EX 4.1 Rights Agreement



 





Exhibit 4.1




 





BLUEGREEN

 CORPORATION




and




MELLON
INVESTOR

 SERVICES LLC




Rights Agreement




Dated as of July 27, 2006




 





 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 	 	Number	 
	Section 1.
	 	Definitions	 	 	1	 
	 
	 	 	 	 	 	 
	Section 2.
	 	Appointment of Rights Agent	 	 	7	 
	 
	 	 	 	 	 	 
	Section 3.
	 	Issue of Right Certificates	 	 	7	 
	 
	 	 	 	 	 	 
	Section 4.
	 	Form of Right Certificates	 	 	11	 
	 
	 	 	 	 	 	 
	Section 5.
	 	Countersignature and Registration	 	 	11	 
	 
	 	 	 	 	 	 
	Section 6.
	 	Transfer, Split Up, Combination and Exchange of Right Certificates;	 	 	 	 
	 
	 	    Mutilated, Destroyed, Lost or Stolen Right Certificates	 	 	12	 
	 
	 	 	 	 	 	 
	Section 7.
	 	Exercise of Rights; Purchase Price; Expiration Date of Rights	 	 	13	 
	 
	 	 	 	 	 	 
	Section 8.
	 	Cancellation and Destruction of Right Certificates	 	 	16	 
	 
	 	 	 	 	 	 
	Section 9.
	 	Availability of Preferred Shares	 	 	16	 
	 
	 	 	 	 	 	 
	Section 10.
	 	Preferred Shares Record Date	 	 	17	 
	 
	 	 	 	 	 	 
	Section 11.
	 	Adjustment of Purchase Price, Number of Shares or Number of Rights	 	 	18	 
	 
	 	 	 	 	 	 
	Section 12.
	 	Certificate of Adjusted Purchase Price or Number of Shares	 	 	28	 
	 
	 	 	 	 	 	 
	Section 13.
	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	 	 	29	 
	 
	 	 	 	 	 	 
	Section 14.
	 	Fractional Rights and Fractional Shares	 	 	31	 
	 
	 	 	 	 	 	 
	Section 15.
	 	Rights of Action	 	 	33	 
	 
	 	 	 	 	 	 
	Section 16.
	 	Agreement of Right Holders	 	 	34	 
	 
	 	 	 	 	 	 
	Section 17.
	 	Right Certificate Holder Not Deemed a Stockholder	 	 	35	 
	 
	 	 	 	 	 	 
	Section 18.
	 	Concerning the Rights Agent	 	 	35	 
	 
	 	 	 	 	 	 
	Section 19.
	 	Merger or Consolidation or Change of Name of Rights Agent	 	 	37	 






-i-









 






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 	 	Number	 
	Section 20.
	 	Duties of Rights Agent	 	 	38	 
	 
	 	 	 	 	 	 
	Section 21.
	 	Change of Rights Agent	 	 	42	 
	 
	 	 	 	 	 	 
	Section 22.
	 	Issuance of New Right Certificates	 	 	43	 
	 
	 	 	 	 	 	 
	Section 23.
	 	Redemption	 	 	44	 
	 
	 	 	 	 	 	 
	Section 24.
	 	Exchange	 	 	45	 
	 
	 	 	 	 	 	 
	Section 25.
	 	Notice of Certain Events	 	 	47	 
	 
	 	 	 	 	 	 
	Section 26.
	 	Notices	 	 	48	 
	 
	 	 	 	 	 	 
	Section 27.
	 	Supplements and Amendments	 	 	49	 
	 
	 	 	 	 	 	 
	Section 28.
	 	Successors	 	 	50	 
	 
	 	 	 	 	 	 
	Section 29.
	 	Benefits of this Agreement	 	 	51	 
	 
	 	 	 	 	 	 
	Section 30.
	 	Determinations and Actions by the
Board of Directors	 	 	51	 
	 
	 	 	 	 	 	 
	Section 31.
	 	Severability	 	 	51	 
	 
	 	 	 	 	 	 
	Section 32.
	 	Governing Law	 	 	52	 
	 
	 	 	 	 	 	 
	Section 33.
	 	Counterparts	 	 	52	 
	 
	 	 	 	 	 	 
	Section 34.
	 	Descriptive Headings	 	 	52	 
	 
	 	 	 	 	 	 
	Signatures
	 	 	 	 	53	 






	 	 	 	 	 
	Exhibit A

	 	—
	 	Form of Certificate of Designations, Preferences and Rights
	 
	Exhibit B

	 	—
	 	Form of Right Certificate
	 
	Exhibit C

	 	—
	 	Summary of Rights to Purchase Preferred Shares






-ii-









 






     Agreement, dated as of July 27, 2006, between Bluegreen Corporation, a Massachusetts
corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey limited
liability company, as rights agent (the “Rights Agent”).



     The Board of Directors of the Company has authorized and declared a dividend of one preferred
share purchase right (a “Right”) for each Common Share (as hereinafter defined) of the
Company outstanding at the close of business on August 17, 2006 (the “Record Date”), each
Right representing the right to purchase one one-hundredth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein set forth, and has further authorized
and directed the issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date (as such terms are hereinafter defined).



     Accordingly, in consideration of the premises and the mutual agreements herein set forth, the
parties hereby agree as follows:



     Section 1. Definitions. For purposes of this Agreement, the following terms have the
meanings indicated:



     (a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who
or which, together with all Affiliates (as such term is hereinafter defined) and Associates (as
such term is hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the Common Shares (as such term is hereinafter defined) of
the Company (as such term is hereinafter defined) then outstanding, but shall not include (1) the
Company, (2) any Subsidiary (as such term is hereinafter defined) of the Company, (3) any employee
benefit plan of the Company or of any Subsidiary of the Company,



 









 




or any entity holding Common Shares for or pursuant to the terms of any such plan or (4)
Levitt Corporation, a Florida corporation, or any Affiliate of Levitt Corporation by virtue of its
Affiliation therewith, or any of their respective successors or assigns (“Levitt”).
Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of an
acquisition of Common Shares by the Company that, by reducing the number of Common Shares of the
Company outstanding, increases the proportionate number of Common Shares of the Company
beneficially owned by such Person to 15% or more of the Common Shares of the Company then
outstanding; provided, however, that, if a Person shall become the Beneficial Owner
of 15% or more of the Common Shares of the Company then outstanding by reason of share purchases by
the Company and shall, after such share purchases by the Company, become the Beneficial Owner of
any additional Common Shares of the Company, then such Person shall be deemed to be an “Acquiring
Person.” Notwithstanding the foregoing, if the Board of Directors determines in good faith that a
Person who would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing
provisions of this paragraph (a), (i) has become such inadvertently or (ii) has become such as the
result of contractual obligations that are or purport to be legally binding entered into prior to,
and not materially amended or modified after, the date of this Agreement and has not acquired 1% or
more of the Common Shares of the Company then outstanding by means other than such contractual
obligations since the date of this Agreement, and in either of case (i) or (ii), such Person
divests as promptly as practicable (but in the case of clause (ii), in no event later than 60
calendar days following the date of the acquisition of beneficial ownership that would otherwise
cause such Person to be an Acquiring Person) a sufficient number of Common Shares so that such
Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of
this paragraph (a), then such Person




-2-









 







(as such term is hereinafter defined) shall not be deemed to be an “Acquiring Person” for any
purposes of this Agreement. For the avoidance of doubt, if any Person may avoid being an Acquiring
Person by divesting Common Shares as described above, then such Person shall not be considered to
become an Acquiring Person until (I) in the case of clause (i) above, the date that the Board of
Directors determines in good faith that such divestiture has not occurred as promptly as
practicable or (II) in the case of clause (ii) above, the expiration of the 60-day deadline for
divestiture.




     (b) “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement.



     (c) “Associate” shall have the meaning ascribed to such term in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement.



     (d) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially
own” any securities:




     (i) which such Person or any of such Person’s Affiliates or Associates beneficially
owns, directly or indirectly;




     (ii) which such Person or any of such Person’s Affiliates or Associates has (A) the
right to acquire (whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with



-3-









 






respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than these Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the Beneficial Owner
of, or to beneficially own, any security if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations promulgated under the Exchange Act and (2) is not
also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor
report); or




     (iii) which are beneficially owned, directly or indirectly, by any other Person with
which such Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to
Section 1(d)(ii)(B) hereof) or disposing of any securities of the Company.



     Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the
phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued



-4-









 




and outstanding together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.




     (e) “Board of Directors” shall mean the Board of Directors of the Company or any duly
authorized committee thereof.



     (f) “Business Day” shall mean any day other than a Saturday, a Sunday, or a day on
which banking institutions in the State of New Jersey are authorized or obligated by law or
executive order to close.



     (g) “Close of Business” on any given date shall mean 5:00 P.M., New York City time, on
such date; provided, however, that, if such date is not a Business Day, it shall
mean 5:00 P.M., New York City time, on the next succeeding Business Day.



     (h) “Common Shares” when used with reference to the Company shall mean the shares of
common stock, par value $0.01 per share, of the Company. “Common Shares” when used with reference
to any Person other than the Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such first-mentioned Person.



     (i) “Distribution Date” shall have the meaning set forth in Section 3(a) hereof.



     (j) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.



-5-









 





     (k) “Exchange Ratio” shall have the meaning set forth in Section 24(a) hereof, unless
otherwise expressly specified.



     (l) “Final Expiration Date” shall have the meaning set forth in Section 7(a) hereof.



     (m) “NASDAQ” shall mean The Nasdaq Stock Market.



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



     (o) “Preferred Shares” shall mean shares of Series A Junior Participating Preferred
Stock, par value $0.01 per share, of the Company having the rights and preferences set forth in the
Form of Certificate of Designations, Preferences and Rights attached to this Agreement as Exhibit
A.



     (p) “Purchase Price” shall have the meaning set forth in Section 4 hereof.



     (q) “Record Date” shall have the meaning set forth in the second paragraph hereof.



     (r) “Redemption Date” shall have the meaning set forth in Section 7(a) hereof.



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



     (t) “Right” shall have the meaning set forth in the second paragraph hereof.



-6-









 





     (u) “Right Certificate” shall have the meaning set forth in Section 3(a) hereof.



     (v) “Shares Acquisition Date” shall mean the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such.



     (w) “Subsidiary” of any Person shall mean any Person of which a majority of the voting
power of the voting equity securities or equity interest is owned, directly or indirectly, by such
Person.



     (x) “Summary of Rights” shall have the meaning set forth in Section 3(b) hereof.



     (y) “Trading Day” shall have the meaning set forth in Section 11(d) hereof.



     Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable. If the Company appoints one or more co-rights
agents, the respective duties of the Rights Agent and any co-rights agent shall be as the Company
shall determine, and the Company will notify, in writing, the Rights Agent and any co-rights agents
of any such respective duties. The Rights Agent shall have no duty to supervise, and in no event
shall be liable for, the acts or omissions of any such co-Rights Agent.



     Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the tenth day
after the Shares Acquisition Date or (ii) the tenth Business Day (or such later date as may be



-7-









 




determined by action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares of the Company for or pursuant to the terms of any such
plan, or Levitt) of a tender or exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares of the Company aggregating 15% or more of the then
outstanding Common Shares of the Company (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier of such dates being herein referred
to as the “Distribution Date”), (x) the Rights will be evidenced (subject to the provisions
of Section 3(b) hereof) by the certificates for Common Shares of the Company (or, in the case of
uncertificated Common Shares, by the book-entry account that evidences record ownership of such
Common Shares) registered in the names of the holders thereof (which certificates, if any, shall
also be deemed to be Right Certificates) and not by separate Right Certificates, and (y) the right
to receive Right Certificates will be transferable only in connection with the transfer of Common
Shares of the Company. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be
sent (and the Rights Agent will, if requested and provided with all necessary information, send) by
first-class, insured, postage-prepaid mail, to each record holder of Common Shares of the Company
as of the Close of Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a
“Right Certificate”), evidencing one Right for each Common Share so held. In the event
that an adjustment in the number of Rights per Common Share has been made pursuant to Section 11(i)

-8-









 








hereof, at the time of distribution of the Right Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that
Right Certificates representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of the Distribution Date, the Rights will be evidenced solely by
such Right Certificates. The Company shall promptly notify the Rights Agent in writing upon the
occurrence of the Distribution Date and, if such notification is given orally, the Company shall
confirm same in writing on or prior to the Business Day next following. Until such notice is
received by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the
Distribution Date has not occurred.




     (b) On the Record Date, or as soon as practicable thereafter, the Company will send a copy of
a Summary of Rights to Purchase Preferred Shares, in substantially the form of Exhibit C hereto
(the “Summary of Rights”), by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for Common Shares of the Company
outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto. With respect to uncertificated Common Shares of the Company
outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by the
book-entry account that evidences record ownership of such Common Shares in the names of the
holders thereof together with a copy of the Summary of Rights maintained by the Company. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate (or, in the case of uncertificated Common Shares, a
transfer recorded in the book-entry accounts that evidence record ownership



-9-









 




of such Common Shares) for Common Shares of the Company outstanding on the Record Date, with
or without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of
the Rights associated with the Common Shares of the Company represented thereby.




     (c) Certificates for Common Shares which become outstanding (including, without limitation,
reacquired Common Shares referred to in the last sentence of this paragraph (c)) after the Record
Date but prior to the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them a
legend in substantially the following form:




This certificate also evidences and entitles the holder hereof to certain rights as set
forth in a Rights Agreement between Bluegreen Corporation and Mellon Investor Services LLC,
dated as of July 27, 2006, as it may be amended or supplemented from time to time (the
“Agreement”), the terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of Bluegreen Corporation. Under certain
circumstances, as set forth in the Agreement, such Rights (as defined in the Agreement) will
be evidenced by separate certificates and will no longer be evidenced by this certificate.
Bluegreen Corporation will mail to the holder of this certificate a copy of the Agreement
without charge after receipt of a written request therefor. As set forth in the Agreement,
Rights beneficially owned by any Person (as defined in the Agreement) who becomes an
Acquiring Person (as defined in the Agreement) become null and void.


With respect to such certificates containing the foregoing legend, the Rights associated with the
Common Shares of the Company represented by such certificates shall, until the Distribution Date,
be evidenced by such certificates alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the Common Shares of the Company
represented thereby. In the event that the Company purchases or acquires any Common Shares of the
Company after the Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares of the Company shall be deemed cancelled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Shares of the Company which are no
longer outstanding.




-10-









 








     Section 4. Form of Right Certificates. The Right Certificates (and the forms of
election to purchase Preferred Shares and of assignment to be printed on the reverse thereof) shall
be substantially the same as Exhibit B hereto, and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company may deem
appropriate (but which do not affect the rights, duties or responsibilities of the Rights Agent)
and as are not inconsistent with the provisions of this Agreement, or as may be required to comply
with any applicable law or with any applicable rule or regulation made pursuant thereto or with any
applicable rule or regulation of any stock exchange or the National Association of Securities
Dealers, Inc., or to conform to usage. Subject to the provisions of Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one one-hundredth of a Preferred
Share set forth therein (the “Purchase Price”), but the number of such one one-hundredths
of a Preferred Share and the Purchase Price shall be subject to adjustment as provided herein.



     Section 5. Countersignature and Registration. The Right Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its President, or its Treasurer,
either manually or by facsimile signature, shall have affixed thereto the Company’s seal or a
facsimile thereof, and shall be attested by the Secretary or the Clerk of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless countersigned. In case any officer of
the Company who shall have signed any of the Right Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent and



-11-









 




issued and delivered by the Company with the same force and effect as though the individual
who signed such Right Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any individual who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such individual was not
such an officer.




     Following the Distribution Date and receipt by the Rights Agent of notice and all other
relevant information, the Rights Agent will keep or cause to be kept, at its office designated for
such purpose, books for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the date of each of
the Right Certificates.



     Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 14 hereof,
at any time after the Close of Business on the Distribution Date, at or prior to the Close of
Business on the earlier of the Redemption Date or the Final Expiration Date, and following receipt
in writing by the Rights Agent of notice to that effect, any Right Certificate or Right
Certificates (other than Right Certificates representing Rights that have become null and void
pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may
be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates
entitling the registered holder to purchase a like number of one one-hundredths of a Preferred
Share as the Right Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or exchange any



-12-









 




Right Certificate or Right Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred,
split up, combined or exchanged at the office of the Rights Agent designated for such purpose. The
Rights Certificates are transferable only on the registry books of the Rights Agent. Thereupon the
Rights Agent, subject to the provisions hereof, shall countersign (by manual signature) and deliver
to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment from the holder of a Rights Certificate of a sum
sufficient to cover any tax or charge that may be imposed in connection with any transfer, split
up, combination or exchange of such Right Certificates. The Rights Agent shall have no duty or
obligation to take any action under any section of this Agreement which requires the payment by a
Rights holder of applicable taxes and charges unless and until the Rights Agent is satisfied that
all such taxes and/or charges have been paid.




     Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft
or destruction, of indemnity or security satisfactory to them, and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.



     Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) The
registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein), in whole or in part, at any time after the Distribution Date, upon



-13-









 




surrender of the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed (with such signature duly guaranteed), to the Rights Agent at the office of
the Rights Agent designated for such purpose, together with payment of the Purchase Price for each
one one-hundredth of a Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on July 27, 2016 (the “Final Expiration Date”), (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof (the “Redemption
Date”), or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof.




     (b) The Purchase Price for each one one-hundredth of a Preferred Share purchasable pursuant to
the exercise of a Right shall initially be $40.00, and shall be subject to adjustment from time to
time as provided in Section 11 or 13 hereof, and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.



     (c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of
election to purchase and certification duly executed, accompanied by payment of the Purchase Price
for the shares to be purchased and an amount equal to any applicable tax or charge required to be
paid by the holder of such Right Certificate in accordance with Section 9 hereof by certified
check, cashier’s check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares certificates
for the number of Preferred Shares to be purchased and the Company hereby irrevocably authorizes
and directs any such transfer agent to comply with all such requests, or (B) requisition from the
depositary agent depositary receipts representing such number of one one-hundredths of a Preferred
Share as are to be purchased (in which case certificates for the Preferred Shares represented by
such receipts shall be deposited by the transfer agent of the Preferred Shares with such depositary
agent) and the Company hereby



-14-









 




directs such depositary agent to comply with such request; (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof; (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by such holder; and (iv)
when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate; provided, however, that in the case of a purchase of securities,
other than Common Shares of the Company, pursuant to Section 13 hereof, the Rights Agent shall
promptly take the appropriate actions corresponding to the foregoing clauses (i) through (iv). In
the event that the Company is obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate.




     (d) In case the registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to such holder’s duly authorized assigns, subject to the provisions of Section 14
hereof.



     (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in Section 7 unless such registered holder shall
have (i) properly completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered



-15-









 




for such exercise and (ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company or the Rights
Agent shall reasonably request.




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



     Section 9. Availability of Preferred Shares. The Company covenants and agrees that it
will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or
any Preferred Shares held in its treasury the number of Preferred Shares that will be sufficient to
permit the exercise in full of all outstanding Rights in accordance with Section 7 hereof. The
Company covenants and agrees that it will take all such action as may be necessary to ensure that
all Preferred Shares delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.



-16-









 





     The Company further covenants and agrees that it will pay when due and payable any and all
taxes and charges which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any tax or charge which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates
or depositary receipts for the Preferred Shares in a name other than that of, the registered holder
of the Right Certificate evidencing Rights surrendered for exercise or to issue or to deliver any
certificates or depositary receipts for Preferred Shares upon the exercise of any Rights until any
such tax shall have been paid (any such tax or charge being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the Company’s reasonable
satisfaction that no such tax is due.



     Section 10. Preferred Shares Record Date. Each Person in whose name any certificate
for Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable taxes or charges) was made;
provided, however, that, if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not
be entitled to any rights of a holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive dividends or other



-17-









 




distributions or to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.




     Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The
Purchase Price, the number of Preferred Shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this Section 11.



     (a) (i) In the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation), except as otherwise provided in
this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to receive the aggregate number
and kind of shares of capital stock which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Shares transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company issuable upon exercise of one Right.



-18-









 





     (ii) Subject to Section 24 hereof, in the event any Person becomes an Acquiring Person, each
holder of a Right shall thereafter have a right to receive, upon exercise thereof at a price equal
to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of Common Shares of the Company as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of
a Preferred Share for which a Right is then exercisable and dividing that product by (B) 50% of the
then current per share market price of the Common Shares of the Company (determined pursuant to
Section 11(d) hereof) on the date of the occurrence of such event. In the event that any Person
shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not
take any action which would eliminate or diminish the benefits intended to be afforded by the
Rights.



     From and after the occurrence of such event, any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
shall be null and void, and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement. No Right Certificate shall be issued pursuant
to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person whose Rights
would be null and void pursuant to the preceding sentence or any Associate or Affiliate thereof; no
Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be null and void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be null and void pursuant to the preceding sentence shall be
cancelled.



-19-









 





     (iii) In the event that there shall not be sufficient Common Shares issued but not outstanding
or authorized but unissued to permit the exercise in full of the Rights in accordance with
subparagraph (ii) above, the Company shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the Rights. In the event the Company shall,
after good faith effort, be unable to take all such action as may be necessary to authorize such
additional Common Shares, the Company shall substitute, for each Common Share that would otherwise
be issuable upon exercise of a Right, a number of Preferred Shares or fraction thereof such that
the current per share market price of one Preferred Share multiplied by such number or fraction is
equal to the current per share market price of one Common Share as of the date of issuance of such
Preferred Shares or fraction thereof.



     (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares
having the same rights, privileges and preferences as the Preferred Shares (“equivalent
preferred shares”)) or securities convertible into Preferred Shares or equivalent preferred
shares at a price per Preferred Share or equivalent preferred share (or having a conversion price
per share, if a security convertible into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred Shares (as determined pursuant to
Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the number of Preferred Shares outstanding on such
record date



-20-









 




plus the number of Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of additional Preferred Shares and/or equivalent preferred shares
to be offered for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and holders of the Rights. Preferred Shares owned by or held
for the account of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record date is fixed; and,
in the event that such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record date had not been
fixed.




     (c) In case the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants (excluding those



-21-









 




referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then-current per share market price
of the Preferred Shares on such record date, less the fair market value (as determined in good
faith by the Board of Directors, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and holders of the Rights) of the portion
of the assets or evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Preferred Share and the denominator of which shall be such then-current
per share market price of the Preferred Shares on such record date; provided,
however, that in no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively whenever such a record
date is fixed; and, in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such record date had
not been fixed.




     (d) (i) For the purpose of any computation hereunder, the “current per share market price”
of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall
be deemed to be the average of the daily closing prices per share of such Security for the 30
consecutive Trading Days immediately prior to but not including such date; provided,
however, that, in the event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such Security or Securities
convertible into such shares, or (B) any subdivision, combination or reclassification of such
Security and prior to the expiration of 30 Trading Days after but not including the ex-dividend
date for such dividend



-22-









 




or distribution, or the record date for such subdivision, combination or reclassification,
then, and in each such case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The closing price for each
day shall be the last sale price, regular way, reported at or prior to 4:00 P.M. Eastern time or,
in case no such sale takes place on such day, the average of the bid and asked prices, regular way,
reported as of 4:00 P.M. Eastern time, in either case, as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading on any national
securities exchange, the last quoted price reported at or prior to 4:00 P.M. Eastern time or, if
not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as
reported as of 4:00 P.M. Eastern time by NASDAQ or such other system then in use, or, if on any
such date the Security is not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the Security selected
by the Board of Directors. The term “Trading Day” shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to trading is open for the
transaction of business, or, if the Security is not listed or admitted to trading on any national
securities exchange, a Business Day.




     (ii) For the purpose of any computation hereunder, the “current per share market price” of the
Preferred Shares shall be determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the “current per share



-23-









 




market price” of the Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section 11(d)(i) hereof (appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date
hereof), multiplied by one hundred. If neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, “current per share market price” shall mean the fair value
per share as determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and
the holders of the Rights for all purposes.




     (e) No adjustment in the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one one-millionth of a Preferred
Share or one ten-thousandth of any other share or security as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any Rights.



     (f) If, as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any shares of capital stock of the
Company other than Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained
in Section 11(a) through (c) hereof, inclusive, and the provisions of
Sections 7, 9, 10 and 13 hereof with respect to the Preferred Shares shall apply on like terms
to any such other shares.



-24-









 





     (g) All Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.



     (h) Unless the Company shall have exercised its election as provided in Section 11(i) hereof,
upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b)
and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a Preferred Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (A) multiplying (x) the number of one one-hundredths of a share covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (B) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.



     (i) The Company may elect, on or after the date of any adjustment of the Purchase Price, to
adjust the number of Rights in substitution for any adjustment in the number of one one-hundredths
of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the



-25-









 




number of Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment
of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. The Company shall notify the Rights Agent whenever it makes a public
announcement pursuant to this Section 11(i), and shall promptly give the Rights Agent a copy of
such announcement. This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly
as practicable, cause to be distributed to holders of record of Right Certificates on such record
date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein, and shall be registered in
the names of the holders of record of Right Certificates on the record date specified in the public
announcement.




     (j) Irrespective of any adjustment or change in the Purchase Price or in the number of one
one-hundredths of a Preferred Share issuable upon the exercise of the Rights, the



-26-









 




Right Certificates theretofore and thereafter issued may continue to express the Purchase
Price and the number of one one-hundredths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.




     (k) Before taking any action that would cause an adjustment reducing the Purchase Price below
one one-hundredth of the then par value, if any, of the Preferred Shares issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully paid and nonassessable
Preferred Shares at such adjusted Purchase Price.



     (l) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
(with prompt written notice of such election to the Rights Agent) until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of the Preferred
Shares and other capital stock or securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder’s right to receive such additional shares upon
the occurrence of the event requiring such adjustment.



     (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that it, in its sole discretion, shall determine to be
advisable in order that any consolidation or subdivision of the Preferred Shares,



-27-









 




issuance wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, dividends on Preferred Shares payable in Preferred
Shares or issuance of rights, options or warrants referred to in Section 11(b) hereof, hereafter
made by the Company to holders of the Preferred Shares shall not be taxable to such stockholders.




     (n) In the event that, at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the Common Shares payable
in Common Shares, or (ii) effect a subdivision, combination or consolidation of the Common Shares
(by reclassification or otherwise than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then, in any such case, (A) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of each Right shall be determined
by multiplying the number of one one-hundredths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is the number of Common
Shares outstanding immediately after such event, and (B) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever such a dividend is declared
or paid or such a subdivision, combination or consolidation is effected.



     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 or 13 hereof, or any event affecting the Rights or
their exercisability (including, without limitation, an event which causes the Rights



-28-









 




to become null and void), the Company shall promptly (a) prepare a certificate setting forth
such adjustment and a brief, reasonably detailed statement of the facts, computations and
methodology accounting for such adjustment or describing such event, (b) file with the Rights Agent
and with each transfer agent for the Common Shares or the Preferred Shares a copy of such
certificate and (c) if such adjustment occurs at any time after the Distribution Date, mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof.
Notwithstanding the foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of the requirement for such adjustment. The Rights
Agent shall be fully protected in relying on any certificate prepared by the Company pursuant to
Sections 11 and 13 and on any adjustment therein contained and shall have no duty with respect to
and shall not be deemed to have knowledge of any such adjustment unless and until it shall have
received such certificate.




     Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. In
the event, directly or indirectly, at any time after a Person has become an Acquiring Person, (a)
the Company shall consolidate with, or merge with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such merger, all or part
of the Common Shares shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person other than the Company or one
or more of its wholly-owned Subsidiaries, then,



-29-









 




and in each such case, proper provision shall be made so that (i) each holder of a Right
(except as otherwise provided herein) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of such other
Person (including the Company as successor thereto or as the surviving corporation) as shall equal
the result obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product
by (B) 50% of the then current per share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) the issuer of such Common Shares shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term “Company” shall thereafter be
deemed to refer to such issuer; and (iv) such issuer shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares in accordance with Section
9 hereof) in connection with such consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common
Shares of the Company thereafter deliverable upon the exercise of the Rights. The Company shall
not consummate any such consolidation, merger, sale or transfer unless, prior thereto, the Company
and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement so
providing. The Company shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements

-30-









 








which, as a result of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. The provisions of this Section 13
shall similarly apply to successive mergers or consolidations or sales or other transfers.




     Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not be
required to issue fractions of Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case, as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of
Directors shall be used.



-31-









 





     (b) The Company shall not be required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of
the Rights or to distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred Shares represented by
such depositary receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Preferred Share. For the purposes of this
Section 14(b), the current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.



     (c) The holder of a Right, by the acceptance of the Right, expressly waives such holder’s
right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as
provided above).



-32-









 





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



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



-33-









 




breach of this Agreement, and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the obligations of any
Person subject to, this Agreement.




     Section 16. Agreement of Right Holders. Every holder of a Right, by accepting the
same, consents and agrees with the Company and the Rights Agent and with every other holder of a
Right that:



     (a) prior to the Distribution Date, the Rights will not be evidenced by a Rights Certificate
and will be transferable only in connection with the transfer of the Common Shares;



     (b) after the Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the office of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of transfer with all required
certifications completed;



     (c) the Company and the Rights Agent may deem and treat the Person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common Shares) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Shares certificate (if any)
made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the contrary; and



     (d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or other Person



-34-









 




as a result of its inability to perform any of its obligations under this Agreement by reason
of any order, decree or ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best efforts to have
any such order, decree or ruling lifted or otherwise overturned as soon as possible.




     Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of
any Right Certificate shall be entitled to vote, receive dividends in respect of or be deemed for
any purpose to be the holder of the Preferred Shares or any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights in respect of such stock or securities, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in accordance with the
provisions hereof.



     Section 18. Concerning the Rights Agent. The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder, and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, negotiation, delivery, administration, amendment and execution of this
Agreement and the exercise and performance of its duties hereunder. The



-35-









 




Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense
(including, without limitation, the reasonable fees and expenses of legal counsel) incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights Agent (which gross
negligence, bad faith or willful misconduct must be determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction) for any action taken, suffered or
omitted by the Rights Agent in connection with the acceptance, administration, exercise and
performance of its duties under this Agreement, including, without limitation, the costs and
expenses of defending against any claim of liability arising therefrom, directly or indirectly.
The costs and expenses incurred in enforcing this right of indemnification shall be paid by the
Company. The provisions of this Section 18 and Section 20 below shall survive the termination of
this Agreement, the exercise or expiration of the Rights and the resignation, replacement or
removal of the Rights Agent.




     The Rights Agent shall be authorized and protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its acceptance and
administration of this Agreement and the exercise and performance of its duties hereunder in
reliance upon any Right Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper
or document believed by it to be genuine and to be signed, executed and, where necessary,
guaranteed, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice
of counsel as set forth in Section 20 hereof. The Rights Agent shall not be deemed to have
knowledge of any event of which it was supposed to receive notice thereof hereunder, and



-36-









 




the Rights Agent shall be fully protected and shall incur no liability for failing to take any
action in connection therewith unless and until it has received such notice in writing.




     Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any Person
into which the Rights Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer
business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates
so countersigned; and, in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights Agent; and, in all such
cases, such Right Certificates shall have the full force provided in the Right Certificates and in
this Agreement.



     In case at any time the name of the Rights Agent shall be changed and at such time any of the
Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so countersigned; and, in case
at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name



-37-









 




or in its changed name; and, in all such cases, such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.




     Section 20. Duties of Rights Agent. The Rights Agent undertakes to perform only the
duties and obligations expressly imposed by this Agreement (and no implied duties) upon the
following terms and conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:



     (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company
or an employee of the Rights Agent), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted by it in good faith and in
accordance with such advice or opinion.



     (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter be proved or established by the Company prior to
taking, suffering or omitting to take any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of the Board, the
President, the Treasurer, the Secretary or the Clerk of the Company and delivered to the Rights
Agent; and such certificate shall be full and complete authorization and protection to the Rights
Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered
or omitted by it in good faith under the provisions of this Agreement in reliance upon such
certificate.



-38-









 





     (c) The Rights Agent shall be liable hereunder to the Company and any other Person only for
its own gross negligence, bad faith or willful misconduct (each as determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). Anything
to the contrary notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind whatsoever (including
but not limited to lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage. Any liability of the Rights Agent under this Agreement will be limited to the
amount of annual fees paid by the Company to the Rights Agent.



     (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.



     (e) The Rights Agent shall not have any liability for or be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights (including the
Rights becoming null and void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms
of the Rights (including the manner, method or amount of any such adjustments thereof) provided for
in Section 3, 11, 13, 23 or 24 hereof, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice that such change or



-39-









 




adjustment is required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and nonassessable.




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



     (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any one of the Chairman of the Board, the President,
the Secretary, the Clerk or the Treasurer of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and such instructions shall be full authorization
and protection to the Rights Agent and the Rights Agent shall not be liable for or in respect of
any action taken, suffered or omitted by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those instructions. The Rights Agent
shall be fully authorized and protected in relying upon the most recent instructions received by
any such officer. Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action proposed to be taken,
suffered or omitted by the Rights Agent under this Rights Agreement and the date on and/or after
which such action shall be taken or suffered or such omission shall be effective. The Rights Agent
shall not be liable for any action taken or suffered by, or omission of, the Rights Agent in good
faith in accordance with a proposal included in any such application on or after the date specified
in such application (which date shall not be less



-40-









 




than five Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of an omission), the Rights
Agent shall have received written instructions in response to such application specifying the
action to be taken, suffered or omitted.




     (h) The Rights Agent and any shareholder, affiliate, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as though the
Rights Agent were not the Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent (or any such shareholder, affiliate, director, officer or employee) from acting in any
other capacity for the Company or for any other Person.



     (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself (through its directors, officers and employees) or by
or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the
Company or to any holders of Rights or to any other Person resulting from any such act, default,
neglect or misconduct, absent gross negligence, bad faith or willful misconduct in the selection
and continued employment thereof (each as determined by a final, non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction).



     (j) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate contained in the form of assignment or the form of election



-41-









 




to purchase set forth on the reverse thereof, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall
not take any further action with respect to such requested exercise or transfer without first
consulting with the Company.




     (k) No provision of this Rights Agreement shall require the Rights Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.



     Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing
mailed to the Company and to each transfer agent of the Common Shares or Preferred Shares known to
the Rights Agent by registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30
days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Shares or Preferred Shares by registered or certified
mail, and to the holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such appointment within a period
of 30 days after giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (which holder shall, with such notice, submit such holder’s Right Certificate for
inspection by the Company), then the incumbent Rights Agent or the registered holder of any Right
Certificate may apply to any court of competent jurisdiction



-42-









 




for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by
the Company or by such a court, shall be (i) a Person organized and doing business under the laws
of the United States or of the State of New York (or of any other state of the United States so
long as such Person is authorized to do business as a banking institution in the State of New
York), in good standing, having an office in the State of New York, which is authorized under such
laws to exercise stock transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million or (ii) an affiliate of an institution that satisfies the
requirements set forth in clause (i) of this sentence. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares
or Preferred Shares, and mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.




     Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by the Board of



-43-









 




Directors to reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.




     Section 23. Redemption. (a) The Board of Directors may, at its option, at any time
prior to such time as any Person becomes an Acquiring Person, redeem all but not less than all the
then outstanding Rights at a redemption price of $0.01 per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the “Redemption Price”). The redemption
of the Rights by the Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors, in its sole discretion, may establish.



     (b) Immediately upon the action of the Board of Directors ordering the redemption of the
Rights pursuant to paragraph (a) of this Section 23, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption. Within 10 days after
such action of the Board of Directors ordering the redemption of the Rights, the Company shall mail
a notice of redemption to all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares (with prompt written notice thereof to
the Rights Agent). Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.



-44-









 




Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner other than that specifically set forth in this
Section 23 or in Section 24 hereof, and other than in connection with the purchase of Common Shares
prior to the Distribution Date.




     Section 24. Exchange. (a) The Board of Directors may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share
per Right, appropriately adjusted to reflect any adjustment in the number of Rights pursuant to
Section 11(i) (such exchange ratio being hereinafter referred to as the “Exchange Ratio”).
Notwithstanding the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Shares
for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding.



     (b) Immediately upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any further action and without any notice,
the right to exercise such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice (with
prompt written notice of such exchange to the Rights Agent) of any such exchange; provided,
however, that the failure to give, or any defect in, such



-45-









 




notice shall not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the Common Shares for Rights will
be effected, and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number of
Rights (other than Rights which have become null and void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.




     (c) In the event that there shall not be sufficient Common Shares issued but not outstanding
or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to authorize additional
Common Shares for issuance upon exchange of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be necessary to authorize such additional
Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable
upon exchange of a Right, a number of Preferred Shares or fraction thereof such that the current
per share market price of one Preferred Share multiplied by such number or fraction is equal to the
current per share market price of one Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.



     (d) The Company shall not be required to issue fractions of Common Shares or to distribute
certificates which evidence fractional Common Shares. In lieu of such fractional Common Shares,
the Company shall pay to the registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash



-46-









 




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




     Section 25. Notice of Certain Events. (a) In case the Company shall, at any time
after the Distribution Date, propose (i) to pay any dividend payable in stock of any class to the
holders of the Preferred Shares or to make any other distribution to the holders of the Preferred
Shares (other than a regular quarterly cash dividend), (ii) to offer to the holders of the
Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares
or shares of stock of any class or any other securities, rights or options, (iii) to effect any
reclassification of the Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends
in Common Shares), then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger, sale,



-47-









 




transfer, liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Preferred Shares, if any such date
is to be fixed, and such notice shall be so given in the case of any action covered by clause (i)
or (ii) above at least 10 days prior to the record date for determining holders of the Preferred
Shares for purposes of such action, and, in the case of any such other action, at least 10 days
prior to the date of the taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the earlier.




     (b) In case the event set forth in Section 11(a)(ii) hereof shall occur, then the Company
shall, as soon as practicable thereafter, give to each holder of a Right Certificate, in accordance
with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights under Section 11(a)(ii) hereof, and,
upon consummating such transaction, shall similarly give notice thereof to the Rights Agent and to
each holder of Rights.



     Section 26. Notices. Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:


Bluegreen Corporation

4960 Conference Way North, Suite 100

Boca Raton, Florida 33431

Attention: Corporate Secretary




-48-









 







With a copy to:



Wachtell, Lipton, Rosen & Katz

51 West Fifty-Second Street

New York, NY 10019

Attention: Craig M. Wasserman, Esq.

                  Elliott V. Stein, Esq.



Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement
to be given or made by the Company or by the holder of record of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as follows:



Mellon Investor Services LLC

480 Washington Boulevard

Jersey City, NJ 07310

Attention: Client Relationship Executive



With a copy to:



Mellon Investor Services LLC

480 Washington Boulevard

Jersey City, NJ 07310

Attention: General Counsel



Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of record of any Right Certificate shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.




     Section 27. Supplements and Amendments. The Company may from time to time supplement
or amend this Agreement without the approval of any holders of Right Certificates in order to cure
any ambiguity, to correct or supplement any provision contained



-49-









 




herein which may be defective or inconsistent with any other provisions herein, or to make any
other provisions with respect to the Rights which the Company may deem necessary or desirable, any
such supplement or amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that, from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would adversely affect
the interests of the holders of Rights. Without limiting the foregoing, the Company may at any
time prior to such time as any Person becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Section 1(a) and 3(a) hereof to not less than 10% (the “Reduced
Threshold”); provided, however, that no Person who beneficially owns a number of
Common Shares equal to or greater than the Reduced Threshold shall become an Acquiring Person
unless such Person shall, after the public announcement of the Reduced Threshold, increase its
beneficial ownership of the then outstanding Common Shares (other than as a result of an
acquisition of Common Shares by the Company) to an amount equal to or greater than the greater of
(x) the Reduced Threshold or (y) the sum of (i) the lowest beneficial ownership of such Person as a
percentage of the outstanding Common Shares as of any date on or after the date of the public
announcement of such Reduced Threshold plus (ii) .001%. Notwithstanding anything contained in this
Agreement to the contrary, the Rights Agent may, but shall not be obligated to, enter into any
supplement or amendment that affects the Rights Agent’s own rights, duties, obligations or
immunities under this Agreement.




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



-50-









 





     Section 29. Benefits of this Agreement. Nothing in this Agreement shall be construed
to give to any Person other than the Company, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares).



     Section 30. Determinations and Actions by the Board of Directors. The Board of
Directors shall have the exclusive power and authority to administer this Agreement and to exercise
the rights and powers specifically granted to the Company’s Board of Directors or to the Company,
or as may be necessary or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this Agreement (including,
without limitation, a determination to redeem or not redeem the Rights or to amend or not amend
this Agreement). All such actions, calculations, interpretations and determinations that are done
or made by the Board of Directors in good faith shall be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights, as such, and all other parties.
Notwithstanding anything contained herein to the contrary, the Rights Agent is entitled always to
assume that the Company’s Board of Directors acted in good faith and shall be fully protected and
incur no liability in reliance thereon.



     Section 31. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected, impaired or
invalidated.



-51-









 





     Section 32. Governing Law. This Agreement and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the Commonwealth of Massachusetts and for
all purposes shall be governed by and construed in accordance with the laws of such Commonwealth
applicable to contracts to be made and performed entirely within such Commonwealth, provided,
however, that all provisions regarding the rights, duties and obligations of the Rights Agent shall
be governed by and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.



     Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same instrument.



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



-52-









 





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



	 	 	 
	Attest:	 	
BLUEGREEN CORPORATION
	 	 	 
	By
 

Name:	 	
By
 

Name:
	Title:	 	
Title
	 	 	 
	Attest:	 	
MELLON INVESTOR SERVICES LLC
	 	 	 
	By
 

Name:	 	
By
 

Name:
	Title:	 	
Title






-53-









 






Exhibit A




FORM




of




CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS




of




SERIES A JUNIOR PARTICIPATING PREFERRED STOCK




of




BLUEGREEN CORPORATION




(Pursuant to Section 6.02 of the

Massachusetts Business Corporation Act)




 






     Bluegreen Corporation, a corporation organized and existing under the Business Corporation Law
of the Commonwealth of Massachusetts (hereinafter called the “Corporation”), hereby certifies that
the following resolution was adopted by the Board of Directors of the Corporation as required by
Section 6.02 of the Massachusetts Business Corporation Act at a meeting duly called and held on
July 27, 2006:



     RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of
this Corporation (hereinafter called the “Board of Directors” or the “Board”) in accordance with
the provisions of the Articles of Organization, the Board of Directors hereby creates a series of
Preferred Stock, par value $0.01 per share, of the Corporation (the “Preferred Stock”), and hereby
states the designation and number of shares, and fixes the relative rights, preferences, and
limitations thereof as follows:



     Series A Junior Participating Preferred Stock:



     Section 1. Designation and Amount. The shares of such series shall be designated as
“Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of
shares constituting the Series A Preferred Stock shall be 400,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any outstanding securities issued
by the Corporation convertible into Series A Preferred Stock.



     Section 2. Dividends and Distributions.




     (A) Subject to the rights of the holders of any shares of any series of Preferred Stock
(or any similar stock) ranking prior and superior to the Series A Preferred Stock



A-1









 






with respect to dividends, the holders of shares of Series A Preferred Stock, in
preference to the holders of Common Stock, par value $0.01 per share (the “Common Stock”),
of the Corporation, and of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June, September and December
in each year (each such date being referred to herein as a “Quarterly Dividend Payment
Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of
a share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares of Common Stock or
a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Series A Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately prior to such
event.




     (B) The Corporation shall declare a dividend or distribution on the Series A Preferred
Stock as provided in paragraph (A) of this Section immediately after it declares a dividend
or distribution on the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.




     (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of
such shares, unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest.



A-2









 






Dividends paid on the shares of Series A Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date fixed for the
payment thereof.



          Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall
have the following voting rights:




     (A) Subject to the provision for adjustment hereinafter set forth, each share of Series
A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to
a vote of the stockholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.




     (B) Except as otherwise provided herein, in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock, or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.




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



          Section 4. Certain Restrictions.




     (A) Whenever quarterly dividends or other dividends or distributions payable on the
Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on shares of Series
A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:



A-3









 






     (i) declare or pay dividends, or make any other distributions, on any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;




     (ii) declare or pay dividends, or make any other distributions, on any shares
of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;




     (iii) redeem or purchase or otherwise acquire for consideration shares of any
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series A Preferred
Stock; or




     (iv) redeem or purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with the Series
A Preferred Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.




     (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.



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



     Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution
or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock
shall have received $100 per share, plus an amount equal to accrued and unpaid



A-4









 




dividends and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or
(2) to the holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions
made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of
the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.




     Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.



     Section 8. No Redemption. The shares of Series A Preferred Stock shall not be
redeemable.



     Section 9. Rank. The Series A Preferred Stock shall rank, with respect to the payment
of dividends and the distribution of assets, junior to all series of any other class of the
Corporation’s Preferred Stock.



     Section 10. Amendment. The Articles of Organization of the Corporation shall not be
amended in any manner which would materially alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.



A-5









 





     IN WITNESS WHEREOF, this Certificate of Designations, Preferences and Rights is executed on
behalf of the Corporation by its President and attested by its Clerk this 26th day of July, 2006.



	 	 	 	 	 
	 	 	 
	 	
 	 
	 	President 	 
	 	 	 
	 



	 	 	 	 	 
	 	Attest:

 	 
	 	
 	 
	 	Clerk 	 
	 	 	 



A-6









 






	 	 	 	 	 



Exhibit B




Form of Right Certificate




					
	 
	Certificate No. R-
	 	
	 	           Rights







NOT
EXERCISABLE AFTER JULY 27, 2016 OR EARLIER IF

REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT

TO REDEMPTION AT $0.01 PER RIGHT AND TO EXCHANGE

ON THE TERMS SET FORTH IN THE AGREEMENT.



Right Certificate




BLUEGREEN CORPORATION




     This
certifies that ___________________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to
the terms, provisions and conditions of the Agreement, dated as of July 27, 2006 (the “Agreement”),
between Bluegreen Corporation, a Massachusetts corporation (the “Company”), and Mellon Investor
Services LLC (the “Rights Agent”), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Agreement) and prior to 5:00 P.M., New York City time, on July
27, 2016 at the office of the Rights Agent designated for such purpose, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $0.01 per share, of the Company (the “Preferred
Shares”), at a purchase price of $40.00 per one one-hundredth of a Preferred Share (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number
of one one-hundredths of a Preferred Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price as of July 27,
2006, based on the Preferred Shares as constituted at such date. As provided in the Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.



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



     This Right Certificate, with or without other Right Certificates, upon surrender at the office
of the Rights Agent designated for such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Right



B-1









 







Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not
exercised.



     Subject to the provisions of the Agreement, the Rights evidenced by this Right Certificate (i)
may be redeemed by the Company at a redemption price of $0.01 per Right or (ii) may be exchanged in
whole or in part for Preferred Shares or shares of the Company’s Common Stock, par value $0.01 per
share.



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



     No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall anything contained in
the Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting stockholders (except
as provided in the Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in
the Agreement.



     This Right Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.



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



	 	 	 
	ATTEST:	 	
BLUEGREEN CORPORATION
	 	 	 
	 
 

Name:	 	
By
 

Name:
	Title:	 	
Title:
	Countersigned:	 	 
	 	 	 
	MELLON INVESTOR SERVICES LLC	 	 
	 	 	 
	By
 

Name:	 	 
	Title:	 	 






Form of Reverse Side of Right Certificate




B-2









 








FORM OF ASSIGNMENT




(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)



     FOR
VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto
_________________________________________________________________________________________________________________



 




(Please print name and address of transferee)




 




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




Dated: ___________________




	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 
	 



Signature Guaranteed:





     All Guarantees must be made by a financial institution (such as a bank or broker) which is a
participant in the Securities Transfer Agents Medallion Program (“STAMP”), the New York Stock
Exchange, Inc. Medallion Signature Program (“MSP”), or the Stock Exchanges Medallion Program
(“SEMP”) and must not be dated. Guarantees by a notary public are not acceptable.



     The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Agreement).



	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 
	 



Form of Reverse Side of Right Certificate — continued




B-3









 








FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to exercise

Rights represented by the Right Certificate.)




To: BLUEGREEN CORPORATION





     The
undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Right Certificate to purchase the Preferred Shares issuable upon the
exercise of such Rights and requests that certificates for such Preferred Shares be issued in the
name of:



Please insert social security

or other identifying number




 




(Please print name and address)




 




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




Please insert social security

or other identifying number




 




(Please print name and address)




Dated: ____________________




	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 
	 



Signature Guaranteed:





     All Guarantees must be made by a financial institution (such as a bank or broker) which is a
participant in the Securities Transfer Agents Medallion Program (“STAMP”), the New York Stock
Exchange, Inc. Medallion Signature Program (“MSP”), or the Stock Exchanges Medallion Program
(“SEMP”) and must not be dated. Guarantees by a notary public are not acceptable.



B-4









 





     The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Agreement).



	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 
	 



NOTICE





     The signature in the Form of Assignment or Form of Election to Purchase, as the case may be,
must conform to the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.



     In the event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent will
deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Agreement) and such Assignment or
Election to Purchase will not be honored.



B-5









 





Exhibit C




SUMMARY OF RIGHTS TO PURCHASE

PREFERRED SHARES




Introduction




     On July 27, 2006, the Board of Directors of our Company, Bluegreen Corporation, a
Massachusetts corporation, declared a dividend of one preferred share purchase right (a “Right”)
for each outstanding share of common stock, par value $0.01 per share. The dividend is payable on
August 17, 2006 to the stockholders of record on that date.



     Our Board has adopted this Rights Agreement to protect stockholders from coercive or otherwise
unfair takeover tactics. In general terms, it works by imposing a significant penalty upon any
person or group which acquires 15% or more of our outstanding common stock without the approval of
our Board, with exceptions for the Company, its affiliates, and Levitt Corporation, which currently
owns approximately 31% of our stock. The Rights Agreement should not interfere with any merger or
other business combination approved by our Board.



     For those interested in the specific terms of the Rights Agreement as made between our Company
and Mellon Investor Services LLC, a New Jersey limited liability company, as the Rights Agent, on
July 27, 2006, we provide the following summary description. Please note, however, that this
description is only a summary, and is not complete, and should be read together with the entire
Rights Agreement, which has been filed with the Securities and Exchange Commission as an exhibit to
a Registration Statement on Form 8-A dated ________________ , 2006. A copy of the agreement is
available free of charge from our Company.



The Rights. Our Board authorized the issuance of a Right with respect to each outstanding share of
common stock on July 27, 2006. The Rights will initially trade with, and will be inseparable from,
the common stock. The Rights are evidenced only by certificates that represent shares of common
stock, or in the case of uncertificated shares, the book-entry records representing shares of
common stock. New Rights will accompany any new shares of common stock we issue after August 17,
2006 until the Distribution Date described below.



Exercise Price. Each Right will allow its holder to purchase from our Company one one-hundredth of
a share of Series A Junior Participating Preferred Stock (“Preferred Share”) for $40.00, once the
Rights become exercisable. This portion of a Preferred Share will give the stockholder
approximately the same dividend, voting, and liquidation rights as would one share of common stock.
Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.



Exercisability. The Rights will not be exercisable until





	•	 	10 days after the public announcement that a person or group has become an “Acquiring
Person” by obtaining beneficial ownership of 15% or more of our outstanding common stock, or,
if earlier,




C-1









 












	•	 	10 business days (or a later date determined by our Board before any person or group
becomes an Acquiring Person) after a person or group begins a tender or exchange offer which,
if completed, would result in that person or group becoming an Acquiring Person.





     We refer to the date when the Rights become exercisable as the “Distribution Date.” Until
that date, the common stock certificates, or in the case of uncertificated shares, the book-entry
records evidencing common stock, will also evidence the Rights, and any transfer of shares of
common stock will constitute a transfer of Rights. After that date, the Rights will separate from
the common stock and be evidenced by book-entry credits or by Rights certificates that we will mail
to all eligible holders of common stock. Any Rights held by an Acquiring Person are null and void
and may not be exercised.



     Our Board may reduce the threshold at which a person or group becomes an Acquiring Person from
15% to not less than 10% of the outstanding common stock.



Exceptions to the Definition of “Acquiring Person.”




     Levitt Corporation and its affiliates and assigns, who currently own approximately 31.3% of
the Company’s common stock, will not be considered to be an Acquiring Person. If the Company
repurchases some of its own common stock and this causes a person or group’s holdings to constitute
15% or more of the remaining outstanding common stock, that person or group will not be an
Acquiring Person so long as it does not make any further acquisition of the Company’s common stock.
Finally, if a person or group acquires 15% or more of the Company’s common stock inadvertently or
as a result of third parties exercising contractual rights that exist as of July 27, 2006 (and
without acquiring by other means 1% or more of the Company’s common stock since July 27, 2006), and
that person or group sells enough common stock to reduce its holdings below 15% of the Company’s
common stock as promptly as practicable (which, in the contractual rights case, shall not be longer
than 60 days), such person or group will not be an Acquiring Person.



Consequences of a Person or Group Becoming an Acquiring Person.





	•	 	Flip In. If a person or group becomes an Acquiring Person, all holders of Rights except the
Acquiring Person may, for $40.00, purchase shares of our common stock with a market value of
$80.00, based on the market price of the common stock prior to such acquisition.






	•	 	Flip Over. If our Company is later acquired in a merger or similar transaction after the
Rights Distribution Date, all holders of Rights except the Acquiring Person may, for $40.00,
purchase shares of the acquiring entity with a market value of $80.00 based on the market
price of the acquiring entity’s stock, prior to such merger.





Preferred Share Provisions.




Each one one-hundredth of a Preferred Share, if issued:





	•	 	will not be redeemable.




C-2









 












	•	 	will entitle holders to quarterly dividend payments of $0.01 or an amount equal to the
dividend paid on one share of common stock, whichever is greater.






	•	 	will entitle holders upon liquidation either to receive $1.00 or an amount equal to the
payment made on one share of common stock, whichever is greater.






	•	 	will have the same voting power as one share of common stock.






	•	 	if shares of our common stock are exchanged via merger, consolidation, or a similar
transaction, will entitle holders to a per share payment equal to the payment made on one
share of common stock.




The value of one one-hundredth interest in a Preferred Share should approximate the value of one
share of common stock.



Expiration. The Rights will expire on July 27, 2016.



Redemption. Our Board may redeem the Rights for $0.01 per Right at any time before any person or
group becomes an Acquiring Person. If our Board redeems any Rights, it must redeem all of the
Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to receive
the redemption price of $0.01 per Right. The redemption price will be adjusted if we have a stock
split or stock dividends of our common stock.



Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns
50% or more of our outstanding common stock, our Board may extinguish the Rights by exchanging one
share of common stock or an equivalent security for each Right, other than Rights held by the
Acquiring Person.



Anti-Dilution Provisions. Our Board may adjust the purchase price of the Preferred Shares, the
number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that
may occur from a stock dividend, a stock split, a reclassification of the Preferred Shares or
common stock. No adjustments to the Exercise Price of less than 1% will be made.



Amendments. The terms of the Rights Agreement may be amended by our Board without the consent of
the holders of the Rights. However, our Board may not amend the Rights Agreement to lower the
threshold at which a person or group becomes an Acquiring Person to below 10% of our outstanding
common stock. In addition, the Board may not cause a person or group to become an Acquiring Person
by lowering this threshold below the percentage interest that such person or group already owns.
After a person or group becomes an Acquiring Person, our Board may not amend the agreement in a way
that adversely affects holders of the Rights.





C-3