Exhibit 4.1
XWELL, INC.
and
EQUINITI TRUST COMPANY, LLC
as Rights Agent
Tax Benefits Preservation Plan
Dated as of August 16, 2024
TAX
BENEFITS PRESERVATION PLAN
Tax Benefits Preservation Plan,
dated as of August 16, 2024 (this “Plan”), between XWELL, Inc., a Delaware corporation (the “Company”),
and Equiniti Trust Company, LLC, a New York limited liability trust company, as Rights Agent (the “Rights Agent”).
RECITALS
WHEREAS, on August 15,
2024, the Board of Directors (the “Board”) of the Company adopted this Plan and, in connection therewith, authorized
and declared a dividend of one preferred stock purchase right (a “Right”) for each share of Common Stock (as defined
in Section 1.6) of the Company outstanding at the close of business on August 26, 2024 (the “Record Date”)
and authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each share of Common
Stock that shall become outstanding between the Record Date and the earliest of the Distribution Date and the Expiration Date (as such
terms are defined in Sections 3.1 and 7.1), each Right initially representing the right to purchase one one-thousandth
(subject to adjustment) of a share of Series A Junior Participating Preferred Stock (the “Preferred Stock”) of
the Company having the rights, powers and preferences set forth in the form of Certificate of Designation of Series A Junior Participating
Preferred Stock attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth, provided,
however, that Rights may be issued with respect to Common Stock that shall become outstanding after the Distribution Date and prior
to the Expiration Date in accordance with Section 21;
WHEREAS, the Company has significant
net operating loss carryforwards (collectively, the “Tax Attributes”) that could be materially diminished or lost
in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the
“Code”); and
WHEREAS, the Company views
its Tax Attributes as a valuable asset of the Company, which are likely to inure to the benefit of the Company and its stockholders,
and the Company believes that it is in the best interests of the Company and its stockholders that the Company provide for the protection
of the Tax Attributes on the terms and conditions set forth herein.
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 Plan, the following terms have the meanings indicated:
1.1. “Acquiring
Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, from and after the
date of this Plan shall be the Beneficial Owner of 4.99% or more of the Common Stock then outstanding, but shall not include (i) any
Exempt Person, (ii) any Person who or which becomes the Beneficial Owner of 4.99% or more of the Common Stock solely as a result
of equity compensation awards granted to such Person by the Company or as a result of an adjustment to the number of shares of Common
Stock represented by such equity compensation award pursuant to the terms thereof, unless and until such time, in the case of this clause
(ii), as such Person or one or more of its Affiliates or Associates thereafter acquires Beneficial Ownership of one additional share
of Common Stock (other than Common Stock acquired as described in clause (ii) or pursuant to a dividend or distribution paid or
made by the Company on the outstanding Common Stock in Common Stock or pursuant to a split or reclassification of the outstanding Common
Stock) or (iii) any Existing Holder, unless and until such time as such Existing Holder shall become the Beneficial Owner of (A) one
or more additional shares of Common Stock (excluding any shares of Common Stock acquired after the first public announcement of the adoption
of this Plan in the manner described in the immediately preceding clause (ii) or pursuant to a dividend or distribution paid or
made by the Company on the outstanding Common Stock in Common Stock or pursuant to a split or reclassification of the outstanding Common
Stock) or (B) less than 4.99% of the Common Stock then outstanding (after which time, if such Person shall be the Beneficial Owner
of 4.99% or more of the Common Stock then outstanding (other than by virtue of acquiring Beneficial Ownership of any shares of Common
Stock in the manner described in the immediately preceding clause (ii) or pursuant to a dividend or distribution paid or made by
the Company on the outstanding Common Stock in Common Stock or pursuant to a split or reclassification of the outstanding Common Stock),
such Person shall be or become deemed an “Acquiring Person”). Notwithstanding the foregoing, no Person shall become an “Acquiring
Person” as the result of an acquisition of Common Stock by the Company which, by reducing the number of shares outstanding, increases
the proportionate number of shares Beneficially Owned by such Person to 4.99% or more of the Common Stock then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 4.99% or more of the Common Stock then outstanding solely by reason
of share acquisitions by the Company and shall, after such share acquisitions by the Company, become the Beneficial Owner of one or more
additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common
Stock in Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), then such Person shall be deemed to be
an “Acquiring Person” unless, upon becoming the Beneficial Owner of such additional Common Stock, such Person does not Beneficially
Own 4.99% or more of the Common Stock then outstanding.
1.1.1. Notwithstanding
the foregoing, if (i) the Board determines in good faith that a Person who would otherwise be an “Acquiring Person,”
as defined pursuant to the foregoing provisions of Section 1.1, 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 Plan), and (ii) such Person divests as promptly
as practicable (as determined in good faith by the Board) a sufficient number of shares of Common Stock so that such Person would no
longer be an Acquiring Person, as defined pursuant to the foregoing provisions of Section 1.1, then such Person shall not
be deemed to be or have become an “Acquiring Person.”
1.1.2. For
all purposes of this Plan, any calculation of the number of shares of Common Stock outstanding at any particular time, for purposes of
determining the particular percentage of such outstanding Common Stock of which any Person is the Beneficial Owner, shall be made pursuant
to and in accordance with Section 382 of the Code and the Treasury Regulations promulgated thereunder and/or the last sentence of
Rule 13d-3(d)(1)(i) under the Exchange Act.
1.2. “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on the date of
this Plan, and, to the extent not included within the foregoing clause of this Section 1.2, shall also include, with respect
to any Person, any other Person (other than an Exempt Person or an Existing Holder) whose Common Stock would be deemed constructively
owned by such first Person, owned by a “single entity” with respect to such first Person as defined in Section 1.382-3(a)(1) of
the Treasury Regulations, or otherwise aggregated with shares owned by such first Person, pursuant to the provisions of Section 382
of the Code and the Treasury Regulations promulgated thereunder.
1.3. A
Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially Own” or have
“Beneficial Ownership” of any securities:
1.3.1. which
such Person or any of such Person’s Affiliates or Associates directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (A) voting power which includes the power to vote, or to direct the voting of, such security
(except that a Person shall not be deemed to be the Beneficial Owner of any security under this clause (A) if such voting
power arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, Section 14(a) of the Exchange Act by means of a solicitation statement filed on Schedule
14A), and/or (B) investment power which includes the power to dispose, or to direct the disposition of such security;
1.3.2. which
such Person or any of such Person’s Affiliates or Associates directly or indirectly, has the Right to Acquire; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, (w) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities
are accepted for purchase or exchange, (x) securities which such Person has a Right to Acquire upon the exercise of Rights at any
time prior to the time that any Person becomes an Acquiring Person (except to the extent the acquisition or transfer of such rights,
options or warrants would be treated as exercised on the date of its acquisition or transfer under Section 1.382-4(d) of the
Treasury Regulations under Section 382 of the Code), or (y) securities issuable upon the exercise of Rights from and after
the time that any Person becomes an Acquiring Person if such Rights were acquired by such Person or any of such Person’s Affiliates
or Associates prior to the Distribution Date or pursuant to Section 3.1 or Section 21 (“Original Rights”)
or pursuant to Section 11.9 or Section 11.15 with respect to an adjustment to Original Rights;
1.3.3. which
are Beneficially Owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with whom such Person or
any of such Person’s Affiliates or Associates, has an agreement, arrangement or understanding to act together for the purpose of
acquiring, holding, voting or disposing of any securities of the Company, provided that the foregoing shall apply only if the effect
of such agreement, arrangement or understanding is to treat such Persons as an “entity” under Section 1.382-3(a)(1) of
the Treasury Regulations under Section 382 of the Code (except that a Person shall not be deemed to be the Beneficial Owner of any
security under this Section 1.3.3 if such voting power arises solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange
Act by means of a solicitation statement filed on Schedule 14A);
1.3.4. of
which such Person would otherwise be deemed to be the beneficial owner pursuant to Rule 13d-3 under the Exchange Act; or
1.3.5. which
such Person would be deemed to actually or constructively own for purposes of Section 382 of the Code, or any successor provision
or replacement provision.
No Person shall be deemed to
be the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “Beneficially Own” any securities
which such Person or any of such Person’s Affiliates or Associates would otherwise be deemed to “Beneficially Own”
pursuant to this Section 1.3 (x) solely as a result of any merger or other acquisition agreement between the Company
and such Person (or one or more of such Person’s Affiliates or Associates), or any tender, voting or support agreement entered
into by such Person (or one or more of such Person’s Affiliates or Associates) in connection therewith, if, prior to such Person
becoming an Acquiring Person, the Board has approved such merger or other acquisition agreement, or such tender, voting or support agreement,
(y) solely as a result of the Right to Acquire such securities unless the acquisition or transfer of such Right to Acquire would
be deemed, on the date of such acquisition or transfer, to constitute the exercise of such Right to Acquire for the purposes of Section 1.382-4(d) of
the Treasury Regulations promulgated under Section 382 of the Code, or (z) solely as a result of any agreement, arrangement,
understanding or relationship unless the effect thereof is to treat such Person, or any of such Person’s Affiliates or Associates,
as an “entity” under Section 1.382-3(a)(1) of the Treasury Regulations promulgated under Section 382 of the
Code.
No Person who is an officer,
director or employee of an Exempt Person shall be deemed, solely by reason of such Person’s status or authority as such, to be
the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “Beneficially Own” any securities
that are “Beneficially Owned” (as defined in this Section 1.3), including, without limitation, in a fiduciary
capacity, by an Exempt Person or by any other such officer, director or employee of an Exempt Person.
1.4. “Business
Day” shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
1.5. “close
of business” on any given date shall mean 5:00 p.m., New York time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 p.m., New York time, on the next succeeding Business Day.
1.6. “Common
Stock” shall mean the common stock, par value $0.01 per share, of the Company.
1.7. “Exempt
Person” shall mean (i) the Company, any Subsidiary of the Company, in each case including, without limitation, the officers
and board of directors thereof acting in their fiduciary capacity, or any employee benefit plan of the Company or of any Subsidiary of
the Company or any entity or trustee holding shares of capital stock of the Company for or pursuant to the terms of any such plan, or
for the purpose of funding other employee benefits for employees of the Company or any Subsidiary of the Company, (ii) any Person
deemed to be an “Exempt Person” in accordance with Section 27 for so long as such Person complies with any limitations
or conditions required by the Board in making such determination, (iii) any other Person whose Beneficial Ownership (together with
all Affiliates and Associates of such Person) of shares in excess of 4.99% of the then-outstanding Common Stock will not, as determined
by the Board in its sole discretion, jeopardize or endanger the value or availability to the Company of the Tax Attributes or as otherwise
determined by the Board, in its sole discretion, and (iv) any other Person if the Board has determined in good faith that such Person
shall be an “Exempt Person”; provided, however, that any Person deemed to be an “Exempt Person”
pursuant to clauses (ii) or (iii) will cease to be an “Exempt Person” if the Board thereafter makes a determination
that such Person’s Beneficial Ownership (together with all Affiliates and Associates of such Person) would, notwithstanding its
prior determination to the contrary, jeopardize or endanger the value or availability to the Company of the Tax Attributes or the Board
otherwise determines it is not in the best interests of the Company that such Person be an “Exempt Person.”
1.8. “Existing
Holder” shall mean any Person (together with all Affiliates and Associates of such Person) who, immediately prior to the first
public announcement of the adoption of this Plan, is the Beneficial Owner of 4.99% or more of the Common Stock then outstanding, together
with any Affiliates and Associates of such Person. Any Existing Holder who (together with all Affiliates and Associates of such Existing
Holder), after the first public announcement of the adoption of this Plan becomes the Beneficial Owner of less than 4.99% of the Common
Stock then outstanding shall cease to be an Existing Holder and shall be subject to all the provisions of this Plan in the same manner
as any Person who is not and was not an Existing Holder.
1.9. “Person”
shall mean any individual, partnership, joint venture, limited liability company, firm, corporation, unincorporated association, trust
or other entity, and shall include any successor (by merger or otherwise) of such entity.
1.10. “Right
to Acquire” shall mean a legal, equitable or contractual right to acquire any securities (whether directly or indirectly and
whether exercisable immediately, or only after the passage of time, compliance with regulatory requirements, fulfillment of a condition
or otherwise), pursuant to any agreement, arrangement or understanding, whether or not in writing (excluding customary agreements entered
into in good faith with and between an underwriter and selling group members in connection with a firm commitment underwriting registered
under the Securities Act of 1933, as amended (the “Securities Act”)), or upon the exercise of any option, warrant
or right, through conversion of a security, pursuant to the power to revoke a trust, discretionary account or similar arrangement, pursuant
to the power to terminate a repurchase or similar so-called “stock borrowing” agreement or arrangement, or pursuant to the
automatic termination of a trust, discretionary account or similar arrangement.
1.11. “Stock
Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include,
without limitation, the filing of a report pursuant to Section 13(d) of the Exchange Act or pursuant to a comparable successor
statute) by the Company or an Acquiring Person that an Acquiring Person has become such or that discloses information which reveals the
existence of an Acquiring Person or such earlier date as a majority of the Board shall become aware of the existence of an Acquiring
Person.
1.12. “Subsidiary”
of any Person shall mean any partnership, joint venture, limited liability company, firm, corporation, unincorporated association, trust
or other entity of which a majority of the voting power of the voting equity securities or equity interests is owned, of record or beneficially,
directly or indirectly, by such Person.
1.13. A
“Trigger Event” shall be deemed to have occurred upon any Person becoming an Acquiring Person.
1.14. The
following terms shall have the meanings defined for such terms in the Sections set forth below:
| Term |
Section |
| Adjustment
Shares |
11.1.2 |
| Blue
Sky |
9 |
| Board |
Recitals |
| Book
Entry Shares |
3.1 |
| Code |
Recitals |
| common
stock equivalent |
11.1.3 |
| Company |
Preamble |
| current
per share market price |
11.4.1 |
| Current
Value |
11.1.3 |
| Distribution
Date |
3.1 |
| equivalent
preferred stock |
11.2 |
| Exchange
Act |
1.2 |
| Exchange
Consideration |
26.1 |
| Exemption
Request |
27 |
| Expiration
Date |
7.1 |
| Final
Expiration Date |
7.1 |
| Original
Rights |
1.3.2 |
| Plan |
Preamble |
| Preferred
Stock |
Recitals |
| Purchase
Price |
4 |
| Record
Date |
Recitals |
| Redemption
Date |
7.1 |
| Redemption
Period; Redemption Price |
22.1 |
| Requesting
Person |
27 |
| Right |
Recitals |
| Right
Certificate |
3.1 |
| Rights
Agent |
Preamble |
| Securities
Act |
1.10 |
| Security |
11.4.1 |
| Spread |
11.1.3 |
| Substitution
Period |
11.1.3 |
Tax Attributes
Trading Day |
Recitals
11.4.1 |
| Trust |
26.1 |
| Trust
Agreement |
26.1 |
Section 2. Appointment
of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the express terms
and conditions hereof (and no implied terms and conditions), and the Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such co-rights agents as it may deem necessary or desirable upon ten (10) calendar days’ prior written
notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions
of any such co-rights agent. In the event the Company appoints one or more co-rights agents, the respective duties of the Rights Agent
and any co-rights agent shall be as the Company shall reasonably determine, provided that such duties and determination are consistent
with the terms and provisions of this Plan and that contemporaneously with such appointment, if any, the Company shall notify the Rights
Agent in writing thereof.
Section 3. Issuance
of Right Certificates.
3.1. Rights
Evidenced by Stock Certificates. Until the earlier of (i) the tenth (10th) Business Day after the Stock Acquisition
Date or (ii) the tenth (10th) Business Day after the date of the commencement of, or first public announcement of, the
intent of any Person (other than an Exempt Person) to commence, a tender or exchange offer the consummation of which would result in
any Person (other than an Exempt Person) becoming an Acquiring Person (the earlier of (i) and (ii) being herein referred to
as the “Distribution Date”), (x) the Rights (unless earlier expired, redeemed or terminated) will be evidenced
(subject to the provisions of Section 3.2) by the certificates for Common Stock registered in the names of the holders thereof
or, in the case of uncertificated shares of Common Stock registered in book entry form (“Book Entry Shares”), by notation
in book entry (which certificates for Common Stock and Book Entry Shares shall also be deemed to be Right Certificates) and not by separate
certificates, and (y) the Rights (and the right to receive certificates therefor) will be transferable only in connection with the
transfer of the underlying Common Stock. The preceding sentence notwithstanding, prior to the occurrence of a Distribution Date specified
as a result of an event described in clause (ii) (or such later Distribution Date as the Board may select pursuant to this sentence),
the Board may postpone, one or more times, the Distribution Date which would occur as a result of an event described in clause (ii) beyond
the date set forth in such clause (ii). Nothing herein shall permit such a postponement of a Distribution Date after a Person becomes
an Acquiring Person, except as a result of the operation of Section 1.1.1. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign and the Company (or, if requested, the Rights Agent at
the expense of the Company and upon receipt of all relevant information) will send, by first-class, postage-prepaid mail, to each record
holder of Common Stock as of the close of business on the Distribution Date (other than any Acquiring Person or any Associate or Affiliate
of an Acquiring Person), at the address of such holder shown on the records of the Company, one or more certificates for Rights, in substantially
the form of Exhibit B hereto (a “Right Certificate”), evidencing one Right (subject to adjustment as provided
herein) for each share of Common Stock so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates.
3.2. Registered
Holders; Transfer. With respect to certificates for Common Stock and Book Entry Shares outstanding as of the close of business on
the Record Date, until the Distribution Date (or the earlier Expiration Date), the Rights will be evidenced by such certificates for
Common Stock registered in the names of the holders thereof or Book Entry Shares, as applicable, and the registered holders of the Common
Stock shall also be registered holders of the associated Rights. Until the Distribution Date (or the earlier Expiration Date), the surrender
for transfer of any certificate for Common Stock or Book Entry Shares outstanding at the close of business on the Record Date shall also
constitute the transfer of the Rights associated with the Common Stock represented thereby and the Book Entry Shares, as applicable.
3.3. New
Certificates and Uncertificated Shares After Record Date. Certificates for Common Stock which become outstanding after the Record
Date but prior to the earliest of the Distribution Date or the Expiration Date, shall have impressed, printed, stamped, written or otherwise
affixed onto them the following legend:
This certificate also evidences and
entitles the holder hereof to certain rights as set forth in a Tax Benefits Preservation Plan between XWELL, Inc. (the “Company”)
and Equiniti Trust Company, LLC, as Rights Agent, dated as of August 16, 2024, as the same may be amended from time to time (the
“Plan”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in the Plan, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Plan without
charge after receipt of a written request therefor. As described in the Plan, Rights which are owned by, transferred to or have been
owned by Acquiring Persons or Associates or Affiliates thereof (each, as defined in the Plan) and their transferees shall become null
and void and will no longer be transferable.
With respect to any Book Entry Shares, such legend
shall be included in a notice to the record holder of such shares in accordance with applicable law. Until the Distribution Date (or
the earlier Expiration Date), the Rights associated with the Common Stock represented by such certificates and such Book Entry Shares
shall be evidenced by such certificates and the Book Entry Shares alone, and the surrender for transfer of any such certificates or Book
Entry Shares, except as otherwise provided herein, shall also constitute the transfer of the Rights associated with the Common Stock
represented thereby. In the event that the Company purchases or acquires any Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock shall be deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the shares of Common Stock that are no longer outstanding.
Notwithstanding this Section 3.3,
neither the omission of the legend, nor the failure to provide the notice thereof, shall affect the enforceability of any part of this
Plan or the rights of any holder of the Rights.
Section 4. Form of
Right Certificates. The Right Certificates (and the forms of election to purchase shares, certification and assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Plan, or as may be required to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or trading system on which the Rights may from time to time be listed
or quoted, or to conform to usage. Subject to the terms and conditions hereof, the Right Certificates, whenever issued, shall be dated
as of the Record Date, and shall show the date of countersignature by the Rights Agent, and on their face shall entitle the holders thereof
to purchase such number of one one-thousandths of a share of Preferred Stock as shall be set forth therein at the price per one one-thousandth
of a share of Preferred Stock set forth therein (the “Purchase Price”), but the number of such one one-thousandths
of a share of Preferred Stock and the Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature
and Registration. The Right Certificates shall be executed on behalf of the Company by the President, any Vice President, the Treasurer,
any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and shall be attested by the Secretary or any Assistant
Secretary of the Company or by such other officers as the Board may designate, either manually or by facsimile signature. The Right Certificates
shall be countersigned, either manually or by facsimile signature, by an authorized signatory of the Rights Agent, but it shall not be
necessary for the same signatory to countersign all of the Right Certificates hereunder. No Right Certificate shall be valid for any
purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed
on behalf of the Company by any person who, at the actual date of the execution of such Right Certificate, shall be a proper officer
of the Company to sign such Right Certificate, although at the date of the execution of this Plan any such person was not such an officer.
Following the Distribution
Date, and receipt by the Rights Agent of written notice to that effect and all other relevant information referred to in this Plan, the
Rights Agent will keep or cause to be kept, at its principal office, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates, the certificate number of each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject to the
provisions of Section 11.1.2 and Section 13, 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 Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section 11.1.2 or that have been exchanged pursuant to Section 26)
may be transferred, split up or combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-thousandths of a share of Preferred Stock as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to transfer, split up or combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights Agent, and shall surrender, together with any required form of assignment
and certificate duly completed, the Right Certificate or Right Certificates to be transferred, split up or combined or exchanged at the
office of the Rights Agent designated for such purpose accompanied by a signature guarantee (“Signature Guarantee”) from
an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association, and
any other reasonable evidence of authority that may be reasonably required by the Rights Agent. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate or Right Certificates
until the registered holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of
such Right Certificate or Right Certificates and shall have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon, the Rights Agent
shall countersign and deliver to the person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment from the holders of Right Certificates of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up or combination or exchange of such Right Certificates. The Rights Agent shall
not have any duty or obligation to take any action under any section of this Plan that requires the payment of taxes and/or charges unless
and until it is satisfied that all such payments have been made.
Subject to the provisions of
Section 11.1.2, at any time after the Distribution Date and prior to the Expiration Date, upon receipt by the Company and
the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company’s request,
reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise
of Rights; Purchase Price; Expiration Date of Rights.
7.1. Exercise
of Rights. Subject to Section 11.1.2 and except as otherwise provided herein, the registered holder of any Right Certificate
may exercise the Rights evidenced thereby in whole or in part at any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase and certification on the reverse side thereof duly executed, to the Rights Agent at the office
of the Rights Agent designated for such purpose accompanied by a Signature Guarantee, and any other reasonable evidence of authority
that may be reasonably required by the Rights Agent, together with payment of the aggregate Purchase Price for the total number of one
one-thousandths of a share of Preferred Stock (or other securities, cash or other assets) as to which the Rights are exercised, at or
prior to the time (the “Expiration Date”) that is the earliest of (i) the close of business on August 16,
2027 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 22
(the “Redemption Date”), (iii) the time at which the Rights are exchanged as provided in Section 26,
(iv) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described
in the penultimate paragraph of Section 1.3, (v) the close of business on the effective date of the repeal of Section 382
of the Code if the Board determines that this Plan is no longer necessary or desirable for the preservation of the Tax Attributes and
(vi) the close of business on the first day of a taxable year of the Company following a Board determination that no Tax Attributes
may be carried forward or otherwise utilized.
7.2. Purchase.
The Purchase Price for each one one-thousandth of a share of Preferred Stock pursuant to the exercise of a Right shall initially be $7.50,
shall be subject to adjustment from time to time as provided in Sections 11 and 25 and shall be payable in lawful money
of the United States of America in accordance with Section 7.3.
7.3. Payment
Procedures. Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase and certification
duly executed, accompanied by payment of the aggregate Purchase Price for the total number of one one-thousandths of a share of Preferred
Stock to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate
in accordance with Section 9, in cash or by certified or cashier’s check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i)(A) requisition from any transfer agent of the Preferred Stock (or make available,
if the Rights Agent is the transfer agent) certificates for the number of shares 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 depository agent, requisition from
the depositary agent depositary receipts representing interests in such number of one one-thousandths of a share of Preferred Stock as
are to be purchased (in which case certificates for the Preferred Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby directs the depositary agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu of the issuance of fractional shares in accordance with
Section 13 or otherwise in accordance with Section 11.1.3, (iii) promptly 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 Right Certificate, registered
in such name or names as may be designated by such holder and (iv) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate. In the event that the Company is obligated to issue other securities
of the Company, pay cash and/or distribute other property pursuant to Section 11.1.3, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when appropriate.
7.4. Partial
Exercise. In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered
to the registered holder of such Right Certificate or to his or her duly authorized assigns, subject to the provisions of Section 13.
7.5. Full
Information Concerning Ownership. Notwithstanding anything in this Plan to the contrary, neither the Rights Agent nor the Company
shall be obligated to undertake any action with respect to a registered holder of Rights upon the occurrence of any purported exercise
as set forth in this Section 7 unless the certificate contained in the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise shall have been duly completed and executed by the registered holder thereof
and the Company shall have been provided with such additional evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation
and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination
or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Plan. The Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the written request
and expense of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof
to the Company.
Section 9. Reservation
and Availability of Capital Stock. The Company covenants and agrees that, from and after the Distribution Date, it will cause to
be reserved and kept available out of its authorized and unissued Preferred Stock (and, following the occurrence of a Trigger Event,
out of its authorized and unissued Common Stock, other securities, other asset(s) or out of its shares held in its treasury) the
number of shares of Preferred Stock (and, following the occurrence of a Trigger Event, Common Stock, other securities and/or other asset(s))
that will be sufficient to permit the exercise in full of all outstanding Rights.
So long as the Preferred Stock
(and, following the occurrence of a Trigger Event, Common Stock and/or other securities) issuable upon the exercise of Rights may be
listed on any national securities exchange or traded in the over-the-counter market, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted to trading
on such exchange or market upon official notice of issuance upon such exercise.
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 Trigger
Event, Common Stock and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares.
From and after such time as
the Rights become exercisable, the Company shall use its best efforts, if then necessary to permit the issuance of Preferred Stock upon
the exercise of Rights, to register and qualify such Preferred Stock under the Securities Act and any applicable state securities or
“Blue Sky” laws (to the extent exemptions therefrom are not available), cause such registration statement and qualifications
to become effective as soon as possible after such filing and keep such registration and qualifications effective until the earlier of
the date as of which the Rights are no longer exercisable for such securities and the Expiration Date. The Company may temporarily suspend,
for a period of time not to exceed one hundred twenty (120) days, the exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension
is no longer in effect. Notwithstanding any provision of this Plan to the contrary, the Rights shall not be exercisable in any jurisdiction
unless the requisite qualification in such jurisdiction shall have been obtained and until a registration statement under the Securities
Act (if required) shall have been declared effective. The Company shall promptly notify the Rights Agent in writing whenever it makes
a public announcement pursuant to this Section 9 and give the Rights Agent a copy of such announcement.
The Company further covenants
and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect
of the issuance or delivery of the Right Certificates or of any Preferred Stock (or Common Stock and/or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a person other than, or the issuance or delivery of certificates for the Preferred
Stock (or Common Stock and/or other securities, as the case may be) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver any certificates for Preferred Stock (or Common Stock and/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 any such
tax shall have been paid (any such tax being payable by the registered holder of such Right Certificate at the time of surrender) or
until it has been established to the Company’s and the Rights Agent’s satisfaction that no such tax is due.
Section 10. Preferred
Stock Record Date. Each person in whose name any certificate for Preferred Stock (or Common Stock and/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 the Preferred
Stock (or Common Stock and/or other securities, as the case may be) represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred
Stock (or Common Stock and/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 shares (fractional or otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/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 holder of a Right Certificate shall not be entitled to any rights
of a holder of Preferred Stock for which the Rights shall be exercisable, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment
of Purchase Price, Number of Shares or Number of Rights. The Purchase Price, the number of shares of Preferred Stock or other securities
or property purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
11.1. Post-Execution
Events.
11.1.1. Corporate
Dividends, Reclassifications, Etc. In the event the Company shall, at any time after the date of this Plan, (A) declare and
pay a dividend on the Preferred Stock payable in Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue any shares of its capital stock
in a reclassification of the 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 11.1.1, the Purchase
Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open,
he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination 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 of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an
adjustment under both Section 11.1.1 and Section 11.1.2, the adjustment provided for in this Section 11.1.1
shall be in addition to, and shall be made prior to, the adjustment required pursuant to, Section 11.1.2.
11.1.2. Acquiring
Person Events; Triggering Events. Subject to Section 26, in the event that a Trigger Event occurs, then, from and after
the first occurrence of such event upon expiration of the Redemption Period, each holder of a Right, except as provided below, shall
thereafter have a right to receive, upon exercise thereof at a price per Right equal to the then-current Purchase Price multiplied by
the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable (without giving effect to this
Section 11.1.2), in accordance with the terms of this Plan and in lieu of Preferred Stock, such number of shares of Common
Stock as shall equal the result obtained by (x) multiplying the then-current Purchase Price by the then-current number of one one-thousandths
of a share of Preferred Stock for which a Right is then exercisable (without giving effect to this Section 11.1.2) and (y) dividing
that product by 50% of the current per share market price of the Common Stock (determined pursuant to Section 11.4) on the
first of the date of the occurrence of, or the date of the first public announcement of, a Trigger Event (the “Adjustment Shares”);
provided that the Purchase Price and the number of Adjustment Shares shall thereafter be subject to further adjustment as appropriate
in accordance with Section 11.6. Notwithstanding the foregoing, upon the occurrence of a Trigger Event, any Rights that are
or were acquired or Beneficially Owned by (1) any Acquiring Person or any Associate or Affiliate thereof, (2) a transferee
of any Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(3) a transferee of any 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 to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has
any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board has determined
is part of a plan, arrangement or understanding which has as a primary purpose or effect avoidance of this Section 11.1.2,
and subsequent transferees, shall become void without any further action, and any holder (whether or not such holder is an Acquiring
Person or an Associate or Affiliate of an Acquiring Person) of such Rights shall thereafter have no right to exercise such Rights under
any provision of this Plan or otherwise. From and after the Trigger Event, no Right Certificate shall be issued pursuant to Section 3
or Section 6 that represents Rights that are or have become void pursuant to the provisions of this paragraph, and any
Right Certificate delivered to the Rights Agent that represents Rights that are or have become void pursuant to the provisions of this
paragraph shall be canceled.
The Company shall use all reasonable
efforts to ensure that the provisions of this Section 11.1.2 are complied with, but shall have no liability to any holder
of Right Certificates or any other Person as a result of its failure to make any determinations with respect to any Acquiring Person
or its Affiliates, Associates or transferees hereunder.
11.1.3. Insufficient
Shares. The Company may at its option substitute for Common Stock issuable upon the exercise of Rights in accordance with the foregoing
Section 11.1.2 a number of shares of Preferred Stock or fraction thereof such that the current per share market price of
one share of Preferred Stock multiplied by such number or fraction is equal to the current per share market price of one share of Common
Stock. In the event that upon the occurrence of a Trigger Event there shall not be sufficient Common Stock authorized but unissued, or
held by the Company as treasury shares, to permit the exercise in full of the Rights in accordance with the foregoing Section 11.1.2,
the Company may take all such action as necessary to authorize additional Common Stock for issuance upon exercise of the Rights, provided,
however, if the Company determines that it is unable to cause the authorization of a sufficient number of additional shares of Common
Stock, then, in the event the Rights become exercisable, the Company, with respect to each Right and to the extent necessary and permitted
by applicable law and any agreements or instruments in effect on the date hereof to which it is a party, shall: (A) determine the
excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the “Current Value”),
over (2) the Purchase Price (such excess, the “Spread”) and (B) with respect to each Right (other than Rights
which have become void pursuant to Section 11.1.2), make adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Preferred Stock, (4) other
equity securities of the Company (including, without limitation, shares, or fractions of shares, of preferred stock which, by virtue
of having dividend, voting and liquidation rights substantially comparable to those of the Common Stock, the Board has deemed in good
faith to have substantially the same value as the Common Stock) (each such share of preferred stock or fractions of shares of preferred
stock constituting a “common stock equivalent”), (5) debt securities of the Company, (6) other asset(s) or
(7) 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 in good faith by the Board; provided,
however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty
(30) days following the occurrence of a Trigger Event, then the Company shall be obligated to deliver, to the extent necessary and permitted
by applicable law and any agreements or instruments in effect on the date hereof to which it is a party, 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, such number
or fractions of Preferred Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If the Board shall determine 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 thirty (30) day period set forth above may be extended and re-extended to the extent
necessary, but not more than ninety (90) days following the occurrence of a Trigger Event, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period as may be extended, the “Substitution Period”).
To the extent that the Company determines that some actions need to be taken pursuant to the second and/or third sentences of this Section 11.1.3,
the Company (x) shall provide that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/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 11.1.3,
the value of a share of Common Stock shall be the current per share market price (as determined pursuant to Section 11.4)
on the date of the occurrence of a Trigger Event and the value of any “common stock equivalent” shall be deemed to have the
same value as the Common Stock on such date. The Board may, but shall not be required to, establish procedures to allocate the right
to receive Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11.1.3.
11.2. Dilutive
Rights Offering. In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred
Stock entitling them (for a period expiring within forty-five (45) calendar days after such record date) to subscribe for or purchase
Preferred Stock (or securities having the same rights, privileges and preferences as the Preferred Stock (“equivalent preferred
stock”)) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock
or per share of equivalent preferred stock (or having a conversion or exercise price per share, if a security convertible into or exercisable
for Preferred Stock or equivalent preferred stock) less than the current per share market price of the Preferred Stock (as determined
pursuant to Section 11.4) 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 and shares of equivalent preferred stock outstanding on such record date plus the number of shares
of Preferred Stock and shares of equivalent preferred stock which the aggregate offering price of the total number of shares of Preferred
Stock and/or shares of equivalent preferred stock to be offered (and/or the aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such current per share market price and the denominator of which shall be the number of shares of
Preferred Stock and shares of equivalent preferred stock outstanding on such record date plus the number of additional Preferred Stock
and/or shares of equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to
be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right.
In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of
such consideration shall be as determined in good faith by the Board, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Preferred Stock and shares of equivalent preferred
stock owned by or held for the account of the Company or any Subsidiary of the Company 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 or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
11.3. Distributions.
In case the Company shall fix a record date for the making of a distribution to all holders of the 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 evidences
of indebtedness, cash, securities or assets (other than a regular periodic cash dividend at a rate not in excess of 125% of the rate
of the last regular periodic cash dividend theretofore paid or, in case regular periodic cash dividends have not theretofore been paid,
at a rate not in excess of 50% of the average net income per share of the Company for the four quarters ended immediately prior to the
payment of such dividend, or a dividend payable in Preferred Stock (which dividend, for purposes of this Plan, shall be subject to the
provisions of Section 11.1.1(A))) or convertible securities, or subscription rights or warrants (excluding those referred
to in Section 11.2), 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 per share market price
of the Preferred Stock (as determined pursuant to Section 11.4) 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) of the portion of the
cash, assets, securities or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one
share of Preferred Stock and the denominator of which shall be such current per share market price of the Preferred Stock (as determined
pursuant to Section 11.4); provided, however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
11.4. Current
Per Share Market Value.
11.4.1. General.
For the purpose of any computation hereunder, the “current per share market price” of any security (a “Security”
for the purpose of this Section 11.4.1) on any date shall be deemed to be the average of the daily closing prices per share
of such Security for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided,
however, in the event that the current per share market price of the Security is determined during any period following the announcement
by the issuer of such Security of (i) a dividend or distribution on such Security payable in shares of such Security or securities
convertible into such shares or (ii) any subdivision, combination or reclassification of such Security, and prior to the expiration
of thirty (30) Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the “current per share market price” shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last 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 on the principal national
securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported thereby or such other system then in use, or, if on any such date the Security is not quoted by
any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in
the Security selected by the Board. If on any such date no such market maker is making a market in the Security, the fair value of the
Security on such date as determined in good faith by the Board shall be used. The term “Trading Day” shall mean a
day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction
of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. If the Security
is not publicly held or not so listed or traded, or if on any such date the Security is not so quoted and no such market maker is making
a market in the Security, “current per share market price” shall mean the fair value per share as determined in good faith
by the Board or, if at the time of such determination there is an Acquiring Person, by a nationally recognized investment banking firm
selected by the Board, which shall have the duty to make such determination in a reasonable and objective manner, whose determination
shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
11.4.2. Preferred
Stock. Notwithstanding Section 11.4.1, for the purpose of any computation hereunder, the “current per share market
price” of the Preferred Stock shall be determined in the same manner as set forth above in Section 11.4.1 (other than
the last sentence thereof). If the current per share market price of the Preferred Stock cannot be determined in the manner described
in Section 11.4.1, the “current per share market price” of the 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 to the Common Stock occurring after the date of this Plan) multiplied by the current per share market price of the Common
Stock (as determined pursuant to Section 11.4.1). If neither the Common Stock nor the Preferred Stock are publicly held or
so listed or traded, or if on any such date neither the Common Stock nor the Preferred Stock are so quoted and no such market maker is
making a market in either the Common Stock or the Preferred Stock, “current per share market price” of the Preferred Stock
shall mean the fair value per share as determined in good faith by the Board, or, if at the time of such determination there is an Acquiring
Person, by a nationally recognized investment banking firm selected by the Board, which shall have the duty to make such determination
in a reasonable and objective manner, which determination shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For purposes of this Plan, the “current per share market price” of one one-thousandth of a share
of Preferred Stock shall be equal to the “current per share market price” of one share of Preferred Stock divided by 1,000.
11.5. Insignificant
Changes. 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. Any adjustments which by reason of this Section 11.5 are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one one-thousandth of a share of Preferred Stock or the nearest one-thousandth of a share of Common
Stock or other share or security, as the case may be.
11.6. Shares
Other Than Preferred Stock. If as a result of an adjustment made pursuant to Section 11.1, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Stock, thereafter the number
of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11.1, 11.2,
11.3, 11.5, 11.8, 11.9 and 11.13, and the provisions of Sections 7, 9, 10 and
13 with respect to the Preferred Stock shall apply on like terms to any such other shares.
11.7. Rights
Issued Prior to Adjustment. 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
purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.
11.8. Effect
of Adjustments. Unless the Company shall have exercised its election as provided in Section 11.9, upon each adjustment
of the Purchase Price as a result of the calculations made in Sections 11.2 and 11.3, 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 one one-thousandth of a share of Preferred Stock) obtained
by (i) multiplying (x) the number of one one-thousandths of a share of Preferred Stock covered by a Right immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.
11.9. Adjustment
in Number of Rights. The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights,
in substitution for any adjustment in the number of one one-thousandths of a share of Preferred Stock issuable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-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-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 Right Certificates have been issued, shall be
at least ten (10) days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11.9, the Company may, as promptly as practicable, cause to be distributed
to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 13, the
additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause
to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed and 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 Right Certificates on the record date specified in the public announcement.
11.10. Right
Certificates Unchanged. 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 Right Certificates theretofore and thereafter issued may continue
to express the Purchase Price per share and the number of one one-thousandths of a share of Preferred Stock which were expressed in the
initial Right Certificates issued hereunder.
11.11. Par
Value Limitations. Before taking any action that would cause an adjustment reducing the Purchase Price below one one-thousandth of
the then-current par value, if any, of the Preferred Stock or other shares of capital stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable Preferred Stock or other such shares at such adjusted Purchase Price.
11.12. Deferred
Issuance. 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 holder
of any Right exercised after such record date of that number of shares of Preferred Stock and shares of other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the Preferred Stock and shares of other capital stock or other securities,
assets or cash of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s
right to receive such additional shares upon the occurrence of the event requiring such adjustment.
11.13. Reduction
in Purchase Price. Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make
such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any of the Preferred Stock at less than the current market price, issuance wholly for cash of Preferred
Stock or securities which by their terms are convertible into or exchangeable for Preferred Stock, dividends on Preferred Stock payable
in Preferred Stock or issuance of rights, options or warrants referred to hereinabove in this Section 11, hereafter made
by the Company to holders of its Preferred Stock shall not be taxable to such stockholders.
11.14. Company
Not to Diminish Benefits of Rights. The Company covenants and agrees that after the earlier of the Stock Acquisition Date or Distribution
Date it will not, except as permitted by Section 22, Section 25 or Section 26, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights.
11.15. Adjustment
of Rights Associated with Common Stock. Notwithstanding anything contained in this Plan to the contrary, in the event that the Company
shall at any time after the date hereof and prior to the Distribution Date (i) declare or pay any dividend on the outstanding Common
Stock payable in shares of Common Stock, (ii) effect a subdivision or consolidation of the outstanding Common Stock (by reclassification
or otherwise than by the payment of dividends payable in shares of Common Stock), or (iii) combine the outstanding Common Stock
into a greater or lesser number of shares of Common Stock, then in any such case, 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 in accordance with Section 21
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 adjustments provided for in this Section 11.15 shall be made successively whenever
such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.
Section 12. Certificate
of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a brief, reasonably detailed statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent and with each transfer agent for the Common Stock or the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 24. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein
contained and shall not have any duty or liability with respect thereto and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.
Section 13. Fractional
Rights and Fractional Shares.
13.1. Cash
in Lieu of Fractional Rights. The Company shall not be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights (except prior to the Distribution Date in accordance with Section 11.15). In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes
of this Section 13.1, the current market value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall
be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed
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 such system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board. If on any such date no such market maker is making a market in the Rights, the current market value
of the Rights on such date shall be the fair value of the Rights as determined in good faith by the Board, or, if at the time of such
determination there is an Acquiring Person, by a nationally recognized investment banking firm selected by the Board, which shall have
the duty to make such determination in a reasonable and objective manner, which determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
13.2. Cash
in Lieu of Fractional Shares of Preferred Stock. The Company shall not be required to issue fractions of shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) upon exercise or exchange of
the Rights or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock). Interests in fractions of shares of Preferred Stock in integral multiples
of one one-thousandth of a share of Preferred Stock may, at the election of the Company, be evidenced by depositary receipts, pursuant
to an appropriate agreement between the Company and a depositary selected by it; provided, that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as Beneficial
Owners of the Preferred Stock represented by such depositary receipts. 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 shall pay to the registered holders of Right Certificates
at the time such Rights are exercised or exchanged as herein provided an amount in cash equal to the same fraction of the current per
share market price of one share of Preferred Stock (as determined in accordance with Section 13.1) for the Trading Day immediately
prior to the date of such exercise or exchange.
13.3. Cash
in Lieu of Fractional Shares of Common Stock. The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock upon the exercise or exchange of Rights. In lieu of such fractional
shares of Common Stock, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional
shares of Common Stock would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock (as determined in accordance with Section 13.1) for the Trading Day immediately prior to the date of
such exercise or exchange.
13.4. Waiver
of Right to Receive Fractional Rights or Shares. The holder of a Right by the acceptance of the Rights expressly waives his right
to receive any fractional Rights or any fractional shares upon exercise or exchange of a Right, except as permitted by this Section 13.
13.5. Reliance
by Rights Agent. Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent under any section
of this Plan, 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 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 Plan 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 14. Rights
of Action. All rights of action in respect of this Plan, except the rights of action given to the Rights Agent under this Plan, are
vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Stock),
may, in his own behalf and for his own benefit, enforce this Plan, and may institute and maintain any suit, action or proceeding against
the Company to enforce this Plan, or otherwise enforce or act in respect of his right to exercise the Rights evidenced by such Right
Certificate (or, prior to the Distribution Date, such Common Stock) in the manner provided in such Right Certificate and in this Plan.
Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Plan by the Company and shall be entitled to specific performance
of the obligations under, and injunctive relief against actual or threatened violations by the Company of its obligations under this
Plan.
Section 15. Agreement
of Right Holders. Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior
to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Stock;
(b) as
of and after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purpose accompanied by a Signature Guarantee and any other reasonable evidence
of authority that may be reasonably required by the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer with
all required certifications completed; and
(c) the
Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificates or the associated Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice
to the contrary.
Section 16. Right
Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a 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 23), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised
in accordance with the provisions hereof.
Section 17. Concerning
the Rights Agent. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder
in accordance with a mutually agreed upon fee schedule and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the preparation, delivery, negotiation, amendment, administration and execution
of this Plan and the exercise and performance of its duties hereunder. The Company also covenants and agrees to indemnify the Rights
Agent for, and to hold it harmless against, any and all loss, liability, damage, judgment, fine, penalty, claim, demand, settlement,
cost or expense (including, without limitation, the reasonable fees and expenses of legal counsel) that may be paid, incurred or suffered
by it, or which it may become subject, without gross negligence, bad faith or willful misconduct on the part of the Rights Agent (which
gross negligence, bad faith, or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction),
for any action taken, suffered, or omitted to be taken by the Rights Agent in connection with the execution, acceptance, administration,
exercise and performance of its duties under this Plan, including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly, or enforcing its rights hereunder. The provisions under this Section 17 and Section 19
below shall survive the expiration of the Rights and the termination of this Plan and the resignation, replacement or removal of
the Rights Agent. The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company.
The Rights Agent shall be protected
and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of
this Plan in reliance upon any Right Certificate or certificate for the Preferred Stock or the Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction, direction,
consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 18. Merger
or Consolidation or Change of Name of Rights Agent. Any corporation, limited liability company or other entity into which the Rights
Agent or any successor Rights Agent may be merged, converted or with which it may be consolidated, or any corporation, limited liability
company or other entity resulting from any merger, conversion or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation or limited liability company succeeding to the corporate trust or stock transfer business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Plan without the execution or filing
of any paper or any further act on the part of any of the parties hereto, provided that such corporation, limited liability company
or other entity would be eligible for appointment as a successor Rights Agent under the provisions of Section 20. In case
at the time such successor Rights Agent shall succeed to the agency created by this Plan, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates
and in this Plan.
In case at any time the name
of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Plan.
Section 19. Duties
of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Plan upon the following express terms and
conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound:
19.1. Legal
Counsel. The Rights Agent may consult with legal counsel selected by it (who may be legal counsel for the Company), and the opinion
or advice of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted
by it in the absence of bad faith and in accordance with such opinion.
19.2. Certificates
as to Facts or Matters. Whenever in the performance of its duties under this Plan the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions of this Plan in reliance upon such certificate.
19.3. Standard
of Care. The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct (which gross
negligence, bad faith or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction).
Notwithstanding anything in this Plan to the contrary, any liability of the Rights Agent under this Plan will be limited to the amount
of annual fees (not including reimbursed expenses and charges) paid by the Company to the Rights Agent during the twelve (12) months
immediately preceding the event for which recovery from the Rights Agent is being sought. Anything to the contrary notwithstanding, in
no event will the Rights Agent be liable for special, punitive, indirect, incidental or consequential loss or damages of any kind whatsoever
(including, without limitation, lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damages, and
regardless of the form of action.
19.4. Reliance
on Agreement and Right Certificates. The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals
contained in this Plan or in the Right Certificates (except as to its countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have been made by the Company only.
19.5. No
Responsibility as to Certain Matters. The Rights Agent shall not be under any responsibility in respect of the validity of this Plan
or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution
of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant
or condition contained in this Plan or in any Right Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section 11.1.2) or any adjustment required under the provisions
of Sections 3, 11, 22 or 26 or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after actual notice of any such change or adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Preferred Stock or other securities to be issued pursuant to
this Plan or any Right Certificate or as to whether any Preferred Stock will, when so issued, be validly authorized and issued, fully
paid and nonassessable.
19.6. Further
Assurance by Company. 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 Plan.
19.7. Authorized
Company Officers. The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its
duties hereunder from any one of the Chief Executive Officer, the Chief Financial Officer, the President, the Chief Operating Officer,
any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its duties under this Plan, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting
for these instructions. 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 with respect to its duties or obligations
under this Plan and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent shall
not be liable to the Company for any action taken by, or omission of, the Rights Agent in accordance with a proposal included in any
such application on or after the date specified therein (which date shall not be less than three (3) Business Days after the date
any such officer actually receives such application, unless any such officer shall have consented in writing to an earlier date) unless,
prior to taking of any such action (or the effective date in the case of omission), the Rights Agent shall have received written instructions
in response to such application specifying the action to be taken or omitted.
19.8. Freedom
to Trade in Company Securities. The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy,
sell or deal in any of the Rights or other securities of the Company or obtain a pecuniary interest in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent
under this Plan. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal
entity.
19.9. Reliance
on Attorneys and Agents. The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for
any act, omission, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such
act, omission, default, neglect or misconduct absent gross negligence or bad faith in the selection and continued employment thereof
(which gross negligence or bad faith must be determined by a final, non-appealable judgment of a court of competent jurisdiction).
19.10. Incomplete
Certificate. If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the certificate
contained in the form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has not
been completed to certify the holder is not an Acquiring Person (or an Affiliate or Associate thereof), the Rights Agent shall not take
any further action with respect to such requested exercise or transfer without first consulting with the Company; provided, however that
Rights Agent shall not be liable for any delays arising from the duties under this Section 19.10.
19.11. Rights
Holders List. At any time and from time to time after the Distribution Date, upon the request of the Company, the Rights Agent shall
promptly deliver to the Company a list, as of the most recent practicable date (or as of such earlier date as may be specified by the
Company), of the holders of record of Rights.
19.12. No
Risk of Own Funds. No provision of this Plan 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 any of its rights or powers if it believes that
repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.
19.13. No
Interest. The Rights Agent shall have no responsibility to the Company, any holders of Rights, any holders of shares of Common Stock
or any other Person for interest or earnings on any moneys held by the Rights Agent pursuant to this Plan.
19.14. No
Notice. The Rights Agent shall not be required to take notice or be deemed to have notice of any event or condition hereunder, including
any event or condition that may require action by the Rights Agent, unless the Rights Agent shall be specifically notified in writing
of such event or condition by the Company, and all notices or other instruments required by this Plan to be delivered to the Rights Agent
must, in order to be effective, be received by the Rights Agent as specified in Section 24 hereof, and in the absence of
such notice so delivered, the Rights Agent may conclusively assume no such event or condition exists.
19.15. Miscellaneous.
19.15.1. In
the event the Rights Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or
other communication, paper or document received by the Rights Agent hereunder, the Rights Agent, may, in its sole discretion, refrain
from taking any action, and shall be fully protected and shall not be liable in any way to Company, the holder of any Rights Certificate
or Book-Entry Shares or any other Person for refraining from taking such action, unless the Rights Agent receives written instructions
signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Rights Agent.
19.15.2. The
Rights Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations relating to any
registration statement filed with the Securities and Exchange Commission or this Plan, including without limitation obligations under
applicable regulation or law.
19.15.3. The
Rights Agent shall act hereunder solely as agent for the Company. The Rights Agent shall not assume any obligations or relationship of
agency or trust with any of the owners or holders of the Rights or Common Stock.
19.15.4. The
Rights Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature by
an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion Program or
other comparable “signature guarantee program” or insurance program in addition to, or in substitution for, the foregoing;
or (b) any related law, act, regulation or any interpretation of the same even though such law, act, or regulation may thereafter
have been altered, changed, amended or repealed.
19.15.5. The
Rights Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any holder of Rights with
respect to any action or default by the Company, including, without limiting the generality of the foregoing, any duty or responsibility
to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Company.
Section 20. Change
of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Plan upon
thirty (30) days’ notice in writing mailed to the Company and (of then known to the Rights Agent) to each transfer agent of the
Common Stock and/or Preferred Stock, as applicable, by registered or certified mail. Following the Distribution Date, the Company shall
promptly notify the holders of the Right Certificates by first-class mail of any such resignation. In the event the transfer agency relationship
in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be
discharged from its duties under this Plan 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 thirty (30) days’ notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and/or Preferred
Stock, as applicable, by registered or certified mail, and to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting, the resigning, removed, or incapacitated Rights Agent
shall remit to the Company, or to any successor Rights Agent designated by the Company, all books, records, funds, certificates or other
documents or instruments of any kind then in its possession which were acquired by such resigning, removed or incapacitated Rights Agent
in connection with its services as Rights Agent hereunder, and shall thereafter be discharged from all duties and obligations hereunder.
Following notice of such removal, resignation or incapacity, the Company shall appoint a successor to such Rights Agent. If the Company
shall fail to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be an unnatural Person organized and doing business under the laws of the United States, in
good standing, which is authorized under such laws to exercise stock transfer or corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus
of at least $100 million. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose, but such predecessor Rights Agent shall not be required to make any additional expenditure or
assume any additional liability in connection with the foregoing. 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/or Preferred Stock,
as applicable, and, following the Distribution Date, mail a notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 20, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.
Section 21. Issuance
of New Right Certificates. Notwithstanding any of the provisions of this Plan or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its 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 Right
Certificates made in accordance with the provisions of this Plan. In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company shall, with respect to Common Stock so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement, granted or awarded, or upon exercise, conversion or exchange
of securities hereinafter issued by the Company, in each case existing prior to the Distribution Date, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance or sale; provided, however, that (i) no such Right 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 Right Certificate would be issued and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 22. Redemption.
22.1. Right
to Redeem. At any time prior to the earlier of (i) the tenth (10th) Business Day after the Stock Acquisition Date and (ii) the
Final Expiration Date (the earlier of (i) and (ii) being herein referred to as the “Redemption Period”),
the Board may, at its option, redeem all, but not less than all, of the then-outstanding Rights at a redemption price of $0.001 per Right,
appropriately adjusted to reflect any stock split, stock dividend, recapitalization or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the “Redemption Price”), and the Company may, at its option,
pay the Redemption Price in Common Stock (based on the “current per share market price,” determined pursuant to Section 11.4,
of the Common Stock at the time of redemption), cash or any other form of consideration deemed appropriate by the Board. The redemption
of the Rights by the Board may be made effective at such time, on such basis and subject to such conditions as the Board in its sole
discretion may establish.
22.2. Redemption
Procedures. Immediately upon the action of the Board ordering the redemption of the Rights (or at such later time as the Board may
establish for the effectiveness of such redemption), and without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right
so held. The Company shall promptly give public notice of such redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption. The Company shall promptly give, or cause the Rights Agent
to give, notice of such redemption to the holders of the then-outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption shall state the method by which the payment of the Redemption Price will
be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time
in any manner other than that specifically set forth in this Section 22 or in Section 26, and other than in connection
with the purchase, acquisition or redemption of Common Stock prior to the Distribution Date.
Section 23. Notice
of Certain Events. In case the Company shall propose at any time after the earlier of the Stock Acquisition Date and the Distribution
Date (a) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to
the holders of Preferred Stock (other than a regular periodic cash dividend at a rate not in excess of 125% of the rate of the last regular
periodic cash dividend theretofore paid or, in case regular periodic cash dividends have not theretofore been paid, at a rate not in
excess of 50% of the average net income per share of the Company for the four quarters ended immediately prior to the payment of such
dividends, or a stock dividend on, or a subdivision, combination or reclassification of the Common Stock), or (b) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (c) to effect any reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding Preferred Stock), or (d) to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person
(other than pursuant to a merger or other acquisition agreement of the type excluded from the definition of “Beneficial Ownership”
in Section 1.3), or (e) to effect the liquidation, dissolution or winding up of the Company, or (f) to declare
or pay any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of dividends in Common Stock), then, in each such case, the Company shall give
to the Rights Agent and to each holder of a Right Certificate, in accordance with Section 24, 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 holders of the Preferred Stock and/or Common 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 (a) or (b) above at least ten (10) days prior to the record date
for determining holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least ten (10) days
prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Preferred Stock and/or
Common Stock, whichever shall be the earlier.
In case any event set forth
in Section 11.1.2 shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give
to the Rights Agent and to each holder of a Right Certificate, in accordance with Section 24, a notice of the occurrence
of such event, which notice shall describe the event and the consequences of the event to holders of Rights under Section 11.1.2,
and (ii) all references in this Section 23 to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or,
if appropriate, other securities.
Section 24. Notices.
Notices or demands authorized by this Plan to be given or made by the Rights Agent or by the holder of any Right Certificate to or on
the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed
in writing with the Rights Agent) as follows:
XWELL, Inc.
254 West 31st Street,
11th Floor
New York, NY 10001
Attn: Corporate Secretary
Subject to the provisions of Section 20
and Section 23, any notice or demand authorized by this Plan to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, or overnight
courier delivery addressed (until another address is filed in writing with the Company) as follows:
Equiniti Trust Company, LLC
48 Wall Street, 23rd Floor
New York, NY 10005
Attn: Relationship Management
Notices or demands authorized by this Plan to
be given or made by the Company or the Rights Agent to the holder of any Right Certificate (or, prior to the Distribution Date, to the
holder of any certificate representing Common Stock) shall be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry books of the Company; provided that prior to the Distribution
Date a filing by the Company with the Securities and Exchange Commission shall constitute sufficient notice to the holders of securities
of the Company, including the Rights, for purposes of this Plan and no other notice need be given.
Section 25. Supplements
and Amendments. For so long as the Rights are then redeemable, the Company, subject to the terms of this Section 25,
may in its sole and absolute discretion, and the Rights Agent shall, if the Company so directs, supplement or amend any provision of
this Plan in any respect without the approval of any holders of Rights or Common Stock. From and after the time that the Rights are no
longer redeemable, the Company may, and the Rights Agent shall, if the Company so directs, from time to time supplement or amend this
Plan without the approval of any holders of Rights (i) to cure any ambiguity or to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein or (ii) to make any other changes or provisions in
regard to matters or questions arising hereunder which the Company may deem necessary or desirable, including but not limited to extending
the Final Expiration Date; provided, however, that no such supplement or amendment shall adversely affect the interests of the
holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no such supplement
or amendment may cause the Rights again to become redeemable or cause this Plan again to become amendable as to an Acquiring Person or
an Affiliate or Associate of an Acquiring Person other than in accordance with this sentence; provided further, that the right
of the Board to extend the Distribution Date shall not require any amendment or supplement hereunder. Upon the delivery of a certificate
from the Company’s Chief Executive Officer, Chief Financial Officer, treasurer, assistant treasurer, secretary or assistant secretary
which states that the proposed supplement or amendment is in compliance with the terms of this Section 25, the Rights Agent
shall execute such supplement or amendment. Notwithstanding anything in this Plan to the contrary, the Rights Agent shall not be required
to execute any supplement or amendment to this Plan that it has determined would adversely affect its own rights, duties, obligations
or immunities under this Plan. No supplement or amendment to this Plan shall be effective unless duly executed by the Rights Agent.
Section 26. Exchange.
26.1. Exchange
of Common Stock for Rights. At any time after the occurrence of a Trigger Event, the Board may, at its option, exchange Common Stock
for all or part of the then-outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 11.1.2) by exchanging 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 amount per Right being hereinafter
referred to as the “Exchange Consideration”). Notwithstanding the foregoing, the Board shall not be empowered to effect
such exchange at any time after any Acquiring Person shall have become the Beneficial Owner of 50% or more of the Common Stock then outstanding.
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. Without limiting the foregoing, prior to effecting an exchange pursuant to this Section 26,
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 of the shares of Common Stock issuable pursuant to the exchange
(or any portion thereof that have not theretofore been issued in connection with the exchange). From and after the time at which such
shares are issued to the Trust, all stockholders then entitled to receive shares pursuant to the exchange shall be entitled to receive
such shares (and any dividends or distributions made thereon after the date on which such shares are deposited in the Trust) only from
the Trust and solely upon compliance with the relevant terms and provisions of the Trust Agreement. Any shares of Common Stock issued
at the direction of the Board in connection herewith shall be validly issued, fully paid and nonassessable shares of Common Stock, 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.
26.2. Exchange
Procedures. Immediately upon the action of the Board ordering the exchange for any Rights pursuant to Section 26.1 and
without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive the Exchange Consideration. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of exchange shall 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 which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than the Rights that have become void pursuant to the provisions of Section 11.1.2)
held by each holder of Rights.
26.3. Insufficient
Shares. In the event that there shall not be sufficient Common Stock issued but not outstanding, authorized but unissued, or held
by the Company as treasury shares, to permit an exchange of Rights for Common Stock, as contemplated in accordance with this Section 26,
the Company may take all such action as necessary to authorize additional Common Stock for issuance upon exchange of the Rights; provided,
however, if the Company determines that it is unable to cause the authorization of a sufficient number of additional shares of
Common Stock, then, in the event the Rights are to be exchanged, the Company, with respect to each Right and to the extent necessary
and permitted by applicable law and any agreements or instruments in effect on the date hereof to which it is a party, may, at its option,
make adequate provision to ensure and provide that each Right shall thereafter constitute the right to receive (1) cash, (2) a
number of shares of Preferred Stock or fraction thereof (or equivalent preferred stock, as such term is defined in Section 11.2)
such that the current per share market price (determined pursuant to Section 11.4) of one share of Preferred Stock (or equivalent
preferred stock) multiplied by such number or fraction is equal to the current per share market price of one share of Common Stock (determined
pursuant to Section 11.4) as of the date of such exchange, (3) other equity securities of the Company (including, without
limitation, a common stock equivalent as defined in Section 11.1.3) (4) debt securities of the Company, (5) other
asset(s) or (6) any combination of the foregoing having an aggregate value substantially comparable to the current per share
market price of one share of Common Stock (determined pursuant to Section 11.4) as of the date of such exchange, where such
aggregate value has been determined by the Board in good faith. If the Board shall determine in good faith that it is likely that sufficient
additional Common Stock could be authorized for issuance upon exchange of the Rights, the Company may seek stockholder approval for the
authorization of such additional shares. To the extent that the Company determines that some actions need to be taken pursuant to the
second sentence of this Section 26.3, the Company (x) shall provide that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exchange of the Rights in order to seek any authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to such first sentence of this Section 26.3 and to determine the
value thereof. For purposes of this Section 26.3, the value of a share of Common Stock shall be the current per share market
price (as determined pursuant to Section 11.4) on the date of the occurrence of a Trigger Event and the value of any “common
stock equivalent” shall be deemed to have the same value as the Common Stock on such date. The Board may, but shall not be required
to, establish procedures to allocate the right to receive Common Stock upon the exchange of the Rights among holders of Rights pursuant
to this Section 26.3. In the case of a substitution described in this Section 26.3, references to “Common
Stock” shall be replaced with “cash,” “Preferred Stock,” such equity security, such debt security and/or
such other asset(s) where applicable throughout Section 26 of this Plan and any other provisions where appropriate to
effect and properly reflect this substitution.
Section 27. Process
to Seek Exemption. Any Person who desires to effect any acquisition of Common Stock that might, if consummated, result in such Person
(together with its Affiliates and Associates) Beneficially Owning 4.99% or more of the then-outstanding Common Stock (or, in the case
of an Existing Holder, one or more additional shares of Common Stock) (a “Requesting Person”) may, prior to the Stock
Acquisition Date and in accordance with this Section 27, request that the Board grant an exemption with respect to such acquisition
under this Plan so that such Person would be deemed to be an “Exempt Person” under clause (ii) of Section 1.7
hereof for purposes of this Plan (an “Exemption Request”). An Exemption Request shall be in proper form and shall
be delivered by registered mail, return receipt requested, to the Secretary of the Company at the principal executive office of the Company.
The Exemption Request shall be deemed made upon receipt by the Corporate Secretary of the Company. To be in proper form, an Exemption
Request shall set forth (i) the name and address of the Requesting Person, (ii) the number and percentage of shares of Common
Stock then Beneficially Owned by the Requesting Person, together with all Affiliates and Associates of the Requesting Person, and (iii) a
reasonably detailed description of the transaction or transactions by which the Requesting Person would propose to acquire Beneficial
Ownership of Common Stock aggregating 4.99% or more of the then-outstanding Common Stock (or, in the case of an Existing Holder, one
or more additional shares of Common Stock) and the maximum number and percentage of shares of Common Stock that the Requesting Person
proposes to acquire. The Board shall endeavor to respond whether to grant an exemption in response to an Exemption Request as promptly
as practicable (and, in any event, within twenty (20) Business Days) after receipt thereof; provided, that the failure of the Board to
respond within such period shall be deemed to constitute the denial by the Board of the Exemption Request. The Requesting Person shall
respond promptly to reasonable and appropriate requests for additional information from the Company or the Board and its advisors to
assist the Board in making its determination. The Board shall grant an exemption in response to an Exemption Request only if the Board
determines in its sole discretion that the acquisition of Beneficial Ownership of Common Stock by the Requesting Person (i) will
not jeopardize or endanger the value or availability to the Company of the Tax Attributes or (ii) is otherwise in the best interests
of the Company. Any exemption granted hereunder may be granted in whole or in part, and may be subject to limitations or conditions (including
a requirement that the Requesting Person agree that it will not acquire Beneficial Ownership of shares of Common Stock in excess of the
maximum number and percentage of shares approved by the Board), in each case as and to the extent the Board shall determine necessary
or desirable to provide for the protection of the Company’s Tax Attributes. Any Exemption Request may be submitted on a confidential
basis and, except to the extent required by applicable law, the Company shall maintain the confidentiality of such Exemption Request
and the Board’s determination with respect thereto, unless the information contained in the Exemption Request or the determination
of the Board with respect thereto otherwise becomes publicly available or is required to be disclosed by applicable law or regulation.
Section 28. Successors.
All the covenants and provisions of this Plan by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 29. Benefits
of this Plan. Nothing in this Plan shall be construed to give to any Person or corporation other than the Company, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Plan; but this Plan shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock).
Section 30. Determination
and Actions by the Board. Without limiting any of the rights and immunities of the Rights Agent, the Board shall have the power and
authority to administer this Plan and to exercise the rights and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable, as determined by the Board, in the administration of this Plan. The Rights Agent is entitled to assume the
Board acted in good faith and shall be fully protected and incur no liability in reliance thereon.
Section 31. Severability.
If any term, provision, covenant or restriction of this Plan 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 Plan shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided, however, that if such excluded provision shall affect the
rights, immunities, liabilities, duties or obligations of the Rights Agent, the Rights Agent shall be entitled to resign immediately
upon written notice to the Company.
Section 32. Governing
Law. This Plan and each Right Certificate issued hereunder shall be deemed to be a contract made under the internal 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
to be made and performed entirely within such State.
Section 33. Counterparts.
This Plan 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 signature to this Plan transmitted electronically
shall have the same authority, effect and enforceability as an original signature.
Section 34. Descriptive
Headings. Descriptive headings of the several Sections of this Plan 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 (including, but not limited
to, natural disasters, catastrophic events, epidemics and pandemics), terrorist acts, shortage of supply, breakdowns or malfunctions,
interruptions or malfunctions of any utilities, communications, or 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.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties
hereto have caused this Plan to be duly executed, as of the day and year first above written.
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XWELL, INC. |
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/s/ Scott Milford |
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Name: Scott Milford |
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Title: Chief Executive Officer |
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EQUINITI
TRUST COMPANY, LLC |
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By |
/s/ Sharon Best-Jhagroo |
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Name: Sharon Best-Jhagroo |
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Title: S.V.P. - Relationship Director |
SIGNATURE PAGE TO
TAX BENEFITS PRESERVATION PLAN
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
of
SERIES
A JUNIOR PARTICIPATING PREFERRED STOCK
of
XWELL, INC.
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
XWELL, Inc., a corporation
organized and existing under the laws of the State of Delaware (the “Corporation”), in accordance with the provisions
of Section 103 thereof, DOES HEREBY CERTIFY:
That,
pursuant to the authority vested in the Board of Directors of the Corporation (the “Board of Directors”) in accordance
with the provisions of the Certificate of Incorporation of the Corporation, as heretofore amended (the “Certificate of Incorporation”),
the Board of Directors on August 15, 2024 adopted the following resolution creating a series of 9,000 shares of Preferred
Stock designated as “Series A Junior Participating Preferred Stock”:
RESOLVED, that pursuant to the authority
vested in the Board of Directors of this Corporation in accordance with the provisions of the Certificate of Incorporation, a series
of Preferred Stock, par value $0.01 per share, of the Corporation be and hereby is created, and that the designation and number of shares
thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series
and the qualifications, limitations and restrictions thereof are as follows:
Series A Junior Participating Preferred
Stock
1. Designation
and Amount. There shall be a series of Preferred Stock that shall be designated as “Series A Junior Participating Preferred
Stock,” and the number of shares constituting such series shall be 9,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, however, that no decrease shall reduce the number of shares of Series A Junior Participating
Preferred Stock to less than the number of shares then issued and outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities issued by the Corporation.
2. Dividends
and Distributions.
(A) Subject
to the prior and superior rights of the holders of any shares of any class or series of stock of the Corporation 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 any class or series of stock of the Corporation ranking
junior to the Series A Junior Participating Preferred Stock in respect thereof, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the 15th
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 sum
of (1) the Adjustment Number (as defined below) times the aggregate per share amount of all cash dividends, plus (2) the Adjustment
Number 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, par value $0.01 per share, of the Corporation (the “Common Stock”), or a subdivision
of the outstanding shares of Common Stock (by reclassification or otherwise), in each case 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. The “Adjustment Number” shall
initially be 1,000. In the event the Corporation shall at any time after August 16, 2024 (i) declare and pay 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.
(B) The
Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph
(A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares
of Common Stock).
(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.
The Board of Directors 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 60 days prior
to the date fixed for the payment thereof.
3. Voting
Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights:
(A) Each
share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment
Number on all matters submitted to a vote of the stockholders of the Corporation.
(B) Except
as required by law, by paragraph (C) of this Section 3 and by Section 10 hereof, 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.
(C) If,
at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether or
not consecutive) payable on any share or shares of Series A Junior Participating Preferred Stock are in default, the number of directors
constituting the Board of Directors shall be increased by two. In addition to voting together with the holders of Common Stock for the
election of other directors of the Corporation, the holders of record of the Series A Junior Participating Preferred Stock, voting
separately as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each
subsequent annual meeting of stockholders), unless all dividends in arrears on the Series A Junior Participating Preferred Stock
have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the Corporation, the
holders of any Series A Junior Participating Preferred Stock being entitled to cast a number of votes per share of Series A
Junior Participating Preferred Stock as is specified in paragraph (A) of this Section 3. To the extent the Board of Directors
is divided into classes, with the directors in the classes serving staggered terms, at the time of the election of directors elected
by the holders of the Series A Junior Participating Preferred Stock pursuant hereto, each such additional director shall not be
a member of any such class, but shall serve until the next annual meeting of stockholders for the election of directors, or until his
successor shall be elected and shall qualify, or until his right to hold such office terminates pursuant to the provisions of this Section 3(C).
Until the default in payments of all dividends which permitted the election of said directors shall cease to exist, any director who
shall have been so elected pursuant to the provisions of this Section 3(C) may be removed at any time, without cause, only
by the affirmative vote of the holders of the shares of Series A Junior Participating Preferred Stock at the time entitled to cast
a majority of the votes entitled to be cast for the election of any such director at a special meeting of such holders called for that
purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when such default shall cease to exist, the
holders of the Series A Junior Participating Preferred Stock shall be divested of the foregoing special voting rights, subject to
revesting in the event of each and every subsequent like default in payments of dividends. Upon the termination of the foregoing special
voting rights, the terms of office of all persons who may have been elected directors pursuant to said special voting rights shall forthwith
terminate, and the number of directors constituting the Board of Directors shall be reduced by two. The voting rights granted by this
Section 3(C) shall be in addition to any other voting rights granted to the holders of the Series A Junior Participating
Preferred Stock in this Section 3.
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, make any other distributions on, or redeem or purchase or otherwise acquire for consideration 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 other than (A) such redemptions or purchases that may be deemed to occur upon the exercise of stock options, warrants or similar
rights or grant, vesting or lapse of restrictions on the grant of any other performance shares, restricted stock, restricted stock units
or other equity awards to the extent that such shares represent all or a portion of (x) the exercise or purchase price of such options,
warrants or similar rights or other equity awards and (y) the amount of withholding taxes owed by the recipient of such award in
respect of such grant, exercise, vesting or lapse of restrictions; (B) the repurchase, redemption, or other acquisition or retirement
for value of any such shares from employees, former employees, directors, former directors, consultants or former consultants of the
Corporation or their respective estate, spouse, former spouse or family member, pursuant to the terms of the agreements pursuant to which
such shares were acquired;
(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; or
(iii) 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 of Directors) to all holders of Series A Junior Participating Preferred Stock, or to
such holders and holders of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine
will result in fair and equitable treatment among the respective series or classes.
(B) The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock
of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
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 promptly after the acquisition thereof. All such shares shall upon their retirement 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 of Directors, subject to any conditions and restrictions on issuance set forth herein.
6. Liquidation,
Dissolution or Winding Up.
(A) Upon
any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise, 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 per share (the “Series A Liquidation Preference”) equal to the greater of (i) $10.00 plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, and (ii) the
Adjustment Number times the per share amount of all cash and other property to be distributed in respect of the Common Stock upon such
liquidation, dissolution or winding up of the Corporation.
(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 classes and series of stock of the Corporation, if any, that rank on a parity with the Series A
Junior Participating Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably
to the holders of the Series A Junior Participating Preferred Stock and the holders of such parity shares in proportion to their
respective liquidation preferences.
(C) Neither
the merger or consolidation of the Corporation into or with another entity nor the merger or consolidation of any other entity into or
with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 6.
7. Consolidation,
Merger, Etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the outstanding
shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such
case each share of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share equal to the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged.
8. No
Redemption. Shares of Series A Junior Participating Preferred Stock shall not be subject to redemption by the Corporation.
9. Ranking.
The Series A Junior Participating Preferred Stock shall rank junior to all other series of Preferred Stock as to the payment
of dividends and as to the distribution of assets upon liquidation, dissolution or winding up, unless the terms of any such series shall
provide otherwise, and shall rank senior to the Common Stock as to such matters.
10. Amendment.
At any time that any shares of Series A Junior Participating Preferred Stock are outstanding, the Certificate of Incorporation
of the Corporation shall not be amended, by merger, consolidation or otherwise, which 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 of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a
class.
11. Fractional
Shares. 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.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate this 15th day of August, 2024.
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XWELL, INC. |
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EXHIBIT B
Form of Right Certificate
| Certificate No. R- |
_______ Rights |
NOT EXERCISABLE AFTER AUGUST 16, 2027
OR EARLIER IF UPON AN EXPIRATION DATE, INCLUDING IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION
AT $0.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE PLAN. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2
OF THE PLAN), RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS DEFINED IN THE PLAN), OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
XWELL, INC.
This certifies that ________________,
or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Tax Benefits Preservation Plan, dated as of August 16, 2024, as the same may be amended
from time to time (the “Plan”), between XWELL, Inc., a Delaware corporation (the “Company”),
and Equiniti Trust Company, LLC, a New York limited liability trust company, as Rights Agent (the “Rights Agent”),
to purchase from the Company at any time after the Distribution Date and prior to 5:00 P.M. (New York time) on August 16, 2027
at the offices of the Rights Agent, or its successors as Rights Agent, designated for such purpose, one one-thousandth of a fully paid,
nonassessable share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”),
of the Company, at a purchase price of $7.50 per one one-thousandth of a share of Preferred Stock, subject to adjustment (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase and certification
duly executed. The number of Rights evidenced by this Right Certificate (and the number of one one-thousandths of a share of Preferred
Stock which may be purchased upon exercise thereof) set forth above, and the Purchase Price set forth above, are the number and Purchase
Price as of August 16, 2024 based on the Preferred Stock as constituted at such date. Capitalized terms used in this Right Certificate
without definition shall have the meanings ascribed to them in the Plan. As provided in the Plan, the Purchase Price and the number of
shares of Preferred Stock which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
This Right Certificate is subject
to all of the terms, provisions and conditions of the Plan, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Plan reference is hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the
Plan are on file at the principal offices of the Company and the Rights Agent.
This Right Certificate, with
or without other Right Certificates, upon surrender at the offices of the Rights Agent designated for such purpose, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-thousandths of a share of Preferred Stock as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of
the Plan, the Board may, at its option, (i) redeem the Rights evidenced by this Right Certificate at a redemption price of $0.001
per Right or (ii) exchange Common Stock for the Rights evidenced by this Certificate, in whole or in part.
No fractional Preferred Stock
will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions of Preferred Stock which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depository
receipts), but in lieu thereof a cash payment will be made, as provided in the Plan.
No holder of this Right Certificate,
as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Stock or of any other
securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Plan or herein
be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Plan), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided
in the Plan.
If any term, provision, covenant
or restriction of the Plan 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 the Plan shall remain in full force and effect and shall in no way
be affected, impaired or invalidated.
This Right Certificate shall
not be valid or binding for any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company.
Dated as of __________, 2024.
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Countersigned:
EQUINITI TRUST COMPANY, LLC
as Rights Agent
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED_____________________________________________________________________________________________________
hereby sells, assigns and transfers unto_________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
(Please print name and address
of transferee)
Rights
evidenced by this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and
appoint Attorney,
to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.
Dated:_____________
Signature Guaranteed:
Signatures must be guaranteed
by an “eligible guarantor institution” as defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.
The undersigned
hereby certifies that:
(1) the
Rights evidenced by this Right Certificate are not Beneficially Owned by and are not being assigned to an Acquiring Person or an Affiliate
or an Associate thereof; and
(2) after
due inquiry and to the best knowledge of the undersigned, the undersigned did not acquire the Rights evidenced by this Right Certificate
from any person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate thereof.
Dated:__________________________________
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To XWELL, Inc.:
The undersigned hereby irrevocably
elects to exercise __________________ Rights represented by this Right Certificate to purchase the Preferred Stock issuable upon the
exercise of such Rights (or such other securities or property of the Company or of any other Person which may be issuable upon the exercise
of the Rights) and requests that certificates for such stock be issued in the name of:
___________________________________________________________
(Please print name and address)
_____________________________________________________________
If such number of Rights shall not be all the
Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the
name of and delivered to:
Please insert social security
or other identifying number
____________________________________________________________
(Please print name and address)
____________________________________________________________
Dated: __________________
Signature Guaranteed:
____________________________________________________________
Signatures must be guaranteed
by an “eligible guarantor institution” as defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.
The undersigned hereby certifies that:
(1) the
Rights evidenced by this Right Certificate are not Beneficially Owned by and are not being assigned to an Acquiring Person or an Affiliate
or an Associate thereof; and
(2) after
due inquiry and to the best knowledge of the undersigned, the undersigned did not acquire the Rights evidenced by this Right Certificate
from any person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate thereof.
Dated:_______________
NOTICE
The signature in the foregoing
Form of Assignment and Form of Election to Purchase must conform to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
In the event the certification
set forth above in the Form of Assignment or Form of Election to Purchase is not completed, the Company will deem the Beneficial
Owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or Associate hereof and such Assignment
or Election to Purchase will not be honored.
