Current Report Filing (8-k)

GRAFTECH INTERNATIONAL LTD.

Date: May 4, 2015

/s/ John D. Moran

John D. Moran

Vice President, General Counsel and Secretary

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 4, 2015

LOGO

GRAFTECH INTERNATIONAL LTD.

(Exact Name of Registrant as Specified in its Charter)

Delaware

1-13888

27-2496053

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification Number)

Suite 300 Park Center I

6100 Oak Tree Boulevard

Independence, Ohio 44131

(Address of Principal Executive Offices, including Zip Code)

Registrant’s Telephone Number, including Area Code: 216-676-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.

Entry into a Material Definitive Agreement.

Investment Agreement

On May 4, 2015, GrafTech International Ltd. (the “Company”) entered into an Investment Agreement (the “Investment Agreement”) with BCP IV GrafTech Holdings LP, an affiliate of Brookfield Capital Partners Ltd. (“Brookfield”), pursuant to which the Company agreed to issue and sell and Brookfield agreed to purchase and pay for: (i) shares of a new Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”) in an amount equal to 19.9% of the Company’s outstanding common stock (the “Series A Preferred Shares”) and (ii) shares of a new Series B Convertible Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock,” and, together with the Series A Preferred Stock, the “Preferred Stock”), in an amount equal to 150,000 less the number of Series A Preferred Shares, for an aggregate purchase price of $150,000,000 in cash (the “Purchase Price”).

The closing of the purchase and sale of the Preferred Stock (the “Closing”) is expected to occur upon the satisfaction of customary closing conditions set forth in the Investment Agreement, including the expiration or early termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction of any other applicable antitrust and regulatory approval requirements. The Investment Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature.

Pursuant to the Investment Agreement, the Company is required to reimburse Brookfield for its reasonable, out-of-pocket fees and expenses (including the reasonable fees and expenses of legal counsel, accountants, investment bankers, brokers, or other representatives or consultants) up to $500,000 incurred in connection with the transaction.

Upon issuance, the holders of the Preferred Stock have the right, if a change of control shall have occurred prior to the Closing, to require the Company to repurchase all or any portion of such holder’s shares of Preferred Stock at an amount equal to the amount that the holders of the Preferred Stock would have received had they converted the Preferred Stock into shares of common stock immediately prior to such change of control.

The proceeds from the sale of the Preferred Stock will be used by the Company, along with its other cash and borrowing resources, to repay the Company’s senior subordinated notes due to mature in November 2015.

Preferred Stock

Upon issuance, the Series A Preferred Stock will be immediately convertible, at Brookfield’s option, into shares of common stock of the Company, at a conversion price of $5.00 per common share, subject to customary anti-dilution adjustments. Each share of the Series B Preferred Stock will automatically convert into one share of Series A Preferred Stock upon approval by the Company’s stockholders of such conversion in accordance with New York Stock Exchange requirements (the “Stockholder Approval”). The Company has agreed to seek the Stockholder Approval at the Company’s 2015 annual stockholders meeting.

The Preferred Stock will be entitled to an annual dividend at the rate of 7.0% prior to any dividend or distribution with respect to any of the Company’s capital stock junior to the Preferred Stock, which will be due and payable quarterly in arrears in cash. Dividends will be cumulative and will accrue until paid. If the Company fails to make timely dividend payments, the dividend rate would increase to 8% per annum until such time as all accrued but unpaid dividends have been paid in full. The Preferred Stock will have a liquidation preference equal to the greater of (x) $1,000 per share, plus all accrued and unpaid dividends thereon, whether or not declared and (y) the amount that the holders of the Preferred Stock would have received had they converted the Preferred Stock into shares of common stock (or Series A Preferred Stock in the case of Series B Preferred Stock) immediately prior to the time of liquidation. The Preferred Stock will rank junior to the Company’s existing and future indebtedness. The Series A Preferred Stock will have certain mandatory redemption rights at the holders’ option following the seventh anniversary of the issue date and certain redemption rights at the option of the Company following the fourth anniversary of the issue date if the daily volume weighted average price of the Company’s common stock equals or exceeds 175.0% of the conversion price for at least 40 trading days during a period of 60 consecutive trading days, in each instance at a redemption price per share equal to $1,000 per share plus all accrued and unpaid

dividends thereon, whether or not declared. The Series B Preferred Stock has a mandatory redemption right at the holders’ option if the Stockholder Approval is not obtained by a specified date. The holders of the Preferred Stock also have the right, upon the occurrence of a change of control (other than one for which such holders have a repurchase right under the Investment Agreement), to require the Company to repurchase all or any portion of such holder’s shares of Preferred Stock, at a make-whole premium.

The holders of the Preferred Stock will be entitled to vote as a class on matters adversely affecting the Preferred Stock and, subject to certain ownership thresholds, on the election of designated board nominees, and the holders of the Series A Preferred Stock will be entitled to vote together with the holders of common stock, as a single class, on an as converted basis, on other matters. So long as 25% of the originally issued shares of Series A Preferred Stock is outstanding, holders of a majority of the Preferred Stock are entitled to veto rights over issuances of senior or parity securities and changes to the certificate of incorporation of the Company that are adverse to the Preferred Stock.

Stockholder Rights

The Investment Agreement contains a form of Stockholder Rights Agreement (“Stockholder Rights Agreement”), which will be executed by the parties at the Closing. Pursuant to the Stockholder Rights Agreement, upon issuance of the Preferred Stock, Brookfield will have the right to designate two members for election to the Company’s board of directors for so long as Brookfield owns at least 75% of the common stock issuable or actually issued upon conversion of the Series A Preferred Stock, excluding all shares of Series A Preferred Stock issued upon conversion of the Series B Preferred Stock (the “Original Preferred Shares”). Brookfield will have the right to appoint one such member of the board for so long as Brookfield owns at least 25%, but less than 75%, of the Original Preferred Shares. In addition, for so long as at least 25% of the Original Preferred Shares remain outstanding, the Company will not increase the size of the board to more than 11 members without the prior written consent of the holders of a majority of the outstanding shares of Series A Preferred Stock.

For so long as Brookfield owns 25% or more of the Preferred Stock, Brookfield will have preemptive rights with respect to equity offerings, to enable Brookfield to maintain its proportionate equity ownership interest, subject to certain exceptions. The Stockholder Rights Agreement also prohibits Brookfield from selling or transferring any of the Preferred Stock to any competitor, key supplier or vendor of the Company as specified by the Company.

Registration Rights

The Investment Agreement also contains a form of Registration Rights Agreement (the “Registration Rights Agreement”), which will be executed by the parties at the Closing. The Registration Rights Agreement entitles Brookfield to customary demand, piggyback and shelf registration rights with respect to the shares of common stock underlying the Series A Preferred Stock and any other shares of common stock that Brookfield may acquire.

Limited Guarantee

In connection with the Investment Agreement, Brookfield Capital Partners IV L.P. (“Capital Partners”) delivered a limited guarantee (the “Limited Guarantee”) in favor of the Company, pursuant to which Capital Partners guaranteed performance of the obligations of Brookfield under the Investment Agreement through the Closing.

The foregoing descriptions of the Investment Agreement and the agreements and documents that are attached thereto and the Limited Guarantee do not purport to be complete and are qualified in their entirety by reference to the Investment Agreement and the Limited Guarantee, copies of which are filed as exhibits to this Current Report on Form 8-K.

Item 3.02.

Unregistered Sale of Equity Securities.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 3.02 by reference.

The Preferred Stock is being sold without registration under the Securities Act of 1933, as amended (the “Act”), or state securities laws, in reliance on the exemptions provided by Section 4(a)(2) of the Act and in reliance on similar exemptions under applicable state laws. Brookfield represented to the Company in the Investment Agreement that it is an “accredited investor” within the meaning of Rule 501 under the Act and a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, and that it has not acquired the Preferred Stock with a view to the distribution thereof. Because the Preferred Stock (and the shares of common stock underlying the Preferred Stock, except as provided in the Registration Rights Agreement) will not be registered, it may not be offered or sold by Brookfield absent registration or an applicable exemption from registration requirements, such as the exemption afforded by Rule 144 under Act.

Item 8.01.

Other Events.

Press Release

On May 4, 2015, the Company issued a press release announcing that the Company entered into the Investment Agreement described above. A copy of such press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

Item 9.01.

Financial Statements and Exhibits.

The exhibits required to be filed as a part of this Current Report on Form 8-K are listed in the Exhibit Index attached hereto, which is incorporated herein by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

EXHIBIT INDEX


Exhibit No.		Exhibit Description

10.1		Investment Agreement (with form of Registration Rights Agreement, Certificates of Designation and Stockholder Rights Agreement attached)

10.2		Limited Guarantee

99.1		Press Release

Exhibit 10.1

EXECUTION VERSION

INVESTMENT AGREEMENT

dated as of May 4, 2015

by and between

GrafTech International Ltd.

and

BCP IV GrafTech Holdings LP

TABLE OF CONTENTS


		Page

ARTICLE I

PURCHASE; CLOSING

1.1	Purchase		1

1.2	Closing		2

1.3	Closing Conditions		2

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1	Representations and Warranties of the Company		5

2.2	Representations and Warranties of the Purchaser		15

ARTICLE III

COVENANTS

3.1	Filings; Other Actions		17

3.2	Reasonable Best Efforts to Close		18

3.3	Stockholder Approval; Proxy Statement		19

3.4	Authorized Common Stock		19

3.5	Series A Certificate		20

3.6	Series B Certificate		20

3.7	Certain Adjustments		20

3.8	Confidentiality		20

3.9	NYSE Listing of Shares		20

3.10	State Securities Laws		21

3.11	Negative Covenants		21

3.12	Change of Control		21

ARTICLE IV

ADDITIONAL AGREEMENTS

4.1	Legend		22

4.2	Tax Matters		23

TABLE OF CONTENTS

(continued)


		Page

ARTICLE V

INDEMNITY

5.1	Indemnification by the Company		23

5.2	Indemnification by the Purchaser		24

5.3	Indemnification Procedure		24

5.4	Tax Matters		25

5.5	Survival		26

5.6	Limitation on Damages		26

ARTICLE VI

MISCELLANEOUS

6.1	Expenses		26

6.2	Amendment; Waiver		26

6.3	Counterparts; Electronic Transmission		27

6.4	Governing Law		27

6.5	WAIVER OF JURY TRIAL		27

6.6	Notices		27

6.7	Entire Agreement		29

6.8	Assignment		29

6.9	Interpretation; Other Definitions		29

6.10	Captions		33

6.11	Severability		33

6.12	No Third Party Beneficiaries		34

6.13	Public Announcements		34

6.14	Specific Performance		34

6.15	Termination		34

6.16	Effects of Termination		35

6.17	Non-Recourse		35

INDEX OF DEFINED TERMS


Term		Location of Definition
Affiliate		6.9(f)
Agreement		Preamble
Board of Directors		2.1(c)(1)
Brookfield Parties		6.9(g)
business day		6.9(d)
Bylaws		2.1(c)(2)
Capitalization Date		2.1(b)(1)
Certificate of Incorporation		2.1(c)(2)
CFIUS		1.3(a)(3)
CFIUS Clearance		1.3(a)(3)
CFIUS Notice		3.1
Closing		1.2(a)
Closing Date		1.2(a)
Code		4.2(b)
Common Stock		Recitals
Company		Preamble
Company Material Adverse Effect		6.9(h)
Company Related Parties		5.2
Company Stock Awards		2.1(b)(1)
Company Stock Options		2.1(b)(1)
Company Subsidiary		2.1(a)(2)
Confidentiality Agreement		3.8
control/controlled by/under common control with		6.9(f)
Credit Agreement		6.9(i)
Draft CFIUS Notice		3.1
Effect		6.9(j)
Environmental Law		6.9(j)
Equity Securities		6.9(l)
ERISA		6.9(m)
Exchange Act		2.1
Exon Florio		6.9(n)
Fund Guarantee		Recitals
GAAP		2.1(f)(4)
Governmental Entity		6.9(o)
Government Official		2.1(t)
herein/hereof/hereunder		6.9(c)
HSR Act		3.1
including/includes/included/include		6.9(b)
Indemnified Party		5.3(b)
Indemnifying Party		5.3(b)
Information		3.8
Intellectual Property		6.9(p)
Knowledge of the Company		6.9(q)
Law		6.9(r)

iii


Term		Location of Definition
Letter of Intent		6.9(s)
Lien		6.9(t)
Losses		5.1
Materials of Environmental Concern		6.9(u)
Non-Recourse Party		6.17
or		6.9(a)
person		6.9(e)
Permitted Transferee		6.9(v)
Plan		6.9(w)
Preferred Shares		1.1
Preferred Stock		2.1(b)(1)
Pre-Closing Change of Control		3.12
Pre-Closing Period		3.1
Proxy Statement		3.3
Purchase Price		1.1
Purchaser		Preamble
Purchaser Related Parties		5.1
Registration Rights Agreement		6.9(x)
SEC		2.1(f)(1)
SEC Documents		2.1(f)(1)
Senior Notes		6.9(y)
Senior Subordinated Notes		6.9(z)
Series A Certificate		Recitals
Series A Number		6.9(aa)
Series A Preferred Stock		Recitals
Series B Certificate		Recitals
Series B Number		6.9(bb)
Series B Preferred Stock		Recitals
Stockholder Approval		3.3
Stockholder Meeting		3.3
Stockholder Rights Agreement		6.9(cc)
Subsidiary		2.1(a)(2)
Tax Return		6.9(dd)
Taxes		6.9(ee)
Tender Offer Letter of Intent		6.9(h)
Third Party Claim		5.3(b)
Transaction Documents		6.9(ff)
Treasury Department		3.1
Voting Debt		2.1(b)(2)

LIST OF SCHEDULES


Schedule A:		Form of Series A Convertible Preferred Stock Certificate of Designations
Schedule B:		Form of Series B Convertible Preferred Stock Certificate of Designations
Schedule C:		Form of Registration Rights Agreement
Schedule D:		Form of Stockholder Rights Agreement

INVESTMENT AGREEMENT, dated as of May 4, 2015 (this “Agreement”), by and between GrafTech International Ltd., a Delaware corporation (the “Company”), and BCP IV GrafTech Holdings LP, a limited partnership formed under the laws of Delaware (the “Purchaser”).

RECITALS:

WHEREAS, the Company proposes to issue and sell to the Purchaser (including its permitted assignees pursuant to Section 6.8) shares of its preferred stock, par value $0.01 per share, designated as “Series A Convertible Preferred Stock” (the “Series A Preferred Stock”), having the terms set forth in the Certificate of Designations (the “Series A Certificate”) in the form attached to this Agreement as Schedule A, subject to the terms and conditions set forth in this Agreement;

WHEREAS, the Company proposes to issue and sell to the Purchaser (including its permitted assignees pursuant to Section 6.8) shares of its preferred stock, par value $0.01 per share, designated as “Series B Convertible Preferred Stock” (the “Series B Preferred Stock”), having the terms set forth in the Certificate of Designations (the “Series B Certificate”) in the form attached to this Agreement as Schedule B, subject to the terms and conditions set forth in this Agreement;

WHEREAS, the Series A Preferred Stock will be convertible into shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”);

WHEREAS, the Series B Preferred Stock will be conditionally convertible into shares of Series A Preferred Stock;

WHEREAS, concurrently herewith, and as a condition and inducement to enter into this Agreement, Brookfield Capital Partners IV L.P. (“Brookfield”) has delivered a limited guarantee (the “Fund Guarantee”) in favor of the Company, pursuant to which Brookfield has irrevocably guaranteed the payment, performance and discharge of the obligations of the Purchaser under this Agreement.

WHEREAS, capitalized terms used in this Agreement have the meanings set forth in Section 6.9 or such other section indicated in the preceding Index of Defined Terms.

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, the parties agree as follows:

ARTICLE I

PURCHASE; CLOSING

1.1 Purchase. On the terms and subject to the conditions herein, on the Closing Date, the Company agrees to sell and issue to the Purchaser, and the Purchaser agrees to purchase from the Company (i) the Series A Number of shares of Series A Preferred Stock, free and clear of any Liens (other than restrictions arising under applicable securities Laws and the Stockholder Rights Agreement), at a purchase price of $1,000 per share of Series A Preferred Stock, and (ii)

the Series B Number of shares of Series B Preferred Stock, free and clear of any Liens (other than restrictions arising under applicable securities Laws and the Stockholder Rights Agreement), at a purchase price of $1,000 per share of Series B Preferred Stock, for an aggregate purchase price of $150,000,000 in cash (the “Purchase Price”). The shares of Series A Preferred Stock and Series B Preferred Stock to be issued and sold by the Company to the Purchaser pursuant to this Agreement are collectively referred to as the “Preferred Shares”.

1.2 Closing.

(a) Subject to the satisfaction or waiver of the conditions set forth in this Agreement, the closing of the purchase and sale by the Purchaser of the Preferred Shares referred to in Section 1.1 pursuant to this Agreement (the “Closing”) shall be held at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, at 10:00 a.m. New York time on the third business day after the satisfaction or waiver of the latest to occur of the conditions set forth in Section 1.3 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to their satisfaction) or at such other date, time and place as the Company and the Purchaser agree (the “Closing Date”).

(b) Subject to the satisfaction or waiver on or prior to the Closing Date of the applicable conditions to the Closing in Section 1.3, at the Closing:

(1) the Company will deliver to the Purchaser (i) certificates representing the Series A Preferred Stock being purchased, (ii) certificates representing the Series B Preferred Stock being purchased, (ii) the executed Registration Rights Agreement, in the form of Schedule C hereto, (iii) the executed Stockholder Rights Agreement, in the form of Schedule D hereto and (iv) all other documents, instruments and writings required to be delivered by the Company to the Purchaser pursuant to this Agreement or otherwise required in connection herewith; and

(2) the Purchaser will deliver or cause to be delivered (i) to a bank account designated by the Company in writing at least two (2) business days prior to the Closing Date, the Purchase Price by wire transfer of immediately available funds, (ii) the executed Registration Rights Agreement and (iii) the executed Stockholder Rights Agreement and all other documents, instruments and writings required to be delivered by the Purchaser to the Company pursuant to this Agreement or otherwise required in connection herewith.

1.3 Closing Conditions.

(a) The obligation of the Purchaser, on the one hand, and the Company, on the other hand, to effect the Closing is subject to the satisfaction or written waiver by the Purchaser and the Company prior to the Closing of the following conditions:

(1) no temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any Governmental Entity, and no Law shall be in effect restraining, enjoining, making illegal or otherwise prohibiting the consummation of the transactions contemplated by this Agreement;

(2) all applicable waiting periods (and any extension thereof) prescribed by the HSR Act and other applicable antitrust Laws agreed to by the Purchaser and the Company shall have expired or shall have been terminated; and

(3) the receipt by the Purchaser of written notice from the Committee on Foreign Investment in the United States (“CFIUS”) with (A) its determination that the transaction contemplated by this Agreement is not subject to Exon-Florio, (B) its determination following a review or investigation of the transaction that there are no unresolved national security concerns, or (C) a determination by the President of the United States not to suspend or prohibit the transaction contemplated by this Agreement pursuant to his authority under Exon-Florio, and (ii) CFIUS has not required any condition to mitigate any threat to the national security of the United States that is unacceptable to the Purchaser (collectively, “CFIUS Clearance”).

(b) The obligation of the Purchaser to effect the Closing is also subject to the satisfaction or written waiver by the Purchaser at or prior to the Closing of the following conditions:

(1) (i) the representations and warranties of the Company set forth in Section 2.1 hereof (other than Sections 2.1(a)(1), 2.1(b), 2.1(c)(1), 2.1(e) and 2.1(h)) shall be true and correct (disregarding all qualifications or limitations as to materiality or Company Material Adverse Effect) as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent that such representation or warranty speaks to an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, have a Company Material Adverse Effect, and (ii) the representations and warranties of the Company set forth in Sections 2.1(a)(1), 2.1(b), 2.1(c)(1), 2.1(e) and 2.1(h) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of such date;

(2) the Company shall have performed in all material respects all obligations required to be performed by it pursuant to this Agreement prior to the Closing;

(3) the Purchaser shall have received a certificate signed on behalf of the Company by a duly authorized person certifying to the effect that the conditions set forth in Sections 1.3(b)(1), (2), (8) and (9) have been satisfied;

(4) the Company shall have adopted and filed the Series A Certificate with the Secretary of State of the State of Delaware, and the Series A Certificate shall be in full force and effect;

(5) the Company shall have adopted and filed the Series B Certificate with the Secretary of State of the State of Delaware, and the Series B Certificate shall be in full force and effect;

(6) the shares of Common Stock issuable upon conversion of the Series A Preferred Stock (including the Series A Preferred Stock issuable upon conversion of the Series B Preferred Stock) shall have been approved for listing on the New York Stock Exchange (“NYSE”), subject to official notice of issuance;

(7) substantially contemporaneous with the Closing, the Company shall have reimbursed the documented, out-of-pocket third-party costs and expenses of the Purchaser incurred in connection with the transaction contemplated by this Agreement, including the fees and expenses of Weil, Gotshal & Manges LLP, counsel to the Purchaser, as well as Purchaser’s financial advisors, accountants, consultants and other advisors; provided that the aggregate of all such costs and expenses reimbursable by the Company shall not exceed $500,000;

(8) the Board of Directors shall have taken all actions necessary, without expanding the Board of Directors beyond eleven (11) directors, to cause to be elected to the Board of Directors, effective immediately upon the Closing, two (2) individuals designated by the Purchaser in writing at least three (3) business days prior to the Closing Date, and the Board of Directors shall have appointed at least one of such individuals to each committee of the Board of Directors (other than the special committee formed to handle the 2015 annual meeting of the stockholders), subject to compliance with the applicable Law and NYSE rules regarding qualification, the Company’s director qualifications and completion by such individuals of a D&O questionnaire, and the Purchaser shall have received evidence reasonably satisfactory to it of the taking of such actions; and

(9) since March 31, 2015, there shall not have occurred any Company Material Adverse Effect.

(c) The obligation of the Company to effect the Closing is also subject to the satisfaction or written waiver by the Company prior to the Closing of the following conditions:

(1) (i) the representations and warranties of the Purchaser set forth in Section 2.2 hereof (other than Sections 2.2(a), 2.2(b)(1), 2.2(c) and 2.2(d)) shall be true and correct as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent that such representation or warranty speaks of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, prevent or materially delay the consummation of the transactions contemplated by this Agreement or have a material adverse effect on the ability of the Purchaser to fully perform its covenants and obligations under the Transaction Documents and (ii) the representations and warranties of the Purchaser set forth in Sections 2.2(a), 2.2(b)(1), 2.2(c) and 2.2(d) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of such date;

(2) the Purchaser shall have performed in all material respects all obligations required to be performed by it pursuant to this Agreement prior to the Closing; and

(3) the Company shall have received a certificate signed on behalf of the Purchaser by a senior executive officer certifying to the effect that the conditions set forth in Sections 1.3(c)(1) and (2) have been satisfied.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1 Representations and Warranties of the Company. Except as set forth (x) in publicly available SEC Documents filed prior to the date of this Agreement, excluding any disclosures set forth in risk factors or any “forward looking statements” within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or (y) in a correspondingly identified schedule attached hereto (provided that any such disclosure shall be deemed to be disclosed with respect to each other representation and warranty to which the relevance of such exception is reasonably apparent on the face of such disclosure), the Company represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date (except to the extent made only as of a specified date in which case as of such date), that:

(a) Organization and Authority.

(1) The Company is a corporation duly organized and validly existing under the laws of the State of Delaware, has all requisite corporate power and authority to own its properties and conduct its business as presently conducted, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have Company Material Adverse Effect. True and accurate copies of the Certificate of Incorporation and Bylaws, each as in effect as of the date of this Agreement, have been made available to the Purchaser prior to the date hereof.

(2) Each material Company Subsidiary is duly organized and validly existing under the laws of its jurisdiction of organization, has all requisite corporate or other applicable entity power and authority to own its properties and conduct its business as presently conducted, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. As used herein, “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or Persons performing similar functions with respect to such Person, is directly or indirectly owned by such Person and/or one or more subsidiaries thereof; and “Company Subsidiary” means any Subsidiary of the Company.

(b) Capitalization.

(1) The authorized capital stock of the Company consists of 225,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”). As of the close of business on April 20, 2015 (the “Capitalization Date”), there were 137,677,872 shares of Common Stock outstanding and zero shares of Preferred Stock outstanding. As of the close of business on the Capitalization Date, (i) 1,945,043 shares of Common Stock were reserved for issuance upon the exercise or payment of stock options outstanding on such date (“Company Stock Options”) and 4,193,962 shares of Common Stock were reserved for issuance upon the exercise or payment of stock units (including restricted stock and restricted stock units) or other equity-based incentive awards granted pursuant to any plans, agreements or arrangements of the Company and outstanding on such date), including Company Stock Options (collectively, the “Company Stock Awards”) and (ii) 15,446,360 shares of Common Stock were held by the Company in its treasury. All of the issued and outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. From the Capitalization Date through and as of the date of this Agreement, no other shares of Common Stock or Preferred Stock have been issued other than shares of Common Stock issued in respect of the exercise of Company Stock Options or grant or payment of Company Stock Awards in the ordinary course of business. The Company does not have outstanding stockholder purchase rights or “poison pill” or any similar arrangement in effect.

(2) No bonds, debentures, notes or other indebtedness having the right to vote (or convertible into or exchangeable for, securities having the right to vote) on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding. Except (i) pursuant to any cashless exercise provisions of any Company Stock Options or pursuant to the surrender of shares to the Company or the withholding of shares by the Company to cover tax withholding obligations under Company Stock Options or Company Stock Awards, and (ii) as set forth in Section 2.1(b)(1), the Company does not have and is not bound by any outstanding options, preemptive rights, rights of first offer, warrants, calls, commitments or other rights or agreements calling for the purchase or issuance of, or securities or rights convertible into, or exchangeable for, any shares of Common Stock or any other equity securities of the Company or Voting Debt or any securities representing the right to purchase or otherwise receive any shares of capital stock of the Company (including any rights plan or agreement).

(1) The Company has the corporate power and authority to enter into this Agreement and the other Transaction Documents and to carry out its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company and the consummation of the transactions contemplated hereby and thereby have been duly authorized by the board of directors of the Company (the “Board of Directors”). This Agreement has been, and (as of the Closing) the other Transaction Documents will be, duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the

Purchaser, is, and (as of the Closing) each of the other Transaction Documents will be, a valid and binding obligation of the Company enforceable against the Company in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles). No other corporate proceedings are necessary for the execution and delivery by the Company of this Agreement or the other Transaction Documents, the performance by it of its obligations hereunder or thereunder or the consummation by it of the transactions contemplated hereby or thereby other than the Stockholder Approval with respect to the exchange of Series B Preferred for Series A Preferred Stock in accordance with the terms of the Series B Certificate of Designations. The Board of Directors has taken all necessary actions such that the restrictions set forth in Section 203 of the Delaware General Corporation Law will not apply to any acquisition by the Purchaser of the Preferred Shares to be issued pursuant to this Agreement or upon the conversion of the Preferred Shares issued pursuant to this Agreement.

(2) Neither the execution and delivery by the Company of this Agreement or the other Transaction Documents, nor the consummation of the transactions contemplated hereby or thereby, nor compliance by the Company with any of the provisions hereof or thereof (including the conversion or exercise provisions of the Preferred Shares), will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Lien upon any of the material properties or assets of the Company or any Company Subsidiary under any of the terms, conditions or provisions of (i) the certificate of incorporation of the Company (as amended or modified from time to time prior to the date hereof, the “Certificate of Incorporation”) or bylaws of the Company (as amended or modified from time to time prior to the date hereof, the “Bylaws”) or the certificate of incorporation, charter, bylaws or other governing instrument of any Company Subsidiary or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any Company Subsidiary is a party or by which it may be bound, or to which the Company or any Company Subsidiary or any of the properties or assets of the Company or any Company Subsidiary may be subject, or (B) violate any law, statute, ordinance, rule, regulation, permit, franchise or any judgment, ruling, order, writ, injunction or decree applicable to the Company or any Company Subsidiary or any of their respective properties or assets, except in the case of clauses (A)(ii) and (B) for such violations, conflicts and breaches as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(3) Other than (A) the securities or blue sky laws of the various states and Canada, (B) approval or expiration of applicable waiting periods under the HSR Act and the antitrust laws agreed to by the Purchaser and the Company, (C) the CFIUS Clearance, (D) the filing with the Secretary of State of the State of Delaware of the Series A Certificate and the Series B Certificate, (E) the filing of a Form D, one or more Forms 8-K and the Proxy Statement with the SEC, and (F) the listing on the NYSE of the shares of Common Stock issuable upon the conversion of the Series A Preferred Stock, no notice to,

registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of any Governmental Entity, nor expiration or termination of any statutory waiting period, is necessary for the consummation by the Company of the transactions contemplated by this Agreement or the other Transaction Documents.

(d) Sale of Securities. Based in part on the Purchaser’s representations in Section 2.2, the offer and sale of the Preferred Shares is exempt from the registration and prospectus delivery requirements of the Securities Act and the rules and regulations promulgated thereunder. Without limiting the foregoing, neither the Company nor, to the Knowledge of the Company, any other person authorized by the Company to act on its behalf, has engaged in a general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to offer or sales of the Preferred Shares and neither the Company nor, to the Knowledge of the Company, any person acting on its behalf, has made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering or issuance of the Preferred Shares under this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act that would result in Regulation D or any other applicable exemption from registration under the Securities Act not being available, nor will the Company take any action or steps that would cause the offering or issuance of the Preferred Shares under this Agreement to be integrated with other offerings.

(e) Status of Securities. The Preferred Shares to be issued pursuant to this Agreement, the shares of Series A Preferred Stock to be issued upon conversion of the Series B Preferred Stock (subject to the Stockholder Approval), and the shares of Common Stock to be issued upon conversion of the Series A Preferred Stock have been duly authorized by all necessary corporate action. When issued and sold against receipt of the consideration therefor as provided in this Agreement, the Series A Certificate or the Series B Certificate, such securities will be validly issued, fully paid and nonassessable, will not be subject to preemptive rights of any other stockholder of the Company, and will effectively vest in the Purchaser good title to all such securities, free and clear of all Liens (other than Liens incurred by the Purchaser and restrictions arising under applicable securities Laws), except restrictions imposed by the Securities Act, any applicable state or foreign securities laws and the Stockholder Rights Agreement. Upon any conversion of any shares of Series A Preferred Stock into Common Stock pursuant to the Series A Certificate, the shares of Common Stock issued upon such conversion will be validly issued, fully paid and nonassessable, and will not be subject to preemptive rights of any other stockholder of the Company, and will effectively vest in the Purchaser good title to all such securities, free and clear of all Liens (other than Liens incurred by the Purchaser, restrictions arising under applicable securities Laws), except restrictions imposed by the Securities Act, any applicable state or foreign securities laws and the Stockholder Rights Agreement. The respective rights, preferences, privileges, and restrictions of the Series A Preferred Stock, Series B Preferred Stock and the Common Stock are as stated in the Certificate of Incorporation (including the Series A Certificate and the Series B Certificate). The shares of Common Stock to be issued upon any conversion of shares of Preferred Shares into Common Stock have been duly reserved for such issuance.

(f) SEC Documents; Financial Statements.

(1) The Company has filed all required reports, proxy statements, forms, and other documents with the Securities and Exchange Commission (the “SEC”) since December 31, 2012 (collectively, the “SEC Documents”). Each of the SEC Documents, as of its respective date complied in all material respects with the requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Documents, and, except to the extent that information contained in any SEC Document has been revised or superseded by a later filed SEC Document filed and publicly available prior to the date of this Agreement, none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(2) The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are reasonably designed to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the individuals responsible for the preparation of the Company’s filings with the SEC and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the Board of Director’s audit committee (A) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. As of the date of this Agreement, to the Knowledge of the Company, there is no reason that its outside auditors and its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when next due.

(3) There is no transaction, arrangement or other relationship between the Company and/or any of its Subsidiaries and an unconsolidated or other off-balance sheet entity that is required to be disclosed by the Company in its SEC Documents and is not so disclosed.

(4) The financial statements of the Company and its consolidated Subsidiaries included in the SEC Documents (a) complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, in each case as of the date such SEC Document was filed, and (b) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis during the periods involved (except as may be indicated in such financial statements or the notes thereto) and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their

operations and cash flows of the Company and its consolidated subsidiaries for the periods then ended (subject, in the case of unaudited statements, to the absence of footnote disclosures and normal audit adjustments).

(g) Undisclosed Liabilities. Except for (i) those liabilities that are reflected or reserved for in the consolidated financial statements of the Company included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014, (ii) liabilities incurred since December 31, 2014 in the ordinary course of business consistent with past practice, (iii) liabilities incurred pursuant to the transactions contemplated by this Agreement, the Registration Rights Agreement or the Stockholder Rights Agreement, and (iv) liabilities that would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the Company and its Subsidiaries do not have any liabilities or obligations of any nature whatsoever (whether accrued, absolute, contingent or otherwise).

(h) Brokers and Finders. Except for J.P. Morgan Securities LLC pursuant to that certain engagement letter dated April 20, 2015, the fees and expenses of which will be paid by the Company, neither the Company nor its Subsidiaries or any of their respective officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby.

(i) Litigation. There is no action, suit, proceeding or investigation pending or, to the Knowledge of the Company, threatened (including “cease and desist” letters or invitations to take patent license) against, nor any outstanding judgment, order, writ or decree against, the Company or any of its Subsidiaries or any of their respective assets before or by any Governmental Entity, which in the aggregate have, or if adversely determined, would reasonably be expected to have, a Company Material Adverse Effect. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries is in default with respect to any judgment, order or decree of any Governmental Entity.

(j) Taxes.

(1) Each of the Company and its Subsidiaries has filed all material Tax Returns required to have been filed, such Tax Returns were accurate in all material respects, and all material Taxes due and payable (taking into account any extensions properly obtained) by the Company (whether or not shown on any Tax Return) have been timely paid, except for those which are being contested in good faith and by appropriate proceedings and in respect of which adequate reserves with respect thereto are maintained in accordance with GAAP.

(2) No material examination or audit of any Tax Return relating to any material Taxes of the Company or any of its Subsidiaries or with respect to any material Taxes due from or with respect to the Company or any of its Subsidiaries by any taxing authority is currently in progress or threatened in writing.

(3) Neither the Company nor any of its Subsidiaries has engaged in, or has any obligation with respect to, any “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4.

(4) The Company is not and has not been during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, a “United States real property holding Corporation” within the meaning of Section 897(c)(2) of the Code.

(k) Permits and Licenses. The Company and its Subsidiaries possess all certificates, authorizations and permits issued by each Governmental Entity necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations and permits would not, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect.

(l) Environmental Matters. The Company and its Subsidiaries are in compliance with all, and since January 1, 2012 have not violated any, applicable Environmental Laws except where failure to be in such compliance would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries has released Materials of Environmental Concern and, to the Knowledge of the Company, Materials of Environmental Concern are not present at, under, in or affecting any Property currently or formerly owned, leased or used by the Company or any of its Subsidiaries, or at any location to which Materials of Environmental Concern have been sent for re-use or recycling or for treatment, storage or disposal, except, in each case, as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(m) Title. Each of the Company and its Subsidiaries has (i) good and marketable title to its Property that is owned real property, (ii) to the Knowledge of the Company, valid leases to its Property that is leased real property, and (iii) good and valid title to all of its other Property, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(n) Intellectual Property. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) the Company or its Subsidiaries exclusively own all (a) Intellectual Property registrations and applications filed in their names that have not expired or been abandoned, which such registrations are subsisting and unexpired, and to the Knowledge of the Company, valid and enforceable and (b) other proprietary Intellectual Property used in the conduct of the businesses of the Company or its Subsidiaries that is not used pursuant to a license; provided, however, the foregoing representation in Section 2.1(n)(i) is subject to the Knowledge of the Company with respect to patents owned by third parties under which a license may be needed to practice any such Intellectual Property; (ii) the conduct of the businesses of Company and its Subsidiaries does not materially infringe the Intellectual Property of any third party, and to the Knowledge of the Company, no person is materially infringing any Intellectual Property owned by the Company or its Subsidiaries; (iii) the Company and its Subsidiaries take reasonable actions to protect the material trade secrets and confidential information owned by the Company or its Subsidiaries and the security and operation of their material software, websites and systems (and the data therein), and there have been no material breaches or outages of same; and (iv) there are no

judicial or administrative orders, decrees or judgments to which the Company or any of the Subsidiaries is a party or by which they are bound which restrict any rights to any material proprietary Intellectual Property used in the conduct of the businesses of the Company or its Subsidiaries.

(o) Employee Benefits/Labor.

(1) Except as would not reasonably be expected, individually or in the aggregate, to result in a Company Material Adverse Effect, (A) each Plan complies with, and has been operated and administered in compliance with, its terms and all applicable Laws (including, without limitation ERISA and the Code), (B) the Company and each of its Subsidiaries have filed all reports, returns, notices, and other documentation required by ERISA, the Code or other applicable Law to be filed with any Governmental Entity with respect to each Plan, (C) with respect to any Plan, no actions, Liens, lawsuits, claims or complaints (other than routine claims for benefits, appeals of such claims and domestic relations order proceedings) are pending or, to the Knowledge of the Company, threatened, and, to the Knowledge of the Company, no facts or circumstances exist that would reasonably be expected to give rise to any such actions, Liens, lawsuits, claims or complaints, and (D) to the Knowledge of the Company, no event has occurred with respect to a Plan which would reasonably be expected to result in a liability of the Company or any of its Subsidiaries to any Governmental Entity. Neither the Company, its Subsidiaries, nor any other entity which, together with the Company or its Subsidiaries, would be treated as a single employer under Section 4001 of ERISA or Section 414 of the Code, has at any time during the last six (6) years maintained, sponsored or contributed to any employee benefit plan that is subject to Title IV of ERISA, including, without limitation, any “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA).

(2) Except as would not reasonably be expected, individually or in the aggregate, to result in a Company Material Adverse Effect, none of the execution of, or the completion of the transactions contemplated by, this Agreement (whether alone or in connection with any other event(s)), could result in (A) severance pay or an increase in severance pay upon termination after Closing to any current or former employee of the Company or its Subsidiaries, (B) any payment, compensation or benefit becoming due, or increase in the amount of any payment, compensation or benefit due, to any current or former employee of the Company or its Subsidiaries, (C) acceleration of the time of payment or vesting or result in funding of compensation or benefits to any current or former employee of the Company or its Subsidiaries, (D) any new material obligation under any Plan, (E) any limitation or restriction on the right of Company to merge, amend, or terminate any Plan, or (F) any payments which would not be deductible under Section 280G of the Code or subject to Tax under Section 4999 of the Code. No Plan provides for reimbursement or gross-up of any excise tax under Section 409A or Section 4999 of the Code.

(3) Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, as of the date of this Agreement: (A) the Company and each of its Subsidiaries is not a party to any collective bargaining agreement or other contract or agreement with any labor organization or other representative of any of the employees of

the Company or any Subsidiary, nor is any such contract or agreement presently being negotiated; (B) to the Knowledge of the Company, no campaigns are being conducted to solicit cards from any of the employees of the Company or any of its Subsidiaries to authorize representation by any labor organization, and no such campaigns have been conducted within the past three years; (C) no labor strike, slowdown, work stoppage, dispute, lockout or other labor controversy is in effect or, to the Knowledge of the Company, threatened in writing, and neither the Company nor any of its Subsidiaries has experienced any such labor controversy within the past three years; (D) no unfair labor practice charge or complaint is pending or, to the Knowledge of the Company, threatened in writing with respect to any employment practices of the Company or any of its Subsidiaries; (E) no action, complaint, charge, inquiry, proceeding or investigation by or on behalf of any current or former employee, labor organization or other representative of the employees of the Company or any of its Subsidiaries (including persons employed jointly by such entities with any other staffing or other similar entity) is pending or, to the Knowledge of the Company, threatened in writing; (F) the Company and each of its Subsidiaries are in compliance with all applicable laws, agreements, contracts, policies, plans and programs relating to employment, employment practices, compensation, benefits, hours, terms and conditions of employment, and the termination of employment, including any obligations pursuant to the Worker Adjustment and Retraining Notification Act of 1988, as amended, the classification of employees as exempt or non-exempt from overtime pay requirements, the provision of meal and rest breaks and pay for all working time, and the proper classification of individuals as non-employee contractors or consultants; and (G) the Company and each of its Subsidiaries is in compliance with all applicable Law relating to child labor, forced labor and involuntary servitude.

(4) With respect to the Company’s Benefits Protection Trust: (A) the only plan covered by the Benefits Protection Trust is the Deferred Compensation Plan and (B) the Company makes contributions to the Benefits Protection Trust so that the liabilities of the Deferred Compensation Plan are fully funded at March 31, 2015 (with cash and, at March 31, 2015, 72,679 shares of Common Stock valued, at March 31, 2015, at approximately $700,000).

(p) Indebtedness. Neither the Company nor any of its Subsidiaries is, immediately prior to the execution and delivery of this Agreement, in default in the payment of any material indebtedness or in default under any agreement relating to its material indebtedness.

(q) Registration Rights. Except as provided in the Registration Rights Agreement, the Company has not granted or agreed to grant, and is not under any obligation to provide, any rights to register under the Securities Act any of its presently outstanding securities or any of its securities that may be issued subsequently.

(r) Compliance with Laws. Neither the Company nor any of its Subsidiaries is, or since January 1, 2012 has been, in violation of any applicable Law, except where such violation would not, individually or in the aggregate, reasonably be expected to have, or has not had, a Company Material Adverse Effect. To the Knowledge of the Company as of the date of this Agreement, neither the Company nor any of its Subsidiaries is being investigated with respect to any applicable Law, except for such of the foregoing as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(s) Absence of Changes. Since December 31, 2014, there has not been any action or omission of the Company or any of its Subsidiaries that, if such action or omission occurred between the date of this Agreement and the Closing Date, would violate Section 3.11.

(t) Illegal Payments; FCPA Violations. None of the Company or its Subsidiaries, nor any of their respective officers, directors, employees, nor, to the Knowledge of the Company, any agent, representative or consultant of the Company or its Subsidiaries have, in connection with the business of the Company: (i) corruptly offered, paid, promised to pay, or authorized the payment of, directly or indirectly, anything of value, including, but not limited to, money, loans, gifts, travel, or entertainment, to any person acting in an official capacity for any Government Entity, to any political party or official thereof, or to any candidate for political office (each, a “Government Official”) with the purpose of (a) influencing any act or decision of such Government Official in his official capacity; (b) inducing such Government Official to perform or omit to perform any activity in violation of his legal duties; (c) securing any improper advantage; or (d) inducing such Government Official to influence or affect any act or decision of such Government Entity, except as permitted under the U.S. Foreign Corrupt Practices Act; (ii) made any illegal contribution to any political party or candidate; (iii) made, offered or promised to pay any bribe, payoff, influence payment, kickback, unlawful rebate, or other similar unlawful payment of any nature, directly or indirectly, in connection with the business of the Company, to any person, including any supplier or customer; (iv) established or maintained any unrecorded fund or asset or made any false entries on any books or records for any purpose; or (v) otherwise violated the U.S. Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act of 2010 or any other applicable anti-corruption or anti-bribery law.

(1) For purposes of this Section, “Government Official” means any officer or employee of a Government Entity or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such Government or department, agency, or instrumentality, or for or on behalf of any such public international organization, or any political party, party official, or candidate thereof, excluding officials related to the government of the United States; and

(2) “Government Entity” means any foreign Government, any political subdivision thereof, or any corporation or other entity owned or controlled in whole or in part by any Government or any sovereign wealth fund, excluding entities related to the government of the United States.

(u) Economic Sanctions. Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, the Company is not in contravention of and has not engaged in any conduct sanction sanctionable under U.S. economic sanctions laws, including laws administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, 31 C.F.R. Part V, the Iran Sanctions Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act, the Iran Threat Reduction and Syria Human Rights Act, the Iran Freedom and Counter-Proliferation Act of 2012, and any executive order issued pursuant to any of the foregoing.

(v) Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to the Knowledge of the Company is reasonably likely to, have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received as of the date of this Agreement any notification that the SEC is contemplating terminating such registration.

(w) No Restriction on Ability to Pay Cash Dividends. Except as set forth in the the Credit Agreement, the Company is not party to any contract, agreement, arrangement or other understanding, oral or written, express or implied, and is not subject to any provision in its Certificate of Incorporation or Bylaws or other governing documents or resolutions of the Board of Directors that, in each case, by its terms restricts, limits, prohibits or prevents the Company from paying dividends, including in full in cash on the Preferred Shares in the amounts contemplated by the Series A Certificate and Series B Certificate, as applicable.

(x) No Additional Representations. Except for the representations and warranties made by the Company in this Section 2.1, neither the Company nor any other Person makes any express or implied representation or warranty with respect to the Company or any Subsidiaries or their respective businesses, operations, assets, liabilities, employees, employee benefit plans, conditions or prospects, and the Company hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither the Company nor any other Person makes or has made any representation or warranty to the Purchaser, or any of its Affiliates or representatives, with respect to (i) any financial projection, forecast, estimate, budget or prospect information relating to the Company or any of its Subsidiaries or their respective business, or (ii) any oral or written information presented to the Purchaser or any of its Affiliates or representatives in the course of their due diligence investigation of the Company, the negotiation of this Agreement or in the course of the transactions contemplated hereby. Notwithstanding anything to the contrary herein, nothing in this Agreement shall limit the right of the Purchaser and its Affiliates to rely on the representations, warranties, covenants and agreements expressly set forth in this Agreement or in any certificate delivered pursuant hereto, nor will anything in this Agreement operate to limit any claim by the Purchaser or any of its Affiliates for fraud.

2.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date (except to the extent made only as of a specified date in which case as of such date),that:

(a) Organization and Authority. The Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where failure to be so qualified would not reasonably be expected to materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis, and the Purchaser has the corporate or other power and authority and governmental authorizations to own its properties and assets and to carry on its business as it is now being conducted.

(b) Authorization.

(1) The Purchaser has the corporate or other power and authority to enter into this Agreement and the other Transaction Documents and to carry out its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Purchaser and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of the Purchaser, and no further approval or authorization by any of its stockholders, partners, members or other equity owners, as the case may be, is required. This Agreement has been and (as of the Closing) the other Transaction Documents will be, duly and validly executed and delivered by the Purchaser and assuming due authorization, execution and delivery by the Company, is, and (as of the Closing) each of the other Transaction Documents will be, a valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(2) Neither the execution, delivery and performance by the Purchaser of this Agreement or the other Transaction Documents, nor the consummation of the transactions contemplated hereby or thereby, nor compliance by the Purchaser with any of the provisions hereof or thereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Lien upon any of the properties or assets of the Purchaser under any of the terms, conditions or provisions of (i) its governing instruments or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Purchaser is a party or by which it may be bound, or to which the Purchaser or any of the properties or assets of the Purchaser may be subject, or (B) subject to compliance with the statutes and regulations referred to in the next paragraph, violate any law, statute, ordinance, rule or regulation, permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to the Purchaser or any of their respective properties or assets except in the case of clause (A)(ii) and (B) for such violations, conflicts and breaches as would not reasonably be expected to prevent or materially delay the consummation of the transactions contemplated by this Agreement or have a material adverse effect on the Purchaser’s ability to fully perform its respective covenants and obligations under this Agreement.

(3) Other than (A) the securities or blue sky laws of the various states and Canada, (B) approval or expiration of applicable waiting periods under the HSR Act and the antitrust Laws agreed to by the Purchaser and the Company and (C) CFIUS Clearance, no notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, nor expiration or

termination of any statutory waiting period, is necessary for the consummation by the Purchaser of the transactions contemplated by this Agreement or the other Transaction Documents.

(c) Purchase for Investment. The Purchaser acknowledges that the Preferred Shares have not been registered under the Securities Act or under any state securities laws. The Purchaser (1) acknowledges that it is acquiring the Preferred Shares pursuant to an exemption from registration under the Securities Act solely for investment with no present intention to distribute any of the Preferred Shares to any person in violation of applicable securities laws, (2) will not sell or otherwise dispose of any of the Preferred Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act, any other applicable securities laws and the Stockholder Rights Agreement, (3) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Preferred Shares and of making an informed investment decision, (4) is an “accredited investor” (as that term is defined by Rule 501 of the Securities Act), (5) is a “qualified institutional buyer” (as that term is defined in Rule 144A of the Securities Act), and (6) (A) has been furnished with or has had full access to all the information that it considers necessary or appropriate to make an informed investment decision with respect to the Preferred Shares, (B) has had an opportunity to discuss with management of the Company the intended business and financial affairs of the Company and to obtain information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to it or to which it had access and (C) can bear the economic risk of (x) an investment in the Preferred Shares indefinitely and (y) a total loss in respect of such investment. The Purchaser has such knowledge and experience in business and financial matters so as to enable it to understand and evaluate the risks of and form an investment decision with respect to, its investment in the Preferred Shares and to protect its own interest in connection with such investment.

(d) Financial Capability. The Purchaser at the Closing will have available funds necessary to consummate the Closing on the terms and conditions contemplated by this Agreement. The Purchaser is not aware of any reason why the funds sufficient to fulfill its obligations under Article I will not be available on the Closing Date.

(e) Brokers and Finders. Neither the Purchaser nor its Affiliates or any of their respective officers, directors, employees or agents has employed any broker or finder for which the Company will incur any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees.

ARTICLE III

COVENANTS

3.1 Filings; Other Actions. During the period commencing on the date hereof and terminating on the earlier to occur of (a) the Closing and (b) the termination of this Agreement in accordance with the provisions hereof (the “Pre-Closing Period”), each of the Purchaser, on the one hand, and the Company, on the other hand, will cooperate and consult with the other and use reasonable best efforts to prepare and file all necessary documentation, to effect all necessary

applications, notices, petitions, filings and other documents, and to obtain all necessary permits, consents, orders, approvals and authorizations of, or any exemption by, all third parties and Governmental Entities, and the expiration or termination of any applicable waiting period, necessary or advisable to consummate the transactions contemplated by this Agreement, and to perform the covenants contemplated by this Agreement. Each party shall execute and deliver both before and after the Closing such further certificates, agreements and other documents and take such other actions as the other party may reasonably request to consummate or implement such transactions or to evidence such events or matters. In particular, the Purchaser and the Company shall submit to CFIUS (i) a draft joint voluntary notice of the transaction contemplated by this agreement pursuant to 31 C.F.R. § 800.401(f) (the “Draft CFIUS Notice”) within 10 business days of the date hereof; (ii) a joint voluntary notice pursuant to 31 C.F.R. § 800.401(a) (the “CFIUS Notice”) within 20 business days of the date hereof, unless U.S. Department of the Treasury (“Treasury Department”) comments on the Draft CFIUS Notice indicate that filing the CFIUS Notice at a later date would be prudent, in which case the CFIUS Notice shall be filed as soon thereafter as is practicable in light of the Treasury Department’s comments; and (iii) any supplemental information requested by CFIUS within any deadline imposed by CFIUS under Exon-Florio. The Purchaser and the Company shall cooperate in all respects with each other to provide or cause to be provided to CFIUS all information requested by CFIUS. In addition, the Purchaser and the Company shall use all reasonable best efforts to obtain or submit, as the case may be, as promptly as practicable following the date hereof (and in any event within fifteen (15) business days of the date hereof), the approvals and authorizations of, filings and registrations with, and notifications to, or expiration or termination of any applicable waiting period, under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and other applicable antitrust Laws, in each case, with respect to the transactions contemplated hereby, including the issuance of Preferred Shares and Common Stock to the Purchaser (upon conversion of Series A Preferred Stock). Without limiting the foregoing, the Purchaser and the Company shall prepare and file a Notification and Report Form pursuant to the HSR Act in connection with the transactions contemplated by this Agreement. The Purchaser and the Company will have the right to review in advance, and to the extent practicable, each will consult with the other, in each case, subject to applicable laws relating to the exchange of information, all the information relating to such other party, and any of their respective Affiliates, which appears in any filing made with, or written materials submitted to, any third party or any Governmental Entity in connection with the transactions contemplated by this Agreement. In exercising the foregoing right, each of the parties hereto agrees to act reasonably and as promptly as practicable. Each party hereto agrees to keep the other party apprised of the status of matters referred to in this Section 3.1. The Purchaser shall promptly furnish the Company, and the Company shall promptly furnish the Purchaser, to the extent permitted by Law, with copies of written communications received by it or its Subsidiaries from any Governmental Entity in respect of the transactions contemplated by this Agreement.

3.2 Reasonable Best Efforts to Close. During the Pre-Closing Period, the Company and the Purchaser will use reasonable best efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary under applicable laws so as to permit consummation of the transactions contemplated hereby as promptly as practicable and otherwise to enable consummation of the transactions contemplated hereby and shall cooperate reasonably with the other party hereto to that end, including in relation to the satisfaction of the conditions to Closing set forth in Sections 1.3(a), (b) and (c) and cooperating in seeking to obtain any consent required from Governmental Entities.

3.3 Stockholder Approval; Proxy Statement. The Company agrees to use its reasonable best efforts to seek the approval of the holders of a majority of the outstanding Common Stock voting as a single class (which, for this purpose, shall not include the votes of holders of shares of the Series A Preferred Stock), in accordance with applicable Law, the By-laws and the NYSE Listed Company Manual, of the conversion of the Series B Preferred Stock into Series A Preferred Stock (the “Stockholder Approval”) at the 2015 annual meeting of the stockholders of the Company (the “Stockholder Meeting”), which shall be held as soon as reasonably practicable after the consummation of the transactions contemplated by this Agreement, provided that if the Purchaser or an Affiliate of the Purchaser commences the tender offer contemplated by the Tender Offer Letter of Intent, such meeting shall be scheduled promptly following consummation or termination of such tender offer. The preliminary proxy statement to be sent to the Company’s stockholders in connection with the Stockholder Meeting (the “Proxy Statement”) shall include the recommendation of the Board of Directors that the stockholders vote in favor of the Stockholder Approval. If the Stockholder Approval is not obtained at the Stockholder Meeting, then the Company will use its reasonable best efforts to obtain the Stockholder Approval at the next occurring annual meeting of the stockholders of the Company. The Company shall use commercially reasonable efforts to solicit from the stockholders proxies in favor of the Stockholder Approval and to obtain the Stockholder Approval. The Purchaser agrees to furnish to the Company all information concerning the Purchaser and its Affiliates as the Company may reasonably request in connection with any stockholder meeting at which the Stockholder Approval is sought. The Company shall respond reasonably promptly to any comments received from the SEC with respect to any preliminary Proxy Statement. The Company shall provide to the Purchaser, as promptly as reasonably practicable after receipt thereof, any written comments from the SEC or any written request from the SEC or its staff for amendments or supplements to the Proxy Statement or any preliminary proxy statement as it relates to the Stockholder Approval and shall provide the Purchaser with copies of all correspondence between the Company, on the one hand, and the SEC and its staff, on the other hand, relating to the Proxy Statement as it relates to the Stockholder Approval. Notwithstanding anything to the contrary stated above, prior to filing or mailing the Proxy Statement (or, in each case, any amendment or supplement thereto) or responding to any comments of the SEC or its staff with respect thereto as it relates to the Stockholder Approval, the Company shall provide the Purchaser with a reasonable opportunity to review and comment on such document or response.

3.4 Authorized Common Stock. At any time that any Preferred Shares are outstanding, the Company shall from time to time take all lawful action within its control to cause the authorized capital stock of the Corporation to include a sufficient number of authorized but unissued shares of (a) Common Stock to satisfy the conversion requirements of all shares of the Series A Preferred Stock then outstanding (assuming full conversion of the Series B Preferred Stock and giving effect to any adjustment to the Conversion Rate (as defined in the Series A Certificate) pursuant to Section 9 of the Series A Certificate) and (b) Series A Preferred Stock to satisfy the conversion requirements of all shares of the Series B Preferred Stock then outstanding (giving effect to any adjustment of the Conversion Rate (as defined in the Series B Certificate) pursuant to Section 9 of the Series B Certificate). All shares of Common Stock

delivered upon conversion of the Series A Preferred Stock shall be newly issued shares or shares held in treasury by the Company, shall have been duly authorized and validly issued and shall be fully paid and nonassessable, and free and clear of any Liens (other than Liens incurred by the Purchaser, restrictions arising under applicable securities Laws or the Stockholder Rights Agreement).

3.5 Series A Certificate. Prior to the Closing, the Company shall file in the office of the Secretary of State of the State of Delaware the Series A Certificate in the form attached to this Agreement as Schedule A, with such changes thereto as the parties may agree.

3.6 Series B Certificate. Prior to the Closing, the Company shall file in the office of the Secretary of State of the State of Delaware the Series B Certificate in the form attached to this Agreement as Schedule B, with such changes thereto as the parties may agree.

3.7 Certain Adjustments. If any occurrence from the date hereof until the Closing would have resulted in an adjustment to the Conversion Rate (as defined in the Series A Certificate) pursuant to Section 9 of the Series A Certificate if the Series A Preferred Stock had been issued and outstanding since the date hereof, the Company shall adjust the Conversion Rate, effective as of the Closing, in the same manner as would have been required by Section 9 of the Series A Certificate if the Series A Preferred Stock had been issued and outstanding since the date hereof.

3.8 Confidentiality. Each party to this Agreement will hold, and will cause its respective Affiliates and their respective directors, managers, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless disclosure to a regulatory authority is necessary in connection with any necessary regulatory approval, examination or inspection or unless disclosure is required by judicial or administrative process or by other requirement of law or the applicable requirements of any regulatory agency or relevant stock exchange (in which case, other than in connection with a disclosure in connection with a routine audit or examination by, or document request from, a regulatory or self-regulatory authority, bank examiner or auditor, the party disclosing such information shall provide the other party with prior written notice of such permitted disclosure), all non-public records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other party hereto furnished to it by or on behalf of such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) previously known by such party from other sources, provided that such source was not known, after reasonable inquiry and investigation, by such party to be bound by a contractual, legal or fiduciary obligation of confidentiality to the other party, (2) in the public domain through no violation of this Section 3.8 by such party or (3) later lawfully acquired from other sources by the party to which it was furnished), and neither party hereto shall release or disclose such Information to any other person, except its auditors, attorneys, financial advisors, financing sources and other consultants and advisors. The Confidentiality Agreement, dated as of March 20, 2015 (the “Confidentiality Agreement”), by and between GrafTech International Ltd. and Brookfield Capital Partners LLC shall remain in full force and effect.

3.9 NYSE Listing of Shares. To the extent it has not already done so, the Company shall promptly apply to cause the shares of Common Stock issuable upon the conversion of the Series A Preferred Stock to be approved for listing on the NYSE, subject to official notice of issuance.

3.10 State Securities Laws. During the Pre-Closing Period, the Company shall use its reasonable best efforts to (a) obtain all necessary permits and qualifications, if any, or secure an exemption therefrom, required by any state or country prior to the offer and sale of Common Stock upon the conversion of the Preferred Shares and/or the Preferred Shares and (b) cause such authorization, approval, permit or qualification to be effective as of the Closing and, as to such Common Stock, as of any conversion of the Preferred Shares.

3.11 Negative Covenants. During the Pre-Closing Period, the Company and its Subsidiaries shall use their reasonable best efforts to operate their businesses in the ordinary course, and, without the prior written consent of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed), shall not:

(a) declare, or make payment in respect of, any dividend or other distribution upon any shares of capital stock of the Company;

(b) redeem, repurchase or acquire any capital stock of the Company or any of its Subsidiaries, other than repurchases of capital stock from employees, officers or directors of the Company or any of its Subsidiaries in the ordinary course of business pursuant to any of the Company’s agreements or plans in effect as of the date hereof;

(c) amend the Certificate of Incorporation or Bylaws in a manner that would adversely affect the Purchaser either as a holder of Series A Preferred Stock or with respect to the rights of the Purchaser under this Agreement, the Registration Rights Agreement or the Stockholder Rights Agreement; or

(d) authorize, issue or reclassify any capital stock, or securities exercisable for, exchangeable for or convertible into capital stock, of the Company other than (i) the authorization and issuance of the Series A Preferred Stock and the Series B Preferred Stock and (ii) issuances of capital stock, or securities exercisable for, exchangeable for or convertible into capital stock, of the Company to employees, officers and directors of the Company or any of its Subsidiaries in the ordinary course of business pursuant to any of the Company’s agreements or plans in effect as of the date hereof.

3.12 Change of Control. The parties agree that in the event a Change of Control (as defined in the Series A Certificate) occurs on or prior to the Closing Date (a “Pre-Closing Change of Control”), upon issuance of the Preferred Shares, the holders of the Preferred Shares shall have the right to require the Company to repurchase, by irrevocable, written notice to the Company, all or any portion of such holder’s Preferred Shares at a purchase price per Preferred Share equal to the amount such holders would have received in the Pre-Closing Change of Control had they converted such shares into shares of Common Stock immediately prior to the Pre-Closing Change of Control (i.e., the As-Converted Value of Preferred Stock per Annex 1 to the Series A Certificate) (the “Repurchase Price”). Within thirty (30) days following the Pre-Closing Change of Control, the Company shall send notice by first class mail, postage prepaid, addressed to (a) if the Closing has occurred, the holders of record of Preferred Shares at their

respective last addresses appearing on the books of the Company or (b) if the Closing has not occurred, to the Purchaser in accordance with Section 6.6, stating (i) that a Pre-Closing Change of Control has occurred, (ii) that all shares of Series A Preferred Stock tendered prior to a specified Business Day no earlier than thirty (30) days nor later than sixty (60) days from the date such notice is mailed shall be accepted for repurchase; provided, that if the Closing has not occurred as of the date such notice is mailed, then such specified Business Day shall be no earlier than thirty (30) days nor later than sixty (60) days after the Closing Date, and (iii) the procedures that the holders of the Preferred Shares must follow in order for their Preferred Shares to be repurchased, including the place or places where certificates for such shares are to be surrendered for payment of the Repurchase Price. If such holders have not timely tendered their shares of Series A Preferred Stock in accordance with the foregoing sentence, such holders shall be deemed to have waived all rights to have their Preferred Shares repurchased under this Section 3.12 and under the Series A Certificate with respect to such Pre-Closing Change of Control.

ARTICLE IV

ADDITIONAL AGREEMENTS

4.1 Legend.

(a) The Purchaser agrees that all certificates or other instruments representing the Preferred Shares subject to this Agreement (or the shares of Common Stock issuable upon conversion thereof) will bear a legend substantially to the following effect:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER AND OTHER RESTRICTIONS SET FORTH IN A STOCKHOLDER RIGHTS AGREEMENT, DATED AS OF [●], 2015, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE ISSUER.

(b) Upon request of the applicable Brookfield Party (or any Permitted Transferee), upon receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state laws, the Company shall promptly cause the first paragraph of the legend to be removed from any certificate for any Preferred Shares to be transferred in accordance with the terms of the Stockholder Rights Agreement. The Purchaser acknowledges that the Preferred Shares and Common Stock issuable upon conversion of the Series A Preferred Stock have not been registered under the Securities Act or under any state securities laws and agrees that it will not

sell or otherwise dispose of any of the Preferred Shares or Common Stock issuable upon conversion of the Series A Preferred Stock, except in compliance with the registration requirements or exemption provisions of the Securities Act, any other applicable securities laws and the Stockholder Rights Agreement.

4.2 Tax Matters.

(a) The Company and its paying agent shall be entitled to withhold taxes on all payments on the Preferred Shares or Common Stock or other securities issued upon conversion of the Series A Preferred Stock to the extent required by law. Prior to the date of any such payment, the Purchaser (or any transferee) shall deliver to the Company or its paying agent a duly executed, valid, accurate and properly completed Internal Revenue Service Form W-9 or an appropriate Internal Revenue Service Form W-8, as applicable.

(b) Absent a change in law or Internal Revenue Service practice, or a contrary determination (as defined in Section 1313(a) of the United States Internal Revenue Code of 1986, as amended (the “Code”)), the Purchaser and the Company agree not to treat the Preferred Shares (based on their terms as set forth in the Series A Certificate and Series B Certificate, as applicable) as “preferred stock” within the meaning of Section 305 of the Code, and Treasury Regulation Section 1.305-5 for United States federal income tax and withholding tax purposes and shall not take any position inconsistent with such treatment.

(c) The Company shall pay any and all documentary, stamp and similar issue or transfer tax due on (x) the issuance of the Preferred Shares, (y) the issuance of shares of Common Stock upon conversion of the Series A Preferred Stock or (z) the issuance of shares of Series A Preferred Stock upon conversion of the Series B Preferred Stock. However, in the case of conversion of Series A Preferred Stock, the Company shall not be required to pay any tax or duty that may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock or Series A Preferred Stock in a name other than that of the holder of the shares to be converted, and no such issuance or delivery shall be made unless and until the person requesting such issuance has paid to the Company the amount of any such tax or duty, or has established to the satisfaction of the Company that such tax or duty has been paid.

(d) The Purchaser and the Company agree to cooperate with each other in connection with any redemption of part of the Preferred Shares and to use good faith efforts to structure such redemption so that such redemption may be treated as a sale or exchange pursuant to Section 302 of the Code; provided that nothing in this Section 4.2(d) shall require the Company to purchase any of the Preferred Shares, and provided further that the Company makes no representation or warranty hereunder regarding the tax treatment of any redemption of the Preferred Shares.

ARTICLE V

INDEMNITY

5.1 Indemnification by the Company. From and after the Closing, the Company agrees to indemnify the Purchaser and its Affiliates and its and their officers, directors, managers, employees and agents (collectively, “Purchaser Related Parties”) from, and hold each

of them harmless against, any and all losses, damages, actions, suits, proceedings (including any investigations, litigation or inquiries), demands and causes of action (“Losses”), and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all reasonable and documented out-of-pocket costs, losses, liabilities, damages or expenses of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel and all other reasonable and documented out-of-pocket expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them), whether or not involving a Third Party Claim, incurred by or asserted against such Purchaser Related Parties, as a result of or arising out of (i) the failure of the representations or warranties made by the Company contained in Section 2.1(a), 2.1(b), 2.1(c)(1), 2.1(e), 2.1(f)(1), 2.1(f)(4) or in any certificate delivered pursuant hereto to be true and correct or (ii) the breach of any of the covenants of the Company contained herein; provided that in the case of the immediately preceding clause (i), such claim for indemnification relating to a breach of any representation or warranty is made prior to the expiration of such representation or warranty as set forth in Section 5.5; provided, further, that for purposes of determining when an indemnification claim has been made, the date upon which a Purchaser Related Party shall have given written notice (stating in reasonable detail the basis of the claim for indemnification) to the Company shall constitute the date upon which such claim has been made.

5.2 Indemnification by the Purchaser. From and after the Closing, the Purchaser agrees to indemnify the Company and its officers, directors, managers, employees, and agents (collectively, “Company Related Parties”) from, and hold each of them harmless against, any and all Losses, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all reasonable and documented out-of-pocket costs, losses, liabilities, damages or expenses of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel and all other reasonable and documented out-of-pocket expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them), whether or not involving a Third Party Claim, incurred by or asserted against such Company Related Parties as a result of or arising out of (i) the failure of any of the representations or warranties made by the Purchaser contained in Section 2.2(a), 2.2(b)(1) or 2.2(c) to be true and correct or (ii) the breach of any of the covenants of the Purchaser contained herein; provided that in the case of the immediately preceding clause (i), such claim for indemnification relating to a breach of any representation or warranty is made prior to the expiration of such representation or warranty as set forth in Section 5.5; provided, further, that for purposes of determining when an indemnification claim has been made, the date upon which a Company Related Party shall have given written notice (stating in reasonable detail the basis of the claim for indemnification) to the Purchaser shall constitute the date upon which such claim has been made.

5.3 Indemnification Procedure.

(a) A claim for indemnification for any matter not involving a Third Party Claim may be asserted by written notice to the party from whom indemnification is sought; provided, however, that failure to so notify the indemnifying party shall not preclude the indemnified party from any indemnification that it may claim in accordance with this Article V unless and to the extent the Indemnifying Party is materially prejudiced by such failure, except as otherwise provided in Sections 5.1 and 5.2.

(b) Promptly after any Company Related Party or Purchaser Related Party (hereinafter, the “Indemnified Party”) has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third person, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement (each, a “Third Party Claim”), the Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”) written notice of such Third Party Claim but failure or delay to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure or delay. Such notice shall state the nature and the basis of such Third Party Claim to the extent then known. The Indemnifying Party shall have the right to assume and control the defense of, and settle, at its own expense and by its own counsel, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to assume and control the defense or settle such Third Party Claim, it shall promptly, and in no event later than ten (10) business days after notice of such claim, notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all reasonable respects in the defense thereof and/or the settlement thereof. Such cooperation shall include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that the Indemnified Party shall be entitled (i) at its own expense, to participate in the defense of such asserted liability and any negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has, within fifteen (15) business days of when the Indemnified Party provides written notice of a Third Party Claim, failed to (y) assume the defense or settlement of such Third Party Claim and (z) notify the Indemnified Party of such assumption, or (B) the defendants in any such action include both the Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then, in each case, the Indemnified Party shall have the right to select one (1) separate counsel and, upon prompt notice to the Indemnifying Party, to assume such settlement or legal defense and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, and includes a complete release from liability of, and does not contain any admission of wrongdoing by, the Indemnified Party.

5.4 Tax Matters. All indemnification payments under this Article V shall be treated as adjustments to the Purchase Price for tax purposes, except as otherwise required by applicable Law.

5.5 Survival. The representations and warranties of the parties contained in this Agreement shall survive for twelve (12) months following the Closing, except that (i) the representations and warranties of the Company contained in Sections 2.1(a), 2.1(b), 2.1(c)(1) and 2.1(e) will survive until the expiration of the applicable statute of limitations, and (ii) the representations and warranties of the Purchaser contained in Sections 2.2(a), 2.2(b)(1) or 2.2(c) will survive until the expiration of the applicable statute of limitations. All of the covenants or other agreements of the parties contained in this Agreement shall survive until fully performed or fulfilled, unless and to the extent that non-compliance with such covenants or agreements is waived in writing by the party entitled to such performance.

5.6 Limitation on Damages. Notwithstanding any other provision of this Agreement, except in the case of fraud, no party hereto shall have any liability to the other party in excess of the Purchase Price, and neither party shall be liable for any exemplary or punitive damages or any other damages to the extent not reasonably foreseeable arising out of or in connection with this Agreement or the transactions contemplated hereby (in each case, unless any such damages are awarded pursuant to a Third Party Claim).

ARTICLE VI

MISCELLANEOUS

6.1 Expenses. Each of the parties will bear and pay all costs and expenses incurred by it or on its behalf in connection with the transactions contemplated pursuant to this Agreement; provided that, except as set forth in Section 4.2(c) that the Company shall, upon the Closing of the transaction contemplated hereby, or thereafter, reimburse the Purchaser for its reasonable and documented out-of-pocket third-party costs and expenses incurred in connection with due diligence, the negotiation and preparation of this Agreement and undertaking of the transactions contemplated pursuant to this Agreement, including any such costs and expenses incurred after the Closing (including fees and expenses of attorneys and accounting and financial advisers in connection with the transactions contemplated pursuant to this Agreement); provided that the maximum amount of such reimbursable costs and expenses shall not exceed $500,000 in the aggregate.

6.2 Amendment; Waiver. No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an officer of a duly authorized representative of such party. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The conditions to each party’s obligation to consummate the Closing are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable law. No waiver of any party to this Agreement will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

6.3 Counterparts; Electronic Transmission. For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile or other means of electronic transmission and such facsimiles or other means of electronic transmission will be deemed as sufficient as if actual signature pages had been delivered.

6.4 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts located in the State of Delaware for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby. The parties hereby irrevocably and unconditionally consent to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such action, suit or proceeding and irrevocably waive, to the fullest extent permitted by law, any objection that they may now or hereafter have to the laying of the venue of any such action, suit or proceeding in any such court or that any such action, suit or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such action, suit or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 6.6 shall be deemed effective service of process on such party.

6.5 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

6.6 Notices. Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.

(a)

If to Purchaser:

BCP IV GrafTech Holdings LP

c/o Brookfield Capital Partners Ltd.

Brookfield Place

181 Bay Street, Suite 300

Toronto, Ontario M5J 2T3


Attn:		David Nowak
		Peter Gordon
E-mail:		David.Nowak@brookfield.com
		Peter.Gordon@brookfield.com
Fax:		416-365-9642

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

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153


Attn:		Michael J. Aiello
		Jackie Cohen
E-mail:		michael.aiello@weil.com
		jackie.cohen@weil.com
Fax:		212-310-8007

(b)

If to the Company:

GrafTech International Ltd.

Suite 300 Park Center I

6100 Oak Tree Boulevard

Independence, Ohio 44131


Attn:		General Counsel
E-mail:		john.moran@graftech.com
Fax:		216-676-2526

with copies to (which copy alone shall not constitute notice):

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019


Attn:		Steven A. Seidman
		Michael A. Schwartz
E-mail:		sseidman@willkie.com
		mschwartz@willkie.com
Fax:		212-728-8111

and

Withers Bergman LLP

660 Steamboat Road

Greenwich, Connecticut 06830


Attn:		M. Ridgway Barker
E-mail:		mr.barker@withersworldwide.com
Fax:		203-302-6613

6.7 Entire Agreement. This Agreement (including the Schedules hereto and the documents and instruments referred to in this Agreement), together with the Fund Guarantee and the Confidentiality Agreement, constitutes the entire agreement among the parties and supersedes the Letter of Intent and all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof and transactions contemplated hereby.

6.8 Assignment. Neither this Agreement, nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consent of the other party, provided, however, that (a) the Purchaser or any Brookfield Party may assign its rights, interests and obligations under this Agreement, in whole or in part, to one or more Permitted Transferees, after the Closing, subject to any conditions in the Stockholder Rights Agreement, and (b) in the event of such assignment, the assignee shall agree in writing to be bound by the provisions of this Agreement, including the rights, interests and obligations so assigned; provided that no such assignment will relieve the Purchaser of its obligations hereunder prior to the Closing; provided, further, that no Brookfield Party shall assign any of its obligations hereunder with the primary intent of avoiding, circumventing or eliminating such Brookfield Party’s obligations hereunder.

6.9 Interpretation; Other Definitions. Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time. All article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit, annex, letter and schedule references not attributed to a particular document shall be references to such exhibits, annexes, letters and schedules to this Agreement. In addition, the following terms are ascribed the following meanings:

(a) the word “or” is not exclusive;

(b) the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(c) the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision;

(d) the term “business day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or the State of Ohio generally are authorized or required by law or other governmental action to close; and

(e) the term “person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

(f) “Affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person; provided, however, that (i) portfolio companies in which any person or any of its Affiliates has an investment shall not be deemed an Affiliate of such person, or (ii) the Company, any of its Subsidiaries, or any of the Company’s other controlled Affiliates, in each case, will not be deemed to be Affiliates of the Purchaser for purposes of this Agreement; provided, however, that for the purposes of Section 3.8, any portfolio company of the Purchaser or its Affiliates that (but for clause (i) of this definition) would be an Affiliate of the Purchaser will be an Affiliate if the Purchaser or any of its Affiliates (or any representative on behalf of the Purchaser or any of its Affiliates) has provided, directly or indirectly, such portfolio company with Information subject to the restrictions in Section 3.8. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities, by contract or otherwise.

(g) “Brookfield Parties” means the Purchaser and affiliates of the Purchaser to whom shares of Series A Preferred Stock, Series B Preferred Stock or Common Stock are transferred pursuant to the Stockholder Rights Agreement.

(h) “Company Material Adverse Effect” shall mean, with respect to the Company, any Effect that, individually or taken together with all other Effects that have occurred prior to the date of determination of the occurrence of the Company Material Adverse Effect, is or is reasonably likely to be materially adverse to the business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole; provided, however, that in no event shall any of the following individually or taken together, be deemed to constitute, or be taken into account in determining whether a Company Material Adverse Effect has occurred: (A) any change in the Company’s stock price or trading volume on the NYSE, (B) any failure by the Company to meet internal or analyst revenue, earnings or other financial projections or expectations for any period, (C) any default of or acceleration or repurchase obligation under the Credit Agreement, Senior Notes or Senior Subordinated Notes by the Company as a direct result of the transactions contemplated by this Agreement or as a result of the tender offer contemplated by the letter of intent executed on April 29, 2015, by and between the Company and an Affiliate of the Purchaser (the “Tender Offer Letter of Intent”) (including any event of default as a result of a cross default), (D) any Effect that results from changes affecting the industry in which the Company operates, or the United States economy generally, or any Effect that results from changes affecting general worldwide economic or United States or global capital market conditions, (E) any Effect caused by the announcement or pendency of the transactions contemplated by this Agreement or the other Transaction Documents, or the identity of the Purchaser or any of its Affiliates as the purchaser in connection with the transactions contemplated by this Agreement, (F) political conditions, including acts of war or terrorism or

natural disasters, (G) the performance of this Agreement and the transactions contemplated hereby, including compliance with the covenants set forth herein and therein, or any action taken or omitted to be taken by the Company at the written request or with the prior written consent of the Purchaser, (H) changes in GAAP or other accounting standards (or any interpretation thereof), (I) changes in any Laws or other binding directives issued by any Governmental Entity or interpretations or enforcement thereof or (J) the matters set forth in Schedule 6.9(i); provided, however, that (x) the exceptions in clause (A) and (B) shall not prevent or otherwise affect a determination that any Effect underlying such change or failure has resulted in, or contributed to, a Company Material Adverse Effect, (y) with respect to clauses (D), (F) and (I), such Effects, alone or in combination, may be deemed to constitute, or be taken into account in determining whether a Company Material Adverse Effect has occurred, but only to the extent such Effects disproportionately affect the Company and its Subsidiaries, taken as a whole, relative to other companies operating in the same industry as the Company and its Subsidiaries.

(i) “Credit Agreement” means that certain Second Amended and Restated Credit Agreement, dated as of February 27, 2015, among the Company, GrafTech Finance Inc., GrafTech Luxembourg I S.a.r.l., GrafTech Luxembourg II S.a.r.l., GrafTech Switzerland S.A., the LC Subsidiaries (as defined therein) from time to time party thereto, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A. as administrative agent (as amended, restated, supplemented or otherwise modified from time to time).

(j) “Effect” shall mean any change, event, effect, development or circumstance.

(k) “Environmental Law” shall mean any Laws regulating, relating to or imposing standards of conduct concerning protection of the environment or of human health and safety.

(l) “Equity Securities” means the equity securities of the Company, including shares of Common Stock, Series A Preferred Stock and Series B Preferred Stock.

(m) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and all rules, regulations, rulings and interpretations adopted by the Internal Revenue Service or the Department of Labor thereunder.

(n) “Exon Florio” shall mean section 721 of the Defense Production Act of 1950, codified at 50 U.S.C. App. § 2170, as amended, together with the implementing regulations set forth at 31 C.F.R. pt. 800.

(o) “Governmental Entity” shall mean any court, administrative or regulatory agency or commission or other governmental or arbitral body or authority or instrumentality, including any state-controlled or owned corporation or enterprise, in each case whether federal, state, local or foreign, and any applicable industry self-regulatory organization.

(p) “Intellectual Property” means all worldwide intellectual and industrial property rights, whether or not registered, including patents, utility models, trademarks, service marks, trade names, corporate names, trade dress, domain names, and other source indicators (and all goodwill relating thereto), copyrights and copyrighted works, inventions, know-how, trade secrets, methods, processes, formulae, technical or proprietary information, and technology and all registrations, applications, renewals, re-examinations, re-issues, divisions, continuations, continuations-in part and foreign counterparts thereof.

(q) “Knowledge of the Company” means the actual knowledge after reasonable inquiry of one or more of Joel L. Hawthorne, Erick R. Asmussen, John D. Moran, Lionel D. Batty, Darrell Blair, Michael Carr and Tom Jacques.

(r) “Law” means any applicable federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, order, edict, decree, rule, regulation, ruling or other legally binding requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity.

(s) “Letter of Intent” means that certain letter agreement, dated as of April 29, 2015, by and between the Purchaser and the Company, relating to the purchase of Preferred Shares by the Purchaser from the Company.

(t) “Lien” means any mortgage, pledge, security interest, encumbrance, lien, charge or other restriction of any kind, whether based on common law, statute or contract.

(u) “Materials of Environmental Concern” shall mean any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity, and any other substances that are regulated pursuant to or could give rise to liability under any Environmental Law.

(v) “Permitted Transferee” means, with respect to any person, (i) any Affiliate of such person, (ii) any successor entity of such person and (iii) with respect to any person that is an investment fund, vehicle or similar entity, any other investment fund, vehicle or similar entity of which such person or an Affiliate, advisor or manager of such person serves as the general partner, manager or advisor.

(w) “Plan” shall mean (i) any employee pension benefit plan (as defined in Section 3(2)(A) of ERISA) maintained for employees of the Company or of any member of a “controlled group,” as such term is defined in Section 414 of the Code, of which the Company or any of its Subsidiaries is a part, or any such employee pension benefit plan to which the Company or any of its Subsidiaries is required to contribute on behalf of its employees, and any other employee benefit plan (as defined in Section 3(3) of ERISA), whether or not subject to ERISA; or (ii) any compensation or other benefit plan, policy, program, agreement or arrangement, including any employment, change in control, bonus, equity-based compensation, retention or other similar agreement, that the Company or any of its Subsidiaries, maintains, sponsors, is a party to, or as to which the Company or any of its Subsidiaries otherwise has any material obligation or material liability.

(x) “Registration Rights Agreement” means that certain Registration Rights Agreement, the form of which is set forth as Schedule B.

(y) “Senior Notes” means the 6.375% senior promissory notes of the Company, issued on November 20, 2012, due 2020.

(z) “Senior Subordinated Notes” means the senior subordinated promissory notes of the Company, issued on November 30, 2010, for an aggregate total face amount of $200 million, due November 2015.

(aa) “Series A Number” means the number of whole shares of Series A Preferred Stock that, upon issuance of the Series A Preferred Stock on the Closing Date, is convertible into an aggregate number of shares of Common Stock that is most nearly equal to (but not more than) 19.9% of the number of shares of Common Stock outstanding immediately prior to such issuance of the Series A Preferred Stock.

(bb) “Series B Number” means a number of whole shares of Series B Preferred Stock equal to (x) 150,000 minus (y) the number of Series A Shares.

(cc) “Stockholder Rights Agreement” means that certain Stockholder Rights Agreement, the form of which is attached hereto as Schedule D.

(dd) “Tax Return” means any return, declaration, report, statement or other document filed or required to be filed in respect of Taxes (including any attached schedules), including any information return, claim for refund, amended return and declaration of estimated Tax.

(ee) “Taxes” shall mean all United States federal, state, local or foreign taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, excise, real and personal property, profits, estimated, severance, occupation, production, capital gains, capital stock, goods and services, environmental, employment, withholding, stamp, value added, alternative or add-on minimum, sales, transfer, use, license, payroll and franchise taxes or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, imposed by the United States, or any state, county, local or foreign government or subdivision or agency thereof, and such term shall include any interest, penalties, fines, related liabilities or additions to tax attributable to such taxes, charges, fees, levies or other assessments, and any liability for Taxes (as heretofore defined) payable by reason of contract, assumption, transferee liability, operation of Law, Treas. Reg. § 1.1502-6(a) (or any predecessor or successor thereof and any analogous or similar provision under Law) or otherwise.

(ff) “Transaction Documents” means this Agreement, the Series A Certificate, the Series B Certificate, the Registration Rights Agreement and the Stockholder Rights Agreement.

6.10 Captions. The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11 Severability. If any provision of this Agreement or the application thereof to any person (including the officers and directors of the parties hereto) or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect

and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

6.12 No Third Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon any person other than the parties hereto (and their permitted assigns), any benefit, right or remedies other than the Indemnified Parties pursuant to Article V.

6.13 Public Announcements. Subject to each party’s disclosure obligations imposed by law or regulation or the rules of any stock exchange upon which its securities are listed, each of the parties hereto will cooperate with each other in the development and distribution of all news releases and other public information disclosures with respect to this Agreement and any of the transactions contemplated by this Agreement, and neither the Company nor the Purchaser will make any such news release or public disclosure without first consulting with the other, and, in each case, also receiving the other’s consent (which shall not be unreasonably withheld or delayed) and each party shall coordinate with the party whose consent is required with respect to any such news release or public disclosure.

6.14 Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, without the necessity of posting bond or other undertaking, the parties shall be entitled to specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity, and in the event that any action or suit is brought in equity to enforce the provisions of this Agreement, and no party will allege, and each party hereby waives, the defense or counterclaim that there is an adequate remedy at law.

6.15 Termination. Prior to the Closing, this Agreement may only be terminated:

(a) by mutual written agreement of the Company and the Purchaser;

(b) by the Company or the Purchaser, upon written notice to the other party if the Closing has not occurred by the date that is 150 days after the date hereof; provided, however that the right to terminate this Agreement pursuant to this Section 6.15(b) shall not be available to any party whose failure to fulfill any obligations under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date;

(c) by notice given by the Company to the Purchaser, if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by the Purchaser in this Agreement such that the conditions in Section 1.3(c)(1) or (2) would not be satisfied and which have not been cured by the Purchaser thirty (30) days after receipt by the Purchaser of written notice from the Company requesting such inaccuracies or breaches to be cured; or

(d) by notice given by the Purchaser to the Company, if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements

made by the Company in this Agreement such that the conditions in Section 1.3(b)(1) or (2) would not be satisfied and which have not been cured by the Company within thirty (30) days after receipt by the Company of written notice from the Purchaser requesting such inaccuracies or breaches to be cured.

6.16 Effects of Termination. In the event of any termination of this Agreement in accordance with Section 6.15, neither party (or any of its Affiliates) shall have any liability or obligation to the other (or any of its Affiliates) under or in respect of this Agreement, except to the extent of (A) any liability arising from any breach by such party of its obligations of this Agreement arising prior to such termination and (B) any fraud or intentional or willful breach of this Agreement. In the event of any such termination, this Agreement shall become void and have no effect, and the transactions contemplated hereby shall be abandoned without further action by the parties hereto, in each case, except (x) as set forth in the preceding sentence and (y) that the provisions of Sections 3.5 (Confidentiality), 6.2 to 6.14 (Amendment, Waiver; Counterparts, Electronic Transmission; Governing Law; Waiver of Jury Trial; Notices; Entire Agreement, Assignment; Interpretation; Other Definitions; Captions; Severability; No Third Party Beneficiaries; Public Announcements; and Specific Performance) and Section 6.17 (Non-Recourse) shall survive the termination of this Agreement.

6.17 Non-Recourse. Subject to the Fund Guarantee, this Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto, including entities that become parties hereto after the date hereof, including permitted assignees and successors, or that agree in writing for the benefit of the Company to be bound by the terms of this Agreement applicable to the Purchaser, and no former, current or future equityholders, controlling persons, directors, officers, employees, agents or Affiliates of any party hereto or any former, current or future equityholder, controlling person, director, officer, employee, general or limited partner, member, manager, advisor, agent or Affiliate of any of the foregoing (each, a “Non-Recourse Party”) shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the transactions contemplated hereby or in respect of any representations made or alleged to be made in connection herewith. Subject to the Fund Guarantee, without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Non-Recourse Party.

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


GRAFTECH INTERNATIONAL LTD.

By:	/s/ Joel Hawthorne
	Name:	Joel Hawthorne
	Title:	Chief Executive Officer

[Signature Page to Investment Agreement]


BCP IV GRAFTECH HOLDINGS LP

By:	BPE IV (Non-Cdn) GP LP,
	its general partner

	By:	Brookfield Capital Partners Ltd.,
		its general partner

		/s/ David Nowak
		Name:	David Nowak
		Title:	Managing Partner

		/s/ J. Peter Gordon
		Name:	J. Peter Gordon
		Title:	Managing Partner

[Signature Page to Investment Agreement]

SCHEDULE A

CERTIFICATE OF DESIGNATIONS

OF THE

SERIES A CONVERTIBLE PREFERRED STOCK,

PAR VALUE $0.01 PER SHARE,

GRAFTECH INTERNATIONAL LTD.

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

The undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board of Directors (the “Board”) of GrafTech International Ltd., a Delaware corporation (hereinafter called the “Corporation”), with the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, having been fixed by the Board pursuant to authority granted to it under Article Sixth of the Corporation’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate”) and in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware:

RESOLVED: That, pursuant to authority conferred upon the Board by the Certificate, the Board hereby authorizes the issuance of up to 150,000 shares of Series A Convertible Preferred Stock, par value $0.01 per share, of the Corporation and hereby fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such shares, in addition to those set forth in the Certificate, as follows:

Section 1. Designation. The shares of such series shall be designated “Series A Convertible Preferred Stock,” and the number of shares constituting such series shall be 150,000 (the “Series A Preferred Stock”). The number of shares of Series A Preferred Stock may be increased or decreased by resolution of the Board and the approval by the holders of a majority of the outstanding shares of the Series A Preferred Stock, voting as a separate class; provided that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares of such series then outstanding.

Section 2. Currency. All Series A Preferred Stock shall be denominated in United States currency, and all payments and distributions thereon or with respect thereto shall be made in United States currency. All references herein to “$” or “dollars” refer to United States currency.

Section 3. Ranking. The Series A Preferred Stock shall, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank senior to each other class or series of shares of the Corporation that the Corporation may issue in the future the terms of which do not expressly provide that such class or series ranks equally with, or senior to, the Series A Preferred Stock, with respect to dividend rights and/or rights upon liquidation, winding up or dissolution, including, without limitation, the common stock of the Corporation, par value $0.01 per share (the “Common Stock”) (such junior stock being referred to hereinafter collectively as “Junior Stock”).

The Series A Preferred Stock shall, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank equally with each other class or series of shares of the Corporation that the Corporation may issue in the future the terms of which expressly provide that such class or series shall rank equally with the Series A Preferred Stock with respect to dividend rights and rights upon liquidation, winding up or dissolution (“Parity Stock”).

The Series A Preferred Stock shall, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank junior to each other class or series of shares of the Corporation that the Corporation may issue in the future, the terms of which expressly provide that such class or series shall rank senior to the Series A Preferred Stock with respect to dividend rights and rights upon liquidation, winding up or dissolution. The Series A Preferred Stock shall also rank junior to the Corporation’s existing and future Indebtedness.

For the avoidance of doubt, the Series B Convertible Preferred Stock of the Company (the “Series B Preferred Stock”) shall, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank equally with the Series A Preferred Stock.

Section 4. Dividends.

(a) The holders of Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board, out of any funds legally available therefor, dividends per share of Series A Preferred Stock of an amount equal to (i) 7.0% per annum of the Stated Value (as herein defined) of each share of such Series A Preferred Stock then in effect, before any dividends shall be declared, set apart for or paid upon the Junior Stock (the “Regular Dividends”), and (ii) the aggregate amount of any dividends or other distributions, whether cash, in kind or other property, paid on outstanding shares of Common Stock on a per share basis based on the number of shares of Common Stock into which such share of Series A Preferred Stock could be converted on the applicable record date for such dividends or other distributions, assuming such shares of Common Stock were outstanding on the applicable record date for such dividend or other distributions (the “Participating Dividends” and, together with the Regular Dividends, the “Dividends”). For purposes hereof, the term “Stated Value” shall mean $1,000.00 per share of Series A Preferred Stock, as adjusted as described in Section 4(c) below.

(b) Regular Dividends shall be payable quarterly in arrears on [January 1, April 1, July 1 and October 1] of each year (unless any such day is not a Business Day, in which event such Regular Dividends shall be payable on the next succeeding Business Day, without accrual to the actual payment date), commencing on [July 1], 2015 (each such payment date being a “Regular Dividend Payment Date,” and the period from the date of issuance of the Series A Preferred Stock to the first Regular Dividend Payment Date and each such quarterly period thereafter being a “Regular Dividend Period”). The amount of Regular Dividends payable on the Series A Preferred Stock for any period shall be computed on the basis of a 365-day year and the actual number of days elapsed. Participating Dividends shall be payable as and when paid to the holders of shares of Common Stock (each such date being a “Participating Dividend Payment Date,” and, together with each Regular Dividend Payment Date, a “Dividend Payment Date”).

(c) Regular Dividends shall begin to accrue from the Issue Date and, if not declared, shall be cumulative. Any Regular Dividend or portion thereof undeclared and accrued but

unpaid on any Regular Dividend Payment Date shall, (i) so long as Stockholder Approval (as defined in the Investment Agreement) has been obtained, be added to the Stated Value until, but only until, such Regular Dividend or portion thereof is paid in cash in full or (ii) shall remain outstanding as accrued but unpaid dividends until, but only until, such Regular Dividend or portion thereof is paid in cash in full. If at any time the Corporation does not pay any Regular Dividend in full on any scheduled Regular Dividend Payment Date, such Regular Dividends will accrue at an annual rate of 8.0% of the Stated Value from such scheduled Regular Dividend Payment Date to the date that all accumulated Regular Dividends on the Series A Preferred Stock have been paid in cash in full, and thereafter will accrue at an annual rate of 7.0%. For the avoidance of doubt, Regular Dividends shall accumulate whether or not in any Regular Dividend Period there have been funds of the Corporation legally available for the payment of such dividends. Participating Dividends are payable on a cumulative basis once declared, whether or not there shall be funds legally available for the payment thereon.

(d) Except as otherwise provided herein, if at any time the Corporation pays less than the total amount of Dividends then accrued but unpaid with respect to the Series A Preferred Stock, such payment shall be distributed pro rata among the holders thereof based upon the Stated Value on all shares of Series A Preferred Stock held by each such holder as of the record date for such payment. When Dividends are not paid in full upon the shares of Series A Preferred Stock, all Dividends declared on Series A Preferred Stock and any other Parity Stock shall be paid pro rata so that the amount of Dividends so declared on the shares of Series A Preferred Stock and each such other class or series of Parity Stock shall in all cases bear to each other the same ratio as accrued but unpaid Dividends (for the full amount of dividends that would be payable for the most recently payable dividend period if dividends were declared in full on non-cumulative Parity Stock) on the shares of Series A Preferred Stock and such other class or series of Parity Stock bear to each other.

(e) When and if declared, the Regular Dividends shall be paid in cash.

(f) The Corporation shall not declare or pay any dividends on shares of Common Stock unless the holders of the Series A Preferred Stock then outstanding shall simultaneously receive Participating Dividends on a pro rata basis as if the shares of Series A Preferred Stock had been converted into shares of Common Stock pursuant to Section 7 immediately prior to the record date for determining the stockholders eligible to receive such dividends.

(g) Each Dividend shall be payable to the holders of record of shares of Series A Preferred Stock as they appear on the stock records of the Corporation at the Close of Business on such record dates (each, a “Dividend Payment Record Date”), which (i) with respect to Regular Dividends, shall be not more than thirty (30) days nor less than ten (10) days preceding the applicable Regular Dividend Payment Date, and (ii) with respect to Participating Dividends, shall be the same day as the record date for the payment of dividends or distributions to the holders of shares of Common Stock.

(h) From and after the time, if any, that the Corporation shall have failed to pay all accrued but unpaid Regular Dividends for all prior Regular Dividend Periods and/or declared and unpaid Participating Dividends in accordance with this Section 4, no dividends shall be declared or paid or set apart for payment, or other distribution declared or made, upon any Junior

Stock, nor shall any Junior Stock be redeemed, purchased or otherwise acquired for any consideration (nor shall any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such Junior Stock) by the Corporation, directly or indirectly until all such Regular Dividends and/or Participating Dividends have been paid in full, without the consent of the holders of a majority of the outstanding shares of Series A Preferred Stock; provided, however, that the foregoing limitation shall not apply to:

(1) purchases, redemptions or other acquisitions of shares of Junior Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors, managers or consultants of or to the Corporation or any of its Subsidiaries;

(2) an exchange, redemption, reclassification or conversion of any class or series of Junior Stock for any class or series of Junior Stock; or

(3) any dividend in the form of stock, warrants, options or other rights where the dividended stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks equal or junior to that stock.

Section 5. Liquidation, Dissolution or Winding Up.

(a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation (each, a “Liquidation”), after satisfaction of all liabilities and obligations to creditors of the Corporation and before any distribution or payment shall be made to holders of any Junior Stock, each holder of Series A Preferred Stock shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether capital or surplus) legally available therefor, an amount per share of Series A Preferred Stock equal to the greater of:

(1) the Stated Value per share, plus an amount equal to any Regular Dividends accrued but unpaid thereon (whether or not declared) plus declared but unpaid Participating Dividends, in each case, through the date of Liquidation; and

(2) the payment such holders would have received had such holders, immediately prior to such Liquidation converted their shares of Series A Preferred Stock into shares of Common Stock (at the then applicable Conversion Rate) pursuant to Section 7 immediately prior to such Liquidation, plus declared but unpaid Participating Dividends through the date of Liquidation.

(the greater of (1) and (2) is referred to herein as the “Liquidation Preference”). Holders of Series A Preferred Stock will not be entitled to any other amounts from the Corporation after they have received the full amounts provided for in this Section 5(a) and will have no right or claim to any of the Corporation’s remaining assets.

(b) If, in connection with any distribution described in Section 5(a) above, the assets of the Corporation or proceeds thereof are not sufficient to pay in full the Liquidation Preference payable on the Series A Preferred Stock and the corresponding amounts payable on the Parity Stock, then such assets, or the proceeds thereof, shall be paid pro rata in accordance with the full respective amounts which would be payable on such shares if all amounts payable thereon were paid in full.

(c) For purposes of this Section 5, the merger or consolidation of the Corporation with or into any other corporation or other entity, or the sale, conveyance, lease or other disposition of all or substantially all of the assets of the Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.

Section 6. Voting Rights.

(a) Except as otherwise required by law, the holders of the shares of Series A Preferred Stock shall be entitled to (i) vote as a class on all matters adversely affecting the rights of holders of Series A Preferred Stock, (ii) vote with the holders of the Common Stock on all matters submitted for a vote of holders of Common Stock (subject to the Stockholder Rights Agreement, dated as of [●], 2015, by and between the Corporation and BCP IV Graftech Holdings LP (as may be amended from time to time, the “Stockholder Rights Agreement”) with respect to the election of directors), (iii) a number of votes per share of Series A Preferred Stock equal to the number of shares of Common Stock into which each such share of Series A Preferred Stock is then convertible at the time of the related record date, (iv) notice of all stockholders’ meetings (or pursuant to any action by written consent) in accordance with the Certificate and the Amended and Restated By-laws of the Corporation (the “By-Laws”) as if the holders of Series A Preferred Stock were holders of Common Stock and (v) so long as (i) the Approved Holders (as defined in the Stockholder Rights Agreement) have the right to designate a director pursuant to the Stockholder Rights Agreement and (ii) the Approved Holders are the holders of a majority of the outstanding shares of Series A Preferred Stock, vote as a class on the election of directors as described in Section 6(c).

(b) For so long as the Outstanding Preferred Percentage is at least 25%, the Corporation shall not and shall not permit any direct or indirect Subsidiary of the Corporation to, without first obtaining the written consent or affirmative vote at a meeting called for that purpose of holders of a majority of outstanding shares of Series A Preferred Stock (the “Majority Holders”), take any of the following actions:

(1) Any change, amendment, alteration or repeal (including as a result of a merger, consolidation, or other similar or extraordinary transaction) of any provisions of the Certificate or By-Laws that adversely amends, modifies or affects the rights, preferences, privileges or voting powers of the Series A Preferred Stock; or

(2) Any authorization, issuance or reclassification of stock (other than the conversion of the Series B Preferred Stock into the Series A Preferred Stock) that would rank equal or senior to the Series A Preferred Stock with respect to the redemption, liquidation, dissolution or winding up of the Corporation or with respect to dividend rights.

(c) (i) For so long as the Majority Approved Holders (as defined in the Stockholder Rights Agreement) have the right to designate one director pursuant to the Stockholder Rights Agreement, the Majority Holders shall have the right to elect one member of the board of

directors of the Company at any meeting of stockholders of the Company at which directors are to be elected, designated or appointed, except such meetings for the purpose of filling vacancies or newly created directorships, voting as a separate class or by execution of a written consent in lieu of such meeting, and (ii) for so long as the Majority Approved Holders have the right to designate two directors pursuant to the Stockholder Rights Agreement, the Majority Holders shall have the right to elect two members of the board of directors of the Company at any meeting of stockholders of the Company at which directors are to be elected, designated or appointed, except such meetings for the purpose of filling vacancies or newly created directorships, voting as a separate class or by execution of a written consent in lieu of such meeting.

(d) In the event of the death, disability, resignation or removal of a director elected, designated or appointed by the Majority Holders, the Majority Holders may, to the extent the Majority Approved Holders (as defined in the Stockholder Rights Agreement) have the right to designate a director pursuant to the Stockholder Rights Agreement, elect or appoint a replacement director to fill the resulting vacancy; provided that if a director elected by the Majority Holders is removed for cause, the replacement director will not be the same person who was removed. Other than for cause, a director elected, designated or appointed by the Majority Holders may not be removed by the Board or the stockholders of the Corporation without the prior written consent of the Majority Holders.

(e) The Corporation will at all times provide the directors elected by the Majority Holders with the same rights to indemnification that it provides to the other members of the Board. The directors elected by the Majority Holders shall each receive director fees and rights to expense reimbursement that are no less favorable to them than the fees and reimbursement provided to any other non-management director (in their capacity as directors).

Section 7. Conversion.

(a) Conversion. At any time, each holder of Series A Preferred Stock shall have the right, at such holder’s option, to convert any or all of such holder’s shares of Series A Preferred Stock, and the shares of Series A Preferred Stock to be converted shall be converted into (i) a number of shares of Common Stock equal to the product of the aggregate Stated Value of the shares of Series A Preferred Stock to be converted divided by $1,000 multiplied by the Conversion Rate then in effect, plus (ii) cash in lieu of fractional shares, as set out in Section 9(i), plus an amount in cash per share of Series A Preferred Stock equal to accrued but unpaid dividends on such share from and including the immediately preceding Dividend Payment Date to but excluding the applicable Conversion Date to the extent not added to Stated Value, out of funds legally available therefor.

(b) Conversion Rate. The “Conversion Rate” means 200 shares, subject to adjustment in accordance with the provisions of this Certificate of Designations.

(c) Conversion Procedures. A holder must do each of the following in order to convert its shares of Series A Preferred Stock pursuant to this Section 7:

(1) complete and manually sign the conversion notice provided by the Conversion Agent, and deliver such notice to the Conversion Agent;

(2) deliver to the Conversion Agent the certificate or certificates representing the shares of Series A Preferred Stock to be converted (or, if such certificate or certificates have been lost, stolen or destroyed, a lost certificate affidavit and indemnity in form and substance reasonably acceptable to the Corporation);

(3) if required, furnish appropriate endorsements and transfer documents in form and substance reasonably acceptable to the Corporation; and

(4) if required, pay any stock transfer, documentary, stamp or similar taxes not payable by the Corporation pursuant to Section 7(g).

The “Conversion Date” means the date on which a holder complies in all respects with the procedures set forth in this Section 7(c).

(d) Effect of Conversion. Effective immediately prior to the Close of Business on the Conversion Date applicable to any shares of Series A Preferred Stock, dividends shall no longer accrue or be declared on any such shares of Series A Preferred Stock and such shares of Series A Preferred Stock shall cease to be outstanding.

(e) Record Holder of Underlying Securities as of Conversion Date. The Person or Persons entitled to receive the Common Stock and, to the extent applicable, cash, issuable upon conversion of Series A Preferred Stock on a Conversion Date shall be treated for all purposes as the record holder(s) of such shares of Common Stock and/or cash as of the Close of Business on such Conversion Date. As promptly as practicable on or after the Conversion Date and compliance by the applicable holder with the relevant conversion procedures contained in Section 7(c) (and in any event no later than three Trading Days thereafter), the Corporation shall issue the number of whole shares of Common Stock issuable upon conversion (and deliver payment of cash in lieu of fractional shares). Such delivery of shares of Common Stock and, if applicable, cash, shall be made, at the option of the applicable holder, in certificated form or by book-entry. Any such certificate or certificates shall be delivered by the Corporation to the appropriate holder on a book-entry basis or by mailing certificates evidencing the shares to the holders at their respective addresses as set forth in the conversion notice. If fewer than all of the shares of Series A Preferred Stock held by any holder hereto are converted pursuant to Section 7(b), then a new certificate representing the unconverted shares of Series A Preferred Stock shall be issued to such holder concurrently with the issuance of the certificates (or book-entry shares) representing the applicable shares of Common Stock. In the event that a holder shall not by written notice designate the name in which shares of Common Stock and, to the extent applicable, cash to be delivered upon conversion of shares of Series A Preferred Stock should be registered or paid, or the manner in which such shares and, if applicable, cash should be delivered, the Corporation shall be entitled to register and deliver such shares and, if applicable, cash in the name of the holder and in the manner shown on the records of the Corporation.

(f) Status of Converted or Acquired Shares. Shares of Series A Preferred Stock duly converted in accordance with this Certificate of Designations, 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 and any filing required by the Delaware General Corporation Law become authorized but unissued shares of Preferred Stock, without designation as to series until such shares are once more designated as part of a particular series by the Board pursuant to the provisions of the Certificate of Incorporation.

(g) Taxes.

(1) The Corporation and its paying agent shall be entitled to withhold taxes on all payments on the Series A Preferred Stock or Common Stock or other securities issued upon conversion of the Series A Preferred Stock to the extent required by law. Prior to the date of any such payment, the Corporation shall request and, upon request, each holder of Series A Preferred Stock shall deliver to the Corporation or its paying agent a duly executed, valid, accurate and properly completed Internal Revenue Service Form W-9 or an appropriate Internal Revenue Service Form W-8, as applicable.

(2) Absent a change in law or Internal Revenue Service practice, or a contrary determination (as defined in Section 1313(a) of the United States Internal Revenue Code of 1986, as amended (the “Code”)), each holder of Series A Preferred Stock and the Corporation agree not to treat the Series A Preferred Stock (based on their terms as set forth in this Certificate of Designations) as “preferred stock” within the meaning of Section 305 of the Code, and Treasury Regulation Section 1.305-5 for United States federal income tax and withholding tax purposes and shall not take any position inconsistent with such treatment.

(3) The Corporation shall pay any and all documentary, stamp and similar issuance or transfer tax due on (x) the issuance of the Series A Preferred Stock and (y) the issuance of shares of Common Stock upon conversion of the Series A Preferred Stock. However, in the case of conversion of Series A Preferred Stock, the Corporation shall not be required to pay any tax or duty that may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock or Series A Preferred Stock in a name other than that of the holder of the shares to be converted, and no such issuance or delivery shall be made unless and until the person requesting such issuance has paid to the Corporation the amount of any such tax or duty, or has established to the satisfaction of the Corporation that such tax or duty has been paid.

(4) Each holder of Series A Preferred Stock and the Corporation agree to cooperate with each other in connection with any redemption of part of the shares of Series A Preferred Stock and to use good faith efforts to structure such redemption so that such redemption may be treated as a sale or exchange pursuant to Section 302 of the Code; provided that nothing in this Section 7(g) shall require the Corporation to purchase any shares of Series A Preferred Stock, and provided further that the Corporation makes no representation or warranty in this Section 7(g) regarding the tax treatment of any redemption of Series A Preferred Stock.

Section 8. Redemption and Repurchase.

(a) Optional Redemption.

(1) The Series A Preferred Stock may be redeemed, in whole or in part, at any time on or after the seventh anniversary of the Issue Date, at the option of the Corporation, upon giving notice of redemption pursuant to Section 8(d), at a redemption price per share equal to the sum of the Stated Value per share of the Series A Preferred Stock to be redeemed plus an amount per share equal to accrued but unpaid dividends on such share of Series A Preferred Stock from and including the immediately preceding Dividend Payment Date to but excluding the date of redemption.

(2) The Series A Preferred Stock may be redeemed in whole or in part, if, at any time after the fourth anniversary of the Issue Date, the daily volume weighted average price (“VWAP”) of the Common Stock equals or exceeds 175.0% of the Conversion Price then in effect for at least 40 Trading Days during a period of 60 consecutive Trading Days, at the option of the Corporation, upon giving notice of redemption pursuant to Section 8(d), at a redemption price per share equal to the sum of the Stated Value per share of the Series A Preferred Stock to be redeemed plus an amount per share equal to accrued but unpaid dividends on such share of Series A Preferred Stock from and including the immediately preceding Dividend Payment Date to but excluding the date of redemption.

(3) For the avoidance of doubt, holders of Series A Preferred Stock shall have the right to convert all or a portion of the Series A Preferred Stock pursuant to Section 7(a) at any time prior to the date fixed for redemption.

(b) Repurchase at the Option of the Holder Upon a Change of Control. Upon the occurrence of a Change of Control, each holder of shares of Series A Preferred Stock shall have the right to require the Corporation to repurchase, by irrevocable, written notice to the Corporation, all or any portion of such holder’s shares of Series A Preferred Stock at a purchase price per share equal to the value calculated in accordance with the applicable formula as set forth on Annex 1 (the “Fair Value”).

Within thirty (30) days of the occurrence of a Change of Control, the Corporation shall send notice by first class mail, postage prepaid, addressed to the holders of record of the shares of Series A Preferred Stock at their respective last addresses appearing on the books of the Corporation stating (1) that a Change of Control has occurred, (2) that all shares of Series A Preferred Stock tendered prior to a specified Business Day no earlier than thirty (30) days nor later than sixty (60) days from the date such notice is mailed shall be accepted for repurchase and (3) the procedures that holders of the Series A Preferred Stock must follow in order for their shares of Series A Preferred Stock to be repurchased, including the place or places where certificates for such shares are to be surrendered for payment of the repurchase price. Any notice mailed as provided in this subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Series A Preferred Stock designated for repurchase shall not affect the validity of the proceedings for the redemption of any other shares of Series A Preferred Stock.

(c) Mandatory Redemption. For a six (6)-month period (the “Mandatory Redemption Period”) beginning on the seventh anniversary of the Issue Date (the “Initial Mandatory Redemption Date”), a holder of shares of Series A Preferred Stock may irrevocably elect to require the Corporation to repurchase all or any portion of such holder’s shares of Series A Preferred Stock in accordance with the next succeeding sentence by giving irrevocable, written notice to the Corporation at a repurchase price per share, payable in cash, equal to the sum of (1) the Stated Value per share of the Series A Preferred Stock plus (2) an amount per share equal to accrued but unpaid dividends from and including the immediately preceding Dividend Payment Date to but excluding the date of repurchase; provided that the Corporation shall provide written notice of the Initial Mandatory Redemption Date to each holder of record of Series A Convertible Preferred Stock not more than thirty (30) days in advance of the Initial Mandatory Redemption Date; provided further, that if the Corporation fails to provide such notice in a timely manner, the Mandatory Redemption Period shall be extended until the date which is the six-month anniversary of the delivery of such notice but in no event earlier than the Initial Mandatory Redemption Date. Such notice shall state the number of shares of Series A Preferred Stock to be repurchased and the date of repurchase, which shall be at least five (5) but no more than twenty (20) Business Days following the delivery of such notice. Any notice mailed as provided in this subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Series A Preferred Stock designated for repurchase shall not affect the validity of the proceedings for the redemption of any other shares of Series A Preferred Stock.

(d) Notice of Redemption at the Option of the Corporation. Notice of every redemption of shares of Series A Preferred Stock pursuant to Section 8(a) shall be given by first class mail, postage prepaid, addressed to the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be at least thirty (30) days and not more than sixty (60) days before the date fixed for redemption. Any notice mailed as provided in this Section 8(d) shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Series A Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Series A Preferred Stock. Each notice of redemption given to a holder shall state: (1) the redemption date; (2) the number of shares of the Series A Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of the redemption price. For the avoidance of doubt, holders of Series A Preferred Stock shall have the right to convert all or a portion of the Series A Preferred Stock at any time prior to the date fixed for redemption.

(e) Partial Redemption. In case of any redemption of part of the shares of Series A Preferred Stock at the time outstanding pursuant to Section 8(a), the shares to be redeemed shall be selected pro rata. Subject to the provisions hereof, the Corporation shall have full power and

authority to prescribe the terms and conditions upon which shares of Series A Preferred Stock shall be redeemed from time to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.

(f) Effectiveness of Redemption. If notice of redemption has been duly given under Section 8(d) and if on or before the redemption date specified in the notice all funds necessary for the redemption have been deposited by the Corporation, in trust for the pro rata benefit of the holders of the shares called for redemption, with a bank or trust company doing business in the Borough of Manhattan, The City of New York, and having a capital and surplus of at least $500 million and selected by the Board, so as to be and continue to be available solely therefor, then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date specified in the notice dividends shall cease to accrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares (including voting and consent rights) shall forthwith on such redemption date specified in the notice cease and terminate, except that the right of the holders thereof to receive the amount payable on such redemption from such bank or trust company, without interest shall survive such cessation and termination. Any funds unclaimed at the end of three years from the redemption date specified in the notice shall, to the extent permitted by law, be released to the Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption price of such shares.

Section 9. Anti-Dilution Provisions.

(a) Adjustments. The Conversion Rate will be subject to adjustment, without duplication, under the following circumstances:

(1) the issuance of Common Stock as a dividend or distribution to all or substantially all holders of Common Stock, to the extent that an equivalent Participating Dividend was not distributed to the holders of Series A Preferred Stock, or a subdivision or combination of Common Stock or a reclassification of Common Stock into a greater or lesser number of shares of Common Stock, in which event the Conversion Rate will be adjusted based on the following formula:

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where,

CR₀ = the Conversion Rate in effect immediately prior to the Close of Business on (i) the Record Date for such dividend or distribution, or (ii) the effective date of such subdivision, combination or reclassification;

CR₁ = the new Conversion Rate in effect immediately after the Close of Business on (i) the Record Date for such dividend or distribution, or (ii) the effective date of such subdivision, combination or reclassification;

OS₀ = the number of shares of Common Stock outstanding immediately prior to the Close of Business on (i) the Record Date for such dividend or distribution or (ii) the effective date of such subdivision, combination or reclassification; and

OS₁ = the number of shares of Common Stock that would be outstanding immediately after, and solely as a result of, the completion of such event.

Any adjustment made pursuant to this clause (1) shall be effective immediately prior to the Open of Business on the Trading Day immediately following the Record Date, in the case of a dividend or distribution, or the effective date in the case of a subdivision, combination or reclassification. If any such event is declared but does not occur, the Conversion Rate shall be readjusted, effective as of the date the Board announces that such event shall not occur, to the Conversion Rate that would then be in effect if such event had not been declared.

(b) Calculation of Adjustments. All adjustments to the Conversion Rate shall be calculated by the Corporation to the nearest 1/10,000th of one share of Common Stock (or if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment to the Conversion Rate will be required unless such adjustment would require an increase or decrease of at least one percent of the Conversion Rate; provided, however, that any such adjustment that is not required to be made will be carried forward and taken into account in any subsequent adjustment; provided, further that any such adjustment of less than one percent that has not been made will be made upon any Conversion Date.

(1) Except as otherwise provided in this Section 9, the Conversion Rate will not be adjusted for the issuance of Common Stock or any securities convertible into or exchangeable for Common Stock or carrying the right to purchase any of the foregoing, or for the repurchase of Common Stock.

(2) No adjustment of the Conversion Rate shall be made as a result of the issuance of, the distribution of separate certificates representing, the exercise or redemption of, or the termination or invalidation of, rights pursuant to any stockholder rights plans.

(3) Notwithstanding the foregoing, no adjustment to the Conversion Rate shall be made:

(A) if such adjustment would cause the outstanding Series A Preferred Stock to be convertible in the aggregate into more than 19.9% of the shares of Common Stock outstanding on the date hereof unless Stockholder Approval (as defined in the Investment Agreement) has been obtained;

(B) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and the investment of additional optional amounts in

Common Stock under any plan in which purchases are made at market prices on the date or dates of purchase, without discount, and whether or not the Corporation bears the ordinary costs of administration and operation of the plan, including brokerage commissions;

(C) upon the issuance of any shares of Common Stock or options or rights to purchase such shares pursuant to any present or future employee, director, manager or consultant benefit plan or program of or assumed by the Corporation or any of its Subsidiaries or of any employee agreements or arrangements or programs;

(D) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security outstanding as of the Issue Date;

(E) for a change in the par value of the Common Stock; or

(F) for accrued and unpaid dividends on the Series A Preferred Stock.

(d) Successive Adjustments. After an adjustment to the Conversion Rate under this Section 9, any subsequent event requiring an adjustment under this Section 9 shall cause an adjustment to each such Conversion Rate as so adjusted.

(e) Multiple Adjustments. For the avoidance of doubt, if an event occurs that would trigger an adjustment to the Conversion Rate pursuant to this Section 9 under more than one subsection hereof (other than where holders of Series A Preferred Stock are entitled to elect the applicable adjustment, in which case such election shall control), such event, to the extent fully taken into account in a single adjustment, shall not result in multiple adjustments hereunder; provided, however, that if more than one subsection of this Section 9 is applicable to a single event, the subsection shall be applied that produces the largest adjustment.

(f) Other Adjustments. The Corporation may, but shall not be required to, make such increases in the Conversion Rate, in addition to those required by this Section 9, as the Board considers to be advisable in order to avoid or diminish any income tax to any holders of shares of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such for income tax purposes or for any other reason.

(g) Notice of Adjustments. Whenever the Conversion Rate is adjusted as provided under this Section 9, the Corporation shall as soon as reasonably practicable following the occurrence of an event that requires such adjustment (or if the Corporation is not aware of such occurrence, as soon as reasonably practicable after becoming so aware) or the date the Corporation makes an adjustment pursuant to Section 9(f):

(1) compute the adjusted applicable Conversion Rate in accordance with this Section 9 and prepare and transmit to the Conversion Agent an officer’s certificate setting forth the applicable Conversion Rate, the method of calculation thereof in reasonable detail, and the facts requiring such adjustment and upon which such adjustment is based; and

(2) provide a written notice to the holders of the Series A Preferred Stock of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the applicable Conversion Rate was determined and setting forth the adjusted applicable Conversion Rate.

(h) Conversion Agent. The Conversion Agent shall not at any time be under any duty or responsibility to any holder of Series A Preferred Stock to determine whether any facts exist that may require any adjustment of the applicable Conversion Rate or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Conversion Agent shall be fully authorized and protected in relying on any officer’s certificate delivered pursuant to Section 9(h) and any adjustment contained therein and the Conversion Agent shall not be deemed to have knowledge of any adjustment unless and until it has received such certificate. The Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, that may at the time be issued or delivered with respect to any Series A Preferred Stock; and the Conversion Agent makes no representation with respect thereto. The Conversion Agent, if other than the Corporation, shall not be responsible for any failure of the Corporation to issue, transfer or deliver any shares of Common Stock pursuant to the conversion of Series A Preferred Stock or to comply with any of the duties, responsibilities or covenants of the Corporation contained in this Section 9.

(i) Fractional Shares. No fractional shares of Common Stock will be delivered to the holders of Series A Preferred Stock upon conversion. In lieu of fractional shares otherwise issuable, holders of Series A Preferred Stock will be entitled to receive an amount in cash equal to the fraction of a share of Common Stock, multiplied by the Closing Price of the Common Stock on the Trading Day immediately preceding the applicable Conversion Date. In order to determine whether the number of shares of Common Stock to be delivered to a holder of Series A Preferred Stock upon the conversion of such holder’s shares of Series A Preferred Stock will include a fractional share (in lieu of which cash would be paid hereunder), such determination shall be based on the aggregate number of shares of Series A Preferred Stock of such holder that are being converted on any single Conversion Date.

(j) Reorganization Events. In the event of:

(1) any reclassification, statutory exchange, merger, consolidation or other similar business combination of the Corporation with or into another Person, in each case, pursuant to which the Common Stock (but not the Series A Preferred Stock) is changed or converted into, or exchanged for, cash, securities or other property of the Corporation or another person;

(2) any sale, transfer, lease or conveyance to another Person of all or substantially all the property and assets of the Corporation, in each case pursuant to which the Common Stock (but not the Series A Preferred Stock) is converted into cash, securities or other property; or

(3) any statutory exchange of securities of the Corporation with another Person (other than in connection with a merger or acquisition) or reclassification, recapitalization or reorganization of the Common Stock (but not the Series A Preferred Stock) into other securities,

(each of which is referred to as a “Reorganization Event”), each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of the holders of Series A Preferred Stock and subject to Section 9(k), remain outstanding but shall become convertible into, out of funds legally available therefor, the number, kind and amount of securities, cash and other property (the “Exchange Property”) (without any interest on such Exchange Property and without any right to dividends or distribution on such Exchange Property which have a record date that is prior to the applicable Conversion Date) that the holder of such share of Series A Preferred Stock would have received in such Reorganization Event had such holder converted its share of Series A Preferred Stock into the applicable number of shares of Common Stock immediately prior to the effective date of the Reorganization Event, assuming that such holder is not a Person with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation or to which such sale or transfer was made, as the case may be (any such Person, a “Constituent Person”), or an Affiliate of a Constituent Person to the extent such Reorganization Event provides for different treatment of Common Stock held by Affiliates of the Corporation and non-Affiliates; provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held immediately prior to such Reorganization Event by a Person other than a Constituent Person or an Affiliate thereof, then for the purpose of this Section 9(j), the kind and amount of securities, cash and other property receivable upon such Reorganization Event will be deemed to be the weighted average, as determined by the Corporation in good faith, of the types and amounts of consideration received by the holders of Common Stock. Any notice mailed as provided in this subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Series A Preferred Stock designated for repurchase shall not affect the validity of the proceedings for the redemption of any other shares of Series A Preferred Stock.

(k) Exchange Property Election. In the event that the holders of the shares of Common Stock have the opportunity to elect the form of consideration to be received in such transaction, the Exchange Property that the holders of Series A Preferred Stock shall be entitled to receive shall be determined by the holders of a majority of the outstanding shares of Series A Preferred Stock on or before the earlier of (i) the deadline for elections by holders of Common Stock and (ii) two Business Days before the anticipated effective date of such Reorganization Event. The number of units of Exchange Property for each share of Series A Preferred Stock converted following the effective date of such Reorganization Event shall be determined from among the choices made available to the holders of the Common Stock and based on the per share amount as of the effective date of the Reorganization Event, determined as if the references to “share of Common Stock” in this Certificate of Designations were to “units of Exchange Property.”

(l) Successive Reorganization Events. The above provisions of Section 9(j) and Section 9(k) shall similarly apply to successive Reorganization Events and the provisions of Section 9 shall apply to any shares of Capital Stock (or capital stock of any other issuer) received by the holders of the Common Stock in any such Reorganization Event.

(m) Reorganization Event Notice. The Corporation (or any successor) shall, no less than twenty (20) Business Days prior to the occurrence of any Reorganization Event, provide written notice to the holders of Series A Preferred Stock of such occurrence of such event and of the kind and amount of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this Section 9.

(n) The Corporation shall not enter into any agreement for a transaction constituting a Reorganization Event unless (i) such agreement provides for or does not interfere with or prevent (as applicable) conversion of the Series A Preferred Stock into the Exchange Property in a manner that is consistent with and gives effect to this Section 9, and (ii) to the extent that the Corporation is not the surviving corporation in such Reorganization Event or will be dissolved in connection with such Reorganization Event, proper provision shall be made in the agreements governing such Reorganization Event for the conversion of the Series A Preferred Stock into stock of the Person surviving such Reorganization Event or such other continuing entity in such Reorganization Event, or in the case of a Reorganization Event described in Section 9(j)(2), an exchange of Series A Preferred Stock for the stock of the Person to whom the Corporation’s assets are conveyed or transferred, having voting powers, preferences, and relative, participating, optional or other special rights as nearly equal as possible to those provided in this Certificate of Designations.

Section 10. Reservation of Shares. The Corporation shall at all times when the Series A Preferred Stock shall be outstanding reserve and keep available, free from preemptive rights, for issuance upon the conversion of Series A Preferred Stock, such number of its authorized but unissued Common Stock as will from time to time be sufficient to permit the conversion of all outstanding Series A Preferred Stock. Prior to the delivery of any securities which the Corporation shall be obligated to deliver upon conversion of the Series A Preferred Stock, the Corporation shall comply with all applicable laws and regulations which require action to be taken by the Corporation.

Section 11. Notices. Except as otherwise provided herein, any and all notices or other communications or deliveries hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to or at the Close of Business on a Business Day and electronic confirmation of receipt is received by the sender, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Business Day or later than the Close of Business on any Business Day, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Corporation, attention: Chief Executive Officer and General Counsel, or (ii) if to a holder of Series A Preferred Stock, to the address or facsimile number appearing on the Corporation’s stockholder records or such other address or facsimile number as such holder may provide to the Corporation in accordance with this Section 11.

Section 12. Certain Definitions. As used in this Certificate of Designations, the following terms shall have the following meanings, unless the context otherwise requires:

“Affiliate” with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person; provided, however, that (i) portfolio companies in which any person or any of its Affiliates has an investment shall not be deemed an Affiliate of such person, or (ii) the Corporation, any of its Subsidiaries, or any of the Corporation’s other controlled Affiliates, in each case, will not be deemed to be Affiliates of the Brookfield Group for purposes of this Certificate of Designations. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities, by contract or otherwise.

“Beneficially Own” shall mean “beneficially own” as defined in Rule 13d-3 of the Exchange Act or any successor provision thereto.

“Brookfield Group” means Brookfield Capital Partners Ltd. and any of its Affiliates, any successor entity and any other investment fund, vehicle or similar entity of which such person or an Affiliate, advisor or manager of such person serves as the general partner, manager or advisor.

“Board” shall have the meaning ascribed to it in the recitals.

“Business Day” shall mean a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking institutions in New York, New York, or Cleveland, Ohio, generally are authorized or obligated by law, regulation or executive order to close.

“Capital Stock” shall mean any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by the Corporation.

“Certificate of Designations” shall mean this Certificate of Designations relating to the Series A Preferred Stock, as it may be amended from time to time.

“Change of Control” shall mean the occurrence of any of the following on or after May 4, 2015:

(1) any Person (other than a member of the Brookfield Group) shall Beneficially Own, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, shares of the Corporation’s Capital Stock entitling such Person to exercise 35% or more of the total voting power of all classes of Voting Stock of the Corporation, other than an acquisition by the Corporation, any of the Corporation’s Subsidiaries or any of the Corporation’s employee benefit plans (for purposes of this clause (1), “Person” shall include any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act);

(2) the Corporation (i) merges or consolidates with or into any other Person, another Person merges with or into the Corporation, or the Corporation conveys, sells, transfers or leases all or substantially all of the Corporation’s assets to another Person or (ii) engages in any recapitalization, reclassification or other transaction in which all or substantially all of the Common Stock is exchanged for or converted into cash, securities or other property, in each case other than a merger, consolidation or sale:

1. that does not result in a reclassification, conversion, exchange or cancellation of the Corporation’s outstanding Common Stock; or

2. which is effected solely to change the Corporation’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of the Common Stock solely into shares of common stock of the surviving entity; or

3. where the Voting Stock outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such issuance); or

(3) the Common Stock ceases to be listed or quoted on any of the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market (or any of their respective successors),

provided, that (x) transfers by any holder of any shares of Series A Preferred Stock (or shares of Common Stock converted therefrom) to any Person shall not be taken into account for purposes of determining whether or not a Change of Control has occurred and (y) notwithstanding the foregoing, a transaction or transactions will not constitute a Change of Control if at least 90% of the consideration received or to be received by holders of Common Stock (other than cash payments for fractional shares or pursuant to statutory appraisal rights) in connection with such transaction or transactions consists of common stock, ordinary shares, American depositary receipts or American depositary shares and any associated rights listed and traded on the New York Stock Exchange or another U.S. national securities exchange or automated inter-dealer quotation system (or which will be so listed and traded when issued or exchanged in connection with such consolidation or merger).

“Close of Business” shall mean 5:00 p.m., New York City time, on any Business Day.

“Closing Price” shall means the price per share of the final trade of the Common Stock on the applicable Trading Day on the principal national securities exchange on which the Common Stock is listed or admitted to trading.

“Common Stock” shall have the meaning ascribed to it in Section 3.

“Constituent Person” shall have the meaning ascribed to it in Section 9(j).

“Conversion Rate” shall have the meaning ascribed to it in Section 7(c).

“Corporation” shall have the meaning ascribed to it in the recitals.

“Dividend” shall have the meaning ascribed to it in Section 4(a).

“Dividend Payment Date” shall have the meaning ascribed to it in Section 4(b).

“Exchange Property” shall have the meaning ascribed to it in Section 9(j).

“Fair Value” shall have the meaning ascribed to it in Section 8(b).

“Indebtedness” shall mean any indebtedness (including principal and premium) in respect of borrowed money.

“Investment Agreement” shall mean that certain Investment Agreement, dated as of May 4, 2015, by and between GrafTech International Ltd. and BCP IV Graftech Holdings LP.

“Issue Date” shall mean [●], 2015.

“Junior Stock” shall have the meaning ascribed to it in Section 3.

“Liquidation” shall have the meaning ascribed to it in Section 5(a).

“Liquidation Preference” shall have the meaning ascribed to it in Section 5(a).

“Majority Holders” shall have the meaning ascribed to it in Section 6(b).

“Open of Business” shall mean 9:00 a.m., New York City time, on any Business Day.

“Outstanding Preferred Percentage” means, as of any date, the percentage equal to (i) the aggregate number of shares of Series A Preferred Stock then outstanding divided by (ii) the total number of shares of Series A Preferred Stock issued pursuant to the Investment Agreement.

“Parity Stock” shall have the meaning ascribed to it in Section 3.

“Participating Dividend” shall have the meaning ascribed to it in Section 4(a).

“Person” shall mean any individual, company, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization, government or agency or political subdivision thereof or any other entity.

“Preferred Stock” shall mean any and all series of preferred stock of the Corporation, including the Series A Preferred Stock.

“Record Date” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of shareholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board or by statute, contract, this Certificate of Designations or otherwise).

“Regular Dividend” shall have the meaning ascribed to it in Section 4(a).

“Regular Dividend Payment Date” shall have the meaning ascribed to it in Section 4(b).

“Regular Dividend Period” shall have the meaning ascribed to it in Section 4(b).

“Reorganization Event” shall have the meaning ascribed to it in Section 9(j).

“Series A Preferred Stock” shall have the meaning ascribed to it in Section 1.

“Stated Value” shall have the meaning ascribed to it in Section 4(a).

“Stockholder Rights Agreement” shall have the meaning ascribed to it in Section 6(a).

“Subsidiary” means any company or corporate entity for which the Corporation owns, directly or indirectly, an amount of the voting securities, other voting rights or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, more than 50% of the equity interests of such company or corporate entity).

“Trading Day” shall mean any Business Day on which the Common Stock is traded, or able to be traded, on the principal national securities exchange on which the Common Stock is listed or admitted to trading.

“Voting Stock” shall mean Capital Stock of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances (determined without regard to any classification of directors) to elect one or more members of the Board of Directors of the Corporation (without regard to whether or not, at the relevant time, Capital Stock of any other class or classes (other than Common Stock) shall have or might have voting power by reason of the happening of any contingency).

“VWAP” shall have the meaning ascribed to it in Section 7(a).

Section 13. Headings. The headings of the paragraphs of this Certificate of Designations are for convenience of reference only and shall not define, limit or affect any of the provisions hereof.

Section 14. Record Holders. To the fullest extent permitted by applicable law, the Corporation may deem and treat the record holder of any share of the Series A Preferred Stock as the true and lawful owner thereof for all purposes, and the Corporation shall not be affected by any notice to the contrary.

Section 15. Notices. All notices or communications in respect of the Series A Preferred Stock shall be sufficiently given if given in writing and delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate of Incorporation or By-laws or by applicable law or regulation. Notwithstanding the foregoing, if the Series A Preferred Stock is issued in book-entry form through The Depository Trust Corporation or any similar facility, such notices may be given to the holders of the Series A Preferred Stock in any manner permitted by such facility.

Section 16. Replacement Certificates. The Corporation shall replace any mutilated certificate at the holder’s expense upon surrender of that certificate to the Corporation. The Corporation shall replace certificates that become destroyed, stolen or lost at the holder’s expense upon delivery to the Corporation of reasonably satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Corporation.

Section 17. Transfer Agent, Conversion Agent, Registrar and Paying Agent. The duly appointed Transfer Agent, Conversion Agent, Registrar and Paying Agent for the Series A Preferred Stock shall be the Corporation. The Corporation may, in its sole discretion, resign from its position as Transfer Agent or remove a successor Transfer Agent in accordance with the agreement between the Corporation and such Transfer Agent; provided that the Corporation shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of any such resignation or removal. Upon any such removal, resignation or appointment, the Corporation shall send notice thereof by first-class mail, postage prepaid, to the holders of the Series A Preferred Stock.

Section 18. Severability. If any term of the Series A Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other terms set forth herein which can be given effect without the invalid, unlawful or unenforceable term will, nevertheless, remain in full force and effect, and no term herein set forth will be deemed dependent upon any other such term unless so expressed herein.

Section 19. Other Rights. The shares of Series A Preferred Stock shall not have any rights, preferences, privileges or voting powers or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided by applicable law and regulation.

Section 20. Transfer Rights. The shares of Series A Preferred Stock may be sold or otherwise transferred except as prohibited in the Stockholder Rights Agreement.

IN WITNESS WHEREOF, GrafTech International Ltd. has caused this Certificate of Designations to be duly executed by its authorized corporate officer this [●] day of [●], 2015.


GRAFTECH INTERNATIONAL LTD.

By
		Name:
		Title:

Annex 1

Fair Value Calculations

Annex 1

The basis for the Fair Value Top-Up Payment will be the Black Scholes Option Valuation methodology as described below:

Call Value (CV) = SN (d₁) – Ke^–rtN(d₂)

where by,

S = The Change of Control price

K = The conversion price

t = The time to option expiration (put date)

r = ln(1+r’) where r’ = US Treasury with closest maturity to option expiration (put date)

N = The Normal Distribution of d₁ amd d₂ where, as defined below,

LOGO

s = Volatility of the underlying security

The Fair Value Top-Up Payment will then be calculated as follows:

Fair Value Top-Up Payment = Net Option Value * Conversion Ratio * Preferred Shares Outstanding

* (% of Fair Value Top – Up Applicable Percentage)

where by,

Net Option Value = Call Value – In the Money Value where,

In the Money Value = S – K

LOGO

Fair Value Top – Up Applicable Percentage = one of the following scenarios:

(i)

Change of Control on or after 2nd anniversary of the date of the Investment Agreement:

Fair Value Top – Up Applicable Percentage = 100%

(ii)

Change of Control before 2nd anniversary of the date of the Investment Agreement not initiated by an Approved Holder (as defined in the Investment Agreement) or any of their respective Affiliates (as defined in the Investment Agreement):

Fair Value Top – Up Applicable Percentage = 100%

(iii)

Change of Control before 2nd anniversary of the date of the Investment Agreement initiated by Approved Holder (as defined in the Investment Agreement) or any of their respective Affiliates (as defined in the Investment Agreement):

Fair Value Top – Up Applicable Percentage = 25%

(iv)

Change of Control during Go-Shop Period (or Go-Shop Extension) (each as defined in that certain letter of intent, dated as of April 29, 2015, by and between the Company and Brookfield Capital Partners Ltd. regarding a proposed tender offer for the outstanding shares of the Common Stock)

Fair Value Top – Up Applicable Percentage = 0%

A holder of shares of Series A Preferred Stock would be entitled to the amount such holder would have received had they converted such shares into shares of Common Stock immediately prior to such transaction.

- 23 -

An illustrative example of the Fair Value is as follows:

Assumptions


				Source:
Market Assumptions
Issue Date		30-Apr-15
US Treasury¹		1.29	%	Bloomberg
Change of Control Price	$	5.50

Options Assumptions
Put Date		30-Apr-22
Change of Control Date		30-Apr-18
Strike Price	$	5.00
Volatility		35.00	%	Fixed

1.	Liquid US Treasury with closest maturity to Put Date from Bloomberg

US$ Option Value Calculation


Expiry Date (Put Date)			30-Apr-22
Change of Control Price	S=	$	5.50
Strike Price	K=	$	5.00
Time to Expiration (years)	t=		4 years
US Govt’ Risk Free Rate	r’=		1.29	%
Continuous Risk Free Rate = r = ln(1 + r’) =			0.013
Volatility	s=		35	%
Normal Distribution of d1			0.712
Normal Distribution of d2			0.444

[A] Call Value = SN(d1) - Ke-rtN(d2) =		$	1.81



	0.392	=	0.559
	0.700

d2= d1 - s * Öt =	(0.141)

N(d1) =	0.712
N(d2) =	0.444

Fair Value in Change of Control

US$


Par Value per Share of Preferred Stock	$	1,000.00
Strike Price of Conversion Option	$	5.00

Shares of Common Equity per share of Preferred Stock		200

[A] Call Value of Conversion Option per share of Common Stock	$	1.81
Less: In-the-money Value of Conversion Option	($	0.50	)

Net Fair Value Payment per share of Common Stock (as-converted basis)	$	1.31
Shares of Common Stock per share of Preferred Stock		200

Fair Value of Top-Up Payment per share of Preferred Stock	$	261.37
Shares of Preferred Stock Issued		150,000

Fair Value Top-Up Payment in Change of Control	$	39,204,791
Fair Value Top-up Applicable Percentage		100	%

Adjusted Fair Value Top-Up Payment in Change of Control	$	39,204,791
Adjusted Fair Value Top-Up Payment in Change of Control per Share of Preferred Stock	$	261.37

Shares of Common Stock per share of Preferred Stock		200
Change of Control Price	$	5.50

As-Converted Value of a Share of Preferred Stock	$	1,100.00
Adjusted Fair Value Top-Up Payment in Change of Control per Share of Preferred Stock	$	261.37

Fair Value per share of Preferred Stock	$	1,361.37

In addition, an illustrative example of Fair Value Top-Up Payment under several Change of Control outcomes is provided below, noting that such outcomes do not intend to demonstrate an exhaustive set of potential outcomes. The values in the below tables are calculated using the US Treasury rate from the above example for simplicity (i.e. 4 year) and are not intended to govern the agreement.

(i)

Change of Control on or after 2nd anniversary of the date of the Investment Agreement

US$


Time of	Time to	Change of Control Price
CoC	Expiration	$5.00		$5.25		$5.50		$5.75		$6.00		$6.25		$6.50
2.0 yrs	5.0 yrs	$	49,044,551	$	46,742,523	$	44,598,312	$	42,599,769	$	40,735,714	$	38,995,872	$	37,370,804
3.0 yrs	4.0 yrs	$	43,875,023	$	41,449,736	$	39,204,791	$	37,126,081	$	35,200,522	$	33,416,021	$	31,761,423
4.0 yrs	3.0 yrs	$	37,952,855	$	35,387,837	$	33,035,583	$	30,879,008	$	28,902,078	$	27,089,842	$	25,428,428
5.0 yrs	2.0 yrs	$	30,885,686	$	28,158,618	$	25,697,547	$	23,480,019	$	21,484,511	$	19,690,665	$	18,079,438

- 24 -

(ii)

Change of Control before 2nd anniversary of the date of the Investment Agreement not Initiated by Investor or Holder

US$


Time of	Time to	Change of Control Price
CoC	Expiration	$5.00		$5.25		$5.50		$5.75		$6.00		$6.25		$6.50
0.0 yrs	7.0 yrs	$	57,860,533	$	55,769,503	$	53,806,092	$	51,960,656	$	50,224,403	$	48,589,314	$	47,048,063
0.5 yrs	6.5 yrs	$	55,810,421	$	53,670,321	$	51,664,133	$	49,781,699	$	48,013,746	$	46,351,799	$	44,788,108
1.0 yrs	6.0 yrs	$	53,665,431	$	51,473,976	$	49,423,449	$	47,503,117	$	45,703,159	$	44,014,582	$	42,429,157
1.5 yrs	5.5 yrs	$	51,414,613	$	49,169,276	$	47,072,767	$	45,113,694	$	43,281,609	$	41,566,926	$	39,960,859

(iii)

Change of Control before 2nd anniversary of the date of the Investment Agreement Initiated by Investor or Holder

US$


Time of	Time to	Change of Control Price
CoC	Expiration	$5.00		$5.25		$5.50		$5.75		$6.00		$6.25		$6.50
0.0 yrs	7.0 yrs	$	14,465,133	$	13,942,376	$	13,451,523	$	12,990,164	$	12,556,101	$	12,147,329	$	11,762,016
0.5 yrs	6.5 yrs	$	13,952,605	$	13,417,580	$	12,916,033	$	12,445,425	$	12,003,437	$	11,587,950	$	11,197,027
1.0 yrs	6.0 yrs	$	13,416,358	$	12,868,494	$	12,355,862	$	11,875,779	$	11,425,790	$	11,003,646	$	10,607,289
1.5 yrs	5.5 yrs	$	12,853,653	$	12,292,319	$	11,768,192	$	11,278,424	$	10,820,402	$	10,391,731	$	9,990,215

- 25 -

SCHEDULE B

CERTIFICATE OF DESIGNATIONS

OF THE

SERIES B CONVERTIBLE PREFERRED STOCK,

PAR VALUE $0.01 PER SHARE,

GRAFTECH INTERNATIONAL LTD.

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

RESOLVED: That, pursuant to authority conferred upon the Board by the Certificate, the Board hereby authorizes the issuance of [●]¹ shares of Series B Convertible Preferred Stock, par value $0.01 per share, of the Corporation and hereby fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such shares, in addition to those set forth in the Certificate, as follows:

Section 1. Designation. The shares of such series shall be designated “Series B Convertible Preferred Stock,” and the number of shares constituting such series shall be [●] (the “Series B Preferred Stock”). The number of shares of Series B Preferred Stock may be increased or decreased by resolution of the Board and the approval by the holders of a majority of the outstanding shares of the Series B Preferred Stock, voting as a separate class; provided that no decrease shall reduce the number of shares of Series B Preferred Stock to a number less than the number of shares of such series then outstanding.

Section 2. Currency. All Series B Preferred Stock shall be denominated in United States currency, and all payments and distributions thereon or with respect thereto shall be made in United States currency. All references herein to “$” or “dollars” refer to United States currency.

Section 3. Ranking. The Series B Preferred Stock shall, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank senior to each other class or series of shares of the Corporation that the Corporation may issue in the future the terms of which do not expressly provide that such class or series ranks equally with, or senior to, the Series B Preferred Stock, with respect to dividend rights and/or rights upon liquidation, winding up or dissolution, including, without limitation, the common stock of the Corporation, par value $0.01 per share (the “Common Stock”) (such junior stock being referred to hereinafter collectively as “Junior Stock”).

¹	NTD: The number of shares shall equal the difference between 150,000 and the number of shares of Series A Preferred Stock issued.

The Series B Preferred Stock shall, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank equally with each other class or series of shares of the Corporation that the Corporation may issue in the future the terms of which expressly provide that such class or series shall rank equally with the Series B Preferred Stock with respect to dividend rights and rights upon liquidation, winding up or dissolution (“Parity Stock”).

The Series B Preferred Stock shall, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank junior to each other class or series of shares of the Corporation that the Corporation may issue in the future, the terms of which expressly provide that such class or series shall rank senior to the Series B Preferred Stock with respect to dividend rights and rights upon liquidation, winding up or dissolution. The Series B Preferred Stock shall also rank junior to the Corporation’s existing and future Indebtedness.

For the avoidance of doubt, the Series A Convertible Preferred Stock of the Corporation (the “Series A Preferred Stock”) shall, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank equally with the Series B Preferred Stock.

Section 4. Dividends.

(a) The holders of Series B Preferred Stock shall be entitled to receive, when, as and if declared by the Board, out of any funds legally available therefor, dividends per share of Series B Preferred Stock of an amount equal to (i) 7.0% per annum of the Stated Value (as herein defined) of each share of such Series B Preferred Stock then in effect, before any dividends shall be declared, set apart for or paid upon the Junior Stock (the “Regular Dividends”), and (ii) the aggregate amount of any dividends or other distributions, whether cash or other property (but excluding dividends in kind), paid on outstanding shares of Common Stock on a per share basis based on the number of shares of Common Stock a share of Series A Preferred Stock could be converted into on the applicable record date for such dividends or other distributions, assuming such shares of Common Stock were outstanding on the applicable record date for such dividend or other distributions (the “Participating Dividends” and, together with the Regular Dividends, the “Dividends”). For purposes hereof, the term “Stated Value” shall mean $1,000.00 per share of Series B Preferred Stock, as adjusted as described in Section 4(c) below.

(b) Regular Dividends shall be payable quarterly in arrears on [January 1, April 1, July 1 and October 1] of each year (unless any such day is not a Business Day, in which event such Regular Dividends shall be payable on the next succeeding Business Day, without accrual to the actual payment date), commencing on [July 1], 2015 (each such payment date being a “Regular Dividend Payment Date”, and the period from the date of issuance of the Series B Preferred Stock to the first Regular Dividend Payment Date and each such quarterly period thereafter being a “Regular Dividend Period”). The amount of Regular Dividends payable on the Series B Preferred Stock for any period shall be computed on the basis of a 365-day year and the actual number of days elapsed. Participating Dividends shall be payable as and when paid to the holders of shares of Common Stock (each such date being a “Participating Dividend Payment Date,” and, together with each Regular Dividend Payment Date, a “Dividend Payment Date”).

(c) Regular Dividends shall begin to accrue from the Issue Date and, if not declared, shall be cumulative. Any Regular Dividend or portion thereof undeclared and accrued but unpaid on any Regular Dividend Payment Date shall be added to the Stated Value until, but only until, such Regular Dividend or portion thereof is paid in cash in full. If at any time the Corporation does not pay any Regular Dividend in full on any scheduled Regular Dividend Payment Date, such Regular Dividends will accrue at an annual rate of 8.0% of the Stated Value from such scheduled Regular Dividend Payment Date to the date that all accumulated Regular Dividends on the Series B Preferred Stock have been paid in cash in full, and thereafter will accrue at an annual rate of 7.0%. For the avoidance of doubt, Regular Dividends shall accumulate whether or not in any Regular Dividend Period there have been funds of the Corporation legally available for the payment of such dividends. Participating Dividends are payable on a cumulative basis once declared, whether or not there shall be funds legally available for the payment thereon.

(d) Except as otherwise provided herein, if at any time the Corporation pays less than the total amount of Dividends then accrued but unpaid with respect to the Series B Preferred Stock, such payment shall be distributed pro rata among the holders thereof based upon the Stated Value on all shares of Series B Preferred Stock held by each such holder as of the record date for such payment. When Dividends are not paid in full upon the shares of Series B Preferred Stock, all Dividends declared on Series B Preferred Stock and any other Parity Stock shall be paid pro rata so that the amount of Dividends so declared on the shares of Series B Preferred Stock and each such other class or series of Parity Stock shall in all cases bear to each other the same ratio as accrued but unpaid Dividends (for the full amount of dividends that would be payable for the most recently payable dividend period if dividends were declared in full on non-cumulative Parity Stock) on the shares of Series B Preferred Stock and such other class or series of Parity Stock bear to each other.

(e) When and if declared, the Regular Dividends shall be paid in cash.

(f) The Corporation shall not declare or pay any dividends on shares of Common Stock unless the holders of the Series B Preferred Stock then outstanding, other than in the case of a dividend payable on the Common Stock in shares of Common Stock, shall simultaneously receive Participating Dividends on a pro rata basis as if the shares of Series B Preferred Stock had been converted into shares of Series A Preferred Stock pursuant to Section 7 immediately prior to the record date for determining the stockholders eligible to receive such dividends.

declared or paid or set apart for payment, or other distribution declared or made, upon any Junior Stock, nor shall any Junior Stock be redeemed, purchased or otherwise acquired for any consideration (nor shall any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such Junior Stock) by the Corporation, directly or indirectly until all such Regular Dividends and/or Participating Dividends have been paid in full, without the consent of the holders of a majority of the outstanding shares of Series B Preferred Stock; provided, however, that the foregoing limitation shall not apply to:

(2) an exchange, redemption, reclassification or conversion of any class or series of Junior Stock for any class or series of Junior Stock; or

Section 5. Liquidation, Dissolution or Winding Up.

(a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation (each, a “Liquidation”), after satisfaction of all liabilities and obligations to creditors of the Corporation and before any distribution or payment shall be made to holders of any Junior Stock, each holder of Series B Preferred Stock shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether capital or surplus) legally available therefor, an amount per share of Series B Preferred Stock equal to the greater of:

(2) the payment such holders would have received had their shares of Series B Preferred Stock been converted into Series A Preferred Stock (at the then applicable Conversion Rate), pursuant to Section 7, immediately prior to such Liquidation, plus declared but unpaid Participating Dividends through the date of Liquidation.

(the greater of (1) and (2) is referred to herein as the “Liquidation Preference”). Holders of Series B Preferred Stock will not be entitled to any other amounts from the Corporation after they have received the full amounts provided for in this Section 5(a) and will have no right or claim to any of the Corporation’s remaining assets.

(b) If, in connection with any distribution described in Section 5(a) above, the assets of the Corporation or proceeds thereof are not sufficient to pay in full the Liquidation Preference payable on the Series B Preferred Stock and the corresponding amounts payable on the Parity Stock, then such assets, or the proceeds thereof, shall be paid pro rata in accordance with the full respective amounts which would be payable on such shares if all amounts payable thereon were paid in full.

Section 6. Voting Rights.

(a) The holders of shares of Series B Preferred Stock will not have any voting rights, including the right to elect any directors, except (i) the right to vote as a class on all matters adversely affecting the rights of holders of Series B Preferred Stock or (ii) any other voting rights required by law.

(b) For so long as the Outstanding Preferred Percentage is at least 50%, the Corporation shall not and shall not permit any direct or indirect Subsidiary of the Corporation to, without first obtaining the written consent or affirmative vote at a meeting called for that purpose of holders of a majority of outstanding shares of Series B Preferred Stock and Series A Preferred Stock, voting together as a single class, take any of the following actions:

(2) Any authorization, issuance or reclassification of stock that would rank equal or senior to the Series B Preferred Stock with respect to the redemption, liquidation, dissolution or winding up of the Corporation or with respect to dividend rights.

Section 7. Conversion.

(a) Mandatory Conversion. Effective as of the close of business on the Stockholder Approval Date, each share of Series B Preferred Stock shall automatically, without any action of the holder, convert into one share of Series A Preferred Stock, plus an amount in cash per share of Series B Preferred Stock equal to accrued but unpaid dividends on such share from and including the immediately preceding Dividend Payment Date to but excluding the date of such conversion, out of funds legally available therefor. No Holder may convert shares of Series B Preferred Stock other than pursuant to this Section 7(a).

(b) Conversion Procedures.

(1) In the event of conversion pursuant to Section 7(a), the Corporation shall deliver as promptly as practicable written notice to each holder specifying (A) the Stockholder Approval Date; and (B) the place or places where certificates or evidence of book-entry notation for such shares of Series B Preferred Stock are to be surrendered for issuance of certificates or evidence of book-entry notation representing shares of Series A Preferred Stock; and

Unless the shares of Series A Preferred Stock issuable upon conversion are to be issued in the same name as the name in which such shares of Series B Preferred Stock are registered, each share surrendered for mandatory conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder thereof or such holder’s duly authorized attorney and an amount sufficient to pay any transfer or similar tax in accordance with Section 7(f).

The “Conversion Date” shall be the Stockholder Approval Date.

(c) Effect of Conversion. Effective immediately prior to the Close of Business on the Conversion Date applicable to any shares of Series B Preferred Stock, dividends shall no longer accrue or be declared on any such shares of Series B Preferred Stock and such shares of Series B Preferred Stock shall cease to be outstanding.

(d) Record Holder of Underlying Securities as of Conversion Date. The Person or Persons entitled to receive the Series A Preferred Stock and, to the extent applicable, cash, issuable upon conversion of Series B Preferred Stock on a Conversion Date shall be treated for all purposes as the record holder(s) of such shares of Series A Preferred Stock and/or cash as of the Close of Business on such Conversion Date. As promptly as practicable on or after the Conversion Date (and in any event no later than three Trading Days thereafter), the Corporation shall issue the number of shares of Series A Preferred Stock issuable upon conversion. Such delivery of shares of Series A Preferred Stock and, if applicable, cash, shall be made in certificated form or by book-entry. Any such certificate or certificates shall be delivered by the Corporation to the appropriate holder on a book-entry basis or by mailing certificates evidencing the shares to the holders at their respective addresses as set forth in the conversion notice. In the event that a holder shall not by written notice designate the name in which shares of Series A Preferred Stock to be delivered upon conversion of shares of Series B Preferred Stock should be registered or paid, or the manner in which such shares and, if applicable, cash, should be delivered, the Corporation shall be entitled to register and deliver such shares and, if applicable, cash, in the name of the holder and in the manner shown on the records of the Corporation.

(e) Status of Converted or Acquired Shares. Shares of Series B Preferred Stock duly converted in accordance with this Certificate of Designations, 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 and any filing required by the Delaware General Corporation Law become authorized but unissued shares of Preferred Stock, without designation as to series until such shares are once more designated as part of a particular series by the Board pursuant to the provisions of the Certificate of Incorporation.

(f) Taxes.

(1) The Corporation and its paying agent shall be entitled to withhold taxes on all payments on the Series B Preferred Stock or the Series A Preferred Stock or other securities issued upon conversion of the Series B Preferred Stock to the extent required

by law. Prior to the date of any such payment, the Corporation shall request and, upon request, each holder of Series B Preferred Stock shall deliver to the Corporation or its paying agent a duly executed, valid, accurate and properly completed Internal Revenue Service Form W-9 or an appropriate Internal Revenue Service Form W-8, as applicable.

(2) Absent a change in law or Internal Revenue Service practice, or a contrary determination (as defined in Section 1313(a) of the United States Internal Revenue Code of 1986, as amended (the “Code”)), each holder of Series B Preferred Stock and the Corporation agree not to treat the Series B Preferred Stock (based on their terms as set forth in this Certificate of Designations) as “preferred stock” within the meaning of Section 305 of the Code, and Treasury Regulation Section 1.305-5 for United States federal income tax and withholding tax purposes and shall not take any position inconsistent with such treatment.

(3) The Corporation shall pay any and all documentary, stamp and similar issuance or transfer tax due on (x) the issuance of the Series B Preferred Stock and (y) the issuance of shares of Series A Preferred Stock upon conversion of the Series B Preferred Stock. However, in the case of conversion of Series B Preferred Stock, the Corporation shall not be required to pay any tax or duty that may be payable in respect of any transfer involved in the issuance and delivery of shares of Series A Preferred Stock in a name other than that of the holder of the shares to be converted, and no such issuance or delivery shall be made unless and until the person requesting such issuance has paid to the Corporation the amount of any such tax or duty, or has established to the satisfaction of the Corporation that such tax or duty has been paid.

(4) Each holder of Series B Preferred Stock and the Corporation agree to cooperate with each other in connection with any redemption of part of the shares of Series B Preferred Stock and to use good faith efforts to structure such redemption so that such redemption may be treated as a sale or exchange pursuant to Section 302 of the Code; provided that nothing in this Section 7(f) shall require the Corporation to purchase any shares of Series B Preferred Stock, and provided further that the Corporation makes no representation or warranty in this Section 7(f) regarding the tax treatment of any redemption of Series B Preferred Stock.

Section 8. Redemption and Repurchase.

(a) Optional Redemption.

(1) The Series B Preferred Stock may be redeemed, in whole or in part, at any time on or after the seventh anniversary of the Issue Date, at the option of the Corporation, upon giving notice of redemption pursuant to Section 8(d), at a redemption price per share equal to the sum of the Stated Value per share of the Series B Preferred Stock to be redeemed plus an amount per share equal to accrued but unpaid dividends on such share of Series B Preferred Stock from and including the immediately preceding Dividend Payment Date to but excluding the date of redemption.

(2) The Series B Preferred Stock may be redeemed in whole or in part, if, at any time after the fourth anniversary of the Issue Date, the daily volume weighted average price (“VWAP”) of the Common Stock equals or exceeds 175.0% of the Conversion Price then in effect for at least 40 Trading Days during a period of 60 consecutive Trading Days, at the option of the Corporation, upon giving notice of redemption pursuant to Section 8(d), at a redemption price per share equal to the sum of the Stated Value per share of the Series B Preferred Stock to be redeemed plus an amount per share equal to accrued but unpaid dividends on such share of Series B Preferred Stock from and including the immediately preceding Dividend Payment Date to but excluding the date of redemption.

(3) For the avoidance of doubt, the Series B Preferred Stock shall convert into Series A Preferred Stock pursuant to Section 7(a) upon occurrence of the Stockholder Approval Date prior to any date fixed for redemption.

(b) Repurchase at the Option of the Holder Upon a Change of Control. Upon the occurrence of a Change of Control, each holder of shares of Series B Preferred Stock shall have the right to require the Corporation to repurchase, by irrevocable, written notice to the Corporation, all or any portion of such holder’s shares of Series B Preferred Stock at a purchase price per share equal to the value calculated in accordance with the applicable formula as set forth on Annex 1 (the “Fair Value”).

Within thirty (30) days of the occurrence of a Change of Control, the Corporation shall send notice by first class mail, postage prepaid, addressed to the holders of record of the shares of Series B Preferred Stock at their respective last addresses appearing on the books of the Corporation stating (1) that a Change of Control has occurred, (2) that all shares of Series B Preferred Stock tendered prior to a specified Business Day no earlier than thirty (30) days nor later than sixty (60) days from the date such notice is mailed shall be accepted for repurchase and (3) the procedures that holders of the Series B Preferred Stock must follow in order for their shares of Series B Preferred Stock to be repurchased, including the place or places where certificates for such shares are to be surrendered for payment of the repurchase price. Any notice mailed as provided in this subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Series B Preferred Stock designated for repurchase shall not affect the validity of the proceedings for the redemption of any other shares of Series B Preferred Stock.

(c) Mandatory Redemption. If the Stockholder Approval is not obtained by the date that is the later of (i) the date that is 180 days from the date of the Investment Agreement and (ii) the date that is 90 days from the Tender Offer Closing, a holder of shares of Series B Preferred Stock may thereafter irrevocably elect to require the Corporation to repurchase all or any portion of such holder’s shares of Series B Preferred Stock by giving irrevocable, written notice to the Corporation (a “Redemption Notice”) at a repurchase price per share, payable in cash, equal to the greater of (x) the Stated Value and (y) the average trading price of the Common Stock for the 20 Trading Days immediately preceding the date of the Redemption Notice multiplied by (ii) the number of shares of Common Stock into which a share of Series A Preferred Stock would have been convertible.

(d) Notice of Redemption at the Option of the Corporation. Notice of every redemption of shares of Series B Preferred Stock pursuant to Section 8(a) shall be given by first class mail, postage prepaid, addressed to the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be at least thirty (30) days and not more than sixty (60) days before the date fixed for redemption. Any notice mailed as provided in this Section 8(d) shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Series B Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Series B Preferred Stock. Each notice of redemption given to a holder shall state: (1) the redemption date; (2) the number of shares of the Series B Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of the redemption price.

(e) Partial Redemption. In case of any redemption of part of the shares of Series B Preferred Stock at the time outstanding pursuant to Section 8(a), the shares to be redeemed shall be selected pro rata. Subject to the provisions hereof, the Corporation shall have full power and authority to prescribe the terms and conditions upon which shares of Series B Preferred Stock shall be redeemed from time to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.

Section 9. Anti-Dilution Provisions.

(a) Reorganization Events. In the event of:

(1) any reclassification, statutory exchange, merger, consolidation or other similar business combination of the Corporation with or into another Person, in each case, pursuant to which the Series A Preferred Stock is changed or converted into, or exchanged for, cash, securities or other property of the Corporation or another person;

(2) any sale, transfer, lease or conveyance to another Person of all or substantially all the property and assets of the Corporation, in each case pursuant to which the Series A Preferred Stock is converted into cash, securities or other property; or

(each of which is referred to as a “Reorganization Event”), each share of Series B Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of the holders of Series B Preferred Stock and subject to Section 9(b), remain outstanding but shall become convertible into, out of funds legally available therefor, the number, kind and amount of securities, cash and other property (the “Exchange Property”) (without any interest on such Exchange Property and without any right to dividends or distribution on such Exchange Property which have a record date that is prior to the applicable Conversion Date) that the holder of such share of Series B Preferred Stock would have received in such Reorganization Event had such holder converted its share of Series B Preferred Stock into the applicable number of shares of Series A Preferred Stock immediately prior to the effective date of the Reorganization Event, assuming that such holder is not a Person with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation or to which such sale or transfer was made, as the case may be (any such Person, a “Constituent Person”), or an Affiliate of a Constituent Person to the extent such Reorganization Event provides for different treatment of Series A Preferred Stock held by Affiliates of the Corporation and non-Affiliates; provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Series A Preferred Stock held immediately prior to such Reorganization Event by a Person other than a Constituent Person or an Affiliate thereof, then for the purpose of this Section 9(j), the kind and amount of securities, cash and other property receivable upon such Reorganization Event will be deemed to be the weighted average, as determined by the Corporation in good faith, of the types and amounts of consideration received by the holders of Common Stock. Any notice mailed as provided in this subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Series B Preferred Stock designated for repurchase shall not affect the validity of the proceedings for the redemption of any other shares of Series B Preferred Stock.

(b) Exchange Property Election. In the event that the holders of the shares of Series A Preferred Stock have the opportunity to elect the form of consideration to be received in such transaction, the Exchange Property that the holders of Series B Preferred Stock shall be entitled

to receive shall be determined by the holders of a majority of the outstanding shares of Series B Preferred Stock on or before the earlier of (i) the deadline for elections by holders of Series A Preferred Stock and (ii) two Business Days before the anticipated effective date of such Reorganization Event. The number of units of Exchange Property for each share of Series B Preferred Stock converted following the effective date of such Reorganization Event shall be determined from among the choices made available to the holders of the Series A Preferred Stock and based on the per share amount as of the effective date of the Reorganization Event, determined as if the references to “share of Series A Preferred Stock” in this Certificate of Designations were to “units of Exchange Property.”

(c) Successive Reorganization Events. The above provisions of Sections 9(a) and Section 9(b) shall similarly apply to successive Reorganization Events and the provisions of Section 9 shall apply to any shares of Capital Stock (or capital stock of any other issuer) received by the holders of the Series A Preferred Stock in any such Reorganization Event.

(d) Reorganization Event Notice. The Corporation (or any successor) shall, no less than twenty (20) Business Days prior to the occurrence of any Reorganization Event, provide written notice to the holders of Series B Preferred Stock of such occurrence of such event and of the kind and amount of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this Section 9.

(e) The Corporation shall not enter into any agreement for a transaction constituting a Reorganization Event unless (i) such agreement provides for or does not interfere with or prevent (as applicable) conversion of the Series B Preferred Stock into the Exchange Property in a manner that is consistent with and gives effect to this Section 9, and (ii) to the extent that the Corporation is not the surviving corporation in such Reorganization Event or will be dissolved in connection with such Reorganization Event, proper provision shall be made in the agreements governing such Reorganization Event for the conversion of the Series B Preferred Stock into stock of the Person surviving such Reorganization Event or such other continuing entity in such Reorganization Event, or in the case of a Reorganization Event described in Section 9(a)(2), an exchange of Series B Preferred Stock for the stock of the Person to whom the Corporation’s assets are conveyed or transferred, having voting powers, preferences, and relative, participating, optional or other special rights as nearly equal as possible to those provided in this Certificate of Designations.

Section 10. Reservation of Shares. The Corporation shall at all times when the Series B Preferred Stock shall be outstanding reserve and keep available, free from preemptive rights, for issuance upon the conversion of Series B Preferred Stock, such number of its authorized but unissued Series A Preferred Stock as will from time to time be sufficient to permit the conversion of all outstanding Series B Preferred Stock. Prior to the delivery of any securities which the Corporation shall be obligated to deliver upon conversion of the Series B Preferred Stock, the Corporation shall comply with all applicable laws and regulations which require action to be taken by the Corporation.

delivered via facsimile at the facsimile number specified in this Section prior to or at the Close of Business on a Business Day and electronic confirmation of receipt is received by the sender, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Business Day or later than the Close of Business on any Business Day, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Corporation, attention: Chief Executive Officer and General Counsel, or (ii) if to a holder of Series B Preferred Stock, to the address or facsimile number appearing on the Corporation’s stockholder records or such other address or facsimile number as such holder may provide to the Corporation in accordance with this Section 11.

Section 12. Certain Definitions. As used in this Certificate of Designations, the following terms shall have the following meanings, unless the context otherwise requires:

“Beneficially Own” shall mean “beneficially own” as defined in Rule 13d-3 of the Exchange Act or any successor provision thereto.

“Board” shall have the meaning ascribed to it in the recitals.

“Certificate of Designations” shall mean this Certificate of Designations relating to the Series B Preferred Stock, as it may be amended from time to time.

“Change of Control” shall mean the occurrence of any of the following on or after May [●], 2015:

1. that does not result in a reclassification, conversion, exchange or cancellation of the Corporation’s outstanding Common Stock; or

(3) the Common Stock ceases to be listed or quoted on any of the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market (or any of their respective successors),

provided, that (x) transfers by any holder of any shares of Series B Preferred Stock (or shares of Series A Preferred Stock converted therefrom) to any Person shall not be taken into account for purposes of determining whether or not a Change of Control has occurred and (y) notwithstanding the foregoing, a transaction or transactions will not constitute a Change of Control if at least 90% of the consideration received or to be received by holders of Common Stock (other than cash payments for fractional shares or pursuant to statutory appraisal rights) in connection with such transaction or transactions consists of common stock, ordinary shares, American depositary receipts or American depositary shares and any associated rights listed and traded on the New York Stock Exchange or another U.S. national securities exchange or automated inter-dealer quotation system (or which will be so listed and traded when issued or exchanged in connection with such consolidation or merger).