Document:

EX-4.1

 Exhibit 4.1 

EXECUTION COPY 
  

 
 RIGHTS AGREEMENT 

between 
 ADVANCED EMISSIONS
SOLUTIONS, INC., 
 and 

COMPUTERSHARE TRUST COMPANY, N.A. 

as Rights Agent 
 Dated as of
February 1, 2015 
  
  

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
			
	 Section 1.
	 	 Certain Definitions
	  	 	1	  
			
	 Section 2.
	 	 Appointment of the Rights Agent
	  	 	8	  
			
	 Section 3.
	 	 Issuance of Rights Certificates
	  	 	8	  
			
	 Section 4.
	 	 Form of Rights Certificates
	  	 	10	  
			
	 Section 5.
	 	 Countersignature and Registration
	  	 	11	  
			
	 Section 6.
	 	 Transfer, Split-Up, Combination, and Exchange of Rights Certificates; Mutilated, Destroyed, Lost, or Stolen Rights
Certificates
	  	 	12	  
			
	 Section 7.
	 	 Exercise of Rights; Purchase Price; Expiration Date of Rights
	  	 	13	  
			
	 Section 8.
	 	 Cancellation and Destruction of Rights Certificates
	  	 	15	  
			
	 Section 9.
	 	 Reservation and Availability of Capital Stock
	  	 	15	  
			
	 Section 10.
	 	 Preferred Stock Record Date
	  	 	17	  
			
	 Section 11.
	 	 Adjustment of Purchase Price, Number and Kind of Shares, or Number of Rights
	  	 	18	  
			
	 Section 12.
	 	 Certificate of Adjusted Purchase Price or Number of Shares
	  	 	25	  
			
	 Section 13.
	 	 Consolidation, Merger, or Sale or Transfer of Assets or Earning Power
	  	 	25	  
			
	 Section 14.
	 	 Fractional Rights and Fractional Shares
	  	 	28	  
			
	 Section 15.
	 	 Rights of Action
	  	 	29	  
			
	 Section 16.
	 	 Agreement of Rights Holders
	  	 	30	  
			
	 Section 17.
	 	 Rights Certificate Holder Not Deemed a Stockholder
	  	 	30	  
			
	 Section 18.
	 	 Concerning the Rights Agent
	  	 	31	  
			
	 Section 19.
	 	 Merger or Consolidation or Change of Name of the Rights Agent
	  	 	32	  
			
	 Section 20.
	 	 Duties of the Rights Agent
	  	 	32	  

  
 i 

 TABLE OF CONTENTS 

(Continued) 
  

							
	 	 	 	  	Page	 
			
	 Section 21.
	 	 Change of the Rights Agent
	  	 	34	  
			
	 Section 22.
	 	 Issuance of New Rights Certificates
	  	 	35	  
			
	 Section 23.
	 	 Redemption and Termination
	  	 	36	  
			
	 Section 24.
	 	 Exchange of Rights
	  	 	36	  
			
	 Section 25.
	 	 Notice of Certain Events
	  	 	38	  
			
	 Section 26.
	 	 Notices
	  	 	39	  
			
	 Section 27.
	 	 Supplements and Amendments
	  	 	40	  
			
	 Section 28.
	 	 Successors
	  	 	41	  
			
	 Section 29.
	 	 Determinations and Actions by the Board
	  	 	41	  
			
	 Section 30.
	 	 Benefits of this Agreement
	  	 	41	  
			
	 Section 31.
	 	 Severability
	  	 	41	  
			
	 Section 32.
	 	 Governing Law
	  	 	41	  
			
	 Section 33.
	 	 Counterparts; Facsimiles and PDFs
	  	 	41	  
			
	 Section 34.
	 	 Descriptive Headings
	  	 	42	  
			
	 Section 35.
	 	 Force Majeure
	  	 	42	  

  

			
	Exhibit A	  	Form of Certificate of Designation, Preferences, and Rights
	Exhibit B	  	Form of Rights Certificate
	Exhibit C	  	Form of Summary of Rights to Purchase Preferred Stock

  
 ii 

 RIGHTS AGREEMENT, 

RIGHTS AGREEMENT, dated as of February 1, 2015 (this “Agreement”), between Advanced Emissions Solutions, Inc., a
Delaware corporation (the “Company”), and Computershare Trust Company, N.A., a federally chartered trust company (the “Rights Agent”). 

RECITAL 
 WHEREAS, on
February 1, 2015 (the “Rights Dividend Declaration Date”), the Board authorized and declared a dividend distribution of one right (each, a “Right,” and together with all other such rights distributed or issued
pursuant hereto, the “Rights”) for each share of Common Stock outstanding at the Close of Business on February 16, 2015 (the “Record Date”), and further authorized and directed the issuance of one Right (as
such number may hereinafter be adjusted pursuant hereto) with respect to each share of Common Stock issued between the Record Date (whether originally issued or delivered from the Company’s treasury) and, except as otherwise provided in
Section 22, the earlier of the Distribution Date and the Expiration Date, each Right initially representing the right to purchase one one-thousandth of a share of Preferred Stock, upon the terms and subject to the conditions hereinafter set
forth. 
 AGREEMENT 

NOW, THEREFORE, 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 Agreement, the following terms have the meanings indicated: 

(a) “Acquiring Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 10% or more of the Common Stock then outstanding, but shall not include an Exempt Person. Notwithstanding the foregoing: 

(i) any Person who or which, together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 10% or more of the
Common Stock then outstanding as a result of a reduction in the number of shares of Common Stock outstanding due to the repurchase of Common Stock by the Company shall not be deemed an “Acquiring Person” unless and until such Person,
together with all Affiliates and Associates of such Person, acquires Beneficial Ownership of any additional shares of Common Stock (other than as a result of a stock dividend, stock split, or similar transaction effected by the Company in which all
registered holders of Common Stock are treated substantially equally) while the Beneficial Owner of 10% or more of the Common Stock then outstanding; 

(ii) if the Board determines in good faith that a Person who would otherwise be an “Acquiring Person” has become such inadvertently
(including, 

 
without limitation, because (A) such Person was unaware that it beneficially owned a percentage of Common Stock that would otherwise cause such Person to be an “Acquiring Person”
or (B) such Person was aware of the extent of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement and had no intention of changing or influencing control of
the Company), and such Person divests as promptly as practicable (as determined by the Board in its sole discretion) a sufficient number of shares of Common Stock (without exercising or retaining any power, including, without limitation, voting
power, with respect to such shares) (or, in the case solely of shares of Common Stock beneficially owned, directly or indirectly, by such Person pursuant to Section 1(f)(v) hereof, such Person terminates the subject Derivatives Contract(s) or
disposes of the subject derivative security or securities, or establishes to the satisfaction of the Board that such shares of Common Stock are not held with any intention of changing or influencing control of the Company) so that such Person is no
longer the Beneficial Owner of 10% or more of the Common Stock then outstanding, then such Person shall not be deemed to be or ever to have been an “Acquiring Person” for any purposes of this Agreement as a result of such inadvertent
acquisition; 
 (iii) if a bona fide swaps dealer who would otherwise be an “Acquiring Person” has become so as a result of its
actions in the ordinary course of its business that the Board determines, in its sole discretion, were taken without the intent or effect of evading or assisting any other Person to evade the purposes and intent of this Agreement, or otherwise
seeking to control or influence the management or policies of the Company, then, and unless and until the Board shall otherwise determine, such person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement; and

 (iv) if a Person would otherwise be deemed an “Acquiring Person” upon the execution of this Agreement, such Person (herein
referred to as a “Grandfathered Stockholder”) shall not be deemed an “Acquiring Person” for purposes of this Agreement unless and until, subject to Section 1(a)(i) and Section 1(a)(ii) above, such Grandfathered
Stockholder acquires Beneficial Ownership of additional shares of Common Stock representing 1.0% of the shares of Common Stock then outstanding (other than as a result of a stock dividend, stock split, or similar transaction effected by the Company
in which all registered holders of Common Stock are treated substantially equally) after execution of this Agreement and while the Beneficial Owner of 10% or more of the Common Stock then outstanding, in which case such Person shall no longer be
deemed a Grandfathered Stockholder and shall be deemed an “Acquiring Person”. 
 For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Common Stock of which any Person is the Beneficial Owner, shall include the
number of shares of Common Stock not outstanding at the time of such calculation that such Person is otherwise deemed to beneficially own for purposes of this Agreement. The number of shares of Common Stock not outstanding that such Person is
otherwise deemed to beneficially own for purposes of this Agreement shall be deemed to be outstanding for the purpose of computing the percentage of the outstanding number of shares of Common Stock beneficially owned by such Person but shall not be
deemed to be outstanding for the purpose of computing the percentage of outstanding Common Stock beneficially owned by any other Person. 

  
 2 

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

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

(d) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement; provided, however, that no director or officer of the Company shall be deemed an
Affiliate or Associate of any other director or officer of the Company solely as a result of his or her being a director or officer of the Company. 

(e) “Agreement” shall have the meaning set forth in the preamble hereto. 

(f) 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 beneficially owns, directly or indirectly (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on the date of this
Agreement); 
 (ii) which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement, or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights,
warrants, or options, or otherwise; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, to have “Beneficial Ownership” of, or to “beneficially own,” (A) securities tendered
pursuant to a tender offer or exchange offer made in accordance with the General Rules and Regulations under the Exchange Act by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, (B) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event, or (C) securities issuable upon exercise of Rights from and after the occurrence of a Triggering
Event, which 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 (the “Original Rights”) or pursuant to
Section 11(i) or Section 11(p) hereof in connection with an adjustment made with respect to any Original Rights; 
 (iii) which
such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote or dispose of, including pursuant to any agreement, arrangement, or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the “Beneficial Owner” of, to have “Beneficial 

  
 3 

 
Ownership” of, or to “beneficially own,” any security as a result of an agreement, arrangement, or understanding (whether or not in writing) to vote such security if such
agreement, arrangement, or understanding: (A) arises solely from a revocable proxy (as such term is defined in Regulation 14A under the Exchange Act) given in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, including the disclosure requirements of Schedule 14A thereunder, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor report); 
 (iv) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates or Associates) has any agreement, arrangement, or understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to Section 1(f)(iii)), or disposing of any voting securities of the Company; or 

(v) which are “beneficially owned” (within the meaning of clauses (i)-(iv) above),
directly or indirectly, by a Counterparty (or any of such Counterparty’s Affiliates or Associates) under any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract) to which such
Person or any of such Person’s Affiliates or Associates is a Receiving Party; provided, however, that the number of shares of Common Stock that a Person is deemed to beneficially own pursuant to this clause (v) in connection
with a particular Derivatives Contract shall not exceed the number of Notional Common Shares with respect to such Derivatives Contract; provided, further, that the number of securities beneficially owned by each Counterparty (including
its Affiliates and Associates) under a Derivatives Contract shall for purposes of this clause (v) be deemed to include all securities that are beneficially owned, directly or indirectly, by any other Counterparty (or any of such other
Counterparty’s Affiliates or Associates) under any Derivatives Contract to which such first Counterparty (or any of such first Counterparty’s Affiliates or Associates) is a Receiving Party, with this proviso being applied to successive
Counterparties as appropriate. 
 Notwithstanding anything to the contrary in this Section 1(f), (x) nothing in this
Section 1(f) shall cause a Person engaged in business as an underwriter of securities to be the “Beneficial Owner” of, to have “Beneficial Ownership” of, or to “beneficially own,” any securities acquired or which
such Person has the right to acquire through such Person’s participation in good faith in a firm commitment underwriting until the expiration of 40 days after the date of such acquisition, and then only if such securities continue to be owned
by such Person at such expiration of 40 days; and (y) any stockholder of the Company, with Affiliate(s), Associate(s), or other Person(s) who may be deemed representatives of it serving as director(s) of the Company, shall not be deemed to
beneficially own securities (i) held by such other Persons serving as director(s) of the Company to the extent such securities were issued by the Company to such director(s) in the ordinary course of business as compensation for their services
as director(s) of the Company or (ii) held by such stockholder to the extent such securities were issued by the Company to such stockholder in the ordinary course of business as compensation for such other Persons’ services as director(s)
of the Company. 

  
 4 

 (g) “Board” shall mean the Board of Directors of the Company or any duly
authorized committee thereof. 
 (h) “Book Entry Share” shall mean an uncertificated share of Common Stock registered in
book entry form. 
 (i) “Business Day” shall mean any day other than a Saturday, Sunday, or a day on which banking
institutions in the State of New York or in a State where the principal office of the Rights Agent is located are authorized or obligated by law or executive order to close. 

(j) “Certificate of Incorporation” shall mean the Company’s Second Amended and Restated Certificate of Incorporation, as
such may be amended, modified, or restated from time to time. 
 (k) “Close of Business” on any given date shall mean
5:00 p.m., New York City time, on such date; provided, however, that, if such date is not a Business Day, it shall mean 5:00 p.m., New York City time, on the next succeeding Business Day. 

(l) “Common Stock” shall mean the common stock, par value $0.001 per share, of the Company, except that “Common
Stock” when used with reference to any Person other than the Company shall mean the capital stock (or equity interest) of such Person with the greatest voting power, or the equity securities or other equity interests having power to control
or direct the management of such Person. 
 (m) “Common Stock Equivalents” shall have the meaning set forth in
Section 11(a)(iii) hereof. 
 (n) “Company” shall have the meaning set forth in the preamble hereto, except as
otherwise provided in Section 13(a) hereof. 
 (o) “Counterparty” shall have the meaning set forth in
Section 1(r) hereof. 
 (p) “Current Market Price” shall have the meaning set forth in Section 11(d)(i) hereof.

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

(r) “Derivatives Contract” shall mean a contract between two parties (the “Receiving Party” and the
“Counterparty”) that is designed to produce economic benefits and risks to the Receiving Party that correspond substantially to the ownership by the Receiving Party of a number of shares of Common Stock specified or referenced in
such contract (the number corresponding to such economic benefits and risks, the 

  
 5 

 
“Notional Common Shares”), regardless of whether obligations under such contract are required or permitted to be settled through the delivery of cash, Common Stock or other
property, without regard to any short position under the same or any other Derivatives Contract. For the avoidance of doubt, interests in broad-based index options, broad-based index futures and broad-based publicly traded market baskets of stocks
approved for trading by the appropriate federal governmental authority shall not be deemed to be Derivatives Contracts. 
 (s)
“Distribution Date” shall have the meaning set forth in Section 3(a) hereof. 
 (t) “Equivalent Preferred
Stock” shall have the meaning set forth in Section 11(b) hereof. 
 (u) “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended. 
 (v) “Exchange Ratio” shall have the meaning set forth in Section 24(a)
hereof. 
 (w) “Exempt Person” shall mean (i) the Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company or of any Subsidiary of the Company, (iv) any Person or entity organized, appointed, or established by the Company or any Subsidiary of the Company for or pursuant to the terms of any such employee benefit
plan, or (v) any other Person as determined by the Board in its sole discretion; provided, that any such exemption granted by the Board may be granted in whole or in part, and may be subject to limitations or conditions to the extent the
Board shall determine, in its sole discretion, are necessary or desirable. 
 (x) “Expiration Date” shall have the meaning
set forth in Section 7(a) hereof. 
 (y) “Final Expiration Date” shall have the meaning set forth in Section 7(a)
hereof. 
 (z) “Grandfathered Stockholder” shall have the meaning set forth in Section 1(a)(iv) hereof. 

(aa) “Notional Common Shares” shall have the meaning set forth in Section 1(r) hereof. 

(bb) “Original Rights” shall have the meaning set forth in Section 1(f)(ii) hereof. 

(cc) “Person” shall mean any individual, firm, corporation, partnership, limited liability company, limited liability
partnership, association, trust, syndicate, unincorporated organization, or other entity, and shall include any successor (by merger or otherwise) of such entity. 

  
 6 

 (dd) “Preferred Stock” shall mean shares of Series A Junior Participating
Preferred Stock, par value $0.001 per share, of the Company having the rights and preferences set forth in the Certificate of Designation attached to this Agreement as Exhibit A, and, to the extent that there are not a sufficient number
of shares of Series A Junior Participating Preferred Stock authorized to permit the full exercise of the Rights, any other series of preferred stock of the Company designated for such purpose containing terms substantially similar to the terms
of the Series A Junior Participating Preferred Stock. 
 (ee) “Principal Party” shall have the meaning set forth in
Section 13(b) hereof. 
 (ff) “Purchase Price” shall have the meaning set forth in Section 7(b) hereof. 

(gg) “Receiving Party” shall have the meaning set forth in Section 1(r) hereof. 

(hh) “Record Date” shall have the meaning set forth in the recital to this Agreement. 

(ii) “Redemption Price” shall have the meaning set forth in Section 23(a) hereof. 

(jj) “Right” shall have the meaning set forth in the recital to this Agreement. 

(kk) “Rights Agent” shall have the meaning set forth in the preamble hereto, except as otherwise provided in Section 19
and Section 21 hereof. 
 (ll) “Rights Certificate” shall have the meaning set forth in Section 3(a) hereof. 

(mm) “Rights Dividend Declaration Date” shall have the meaning set forth in the recital to this Agreement. 

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

(oo) “Section 13 Event” shall mean any event described in Section 13(a)(i), Section 13(a)(ii), or
Section 13(a)(iii) hereof. 
 (pp) “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof. 

(qq) “Stock Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed or amended pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such. 

  
 7 

 (rr) “Subsidiary” shall mean, with reference to any Person, any other Person of
which an amount of voting securities (or other ownership interests having ordinary voting power) sufficient to elect or appoint at least a majority of the directors (or other persons performing similar functions) of such other Person is beneficially
owned, directly or indirectly, by such first-mentioned Person, or otherwise controlled by such first-mentioned Person. 
 (ss)
“Substitution Period” shall have the meaning set forth in Section 11(a)(iii) hereof. 
 (tt) “Summary of
Rights” shall have the meaning set forth in Section 3(b) hereof. 
 (uu) “Trading Day” shall have the meaning
set forth in Section 11(d)(i) hereof. 
 (vv) “Triggering Event” shall mean a Section 11(a)(ii) Event or any
Section 13 Event. 
 (ww) “Trust” shall have the meaning set forth in Section 24(f) hereof. 

(xx) “Trust Agreement” shall have the meaning set forth in Section 24(f) hereof. 

Section 2. Appointment of the Rights Agent. The Company hereby appoints the Rights Agent to act as rights agent for the Company in
accordance with the express 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 by written notice to the Rights
Agent setting forth the respective duties of the Rights Agent and any co-rights agent. The Rights Agent has no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-rights agent. If the Company appoints one or
more co-rights agents, the respective duties of the Rights Agent and any co-rights agents shall be determined by the Company. 

Section 3. Issuance of Rights Certificates. 

(a) Until the earlier of (i) the Close of Business on the 10th day after the Stock Acquisition Date (or, if the 10th day after the Stock
Acquisition Date occurs before the Record Date, the Close of Business on the Record Date) and (ii) the Close of Business on the 10th Business Day (or such later date as the Board may determine prior to the occurrence of a Section 11(a)(ii)
Event) after the date of commencement by or on behalf of any Person (other than an Exempt Person) of a tender offer or exchange offer, if upon consummation thereof, such Person would become an Acquiring Person (the earlier of (i) and
(ii) being herein referred to as the “Distribution Date”), (A) the Rights will be evidenced (subject to Section 3(b) and Section 3(c) hereof) by the certificates for the Common Stock registered in the names of
the holders of the Common Stock (which certificates for shares of Common Stock shall be deemed also to be Rights Certificates) or, in the case of Book Entry Shares, by notation in book entry, and not by separate

  
 8 

 
certificates, and the registered holders of shares of Common Stock shall also be the registered holders of the associated Rights, and (B) the Rights will be transferable only in connection
with the transfer of the underlying Common Stock (including a transfer to the Company); provided, however, that, if a tender offer or exchange offer is terminated prior to the occurrence of a Distribution Date, then no Distribution
Date shall occur as a result of such tender offer or exchange offer. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign (either by manual or facsimile signature), and the
Company will send or cause to be sent (and the Rights Agent, if so requested and provided with all necessary information and documentation, will send), in accordance with Section 26 hereof, to each record holder of the Common Stock as of the
Close of Business on the Distribution Date (other than an Acquiring Person or any Associate or Affiliate of an Acquiring Person), one or more rights certificates, in substantially the form of Exhibit B hereto (the “Rights
Certificates”), evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in the number of Rights per share of Common Stock has been made pursuant to
Section 11(i) or Section 11(p) hereof, at the time of distribution of the Rights Certificates, the Company shall not be required to issue Rights Certificates evidencing fractional Rights but may, in lieu thereof, make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates evidencing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates and the Rights will be transferable separately from the transfer of Common Stock. The Company shall promptly notify the Rights Agent in writing upon the occurrence of the
Distribution Date and, if such notification is given orally, the Company shall confirm the same in writing on or prior to the next Business Day. Until such written notice is received by the Rights Agent, the Rights Agent may presume conclusively for
all purposes that the Distribution Date has not occurred. 
 (b) As promptly as practicable following the Record Date, the Company shall
send a copy of a Summary of Rights, in substantially the form attached hereto as Exhibit C (the “Summary of Rights”), to each record holder of Common Stock as of the Close of Business on the Record Date in accordance
with Section 26 hereof. With respect to certificates representing Common Stock and Book Entry Shares outstanding as of the Record Date, until the earlier of the Distribution Date and the Expiration Date, the Rights associated with such Common
Stock will be evidenced by such certificates for Common Stock registered in the names of the holders thereof or Book Entry Shares, as applicable, in each case together with a copy of the Summary of Rights. Until the earlier of the Distribution Date
and the Expiration Date, the surrender for transfer of any share of Common Stock outstanding on the Record Date (whether evidenced by certificates for Common Stock registered in the names of the holders thereof or Book Entry Shares), with or without
a copy of the Summary of Rights, shall also constitute the transfer of the Right associated therewith. 
 (c) Rights shall, without any
further action, be issued in respect of all shares of Common Stock that are issued (whether originally issued or delivered from the Company’s treasury) after the Record Date but prior to the earlier of the Distribution Date and the Expiration
Date and, to the extent provided in Section 22 hereof, in respect of 

  
 9 

 
Common Stock issued after the Distribution Date. Certificates evidencing such Common Stock shall have printed or otherwise affixed to them a legend or statement substantially in the following
form: 
 This certificate also evidences and entitles the registered holder hereof to certain Rights as set forth in the Rights Agreement
between Advanced Emissions Solutions, Inc. (the “Company”) and the Rights Agent thereunder dated as of February 1, 2015 (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will
mail to the registered holder of this certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge, promptly after receipt of a written request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights beneficially owned by any Person who is, was, or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently beneficially owned by or on behalf of such
Person or by any subsequent beneficial owner, may become null and void. 
 With respect to any Book Entry Shares, a legend or statement in substantially the
form of the foregoing shall be included in the confirmation or account statement or other notice sent to the record holder of such shares in accordance with applicable law. Until the earlier of the Distribution Date and the Expiration Date, the
Rights associated with the Common Stock evidenced by such certificates and such Book Entry Shares shall be evidenced by such certificates or the Book Entry Shares alone and the surrender for transfer of any certificate or Book Entry Shares shall
also constitute the transfer of the Rights associated with the Common Stock represented thereby. In the event 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 cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with such Common Stock that are no longer outstanding. Notwithstanding this Section 3(c), the
omission of a legend or statement shall not affect the enforceability of any part of this Rights Agreement or the rights of any holder of the Rights. 

After the Record Date but prior to the earlier of the Distribution Date and the Expiration Date, if new certificate(s) representing shares of
Common Stock are issued in connection with the transfer, split up, combination, or exchange of certificate(s) representing shares of Common Stock, or if new certificate(s) representing shares of Common Stock are issued to replace any certificate(s)
that have been mutilated, destroyed, lost, or stolen, then such new certificate(s) shall bear a legend or statement in substantially the form of the foregoing. 

Section 4. Form of Rights Certificates. The Rights Certificates (and the forms of election to purchase and of assignment and the
certificates contained therein to be printed on the reverse thereof) shall each be substantially in the form attached hereto as Exhibit B  

  
 10 

 
and may have such marks of identification or designation and such legends, summaries, or endorsements printed thereon as the Company may deem appropriate (but which do not affect the rights,
duties, liabilities, protections or responsibilities of the Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Sections 7, 11, 13, 22, 23, 24 and 27 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their face shall entitle the registered holders thereof to purchase such number of one one-thousandths of a share of Preferred Stock as shall be set forth therein at the Purchase Price, but
the amount and type of securities or other assets that may be acquired upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein. The Company shall give written notice to the Rights Agent
promptly after it becomes aware of the existence of any Acquiring Person, and until such written notice is received by the Rights Agent, the Rights Agent may presume for all purposes that no such Acquiring Person exists. 

Section 5. Countersignature and Registration. 

(a) The Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its
President, or any Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company or by such
officers as the Board may designate, either manually or by facsimile signature. The Rights Certificates shall be countersigned by an authorized signatory of the Rights Agent, either manually or by facsimile signature, and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature by an authorized signatory of the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by an authorized signatory of the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of the execution of this Agreement any such person was not such an officer. In case any authorized signatory of the Rights Agent who has countersigned any of the Rights
Certificates ceases to be an authorized signatory of the Rights Agent before issuance and delivery by the Company, such Rights Certificates, nevertheless, may be issued and delivered by the Company with the same force and effect as though the person
who countersigned such Rights Certificates had not ceased to be an authorized signatory of the Rights Agent; and any Rights Certificates may be countersigned on behalf of the Rights Agent by any person who, at the actual date of the countersignature
of such Rights Certificate, is properly authorized to countersign such Rights Certificate, although at the date of the execution of this Agreement any such person was not so authorized. 

  
 11 

 (b) Following the Distribution Date and upon receipt by the Rights Agent of notice to that effect
and all other relevant information and documents referred to in Section 3(a), the Rights Agent will keep, or cause to be kept, at its office or offices designated as the appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective registered holders of the Rights Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates, and the date of each of the Rights Certificates. 
 Section 6. Transfer, Split-Up, Combination, and
Exchange of Rights Certificates; Mutilated, Destroyed, Lost, or Stolen Rights Certificates. 
 (a) Subject to the provisions of
Section 7(e) and Section 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 Expiration Date, any Rights Certificate or Certificates (other than Rights Certificates
evidencing Rights that have become null and void pursuant to Section 7(e) or that have been redeemed or exchanged pursuant to Section 23 or Section 24 hereof) may be transferred, split-up, combined, or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like number of one one-thousandths of a share of Preferred Stock (or, following the occurrence of a Triggering Event, Common Stock, other securities, cash, or other assets,
as the case may be) as the Rights Certificate or Certificates surrendered then entitles such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split-up, combine, or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates to be transferred, split-up, combined, or exchanged, with the form of assignment and certificate
contained therein properly completed and duly executed, at the office or offices of the Rights Agent designated for such purpose with all signatures guaranteed. Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have properly completed and duly signed the certificate contained in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence, as the Company or the Rights Agent may reasonably request, of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Section 7(e), Section 14, and Section 24 hereof, countersign (by manual or facsimile signature) and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require payment from a registered holder of a Rights Certificate of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer,
split-up, combination, or exchange of Rights Certificates. The Rights Agent shall have no duty or obligation to take any action under any section of this Rights Agreement which requires the payment by a registered holder of applicable taxes and/or
charges unless and until it is reasonably satisfied that all such taxes and/or charges have been paid. 
 (b) Upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction, or mutilation of a Rights 

  
 12 

 
Certificate, and, in case of loss, theft, or destruction, of indemnity or security reasonably satisfactory to them, along with a signature guarantee and such other and further documentation as
the Company or the Rights Agent may reasonably request, and reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate, if
mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered holder in lieu of the Rights Certificate so lost, stolen, destroyed, or mutilated. 

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

(a) Subject to Section 7(e) hereof, at any time after the Distribution Date the registered holder of any Rights Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein including, without limitation, the restrictions on exercisability set forth in Section 9(c) and Section 11(a)(iii) hereof) in whole or in part upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate contained therein properly completed and duly executed, to the Rights Agent at the office or offices of the Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of one one-thousandths of a share of Preferred Stock (or, following the occurrence of a Triggering Event, Common Stock, other securities, cash, or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, and an amount equal to any tax or charge required to be paid under Section 9(e), at or prior to the earliest of (i) the Close of Business on February 1, 2016 (the “Final
Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof, and (iii) the time at which the Rights are exchanged in full as provided in Section 24 hereof (the earliest of (i),
(ii), and (iii) being herein referred to as the “Expiration Date”). Except for those provisions herein that expressly survive the termination of this Agreement, this Agreement shall terminate upon the earlier of the Expiration
Date and such time as all outstanding Rights have been exercised, redeemed or exchanged hereunder (other than Rights which have become null and void pursuant to the provisions of Section 7(e) hereof). 

(b) The purchase price for each one one-thousandth of a share of Preferred Stock pursuant to the exercise of a Right initially shall be
$63.00, shall be subject to adjustment from time to time as provided in Section 11 and Section 13(a) hereof, and shall be payable in accordance with Section 7(c) hereof (such purchase price, as so adjusted, the “Purchase
Price”). 
 (c) Upon receipt of a Rights Certificate evidencing exercisable Rights, with the form of election to purchase and the
certificate contained therein properly completed and duly executed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price per one one-thousandth of a share of Preferred Stock (or, following the occurrence of a
Triggering Event, Common Stock, other securities, cash, or other assets, as the case may be) to be purchased as set forth below and an amount equal to any applicable tax or charge required to be paid by the holder of such Rights Certificate in
accordance with Section 9 hereof, or evidence satisfactory to the Company of payment of such tax or charge, the Rights Agent shall, subject to Section 20(k) hereof, thereupon 

  
 13 

 
promptly (i) (A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates for the
total number of one one-thousandths of a share of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts evidencing such number of one one-thousandths of a share of Preferred Stock as are
to be purchased (in which case certificates for Preferred Stock evidenced by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct the depositary agent to comply with such request,
(ii) when necessary to comply with this Agreement, requisition from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, and (iv) after receipt thereof, deliver such
cash, if any, to or upon the order of the registered holder of such Rights Certificate. The payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. In the event that the Company is obligated to issue other securities (including Common Stock) of the Company, pay cash, or distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash, or other property are available for distribution by the Rights Agent, if and when necessary to comply with this Agreement. The Company reserves the right to require prior to
the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock would be issued. 

(d) In case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder of such Rights Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Sections 6 and 14 hereof. 
 (e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person (or any such Associate of Affiliate) to holders of equity interests in such Acquiring Person (or any
such Associate or Affiliate) or to any Person with whom the Acquiring Person (or any such Associate of Affiliate) has any continuing agreement, arrangement, or understanding (whether or not in writing) regarding the transferred Rights, shares of
Common Stock, or the Company or (B) a transfer that the Board, in its sole discretion, has determined is part of a plan, arrangement, or understanding (whether or not in writing) that has as a primary

  
 14 

 
purpose or effect the avoidance of the provisions of this Section 7(e), shall become null and void without any further action and no holder of such Rights shall have any rights or
preferences whatsoever with respect to such Rights, whether under any provision of this Agreement, the Rights Certificates, or otherwise. The Company shall use all reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Rights Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any of its Affiliates, Associates, or transferees
hereunder. 
 (f) Notwithstanding anything in this Agreement or any Rights Certificate to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered holder of a Rights Certificate upon the occurrence of any purported exercise as set forth in this Section 7 by such registered holder unless such registered holder
shall have (i) properly completed and duly signed the certificate contained in the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of the Rights represented by such Rights Certificate or Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request. 

Section 8. Cancellation and Destruction of Rights Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split-up, combination, or exchange shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a certificate of destruction thereof to the Company. 

Section 9. Reservation and Availability of Capital Stock. 

(a) The Company covenants and agrees that at all times prior to the Expiration Date it will cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock and/or out of any shares of Preferred Stock held in its treasury (and following the occurrence of a Triggering Event, out of the authorized but unissued shares of such other equity securities of the
Company as may be issuable upon exercise of the Rights and/or out of any shares of such securities held in its treasury), the number of shares of Preferred Stock (and following the occurrence of a Triggering Event, the number of shares of such other
equity securities of the Company) that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7 hereof. Upon the occurrence of any events resulting in the increase in the aggregate number of
shares of Preferred Stock (or other equity securities of the Company) issuable upon exercise of all outstanding Rights above the number then reserved, the Company shall make appropriate increases in the number of shares so reserved. 

  
 15 

 (b) So long as the Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock or other securities, as the case may be) issuable and deliverable upon the exercise of the Rights may be listed on any national securities exchange or quoted on a quotation system, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable through the Expiration Date, all shares reserved for such issuance to be listed on such exchange or quoted on such quotation system, as the case may be, upon official notice of issuance upon such
exercise. 
 (c) The Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to be delivered by the Company upon exercise of the Rights has been determined in accordance with Section 11(a) hereof, a registration statement on an appropriate form
under the Act, with respect to the securities purchasable upon exercise of the Rights, (ii) cause such registration statement to become effective as soon as practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities, and (B) the date of the expiration of the Rights.
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 after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating 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 notify the Rights Agent in writing whenever it makes a public announcement pursuant to this Section 9(c) and give the Rights Agent a copy of such announcement. In addition, if the Company shall determine
that a registration statement is required following the Distribution Date, the Company similarly may temporarily suspend the exercisability of the Rights until such time as a registration statement has been declared effective and give prompt written
notice of the same to the Rights Agent. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, or the
exercise thereof shall not be permitted under applicable law, or a registration statement shall not 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 Stock (and, following the occurrence of a Triggering Event, Common Stock or other securities, as the case may be) delivered upon exercise
of the Rights shall, at the time of delivery of such shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable. 

  
 16 

 (e) The Company further covenants and agrees that it will pay when due and payable any and all
taxes and charges that may be payable in respect of the issuance or delivery of the Rights Certificates and of any certificates for Preferred Stock (or, following the occurrence of a Triggering Event, Common Stock or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required to pay any tax that may be payable in respect of any transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of Preferred Stock
(or, following the occurrence of a Triggering Event, Common Stock or other securities, as the case may be) in a name other than that of the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to issue or
deliver any certificates for Preferred Stock (or, following the occurrence of a Triggering Event, Common Stock or other securities, as the case may be) in a name other than that of the registered holder upon the exercise of any Rights until such tax
or charge shall have been paid (any such tax or charge being payable by the registered holder of such Rights Certificates at the time of surrender) or until it has been established to the Company’s or the Rights Agent’s satisfaction that
no such tax or charge is due. 
 Section 10. Preferred Stock Record Date. Each person in whose
name any certificate or entry in the book entry account system of the transfer agent for Preferred Stock (or, following the occurrence of a Triggering Event, Common Stock or other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of such Preferred Stock (or, following the occurrence of a Triggering Event, Common Stock or other securities, as the case may be) evidenced thereby on, and such certificate or
entry in the book entry account system of the transfer agent shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable taxes or charges ) was made;
provided, however, that, if the date of such surrender and payment is a date upon which the Preferred Stock (or, following the occurrence of a Triggering Event, Common Stock or other securities, as the case may be) transfer books of
the Company are closed, such Person shall be deemed to have become the record holder of such securities (fractional or otherwise) on, and such certificate or entry in the book entry account system of the transfer agent shall be dated, the next
succeeding Business Day on which the Preferred Stock (or, following the occurrence of a Triggering Event, Common Stock or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the registered holder of a Rights Certificate shall not be entitled to any rights of a stockholder of the Company with respect to shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. 

  
 17 

 Section 11. Adjustment of Purchase Price, Number and Kind of Shares, or Number of
Rights. The Purchase Price, the number and kind of shares, or fractions thereof, 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 Agreement (A) declare or pay a dividend on the shares of
Preferred Stock payable in shares of Preferred Stock, (B) subdivide or split the outstanding shares of Preferred Stock, (C) combine or consolidate the outstanding shares of Preferred Stock into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the shares of Preferred Stock (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) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, split, combination, consolidation, or
reclassification, and the number and kind of shares (or fractions thereof) of Preferred Stock (or other capital stock, as the case may be), issuable on such date, shall be proportionately adjusted so that the registered holder of any Right exercised
after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares (or fractions thereof) of Preferred Stock (or other capital stock, as the case may be), which, if such Right had
been exercised immediately prior to such date (whether or not such Right was then exercisable) and at a time when the Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such dividend, subdivision, split, combination, consolidation, or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of the Company issuable upon the exercise of one Right. If an event occurs that would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof. 

(ii) In the event any Person shall become an Acquiring Person (a “Section 11(a)(ii) Event”), then, promptly following
the occurrence of such Section 11(a)(ii) Event, proper provision shall be made so that each registered holder of a Right (except as provided below and in Section 7(e), Section 13 and Section 24 hereof) shall thereafter have the
right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common
Stock as shall equal the result obtained by (A) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and (B) dividing that product (which, following such first occurrence, shall thereafter be referred to as the “Purchase Price” for each Right and for all purposes of this Agreement other than
Section 13 hereof) by 50% of the Current Market Price per share of Common Stock on the date of such first occurrence (such number of shares of Common Stock, the “Adjustment Shares”). 

(iii) In the event that (A) the number of shares of Common Stock authorized by the Certificate of Incorporation, but which are not
outstanding or reserved for issuance for purposes other than upon exercise of the Rights, are not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii) hereof or

  
 18 

 
(B) the Board otherwise shall determine to do so in its sole discretion, the Company, acting by resolution of the Board, shall (1) determine the value of the Adjustment Shares issuable
upon the exercise of a Right (the “Current Value”), and (2) with respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Right and
payment of the applicable Purchase Price, (u) cash, (v) a reduction in the Purchase Price, (w) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock, such
as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as Common Stock (such shares of preferred stock being referred to as “Common Stock Equivalents”)), (x) debt securities of
the Company, (y) other assets, or (z) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board; provided, however, that, if, under the circumstances set forth in clause (A) above, the Company shall not have made adequate provision to deliver value pursuant to clause (2)
above within 30 days following the first occurrence of a Section 11(a)(ii) Event, then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, Common Stock (to
the extent available) and then, if necessary, cash, which shares and cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term “Spread” shall mean the excess of the Current Value over the
Purchase Price. If the Board determines in good faith that it is likely that sufficient additional Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30-day period set forth
above may be extended to the extent necessary, but not more than 90 days following the first occurrence of a Section 11(a)(ii) Event, in order that the Company may seek stockholder approval for the authorization of such additional shares (such 30-day period, as it may be extended, is herein called the “Substitution Period”). To the extent that action is to be taken pursuant to the first or third sentences of this Section 11(a)(iii),
the Company shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and the Company may suspend the exercisability of the Rights until the expiration of the Substitution Period in order
to seek such stockholder approval for such authorization of additional shares or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of each Adjustment Share shall be the Current Market Price per share of Common Stock on the date of the first occurrence of a Section 11(a)(ii) Event and the per share or per unit value of any Common Stock
Equivalent shall be deemed to equal the Current Market Price per share of Common Stock on such date. 
 (b) In case the Company shall fix a
record date for the issuance of rights, options, or warrants to all registered holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares
having the same rights, privileges, and preferences as the shares of Preferred Stock (“Equivalent Preferred Stock”)) or securities convertible into shares of Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred 

  
 19 

 
Stock or Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into shares of Preferred Stock or Equivalent Preferred Stock) less than the Current Market
Price per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock outstanding on such record date plus the number of shares of Preferred Stock that the aggregate subscription or offering price of the total number of shares of Preferred Stock and/or Equivalent
Preferred Stock 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 shares of Preferred
Stock outstanding on such record date plus the number of additional shares of Preferred Stock and/or Equivalent Preferred Stock 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 by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be binding and conclusive for all purposes on the Rights Agent and the holder of the Rights. Preferred Stock owned by or held for the account of the Company or any Subsidiary
shall not be deemed outstanding for the purpose of any such computation. Such adjustments 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 that would then be in effect if such record date had not been fixed. 
 (c) In case the Company
shall fix a record date for a distribution to all registered holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of cash
(other than a regular periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in shares of Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or
evidences of indebtedness, or of subscription rights, options 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 Current Market Price per share of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and shall be binding and conclusive for all purposes on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to
be distributed, or of such subscription rights, options or warrants applicable to a share of Preferred Stock, and the denominator of which shall be such Current Market Price per share of Preferred Stock. 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 be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed. 

(d) (i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the
“Current Market Price” per 

  
 20 

 
share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of Common Stock for the 30 consecutive Trading Days immediately prior to such date, and
for purposes of computations made pursuant to Section 11(a)(iii) hereof, the “Current Market Price” per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of Common Stock
for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of Common Stock is determined during a period following the announcement by the issuer of
(A) a dividend or distribution on such Common Stock payable in shares of Common Stock or securities convertible into such Common Stock (other than the Rights), or (B) any subdivision, combination, or reclassification of such Common Stock,
and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination, or reclassification shall not have occurred prior to the commencement of the requisite
30-Trading Day or 10-Trading Day period, as set forth above, then, and in each such case, the Current Market Price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale price, 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 Capital Market or, if the Common Stock is not listed or admitted to trading on The NASDAQ Capital Market, as reported in the
principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if the Common Stock 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 on a quotation system then in use, or, if on any such date the
Common Stock is not so quoted, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date the Common Stock is not publicly held and is
not so listed, admitted to trading, or quoted, and no market maker is making a market in the Common Stock, the “Current Market Price” per share of Common Stock shall mean the fair value per share on such date as determined in good
faith by the Board, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. The term “Trading Day” shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for the transaction of business or, if the Common Stock is not listed or admitted to trading on any national securities exchange, a Business Day. 

(ii) For the purpose of any computation hereunder, the “Current Market Price” per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common Stock in Section 11(d)(i) hereof (other than the penultimate sentence thereof). If the Current Market Price per share of Preferred Stock cannot be determined in the manner provided
above or if the shares of Preferred Stock are not publicly held or listed, admitted to trading, or quoted in a manner described in Section 11(d)(i) hereof, the Current Market Price per share of Preferred Stock shall be conclusively deemed to be
an amount equal to 1,000 (as such number may be appropriately adjusted for such events as stock splits, stock dividends, and recapitalizations with respect 

  
 21 

 
to the Common Stock occurring after the date of this Agreement) multiplied by the Current Market Price per share of Common Stock. If neither the Common Stock nor the Preferred Stock is publicly
held or listed, admitted to trading, or quoted, the “Current Market Price” per share of Preferred Stock shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement, the Current Market Price of one one-thousandth of a share of Preferred Stock shall be equal to the Current Market Price of one share
of Preferred Stock divided by 1,000. 
 (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, 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 ten-thousandth of a share of Common Stock or other share or ten-millionth of a share of
Preferred Stock, 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 that
mandates such adjustment and (ii) the Expiration Date. 
 (f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a) hereof, the registered holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock other than Preferred Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), (b), (c),
(d), (e), (g), (h), (i), (j), (k), (l) and (m), and the provisions of Sections 7, 9, 10, 13, and 14 hereof with respect to the Preferred Stock 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-thousandths of a share of Preferred Stock (or other securities or amount of cash or combination thereof) 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)
hereof, upon each adjustment of the Purchase Price as a result of the calculations made in Section 11(b) and Section 11(c) hereof, 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-thousandths of a share of Preferred Stock (calculated to the nearest ten-millionth) obtained by (i) multiplying (A) the number of one one-thousandths of a share of
Preferred Stock covered by a Right immediately prior to this 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. 

  
 22 

 (i) The Company may elect on or after the date of any adjustment of the Purchase Price to adjust
the number of Rights, in lieu of any adjustment in the number of one one-thousandths of a share of Preferred Stock purchasable upon the exercise of a Right pursuant to Section 11(h) hereof. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one one-thousandths of a share of Preferred Stock 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 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 Rights Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after
such adjustment. Rights Certificates so to be distributed shall be issued, executed, and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Rights Certificates on the record date specified in the public announcement. 
 (j) Irrespective of any
adjustment or change in the Purchase Price or the number of one one-thousandths of a share of Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase
Price per one one-thousandth of a share of Preferred Stock and the number of one one-thousandths of a share of Preferred Stock that were expressed in the initial Rights Certificates issued hereunder. 

(k) Before taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the number of one
one-thousandths of a share of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action that may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue, fully paid
and nonassessable, such number of one one-thousandths of a share of Preferred Stock at such adjusted Purchase Price. 
 (l) In any case in
which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the registered holder of
any Right exercised after such record date of the number of one one-thousandths of a share of Preferred Stock and other capital stock or securities of the 

  
 23 

 
Company, if any, issuable upon such exercise over and above the number of one one-thousandths of a share of Preferred Stock 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 (fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment. 
 (m)
Anything in this Section 11 to the contrary notwithstanding, prior to the Distribution Date the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the Board shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any Preferred Stock
at less than the Current Market Price, (iii) issuance wholly for cash of Preferred Stock or securities that by their terms are convertible into or exchangeable for Preferred Stock, (iv) stock dividends, or (v) issuance of rights,
options, or warrants referred to in this Section 11, hereafter made by the Company to registered holders of its Preferred Stock shall not be taxable to such stockholders or shall reduce the taxes payable by such holders. 

(n) The Company covenants and agrees that in the event that a Section 11(a)(ii) Event occurs and the Rights shall then be outstanding, it
shall not, (i) consolidate with any other Person (other than a direct or indirect wholly owned Subsidiary of the Company in a transaction that complies with Section 11(o) hereof), (ii) merge with or into any other Person (other than a
direct or indirect wholly owned Subsidiary of the Company in a transaction that complies with Section 11(o) hereof), or (iii) sell or otherwise transfer (or permit any Subsidiary to sell or otherwise transfer), in one transaction, or a
series of related 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 and calculated on the basis of the Company’s most recent regularly prepared
financial statements) to any other Person or Persons (other than the Company and/or any of its direct or indirect wholly owned Subsidiaries in one or more transactions, each of which complies with Section 11(o) hereof), if (A) at the time
of or immediately after such consolidation, merger, sale, or transfer there are any charter or bylaw provisions, rights, warrants, or other instruments or securities outstanding or agreements in effect that would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (B) prior to, simultaneously with, or immediately after such consolidation, merger, sale, or transfer the stockholders 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 and Associates; provided, however, this Section 11(n)
shall not affect the ability of any Subsidiary of the Company to consolidate with, merge with or into, or sell or transfer assets or earning power to, any other Subsidiary of the Company. 

(o) The Company covenants and agrees that in the event that a Section 11(a)(ii) Event occurs and the Rights shall then be outstanding, it
will not, except as permitted by Section 23, Section 24, or Section 27 hereof, take (or permit any 

  
 24 

 
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. 
 (p) Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the Distribution Date (i) declare or pay a dividend on the outstanding Common Stock payable in shares of Common Stock, (ii) subdivide or split the outstanding Common Stock, or
(iii) combine or consolidate the outstanding Common Stock into a smaller number of shares, the number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date
(or issued or delivered on or after the Distribution Date pursuant to Section 22 hereof), shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding immediately
prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of such event. The adjustment provided for in this Section 11(p) shall be
made successively whenever such a dividend is declared or paid or such a subdivision, split, combination, or reclassification is effected. If an event occurs that would require an adjustment under Section 11(a)(ii) and this Section 11(p),
the adjustment provided for in this Section 11(p) shall be in addition and prior to any adjustment required pursuant to Section 11(a)(ii). 

Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in
Section 11 or Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment or describing such event, and a brief statement of the facts, computations and methodology accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a copy of such certificate, and (c) if a Distribution Date has occurred, mail a brief summary thereof to each
registered holder of a Rights Certificate in accordance with Section 26 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall have no duty or liability with
respect to, and shall not 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 Earning Power. 

(a) In the event that, at any time after a Person has become an Acquiring Person, directly or indirectly, 

(i) the Company shall consolidate with, or merge with and into, any other Person (other than a direct or indirect wholly owned Subsidiary of
the Company in a transaction that complies with Section 11(o) hereof), and the Company shall not be the continuing or surviving corporation or other entity of such consolidation or merger; 

  
 25 

 (ii) any Person (other than a direct or indirect wholly owned Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof) shall consolidate with, or merge with or 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 outstanding Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property; or 

(iii) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one transaction
or a series of related transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole and calculated on the basis of the Company’s most recent regularly
prepared financial statements) to any Person or Persons (other than the Company or any of its direct or indirect wholly owned Subsidiaries in one or more transactions, each of which complies with Section 11(o) hereof); 

then, and in each such case, proper provision shall be made so that: (A) each registered holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, such number of validly authorized and issued, fully paid, non-assessable and freely
tradeable Common Stock of the Principal Party, not subject to any liens, encumbrances, rights of first refusal, or other adverse claims, as shall be equal to the result obtained by (1) multiplying the number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to such first occurrence of a Section 11(a)(ii) Event, and
(2) dividing that product (which, following the first occurrence of a Section 13 Event, shall be referred to as the “Purchase Price” for each Right and for all purposes of this Agreement) by 50% of the Current Market Price
per share of Common Stock of such Principal Party on the date of consummation of such Section 13 Event; (B) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Agreement; (C) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13 Event; (D) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of Common Stock of such
Principal Party) in connection with the consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (E) the provisions of Section 11(a)(ii) hereof shall be of no effect with respect to events occurring at any time following the first occurrence of any Section 13 Event. 

(b) “Principal Party” shall mean: 

(i) in the case of any transaction described in Section 13(a)(i) or Section 13(a)(ii) hereof, (A) the Person (including the
Company as successor thereto or as the surviving entity) that is the issuer of any securities or other equity interests into which 

  
 26 

 
shares of Common Stock of the Company are converted, changed, or exchanged in such merger or consolidation, or if there is more than one such issuer, the issuer of Common Stock that has the
greatest aggregate market value, or (B) if no securities or other equity interests are so issued, the Person that is the other constituent party to such merger or consolidation, or, if there is more than one such Person, the other Person that
is a constituent party to such merger or consolidation, the Common Stock of which has the greatest aggregate market value; and 
 (ii) in
the case of any transaction described in Section 13(a)(iii) 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 transferred pursuant to such transaction or transactions or if the Person receiving the largest portion of the assets or earning power cannot be
determined, whichever of such Persons is the issuer of Common Stock having the greatest aggregate value of shares outstanding; provided, however, that, in any such case, (A) if the Common Stock of such Person is not at such time
and has not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common Stock of
which is and has been so registered, “Principal Party” shall refer to such other Person; and (B) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stock of two or more of which are and
have been so registered, “Principal Party” shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value. 

(c) The Company shall not consummate a Section 13 Event unless the Principal Party shall have a sufficient number of authorized shares of
Common Stock that have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed and delivered to
the Rights Agent a supplemental agreement confirming that the requirements of Section 13(a) and Section 13(b) hereof shall promptly be performed in accordance with their terms and further providing that, as soon as practicable after the
date of any such Section 13 Event, the Principal Party will: 
 (i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, and will use its best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times meeting the requirements of the Act) until the Expiration Date; 
 (ii) take all
such other action as may be necessary to enable the Principal Party to issue the securities purchasable upon exercise of the Rights, including but not limited to the registration or qualification of such securities under all requisite securities
laws of jurisdictions of the various states and the listing of such securities on such exchanges and trading markets as may be necessary or appropriate; and 

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

  
 27 

 The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or
other transfers. In the event that a Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the Rights that have not theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a) hereof. 
 Section 14. Fractional Rights and Fractional Shares. 

(a) The Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates that evidence fractional Rights. In lieu of such fractional Rights, the Company shall pay to the registered holders of the Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For 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 of the Rights for any Trading Day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on The NASDAQ Capital Market or, if the Rights
are not listed or admitted to trading on The NASDAQ Capital 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 a quotation system then in use or, if on any such date the Rights are not so quoted, 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. If on
any such date the Rights are not publicly held and are not so listed, admitted to trading, or quoted, and no market maker is making a market in the Rights, the current market value of a Right shall mean the fair value of a Right on such date as
determined in good faith by the Board, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. 

(b) The Company shall not be required to issue fractions of a share of Preferred Stock (other than fractions that are integral multiples of
one one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates that evidence fractional shares of Preferred Stock (other than fractions that are integral multiples of one one-thousandth of a share of
Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-thousandth of a share of Preferred Stock, the Company may pay to the registered holders of Rights Certificates at

  
 28 

 
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 one-thousandth of a share of Preferred Stock. For purposes of
this Section 14(b), the current market value of one one-thousandth of a share of Preferred Stock shall be one one-thousandth of the closing price of a share of Preferred Stock or, if unavailable, the appropriate alternative price (in each case,
as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of such exercise. 
 (c)
Following the occurrence of a Triggering Event, the Company shall not be required to issue fractions of Common Stock upon exercise of the Rights or to distribute certificates or Book Entry Shares that evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one
share of Common Stock. For purposes of this Section 14(c), the current market value of one share of Common Stock shall be the closing price of one share of Common Stock or, if unavailable, the appropriate alternative price (in each case, as
determined pursuant to Section 11(d)(i) hereof) on the Trading Day immediately prior to the date of such exercise. 
 (d) The
registered holder of a Right by the acceptance of that Right expressly waives such holder’s right to receive any fractional Rights or any fractional shares upon exercise of a Right, except as permitted by this Section 14. 

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

Section 15. Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the
Rights Agent hereunder, including but not limited to Section 18 and Section 20 hereof, are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, of the Common Stock); and any
registered holder of any Rights Certificate (and, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the registered holder of any other Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), may, on such first holder’s own behalf and for such first holder’s own benefit, enforce, and may institute and maintain any suit, action, or proceeding against the Company to enforce, or otherwise act in respect of, such
first holder’s right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the registered holders of
Rights, it is specifically acknowledged that the registered holders of Rights 

  
 29 

 
would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this Agreement. 
 Section 16. Agreement of Rights
Holders. Every registered holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other registered holder of a Right that: 

(a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of Common Stock, and the Rights will
be evidenced by the balances indicated in the book entry account system of the transfer agent of the Common Stock registered in the names of the holders of Common Stock or, in the case of certificated shares, the certificates for the Common Stock
registered in the names of the holders of the Common Stock; 
 (b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office or offices of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates
contained therein duly executed along with a signature guarantee and such other documentation as the Company or the Rights Agent may reasonably request; 

(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the Person in whose name a
Rights Certificate (or, prior to the Distribution Date, a Common Stock certificate or Book Entry Share) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the 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, subject to the last sentence of Section 7(e) hereof, shall
be required to be affected by any notice to the contrary; and 
 (d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent, nor any of their directors, officers, employees and agents shall have any liability to any registered holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, judgment, decree, or ruling issued by a court of competent jurisdiction or by a governmental, regulatory, or administrative agency or commission, or any statute, rule, regulation,
or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, that the Company must use its best efforts to have any such injunction,
order, judgment, decree, or ruling lifted or otherwise overturned as soon as possible. 
 Section 17. Rights Certificate Holder Not
Deemed a Stockholder. No registered holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends, or be deemed for any purpose the registered holder of the Preferred Stock or any other securities

  
 30 

 
of the Company that may at any time be issuable on the exercise of the Rights evidenced thereby, nor shall anything contained herein or in any Rights Certificate be construed to confer upon the
registered holder of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance with the provisions hereof. 
 Section 18. Concerning
the Rights Agent. 
 (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, reimbursement for its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the preparation, delivery, amendment, administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, damage, demand, judgment, fine, penalty, claim, settlement, cost or
expense, incurred without gross negligence, bad faith, or willful misconduct on the part of the Rights Agent (each as determined by a final judgment of a court of competent jurisdiction) for any action taken, suffered, for anything done or omitted
to be taken by the Rights Agent in connection with the acceptance, administration, exercise and performance of its duties under this Agreement, including the costs and expenses of defending against any claim of liability arising therefrom, directly
or indirectly, or enforcing its rights hereunder. 
 (b) The Rights Agent shall be authorized and protected and shall incur no liability for
or in respect of any action taken, suffered or omitted to be taken by it in connection with its acceptance and administration of this Agreement and the exercise and performance of its duties hereunder in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company or 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 have been signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons. The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice
thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take action in connection therewith unless and until it has received such notice in writing. The provisions of this Section 18 and
Section 20 below shall survive the termination of this Rights Agreement, the resignation, replacement or removal of the Rights Agent and the exercise, termination and the expiration of the Rights. Notwithstanding anything in this Agreement to
the contrary, in no event shall the Rights Agent be liable for special, punitive, incidental, indirect or consequential 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 and regardless of the form of the action; and the Company agrees to indemnify the Rights Agent and to hold it harmless to the fullest extent permitted by law against any loss,

  
 31 

 
liability or expense incurred as a result of claims for special, punitive, incidental, indirect or consequential loss or damages of any kind whatsoever; provided, that such claims are not
based on the gross negligence, bad faith or willful misconduct of the Rights Agent (each as determined by a final judgment of a court of competent jurisdiction). Any liability of the Rights Agent under this Agreement shall be limited to the amount
of annual fees paid by the Company to the Rights Agent. 
 Section 19. Merger or Consolidation or Change of Name of the 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 corporate trust, stock transfer, or other shareholder services business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; but only if 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 Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of an authorized signatory of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, an authorized signatory of any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 
 (b) In case at any
time the name of the Rights Agent shall be changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature of an authorized signatory under the Rights
Agent’s prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, an authorized signatory of the Rights Agent may countersign such Rights Certificates
either in the prior name of the Rights Agent or in the changed name of the Rights Agent; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 

Section 20. Duties of the Rights Agent. The Rights Agent undertakes the duties and obligations expressly imposed by this Agreement
upon the following terms and conditions, by all of which the Company and the registered holders of Rights Certificates, by their acceptance thereof, shall be bound: 

(a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Rights Agent or the Company or an employee of the Rights
Agent), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken, suffered, or omitted to be taken by it in the absence of bad faith and in accordance with such
advice or opinion. 

  
 32 

 (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of Current Market Price) be proved or established by the Company prior to taking, suffering or omitting to take
any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, or any Assistant Treasurer of the Company and delivered to the Rights Agent; and such certificate 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 to be taken by it, in the absence of bad faith, under the provisions of this Agreement in reliance upon such
certificate. 
 (c) The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith, or willful misconduct (each as
determined by a final judgment of a court of competent jurisdiction). 
 (d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recital contained in this Agreement or in the Rights Certificates and it shall not be required to verify the same (except as to a countersignature by one of its authorized signatories on such Rights Certificates), but all
such statements and recital 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 Agreement or the execution and delivery hereof (except the due execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any
Rights Certificate (except a countersignature by one of its authorized signatories on any such Rights Certificate); nor shall it be liable or responsible for any breach by the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be liable or responsible for any adjustment required under the provisions of Section 11, Section 13, or Section 24 hereof or responsible for the manner, method, or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after actual notice of any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock or Preferred Stock or other securities to be issued pursuant to this Agreement or any Rights Certificate or as to whether any shares
of Common Stock or Preferred Stock or other securities will, when so issued, be validly authorized and issued, fully paid, and nonassessable. 

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

  
 33 

 (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder and certificates delivered pursuant to any provision hereof from the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, or
any Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and shall not be liable for any action taken, suffered or omitted to be taken by it, in the absence of bad faith, in
accordance with instructions of any such officer. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent shall be fully authorized and protected in relying upon the most recent instructions received from any
such office. 
 (h) The Rights Agent and any stockholder, 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 the Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person. 

(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
(through its directors, officers and employees) 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, any holder of Rights or any other Person resulting from any such act, default, neglect, or misconduct; provided, however, that reasonable care was exercised in the selection and continued employment thereof. 

(j) No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured
to it. 
 (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, either (i) the
certificate contained in the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response to clause 1 or 2 thereof, or (ii) any other actual or suspected
irregularity exists, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company. 

Section 21. Change of the Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days’ notice given to the Company in accordance with Section 26 hereof, and to each 

  
 34 

 
transfer agent of the Common Stock and Preferred Stock known to the Rights Agent by registered or certified mail. In the event the transfer agency relationship in effect between the Company and
the Rights Agent terminates, the Rights Agent will be deemed to have resigned within ten (10) Business Days and be discharged from its duties as Rights Agent under this Agreement as of the effective date of such termination, and the Company
shall be responsible for sending any required notice. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing given to the Rights Agent or successor Rights Agent, as the case may be, in accordance
with Section 26 hereof, and to each transfer agent of the Common Stock and Preferred Stock by registered or certified mail, and, if such removal occurs after the Distribution Date, to the registered holders of the Rights Certificates in
accordance with Section 26 hereof. 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 proper notice of such removal or after it has been properly notified of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the registered holder of a Rights Certificate (who
shall, with such notice, submit such holder’s Rights Certificate for inspection by the Company), then any registered holder of any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a legal business entity organized and doing business under the laws of the United States or of any state of the United States, in good standing, which
is authorized under such laws to exercise corporate trust, stock transfer, or shareholder services powers and which has at the time of its appointment as Rights Agent a combined capital and surplus (including its Affiliates) of at least
$50 million or (b) an affiliate of a legal business entity described in clause (a) of this sentence. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties, and responsibilities as if it had
been originally named as Rights Agent under this Agreement 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 that purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stock, and, if such appointment occurs after the Distribution Date, give notice thereof to the registered holders of the Rights Certificates in accordance with Section 26 hereof. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 

Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights
Certificates to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of Common Stock following the Distribution Date and prior
to the Expiration Date, the Company (a) shall, with respect to Common Stock so 

  
 35 

 
issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement, granted or awarded as of the Distribution Date, or upon the exercise, conversion, or exchange
of securities hereinafter issued by the Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board, issue Rights Certificates evidencing the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.

 Section 23. Redemption and Termination. 

(a) The Board may, at its option, at any time prior to the earlier of (i) the occurrence of a Section 11(a)(ii) Event and
(ii) the Expiration Date, direct the Company to, and if directed the Company shall, redeem all but not less than all of the then outstanding Rights at a redemption price of $0.01 per Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend, or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the “Redemption Price”). The redemption of the Rights by the Board pursuant to
this paragraph (a) may be made effective at such time, on such basis, and with such conditions as the Board 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. 

(b) Immediately upon the action of the Board directing the Company to redeem the Rights pursuant to paragraph (a) of this
Section 23, evidence of which shall have been filed with the Rights Agent, and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the registered holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly after the action of the Board directing the Company to make the redemption of the Rights pursuant to paragraph (a) of this Section 23, the Company shall give notice
of such redemption to the Rights Agent and the registered holders of the then outstanding Rights in accordance with Section 26 hereof; provided, however, that failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Any notice given in accordance with Section 26 hereof shall be deemed given whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption
Price will be made. 
 Section 24. Exchange of Rights. 

(a) The Board may, at its option, at any time after the occurrence of a Section 11(a)(ii) Event, direct the Company to, and if directed
the Company shall, 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 7(e) hereof)

  
 36 

 
for 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 (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). The exchange of the Rights by the Board may be made effective at such time, on such basis, and with such conditions as the Board in its sole
discretion may establish. Notwithstanding the foregoing, the Board shall not be empowered to direct the Company to effect such exchange at any time after any Person (other than an Exempt Person), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Stock then outstanding. 
 (b) Immediately upon the action of the Board
directing the Company to exchange any Rights pursuant to Section 24(a) hereof and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a registered 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 (with prompt written 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 promptly shall give notice of any such exchange to all of the
registered holders of such Rights in accordance with Section 26 hereof. Any notice given in accordance with Section 26 hereof shall be deemed given whether or not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights that will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other
than Rights that have become null and void pursuant to the provisions of Section 7(e) hereof) held by each registered holder of Rights. 

(c) In any exchange pursuant to this Section 24, the Company, at its option, may substitute shares of Preferred Stock (or Equivalent
Preferred Stock, as such term is defined in Section 11(b) hereof) for Common Stock exchangeable for Rights, at the initial rate of one one-thousandth of a share of Preferred Stock (or Equivalent Preferred Stock) for each share of Common Stock,
as appropriately adjusted to reflect stock splits, stock dividends, and other similar transactions after the date hereof. 
 (d) In the
event the number of shares of Common Stock authorized by the Certificate of Incorporation, but which are not outstanding or reserved for issuance for purposes other than upon exercise of the Rights, is not sufficient to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company may take all such action as may be necessary to authorize additional shares of Common Stock for issuance upon exchange of the Rights. 

(e) The Company shall not be required to issue fractions of Common Stock or to distribute certificates that 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 Rights 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 

  
 37 

 
market value of a whole share of Common Stock. For the purposes of this Section 24(e), the current market value of a whole share of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. 

(f) Following the action of the Board ordering the exchange of any Rights pursuant to this Section 24, the Company may implement such
procedures as it deems appropriate, in its sole discretion, for the purpose of ensuring that the Common Stock (or other consideration) issuable upon an exchange pursuant to this Section 24 is not received by holder of Rights that have become
null and void pursuant to Section 7(e). Prior to effecting an exchange pursuant to this Section 24, the Board may direct the Company to enter into a trust agreement in such form and with such terms as the Board shall then approve (the
“Trust Agreement”). If the Board so directs, the Company shall enter into the Trust Agreement and shall issue to the trust created by such agreement (the “Trust”) all or a portion (as designated by the Board) of the
Common Stock, fractional shares of Preferred Stock, or other securities, if any, issuable pursuant to the exchange, and all Persons entitled to receive such shares or other securities (and any dividends or distributions made thereon after the date
on which such shares or other securities are deposited in the Trust) shall be entitled to receive such only from the Trust and solely upon compliance with the relevant terms and provisions of the Trust Agreement. Prior to effecting an exchange and
registering shares of Common Stock (or other securities) in any Person’s name, including any nominee or transferee of a Person, the Company may require (or cause the trustee of the Trust to require), as a condition thereof, that any holder of
Rights provide evidence, including, without limitation, the identity of the Beneficial Owners thereof and their Affiliates and Associates (or former Beneficial Owners thereof and their Affiliates and Associates) as the Company shall reasonably
request in order to determine if such Rights are null and void. If any Person shall fail to comply with such request, the Company shall be entitled to deem the Rights formerly held or exchangeable by such Person to be null and void pursuant to
Section 7(e) and not transferable or exercisable or exchangeable in connection herewith. Any shares of Common Stock or other securities issued at the direction of the Board in connection herewith shall be validly issued, fully paid, and
non-assessable shares of Common Stock or of such other securities (as the case may be), and the Company shall be deemed to have received as consideration for such issuance a benefit having a value that is at least equal to the aggregate par value of
the shares so issued. 
 Section 25. Notice of Certain Events. 

(a) In case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class or
series to the registered holders of Preferred Stock or to make any other distribution to the registered holders of Preferred Stock (other than a regular periodic cash dividend out of earnings or retained earnings of the Company), or (ii) to
offer to the registered holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights, or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving only the 

  
 38 

 
subdivision of outstanding Preferred Stock), or (iv) to effect any consolidation or merger into or with any other Person (other than a direct or indirect, wholly owned Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of related
transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole and calculated on the basis of the Company’s most recent regularly prepared financial statements) to any other Person or Persons
(other than the Company or any of its direct or indirect wholly owned Subsidiaries in one or more transactions, each of which complies with Section 11(o) hereof), or (v) to effect the liquidation, dissolution, or winding up of the Company,
then, in each such case, the Company shall give to the Rights Agent and each registered holder of a Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of
participation therein by the registered holders of the Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 20 days prior to the record
date for determining registered holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least 20 days prior to the date of the taking of such proposed action or the date of participation therein by
the registered holders of the Preferred Stock, whichever shall be the earlier; provided, however, that no such action shall be taken pursuant to this Section 25(a) that will or would conflict with any provision of the Certificate
of Incorporation; provided, further, that no such notice shall be required pursuant to this Section 25, if any Subsidiary of the Company effects a consolidation or merger with or into, or effects a sale or other transfer of assets
or earnings power to, any other Subsidiary of the Company. 
 (b) In case a Section 11(a)(ii) Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to the Rights Agent and each registered holder of a Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to registered holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in Section 25(a) to shares of Preferred Stock shall be deemed thereafter to
refer to shares of Common Stock or, if appropriate, other securities. 
 Section 26. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the registered holder of any Rights Certificate to or on the Company shall be sufficiently given or made if in writing and sent by (a) first-class mail, postage prepaid,
(b) overnight delivery, or (c) courier or messenger service, in each case addressed (until another address is filed in writing by the Company with the Rights Agent) as follows: 

Advanced Emissions Solutions, Inc. 

9135 South Ridgeline Boulevard, Suite 200, 

Highlands Ranch, Colorado 80129 

Attention: General Counsel 

  
 39 

 Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be
given or made by the Company or by the registered holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if in writing and sent by (i) first-class mail, postage prepaid, (ii) overnight delivery, or
(iii) courier or messenger service, in each case addressed (until another address is filed in writing by the Rights Agent with the Company) as follows: 

Computershare Trust Company, N.A. 

250 Royall Street 
 Canton
Massachusetts, 02021 
 Attention: Legal Department 

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the registered holder of any Rights
Certificate (or, if prior to the Distribution Date, of the Common Stock) shall be sufficiently given or made if in writing and sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry
books of the Rights Agent (or, if prior to the Distribution Date, of the transfer agent for the Common Stock). 
 Section 27.
Supplements and Amendments. Except as otherwise provided in this Section 27, the Company, by action of the Board, may from time to time and in its sole and absolute discretion, and the Rights Agent shall if the Company so directs,
supplement or amend any provision of this Agreement in any respect without the approval of any registered holders of the Rights, including, without limitation, in order to (a) cure any ambiguity, (b) correct or supplement any provision
contained herein that may be defective or inconsistent with any other provisions herein, (c) shorten or lengthen any time period hereunder, or (d) otherwise change, amend, or supplement any provisions hereunder in any manner that the
Company may deem necessary or desirable; provided, however, that, from and after the occurrence of a Section 11(a)(ii) Event, no such supplement or amendment shall adversely affect the interests of the registered holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person or certain of their transferees) or shall cause this Agreement to become amendable other than in accordance with this Section 27. Any such
supplement or amendment shall be evidenced by a writing signed by the Company and the Rights Agent. Without limiting the foregoing, the Company, by action of the Board, may at any time before any Person becomes an Acquiring Person amend this
Agreement to make provisions of this Agreement inapplicable to a particular transaction by which a Person might otherwise become an Acquiring Person or to otherwise alter the terms and conditions of this Agreement as they may apply with respect to
any such transaction. Upon the delivery of a certificate from an appropriate officer of the Company that states that the proposed supplement or amendment is in compliance with the terms of this Section 27, an authorized signatory of the Rights
Agent shall execute such supplement or amendment; provided, that notwithstanding anything to the contrary herein, the Rights Agent may, but shall not be obligated to, enter into any supplement or amendment that affects the Rights Agent’s
own rights, duties, obligations or immunities under this Agreement. 

  
 40 

 Section 28. Successors. All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 

Section 29. Determinations and Actions by the Board. The Board shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to
(a) interpret the provisions of this Agreement and (b) make all determinations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend this
Agreement). All such actions, calculations, interpretations, and determinations that are done or made by the Board in good faith, shall be final, conclusive, and binding on the Company, the Rights Agent, the registered holders of the Rights,
and all other parties. 
 Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any
Person other than the Company, the Rights Agent, and the registered holders of the Rights Certificates (and, prior to the Distribution Date, of the Common Stock) any legal or equitable right, remedy, or claim under this Agreement; and this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent, and the registered holders of the Rights Certificates (and, prior to the Distribution Date, of the Common Stock). 

Section 31. Severability. If any term, provision, covenant, or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or
invalidated; provided, however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant, or restriction is held by such court or authority to be invalid, void, or unenforceable and the
Board determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the 10th day following the date of such determination by the Board; provided, further, that if such excluded terms provisions, covenants or restrictions shall affect the rights,
immunities, liabilities, duties, responsibilities or obligations of the Rights Agent, the Rights Agent shall be entitled to resign immediately. 

Section 32. Governing Law. This Agreement, each Right, and each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State. 

Section 33. Counterparts; Facsimiles and PDFs. This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A facsimile or .pdf signature delivered electronically shall constitute an original signature for
all purposes. 

  
 41 

 Section 34. Descriptive Headings. Descriptive headings of the several sections of
this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 

Section 35. Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any
delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunctions of computer facilities, or
loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest. 

[The remainder of this page is intentionally left blank.] 

  
 42 

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

					
	ADVANCED EMISSIONS SOLUTIONS, INC.
		
	By:	 	 /s/ L. Heath Sampson

		 	Name:	 	L. Heath Sampson
		 	Title:	 	Chief Financial Officer
	
	COMPUTERSHARE TRUST COMPANY, N.A.
		
	By:	 	 /s/ Patrick Hayes

		 	Name:	 	Patrick Hayes
		 	Title:	 	Vice President & Manager

 SIGNATURE PAGE TO RIGHTS
AGREEMENT 

 EXHIBIT A 

FORM OF 
 CERTIFICATE OF
DESIGNATION, PREFERENCES, AND 
 RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK 

of 
 ADVANCED EMISSIONS
SOLUTIONS, INC. 
 Pursuant to Section 151 of the General Corporation Law of the State of Delaware 

Advanced Emissions Solutions, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the
“Corporation”), in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY: 
 That pursuant to the
authority conferred upon the Board of Directors of the Corporation (the “Board”) by the Second Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”), the said
Board on February 1, 2015, adopted the following resolution creating a series of Preferred Stock of the Corporation (the “Preferred Stock”) designated as Series A Junior Participating Preferred Stock: 

RESOLVED, that pursuant to the authority vested in the Board in accordance with the provisions of the Certificate of Incorporation and
Section 151(g) of the General Corporation Law of the State of Delaware, the Board hereby designates 50,000 shares of the preferred stock, par value $0.001 per share, of the Corporation as “Series A Junior Participating Preferred
Stock” and the powers, designations, preferences, and relative, participating, optional, and other rights of the Preferred Stock and the qualifications, limitations, and restrictions thereof are as follows: 

Section 1. Designation and Amount. The shares of such series shall be designated as “Series A Junior Participating
Preferred Stock” and the number of shares constituting such series shall be 50,000. Such number of shares may be increased or decreased by resolution of the Board; provided, however, that no such decrease shall reduce the number
of shares of the Series A Junior Participating Preferred Stock to a number less than the number of shares then outstanding, plus the number reserved for issuance upon the exercise of options, rights or warrants, or upon conversion of any outstanding
securities issued by the Corporation convertible into Series A Junior Participating Preferred Stock. 
 Section 2. Dividends and
Distributions. 
 (a) Subject to the prior and superior rights of the holders of any shares of any other class or series of Preferred
Stock ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock, in preference to the holders of shares of
Common Stock, par value $0.001 per share, of the Corporation (the “Common Stock”), and of any other junior stock, shall be entitled to receive, when, as and if declared 

  
 A-1 

 
by the Board out of funds legally available for the purpose, quarterly dividends payable in cash on the last 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 A Junior Participating Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the greater of (i) $10.00 or (ii) subject to the provision for adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times
the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior
Participating Preferred Stock. In the event the Corporation shall at any time after February 1, 2015 (the “Rights Dividend Declaration Date”) (A) declare any dividend on Common Stock payable in shares of Common Stock,
(B) subdivide the outstanding Common Stock, or (C) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock
were entitled immediately prior to such event under clause (ii) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which shall be the number of shares of Common Stock outstanding immediately
after such event and the denominator of which shall be 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 A Junior Participating Preferred Stock as provided in
Section 2(a) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided, that, 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 $10.00 per share on the Series A Junior Participating Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date. 
 (c) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to
the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. 

  
 A-2 

 
The Board may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. 
 Section 3. Voting
Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights: 
 (a)
Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time after the Rights Dividend Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event. 
 (b) Except as otherwise provided herein or by law or in any other Certificate of
Designation creating a series of preferred stock, or any similar stock, the holders of shares of Series A Junior Participating Preferred Stock, the holders of shares of Common Stock, and the holders of any other class or series of capital stock
of the Corporation entitled to vote generally together with the Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. 

(c) (i) If at any time dividends on any Series A Junior Participating Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”) that shall extend until such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Junior Participating Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series A Junior Participating Preferred Stock) with dividends in arrears in an amount equal to six quarterly dividends thereon, voting as a class, irrespective of series, shall have the right
to elect two directors. 
 (ii) During any default period, such voting right of the holders of Series A Junior Participating Preferred
Stock may be exercised initially at a special meeting called pursuant to Section 3(c)(iii) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided, that such voting right shall not be
exercised unless the holders of 10% in number of shares of Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of
such voting right. At any meeting at which the holders of Preferred Stock shall exercise such 

  
 A-3 

 
voting right initially during an existing default period, they shall have the right, voting as a class, to elect directors to fill such vacancies, if any, in the Board as may then exist up to two
directors or, if such right is exercised at an annual meeting, to elect two directors. If the number that may be so elected at any special meeting does not amount to the required number, the holders of Preferred Stock shall have the right to make
such increase in the number of directors as shall be necessary to permit the election by them of the required number. After the holders of Preferred Stock shall have exercised their right to elect directors in any default period and during the
continuance of such period, the number of directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari
passu with the Series A Junior Participating Preferred Stock. 
 (iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect directors, the Board may order, or any stockholder or stockholders owning in the aggregate not less than 10% of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting of the holders of Preferred Stock, which meeting shall thereupon be called by the President, a Vice President, or the Secretary of the Corporation. Notice of such meeting and of
any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this Section 3(c)(iii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to such holder at such holder’s last
address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after
such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than 10% of the total number of shares of Preferred Stock outstanding. Notwithstanding the provisions of this
Section 3(c)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders. 

(iv) In any default period, the holders of Common Stock, and other classes or series of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of directors until the holders of Preferred Stock shall have exercised their right to elect two directors voting as a class, after the exercise of which right (A) the directors so elected by the
holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (B) any vacancy in the Board may (except as provided in Section 3(c)(ii))
be filled by vote of a majority of the remaining directors theretofore elected by the holders of the class of stock that elected the director whose office shall have become vacant. References in this Section 3(c) to directors elected by the
holders of a particular class of stock shall include directors elected by such directors to fill vacancies as provided in clause (B) of the foregoing sentence. 

(v) Immediately upon the expiration of a default period, (A) the right of the holders of Preferred Stock as a class to elect directors
shall cease, (B) the term of any directors elected by the holders of Preferred Stock as a class shall terminate, and (C) the number of directors shall be such number as may be provided for in the Certificate

  
 A-4 

 
of Incorporation or Bylaws irrespective of any increase made pursuant to the provisions of Section 3(c)(ii) (such number being subject, however, to change thereafter in any manner provided
by law or in the Certificate of Incorporation or Bylaws). Any vacancies in the Board effected by the provisions of clauses (B) and (C) in the preceding sentence may be filled by a majority of the remaining directors. 

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

Section 4. Certain Restrictions. 

(a) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not: 
 (i) declare or pay dividends on, 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 A Junior Participating Preferred Stock; 
 (ii)
declare or pay dividends on, or make any other distributions on, any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution, or winding up) with the Series A Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

 (iii) 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 A Junior Participating 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 dissolution, liquidation, or winding up) to the Series A Junior Participating Preferred Stock; or 

(iv) redeem or purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any
shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board) to all holders of such shares upon such terms
as the Board, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective
series or classes. 
 (b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the Corporation could, under Section 4(a), purchase or otherwise acquire such shares at such time and in such manner. 

  
 A-5 

 Section 5. Reacquired Shares. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board, subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or
in any other Certificate of Designation creating a series of Preferred Stock or any similar stock, or as otherwise required by law. 

Section 6. Liquidation, Dissolution, or Winding Up. 

(a) Upon any liquidation (voluntary or otherwise), dissolution, or winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution, or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received an amount equal to $1,000 per share of Series A Participating Preferred Stock, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such
payment (the “Series A Liquidation Preference”). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in Section 6(c) below) (such number in clause (ii), the “Adjustment Number”). Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to one with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively. 
 (b) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock. 

  
 A-6 

 (c) In the event the Corporation shall at any time after the Rights Dividend Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 
 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 converted into other stock or securities, cash, or any
other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged for or converted into an amount per share (subject to the provision for adjustment hereinafter set
forth) equal to 1,000 times the aggregate amount of stock, securities, cash, or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is converted or exchanged. In the event the Corporation
shall at any time after the Rights Dividend Declaration Date (a) declare any dividend on Common Stock payable in shares of Common Stock, (b) subdivide the outstanding Common Stock, or (c) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount set forth in the immediately preceding sentence with respect to the exchange or conversion of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately after such event and the denominator of which shall be the number of shares of Common Stock that were outstanding immediately
prior to such event. 
 Section 8. No Redemption. The shares of Series A Junior Participating Preferred Stock shall not be
redeemable. 
 Section 9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series
of the Corporation’s Preferred Stock, and to any other class of preferred stock that hereafter may be issued by the Corporation, as to the payment of dividends and the distribution of assets, unless the terms of any such series or class shall
provide otherwise. 
 Section 10. Amendment. Except as set forth in Section 1 hereof, at any time when any shares of
Series A Junior Participating Preferred Stock are outstanding, neither the Certificate of Incorporation nor this Certificate of Designation shall be amended, either directly or indirectly, or through merger or consolidation with another entity,
in any manner that would materially alter or change the powers, preferences, or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds or more
of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class. 

  
 A-7 

 Section 11. Fractional Shares. The Series A Junior Participating Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions, and to have the benefit of all other rights of
holders of Series A Junior Participating Preferred Stock. 
 [The remainder of this page is intentionally left blank.] 

  
 A-8 

 IN WITNESS WHEREOF, Advanced Emissions Solutions, Inc. has caused this Certificate of Designation
to be signed by the undersigned this      day of             ,         . 

 

			
	ADVANCED EMISSIONS SOLUTIONS, INC.
		
	By:	 	  

		 	Name:
		 	Title:

  
 A-9 

 EXHIBIT B 

FORM OF RIGHTS CERTIFICATE 
  

			
	Certificate No. R-            	  	             Rights

 NOT EXERCISABLE AFTER FEBRUARY 1, 2016 OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY ANY PERSON WHO IS, WAS, OR BECOMES AN
ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY BENEFICIALLY OWNED BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT BENEFICIAL OWNER, MAY BECOME NULL AND VOID. 

Rights Certificate 

ADVANCED EMISSIONS SOLUTIONS, INC. 

This certifies that                     ,
or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions, and conditions of the Rights Agreement, dated as of February 1, 2015 (the
“Rights Agreement”), between Advanced Emissions Solutions, Inc., a Delaware corporation (the “Company”), and Computershare Trust Company, N.A. a federally chartered trust company (the “Rights
Agent”), to purchase from the Company at any time prior to 5:00 p.m., New York City time, on February 1, 2016 at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, non-assessable share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company (the “Preferred Stock”), at a purchase price of $63.00 per one one-thousandth of
a share of Preferred Stock (such purchase price, as may be adjusted, the “Purchase Price”), upon presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of shares that may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of February 1,
2015, based on the Preferred Stock as constituted at such date. The Company reserves the right to require prior to the occurrence of a Triggering Event (as such term is defined in the Rights Agreement) that a number of Rights be exercised so that
only whole shares of Preferred Stock will be issued. 
 Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Rights Certificate are beneficially 

  
 B-1 

 
owned by (i) an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate), or (iii) under certain circumstances specified in the Rights Agreement, a transferee of a person who, after such transfer, became an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event. 

As provided in the Rights Agreement, the Purchase Price, the number and kind of shares of Preferred Stock or other securities issuable upon
exercise of a Right, and the number of Rights outstanding are subject to modification and adjustment upon the happening of certain events, including Triggering Events. 

This Rights Certificate is subject to all of the terms, provisions, and conditions of the Rights Agreement, which terms, provisions, and
conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties, and immunities hereunder of the
Rights Agent, the Company, and the holders of the Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights Agent and are also available free of charge upon written request to the Rights Agent or the Company. 

Subject to the provisions of the Rights Agreement, this Rights Certificate, with or without other Rights Certificates, upon surrender at the
office or offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of one
one-thousandths of a share of Preferred Stock as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof, along with a signature guarantee and such other and further documentation as the Company or the Rights Agent may reasonably request, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised. 
 Subject to the provisions of the Rights Agreement, the Rights evidenced by this Rights Certificate may be
redeemed by the Company at its option at a redemption price of $0.01 per Right, payable at the Company’s option in cash or other securities or property of the Company, subject to adjustment for certain events as provided in the Rights
Agreement, at any time prior to the earlier of (i) the occurrence of a Section 11(a)(ii) Event and (ii) the Expiration Date (as such terms are defined in the Rights Agreement). In addition, under certain circumstances following the
occurrence of a Section 11(a)(ii) Event but before any person acquires beneficial ownership of 50% or more of the Common Stock (as such term is defined in the Rights Agreement), the Rights may be exchanged, in whole or in part, for Common
Stock, Preferred Stock, or shares of other preferred stock of the Company having essentially the same value or economic rights as such shares. 

  
 B-2 

 Immediately upon the action of the Board authorizing any such redemption or exchange, and without any further
action or any notice, the Rights (other than Rights that are not subject to such redemption or exchange) will terminate and the Rights will only enable holders to receive the redemption price or the shares issuable upon such exchange, as applicable.

 No fractional shares of Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions
that are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment may be made, as provided in the Rights Agreement.

 No holder of this Rights Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Company that may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a
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 consent to or withhold consent from any corporate action, or, to receive notice of meetings
or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided
in the Rights Agreement. 
 This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned
by an authorized signatory of the Rights Agent. 

  
 B-3 

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

 Dated as of             ,         
    . 
  

			
	ADVANCED EMISSIONS SOLUTIONS, INC.
		
	By:	 	  

		 	Name:
		 	Title:

  

			
	Countersigned:
	
	COMPUTERSHARE TRUST COMPANY, N.A.
		
	By:	 	  

		 	Authorized Signature

  
 B-4 

 [Form of Reverse Side of Rights Certificate] 

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

 

					
	 FOR VALUE RECEIVED
	  	  
	  	hereby sells, assigns and

					
	transfers unto	  	  

  
  

(Please print name and address of transferee) 
  

 
  

 
 (Please spell out and include in
numerals the 
 number of Rights being transferred by this Assignment) 

of the Rights evidenced by this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint
                                         
                                         
                                         
                                      Attorney, to transfer
the number of Rights indicated above on the books of the within named Company, with full power of substitution. 
  

							
	Dated:	 	  
	 	,	 	  

 

	
	  

	Signature

 Medallion Signature Guaranteed: 

Signatures must be guaranteed by an eligible guarantor institution (a bank, stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) at a guarantee level satisfactory to the Rights Agent. A notary public is not sufficient. 

  
 B-5 

 Certificate 

The undersigned hereby certifies by checking the appropriate boxes that: 

(1) the Rights evidenced by this Rights Certificate [            ] are
[            ] are not being sold, assigned, and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement); and 
 (2) after due inquiry and to the best knowledge of the undersigned, he,
she, or it [            ] did [            ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was, or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person. 
  

											
	Dated:	 	  
	 	,	 	  
	 		 	  

		 		 		 		 		 	Signature

 Medallion Signature Guaranteed: 

Signatures must be guaranteed by an eligible guarantor institution (a bank, stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) at a guarantee level satisfactory to the Rights Agent. A notary public is not sufficient. 

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

  
 B-6 

 [Form of Reverse Side of Rights Certificate—continued] 

FORM OF ELECTION TO PURCHASE 

(To be executed by the registered holder if such holder desires to 

exercise any or all Rights evidenced by the Rights Certificate.) 
  

	To:	Advanced Emissions Solutions, Inc.: 

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

 
 (Please print social security or other
identifying number) 
  
  

 
  

(Please print name and address) 

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

(Please print social security or other identifying number) 
  

 
  

 
 (Please print name and address) 

 

							
	Dated:	 	  
	 	,	 	  

 

	
	  

	Signature

 Medallion Signature Guaranteed: 

Signatures must be guaranteed by an eligible guarantor institution (a bank, stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) at a guarantee level satisfactory to the Rights Agent. A notary public is not sufficient. 

  
 B-7 

 Certificate 

The undersigned hereby certifies by checking the appropriate boxes that: 

(1) the Rights evidenced by this Rights Certificate [            ] are
[            ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement); and 
 (2) after due inquiry and to the best knowledge of the undersigned, he, she, or it
[            ] did [            ] did not acquire the Rights evidenced by this Rights Certificate from any Person
who is, was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person. 
  

											
	Dated:	 	  
	 	,	 	  
	 		 	  

		 		 		 		 		 	Signature

 Medallion Signature Guaranteed: 

Signatures must be guaranteed by an eligible guarantor institution (a bank, stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) at a guarantee level satisfactory to the Rights Agent. A notary public is not sufficient. 

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

  
 B-8 

 EXHIBIT C 

UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY ANY PERSON WHO IS, WAS, OR BECOMES AN ACQUIRING
PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY BENEFICIALLY OWNED BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT BENEFICIAL OWNER, MAY BECOME NULL AND VOID. 

FORM OF SUMMARY OF RIGHTS 

TO PURCHASE PREFERRED STOCK 

On February 1, 2015, the Board of Directors (the “Board”) of Advanced Emissions Solutions, Inc., a Delaware corporation
(the “Company”), declared a dividend distribution of one right (each, a “Right” and together with all such rights distributed or issued pursuant to the Rights Agreement (defined below), the
“Rights”) for each share of common stock, par value $0.001 of the Company (the “Common Stock”) outstanding as of the close of business on February 16, 2015 (the “Record Date”). 

The following is a summary description of the Rights and the Rights Agreement. This summary is intended to provide a general description only
and is subject to the detailed terms and conditions of the Rights Agreement (the “Rights Agreement”), dated as of February 1, 2015, by and between the Company and Computershare Trust Company, N.A., a federally chartered trust
company, as rights agent (the “Rights Agent”). 
 The Company has filed a copy of the Rights Agreement with the U.S.
Securities and Exchange Commission as an exhibit to a Form 8-K filed on February [    ] 2015. In addition, a copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement. 
  

	1.	Issuance of Rights 

 Each holder of Common Stock as of the Record Date will receive a
dividend of one Right per share of Common Stock. One Right will also be issued together with each share of Common Stock issued by the Company after the Record Date and prior to the Distribution Date (as defined in Section 2 below), and in
certain circumstances, after the Distribution Date. New certificates for Common Stock issued after the Record Date will contain a notation incorporating the Rights Agreement by reference. 

Until the Distribution Date: 
  

	 	•	 	the Rights will not be exercisable; 

  
 C-1 

	 	•	 	the Rights will be evidenced by the certificates for Common Stock (or, in the case of book entry shares, by notation in book entry) and not by separate rights certificates; and 

 

	 	•	 	the Rights will be transferable by, and only in connection with, the transfer of Common Stock. 

  

	2.	Distribution Date; Beneficial Ownership 

 The Rights are not exercisable until the
Distribution Date. As of and after the Distribution Date, the Rights will separate from the Common Stock and each Right will become exercisable to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock, par
value $0.001 per share, of the Company (each whole share, a share of “Preferred Stock”) at a purchase price of $63.00 (such purchase price, as may be adjusted, the “Purchase Price”). This portion of a share of
Preferred Stock would give the holder thereof approximately the same dividend, voting, and liquidation rights as would one share of Common Stock. Prior to exercise, the Right does not give its holder any dividend, voting or liquidation rights. 

The “Distribution Date” is the earlier of: 
  

	 	•	 	ten days following a public announcement that a person has become an “Acquiring Person” by acquiring beneficial ownership of 10% or more of the Common Stock then outstanding (or, in the case of a person that
had beneficial ownership of 10% or more of the outstanding Common Stock on the date the Rights Agreement was executed, by obtaining beneficial ownership of additional shares of Common Stock representing 1.0% of the shares of Common Stock then
outstanding) other than as a result of repurchases of Common Stock by the Company or certain inadvertent acquisitions; and 

  

	 	•	 	ten business days (or such later date as the Board shall determine prior to the time a person becomes an Acquiring Person) after the commencement of a tender offer or exchange offer by or on behalf of any person (other
than the Company and certain related entities) that, if completed, would result in such person becoming an Acquiring Person. 

A person will be deemed to “beneficially own” any Common Stock if such person or any affiliated or associated person of such person:

  

	 	•	 	is considered a “beneficial owner” of the Common Stock under Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended
and as in effect on the date of the Rights Agreement; 

  

	 	•	 	 has the right to acquire the Common Stock, either immediately or in the future, pursuant to any agreement, arrangement, or understanding (other than a
customary underwriting agreement relating to a bona fide public offering of the Common Stock) or upon the exercise of conversion rights, exchange rights, 

  
 C-2 

	 	 
rights, warrants or options, or otherwise, except that a person will not be deemed to be a beneficial owner of (a) securities tendered pursuant to a tender offer or exchange offer by or on
behalf of such person or any affiliated or associated persons of such person until the tendered securities are accepted for purchase or exchange, (b) securities issuable upon exercise of a Right before the occurrence of a Triggering Event (as
defined in Section 5 below), or (c) securities issuable upon exercise of a Right after the occurrence of a Triggering Event if the Rights are originally issued Rights or were issued in connection with an adjustment to originally issued
Rights; 

  

	 	•	 	has the right to vote or dispose of the Common Stock pursuant to any agreement, arrangement, or understanding (other than a right to vote arising from the granting of a revocable proxy or consent that is not also then
reportable on a Schedule 13D); or 

  

	 	•	 	has an agreement, arrangement, or understanding with another person who beneficially owns Common Stock and the agreement, arrangement, or understanding is for the purpose of acquiring, holding, voting, or disposing of
any securities of the Company (other than customary underwriting agreements relating to a bona fide public offering of Common Stock or a right to vote arising from the granting of a revocable proxy or consent that is not also then reportable on a
Schedule 13D). 

 Certain synthetic interests in securities created by derivative positions—whether or not such
interests are considered to be ownership of the underlying common stock or are reportable on a Schedule 13D—are treated as beneficial ownership of the number of shares of Common Stock equivalent to the economic exposure created by the
derivative position, to the extent actual shares of Common Stock are directly or indirectly held by counterparties to the derivatives contracts. Swaps dealers unassociated with any control intent or intent to evade the purposes of the rights plan
are excepted from such imputed beneficial ownership. 
  

	3.	Issuance of Rights Certificates 

 As soon as practicable after the Distribution Date,
rights certificates will be mailed to holders of record of Common Stock as of the close of business on the Distribution Date and, thereafter, the separate rights certificates alone will evidence the Rights. 

 

	4.	Expiration of Rights 

 The Rights will expire on the earliest of (a) 5:00 p.m., New
York City time, on February 1, 2016, (b) the time at which the Rights are redeemed (as described in Section 6 below), and (c) the time at which the Rights are exchanged in full (as described in Section 7 below) (the earliest
of (a), (b) and (c) being herein referred to as the “Expiration Date”). 

  
 C-3 

	5.	Change of Exercise of Rights Following Certain Events 

 The following described events
are referred to as “Triggering Events.” 
 (a) Flip-In Event. In the event that a person becomes an Acquiring
Person, each holder of a Right will thereafter have the right to receive, upon exercise, Common Stock (or, in certain circumstances, other securities, cash, or other assets of the Company) having a value equal to two times the Purchase Price.
Notwithstanding any of the foregoing, following the occurrence of a person becoming an Acquiring Person, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person (or by
certain related parties) will be null and void. 
 For example, at a purchase price of $63.00 per Right, following the occurrence of a
person becoming an Acquiring Person, each Right not owned by the Acquiring Person (or by certain related parties) would entitle its holder to purchase $126.00 worth of Common Stock (or other consideration, as noted above) for $63.00. Assuming that
the Common Stock has a per share value of $10.50 at such time, the holder of each valid Right would be entitled to purchase 12 shares of Common Stock for $63.00. 

(b) Flip-Over Events. In the event that, at any time after a person has become an Acquiring Person, (i) the Company engages in a
merger or other business combination transaction in which the Company is not the continuing or surviving corporation or other entity, (ii) the Company engages in a merger or other business combination transaction in which the Company is the
continuing or surviving corporation and the Common Stock of the Company are changed or exchanged, or (iii) 50% or more of the Company’s assets or earning power is sold or transferred, each holder of a Right (except Rights that have
previously been voided as set forth above) shall thereafter have the right to receive, upon exercise, common shares of the acquiring company having a value equal to two times the Purchase Price. 

 

	6.	Redemption 

 At any time prior to the earlier of (a) a person becoming an Acquiring
Person and (b) the Expiration Date (as defined in the Rights Agreement), the Board may direct the Company to redeem the Rights in whole, but not in part, at a price of $0.01 per Right (payable in cash, Common Stock, or other consideration
deemed appropriate by the Board). Immediately upon the action of the Board directing the Company to redeem the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $0.01 redemption price. 

 

	7.	Exchange of Rights 

 At any time after a person becomes an Acquiring Person but before
any person acquires beneficial ownership of 50% or more of the outstanding Common Stock, the Board may direct the Company to exchange the Rights (other than Rights owned by such person or certain related parties, which will have become null and
void), in whole or in part, at an exchange ratio of one share of Common Stock per Right (subject to adjustment). 

  
 C-4 

 
The Company may substitute shares of Preferred Stock (or shares of a class or series of the Company’s preferred stock having equivalent rights, preferences, and privileges) for Common Stock
at an initial rate of one one-thousandth of a share of Preferred Stock (or of a share of a class or series of the Company’s preferred stock having equivalent rights, preferences, and privileges) per share of Common Stock. Immediately upon the
action of the Board directing the Company to exchange the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of Common Stock (or one one-thousandth of a share of Preferred Stock or
of a share of a class or series of the Company’s preferred stock having equivalent rights, preferences, and privileges) equal to the number of Rights held by such holder multiplied by the exchange ratio. 

 

	8.	Adjustments to Prevent Dilution; Fractional Shares 

 The Board may adjust the Purchase
Price, the number of shares of Preferred Stock or other securities or assets issuable upon exercise of a Right, and the number of Rights outstanding to prevent dilution that may occur (a) in the event of a stock dividend on, or a subdivision,
combination, or reclassification of, the Preferred Stock, (b) in the event of a stock dividend on, or a subdivision or combination of, the Common Stock, (c) if holders of the Preferred Stock are granted certain rights, options, or warrants
to subscribe for Preferred Stock or convertible securities at less than the current market price of the Preferred Stock, or (d) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends) 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 amount to at least 1% of the Purchase Price. No fractional shares of Preferred Stock will be issued (other than fractions that are integral multiples of one
one-thousandth of a share of Preferred Stock), and in lieu thereof, an adjustment in cash may be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise. 

 

	9.	No Stockholder Rights Prior to Exercise; Tax Considerations 

 Until a Right is exercised,
the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. While the distribution of the Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Common Stock (or other consideration) of the Company or for common shares of the acquiring company or in the event of
the redemption of the Rights as set forth in Section 6 above. 
  

	10.	Amendment of Rights Agreement 

 The Company, by action of the Board, may supplement or
amend any provision of the Rights Agreement in any respect without the approval of any registered holder of Rights, including, without limitation, in order to (a) cure any ambiguity, (b) correct or supplement any provision contained in the
Rights Agreement that may be defective or 

  
 C-5 

 
inconsistent with other provisions of the Rights Agreement, (c) shorten or lengthen any time period under the Rights Agreement, or (d) otherwise change, amend, or supplement any
provisions of the Rights Agreement in any manner that the Company deems necessary or desirable; provided, however, that no supplement or amendment made after a person becomes an Acquiring Person shall adversely affect the interests of
the registered holders of rights certificates (other than an Acquiring Person or any affiliated or associated person of an Acquiring Person or certain of their transferees) or shall cause the Rights Agreement to become amendable other than in
accordance with the amendment provision contained therein. Without limiting the foregoing, the Company may at any time before any person becomes an Acquiring Person amend the Rights Agreements to make provisions of the Rights Agreement inapplicable
to a particular transaction by which a person might otherwise become an Acquiring Person or to otherwise alter the terms and conditions of the Rights Agreement as they may apply with respect to any such transaction. 

  
 C-6EX-10.1

Exhibit 10.1

AGREEMENT

This Agreement, dated as of January 30, 2015 (this “Agreement”), is by and among
TeleCommunication Systems, Inc., a Maryland corporation (the “Company”), Steven R. Becker, an
individual resident of Texas (“Becker”), Matthew A. Drapkin, an individual resident of New York
(“Drapkin”), BC Advisors, LLC, a Texas limited liability company (“BCA”), Becker Drapkin
Management, L.P., a Texas limited partnership (“BD Management”), Becker Drapkin Partners (QP),
L.P., a Texas limited partnership (“Becker Drapkin QP”), and Becker Drapkin Partners, L.P., a Texas
limited partnership (“Becker Drapkin, L.P.,” and, collectively, with Becker, Drapkin, BCA, BD
Management and Becker Drapkin QP, the “Shareholder Group”).

WHEREAS, the Company and the Shareholder Group have agreed to each take and refrain from
taking certain actions on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the respective representations,
warranties, covenants, agreements and conditions hereinafter set forth, and intending to be legally
bound hereby, the parties hereto hereby agree as follows:

1. Definitions. For purposes of this Agreement:

(a) “Advance Notice Deadline” means, with respect to any Annual Meeting, the last date upon
which a notice to the Secretary of the Company of nominations of persons for election to the Board
at such Annual Meeting would be considered “timely” under the Company’s Articles of Amendment and
Restatement, as amended or supplemented from time to time (the “Articles”) and the Company’s Second
Amended and Restated By-Laws, as amended or supplemented from time to time (the “By-Laws”).

(b) The terms “Affiliate” and “Associate” have the respective meanings set forth in Rule 12b-2
promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), and shall include persons who become Affiliates or
Associates of any person subsequent to the date of this Agreement, provided that neither
“Affiliate” nor “Associate” shall include (i) any person that is a publicly held concern and is
otherwise an Affiliate or Associate solely by reason of the fact that a principal of any member of
the Shareholder Group serves as a member of the board of directors or similar governing body of
such concern, provided that the Shareholder Group does not control such concern, (ii) such
principal in its capacity as a member of the board of directors or other similar governing body of
such concern or (iii) any entity which is an Associate solely by reason of clause (1) of the
definition of Associate in Rule 12b-2 and is not an Affiliate.

(c) “Annual Meeting” means any annual meeting of stockholders of the Company, including any
postponement or adjournment thereof.

(d) “Appointment Date” means the date when all of the actions set forth in Sections
4(a) and 4(b) have been taken and are effective.

(e) The terms “beneficial owner” and “beneficial ownership” have the respective meanings as
set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act.

(f) “Board” means the Board of Directors of the Company.

(g) “Common Stock” means the Class A common stock of the Company, par value $0.01 per share.

(h) “Compensation Committee” means the Compensation Committee of the Board.

(i) “Nominating & Governance Committee” means the Nominating & Governance Committee of the
Board.

(j) “Nominating Letter” means that certain letter dated January 29, 2015 sent by Becker
Drapkin QP to the Secretary of the Company providing notice of its intent to nominate persons for
election as directors at the Annual Meeting to be held in 2015 (the “2015 Annual Meeting”).

(k) The terms “person” or “persons” means any individual, corporation (including
not-for-profit), general or limited partnership, limited liability company, joint venture, estate,
trust, association, organization or other entity of any kind or nature, including any governmental
authority.

(l) “Shareholder Group Breach” means a breach by any member of the Shareholder Group in any
material respect of any of their representations, warranties, commitments or obligations set forth
in Sections 3, 7, 8, and 13 hereof, which has not been cured within
five (5) business days, with respect to breaches of Sections 7 and 8 hereof, or
thirty (30) days, with respect to breaches of other sections, following written notice of such
breach so long as such breach is curable.

(m) “Standstill Period” means the period from the date hereof until the earlier of:

(i) such date, if any, as the Company has breached in any material respect any of its
representations, warranties, commitments or obligations set forth in Section 2, 4,
5, 6, 10, 11, 12, 14, 15 or 16 of
this Agreement and such breach has not been cured within thirty (30) days following written notice
of such breach, so long as such breach is curable (with the understanding that a breach of
Section 4(a), 4(d), 4(f) or 15 hereof is not curable); and

(ii) December 31, 2016.

2. Representations and Warranties of the Company. The Company represents and warrants as
follows as of the date hereof:

(a) The Company has the corporate power and authority to execute, deliver and carry out the
terms and provisions of this Agreement and to consummate the transactions contemplated hereby.

(b) This Agreement has been duly and validly authorized, executed and delivered by the
Company, constitutes a valid and binding obligation and agreement of the Company and is enforceable
against the Company in accordance with its terms, except as enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar
laws affecting the rights of creditors and subject to general equity principles.

(c) The execution, delivery and performance of this Agreement by the Company does not and will
not (i) violate or conflict with any law, rule, regulation, order, judgment or decree, in each case
that is applicable to the Company, or (ii) result in any material breach or material violation of,
or constitute a material default (or an event which with notice or lapse of time or both could
become a material default) under or pursuant to, or result in the loss of a material benefit under,
or give any right of termination, amendment, acceleration or cancellation of (A) any organizational
document of the Company or (B) any agreement, contract, commitment, understanding or arrangement,
in each case to which the Company is a party or by which it is bound and which is material to the
Company’s business or operations.

3. Representations and Warranties of the Shareholder Group. Each member of the Shareholder
Group severally, and not jointly, represents and warrants with respect to himself or itself as
follows as of the date hereof:

(a) Such member has the power and authority to execute, deliver and carry out the terms and
provisions of this Agreement and to consummate the transactions contemplated hereby. Such member,
if an entity, has the corporate, limited partnership or limited liability company power and
authority, as applicable, to execute, deliver and carry out the terms and provisions of this
Agreement and to consummate the transactions contemplated hereby.

(b) This Agreement has been duly and validly authorized, executed, and delivered by such
member, constitutes a valid and binding obligation and agreement of such member and is enforceable
against such member in accordance with its terms, except as enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar
laws affecting the rights of creditors and subject to general equity principles.

(c) The execution, delivery and performance of this Agreement by such member does not and will
not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to
such member, or (ii) result in any material breach or material violation of, or constitute a
material default (or an event which with notice or lapse of time or both could become a material
default) under or pursuant to, or result in the loss of a material benefit under, or give any right
of termination, amendment, acceleration or cancellation of, (A) any organizational document, if an
entity, or (B) any agreement, contract, commitment, understanding or arrangement, in each case to
which such member is a party or by which such member is bound and which is material to the
Shareholder Group’s business or operations.

(d) As of January 30, 2015, such member is the beneficial owner of at least the number of
shares of Common Stock as set forth on the applicable cover page (including any cross-referenced
information) relating to such member in the report of beneficial ownership of Common Stock on
Schedule 13D filed by members of the Shareholder Group with the SEC on November 24, 2014 (the
“Schedule 13D”). As of the date hereof, the members of the Shareholder Group and their Affiliates
and Associates beneficially own in the aggregate 3,690,345 shares of Common Stock. Except for
those Affiliates and Associates of such member with respect to whom a cover page is included in the
Schedule 13D, no other Affiliate or Associate of such member beneficially owns any shares of Common
Stock.

4. Directors; Related Matters.

(a) Provided that a Shareholder Group Breach has not occurred and is not then continuing, as
soon as reasonably practicable, but in any event, no later than the date which is thirty (30) days
after the date hereof, the Board shall, in accordance with the Articles and By-Laws, adopt a
resolution, effective as of the Appointment Date, to:

(i) increase the size of the Board to nine (9) directors;

(ii) appoint two (2) of the individuals, selected by the Board, from the individuals named in
the Nominating Letter (the two chosen for appointment, the “Nominees”) to the Board, one as a
“Class I” director and the other as a “Class III” director;

(iii) resolve that the Nominating & Governance Committee shall have four (4) members and shall
include at least one (1) Nominee as a member thereof (with such Nominee being designated by the
Shareholder Group and meeting all applicable committee charter, legal and listing requirements for
service on such committee); and

(iv) resolve that the Compensation Committee shall have four (4) members and shall include at
least one (1) Nominee as a member thereof (with such Nominee being designated by the Shareholder
Group and meeting all applicable committee charter, legal and listing requirements for service on
such committee).

(b) On or prior to the Appointment Date, either Richard Young or Thomas Brandt shall have
tendered his resignation from the Board.

(c) Provided that a Shareholder Group Breach has not occurred and is not then continuing and
the Nominees consent to serve:

(i) the Board and the Nominating & Governance Committee shall nominate, at the 2015 Annual
Meeting, the Nominees for election to the Board, one as a “Class I” director and the other as a
“Class III” director; and

(ii) the Company shall recommend that the Company’s stockholders vote, and shall solicit
proxies, in favor of the election of the Nominees at the 2015 Annual Meeting and otherwise support
the Nominees for election in a manner no less rigorous and favorable than the manner in which the
Company supports its other nominees.

(d) Provided that a Shareholder Group Breach has not occurred and is not then continuing, in
the event that the Nominees are not elected to the Board at the 2015 Annual Meeting, for any
reason, then the Board shall, in accordance with the Articles and By-Laws, adopt a resolution,
effective as of immediately after the 2015 Annual Meeting, to (i) appoint the Nominees to the
Board, one as a “Class I” director and the other as a “Class III” director and (ii) if necessary,
increase the size of the Board to accommodate such appointments.

(e) Provided that a Shareholder Group Breach has not occurred and is not then continuing and
the Nominee consents to serve:

(i) the Board and the Nominating & Governance Committee shall nominate, at the Annual Meeting
to be held in 2016 (the “2016 Annual Meeting”), the Nominee who is a “Class III” director for
election to the Board as a “Class III” director; and

(ii) the Company shall recommend that the Company’s stockholders vote, and shall solicit
proxies, in favor of the election of the Nominee who is a “Class III” director at the 2016 Annual
Meeting and otherwise support such Nominee for election in a manner no less rigorous and favorable
than the manner in which the Company supports its other nominees.

(f) Provided a Shareholder Group Breach has not occurred and is not then continuing, the
Company agrees, with respect to the Annual Meeting to be held in 2017 (the “2017 Annual Meeting”)
to notify the Shareholder Group, no later than ninety (90) days prior to the Advance Notice
Deadline of the 2017 Annual Meeting, in writing, whether the Nominating & Governance Committee has
resolved to nominate the Nominee, whose term expires at the 2017 Annual Meeting, for election at
the 2017 Annual Meeting, and if the Nominating & Governance Committee has resolved to not so
nominate such Nominee, then the Company shall take all appropriate action to (i) provide the
Shareholder Group with at least a ninety (90) day period from such notification to comply with the
advance notice provisions for nominations of directors at the 2017 Annual Meeting contained in the
Articles and By-Laws and (ii) cause the 2017 Annual Meeting not to be held prior to 120 days
following such notification.

(g) Provided that a Shareholder Group Breach has not occurred and is not then continuing, the
Company agrees that, until the conclusion of the Standstill Period, (i) the Company will not change
the class year of either of the Nominees as a director unless (A) the Shareholder Group has
consented to such change or (B) such change would extend the Nominee’s term as a director, (ii) the
Company will not increase the size of the Board except as necessary to comply with the terms of
this Agreement, unless the Shareholder Group has consented to such increase, and (iii) the Company
will not remove either of the Nominees from either the Nominating & Governance Committee or the
Compensation Committee, as applicable, without the prior consent of the Shareholder Group, so long
as the respective Nominee continues to serve on the Board and meets all the applicable committee
charter, legal and listing requirements for service on such committee.

5. Nominating Letter. The Company hereby acknowledges receipt of the Nominating Letter and
confirms that the Nominating Letter and receipt thereof is in compliance with all requirements set
forth in the By-Laws, including without limitation any information or disclosure requirements and
requirements that the Nominating Letter be received prior to the Advance Notice Deadline for the
2015 Annual Meeting; provided, that the Company is not confirming any statement in the Nominating
Letter which claims that Becker Drapkin QP has a right to (i) substitute director nominees or
nominate additional nominees or (ii) modify the Nominating Letter. Conditioned and effective upon
all requirements of Section 4(a) and 4(b) having been met in accordance with the terms thereof,
Becker Drapkin QP hereby withdraws its Nominating Letter.

6. Replacement Directors. So long as a Shareholder Group Breach has not occurred and is not
then continuing if, at any time prior to the conclusion of the Standstill Period, either of the
Nominees is unable or unwilling to serve or continue to serve as a director of the Company, the
Shareholder Group and the Board (excluding the departing Nominee) shall select and the Board shall
appoint a mutually agreeable replacement for the departing Nominee within ninety (90) days of the
departing Nominee validly tendering his resignation from the Board (in which case all references in
this Agreement to such “Nominee” with respect to such Nominee’s rights and obligations as a
director, and the Shareholder Group’s rights with respect thereto, shall refer to such replacement,
as applicable), unless such right is waived by the Shareholder Group.

7. Voting. At all shareholder meetings where the matters described in this Section 7
will be voted on during the Standstill Period, each member of the Shareholder Group shall cause all
shares of Common Stock owned of record or beneficially owned by it or its respective Affiliates or
Associates to be present for quorum purposes and to be voted in favor of all directors nominated by
the Board for election to the Board as a director (provided, that such nominees were not nominated
in contravention of this Agreement).

8. Standstill. Each member of the Shareholder Group agrees that, during the Standstill
Period, he or it will not, and he or it will cause each of such person’s respective Affiliates,
Associates and agents and any other persons acting on his or its behalf not to, directly or
indirectly:

(a) acquire, offer to acquire or agree to acquire, alone or in concert with any other person,
individual or entity, by purchase, tender offer, exchange offer, agreement or business combination
or any other manner, beneficial ownership in excess of 12% of the outstanding shares of Common
Stock (based on the latest annual or quarterly report of the Company filed with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act);

(b) submit any shareholder proposal (pursuant to Rule 14a-8 promulgated by the SEC under the
Exchange Act or otherwise) or any notice of nomination or other business for consideration, or
nominate any candidate for election to the Board or oppose the directors nominated by the Board
(provided, that such nominees were not nominated in contravention of this Agreement);

(c) form, join in or in any other way participate in a “partnership, limited partnership,
syndicate or other group” within the meaning of Section 13(d)(3) of the Exchange Act with respect
to the Common Stock or deposit any shares of Common Stock in a voting trust or similar arrangement
or subject any shares of Common Stock to any voting agreement or pooling arrangement, other than
solely with other members of the Shareholder Group or one or more of their respective Affiliates
(provided that any such Affiliate signs a joinder to this Agreement) or to the extent such a group
may be deemed to result with the Company or the Shareholder Group or any of their respective
Affiliates as a result of this Agreement;

(d) solicit proxies or written consents of stockholders or otherwise conduct any nonbinding
referendum with respect to the Common Stock, or make, or in any way encourage, influence or
participate in, any “solicitation” of any “proxy” within the meaning of Rule 14a-1 promulgated by
the SEC under the Exchange Act to vote, or engage in discussions with, advise, encourage or
influence any person with respect to voting or tendering, any shares of Common Stock with respect
to any matter, or become a “participant” in any contested “solicitation” for the election of
directors with respect to the Company (as such terms are defined or used under the Exchange Act and
the rules promulgated by the SEC thereunder), other than a “solicitation” in support of all of the
nominees of the Board at any stockholder meeting;

(e) call or seek to call or to request the calling of a special meeting of the stockholders of
the Company or seek to make or make a shareholder proposal at any meeting of the stockholders of
the Company or make a request for a list of the Company’s stockholders (or otherwise induce,
encourage or assist any other person to initiate or pursue such a proposal or request) or otherwise
acting alone, or in concert with others, seek to control or influence the governance or policies of
the Company;

(f) publicly disclose, or cause or facilitate the public disclosure (including, without
limitation, the filing of any document or report with the SEC or any other governmental agency or
any disclosure to any journalist, member of the media or securities analyst) of, any intent,
purpose, plan or proposal to obtain any waiver, or consent under, or any amendment of, any of the
provisions of Section 7 hereof or this Section 8, or otherwise seek (in any manner
that would require public disclosure by any of the members of the Shareholder Group or their
respective Affiliates or Associates) to obtain any waiver, consent under, or amendment of any
provision of this Agreement;

(g) disparage the Company or any member of the Board or management of the Company, provided
that this provision shall not apply to compelled testimony, either by legal process, subpoena or
otherwise, or to communications that are required by an applicable legal obligation or are subject
to contractual provisions providing for confidential disclosure;

(h) engage in any short sale or any purchase, sale or grant of any option, warrant,
convertible security, stock appreciation right or other similar right (including, without
limitation, any put or call option or “swap” transaction) with respect to any security (other than
a broad-based market basket or index) that includes, relates to or derives any significant part of
its value from a decline in the market price or value of the Company’s securities;

(i) enter into any arrangements, understandings or agreements (whether written or oral) with,
or advise, finance, assist or encourage any other person that engages, or offers or proposes to
engage, in any of the foregoing; or

(j) take or cause or induce or assist others to take any action inconsistent with any of the
foregoing.

9. Company Policies. By the Appointment Date, the Nominees will have reviewed the Company’s
policies concerning confidentiality, disclosure, insider trading, window periods and material
non-public information, as applicable, (collectively, the “Company Policies”), and the Nominees
agree to abide by the provisions of the Company Policies, including any confidentiality policies of
the Company, as they may be amended from time to time, during their service as directors of the
Company and for such period of time thereafter as may be set forth in the Company Policies;
provided, that, other than amendments required by applicable law, regulation or stock exchange
requirement, the Company shall not amend the Company Policies in such a manner to have a material
adverse effect on the Nominees as compared to the other Board members.

10. Compensation. The Nominees shall be compensated for their service as directors and shall
be reimbursed for their expenses on the same basis as all other non-employee directors of the
Company and shall be eligible to be granted equity-based compensation on the same basis as all
other non-employee directors of the Company.

11. Indemnification and Insurance. The Nominees shall be entitled to the same rights of
indemnification and directors’ and officers’ liability insurance coverage as the other non-employee
directors of the Company as such rights may exist from time to time.

12. Non-Disparagement. Provided that a Shareholder Group Breach has not occurred and is not
then continuing, the Company agrees, during the Standstill Period, that it shall not publicly
disparage any member of the Shareholder Group, any member of the management of the Shareholder
Group or the Nominees, and that it shall cause the Board to act the same, provided that this
provision shall not apply to compelled testimony, either by legal process, subpoena or otherwise,
or to communications that are required by an applicable legal obligation or are subject to
contractual provisions providing for confidential disclosure.

13. Schedule 13D. The Shareholder Group shall promptly file an amendment to the Schedule 13D
reporting the entry into this Agreement, amending applicable items to conform to their obligations
hereunder and appending or incorporating by reference this Agreement as an exhibit thereto. The
Shareholder Group shall provide the Company with a reasonable opportunity to review and comment on
such amendment in advance of filing, and shall accept any such reasonable and timely comments of
the Company.

14. Form 8-K. The Company shall provide to the Shareholder Group a reasonable opportunity to
review and comment on any Form 8-K with respect to the execution and delivery of this Agreement by
the parties hereto in advance of its filing, and shall consider in good faith the reasonable and
timely comments of the Shareholder Group.  No member of the Shareholder Group shall make (and they
will cause their Affiliates and Associates not to make) any public statements with respect to the
matters covered by this Agreement (including in any filing with the SEC, any other regulatory or
governmental agency, or any stock exchange, or in any materials that would reasonably be expected
to be filed with the SEC, including pursuant to Exchange Act Rules 14a-6 or 14a-12) that are
inconsistent with, or otherwise contrary to, this Agreement or the statements in any above
described Form 8-K filing.

15. Waiver. The Board has adopted the resolutions set forth in Exhibit A, and such
resolutions are currently in effect. As a matter of contract, such resolutions are irrevocable and
non-modifiable.

16. Expenses. Within two (2) business days of the date hereof, the Company shall reimburse
the Shareholder Group for the reasonable and documented out-of-pocket expenses (up to a maximum of
$75,000) actually incurred by the Shareholder Group in connection with the negotiation, execution
and enforcement of this Agreement. Except as provided in the preceding sentence, all costs and
expenses incurred in connection with this Agreement and all matters related hereto shall be paid by
the party incurring such cost or expense.

17. Specific Performance. Each party hereto acknowledges and agrees, on behalf of itself and
its Affiliates, that irreparable harm would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties will be entitled to specific relief hereunder, including,
without limitation, an injunction or injunctions to prevent and enjoin breaches of the provisions
of this Agreement and to enforce specifically the terms and provisions hereof in any state or
federal court located in the State of Maryland, in addition to any other remedy to which they may
be entitled at law or in equity. Any requirements for the securing or posting of any bond with
such remedy are hereby waived.

18. Jurisdiction. Each party hereto agrees, on behalf of itself and its Affiliates, that any
actions, suits or proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby will be brought solely and exclusively in the state or federal courts of the
State of Maryland (and the parties agree on behalf of themselves and their respective Affiliates
not to commence any action, suit or proceeding relating thereto except in such courts), and further
agrees that service of any process, summons, notice or document by U.S. registered mail to the
respective addresses set forth in Section 22 hereof will be effective service of process
for any such action, suit or proceeding brought against any party in any such court. Each party, on
behalf of itself and its Affiliates, agrees and consents to the personal jurisdiction of the state
and federal courts located in the State of Maryland, and irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or
the transactions contemplated hereby, in the state or federal courts located in the State of
Maryland, and hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any such court has been
brought in an improper or inconvenient forum.

19. Applicable Law. This Agreement shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Maryland applicable to contracts executed
and to be performed wholly within such state, without giving effect to the choice of law principles
of such state. Each party hereto agrees to irrevocably waive any right to trial by jury.

20. Counterparts; Facsimile or Electronic Signatures; Miscellaneous.. This Agreement may be
executed in two or more counterparts that together shall constitute a single agreement. Facsimile
or electronic (e.g., PDF) signatures shall be as effective as original signatures. The headings
used herein are for convenience only and the parties agree that such headings are not to be
construed to be part of this Agreement or to be used in determining the meaning or interpretation
of this Agreement. Unless the context otherwise requires, whenever used in this Agreement the
singular shall include the plural, the plural shall include the singular, and the masculine gender
shall include the neuter or feminine gender and vice versa.

21. Entire Agreement; Amendment and Waiver; Successors and Assigns. This Agreement contains
the entire understanding of the parties hereto with respect to, and supersedes all prior agreements
relating to, its subject matter. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings between the parties other than those expressly set forth
herein. This Agreement may be amended only by a written instrument duly executed by the parties
hereto or their respective successors or assigns. Notwithstanding the foregoing, Section 15
hereof may not be amended, modified or waived. No failure on the part of any party to exercise, and
no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right, power or remedy. All
remedies hereunder are cumulative and are not exclusive of any other remedies provided by law. The
terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the parties hereto and their respective successors, heirs, executors, legal
representatives and assigns. No party hereto may assign or otherwise transfer either this
Agreement or any of its rights, interests or obligations hereunder without the prior written
consent of the other parties hereto. Any purported transfer without such consent shall be void.

22. Notices. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall be in writing and
shall be deemed validly given, made or served (a) if given by facsimile, when such facsimile is
transmitted to the facsimile number set forth below, or to such other facsimile number as is
provided by a party to this Agreement to the other parties pursuant to notice given in accordance
with the provisions of this Section 22, and the appropriate confirmation is received, or
(b) if given by any other means, when actually received during normal business hours at the address
specified in this Section 22, or at such other address as is provided by a party to this
Agreement to the other parties pursuant to notice given in accordance with the provisions of this
Section 22:

if to the Company:

TeleCommunication Systems, Inc.

275 West Street

Annapolis, MD 21401

Facsimile: (410) 280-1048

Attention: Bruce White, Sr. Vice President, General Counsel & Secretary

with a copy (which shall not constitute notice) to:

DLA Piper LLP (US)

The Marbury Building

6225 Smith Avenue

Baltimore, MD 21209-3600

Facsimile: (410) 580-3120

Attention: Wm. David Chalk, Esq.

if to the Shareholder Group or any member thereof:

Becker Drapkin Management, L.P.

500 Crescent Court

Suite 230

Dallas, Texas 75201

Facsimile: (214) 756-6019

Attention: Steven R. Becker

with a copy (which shall not constitute notice) to:

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, NY 10166-0193

Facsimile: (212) 716-0830

Attention: Richard J. Birns, Esq.

23. No Third-Party Beneficiaries. Nothing in this Agreement is intended to confer on any
person other than the parties hereto or their respective successors and assigns, and their
respective Affiliates to the extent provided herein, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

24. Unenforceability. If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, then the other provisions of this Agreement shall remain in
full force and effect. Any provision of this Agreement held invalid or unenforceable only in part
or degree shall remain in full force and effect to the extent not held invalid or unenforceable.
The parties hereto further agree to replace such invalid or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the extent possible, the
purposes of such invalid or unenforceable provision.

25. Construction. Each of the parties hereto acknowledges that it has been represented by
counsel of its choice throughout all negotiations that have preceded the execution of this
Agreement, and that it has executed this Agreement with the advice of such counsel. Each party
hereto and its counsel cooperated and participated in the drafting and preparation of this
Agreement, and any and all drafts relating thereto exchanged among the parties shall be deemed the
work product of all of the parties and may not be construed against any party by reason of its
drafting or preparation. Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this Agreement against any party hereto that drafted or
prepared it is of no application and is hereby expressly waived by each of the parties, and any
controversy over interpretations of this Agreement shall be decided without regard to events of
drafting or preparation.

1

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized
signatories of the parties as of the date first written above.

TELECOMMUNICATION SYSTEMS, INC.

By: /s/ Bruce A. White

Name: Bruce A. White

Title: Senior Vice President & Secretary

/s/ Steven R. Becker

Steven R. Becker

/s/ Matthew A. Drapkin

Matthew A. Drapkin

BC ADVISORS, LLC

By: /s/ Steven Becker

Name: Steven Becker

Title: Managing Partner

BECKER DRAPKIN MANAGEMENT, L.P.

By: BC Advisors, LLC, its general partner

/s/ Steven Becker

Name: Steven Becker

Title: Managing Partner

BECKER DRAPKIN PARTNERS (QP), L.P.

By: Becker Drapkin Management, L.P., its general partner

By: BC Advisors, LLC, its general partner

/s/ Steven Becker

Name: Steven Becker

Title: Managing Partner

BECKER DRAPKIN PARTNERS, L.P.

By: Becker Drapkin Management, L.P., its general partner

By: BC Advisors, LLC, its general partner

/s/ Steven Becker

Name: Steven Becker

Title: Managing Partner

2

EXHIBIT A

RESOLUTIONS

WHEREAS, on January 30, 2015, the Company entered into an Agreement (the “Agreement”) with
Steven R. Becker, Matthew A. Drapkin, BC Advisors, LLC, Becker Drapkin Management, L.P., Becker
Drapkin Partners (QP), L.P. and Becker Drapkin Partners, L.P. (collectively, the “Shareholder
Group”);

WHEREAS, in connection with the Agreement, the Board agreed to take certain actions with
respect to the Shareholder Group (as that term is defined in the Agreement) and certain other
persons as are necessary such that (i) the Shareholder Group and such certain other persons shall
be excluded from the definition of “interested stockholder” under the Maryland Business Combination
Act (the “MBCA”; Sections 3-601 through 3-605 of the Maryland General Corporation Law, as amended
from time to time (“MGCL”)), hereinafter referred to as the “MBCA”), pursuant to Section
3-601(j)(3) and 3-601(j)(4) of the MBCA, subject to certain conditions and under certain
circumstances as described in the following resolutions; and (ii) the Shareholder Group and such
certain other persons are exempted from the provisions of Title 3, Subtitle 7 of the MGCL under
certain conditions and under certain circumstances discussed in the following resolutions;

WHEREAS, for purposes of these resolutions: (i) “Becker Drapkin” means, individually and
collectively, the Shareholder Group and any other investment funds, accounts and other investment
vehicles managed or advised by Becker Drapkin Management, L.P. or any affiliate of Becker Drapkin
Management, L.P., whether currently existing or formed after the date hereof; (ii) except as
expressly provided herein, any word or term used in these WHEREAS provisions or in the resolutions
below which is defined in Section 3-601 of the MGCL has the meaning ascribed to such word or term
in Section 3-601 of the MGCL (and regardless of whether the word or term is capitalized herein or
in Section 3-601 of the MGCL); (iii) the word “person” has the meaning ascribed to such word in the
Agreement; and (iv) the term “beneficially own” or “beneficially owns” or “beneficially owned”
shall have the same meanings as set forth in Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Exchange Act);

NOW, THEREFORE, BE IT RESOLVED, that for purposes of Section 3-601(j)(3) and 3-601(j)(4) of
the MGCL, as long as Becker Drapkin does not beneficially own more than twelve percent (12%) of the
issued and outstanding shares of Common Stock (as such term is defined in the Agreement) (based on
the latest annual or quarterly report of the Company filed with the Securities and Exchange
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended)
(such percentage, the “Ownership Threshold”) (and would not beneficially own more than the
Ownership Threshold of the issued and outstanding shares of Common Stock following any transaction
referenced in the remainder of this sentence), each transaction entered into by the Company or by
Becker Drapkin after the date of these resolutions which would otherwise result in Becker Drapkin
or any affiliate or associate of Becker Drapkin becoming an interested stockholder is hereby
authorized and approved such that Becker Drapkin or any affiliate or associate of Becker Drapkin
will not become an interested stockholder as a result of any such transaction, provided that:

(i) the Board of Directors of the Company approves, including approval by a majority of
the directors who are not Nominees (as such term is defined in the Agreement), any business
combination with Becker Drapkin; and

(ii) if shareholder approval of any business combination with Becker Drapkin is
required, any such business combination is authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the
voting power of the outstanding voting stock which is not beneficially owned by Becker
Drapkin;

provided, further, however, that the foregoing shall not apply in the event that Becker
Drapkin forms a “group” (as that term is defined in Rule 13d-5(b)(1) of the Exchange Act)
with any other person (other than a person included in the definition of “Becker Drapkin”)
with respect to any securities of the Company; and

FURTHER RESOLVED, that Section 6.07 of the Bylaws of the Company is hereby amended to
add the following as a new paragraph at the end of said Section:

So long as Steven R. Becker, Matthew A. Drapkin, BC Advisors, LLC, Becker Drapkin
Management, L.P., Becker Drapkin Partners (QP), L.P., Becker Drapkin Partners, L.P. any
other investment funds, accounts and other investment vehicles managed or advised by Becker
Drapkin Management, L.P. or any affiliate of Becker Drapkin Management, L.P. whether
currently existing or formed after the date hereof (collectively, “Becker Drapkin”) does not
beneficially own more than twelve percent (12%) of the issued and outstanding shares of
Class A Common Stock (the “Common Stock”) of the Corporation (based on the latest annual or
quarterly report of the Corporation filed with the Securities and Exchange Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended), the
provisions of Sections 3-701 to 3-709 of the MGCL shall not apply to any shares of Common
Stock hereafter acquired by Becker Drapkin or any “associate” (as such term is defined in
Section 3-701 of the MGCL) of Becker Drapkin, and such shares of Common Stock are exempted
from such Sections of the MGCL to the fullest extent permitted by Maryland law.
Notwithstanding anything to the contrary contained herein, this paragraph may not be amended
without Becker Drapkin’s prior written consent.

FURTHER RESOLVED, that the foregoing resolutions, the next resolution and this resolution are
irrevocable and non-modifiable.

FURTHER RESOLVED, that this resolution and the foregoing resolutions may be relied upon by
Becker Drapkin.

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00239-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00239-of-00352.parquet"}]]