the Expiration Date reserve and keep available such number of authorized shares of its Common Stock, solely for the
purpose of delivery upon the exercise of the rights represented by this Warrant, as may at any time be deliverable (based upon the number of shares of Common Stock outstanding at any such time) upon the exercise of this Warrant and such shares
issuable upon the exercise of this Warrant shall at no time have an aggregate par value which is in excess of the Aggregate Warrant Price. 
  

 -2- 

	SECTION 3.	PROTECTION AGAINST DILUTION. 

  
 The per share Warrant Price and the number of shares deliverable hereunder shall be adjusted from time to time as hereinafter set forth: 
  
 Section 3.1. Stock Dividends, Subdivisions and Combinations. In
case after the date hereof the Company shall: 
  
 (a) take a record of the Holders of its Common Stock for the purpose of entitling them to receive a dividend declared to be payable in, or other declared distribution of, Common Stock, or 
  
 (b) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or 
  
 (c) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, 
  
 then the per share Warrant Price shall be adjusted to that price determined by multiplying the per share Warrant Price in effect immediately prior to such event by a fraction (i) the numerator of which shall be the
total number of outstanding shares of Common Stock of the Company immediately prior to such event, and (ii) the denominator of which shall be the total number of outstanding shares of Common Stock of the Company immediately after such event.

  
 Section 3.2. Issuance of Additional Shares of Common Stock.
In case after the date hereof the Company shall (except as hereinafter provided) issue any Additional Shares of Common Stock for a consideration less than (a) the then effective per share Warrant Price or (b) the Current Market Price per share,
then the per share Warrant Price upon each such issuance shall be adjusted to that price determined by multiplying the per share Warrant Price in effect immediately prior to such event by a fraction: 
  
 (i) if issued for a consideration per share less than the
then effective per share Warrant Price: 
  
 (1)
the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such Additional Shares of Common Stock plus the number of shares of Common Stock which the aggregate consideration for the
total number of such Additional Shares of Common Stock so issued would purchase at the then effective per share Warrant Price, and 
  
 (2) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock plus the number of such Additional Shares of Common Stock so issued. 
  

 -3- 

 (ii) if issued for a consideration per share less than the Current Market Price per share
of Common Stock: 
  
 (1) the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such Additional Shares of Common Stock plus the number of full shares of Common Stock which the aggregate consideration for the total number of such
Additional Shares of Common Stock so issued would purchase at the Current Market Price per share, and 
  
 (2) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock plus the number of such Additional Shares of Common Stock so issued. 
  
 If such Additional Shares of Common Stock shall be issued at a price per share less than both the then effective per share Warrant Price and the Current
Market Price per share of Common Stock, the per share Warrant Price shall be adjusted in the manner which will result in the greatest reduction of the per share Warrant Price. The provisions of this Section 3.2 shall not apply to any
Additional Shares of Common Stock which are distributed to holders of Common Stock as a stock dividend or subdivision, for which an adjustment is provided for under Section 3.1. No adjustment of the per share Warrant Price shall be made under
this Section 3.2 upon the issuance of any Additional Shares of Common Stock which are issued pursuant to the exercise of any warrants or other subscription or purchase rights or pursuant to the exercise of any conversion or exchange rights in
any Convertible Securities, if any such adjustment shall previously have been made upon the issuance of such warrants or other rights or upon the issuance of such Convertible Securities (or upon the issuance of any warrants or other rights therefor)
pursuant to Section 3.3. 
  
 Section 3.3. Issuance of
Warrants or Other Rights, Convertible Securities. In case the Company shall issue any warrants or other rights to subscribe for or purchase any Additional Shares of Common Stock or issue Convertible Securities and the consideration per share for
which Additional Shares of Common Stock may at any time thereafter be issuable pursuant to such warrants or other rights or pursuant to the terms of such Convertible Securities shall be less than the Current Market Price per share and/or the
effective per share Warrant Price, then the per share Warrant Price shall be adjusted as provided in Section 3.2 above on the basis that: 
  
 (a) the maximum number of Additional Shares of Common Stock issuable pursuant to all such warrants or other rights or necessary to effect
the conversion or exchange of all such Convertible Securities shall be deemed to have been issued as of the earlier of: (i) the date on which the Company shall enter a firm contract or commitment for the issuance of such warrants, other rights or
Convertible Securities or (ii) the date of actual issuance of such warrants, other rights or Convertible Securities, and 
  
 (b) the aggregate consideration for such maximum number of Additional Shares of Common Stock shall be deemed to be the minimum
consideration received and 

  

 -4- 

 
receivable by the Company for the issuance of such Additional Shares of Common Stock pursuant to such warrants or other rights or pursuant to the terms of
such Convertible Securities. 
  
 No adjustment of the per share
Warrant Price shall be made under this Section 3.3 upon the issuance of any Convertible Securities which are issued pursuant to the exercise of any warrants or other subscription or purchase rights therefor, to the extent such adjustment
shall previously have been made upon the issuance of such warrants or other rights pursuant to this Section 3.3. 
  
 Section 3.4. Other Provisions Applicable to Adjustments. The following provisions shall be applicable to the making of adjustments in the per share
Warrant Price hereinbefore provided in this Section 3: 
  
 (a) Computation of Consideration. To the extent that any Additional Shares of Common Stock or any Convertible Securities or any warrants or other rights to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Securities shall be issued for a cash consideration, the consideration received by the Company therefor shall be deemed to be the amount of the cash received by the Company therefor, or, if such Additional Shares of
Common Stock or Convertible Securities or warrants or other rights are offered by the Company for subscription, the subscription price, or, if such Additional Shares of Common Stock or Convertible Securities or warrants or other rights are sold to
underwriters or dealers for public offering without a subscription offering, the offering price, in any such case excluding any amounts paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts
or expenses paid or incurred by the Company for and in the underwriting thereof, or otherwise in connection with the issue thereof. To the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise
expressly provided, the amount of such consideration shall be deemed to be the fair value of such consideration at the time of such issuance as determined in good faith by the Board of Directors of the Company. The consideration for any Additional
Shares of Common Stock issuable pursuant to any warrants or other rights to subscribe for or purchase the same shall be the consideration received by the Company for issuing such warrants or other rights plus the additional consideration payable to
the Company upon the exercise of such warrants or other rights. The consideration for any Additional Shares of Common Stock issuable pursuant to the terms of any Convertible Securities shall be the consideration received by the Company for issuing
any warrants or other rights to subscribe for or purchase such Convertible Securities plus the consideration paid or payable to the Company in respect of the subscription for or purchase of such Convertible Securities plus the additional
consideration, if any, payable to the Company upon the exercise of the right of conversion or exchange of such Convertible Securities. In case of the issuance at any time of any Additional Shares of Common Stock or Convertible Securities in payment
or satisfaction of any dividend upon any class of equity securities other than Common Stock, the Company shall be deemed to have received for such Additional Shares of Common Stock or Convertible Securities a consideration equal to the amount of
such dividend so paid or satisfied. 
  

 -5- 

 (b) Readjustment of Per Share Warrant Price. Upon expiration of the right of
exercise, conversion or exchange of any Convertible Securities, or upon the expiration of any rights, options or warrants, or upon the termination of any firm contract or commitment for the issuance of such rights, options, warrants or Convertible
Securities, or upon any increase in the minimum consideration receivable by the Company for the issuance of Additional Shares of Common Stock pursuant to such Convertible Securities, rights, options or warrants, if any such Convertible Securities
shall not have been exercised, converted or exchanged, or if any such rights, options or warrants shall not have been exercised, the number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that they were issuable
upon exercise, conversion or exchange of any such Convertible Securities or upon exercise of any such rights, options or warrants shall no longer be computed as set forth above, and the per share Warrant Price shall forthwith be readjusted and
thereafter be the price which it would have been (but reflecting any other adjustments in the per share Warrant Price made pursuant to the provisions of this Section 3 after the issuance of such Convertible Securities, rights, options or
warrants) had the adjustment of the per share Warrant Price made upon the issuance or sale of such Convertible Securities or the issuance of such rights, options or warrants been made on the basis of the issuance only of the number of Additional
Shares of Common Stock actually issued upon exercise, conversion or exchange of such Convertible Securities or upon the exercise of such rights, options or warrants, or upon the basis of such increased minimum consideration, as the case may be, and
thereupon only the number of Additional Shares of Common Stock actually so issued plus the number thereof then issuable upon the basis of such increased minimum consideration shall be deemed to have been issued and only the consideration actually
received plus such increased minimum consideration receivable by the Company (computed in accordance with Section 3.4(a)) shall be deemed to have been received by the Company. 
  
 (c) No Rounding Per Share Warrant Price. Any determination of per share Warrant Price hereunder shall
be expressed in United States Dollars, cents and portions of cents and shall not be subject to rounding. 
  
 Section 3.5. Extraordinary Dividends. If the Company declares or pays a dividend upon the Common Stock payable otherwise than in cash out of
earnings or earned surplus (determined in accordance with GAAP consistently applied) except for a stock dividend payable in shares of Common Stock (a “Liquidating Dividend”) then the Company shall pay to the holder of this Warrant
at the time of payment thereof the Liquidating Dividend or other dividend which would have been paid to the holder on the Underlying Shares had this Warrant been fully exercised immediately prior to the date on which a record is taken for such
Liquidating Dividend or other dividend, or, if no record is taken, the date as of which the record holders of Common Stock entitled to such dividends arc to be determined. 
  
 Section 3.6. Adjustment of Number of Shares Purchasable. Upon each adjustment of the per share Warrant Price, the
number of shares of Common Stock purchasable hereunder shall be adjusted by multiplying the number of shares of Common Stock purchasable hereunder immediately prior to such adjustment of the per share Warrant Price by a fraction, the numerator of
which shall be the per share Warrant Price in effect immediately prior to such adjustment and 

  

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the denominator of which shall be the per share Warrant Price in effect immediately following such adjustment. 
  
 Section 3.7. Minimum Adjustment. Except as hereinafter
provided, no adjustment of the per share Warrant Price hereunder shall be made if such adjustment results in a change of the per share Warrant Price then in effect of less than 1.00%. Any adjustment of less than 1.00% shall be carried forward and
shall be made at the time of and together with any subsequent adjustment which, together with the adjustment or adjustments so carried forward, amounts to 1.00% or more of the per share Warrant Price then in effect. However, upon the exercise of
this Warrant, the Company shall make all necessary adjustments not theretofore made to the per share Warrant Price up to and including the date upon which this Warrant is exercised. 
  
 Section 3.8. Notice of Adjustments. (a) Whenever the per share Warrant Price or number of shares deliverable upon
exercise of this Warrant shall be adjusted pursuant to this Section 3, the Company shall promptly prepare a certificate signed by the President or a Vice President and by the Treasurer of the Company setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board of Directors of the Company made any determination hereunder), and shall
promptly cause copies of such certificate to be mailed in the manner provided in Section 17 hereof to the Holder of this Warrant. 
  
 (b) The adjustment set forth in the certificate furnished pursuant to Section 3.8(a) shall be final and binding unless, within 45 days after
receipt thereof, the Majority Holders of the Warrants deliver to the Company a written notice stating that such adjustment may be subject to objection and, within 60 days after original receipt of such notice of adjustment, if the Majority Holders
determine that such adjustment is objectionable, a written statement of objection which shall set forth a proposed alternative adjustment. 
  
 (i) In the event of any such statement of objection by said Majority Holders, the Company’s accountants and a firm of independent
public accountants selected by said Majority Holders shall attempt to prepare a computation in which both accountants concur. Any such joint computation shall be set forth in a joint certificate to each Holder of the Warrants and the Company and
shall be final and binding. 
  
 (ii) If the
Company’s accountants and said Majority Holders’ accountants are unable to resolve their differences within 30 days after the receipt by the Company of said Majority Holders’ statement of objection, they shall submit the matter to a
third firm of independent certified public accountants of nationally recognized standing agreed upon by said Holder and the Company or, if said Majority Holders and the Company are unable to agree within 10 days after the expiration of said 30 day
period, to such firm designated by the then president of the state society of certified public accountants for the state in which the Company maintains its principal place of business. Such third firm of accountants shall thereupon compute the
amount of the adjustment and, upon completion of such computation, shall transmit its certificate to each Holder of the Warrants and the Company setting forth such computations, which shall be final and binding. 
  

 -7- 

 (iii) The fees and expenses of all accountants referred to in this Section 3.8(b)
shall be borne by the Company in the event that the Holders’ proposed adjustment is closer to the final and binding adjustment under this Section 3.8 than the Company’s proposed adjustment, otherwise such fees and expenses shall be
borne by the objecting Holders. 
  

	SECTION 4.	MERGERS, CONSOLIDATIONS, SALES. 

  

Section 4.1. Mergers, Consolidations, Sales. In the case of any consolidation or merger of the Company with another entity (regardless of
whether the Company is a surviving entity), or the sale of all or substantially all of its assets to another entity, or any reorganization, recapitalization or reclassification of the Common Stock or other equity securities of the Company, then, as
a condition of such consolidation, merger, sale, reorganization, recapitalization or reclassification, lawful and adequate provision shall be made whereby the Holder of this Warrant shall thereafter have the right to receive upon the basis and upon
the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore purchasable hereunder, such shares of stock, securities or assets (including, without limitation, cash) as may (by virtue of such
consolidation, merger, sale, reorganization, recapitalization or reclassification) be issued or payable with respect to or in exchange for a number of outstanding shares of Common Stock equal to the number of shares of Common Stock immediately
theretofore so purchasable hereunder had such consolidation, merger, sale, reorganization, recapitalization or reclassification not taken place, and in any such case, appropriate provisions shall be made with respect to the rights and interests of
the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustment of the per share Warrant Price) shall thereafter be applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon exercise of this Warrant. The Company shall not effect any such consolidation, merger, sale, reorganization or reclassification, unless prior to or simultaneously with the consummation thereof, the
successor entity (if other than the Company) resulting from such consolidation, merger, reorganization or reclassification or the entity purchasing such assets shall assume by written instrument executed and mailed or delivered to the Holder of this
Warrant, the obligation to deliver to such Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to receive. 
  
 Section 4.2. Change of Control. (a) The provisions of Section 4.1 shall not apply to any consolidation,
merger, sale, reorganization, recapitalization or reclassification, if all of the following conditions are met: 
  
 (i) the Company shall have complied with the terms of this Section 4.2; 
  
 (ii) following the consummation thereof, a Change of Control
(as hereinafter defined) shall have occurred; 
  
 (iii) in connection with any such transaction, the holders of the Company’s Common Stock shall receive stock or other securities in the successor entity resulting 

  

 -8- 

 
from such transaction (the “Successor”), cash or other liquid assets (excluding stock or securities in any entity other than the Successor)
in exchange for their Common Stock; 
  
 (iv) in
any transaction in which the holders of the Company’s Common Stock receive stock or securities in the Successor in exchange for the Common Stock, either (A) such Successor is a corporation whose common stock is traded on a national exchange and
the holders of the Company’s Common Stock receive fully registered shares of such common stock or (B) such Successor enters into a written agreement reasonably satisfactory to the Majority Holders simultaneously with the consummation of such
transaction, whereby the Successor agrees to afford the Holders registration rights substantially identical to those set forth in Section 10 hereof with respect to the securities received by the Holders in exchange for the Company’s
Common Stock issued upon exercise of the Warrants in connection with such transaction. 
  
 (b) The Company will give written notice (the “Company Notice”) of any proposed Change of Control in the manner provided in Section 17 hereof to each of the Holders. The Company Notice shall be
delivered at least 30 days prior to the occurrence of any Change of Control. The Company Notice shall (1) describe the facts and circumstances of such Change of Control in reasonable detail, (2) make reference to this Section 4.2 and the fact
that Section 4.1 will not apply in connection with such transaction and that the Holders have the option to exercise their Warrants prior to or simultaneously with the consummation of such transaction, and (3) describe in detail the terms and
the value of the consideration proposed to be paid in connection with such transaction, including the consideration payable to the holders of the Common Stock. 
  

For purposes of this Section 4.2: 
  
 “Acquiring Person” means a “person” or “group of persons” within the meaning of
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended. 
  
 “Change of Control” means the earliest to occur of: (a) the date a tender offer or exchange offer results in an Acquiring Person, directly or indirectly, beneficially owning more than 50% of the
Voting Stock of the Company then outstanding, or (b) the date an Acquiring Person becomes, directly or indirectly, the beneficial owner of more than 50% of the Voting Stock of the Company then outstanding, or (c) the date of a merger between the
Company and any other Person, a consolidation of the Company with any other Person or an acquisition of any other Person by the Company, if immediately after such event, the Acquiring Person shall hold more than 50% of the Voting Stock of the
Company outstanding immediately after giving effect to such merger, consolidation or acquisition. 
  
 “Voting Stock” means securities of any class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or Persons performing similar functions). 
  

 -9- 

	SECTION 5.	DISSOLUTION OR LIQUIDATION. 

  
 In the event of any proposed distribution of the assets of the Company in dissolution or liquidation except under circumstances when the foregoing
Section 3.5 or Section 4 shall be applicable, the Company shall mail notice thereof in the manner provided in Section 17 hereof to the Holder of this Warrant and shall make no distribution to shareholders until the expiration of
30 days from the date of mailing of the aforesaid notice and, in any such case, the Holder of this Warrant may exercise the purchase rights with respect to this Warrant within 30 days from the date of mailing such notice and all rights herein
granted not so exercised within such 30-day period shall thereafter become null and void. 
  

	SECTION 6.	NOTICE OF EXTRAORDINARY DIVIDENDS. 

  
 If the Board of Directors of the Company shall declare any dividend or other distribution on its Common Stock except out of
earnings or surplus or by way of a stock dividend payable on its Common Stock, the Company shall mail notice thereof in the manner provided in Section 17 hereof to the Holder of this Warrant not less than 30 days prior to the record date
fixed for determining shareholders entitled to participate in such dividend or other distribution and the Holder of this Warrant shall not participate in such dividend or other distribution or be entitled to any rights on account or as a result
thereof (except adjustments in the per share Warrant Price as provided in Section 3.5), unless and to the extent that this Warrant is exercised prior to such record date. The provisions of this paragraph shall not apply to distributions made
in connection with transactions covered by Section 4 hereof. 
  

	SECTION 7.	FRACTIONAL SHARES. 

  
 Fractional shares shall not be issued upon the exercise of this Warrant, but in any case where the Holder hereof would, except for the provisions of this
paragraph, be entitled to receive a fractional share upon the complete exercise of this Warrant, the Company shall, upon the exercise of this Warrant for the largest number of whole shares then called for, pay to the Holder of this Warrant a sum in
cash in an amount equal to the proportional part of the Current Market Price represented by such fractional share. 
  

	SECTION 8.	FULLY PAID STOCK; TAXES. 

  
 The Company covenants and agrees that the shares of stock represented by each and every certificate for its Common Stock to
be delivered on the exercise of the purchase rights and the payment of the applicable purchase price herein provided for shall, at the time of such delivery, be validly issued and outstanding and be fully paid and nonassessable. The Company further
covenants and agrees that it will pay when due and payable any and all Federal, State and local taxes (other than taxes in respect of income) which may be payable in respect of the delivery of this Warrant or any Common Stock or certificates
therefor upon the exercise of the purchase rights herein provided for pursuant to the provisions hereof. The Company shall not, however, be required to pay any tax which may be payable solely in respect of any transfer and 

  

 -10- 

 
delivery of stock certificates in a name other than that of the Holder exercising this Warrant, and any such tax shall be paid by such holder at the time of
presentation. 
  

	SECTION 9.	RESTRICTIONS ON TRANSFERABILITY. 

  

Section 9.1. In General. This Warrant and the Common Stock issued upon the exercise hereof shall not be transferable except upon the conditions
hereinafter specified, which conditions are intended to insure compliance with the provisions of the Securities Act (or any similar Federal statute at the time in effect) and any applicable State securities laws in respect of the transfer of this
Warrant or any such Common Stock. 
  
 The Holder of each Warrant
or any Restricted Stock, by its acceptance thereof, agrees to sell or otherwise transfer such Warrant or Restricted Stock, as the case may be, in compliance with and so as not to result upon consummation of such sale or transfer in any violation of
applicable law. Further to the foregoing, upon the request of the Company and at the Company’s expense, the Holder of this Warrant shall provide a legal opinion of counsel to such Holder in form reasonably satisfactory to the Company to the
effect that such sale or other transfer does not violate applicable law. 
  
 Section 9.2. Restrictive Legends. Each Warrant shall bear on the face thereof a legend substantially in the form of the notice endorsed on the first page of this Warrant. 
  
 Each certificate for shares of Common Stock initially issued upon the
exercise of any Warrant and each certificate for shares of Common Stock issued to a subsequent transferee of such certificate shall, unless otherwise permitted by the provisions of this Section 9.2, bear on the face thereof a legend reading
substantially as follows: 
  
 “The shares represented by
this certificate have not been registered under the Securities Act of 1933, as amended, or any State securities laws and may not be sold or transferred in the absence of such registration or an exemption therefrom under said Act and any such Slate
laws which may be applicable and are transferable only upon the conditions specified in the Warrant pursuant to which such shares were issued.” 
  
 In the event that a registration statement covering the Underlying Shares or the Restricted Stock shall become effective under the Securities Act and
under any applicable State securities laws or in the event that the Company shall receive an opinion reasonably acceptable to the Company of counsel to the Holder of this Warrant (which may be internal counsel to such Holder) that, in the opinion of
such counsel, such legend is not, or is no longer, necessary or required (including, without limitation, because of the availability of the exemption afforded by Rule 144 or Rule 144A of the General Rules and Regulations of the Commission), the
Company shall, or shall instruct its transfer agents and registrars to, remove such legend from the certificates evidencing the Restricted Stock or issue new certificates without such legend in lieu thereof. 
  

 -11- 

	SECTION 10.	REGISTRATION RIGHTS. 

  
 Anything contained in this Warrant to the contrary notwithstanding, the terms and provisions of Section 10 of this Warrant shall remain in full
force and effect at all times up to and including the Expiration Date. 
  
 Section 10.1. Demand Registration. (a) The Majority Holders (or their transferees) may, at any time, demand registration (a “Demand Registration”) under the Securities Act of any Underlying Shares or Restricted Stock
of the Company obtained pursuant to the exercise of the Warrants, or otherwise, on Form S-1 or any similar long-form registration (“Long-Form Registration”) or Form S-2 or S-3 or any similar short-form registration
(“Short-Form Registration”). The Company shall have discretion whether to use a Short-Form Registration or a Long-Form Registration to the extent Short-Form Registration is available to the Company. Upon receipt of such
written request, the Company shall promptly give written notice to all Holders of Warrants and Restricted Shares of a proposed registration or qualification, and shall, subject to the conditions of Section 10.4 hereof, as expeditiously as
possible, use its commercially reasonable best efforts to effect any such registration or qualification of: 
  
 (i) such Underlying Shares and/or Restricted Stock, or any combination thereof; or 
  
 (ii) all other Underlying Shares and Restricted Stock of
Holders which shall have advised the Company in writing within 60 days after the giving of such written notice by the Company of their desire to have their Underlying Shares and/or Restricted Stock registered or qualified or exempted, 
  
 with, or notification to or approval of, any governmental authority under any Federal or
state securities laws, or listing with any securities exchange, which may be required to permit the sale or other disposition of any such Underlying Shares or Restricted Stock which the Holders thereof propose to make, and the Company will keep
effective such registration, qualification, exemption, notification or approval for such period as may be necessary to effect such sales or dispositions up co a maximum period of six months after initial effectiveness. 
  
 (b) Number of Registrations. The Majority Holders shall be entitled to
demand 6 registrations, not more than one (l) of which may be a Long-Form Registration and the remainder of which shall be Short-Form Registrations. A registration will count as a Demand Registration when it has become effective, unless the Holders
are unable to register and sell 100% of any Underlying Shares relating thereto and/or Restricted Stock, demanded to be included in such registration or the related registration statement is withdrawn prior to effectiveness at the request of the
Majority Holders (or by the underwriter selected pursuant to Section 10.1(e)); provided, that in any event, the Company will pay all registration expenses in connection with any registration initiated as a Demand Registration as
provided in Section 10.5 hereof. 
  
 (c) Priority on
Demand Registrations. Either the Company or the Majority Holders shall have the right to determine whether a Demand Registration shall be an underwritten 

  

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offering; provided that, if the Demand Registration is an underwritten offering, all Holders participating in the Demand Registration shall agree to
participate in the underwritten offering. If a Demand Registration is an underwritten offering, and the managing underwriters advise the Company and the Holders in writing that in their opinion the number of shares of Underlying Shares or shares of
Restricted Stock requested to be included exceeds the number of shares of Underlying Shares or shares of Restricted Stock which, under then current market conditions, can be sold in such offering at the price expected to be obtained for such shares
by the Holders in a commercially reasonable sale, the Company will include in such registration prior to the inclusion of any securities which are not Underlying Shares or shares of Restricted Stock owned by the Holders the number of shares of
Holders’ Underlying Shares or shares of Restricted Stock requested to be included which in the opinion of such underwriters can be sold, pro rated among the Holders based upon the number of Underlying Shares or shares of Restricted Stock owned
by them, and the balance of the Underlying Shares or shares of Restricted Stock which the Holders requested to be included in such offering shall be withheld from sale for such period of time as shall be mutually acceptable to the Holders and
requested by the underwriters (but not to exceed one hundred twenty (120) days from the effective date of the registration statement); provided that nothing herein contained shall be deemed or construed to require any Holder which owns
securities of the Company acquired other than by reason of the exercise of any Warrant, in whole or in part, to withhold such securities from sale during any such period of time, nor shall any Holder be required during such period of time to refrain
from selling its Warrant, Underlying Shares or shares of Restricted Stock, in whole or in part, if any such sale shall be pursuant to a private placement to an Institutional Holder within the provisions of an exemption from the registration
requirements under the Securities Act or is consummated within the limitations or Rule 144 promulgated under the Securities Act. No securities of any Person, other than a Holder, may be included in any registration pursuant to Section 10.1
hereof without the written consent of the Majority Holders. 
  
 (d) Restrictions on Demand Registration. The Company will not be obligated to effect a Demand Registration unless it receives a written request to do so from the Majority Holders, which request proposes to register not less than 50%
of the shares exercisable under then outstanding Warrants, Underlying Shares and shares of Restricted Stock. The Company will not be obligated to effect a Demand Registration within one hundred eighty (180) days after the effective date of a
registration in which the Holders were given “piggyback rights” pursuant to Section 10.2 hereof; provided that if, in connection with any such “piggyback registration,” the number of shares which the Holders request
to have included in such registration are reduced by the underwriter, then such 180-day period shall be reduced to a 120-day period. The Company may postpone or withdraw the filing or the effectiveness of a registration statement for a Demand
Registration (i) for a period not exceeding one hundred twenty (120) days, if the Company shall reasonably determine that such Demand Registration might have an adverse effect on any proposal or plan by the Company to engage in any acquisition of
assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or similar transaction or (ii) for a period not exceeding sixty (60) days, if the Board of Directors of the Company reasonably determines in good faith
that such Demand Registration might have a material adverse effect on the Company, which determination is evidenced by a resolution of the Board and certified to the Holders in a certificate signed by two (2) senior officers of the Company;
provided (x) that in such event, the Majority Holders will be entitled to withdraw such 

  

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request and that, if such request is withdrawn, such Demand Registration, if such Demand Registration was to be a Long-Form Registration, will not be
considered the Long-Form Registration to which the Holders are entitled, (y) the Company may postpone the filing or effectiveness of a registration statement pursuant to this sentence not more that once during any twelve consecutive month period,
and (z) the Company may withdraw the filing or effectiveness of a registration statement pursuant to this sentence not more than twice during the term of this Warrant; and provided, further, that if in accordance with Section 10.1(c)
hereof the number of shares of Warrants, Underlying Shares or shares of Restricted Stock requested to be included in such Demand Registration are cut back by more than 20%, then and in such event the Holders shall be entitled to one additional
Demand Registration in accordance with the terms and provisions of Section 10 of this Warrant. 
  
 (e) Selection of Underwriters, The Company will have the right to select the investment banker(s) and manager(s) to administer the offering,
subject to the Majority Holders’ approval which will not be unreasonably withheld. 
  
 Section 10.2. Participation in Registered Offerings (“Piggyback Rights”). If the Company at any time or times proposes or is required to register any of its Common Stock or other equity securities for
its own account or the account of any other holder for public sale for cash under the Securities Act (other than on Forms S-4 or S-8 or similar registration forms and other than shares issued pursuant to any merger, consolidation, tender offer,
acquisition of assets or similar transaction), or any applicable state securities law, it will at each such time or times give written notice to the Holders of its intention to do so. The Company shall use its commercially reasonable best efforts to
cause to be included in such registration any Warrants, Underlying Shares or shares of Restricted Stock held by the Holders (or their transferees) or Underlying Shares or shares of Restricted Stock obtainable upon exercise of the Warrant and
requested to be registered under the Securities Act and any applicable state securities laws; provided that if the managing underwriter advises that less than all of the shares to be registered should be offered for sale so as not to
materially and adversely affect the price or salability of the offering being registered by the Company, the Holders (but not the Company to the extent it desires to include shares for its own account) shall reduce on a pro rata basis the number of
their shares (as if exercised or converted, as the case may be) to be included in the registration statement as required by the managing underwriter to the extent requisite to permit the sale or other disposition (in accordance with the intended
method of disposition thereof as aforesaid) by the prospective seller or sellers of the securities so registered. Registration pursuant to this Section 10.3 shall be in accordance with, and subject to the provisions of, the “Registration
Procedures” set forth in Section 10.4 hereof. 
  
 Section 10.3. Obligations of Holders. It shall be a condition precedent to the obligation of the Company to register any Underlying Shares or shares of Restricted Stock pursuant to Section 10.1 or Section 10.2
hereof that the Holders shall: (a) furnish to the Company such information regarding the Underlying Shares or shares of Restricted Stock held and the intended method of disposition thereof and other information concerning the Holders as the Company
shall reasonably request and as shall be required in connection with the registration statement to be filed by the Company; (b) agree to abide by such additional or customary terms affecting the proposed offering as are applicable to shareholders
including the Underlying Shares or shares of 

  

 -14- 

 
Restricted Stock in any such registration as reasonably may be requested by the managing underwriter of such offering, including a requirement, if
applicable, and if agreed to by all other members of the Company’s Board of Directors, officers and 5% holders (or greater) of Common Stock and Convertible Securities of the Company, to withhold from the public market for a period of time (not
to exceed 120 days) as shall be mutually acceptable to the Holders and such managing underwriter any shares or Warrants excluded from the offering at the request of such managing underwriter as permitted under Section 10.1 or Section
10.2 hereof; provided that nothing herein contained shall be deemed or construed to require any Holder which owns securities of the Company acquired other than by reason of the exercise of any Warrant, in whole or in part, to withhold
such securities from sale during any such period of time, nor shall any Holder be required during such period of time to refrain from selling its Warrant, in whole or in part, Underlying Shares or shares of Restricted Stock, if such sale shall be
pursuant to a private placement to an Institutional Holder within the provisions of an exemption from the registration requirements under the Securities Act or is consummated within the limitations or Rule 144 promulgated under the Securities Act;
and (c) agree in writing in to pay all underwriting discounts and commissions applicable to the securities being sold by the Holders. 
  
 Section 10.4. Registration Proceedings. In connection with the Company’s obligations with respect to a Demand Registration pursuant to
Section 10.1 hereof, the Company shall use its commercially reasonable best efforts to effect or cause the registration or qualification of the Underlying Shares and/or Restricted Shares under the Securities Act and applicable state
securities laws to permit the sale of such Underlying Shares and/or Restricted Stock by the Holders thereof in accordance with the intended method of distribution thereof (if such distribution is possible), and pursuant thereto, the Company shall:

  
 (a) prepare and, within 30 days after receipt
of the request pursuant to Section 10.1 hereof, file with the Commission a registration statement or registration statements with respect to a Demand Registration on any form which may be utilized by Stock and which shall permit the
disposition of the Underlying Shares and/or Restricted Stock in accordance with the intended method or methods thereof, and use its commercially reasonable best efforts to cause such registration statement or registration statements to become
effective as expeditiously as possible; 
  
 (b)
prepare and file with the Commission such amendments and supplements to a registration statement or statements hereunder and the prospectus used in connection therewith as may be necessary to maintain the effectiveness of such registration statement
for the applicable period specified in Section 10.1 hereof, and comply in all material respects with the provisions of the Securities Act and applicable state securities laws with respect to the disposition of all of the Underlying Shares
and/or Restricted Stock to be included in such registration statement during such applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the registration statement; 
  
 (c) provide the Holders of the Underlying Shares and/or
Restricted Stock to be included in a registration statement hereunder and the underwriters (which term, for purposes of this Agreement, shall include a Person deemed to be an underwriter within 

  

 -15- 

 
the meaning of Section 2(11) of the Securities Act), if any, of the securities being sold and counsel for such underwriters and not more than one counsel for
such Holders the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment or supplement thereto; and make available for inspection by such Persons
such financial and other information, books and records of the Company, and cause the officers, directors and employees of the Company, and counsel and independent certified public accountants for the Company, to respond to such inquiries, as shall
be reasonably necessary, in the opinion of the respective counsel to such Holders and such underwriters, to conduct a reasonable investigation within the meaning of the Securities Act; 
  
 (d) promptly notify the selling Holders of Underlying Shares and/or Restricted Stock to be included in a
registration statement hereunder and the managing underwriters, if any, of the securities being sold and (if requested by any such Person) confirm such advice in writing, (i) when such registration statement, the prospectus or any prospectus
supplement or post-effective amendment has been filed, and, with respect to such registration statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission for amendments or supplements to such
registration statement or the prospectus or for additional or supplemental information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or the initiation of any proceedings for
that purpose, (iv) if at any time the representations and warranties of the Company contemplated by paragraph (k) below cease to be true and correct in all material respects, (v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Underlying Shares or Restricted Stock for sale in any jurisdiction or the initiation or threat of any proceeding for such purpose, or (vi) at any time when a prospectus is required to be delivered under the
Securities Act, of the happening of any event as a result of which such registration statement, prospectus, any prospectus supplement, or any document incorporated by reference in any of the foregoing contains an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; 
  
 (e) make reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a
registration statement hereunder or any post-effective amendment thereto at the earliest practicable date; 
  
 (f) if requested by the managing underwriter or underwriters or the Majority Holders of the Underlying Shares and/or Restricted Stock
being sold, promptly incorporate in a prospectus supplement or post-effective amendment such information as such managing underwriter or underwriters or such Majority Holders specify should be included therein relating to the sale of the Underlying
Shares and/or Restricted Stock, including, without limitation, information with respect to the number of Underlying Shares and/or Restricted Stock being sold to such underwriters, the purchase price being paid therefor by such underwriters and with
respect to any other terms of the underwritten (or best efforts underwritten) offering of the Underlying Shares and/or Restricted Stock to 

  

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be sold in such offering, except to the extent that the Company is advised in a written opinion of outside counsel that the inclusion of such information is
reasonably likely to violate the federal securities laws; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or
post-effective amendment; 
  
 (g) furnish to each
Holder of Underlying Shares and/or Restricted Stock to be included in a registration statement hereunder and each underwriter, if any, of the securities being sold such number of copies of such registration statement, each such amendment and
supplement thereto (in each case including all exhibits thereto), the prospectus included in such registration statement and such other related documents as such Holder and underwriter, if any, may reasonably request in order to facilitate the
disposition of the Underlying Shares and/or Restricted Stock owned by such Holder; the Company consents to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders of Underlying Shares and/or Restricted Stock
and the underwriters in connection with the offering and sale of the Underlying Shares and/or Restricted Stock covered by the prospectus or any supplement or amendment thereto; 
  
 (h) use its commercially reasonable best efforts to (i) register or qualify the Underlying Shares and/or
Restricted Stock to be included in a registration statement hereunder under such other securities laws or Blue Sky laws of such jurisdictions as any Holder of such Warrants, Underlying Shares and/or Restricted Stock and each, underwriter, if any, of
the securities being sold shall reasonably request, (ii) keep such registrations or qualifications in effect for so long as the registration statement remains in effect and (iii) take any and all such actions as may be reasonably necessary or
advisable to enable such Holder and underwriter, if any, to consummate the disposition in such jurisdictions of such Underlying Shares and/or Restricted Stock owned by such Holder in accordance herewith; provided, however, that the Company
shall not be required for any such purpose to (1) qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this paragraph (h) or (2) consent to
general service of process in any such jurisdiction; 
  
 (i) use its best efforts to cause all of the Underlying Shares and/or Restricted Stock that are to be included in a registration statement hereunder to be registered with or approved by such other governmental agencies or authorities as may
be necessary by virtue of the business and operations of the Company to enable the Holder or Holders thereof to consummate the disposition of such Underlying Shares and/or Restricted Stock in accordance herewith; 
  
 (j) cooperate with the Holders of the Underlying Shares
and/or Restricted Stock to be included in a registration statement hereunder and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Underlying Shares and/or Restricted Stock to be sold
and not bearing any restrictive legends; and, in the case of an underwritten offering, enable such Underlying Shares and/or Restricted Stock to be in such denominations and registered in such names as the 

  

 -17- 

 
managing underwriters may request at least two Business Days prior to any sale of the Underlying Shares and/or Restricted Stock; 
  
 (k) enter into such customary agreements (including an
underwriting agreement, in the event that the shares to be included are to be distributed by means of an underwritten public offering) and take such other actions in connection therewith as the Majority Holders of the Underlying Shares and/or
Restricted Stock to be included in a registration statement hereunder shall reasonably request in order to expedite or facilitate the disposition of such Underlying Shares and/or Restricted Stock in accordance herewith and in such connection,
whether or not an underwriting agreement is entered into and whether or not the disposition is an underwritten offering, (i) make such representations, warranties and indemnities to the Holders of such Underlying Shares and/or Restricted Stock and
the underwriters, if any, in form, substance and scope as are customarily made in an underwritten offering; (ii) obtain an opinion of counsel to the Company in customary form and covering such matters of the type customarily covered by such opinion
as the Holders of the Underlying Shares and/or Restricted Stock to be included in such registration statement and the underwriters, if any, may reasonably request, addressed to the selling Holders and the underwriters, if any, and dated the
effective date of such registration statement and dated the effective date of a post-effective amendment to the registration statement, if such is filed (or, if such registration statement covers an underwritten offering, dated the date of the
closing as specified in the underwriting agreement); (iii) obtain a “cold comfort” or procedures letter from the independent certified public accountants of the Company addressed to the selling Holders of Underlying Shares and/or
Restricted Stock and to the underwriters, if any, dated the effective date of such registration statement and dated the effective date of a post-effective amendment to the registration statement, if such is filed (and, if such registration statement
covers an underwritten offering, dated the date of the closing as specified in the underwriting agreement), such letter to be in customary form and covering such matters of the type customarily covered by such letter; and (iv) deliver such documents
and certificates as may be reasonably requested by the Majority Holders of the Underlying Shares and/or Restricted Stock being sold and the managing underwriters, if any, to evidence compliance with clause (i) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the Company; 
  
 (1) otherwise use its commercially reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, an earnings statement covering a period of at least twelve months which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
thereunder; 
  
 (m) provide a transfer agent and
registrar for all Underlying Shares and/or Restricted Stock registered pursuant to such registration statement and a CUSIP number for all such Underlying Shares and/or Restricted Stock, in each case not later than the effective date of such
registration; and 
  

 -18- 

 (n) use its commercially reasonable best efforts to have the Underlying Shares and/or
Restricted Stock listed, subject to notice, on The Nasdaq Stock Market or other applicable national securities exchange as the Company shall determine to be appropriate. 
  
 Upon the occurrence of any event contemplated by paragraph (d) above, the Company shall, as soon as reasonably practicable,
prepare and furnish to each Holder included in such registration statement and underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of the Underlying Shares
and/or Restricted Stock, such prospectus shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances
then existing. Each Holder of Underlying Shares and/or Restricted Stock agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in paragraph (d) hereof, such Holder shall forthwith discontinue the
disposition of Underlying Shares and/or Restricted Stock pursuant to the registration statement applicable to such Warrants, Underlying Shares and/or Restricted Stock until such Holder receives copies of such amended or supplemented registration
statement or prospectus, and, if so directed by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in such Holder’s possession of the prospectus covering such
Underlying Shares and/or Restricted Stock at the time of receipt of such notice. 
  
 Section 10.5. Expenses. With respect to each inclusion of Underlying Shares or shares of Restricted Stock in a registration statement pursuant to Section 10.1 or Section 10.2 hereof, all
reasonable registration expenses, fees, costs and expenses of and incidental to such registration, inclusion and public offering in connection therewith shall be borne by the Company (including the reasonable fees and disbursements of one counsel
acting on behalf of the Holders); provided, however, that holders participating in the registration shall bear their pro rata share of any underwriting discount and commissions. The fees, costs and expenses of registration to be borne
by the Company shall include, without limitation, all registration, filing and NASD fees, printing expenses, costs of special audits, if any, and “cold comfort” letters, reasonable fees and disbursements of one counsel on behalf of
the Holders, reasonable fees and disbursements of counsel and accountants for the Company (including the cost of any special audit requested in order to effect such registration), fees and disbursements of counsel for the underwriter or underwriters
of such securities (if the Company and/or selling security Holders are required to bear such fees and disbursements), all legal fees and disbursements and other expenses of complying with state securities or “Blue Sky” laws of any
jurisdiction in which the securities to be offered are to be registered or qualified, reasonable fees and disbursements of counsel and accountants for the selling Holders who are also retained by the Company (at its option) and the premiums and
other costs of policies of insurance against liability arising out of such public offering which the Company determines to obtain. 
  
 Section 10.6. Indemnification of Holders. (a) Subject to the conditions set forth below, in connection with any registration of Securities pursuant
to Section 10.1 or Section 10.2 hereof, the Company agrees to and does hereby indemnify and hold harmless each Holder selling securities pursuant to said Sections, any underwriter for the Company or acting on behalf of such 

  

 -19- 

 
Holders selling securities and each Holder, if any, who controls any such seller, within the meaning of Section 15 of the Securities Act, as follows:

  
 (i) against any and all loss, claim, damage
and expense whatsoever arising out of or based upon (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending any litigation, commenced or threatened, or any claim whatsoever based
upon) any untrue or alleged untrue statement of a material fact contained in any preliminary prospectus (if used prior to the effective date of the registration statement), the registration statement or the prospectus (as from time to time amended
and supplemented), or in any application or other document executed by the Company or based upon written information furnished by the Company filed in any jurisdiction in order to qualify the Company’s securities under the securities laws
thereof; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or any other violation of applicable federal or state statutory or regulatory
requirements or limitations relating to action or inaction by the Company in the course of preparing, filing, or implementing such registered offering (each, a “Loss”); provided, however, that the indemnity agreement contained in
this Section 10.6(a) shall not apply to any Loss arising out of or based upon any untrue statement or omission made in reliance upon and in conformity with any information furnished in writing to the Company by or on behalf of any Holder
expressly for use in connection therewith or arising out of any action or inaction of any such Holder; and 
  
 (ii) against any and all Losses to the extent of the aggregate amount paid in settlement of any litigation, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission or any such alleged untrue statement or omission (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending
against any such litigation or claim) if such settlement is effected with the written consent of the Company. 
  
 (b) Any seller, underwriter or any such controlling Person shall notify the Company in the manner provided in Section 17 hereof of any action
commenced against any such Person, promptly after such Person shall have been served with the summons or other legal process giving information as to the nature and basis. The failure to so notify the Company, if prejudicial in any material respect
to the Company’s ability to defend such claim, shall relieve the Company from its liability to the indemnified Person under this Section 10.6, but only to the extent that the Company was so prejudiced, but the failure to so notify the
Company shall not relieve the Company from other liability which it may otherwise have separate and apart from its indemnification obligations under this Section 10.6. The Company shall be entitled to participate at its own expense in the
defense of any suit brought to enforce any such claim, but if the Company elects to assume the defense, such defense shall be conducted by counsel chosen by it, provided that such counsel is reasonably satisfactory to the sellers or
controlling Persons which are or may be defendants in any suit so brought. In the event the Company elects to assume the defense of any such suit and retain such counsel, the sellers, underwriter or controlling Persons, defendants in the suit,
shall, after the date they are notified of such election, bear the fees and expenses of any counsel thereafter retained by them as well as any other 

  

 -20- 

 
expenses thereafter incurred in connection with the defense thereof; provided, however, that if the sellers, underwriter or controlling Persons
reasonably believe that there may be available to them any defense or counterclaim different than those available to the Company or that representation of such sellers, underwriters or controlling Persons by counsel for the Company presents a
conflict of interest for such counsel, then such sellers, underwriter and controlling Person shall be entitled to defend such suit with counsel of their own choosing; provided that the Company shall only be required to bear the reasonable
fees, expenses and other costs of one firm of separate counsel. 
  
 (c) The Company understands and agrees that it may not settle any suit or litigation relating to any alleged or actual Loss for which the Company is indemnifying and holding harmless any Person pursuant to this Section 10.6 without
the prior written consent of such indemnified Person, unless, and only unless, such suit or litigation can be and is settled in all respects by the payment of money and such money is so paid pursuant to the terms of such settlement, with the effect
and result that such indemnified Person is fully released and shall not suffer any continuing actual or contingent Loss. 
  
 Section 10.7. Indemnification of Company. Each Person selling securities in any registered offering pursuant to Section 10.1 or
Section 10.2 hereof severally and individually agrees to indemnify and hold harmless the Company, each underwriter for the offering, and each of their officers and directors and agents and each other Person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act against any and all such Losses as are indemnified against by the Company under Section 10.5 hereof; provided, however, that such indemnification by such sellers hereunder shall be
limited to statements or omissions, if any, made (or in settlement of any litigation effected with the written consent of such sellers, alleged to have been made) in any preliminary prospectus, the registration statement or prospectus or any
amendment or supplement thereof or any application or other document in reliance upon, and in conformity with, written information furnished in respect of such seller by or on behalf of such seller expressly for use in any preliminary prospectus,
the registration statement or prospectus or any amendment or supplement thereof or in any such application or other document or arising out of any action or inaction of such seller in implementing such registered offering. In case any action shall
be brought against the Company, or any other Person so indemnified, in respect of which indemnity may be sought against any seller, such seller shall have the rights and duties given to the Company, and each other Person so indemnified shall have
the rights and duties given to the several sellers, by the provisions of Section 10.6(b) hereof. The Person indemnified agrees to notify the sellers promptly after the assertion of any claim against the Person indemnified in connection with
the sale of securities. Notwithstanding the foregoing, in no event shall any Holder selling securities in any registered offering pursuant to Sections 10.1, 10.2 or 10.3 hereof be required to pay an amount under this Section 10.8
which is greater than the dollar amount of the net proceeds received by such Holder with respect to such sale. 
  
 Section 10.8. Contribution. If the indemnification provided for in Sections 10.6 and 10.7 hereof are unavailable or insufficient to
hold harmless an indemnified party in respect of any Losses referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate

  

 -21- 

 
to reflect the relative fault of the indemnified party, on one hand, and such indemnifying party, on the other hand, in connection with the statements or
omissions which resulted in such Losses. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fault relates to information
supplied by the indemnified party, on one hand, or such indemnifying party, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Notwithstanding
the provisions of this Section 10.8, the Holders shall not be required to contribute any amount in excess of the amount by which the total proceeds received by such Holders from the sale pursuant to the registration with respect to which the
registration statement, preliminary or final prospectus, or amendments or supplements thereto, containing such statement, omission or alleged omission related exceeds the amount of any damages which such Holders have otherwise been required to pay
by reason of such statement, omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The amount paid or payable by an indemnified party as a result of the Losses referred to above in this Section 10.8 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending and such action or claim. Notwithstanding the foregoing, in no event shall any Holder selling securities in any registered offering pursuant to Sections 10.1, 10.2 or 10.3 hereof be
required to contribute an amount under this Section 10.9 which is greater than the dollar amount of the net proceeds received by such Holder with respect to such sale. 
  
 Section 10.9. Additional Registration Rights: The Company agrees that, if at any time on or after the date of Closing
the Company grants to any Person the right to request the Company to effect the registration or qualification or filing for exemption under applicable Federal or state securities laws of any securities of the Company (other than on Forms S-4 or S-8
or similar registration forms and other than shares issued pursuant to any merger, consolidation, tender offer, acquisition of assets or similar transaction), whether pursuant to any subsequent agreement or understanding reached on or after the date
of Closing or pursuant to any amendment or supplement to any agreement existing on or prior to the date of Closing or otherwise, such agreement or agreements providing for such rights shall provide that (a) the holders of such rights may participate
in any registration requested pursuant to Section 10.1 (but only on a subordinated basis to the rights of the holders of the Underlying Shares and shares of Restricted Stock to participate therein) if in the opinion of the managing
underwriter of any such underwritten registration such shares may be included in such registration without having an adverse effect on the marketability or the price of any shares of Common Stock of the Company proposed to be offered by the Holders
of Underlying Shares and shares of Restricted Stock, and (b) the Holders of Underlying Shares and shares of Restricted Stock shall be permitted to participate in any such underwritten registration requested by the holders of such rights (on a
subordinated basis to the rights of the holders requesting such registration to participate therein, but pro rata with all other holders of shares of Common Stock of the Company to be included in any such underwritten registration) if in the opinion
of the managing underwriter of any such underwritten registration such shares may be included in such registration without having an adverse effect on the marketability or the price of any shares of Common Stock of the Company proposed to be offered
by the holder or holders of such rights in such underwritten registration. 
  

 -22- 

 Section 10.10. Reporting Requirements under Securities Exchange Act of 1934. If the Company shall
become subject to the reporting requirements of either Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”), the Company shall thereafter, whenever requested by any Holder of Warrants, Underlying
Shares or Restricted Stock issued hereunder, notify such Holder in writing whether the Company has, as of any date specified in such request, complied with the Exchange Act reporting requirements as to which it is subject to a period prior to such
date as may be specified in such request. In addition, in such event, the Company shall take such other measures and file such other information, documents and reports as shall hereafter be required by the Commission as a condition to the
availability of Rule 144 and 144A under the Securities Act (or any corresponding rule hereafter in effect). The Company covenants that all such information, documents and reports or any registration statement required by Section 12 of the Exchange
Act filed with the Commission shall not contain any untrue statement of a material fact or fail to state therein a material fact required to be stated therein or necessary to make the statements contained therein not misleading, and the Company
agrees to indemnify and hold each Holder of any Warrants, Underlying Shares or Restricted Stock issued hereunder or thereunder and each broker, dealer, underwriter or other Person acting for such Holder (and any controlling Person of any of the
foregoing) harmless from and against any and all claims, liabilities, losses, damages or expenses and judgments arising out of or based upon any breach of the foregoing covenants, representations or warranties. 
  
 Section 10.11. Termination of Registration Obligations. The
Company’s obligation lo effect a registration of the Underlying Shares and shares of Restricted Stock under Sections 10.1 and 10.2 shall terminate if at any time the Holders shall be permitted to sell all of the Underlying:.
Shares and Restricted Stock pursuant to Rule 144 promulgated under the Securities Act during any 90-day period. 
  
 SECTION 11. PARTIAL EXERCISE AND PARTIAL
ASSIGNMENT. 
  
 Section 11.1. Partial Exercise.
If this Warrant is exercised in part only, the Holder shall surrender this Warrant upon such exercise and shall receive a new Warrant, registered in the name of the Holder or its nominee and setting forth a new number of shares in respect of
which this Warrant shall not have been exercised as provided for in Section 1 and a new Aggregate Warrant Price in the first paragraph of page one hereof, which shall be proportionately adjusted to reflect such partial exercise. 

 
 Section 11.2. Assignment. Subject to compliance with Section
9.1, this Warrant may be assigned either in whole or in part by surrender of this Warrant at the principal office of the Company in Kent, Washington (with the assignment or, as the case may be, partial assignment form at the end hereof
duly executed). If this Warrant is being assigned in whole and the Holder hereof previously has not partially exercised this Warrant, the assignee shall receive a new Warrant (registered in the name of such assignee or its nominee) which new Warrant
shall cover the number of shares assigned and the Aggregate Warrant Price applicable to such shares. If this Warrant is being assigned in part and the Holder hereof previously has not partially exercised this Warrant, the assignor and assignee shall
each receive a new Warrant (which, in the case of the assignee, shall be registered in the name of the assignee or its nominee), each of which new 

  

 -23- 

 
Warrants shall cover the number of shares not so assigned and the number of shares so assigned, respectively, and in each case setting forth the
proportionate Aggregate Warrant Price applicable to such shares. If this Warrant is being assigned in whole and the holder hereof previously has partially exercised this Warrant, the assignee shall receive a new Warrant (registered in the name of
such assignee or its nominee), which new Warrant shall cover the number of shares so assigned and set forth the proportionate Aggregate Warrant Price applicable to such assigned shares. If this Warrant is being assigned in part and the Holder hereof
previously has partially exercised this Warrant, the assignor and assignee shall each receive a new Warrant (which, in the case of the assignee, shall be registered in the name of the assignee or its nominee), each of which new Warrants shall cover
the number of shares not so assigned and in respect of which no such exercise has been made in the case of the assignor and the number of shares so assigned in the case of the assignee, and in each case setting forth the proportionate Aggregate
Warrant Price applicable to such shares. 
  
 SECTION 12. WARRANT DENOMINATIONS. 
  
 Warrants are issuable or transferable in the minimum denomination of 1000 shares (such number to be adjusted to reflect stock splits, dividends paid in stock, combinations, reclassifications and similar events) or any
integral multiple thereof (as nearly as may be practicable and subject to required adjustments hereunder), and the Warrants of each denomination are interchangeable upon surrender thereof at the office of the Company for Warrants of other
denominations (not less than such minimum denomination, as adjusted), but aggregating the same number of shares as the Warrants so surrendered. All Warrants will be dated the same date as this Warrant. 
  
 SECTION 13. DEFINITIONS.

  
 In addition to the terms defined elsewhere in this Warrant,
the following terms have the following respective meanings: 
  
 The term “Additional Shares of Common Stock” shall mean all shares of Common Stock issued by the Company after the date of Closing, except: 
  
 (a) Common Stock issued upon exercise of the Warrants; and 
  
 (b) up to 400,000 shares (as adjusted to reflect stock
splits, dividends paid in stock, combinations, reclassifications and similar events with respect to such shares) of Common Stock issued (i) to officers, directors or employees of or consultants to, the Company pursuant to stock option or stock
purchase plans or agreements on terms approved by the Company’s Board of Directors or (ii) pursuant to convertible securities which are issued after the date of Closing, the terms of which are approved by the Company’s Board of Directors.

  
 The term “Aggregate Warrant Price” shall
mean, as of the date of any determination, the amount then so designated in the first paragraph of this Warrant. 
  

 -24- 

 The term “Business Day” shall mean any day other than a Saturday, Sunday or other day on
which banks in Kent, Washington are required by law to close or are customarily closed. 
  
 The term “Closing” shall have the meaning ascribed to such term in the Note Purchase Agreement. 
  
 The term “Commission” shall mean the Securities and Exchange Commission, or any other Federal agency at the time administering the
Securities Act. 
  
 The term “Common Stock” as
used herein shall include (a) the common stock of the Company, $0.01 par value, authorized on the date of Closing and (b) any other class of capital stock of the Company now or hereafter authorized which, directly or indirectly, has the right to
share in distributions either of earnings or assets of the Company. 
  
 The term “Convertible Securities” shall mean evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for Additional Shares of Common Stock, either immediately or upon the
arrival of a specified date or the happening of a specified event. 
  
 The term “Current Market Price” shall mean, at the date of determination thereof, an amount equal to the market price on the Business Day occurring most recently prior to the subject issuance of such shares of Common Stock
(the “Issuance Date”). The market price for such Business Day shall be the last sale price on such day on the New York Stock Exchange, or, if the Common Stock is not then listed or admitted to trading on the New York Stock Exchange,
on such other principal stock exchange on which such shares are then listed or admitted to trading, or, if no sale takes place on such day on any such exchange, the average of the closing bid and asked prices on such day as officially quoted on any
such exchange, or, if the Common Stock is not then listed or admitted to trading on any stock exchange, the market price for each such Business Day shall be the last reported sale price on such day on The Nasdaq Stock Market’s National Market,
as furnished by NASDAQ, or, if no sale takes place on such day on such system, the average of the closing bid and asked prices on such day as officially quoted by NASDAQ, or, if such price at the time is not available from such system, the market
price for such Business Day shall be the average of the reported closing bid and asked prices on such day in the over-the-counter market, as furnished by NASDAQ, or, if such price at the time is not available from such system, such price shall be
determined in good faith by the Company’s Board of Directors, which shall be evidenced by a notice setting forth such determination in reasonable detail (including computations and assumptions used) (the “CMP Computation
Notice”) to each Holder of the Warrants not later than 30 days after the issuance date of the Common Stock giving rise to such determination (the “CMP Computation Date”) setting forth such determination and setting
forth in detail the rights and procedures the Holders of the Warrants may take in the event the Majority Holders do not agree with the valuation set forth in the CMP Computation Notice, provided, that if the Majority Holders of such Warrants
shall object to the valuation contained in the CMP Computation Notice in writing to the Company within 15 days of the CMP Computation Date, an Appraiser, shall be selected by the Company and said Majority Holders (on behalf of all of the Holders of
the Warrants as a class), or, if said Majority Holders and the Company are unable to agree upon the selection of an Appraiser within 

  

 -25- 

 
10 days of the date of the written notice from said Majority Holders to the Company objecting to the CMP Computation Notice, by the American Arbitration
Association. Said Majority Holders and the Company shall be jointly responsible for engaging the Appraiser finally selected, provided that the fees and expenses of such Appraiser shall be paid by the Company unless the final valuation of the
Current Market Price determined by the Appraiser is equal to or less than the valuation contained in the CMP Computation Notice, in which case the fees and expenses of the Appraiser shall be paid by the Holders. In the event that the Majority
Holders do not object to the CMP Computation Notice within 15 days after receiving the CMP Computation Notice, then the value shall be that which was determined solely by the Company’s Board of Directors. The Appraiser appointed pursuant to the
foregoing procedure shall be instructed to determine such value within 15 days after the selection of such Appraiser, and any such determination made by the Appraiser shall be final and binding upon the parties. Notwithstanding the foregoing, in the
event that, on the Issuance Date, shares of Common Stock shall be offered for sale to the public in connection with an underwritten public offering, the Current Market Price in respect of said Issuance Date shall be deemed to be the price at which
said shares are initially sold to the public. 
  
 The term
“Expiration Date” is defined in the first paragraph on page 1 of this Warrant. 
  
 The term “Holders” shall mean all of the Holders of the Warrants, Underlying Shares or Restricted Stock issued pursuant thereto and the
term “Holder” shall mean any Holder of any Warrant, Underlying Shares or Restricted Stock issued pursuant thereto. 
  
 The term “Institutional Holder” shall mean (a) any original purchaser of the Warrants, (b) any holder of more than 5% of the
Warrants, Underlying Shares and/or Restricted Stock, and (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form. 
  
 The term “Majority Holders” shall mean, at the time of any determination, the Holders of (a) a majority of the Warrants (determined by the number of shares of Common Stock represented by each such Warrant as if exercised)
and (b) a majority of the Restricted Stock. 
  
 The term
“Note Purchase Agreement” shall mean the separate Note Purchase Agreements, each dated as of April 30, 2001, between the Company and the Purchasers named therein, respectively, as amended from time to time. 
  
 The term “Notes” shall mean the “Notes” as
defined in the Note Purchase Agreement. 
  
 The term
“Permitted Consideration” shall mean each of the following (or any combination thereof): 
  
 (a) cash or other funds immediately available to the Company; 
  
 (b) Notes; and 
  

 -26- 

 (c) Warrants. 
  
 The term “Person” shall mean an individual, partnership, limited liability company, corporation, trust or
unincorporated organization, and a government and any agency or political subdivision thereof. 
  
 The term “Restricted Stock” shall mean the shares of Common Stock of the Company issued upon the exercise of any of the Warrants and evidenced by a certificate required to bear the legend specified in
Section 9.2 hereof. 
  
 The term “Securities
Act” shall mean the Securities Act of 1933, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 
  
 The term “Underlying Shares” shall mean the shares of Common
Stock of the Company issuable upon exercise of any of the Warrants. 
  
 The term “Warrants” as used herein shall refer to, collectively, this Warrant and all other warrants issued in exchange or substitution for this Warrant. 
  

	SECTION 14.	LOST, STOLEN WARRANTS, ETC. 

  
 In case this Warrant shall be mutilated, lost, stolen or destroyed, the Company may issue a new Warrant of like date, tenor
and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of the mutilated Warrant, or in lieu of the Warrant lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company of the
loss, theft or destruction of such Warrant, and upon receipt of indemnity satisfactory to the Company. If the original Holder of this Warrant or any subsequent Institutional Holder with capital, surplus and undivided profits of at least $25,000,000
is the owner of this Warrant at the time it shall be lost, stolen or destroyed, then the affidavit of an authorized officer of such owner, setting forth the fact of such loss, theft or destruction and of its ownership of this Warrant at the time of
such loss, theft or destruction shall be accepted as satisfactory evidence thereof and no further indemnity or surety shall be required as a condition to the execution and delivery of a new Warrant other than the written agreement of such owner to
indemnify the Company. 
  

	SECTION 15.	WARRANT HOLDER NOT SHAREHOLDER. 

  
 This Warrant does not confer upon the Holder hereof any right to vote or to consent or to receive notice as a shareholder of
the Company, as such, in respect of any matters whatsoever, or any other rights or liabilities as a shareholder, prior to the exercise hereof as hereinbefore provided. 
  

 -27- 

	SECTION 16.	EXERCISE OF REMEDIES. 

  
 In the event that the Company shall fail to observe any provision contained in this Warrant, the Holder hereof and/or any Holder of Common Stock issued
hereunder, as the case may be, may enforce its rights hereunder by suit in equity, by action at law, or by any other appropriate proceedings in aid of the exercise of any power granted in this Warrant and, without limiting the foregoing, said Holder
shall be entitled to the entry of a decree for specific performance and to such other and further relief as such court may decree. 
  

	SECTION 17.	NOTICES. 

  
 All communications provided for hereunder shall be in writing and, if to the Holder of this Warrant or any Common Stock issued hereunder, delivered or
mailed prepaid by registered or certified mail or overnight air courier, or by facsimile communication, in each case addressed to the address of such Holder appearing on Schedule A to the Note Purchase Agreement (in the case of the initial Holder of
this Warrant) or such other address as such Holder or any subsequent Holder of this Warrant or any such Common Stock may designate to the Company in writing, and if to the Company, delivered or mailed by registered or certified mail or overnight air
courier, or by confirmed facsimile communication, addressed to the Company at 2350-64th Avenue South, Kent, Washington 98032, Attention: Chief Financial Officer, or to such other address as the Company may in writing designate to any such Holder;
provided, however, that a notice to the initial Holder of this Warrant by overnight air courier shall only be effective if delivered to said initial Holder at a street address designated for such purpose in said Schedule A, and a notice to
any Holder of this Warrant or any Common Stock issued hereunder by facsimile communication shall only be effective if confirmed by transmission of a copy thereof by prepaid overnight air courier, or, in either case, as any such Holder may designate
to the Company in writing. 
  

	SECTION 18.	SEVERABILITY. 

  
 Should any part of this Warrant for any reason be declared invalid, such decision shall not affect the validity of any remaining portion, which remaining
portion shall remain in force and effect as if this Warrant had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the parties hereto that they would have executed and accepted the remaining portion
of this Warrant without including therein any such part, parts or portion which may, for any reason, be hereafter declared invalid. 
  

	SECTION 19.	CLOSING OF TRANSFER BOOKS. 

  
 The right to exercise this Warrant shall not be suspended during any period that the stock transfer books of the Company for
its Common Stock may be closed. The Company shall not be required, however, to deliver certificates of its Common Stock upon such exercise while such books are duly closed for any purpose, but the Company may postpone the delivery of the
certificates for such Common Stock until the opening of such books, and they shall, in such case, be delivered forthwith upon the opening thereof, or as soon as practicable thereafter. 
  

 -28- 

	SECTION 20.	FINANCIAL STATEMENTS. 

  
 The Company covenants and agrees that Section 7 of the Note Purchase Agreement is incorporated by reference mutatis mutandis with the same force
and effect as if such covenant were set forth in full herein, whether or not the Notes of the Company issued pursuant to the Note Purchase Agreement are redeemed in full and the Note Purchase Agreement thereby discharged and terminated, with the
effect and result that the Company will deliver each and all of the financial statements, reports, notices, certificates and other information referred to in said Section 7 as and to the extent therein provided and to afford to the Holder of this
Warrant the right of inspection and visitation set forth in said Section 7 as and to the extent therein provided. 
  

	SECTION 21.	RIGHT TO ATTEND BOARD OF DIRECTORS MEETINGS AND
RECEIVE RELATED INFORMATION. 

  
 The Company agrees that one Person may be designated by any original Holder, so long as it (together with its affiliates) holds at least 51% of the Warrants or Restricted Stock (determined by the number of shares of
Underlying Shares represented by each such Warrant as if exercised) to have the right to receive all notices of, and to attend (by any of its authorized representatives) at such Holder’s expense, all meetings of the Company’s Board of
Directors and any committees thereof. Such Person shall be entitled to receive copies of all minutes of such meetings, together with copies of any items distributed to the members of the Board of Directors at such meeting, whether or not such Person
attends any such meeting. The rights of the original Holders shall not be transferable to any third-party that is not an affiliate of such original Holders. 
  

	SECTION 22.	CONFIDENTIAL INFORMATION. 

  
 For the purposes of this Section 22, “Confidential Information” means information delivered to any Holder by or on behalf of the Company
or any Subsidiary pursuant to this Warrant that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Holder as being confidential information of the Company or such Subsidiary or
which, by its nature, should reasonably be understood to constitute material, non-public information (and which shall include, without limitation, the proceedings of all board of directors, meetings and information furnished in connection
therewith), provided that such term does not include information that (a) was publicly known or otherwise known to such Holder prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such
Holder or any Person acting on such Holder’s behalf, or (c) otherwise becomes known to such Holder other than through disclosure by the Company or any Subsidiary. Each Holder will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by it in good faith to protect confidential information of third parties delivered to it, provided that a Holder may deliver or disclose Confidential Information to (i) its directors, trustees, officers,
employees, agents, attorneys and affiliates who are advised of the confidential nature thereof (to the extent such disclosure reasonably relates to the administration of the investment represented by this Warrant), (ii) its financial advisors and
other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this 

  

 -29- 

 
Section 22, (iii) any other Holder of any Warrant, (iv) any Institutional Holder to which such Holder sells or offers to sell such Warrant or any part
thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 22), (v) any Person from which such Holder offers to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 22), (vi) any federal or state regulatory authority having jurisdiction over such Holder, (vii)
the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about such Holder’s investment portfolio, or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Holder, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which
such Holder is a party or (z) if a breach of this Warrant by the Company has occurred and is continuing, to the extent such Holder may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under this Warrant; provided that in the event such Holder shall be required to disclose any Confidential Information in response to any subpoena or legal process or in connection with any litigation
referred to in the foregoing subclauses (w) through (y), such Holder will use its best efforts to give the Company notice of such request so that the Company may, if legally permitted to do so, contest or seek a protective order prior to the
disclosure thereof. In the event that such protective order or other remedy is not obtained on or prior to the date such information is required to be disclosed, or the Company elects not to seek any such protective order or remedy, such Holder
shall be permitted to disclose the Confidential Information requested in compliance with such subpoena or legal process or in connection with such litigation. Each Holder of a Warrant, by its acceptance thereof, will be deemed to have agreed to be
bound by and to be entitled to the benefits of this Section 22. On reasonable request by the Company in connection with the delivery to any Holder of a Warrant of information required to be delivered to such Holder hereunder or requested by such
Holder (other than a Holder that shall have previously delivered such a confirmation), such Holder will confirm in writing that it is bound by the provisions of this Section 22. 
  

	SECTION 23.	RESTRICTIONS ON CAPITAL STRUCTURE. 

  
 The Company will not, without the written consent of the Holders of at least 66-2/3%% of the then outstanding Warrants and
Restricted Stock (determined on a Common Stock equivalent basis): 
  
 (a) be bound by or subject to any debt or other agreement which restricts the right or ability of the Company to perform its obligations hereunder, excepting only the Note Purchase Agreement; or 
  
 (b) amend or change its certificate of incorporation or
bylaws (each as currently amended and/or restated) if such amendment or change would, directly or indirectly, limit or prohibit the Company from complying with the terms of this Warrant or would otherwise materially and adversely affect the
Warrants, the Restricted Stock or the rights of the Holders. 
  

 -30- 

	SECTION 24.	SUCCESSORS AND ASSIGNS. 

  
 This Agreement shall be binding upon each of Company and the Holder of this Warrant and each of their respective permitted successors and assigns.

  

	SECTION 25.	INDEX AND CAPTIONS. 

  
 The index and the descriptive headings of the various sections of this Warrant are for convenience only and shall not affect the meaning or construction
of the provisions hereof. 
  

	SECTION 26.	GOVERNING LAW. 

  
 This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of
Washington, excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State. 
  

 -31- 

 IN WITNESS WHEREOF, Flow International Corporation has
caused this Warrant to be signed by its Executive Vice President, Treasurer and Chief Financial Officer and to be dated this          day of
                    , 2001. 
  

			
	 FLOW INTERNATIONAL CORPORATION

		
	By	 	 
	 Name:
	 	Stephen D. Reichenbach

  

 -32- 

 SUBSCRIPTION 
  
 FLOW INTERNATIONAL CORPORATION 
  
 The undersigned,
                                        ,
pursuant to the provisions of the within Warrant, hereby elects to purchase          shares of Common Stock pursuant to the attached Warrant. 
  

			
		
	 Signature
	 	 
	 Address
	 	 

  
 Dated: 
  

 ASSIGNMENT 
  
 FOR VALUE RECEIVED
                                        
hereby sells, assigns and transfers unto
                                        
the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint
                                        ,
attorney, to transfer the said Warrant on the books of FLOW INTERNATIONAL CORPORATION. 
  

			
		
	 Signature
	 	 
	 Address
	 	 

  
 Dated: 
  

 PARTIAL ASSIGNMENT 
  
 FOR VALUE RECEIVED
                                        
hereby sells, assigns and transfers unto
                                        
that portion of the within Warrant and the rights evidenced thereby which will on the date hereof entitle the Holder to purchase
                     shares of Common Stock of FLOW INTERNATIONAL CORPORATION and irrevocably
constitutes and appoints
                                        ,
attorney, to transfer that part of the said Warrant on the books of said Company. 
  

			
		
	 Signature
	 	 
	 Address
	 	 

  
 Dated: 
  

 EXHIBIT A 
 (to Warrant)

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