each holder of a Right (except Rights which previously have been voided as described above) will have the
right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right.
Each share of Preferred Stock, if issued: will not be redeemable, will entitle the holder thereof, when, as and if declared, to
quarterly dividend payments equal to the greater of $1,000 per share and 1,000 times the amount of all cash dividends plus 1,000 times the amount of non-cash dividends or other distributions paid on one share
of Common Stock, will entitle the holder thereof to receive $1,000 plus accrued and unpaid dividends per share upon liquidation, will have the same voting power as 1,000 shares of Common Stock and, if shares of Common Stock are exchanged via merger,
consolidation or a similar transaction, will entitle the holder thereof to a per share payment equal to the payment made on 1,000 shares of Common Stock.
The exercise price payable
and the number of shares of Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution:
in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock,
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
upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above).
With certain exceptions,
no adjustment in the exercise price will be required until cumulative adjustments amount to at least one percent (1%) of the exercise price. No fractional shares of Preferred Stock will be issued and, in lieu thereof, an adjustment in cash will be
made based on the market price of the Preferred Stock on the last trading day prior to the date of exercise.
At any time prior to the earlier of (1) the Stock Acquisition Date and (2) the Final Expiration Time, the Company may redeem the Rights in whole, but
not in part, at a price of $0.001 per Right (subject to adjustment and payable in cash, Common Stock or other consideration deemed appropriate by the Board). Immediately upon the action of the Board authorizing any redemption, the Rights will
terminate and the only right of the holders of Rights will be to receive the redemption price. At any time after any person or group becomes an Acquiring Person and prior to the acquisition by the Acquiring Person of fifty percent (50%) or more of
the outstanding shares of Common Stock, the Company may exchange the Rights (other than Rights owned by the Acquiring Person, which will have become null and void), in whole or in part, at an exchange ratio of one share of Common Stock, or one one-thousandth of a share of Preferred Stock (or of a share of a class or series of the Companys preferred stock having equivalent rights, preferences and privileges), per Right (subject to adjustment).
The Board may exempt certain persons
from the 4.9% ownership threshold if the Board determines that their beneficial ownership of more than 4.9% of Common Stock will not jeopardize the availability of the Companys NOLs. A person may also request that the Board exempt a
transaction that would cause such person to become the beneficial owner of 4.9% or more of Common Stock.
No Rights as Stockholder.
Until a Right is exercised, its holder will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive
Amendment of the Tax Benefits Preservation Plan.
The Company and the Rights Agent may from time to time amend or supplement the Tax Benefits Preservation Plan without the consent of the holders of the Rights.
However, on or after the Stock Acquisition Date, no amendment can materially adversely affect the interests of the holders of the Rights (other than the Acquiring Person, certain related parties thereof or any transferee of the foregoing persons).