EXHIBIT 4.1 

 

 

 

 

 

 

 

 

 







EXECUTION VERSION 

 

 

TAX ASSET PROTECTION PLAN

dated as of

January 14, 2013

between

KRISPY KREME DOUGHNUTS, INC. 

and 

AMERICAN STOCK TRANSFER & TRUST
COMPANY, LLC 

as Rights Agent 

 

 







TAX ASSET PROTECTION PLAN 

Table of Contents 

	      		      	      		      	Page
	ARTICLE I  		DEFINITIONS	 	2
		1.1		Definitions		2
	 	 
	ARTICLE II		THE RIGHTS		6
		2.1		Summary of Rights		6
		2.2		Legend		6
		2.3		Exercise of Rights; Separation of Rights		7
		2.4		Adjustments to Exercise Price; Number of
      Rights		9
		2.5	 	Date on Which Exercise is Effective		11
		2.6		Execution, Authentication, Delivery and
      Dating of Rights Certificates		11
		2.7		Registration, Registration of Transfer and Replacement		11
		2.8		Mutilated, Destroyed, Lost and Stolen
      Rights Certificates		12
		2.9		Persons Deemed Owners		13
		2.10		Delivery and Cancellation of
      Certificates		13
		2.11		Agreement of Rights Holders		13
		 
	ARTICLE III		ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN		
					TRANSACTIONS		14
		3.1		Flip-in		14
		 
	ARTICLE IV		THE RIGHTS AGENT		17
		4.1		General		17
		4.2		Merger or Consolidation or Change of
      Name of Rights Agent		18
		4.3		Duties of Rights Agent		18
		4.4		Change of Rights Agent		21
		 
	ARTICLE V		MISCELLANEOUS		21
		5.1		Redemption		21
		5.2		Expiration		22
		5.3		Process to Seek Exemption		22
		5.4		Issuance of New Rights
      Certificates		23
		5.5		Supplements and Amendments		23
		5.6		Fractional Shares		24
		5.7		Rights of Action		24
		5.8		Holder of Rights Not Deemed a
      Shareholder		24
		5.9		Notices		24
		5.10		Suspension of Exercisability or
      Exchangeability		25
		5.11		Costs of Enforcement		25
		5.12		Successors		25
		5.13		Benefits of this Agreement		25
		5.14		Determination and Actions by the Board
      of Directors, etc		26
		5.15		Descriptive Headings; Section References		26



-i- 







	      	5.16	      	Governing Law; Exclusive Jurisdiction	26
		5.17		Counterparts	27
		5.18	 	Severability	27
		5.19		Withholding
      Rights	27



EXHIBITS 


	Exhibit A	     	
      Form of Rights Certificate
      (together with Form of Election to Exercise)




-ii- 







TAX ASSET PROTECTION
PLAN 

     TAX ASSET
PROTECTION PLAN (as amended from time to time, this “Agreement”), dated as of
January 14, 2013, between KRISPY KREME DOUGHNUTS, INC., a North Carolina
corporation (including any successor hereunder, the “Company”), and AMERICAN
STOCK TRANSFER & TRUST COMPANY, LLC, as Rights Agent (the “Rights Agent”,
which term shall include any successor Rights Agent hereunder). 

WITNESSETH: 

    
WHEREAS, the Rights Agreement (the “Existing Rights Plan”), dated as of
January 14, 2010, between the Company and the Rights Agent will expire on the
close of business on January 14, 2013; 

    
WHEREAS, the Company is entering into this Agreement, which will become
effective immediately upon the expiration of the Existing Rights Plan;


    
WHEREAS, (a) the Company and certain of its Subsidiaries (as defined
below) have certain net operating losses and certain other tax attributes
(collectively, “NOLs”) for United States federal income tax purposes, (b) the
Company desires to avoid an “ownership change” within the meaning of Section 382
of the Internal Revenue Code of 1986, as amended (the “Code”), and thereby
preserve the Company’s ability to utilize such NOLs, and (c) in furtherance of
such objective, the Company desires to enter into this Agreement;

    
WHEREAS, the Board of Directors of the Company (the “Board of Directors”)
has (a) authorized and declared a dividend of one right (“Right”) in respect of
each share of Common Stock (as hereinafter defined) held of record as of the
Close of Business (as hereinafter defined) on January 24, 2013 (the “Record
Time”) payable in respect of each such share upon certification by the New York
Stock Exchange (the “NYSE”) to the Securities and Exchange Commission that the
Rights have been approved for listing and registration (the “Payment Time”) and
(b) as provided in Section 2.4, authorized the issuance of one Right in respect
of each share of Common Stock issued after the Record Time and prior to the
Separation Time (as hereinafter defined) and, to the extent provided in Section
5.4, each share of Common Stock issued after the Separation Time; 

    
WHEREAS, subject to the terms and conditions hereof, each Right entitles
the holder thereof, at or after the Separation Time, to purchase securities or
assets of the Company pursuant to the terms and subject to the conditions set
forth herein; and 

    
WHEREAS, the Company desires to appoint the Rights Agent to act on behalf
of the Company, and the Rights Agent is willing so to act, in connection with
the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein; 

    
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows: 

-1- 







ARTICLE I DEFINITIONS 

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

    
“Acquiring Person” shall mean any Person who is or becomes the Beneficial
Owner of 4.99% or more of the outstanding shares of Common Stock at any time
after the first public announcement of this Agreement; provided, however, that the term
“Acquiring Person” shall not include (i) any Person who is the Beneficial Owner
of 4.99% or more of the outstanding shares of Common Stock at the time of the
first public announcement of the adoption of this Agreement and who continuously
thereafter is the Beneficial Owner of 4.99% or more of the outstanding shares of
Common Stock (an “Existing Holder”), until such time thereafter as such Person
becomes the Beneficial Owner (other than by means of a stock dividend, stock
split or reclassification) of additional shares of Common Stock, (ii) any Person
who becomes the Beneficial Owner of 4.99% or more of the outstanding shares of
Common Stock after the time of the first public announcement of this Agreement
solely as a result of (A) an acquisition by the Company of shares of Common
Stock or (B) an acquisition directly from the Company in a transaction which
duly authorized officers of the Company have determined shall not result in the
creation of an Acquiring Person under the Agreement, until, in each case, such
time thereafter as such Person becomes the Beneficial Owner (other than by means
of a stock dividend, stock split or reclassification) of additional shares of
Common Stock while such Person is or as a result of which such Person becomes
the Beneficial Owner of 4.99% or more of the outstanding shares of Common Stock,
(iii) any Person who the Board of Directors determines, in its sole discretion,
has inadvertently become the Beneficial Owner of 4.99% or more of the
outstanding shares of Common Stock, if such Person promptly divests, or promptly
enters into an agreement with, and satisfactory to, the Board of Directors, in
the Board of Directors’ sole discretion, to divest, and subsequently divests in
accordance with the terms of such agreement (without exercising or retaining any
power, including voting power, with respect to such shares), sufficient shares
of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) so that such Person ceases to be the Beneficial
Owner of 4.99% or more of the outstanding shares of Common Stock or (iv) any
Person determined by the Board of Directors to be an “Exempt Person” in
accordance with Section 5.3 for so long as such Person complies with any
limitations or conditions required by the Board of Directors in making such
determination. In addition, the Company, any Subsidiary of the Company and any
employee stock ownership or other employee benefit plan of the Company or a
Subsidiary of the Company (or any entity or trustee holding shares of Common
Stock for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of the
Company or of any Subsidiary of the Company) shall not be an Acquiring Person.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, for purposes of determining the
particular percentage of such outstanding Common Stock of which any Person is
the Beneficial Owner, shall be made pursuant to and in accordance with Section
382 of the Code and the Treasury Regulations promulgated thereunder.

    
“Affiliate” shall have the meaning ascribed to such term in Rule 12b-2
under the Exchange Act, as such Rule is in effect on the date of this
Agreement.

-2- 







     A Person shall
be deemed the “Beneficial Owner”, and to have “Beneficial Ownership” of, and to
“Beneficially Own”, any securities (i) which such Person directly owns, (ii)
which such Person would be deemed to indirectly or constructively own for
purposes of Section 382 of the Code and the Treasury Regulations promulgated
thereunder or (iii) which any other Person Beneficially Owns, but only if such
Person and such other Person are part of the same group of Persons that, with
respect to such security, are treated as one “entity” as defined under Treasury
Regulation 1.382-3(a)(1). 

    
A Person shall not be deemed the “Beneficial Owner,” or to have
“Beneficial Ownership” of, and to “Beneficially Own,” any security (A) if such
beneficial ownership arises solely as a result of such Person’s status as a
“clearing agency” as defined in Section 3(a)(23) of the Exchange Act, (B) solely
because such security has been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person’s Affiliates or Associates until such
tendered security is accepted for payment or exchange, or (C) solely because
such Person or any of such Person’s Affiliates or Associates has or shares the
power to vote or direct the voting of such security pursuant to a revocable
proxy or consent given in response to a public proxy or consent solicitation
made to more than ten holders of shares of a class of stock of the Company
registered under Section 12 of the Exchange Act and pursuant to, and in
accordance with, the applicable rules and regulations under the Exchange Act,
unless such power (or the arrangements relating thereto) is then reportable
under Item 6 of Schedule 13D under the Exchange Act (or any similar provision of
a comparable or successor report). 

    
“Agreement” shall have the meaning set forth in the Preamble. 

    
“Board of Directors” shall have the meaning set forth in the Recitals and
includes any duly authorized committee thereof. 

    
“Business Day” shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in New York, New York are generally authorized or
obligated by law or executive order to close. 

    
“Close of Business” on any given date shall mean 5:00 p.m. Winston-Salem,
North Carolina time on such date or, if such date is not a Business Day, 5:00
p.m. Winston-Salem, North Carolina time on the next succeeding Business Day.


    
“Common Stock” shall mean the shares of Common Stock, no par value, of
the Company and shares of capital stock of the Company issued in exchange or
substitution for such Common Stock. 

    
“Company” shall have the meaning set forth in the preamble. 

    
“Election to Exercise” shall have the meaning set forth in Section
2.3(d).

    
“Excess Shares” shall have the meaning set forth in Section 3.1(a).


    
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended
from time to time.

-3- 







    
“Exchange Ratio” shall have the meaning set forth in Section 3.1(c).


    
“Exchange Time” shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c). 

    
“Exercise Price” shall mean, as of any date, the price at which a holder
may purchase the securities issuable upon exercise of one whole Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $45.00. 

    
“Expansion Factor” shall have the meaning set forth in Section 2.4(a).


    
“Expiration Time” shall mean the earliest of (i) the Exchange Time, (ii)
the Redemption Time, (iii) the Close of Business on the sixth anniversary of the
date of this Agreement and (iv) the time at which the Board of Directors
receives, at the Board of Directors’ request, a report from the Company’s
advisors that (x) the NOLs have been utilized in all material respects or are no
longer available in any material respect under Section 382 of the Code or any
applicable state law, in each case such that any remaining available NOLs are
not material relative to the total value of the NOLs to the Company as of the
date of this Agreement, or (y) an ownership change under Section 382 of the Code
would not adversely impact in any material respect the time period in which the
Company could use the NOLs, or materially impair the amount of the NOLs that
could be used by the Company in any particular time period relative to the total
value of the NOLS that the Company could use during such time period absent such
ownership change, for applicable tax purposes.

    
“Flip-in Date” shall mean any Stock Acquisition Date or such later date
and time as the Board of Directors may from time to time fix by resolution
adopted prior to the Flip-in Date that would otherwise have occurred.


    
“Independent Directors” shall mean those members of the Board of
Directors who meet the criteria for independent directors of the NYSE corporate
governance rules and any other applicable laws, rules and regulations regarding
independence in effect from time to time. 

    
“Market Price” per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however, that if any event
described in Section 2.4, or any analogous event, shall have caused the closing
prices used to determine the Market Price on any Trading Days during such period
of 20 Trading Days not to be fully comparable with the closing price on such
date, each such closing price so used shall be appropriately adjusted by the
Board of Directors in order to make it fully comparable with the closing price
on such date. The closing price per share of any securities on any date shall be
the last reported sale price, regular way, or, in case no such sale takes place
or is quoted on such date, the average of the closing bid and asked prices,
regular way, for each share of such securities, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the NYSE or, if the securities are not listed on the NYSE,
as reported on the NASDAQ Stock Market or, if the securities are not listed on
the NASDAQ Stock Market, as reported in the principal consolidated transaction
reporting system with respect to the principal national securities exchange on
which the securities are listed or admitted to trading or, if the securities are
not listed or admitted to trading on any national securities exchange, as
reported by such other quotation system then in use or, if on any such date the
securities are not listed or admitted to trading on any national securities
exchange or quoted by any such quotation system, the average of the closing bid
and asked prices in the over-the-counter market as furnished by a professional
market maker making a market in the securities selected by the Board of
Directors; provided, however, that if on any such date the securities are not
listed or admitted to trading on a national securities exchange or traded in the
over-the-counter market, the closing price per share of such securities on such
date shall mean the fair market value per share of such securities on such date
as determined in good faith by the Board of Directors, after consultation with a
nationally recognized investment banking firm, and set forth in a certificate
delivered to the Rights Agent.

-4- 







     “NOLs” shall
have the meaning set forth in the Recitals. 

    
“NYSE” shall have the meaning set forth in the recitals. 

    
“Payment Time” shall have the meaning set forth in the Recitals.


    
“Person” shall mean any individual, firm, partnership, limited liability
company, trust, association, limited liability partnership, corporation or other
“entity” within the meaning of Treasury Regulation Section 1.382-3(a)(1)(i) and
shall include any successor (by merger or otherwise) of any such entity.


    
“Preferred Stock” shall mean the series of Participating Preferred Stock,
no par value, of the Company.

    
“Record Time” shall have the meaning set forth in the
Recitals.

    
“Redemption Price” shall mean an amount equal to $0.01. 

    
“Redemption Time” shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 5.1. 

    
“Right” shall have the meaning set forth in the Recitals. 

    
“Rights Agent” shall have the meaning set forth in the Preamble.


    
“Rights Certificate” shall have the meaning set forth in Section 2.3(c).


    
“Rights Register” shall have the meaning set forth in Section 2.7(a).


    
“Separation Time” shall mean the next Business Day following the earlier
of (i) the tenth Business Day (or such later date as the Board of Directors may
from time to time fix by resolution adopted prior to the Separation Time that
otherwise would have occurred) after the date on which any Person commences a
tender or exchange offer that, if consummated, would result in such Person’s
becoming an Acquiring Person and (ii) the date of the first event causing a
Flip-in Date to occur; provided, that if the foregoing
results in the Separation Time being prior to the Record Time, the Separation
Time shall be the Record Time and provided further, that if any tender or
exchange offer referenced in clause (i) of this paragraph is cancelled,
terminated or otherwise withdrawn prior to the Separation Time without the
purchase of any shares of Common Stock pursuant thereto, such offer shall be
deemed, for purposes of this paragraph, never to have been made.

-5- 







     “Stock
Acquisition Date” shall mean the first date on which there shall be a public
announcement by the Company (by any means) that a Person has become an Acquiring
Person, which announcement makes express reference to such status as an
Acquiring Person pursuant to this Agreement. 

    
“Subsidiary” of any specified Person shall mean any corporation or other
entity of which a majority of the voting power of the equity securities or a
majority of the equity or membership interest is Beneficially Owned, directly or
indirectly, by such Person. 

    
“Trading Day,” when used with respect to any securities, shall mean a day
on which the NYSE is open for the transaction of business or, if such securities
are not listed or admitted to trading on the NYSE, a day on which the principal
national securities exchange on which such securities are listed or admitted to
trading is open for the transaction of business or, if such securities are not
listed or admitted to trading on any national securities exchange, a Business
Day. 

    
“Trading Regulation” shall have the meaning set forth in Section 2.3(c).


    
“Trust” shall have the meaning set forth in Section 3.1(c). 

    
“Trust Agreement” shall have the meaning set forth in Section 3.1(c).


    
“Vice President,” when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title “vice president.” 

ARTICLE II THE RIGHTS 

    
2.1 Summary of Rights. As soon as
practicable after the Record Time, the Company will mail a letter summarizing
the terms of the Rights to each holder of record of Common Stock as of the
Record Time, at such holder’s address as shown by the records of the Company.


    
2.2 Legend. Certificates for the Common
Stock issued on or after the Payment Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend: 

Until the Separation Time (as defined in the Agreement
referred to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Tax Asset Protection Plan, dated as
of January 14, 2013 (as such may be amended from time to time, the “Agreement”),
between Krispy Kreme Doughnuts, Inc. (the “Company”) and American Stock Transfer
& Trust Company, as Rights Agent, the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in the
Agreement, such Rights may be redeemed, may become exercisable for securities or
assets of the Company, may be exchanged for shares of Common Stock or other
securities or assets of the Company, may expire, may become null and void
(including if they are “Beneficially Owned” by an “Acquiring Person” or an
Affiliate thereof, as such terms are defined in the Agreement, or by any
transferee of any of the foregoing) or may be evidenced by separate certificates
and may no longer be evidenced by this certificate. The Company will mail or
arrange for the mailing of a copy of the Agreement to the holder of this
certificate without charge after the receipt of a written request
therefor. 

-6- 







     Certificates
representing shares of Common Stock that are issued and outstanding at the
Payment Time shall, together with the letter mailed pursuant to Section 2.1,
evidence one Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend. 

    
If the Common Stock issued on or after the Payment Time but prior to the
Separation Time shall be uncertificated, the registration of such Common Stock
on the stock transfer books of the Company shall evidence one Right for each
share of Common Stock represented thereby and the Company shall mail to every
Person that holds such Common Stock a confirmation of the registration of such
Common Stock on the stock transfer books of the Company, which confirmation will
have impressed, printed, written or stamped thereon or otherwise affixed thereto
the above legend. The Company shall mail or arrange for the mailing of a copy of
this Agreement to any Person that holds Common Stock, as evidenced by the
registration of the Common Stock in the name of such Person on the stock
transfer books of the Company, without charge, after the receipt of a written
request therefor. 

    
2.3 Exercise of Rights; Separation of Rights.

     (a)
Subject to Sections 3.1, 5.1 and 5.10 and subject
to adjustment as herein set forth, each Right will entitle the holder thereof,
at or after the Separation Time and prior to the Expiration Time, to purchase,
for the Exercise Price, one one-hundredth of a share of Preferred
Stock.

     (b)
Until the Separation Time, (i) no Right may be
exercised and (ii) each Right will be evidenced by the certificate for the
associated share of Common Stock (or, if the Common Stock shall be
uncertificated, by the registration of the associated Common Stock on the stock
transfer books of the Company and any confirmation thereof provided for in
Section 2.2), together, in the case of Common Stock issued and outstanding at
the Payment Time, with the letter mailed to the record holder thereof pursuant
to Section 2.1, and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter or confirmation)
of, such associated share. 

-7- 







     (c) Subject to the terms and conditions hereof, at or after the
Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised pursuant to Section 2.3(d) below; (ii) may be transferred independent
of shares of Common Stock and (iii) the Rights Agent will mail to each holder of
record of Common Stock (provided that the Board of Directors has not elected to
exchange all of the then outstanding Rights pursuant to Section 3.1(c)) as of
the Separation Time (other than any Person whose Rights have become null and
void pursuant to Section 3.1(b)), at such holder’s address as shown by the
records of the Company (the Company hereby agreeing to furnish copies of such
records to the Rights Agent for this purpose), (x) a certificate (a “Rights
Certificate”) in substantially the form of Exhibit A hereto appropriately
completed, representing the number of Rights held by such holder at the
Separation Time and having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law, rule or regulation or with any
rule or regulation of any national securities exchange or quotation system on
which the Rights may from time to time be listed or traded (“Trading
Regulation”), or to conform to usage, and (y) a disclosure statement describing
the Rights. Receipt of a Rights Certificate by any Person shall not preclude a
later determination that such Rights are null and void pursuant to Section
3.1(b). 

     (d)
Subject to the terms and conditions hereof,
Rights may be exercised on any Business Day at or after the Separation Time and
prior to the Expiration Time by submitting to the Rights Agent the Rights
Certificate evidencing such Rights with an Election to Exercise (an “Election to
Exercise”) substantially in the form attached to the Rights Certificate duly
executed and properly completed, accompanied by payment in cash, or by certified
or official bank check or money order payable to the order of the Company, of a
sum equal to the Exercise Price multiplied by the number of Rights being
exercised and a sum sufficient to cover any transfer tax or charge that may be
payable in respect of any transfer involved in the transfer or delivery of
Rights Certificates or the issuance or delivery of certificates (or, if
uncertificated, the registration on the stock transfer books of the Company) for
shares or depositary receipts (or both) in a name other than that of the holder
of the Rights being exercised. 

     (e)
Upon receipt of a Rights Certificate, with an
Election to Exercise accompanied by payment as set forth in Section 2.3(d), and
subject to the terms and conditions hereof, the Rights Agent will thereupon
promptly (i)(A) requisition from a transfer agent stock certificates evidencing
such number of shares or other securities to be purchased or, in the case of
uncertificated shares or other securities, requisition from a transfer agent a
notice setting forth such number of shares or other securities to be purchased
for which registration will be made on the stock transfer books of the Company
(the Company hereby irrevocably authorizing its transfer agents to comply with
all such requisitions), and (B) if the Company elects pursuant to Section 5.5
not to issue certificates (or effect registrations on the stock transfer books
of the Company) representing fractional shares, requisition from the depositary
selected by the Company depositary receipts representing the fractional shares
to be purchased (the Company hereby irrevocably authorizes each such depositary
agent to comply with such requisitions) or, when necessary to comply with this
Agreement, requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.6 and (ii) after receipt of such
certificates, depositary receipts, notices and/or cash, deliver the same to or
upon the order of the registered holder of such Rights Certificate, registered
(in the case of certificates, depositary receipts or notices) in such name or
names as may be designated by such holder. 

-8- 







     (f)
In case the holder of any Rights shall exercise
less than all of the Rights evidenced by such holder’s Rights Certificate, a new
Rights Certificate evidencing the Rights remaining unexercised will be issued by
the Rights Agent to such holder or to such holder’s duly authorized
assigns.

     (g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered (or
evidenced by registration on the stock transfer books of the Company) upon
exercise of Rights shall, at the time of delivery of the certificates (or
registration) for such shares (subject to payment of the Exercise Price), be
duly and validly authorized, executed, issued and delivered (or registered) and
fully paid and nonassessable; (ii) take all such action as may be necessary to
comply with any applicable requirements of the Securities Act of 1933, as
amended from time to time, or the Exchange Act, and the rules and regulations
thereunder, and any other applicable law, rule or regulation, in connection with
the issuance of any shares upon exercise of Rights; and (iii) pay when due and
payable any and all federal and state transfer taxes and charges that may be
payable in respect of the original issuance or delivery of the Rights
Certificates or of any shares issued upon the exercise of Rights,
provided,
that the Company shall not be required to pay any transfer tax or charge that
may be payable in respect of any transfer involved in the transfer or delivery
of Rights Certificates or the issuance or delivery of certificates (or the
registration) for shares in a name other than that of the holder of the Rights
being transferred or exercised. 

     (h)
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 the exercise or assignment of a Rights
Certificate unless the registered holder of such Rights Certificate shall have
(i) properly completed and duly signed the certificate following the form of
assignment or the form of election to exercise, as applicable, set forth on the
reverse side of the Rights Certificate surrendered for such exercise or
assignment. (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) thereof and of the Rights
evidenced thereby, and the Affiliates of such Beneficial Owner or former
Beneficial Owner, as the Company or the Rights Agent may reasonably request and
(iii) paid a sum sufficient to cover any tax or charge that may be imposed as
required under Section 2.3(d). 

    
2.4 Adjustments to Exercise Price; Number of Rights.

     (a)
In the event the Company shall at any time after
the Record Time and prior to the Separation Time (i) declare or pay a dividend
on Common Stock payable in Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares of Common Stock, (x) the Exercise Price in effect after such adjustment
will be equal to the Exercise Price in effect immediately prior to such
adjustment divided by the number of shares of Common Stock including any
fractional shares in lieu of which such holder received cash (the “Expansion
Factor”) that a holder of one share of Common Stock immediately prior to such
dividend, subdivision or combination would hold thereafter as a result thereof
and (y) each Right held prior to such adjustment will become that number of
Rights equal to the Expansion Factor, and the adjusted number of Rights will be
deemed to be distributed among the shares of Common Stock with respect to which
the original Rights were associated (if they remain outstanding) and the shares
issued in respect of such dividend, subdivision or combination, so that each
such share of Common Stock will have exactly one Right associated with it. Each
adjustment made pursuant to this paragraph shall be made as of the payment or
effective date for the applicable dividend, subdivision or
combination. 

-9- 







     In the event
that the Company shall at any time after the Record Time and prior to the
Separation Time issue any shares of Common Stock otherwise than in a transaction
referenced in the preceding paragraph, each such share of Common Stock so issued
shall automatically have one new Right associated with it, which Right shall be
evidenced by the certificate representing such share (or, if the Common Stock
shall be uncertificated, such Right shall be evidenced by the registration of
such Common Stock on the stock transfer books of the Company and the
confirmation thereof provided for in Section 2.2). Rights shall be issued by the
Company in respect of shares of Common Stock that are issued or sold by the
Company after the Separation Time only to the extent provided in Section 5.4.


     (b)
In the event that the Company shall at any time
after the Record Time and prior to the Separation Time issue or distribute any
securities or assets in respect of, in lieu of or in exchange for Common Stock
(other than pursuant to any non-extraordinary periodic cash dividend or a
dividend paid solely in Common Stock) whether by dividend, in a reclassification
or recapitalization (including any such transaction involving a merger,
consolidation or statutory share exchange), or otherwise, the Company shall make
such adjustments, if any, in the Exercise Price, number of Rights and/or
securities or other property purchasable upon exercise of Rights as the Board of
Directors, in its sole discretion, may deem to be appropriate under the
circumstances, and the Company and the Rights Agent shall amend this Agreement
as necessary to provide for such adjustments. 

     (c)
Each adjustment to the Exercise Price made
pursuant to this Section 2.4 shall be calculated to the nearest one hundredth of
a cent. Whenever an adjustment to the Exercise Price is made pursuant to this
Section 2.4, the Company shall (i) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment and (ii) promptly file with the Rights Agent and with each transfer
agent for the Common Stock a copy of such certificate. 

     (d)
Rights Certificates shall represent the right to
purchase the securities purchasable under the terms of this Agreement, including
any adjustment or change in the securities purchasable upon exercise of the
Rights, even though such certificates may continue to express the securities
purchasable at the time of issuance of the initial Rights Certificates.


-10- 







    
2.5 Date on Which Exercise is Effective.
Each Person in whose name any certificate for shares is issued (or registration
on the stock transfer books is effected) upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby at the Close of Business on the Business Day upon which the
Rights Certificate evidencing such Rights was duly surrendered and payment of
the Exercise Price for such Rights (and any applicable taxes and other
governmental charges payable by the exercising holder hereunder) was made;
provided,
however,
that if the date of such surrender and payment is a date upon which the stock
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 (or
registration) shall be dated, the next succeeding Business Day on which the
stock transfer books of the Company are open. 

    
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates.

     (a)
The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, Chief Executive Officer,
President or one of its Vice Presidents and by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile. 

    
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates. 

    
Promptly after the Separation Time, the Company will notify the Rights
Agent of such Separation Time and will deliver Rights Certificates executed by
the Company to the Rights Agent for countersignature, and, subject to Section
3.1(b), the Rights Agent shall manually or by facsimile countersign and deliver
such Rights Certificates to the holders of the Rights pursuant to Section
2.3(c). No Rights Certificate shall be valid for any purpose unless manually or
by facsimile countersigned by the Rights Agent. 

     (b)
Each Rights Certificate shall be dated the date
of countersignature thereof. 

    
2.7 Registration, Registration of Transfer and Replacement.

     (a)
After the Separation Time, the Company will cause
to be kept a register (the “Rights Register”) in which, subject to such
reasonable regulations as it may prescribe, the Company will provide for the
registration and transfer of Rights. The Rights Agent is hereby appointed
“Rights Registrar” for the purpose of maintaining the Rights Register for the
Company and registering Rights and transfers of Rights after the Separation Time
as herein provided. In the event that the Rights Agent shall cease to be the
Rights Registrar, the Rights Agent will have the right to examine the Rights
Register at all reasonable times after the Separation Time. 

    
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or replacement of any Rights Certificate,
and subject to the provisions of Sections 2.7(c) and 2.7(d), the Company will
execute, and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder’s instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so
surrendered. 

-11- 







     (b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or replacement of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange. 

     (c)
Every Rights Certificate surrendered for
registration of transfer or replacement shall be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company or the Rights Agent, as the case may be, duly executed by the holder
thereof or such holder’s attorney duly authorized in writing. As a condition to
the issuance of any new Rights Certificate under this Section 2.7, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto. 

     (d)
The Company shall not register the transfer or
replacement of any Rights that have become null and void under Section 3.1(b),
been exchanged under Section 3.1(c) or been redeemed under Section 5.1.


    
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.

     (a)
If any mutilated Rights Certificate is
surrendered to the Rights Agent prior to the Expiration Time, then, subject to
Sections 3.1(b), 3.1(c) and 5.1, the Company shall execute and the Rights Agent
shall countersign and deliver in replacement therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so
surrendered. 

     (b)
If there shall be delivered to the Company and
the Rights Agent prior to the Expiration Time (i) evidence to their satisfaction
of the destruction, loss or theft of any Rights Certificate and (ii) such
security or indemnity as may be required by them to save each of them and any of
their agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in
the absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen. 

     (c)
As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith. 

     (d)
Every new Rights Certificate issued pursuant to
this Section 2.8 in lieu of any destroyed, lost or stolen Rights Certificate
shall evidence an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Rights Certificate shall be at any
time enforceable by anyone, and, subject to Section 3.1(b) shall be entitled to
all the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder. 

-12- 







     2.9 Persons Deemed Owners. Prior to due
presentment of a Rights Certificate (or, prior to the Separation Time, the
associated Common Stock certificate or notice of transfer, if uncertificated)
for registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the Person in whose name such
Rights Certificate (or, prior to the Separation Time, such Common Stock
certificate or Common Stock registration, if uncertificated) is registered as
the absolute owner thereof and of the Rights evidenced thereby for all purposes
whatsoever, including the payment of the Redemption Price, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary. As
used in this Agreement, unless the context otherwise requires, the term “holder”
of any Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock). 

    
2.10 Delivery and Cancellation of Certificates. All Rights Certificates surrendered upon exercise or for registration
of transfer or exchange shall, if surrendered to any Person other than the
Rights Agent, be delivered to the Rights Agent and, in any case, shall be
promptly cancelled by the Rights Agent. The Company may at any time deliver to
the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder that the Company may have acquired in any
manner whatsoever, and all Rights Certificates so delivered shall be promptly
cancelled by the Rights Agent. No Rights Certificates shall be countersigned in
lieu of or in exchange for any Rights Certificates cancelled as provided in this
Section 2.10. Subject to applicable law and regulation, the Rights Agent shall
maintain in a retrievable database electronic records of all cancelled or
destroyed rights certificates which have been cancelled or destroyed by the
Rights Agent. The Rights Agent shall maintain such electronic records for the
time period required by applicable law and regulation. Upon written request of
the Company (and at the expense of the Company), the Rights Agent shall provide
to the Company or its designee copies of such electronic records relating to
rights certificates cancelled or destroyed by the Rights Agent. 

    
2.11 Agreement of Rights Holders. Every
holder of Rights by accepting the same consents and agrees with the Company and
the Rights Agent and with every other holder of Rights that: 

     (a)
prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock; 

     (b)
after the Separation Time, the Rights
Certificates will be transferable only on the Rights Register as provided
herein; 

     (c)
prior to due presentment of a Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate or
Common Stock registration, if uncertificated) for registration of transfer, the
Company, the Rights Agent and any agent of the Company or the Rights Agent may
deem and treat the Person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate or Common Stock
registration, if uncertificated) is registered as the absolute owner thereof and
of the Rights evidenced thereby for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the
contrary;

-13- 







     (d) Rights Beneficially Owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become null and
void; 

     (e)
this Agreement may be supplemented or amended
from time to time in accordance with its terms;

     (f)
the Board of Directors shall have the exclusive
power and authority delegated to it pursuant to Section 5.14;
and 

     (g)
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 as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency
commission, or any statute, rule regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation. 

ARTICLE III ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN
TRANSACTIONS 

    
3.1 Flip-in.

     (a)
In the event that prior to the Expiration Time a
Flip-in Date shall occur, except as otherwise provided in this Section 3.1, each
Right shall constitute the right to purchase from the Company, upon exercise
thereof in accordance with the terms hereof (but subject to Section 5.10), that
number of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date that gave rise to the Flip-in Date equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that on or after such Stock Acquisition Date any
of the events described in Section 2.4(a) or 2.4(b), or any analogous event,
shall have occurred with respect to the Common Stock); provided, however, that in connection
with any exercise effective pursuant to this Section 3.1(a), no holder of Rights
shall be entitled to receive Common Stock (or other shares of capital stock of
the Company) that would result in such holder, together with such holder’s
Affiliates, becoming the Beneficial Owner of more than 4.99% of the
then-outstanding Common Stock. If a holder would, but for the immediately
preceding proviso, be entitled to receive a number of shares that would
otherwise result in such holder, together with such holder’s Affiliates,
becoming the Beneficial Owner of in excess of 4.99% of the then-outstanding
Common Stock (such shares, the “Excess Shares”), then in lieu of receiving such
Excess Shares and to the extent permitted by law or orders applicable to the
Company, such holder will only be entitled to receive an amount in cash or, at
the election of the Company, a note or other evidence of indebtedness maturing
within nine months with a principal amount, equal to the current per share
Market Price of a share of Common Stock at the close of Business on the Trading
Day following the date of exercise multiplied by the number of Excess Shares
that would otherwise have been issuable to such holder. 

-14- 







     (b) Notwithstanding the foregoing, any Rights that are
Beneficially Owned on the Stock Acquisition Date by an Acquiring Person or an
Affiliate thereof shall become null and void and any holder of such Rights
(including transferees, whether direct or indirect, of any such Persons) shall
thereafter have no right to exercise or transfer such Rights. If any Rights
Certificate is presented for assignment or exercise and the Person presenting
the same will not complete the certification set forth at the end of the form of
assignment or notice of Election to Exercise or, if requested, will not provide
such additional evidence, including, without limitation, the identity of the
Beneficial Owners and their Affiliates (or former Beneficial Owners and their
Affiliates) as the Company or the Board of Directors shall reasonably request in
order to determine if such Rights are null and void, then the Company shall be
entitled conclusively to deem the Rights to be Beneficially Owned by an
Acquiring Person or an Affiliate thereof or a transferee of any of the foregoing
and accordingly deem the Rights evidenced thereby to be null and void and not
transferable, exercisable or exchangeable. 

     (c)
The Board of Directors may, at its option, at any
time after a Flip-in Date, and prior to the time that an Acquiring Person
becomes the Beneficial Owner of more than 50% of the outstanding shares of
Common Stock, elect to exchange all (but not less than all) of the then
outstanding Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 3.1(b)) for shares of Common Stock at
an exchange ratio of one share of Common Stock per Right, appropriately adjusted
in the event that after the Separation Time any of the events described in
Section 2.4(a) or 2.4(b), or any analogous event, shall have occurred with
respect to the Common Stock (such exchange ratio, as adjusted from time to time,
being hereinafter referred to as the “Exchange Ratio”).

    
Immediately upon the action of the Board of Directors electing to
exchange the Rights, without any further action and without any notice, the
right to exercise the Rights will terminate and each Right (other than Rights
that have become null and void pursuant to Section 3.1(b)), whether or not
previously exercised, will thereafter represent only the right to receive a
number of shares of Common Stock equal to the Exchange Ratio; provided, however, that in connection
with any exchange effected pursuant to this Section 3.1(c), no holder of Rights
shall be entitled to receive Common Stock (or other shares of capital stock of
the Company) that would result in such holder, together with such holder’s
Affiliates, becoming the Beneficial Owner of more than 4.99% of the
then-outstanding Common Stock. If a holder would, but for the immediately
preceding proviso, be entitled to receive Excess Shares, in lieu of receiving
such Excess Shares and to the extent permitted by law or orders applicable to
the Company, such holder will only be entitled to receive an amount in cash or,
at the election of the Company, a note or other evidence of indebtedness
maturing within nine months with a principal amount, equal to the current per
share Market Price of a share of Common Stock at the close of Business on the
Trading Day following the date the Board of Directors effects the forgoing
exchange multiplied by the number of Excess Shares that would otherwise have
been issuable to such holder. The exchange 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.
Promptly after the action of the Board of Directors electing to exchange the
Rights, the Company shall give notice thereof (specifying the steps to be taken
to receive shares of Common Stock in exchange for Rights) to the Rights Agent
and the holders of the Rights (other than Rights that have become null and void
pursuant to Section 3.1(b)) outstanding immediately prior thereto by mailing
such notice in accordance with Section 5.9. Before effecting an exchange
pursuant to this Section 3.1(c), the Board of Directors may direct the Company
to enter into a Trust Agreement in such form and with such terms as the Board of
Directors shall then approve (the “Trust Agreement”). If the Board of Directors
so directs, the Company shall enter into the Trust Agreement and shall issue to
the trust created by such agreement (the “Trust”), which Trust shall act as the
agent of the Company, all or some (as designated by the Board of Directors) of
the shares of Common Stock (or other securities) issuable pursuant to the
exchange, and all or some (as designated by the Board of Directors) holders of
Rights entitled to receive shares pursuant to the exchange shall be entitled to
receive such shares (and any dividends paid or distributions made thereon after
the date on which such shares are deposited in the Trust) only from the trust
and solely upon compliance with the relevant terms and provisions of the Trust
Agreement. Prior to effecting an exchange and registering shares of Common Stock
(or other such securities) in any Person’s name, including any nominee or
transferee of a Person, the Company may require (or cause the trustee of the
Trust to require), as a condition thereof, that any holder of Rights provide
evidence, including, without limitation, the identity of the Beneficial Owners
thereof and their Affiliates (or former Beneficial Owners thereof and their
Affiliates) as the Company shall reasonably request in order to determine if
such Rights are null and void. If any Person shall fail to comply with such
request, the Company shall be entitled conclusively to deem the Rights formerly
held by such Person to be null and void pursuant to Section 3.1(b) and not
transferable or exercisable or exchangeable in connection herewith. Any shares
of Common Stock or other securities issued at the direction of the Board of
Directors in connection herewith shall be validly issued, fully paid and
nonassessable shares of Common Stock or of such other securities (as the case
may be), and the Company shall be deemed to have received as consideration for
such issuance a benefit having a value that is at least equal to the aggregate
par value of the shares so issued. Approval by the Board of Directors of the
exchange shall constitute a determination by the Board of Directors that such
consideration is adequate. 

-15- 







     Each Person in
whose name any certificate for shares is issued (or for whom any registration on
the stock transfer books of the Company is made) upon the exchange of Rights
pursuant to this Section 3.1(c) or Section 3.1(d) shall for all purposes be
deemed to have become the holder of record of the shares represented thereby on,
and such certificate (or registration on the stock transfer books of the
Company) shall be dated (or registered as of), the Close of Business on the date
upon which the Rights Certificate evidencing such Rights was duly exchanged or
deemed exchanged by the Company) and payment of any applicable taxes and other
governmental charges payable by the holder was made; provided, however, that if the date of such
exchange and payment is a date upon which the stock 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 (or registration on the stock transfer
books of the Company) shall be dated (or registered as of), the next succeeding
Business Day on which the stock transfer books of the Company are open.


     (d)
Whenever the Company shall become obligated under
Section 3.1(a) or 3.1(c) to issue shares of Common Stock upon exercise of or in
exchange for Rights, the Company, as determined by the Board of Directors, may
substitute therefor shares of Preferred Stock, at a ratio of one one-hundredth
of a share of Preferred Stock for each share of Common Stock so issuable,
subject to adjustment.

-16- 







     (e) In the event that there shall not be sufficient treasury
shares or authorized but unissued shares of Common Stock or Preferred Stock of
the Company to permit the exercise in full of the Rights in accordance with
Section 3.1(a) or if the Company so elects to make the exchange referenced in
Section 3.1(c), to permit the issuance of all shares pursuant to the exchange,
the Company shall either (i) call a meeting of shareholders seeking approval to
cause sufficient additional shares to be authorized (provided that if such
approval is not obtained the Company will take the action specified in clause
(ii) of this sentence) or (ii) take such action as shall be or necessary to
ensure and provide, as and when and to the maximum extent permitted by
applicable law and any agreements or instruments in effect on the Stock
Acquisition Date (and remaining in effect) to which it is a party, that each
Right shall thereafter constitute the right to receive, (x) in the case of any
exercise in accordance with Section 3.1(a), at the Company’s option, either (A)
in return for the Exercise Price, debt or equity securities or other assets (or
a combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as may be required for the valid
issuance of securities or otherwise required by applicable law), debt or equity
securities or other assets (or a combination thereof) having a fair value equal
to the Exercise Price, or (y) in the case of an exchange of Rights in accordance
with Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a share
of Common Stock on the Flip-in Date times the Exchange Ratio in effect on the
Flip-in Date, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the Board of Directors, after consultation with a nationally recognized
investment banking firm. 

     (f)
The Company may, but shall not be required to,
make such changes in the Exercise Price, in addition to those required by
Section 3.1(a), as the Board considers to be advisable in order to avoid or
diminish any income tax to any holders of shares of Common Stock resulting from
any dividend or distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as such for income tax
purposes or for any other reason. 

ARTICLE IV THE RIGHTS AGENT 

    
4.1 General.

     (a)
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 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 administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted to be done by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability. 

-17- 







     (b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
certificate for securities (or registration on the stock transfer books of the
Company) purchasable upon exercise of Rights, Rights Certificate, certificate
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, verified or acknowledged, by
the proper Person or Persons. 

    
4.2 Merger or Consolidation or Change of Name of Rights Agent.

     (a)
Any Person into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any Person resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent is a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent,
will 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 4.4. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights 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 Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.

     (b)
In case at any time the name of the Rights Agent
is changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.

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

-18- 







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

     (b)
Whenever in the performance of its duties under
this Agreement the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the Chief Executive Officer, the President or any
Vice President and by the Treasurer or any Assistant Treasurer or the Secretary
or any Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate will be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate. 

     (c)
The Rights Agent will be liable hereunder only
for its own gross negligence, bad faith or willful misconduct. 

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

     (e)
The Rights Agent will not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due authorization, execution and delivery hereof by
the Rights Agent) or in respect of the validity or execution of any certificate,
if any, for securities purchasable upon exercise of Rights or Rights Certificate
(except its countersignature thereof); nor will it be responsible for any breach
by the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor will it be responsible for any change in the
exercisability or exchangeability of the Rights (including the Rights becoming
null and void pursuant to Section 3.1(b)) or any adjustment required under the
provisions of Section 2.4 or 3.1 or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and 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.

-19- 







     (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the Chief
Executive Officer, the President or any Vice President or the Secretary or any
Assistant Secretary or the Treasurer or any Assistant Treasurer of the Company,
and to apply to such persons for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered by it in
good faith in accordance with instructions of any such person. 

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

     (i)
The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent will 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 resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof. 

     (j)
Tax Compliance: 

     (A) The Rights Agent, on its own behalf
and on behalf of the Company, will comply with all applicable certification,
information reporting and withholding (including “backup” withholding)
requirements imposed by applicable tax laws, regulations or administrative
practice with respect to (i) any payments made hereunder and (ii) the issuance,
delivery, holding, transfer, redemption or exercise of Rights, Common Stock or
Preferred Stock hereunder. Such compliance shall include, without limitation,
the preparation and timely filing of required returns and the timely payment of
all amounts required to be withheld to the appropriate taxing authority or its
designated agent. 

     (B) The Rights Agent shall comply in
accordance with the terms hereof with any written direction received from the
Company with respect to the execution or certification of any required
documentation and the application of such requirements to particular payments or
holders or in other particular circumstances, and may for purposes of this
Agreement conclusively rely on any such direction in accordance with Section
4.3(g). 

     (C) The Rights Agent shall maintain all
appropriate records documenting compliance with such requirements, and shall
make such records available, on written request, to the Company or its
authorized representative within a reasonable period of time after receipt of
such request. 

-20- 







     4.4 Change of Rights Agent. The Rights
Agent may resign and be discharged from its duties under this Agreement upon 90
days’ notice (or such lesser notice as is acceptable to the Company) in writing
mailed to the Company and to each transfer agent of Common Stock by registered
or certified mail, and to the holders of the Rights in accordance with Section
5.9. The Company may remove the Rights Agent upon 30 days’ notice in writing,
mailed to the Rights Agent and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Rights in accordance
with Section 5.9. If the Rights Agent should resign or be removed or otherwise
become incapable of acting, the Company will appoint a successor to the Rights
Agent. If the Company fails to make such appointment within a period of 30 days
after such removal or the effectiveness of such resignation or after it has been
notified in writing of such incapacity by the incapacitated Rights Agent or by
the holder of any Rights (which holder shall, with such notice, submit such
holder’s Rights Certificate for inspection by the Company), then the holder of
any Rights may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a Person organized and doing business under
the laws of the United States or any state of the United States, in good
standing, which is authorized under such laws to exercise the powers of the
Rights Agent contemplated by this Agreement 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
$50,000,000. After appointment, the successor Rights Agent will 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 will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4, 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. 

ARTICLE V MISCELLANEOUS

    
5.1 Redemption.

     (a)
The Board of Directors may, at its option, at any
time prior to the Flip-in Date, elect to redeem all (but not less than all) the
then outstanding Rights at the Redemption Price and the Company, at its option,
may pay the Redemption Price either in cash or shares of Common Stock or other
securities of the Company deemed by the Board of Directors, in the exercise of
its sole discretion, to be at least equivalent in value to the Redemption
Price. 

     (b)
Immediately upon the action of the Board of
Directors electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right,
whether or not previously exercised, will thereafter represent only the right to
receive the Redemption Price in cash or securities, as determined by the Board
of Directors. Promptly after the Rights are redeemed, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice in accordance with Section
5.9. 

-21- 







     (c) The Independent Directors will evaluate this Agreement
annually to determine whether it continues to be in the best interests of the
Company’s shareholders. 

    
5.2 Expiration. The Rights and this
Agreement shall expire at the Expiration Time and no Person shall have any
rights pursuant to this Agreement or any Right after the Expiration Time,
except, if the Rights have been exchanged or redeemed, as provided in Section
3.1 or 5.1, respectively. 

    
5.3 Process to Seek Exemption. Any Person
who desires to effect any acquisition of Common Stock that might, if
consummated, result in such Person beneficially owning 4.99% or more of the
then-outstanding Common Stock (or, in the case of an Existing Holder, additional
shares of Common Stock) (a “Requesting Person”) may request that the Board of
Directors grant an exemption with respect to such acquisition under this
Agreement so that such Person would be deemed to be an “Exempt Person” under the
definition of Acquiring Person hereof for purposes of this Agreement (an
“Exemption Request”). An Exemption Request shall be in proper form and shall be
delivered by registered mail, return receipt requested, to the Secretary of the
Company at the principal executive office of the Company. The Exemption Request
shall be deemed made upon receipt by the Secretary of the Company. To be in
proper form, an Exemption Request shall set forth (i) the name and address of
the Requesting Person, (ii) the number and percentage of shares of Common Stock
then Beneficially Owned by the Requesting Person, together with all Affiliates
of the Requesting Person, and (iii) a reasonably detailed description of the
transaction or transactions by which the Requesting Person would propose to
acquire Beneficial Ownership of Common Stock aggregating 4.99% or more of the
then-outstanding Common Stock and the maximum number and percentage of shares of
Common Stock that the Requesting Person proposes to acquire. The Board of
Directors shall endeavor to respond to an Exemption Request within twenty (20)
Business Days after receipt of such Exemption Request; provided, that the
failure of the Board of Directors to make a determination within such period
shall be deemed to constitute the denial by the Board of Directors of the
Exemption Request. The Requesting Person shall respond promptly to reasonable
and appropriate requests for additional information from the Company or the
Board of Directors and its advisors to assist the Board of Directors in making
its determination. The Board of Directors shall only grant an exemption in
response to an Exemption Request if it receives, at the Board’s request, a
report from the Company’s advisors to the effect that the acquisition of
Beneficial Ownership of Common Stock by the Requesting Person does not create a
significant risk of material adverse tax consequences to the Company or the
Board of Directors otherwise determines in its sole discretion that the
exemption is in the best interests of the Company. Any exemption granted
hereunder may be granted in whole or in part, and may be subject to limitations
or conditions (including a requirement that the Requesting Person agree that it
will not acquire Beneficial Ownership of shares of Common Stock in excess of the
maximum number and percentage of shares approved by the Board of Directors), in
each case as and to the extent the Board of Directors shall determine necessary
or desirable to provide for the protection of the Company’s NOLs. Any Exemption
Request may be submitted on a confidential basis and, except to the extent
required by applicable law, the Company shall maintain the confidentiality of
such Exemption Request and determination of the Board of Directors with respect
thereto, unless the information contained in the Exemption Request or the
determination of the Board of Directors with respect thereto otherwise becomes
publicly available. The Exemption Request shall be considered and evaluated by
the Independent Directors who are also independent of the Requesting Person and
disinterested with respect to the Exemption Request, and the action of a
majority of such Independent Directors shall be deemed to be the determination
of the Board of Directors for purposes of such Exemption Request. Furthermore,
the Board of Directors shall approve within ten (10) Business Days of receiving
an Exemption Request as provided in this Section 5.3 of any proposed acquisition
that, together with other transactions contemplated by the Board of Directors,
does not cause any aggregate increase in the Beneficial Ownership of Persons
with Beneficial Ownership of 4.99% or more of (i) the Common Stock then
outstanding or (ii) any class of stock (as defined for purposes of Section 382
of the Code, or “Stock”) (other than Common Stock) then outstanding (a “Five
Percent Shareholder”) (as determined after giving effect to the proposed
Transfer) over the lowest Beneficial Ownership of Stock by such Five Percent
Shareholders (as determined immediately before the proposed acquisition) at any
time during the relevant testing period, in all cases for purposes of Section
382 of the Code.

-22- 







     5.4 Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the number or kind or class of shares of
stock purchasable upon exercise of Rights made in accordance with the provisions
of this Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock by the Company following the Separation Time and prior to
the Expiration Time pursuant to the terms of securities convertible or
redeemable into shares of Common Stock or to options, warrants or other rights
(other than any securities issued or issuable in connection with the exercise or
exchange of Rights), in each case issued or granted prior to, and outstanding
at, the Separation Time, the Company shall issue to the holders of such shares
of Common Stock, Rights Certificates representing the appropriate number of
Rights in connection with the issuance or sale of such shares of Common Stock;
provided,
however, in
each case, (i) no such Rights Certificate shall be issued, if, and to the extent
that, the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or to the
Person to whom such Rights Certificates would be issued, (ii) no such Rights
Certificates shall be issued if, and to the extent that, appropriate adjustment
shall have otherwise been made in lieu of the issuance thereof, and (iii) the
Company shall have no obligation to distribute Rights Certificates to any
Acquiring Person or Affiliate of an Acquiring Person or any transferee of any of
the foregoing. 

    
5.5 Supplements and Amendments. The
Company and the Rights Agent may from time to time supplement or amend this
Agreement without the approval of any holders of Rights in any respect. The
Rights Agent will duly execute and deliver any supplement or amendment hereto
requested by the Company, provided that any supplement or amendment (other than
to Article IV if the rights and obligations of the Rights Agent are adversely
affected) shall become effective immediately upon execution by the Company,
whether or not also executed by the Rights Agent.

-23- 







     5.6 Fractional Shares. If the Company
elects not to issue certificates representing (or register on the stock transfer
books of the Company) fractional shares upon exercise, redemption or exchange of
Rights, the Company shall, in lieu thereof, in the sole discretion of the Board
of Directors, either (a) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) pay to the
registered holder of such Rights the appropriate fraction of the Market Price
per share in cash. 

    
5.7 Rights of Action. Subject to the terms
of this Agreement (including Sections 3.1(b), 5.10 and 5.14), rights of action
in respect of this Agreement, other than rights of action vested solely in the
Rights Agent, the Board of Directors of the Company or the Company, are vested
in the respective holders of the Rights; and any holder of any Rights, without
the consent of the Rights Agent or of the holder of any other Rights, may, on
such holder’s own behalf and for such holder’s own benefit and the benefit of
other holders of Rights, 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 such holder’s Rights in the manner provided
in such holder’s Rights 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 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.


    
5.8 Holder of Rights Not Deemed a Shareholder. No holder, as such, of any Rights shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of shares or any other
securities that may at any time be issuable on the exercise of such Rights, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders, or to receive dividends or subscription
rights, or otherwise, until such Rights shall have been exercised or exchanged
in accordance with the provisions hereof. 

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

    
Krispy Kreme Doughnuts, Inc.
    
370 Knollwood Street
    
Winston-Salem, North Carolina 27103
     Attention: General Counsel

-24- 







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

     American Stock
Transfer & Trust Company, LLC
    
Operations Center 6201 15th Avenue
     Brooklyn, New York 11219
     Attention: Corporate Trust 

Notices or demands authorized or
required by this Agreement to be given or made by the Company or the Rights
Agent to or on the holder of any Rights shall be sufficiently given or made if
delivered or sent by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as it appears upon the registry books of the
Rights Agent or, prior to the Separation Time, on the registry books of the
transfer agent for the Common Stock. Any notice that is mailed in the manner
herein provided shall be deemed given on the date of mailing, whether or not the
holder receives the notice, except notice to the Company shall be effective only
upon receipt. 

    
5.10 Suspension of Exercisability or Exchangeability. To the extent that the Board of Directors determines in good
faith that some action will or need be taken pursuant to, or in order to
properly give effect to, Section 2.3, 3.1 or 4.4 or to comply with federal or
state securities laws or applicable Trading Regulations, the Company may suspend
the exercisability or exchangeability of the Rights for a reasonable period
sufficient to allow it to take such action or comply with such laws or Trading
Regulations. In the event of any such suspension, the Company shall issue as
promptly as practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice thereof
pursuant to Section 5.9 shall not be required. Upon such suspension, any rights
of action vested in a holder of Rights shall be similarly suspended.

    
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder. 

    
5.11 Costs of Enforcement. The Company
agrees that if the Company or any other Person the securities of which are
purchasable upon exercise of Rights fails to fulfill any of its obligations
pursuant to this Agreement, then the Company or such Person will reimburse the
holder of any Rights for the costs and expenses (including legal fees) incurred
by such holder in actions to enforce such holder’s rights pursuant to any Rights
or this Agreement. 

    
5.12 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. 

    
5.13 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 holders of the Rights any legal or equitable right,
remedy or claim under this Agreement and this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the holders of the
Rights. 

-25- 







    
5.14 Determination and Actions by the Board of Directors, etc. The Board of Directors shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the 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 or implementation of this Agreement, including the right to
determine the Rights to be null and voided pursuant to Section 3.1(b), after
taking into account the purpose of this Agreement and the Company’s interest
maintaining an orderly trading market in the outstanding shares of Common Stock.
All such actions, interpretations and determinations done or made by the Board
of Directors shall be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other Persons. 

    
5.15 Descriptive Headings; Section References. Descriptive headings appear herein for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Where a reference in this Agreement is made to a Section, such reference shall
be to a Section of this Agreement unless otherwise indicated. 

    
5.16 Governing Law; Exclusive Jurisdiction.


     (a)
THIS AGREEMENT, EACH RIGHT, AND EACH RIGHTS
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF NORTH CAROLINA AND FOR ALL PURPOSES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA
APPLICABLE TO CONTRACTS ENTERED INTO, MADE WITHIN, AND TO BE PERFORMED ENTIRELY
WITHIN THE STATE OF NORTH CAROLINA, WITHOUT GIVING EFFECT TO ANY CHOICE OR
CONFLICT OF LAWS PROVISIONS OR RULES THAT WOULD CAUSE THE APPLICATION OF LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF NORTH CAROLINA. 

     (b)
ANY SHAREHOLDER OR OTHER PARTY WHO SEEKS TO HAVE
ANY DISPUTE, CONTROVERSY, OR CLAIM WHATSOEVER REGARDING, ARISING OUT OF, OR IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHT, OR ANY RIGHTS CERTIFICATE ISSUED
HEREUNDER SHALL SEEK TO HAVE SUCH DISPUTE RESOLVED FINALLY AND EXCLUSIVELY IN
THE FORSYTH COUNTY SUPERIOR COURT OF NORTH CAROLINA BY A SPECIAL SUPERIOR COURT
JUDGE FOR COMPLEX BUSINESS CASES OF THE NORTH CAROLINA BUSINESS COURT, WHICH
COURT SHALL HAVE EXCLUSIVE JURISDICTION AND BE THE EXCLUSIVE VENUE TO HEAR ANY
SUCH DISPUTE. PURSUANT TO THE PROCEDURES SET FORTH IN N.C. GEN. STAT. SECTION
7A-45.4, ANY PARTY INITIATING SUCH A DISPUTE IRREVOCABLY AGREES TO DESIGNATE
SUCH DISPUTE AS A MANDATORY COMPLEX BUSINESS CASE AT THE EARLIEST TIME POSSIBLE.
ANY PARTY INITIATING SUCH A DISPUTE IRREVOCABLY SUBMITS TO THE MANDATORY
EXCLUSIVE JURISDICTION AND VENUE OF THE NORTH CAROLINA BUSINESS COURT SITTING IN
FORSYTH COUNTY, NORTH CAROLINA, IN CONNECTION WITH ACTIONS FOR EQUITABLE RELIEF
OR IN CONNECTION WITH ANY OTHER RELIEF SOUGHT. ANY PARTY TO SUCH A DISPUTE
WAIVES AND AGREES NOT TO PLEAD OR CLAIM ANY DEFENSE OF INCONVENIENT FORUM TO THE
MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT, WAIVES AND AGREES NOT TO
SEEK REMOVAL OF SUCH CASE TO FEDERAL COURT, AND FURTHER WAIVES ANY OBJECTION
THAT IT MAY NOW HAVE OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY PROCEEDING
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY RIGHT, OR ANY RIGHTS
CERTIFICATE ISSUED HEREUNDER IN THE NORTH CAROLINA BUSINESS COURT SITTING IN
FORSYTH COUNTY, NORTH CAROLINA. IF THE COURTS OF THE UNITED STATES OF AMERICA
SHOULD HAVE EXCLUSIVE JURISDICTION OVER ANY OTHER RIGHT OR CAUSE OF ACTION, THEN
ONLY FOR SUCH RIGHT OR CAUSE OF ACTION, JURISDICTION AND VENUE SHALL LIE
EXCLUSIVELY IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH
CAROLINA. 

-26- 







     5.17 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. 

    
5.18 Severability. If any term or provision
hereof or the application thereof to any circumstance shall, in any jurisdiction
and to any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions hereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or unenforceable.


    
5.19 Withholding Rights. In the event that
the Company, the Rights Agent or their agents determine that they are obligated
to withhold or deduct any tax or other governmental charge under any applicable
law on actual or deemed payments or distributions hereunder to a holder of the
Rights, Common Stock or other cash, securities or other property, the Company,
the Rights Agent or their agents shall be entitled, but not obligated, to (i)
deduct and withhold such amount by withholding a portion or all of the cash,
securities or other property otherwise deliverable or by otherwise using any
property (including, without limitation, Rights, Preferred Stock, Common Stock
or cash) that is owned by such holder, or (ii) in lieu of such withholding,
require any holder to make a payment to the Company, the Rights Agent or their
agents, in each case in such amounts as they deem necessary to meet their
withholding obligations, and in the case of (i) above, shall also be entitled,
but not obligated, to sell all or a portion of such withheld securities or other
property by public or private sale in such amounts and in such manner as they
deem necessary and practicable to pay such taxes and charges. 

[The
next page is the signature page]

-27- 







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


	KRISPY
      KREME DOUGHNUTS, INC.
	 
	By:	    
	/s/ Douglas R. Muir
	 	 	Name: 
      	Douglas R.
      Muir
			Title:	Chief Financial
      Officer
	 
	 
	AMERICAN STOCK TRANSFER &
	TRUST
      COMPANY, LLC
	 
	By:		/s/ Paula Caroppoli
			Name:	Paula
      Caroppoli
			Title:	Vice
      President










EXHIBIT A

Form of Rights Certificate


	
      Certificate No. W- 
	____________Rights


THE RIGHTS
ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE OPTION OF THE COMPANY,
ON THE TERMS SET FORTH IN THE RIGHTS PLAN. RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS PLAN) OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.


Rights Certificate 

KRISPY KREME DOUGHNUTS, INC. 

This certifies that _______________, or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the registered holder thereof, subject to the
terms, provisions and conditions of the Tax Asset Protection Plan, dated as of
January 14, 2013 (as amended from time to time, the “Rights Plan”), between
KRISPY KREME DOUGHNUTS, INC., a North Carolina corporation (the “Company”), and
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, a New York limited liability
trust company, as Rights Agent (the “Rights Agent”, which term shall include any
successor Rights Agent under the Rights Plan), to purchase from the Company at
any time after the Separation Time (as such term is defined in the Rights Plan)
and prior to the Expiration Time (as such term is defined in the Rights Plan),
one one-hundredth of a fully paid share of Series A Participating Cumulative
Preferred Stock, no par value (the “Preferred Stock”), of the Company (subject
to adjustment as provided in the Rights Plan) at the Exercise Price referred to
below, upon presentation and surrender of this Rights Certificate with the Form
of Election to Exercise duly executed at the principal office of the Rights
Agent in Brooklyn, New York. The Exercise Price shall initially be $45.00 per
Right and shall be subject to adjustment in certain events as provided in the
Rights Plan. 

     In certain
circumstances described in the Rights Plan, the Rights evidenced hereby may
entitle the registered holder thereof to purchase securities of the Company
other than Common Stock, Preferred Stock or assets of the Company, all as
provided in the Rights Plan. 

    
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Plan, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights Plan
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Rights Certificates. Copies of the Rights Plan
are on file at the principal office of the Company and are available without
cost upon written request. 

    
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised. 







     Subject to the
provisions of the Rights Plan, each Right evidenced by this Certificate may be
(a) redeemed by the Company under certain circumstances, at its option, at a
redemption price of $0.01 per Right or (b) exchanged by the Company under
certain circumstances, at its option, for one share of Common Stock (or one
one-hundredth of a share of Preferred Stock) per Right (or, in certain cases,
other securities or assets of the Company), subject in each case to adjustment
in certain events as provided in the Rights Plan. 

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

    
This Rights 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.

	Date: 
      	 



	ATTEST:	      	KRISPY KREME DOUGHNUTS, INC.
			 
			By	
	Secretary	 	Title:	
	 			
	Countersigned:			
	 			
	AMERICAN STOCK TRANSFER &			
	TRUST
      COMPANY, LLC			
	 			
	By 
    	 			
	Authorized Signature			



-2- 







[Form of Reverse Side of Rights
Certificate]

FORM OF ASSIGNMENT 

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

FOR VALUE RECEIVED ____________________
hereby sells, assigns and transfers unto 

	 
	(Please
      print name
	 
	and address
      of transferee)



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

	Dated: 
      	 	 , 
      	       	 	      	
	 
	Signature Guaranteed:			
					Signature
					(Signature must
      correspond to name
					as written upon
      the face of this
					Rights
      Certificate in every particular,
			 		without
      alteration or enlargement or
					any change
      whatsoever)



Signatures must be guaranteed by an
eligible guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee Medallion program), pursuant to Exchange Act Rule 17Ad-15. 

	 
	 
	(To be
      completed if true)



The undersigned hereby represents, for
the benefit of all holders of Rights and shares of Common Stock, that the Rights
evidenced by this Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person or an
Affiliate thereof (as defined in the Rights Plan). 


	
	Signature




-3- 







NOTICE 

     In the event
the certification set forth above is not completed in connection with a
purported assignment, the Company will deem the Beneficial Owner of the Rights
evidenced by the enclosed Rights Certificate to be an Acquiring Person or an
Affiliate thereof (as defined in the Rights Plan) or a transferee of any of the
foregoing and accordingly will deem the Rights evidenced by such Rights
Certificate to be void and not transferable or exercisable. 

-4- 







[To be attached to each Rights
Certificate]

FORM OF ELECTION TO
EXERCISE 

(To be executed if holder desires
to
exercise the Rights Certificate.) 

TO: KRISPY KREME DOUGHNUTS, INC.


     The
undersigned hereby irrevocably elects to exercise ____________________ whole                   Rights represented by
the attached Rights Certificate to purchase the shares of Series A Participating
Cumulative Preferred Stock issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of: 

		 
	      	Address:
	 	
		Social Security
      or Other Taxpayer
		Identification
      Number:
		 



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

		 
	      	Address:
	 	
		Social Security
      or Other Taxpayer
		Identification
      Number:
		 



	Dated: 
      	 	 , 
      	       	 	      	
	 
	Signature Guaranteed:			
					Signature
					(Signature must
      correspond to name
					as written upon
      the face of this
					Rights
      Certificate in every particular,
			 		without
      alteration or enlargement or
					any change
      whatsoever)



     Signatures
must be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved
signature guarantee Medallion program), pursuant to Exchange Act Rule 17Ad-15.


-5- 







	 
	 
	(To be
      completed if true)



    
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by the attached
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate thereof (as
defined in the Rights Plan). 


	
	Signature




	 
	 
	NOTICE



     In the event
the certification set forth above is not completed in connection with a
purported exercise, the Company will deem the Beneficial Owner of the Rights
evidenced by the attached Rights Certificate to be an Acquiring Person or an
Affiliate thereof (as defined in the Rights Plan) or a transferee of any of the
foregoing and accordingly will deem the Rights evidenced by such Rights
Certificate to be void and not transferable or exercisable. 

-6-