Document:

Autumn Run - Contract of Sale (Caspian)

 
Exhibit 10.47
  

PURCHASE AND SALE CONTRACT

BETWEEN

CENTURY PROPERTIES GROWTH FUND XXII, LP,

a Delaware limited partnership
 AS SELLER

AND

AUTUMN RUN APARTMENTS, LLC,

an Illinois limited liability company
 AS PURCHASER

 

 

 

AUTUMN RUN

1627 COUNTRY LAKES DRIVE

NAPERVILLE, ILLINOIS  60563

 
TABLE OF CONTENTS
 Page

 

	
 
	
ARTICLE I
	
DEFINED TERMS
	
1

	
 
	
ARTICLE II
	
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
	
1

	
 
	
2.1
	
Purchase and Sale
	
1

	
 
	
2.2
	
Purchase Price and Deposit
	
1

	
 
	
2.3
	
Escrow Provisions Regarding Deposit
	
2

	
 
	
ARTICLE III
	
FEASIBILITY PERIOD
	
3

	
 
	
3.1
	
Feasibility Period
	
3

	
 
	
3.2
	
Expiration of Feasibility Period
	
3

	
 
	
3.3
	
Conduct of Investigation
	
3

	
 
	
3.4
	
Purchaser Indemnification
	
4

	
 
	
3.5
	
Property Materials
	
5

	
 
	
3.6
	
Property Contracts
	
5

	
 
	
ARTICLE IV
	
TITLE
	
6

	
 
	
4.1
	
Title Documents
	
6

	
 
	
4.2
	
Survey
	
6

	
 
	
4.3
	
Permitted Exceptions
	
6

	
 
	
4.4
	
Subsequently Disclosed Exceptions
	
7

	
 
	
4.5
	
Assumed Encumbrances
	
7

	
 
	
4.6
	
Subsequently Disclosed Exceptions
	
9

	
 
	
4.7
	
Purchaser Financing
	
10

	
 
	
ARTICLE V
	
CLOSING
	
10

	
 
	
5.1
	
Closing Date
	
10

	
 
	
5.2
	
Seller Closing Deliveries
	
10

	
 
	
5.3
	
Purchaser Closing Deliveries
	
11

	
 
	
5.4
	
Closing Prorations and Adjustments
	
12

	
 
	
5.5
	
Post Closing Adjustments
	
15

	
 
	
ARTICLE VI
	
REPRESENTATIONS AND WARRANTIES OF SELLER AND
	
 

	
 
	
 
	
PURCHASER
	
15

	
 
	
6.1
	
Seller’s Representations
	
15

	
 
	
6.2
	
AS-IS
	
16

	
 
	
6.3
	
Survival of Seller’s Representations
	
17

	
 
	
6.4
	
Definition of Seller’s Knowledge
	
17

	
 
	
6.5
	
Representations and Warranties of Purchaser
	
18

	
 
	
ARTICLE VII
	
OPERATION OF THE PROPERTY
	
19

	
 
	
7.1
	
Leases and Property Contracts
	
19

	
 
	
7.2
	
General Operation of Property
	
19

	
 
	
7.3
	
Liens
	
19

	
 
	
7.4
	
Tax Appeals
	
19

	
 
	
ARTICLE VIII
	
CONDITIONS PRECEDENT TO CLOSING
	
20

	
 
	
8.1
	
Purchaser’s Conditions to Closing
	
20

	
 
	
8.2
	
Seller’s Conditions to Closing
	
20

	
 
	
ARTICLE IX
	
BROKERAGE
	
21

	
 
	
9.1
	
Indemnity
	
21

	
 
	
9.2
	
Broker Commission
	
21

	
 
	
ARTICLE X
	
DEFAULTS AND REMEDIES
	
22

	
 
	
10.1
	
Purchaser Default
	
22

	
 
	
10.2
	
Seller Default
	
23

	
 
	
ARTICLE XI
	
RISK OF LOSS OR CASUALTY
	
23

	
 
	
11.1
	
Major Damage
	
23

	
 
	
11.2
	
Minor Damage
	
24

	
 
	
11.3
	
Closing
	
24

	
 
	
11.4
	
Repairs
	
24

	
 
	
ARTICLE XII
	
EMINENT DOMAIN
	
24

	
 
	
12.1
	
Eminent Domain
	
24

	
 
	
ARTICLE XIII
	
MISCELLANEOUS
	
25

	
 
	
13.1
	
Binding Effect of Contract
	
25

	
 
	
13.2
	
Exhibits and Schedules
	
25

	
 
	
13.3
	
Assignability
	
25

	
 
	
13.4
	
Captions
	
25

	
 
	
13.5
	
Number and Gender of Words
	
25

	
 
	
13.6
	
Notices
	
25

	
 
	
13.7
	
Governing Law and Venue
	
28

	
 
	
13.8
	
Entire Agreement
	
28

	
 
	
13.9
	
Amendments
	
28

	
 
	
13.10
	
Severability
	
28

	
 
	
13.11
	
Multiple Counterparts/Facsimile Signatures
	
28

	
 
	
13.12
	
Construction
	
28

	
 
	
13.13
	
Confidentiality
	
28

	
 
	
13.14
	
Time of the Essence
	
29

	
 
	
13.15
	
Waiver
	
29

	
 
	
13.16
	
Attorneys’ Fees
	
29

	
 
	
13.17
	
Time Zone/Time Periods
	
29

	
 
	
13.18
	
1031 Exchange
	
29

	
 
	
13.19
	
No Personal Liability of Officers, Trustees or Directors of
	
 

	
 
	
 
	
Seller’s Partners
	
30

	
 
	
13.20
	
ADA Disclosure
	
30

	
 
	
13.21
	
No Recording
	
30

	
 
	
13.22
	
Relationship of Parties
	
30

	
 
	
13.23
	
Dispute Resolution
	
30

	
 
	
13.24
	
AIMCO Marks
	
31

	
 
	
13.25
	
Non-Solicitation of Employees
	
31

	
 
	
13.26
	
Survival
	
31

	
 
	
13.27
	
Multiple Purchasers
	
31

	
ARTICLE XIV
	
LEAD-BASED PAINT DISCLOSURE
	
31

	
 
	
14.1
	
Disclosure
	
31

								

 

 

 
EXHIBITS AND SCHEDULES
  

EXHIBITS
  

	
Exhibit A
	
Description of Land

	
Exhibit B
	
Form of Special Warranty Deed

	
Exhibit C
	
Form of Bill of Sale

	
Exhibit D
	
Form of General Assignment

	
Exhibit E
	
Form of Lease Assignment

	
Exhibit F
	
Form of Vender Termination Notice Letter

	
Exhibit G
	
Form of Tenant Notice Letter

	
Exhibit H
	
Lead Paint Disclosure

 
  

SCHEDULES
  

	
Schedule 1
	
Defined Terms

	
Schedule 2
	
List of Excluded Permits

	
Schedule 3
	
Excluded Fixtures and Tangible Personal Property

	
Schedule 4
	
List of Materials

	
Schedule 5
	
Certain Permitted Exceptions

 
  

 
PURCHASE AND SALE CONTRACT
 
THIS PURCHASE AND SALE CONTRACT (this “Contract”) is entered into as of the 15
th day of July, 2009 (the “Effective Date”), by and between CENTURY PROPERTIES GROWTH FUND XXII, LP, a Delaware limited partnership, having an address at 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 (“
Seller”), and AUTUMN RUN APARTMENTS, LLC, an Illinois limited liability company, having a principal address at 6538 Lonetree Boulevard, Rocklin, California 95765 (“
Purchaser”).
 NOW, THEREFORE, in consideration of mutual covenants set forth herein, Seller and Purchaser hereby agree as follows:

RECITALS
 
A.                 Seller owns the real estate located in DuPage County, Illinois, as more particularly described in
Exhibit A attached hereto and made a part hereof, and the improvements thereon, commonly known as Autumn Run.

B.                 Purchaser desires to purchase, and Seller desires to sell, such land, improvements and certain associated property, on the terms and conditions set forth below.

ARTICLE I

DEFINED TERMS
 Unless otherwise defined herein, any term with its initial letter capitalized in this Contract shall have the meaning set forth in
Schedule 1 attached hereto and made a part hereof.
 
ARTICLE II

PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
 
2.1       Purchase and Sale.

  Seller agrees to sell and convey the Property to Purchaser and Purchaser agrees to purchase the Property from Seller, all in accordance with the terms and conditions set forth in this Contract.

2.2       Purchase Price and Deposit.

  The total purchase price (“
Purchase Price”) for the Property shall be an amount equal to Twenty-Four Million Seven Hundred Forty Five Thousand  Dollars ($24,745,000.00), payable by Purchaser, as follows:

2.2.1    Concurrently with the execution of this Contract, Purchaser shall deliver to Fidelity National Title Insurance Company, having an address at 8450 E. Crescent Parkway, Suite 410, Greenwood Village, Colorado 80111, Attention: Valena Bloomquist, Tel: (303) 244-9198, Fax: (720) 489-7593 (“
Escrow Agent” or “Title Insurer”) an initial deposit (the “
Initial Deposit”) of Two Hundred Forty Five Thousand Dollars ($245,000.00) by wire transfer of immediately available funds (“
Good Funds”).
 
2.2.2    On or before the day that the Feasibility Period expires, Purchaser shall deliver to Escrow Agent an additional deposit (the “
Additional Deposit”) of Two Hundred Forty Five Thousand  Dollars ($245,000.00) by wire transfer of Good Funds.

2.2.3    At the Closing, subject to the occurrence of the Loan Assumption and Release, Purchaser shall receive a credit against the Purchase Price in the amount of the outstanding principal balance of the Notes, together with all accrued but unpaid interest (if any) thereon, as of the Closing Date (the “
Loan Balance”).
 
2.2.4    The balance of the Purchase Price for the Property shall be paid to and received by Escrow Agent by wire transfer of Good Funds no later than 10:00 a.m. on the Closing Date.

2.3       Escrow Provisions Regarding Deposit.

2.3.1    Escrow Agent shall hold the Deposit and make delivery of the Deposit to the party entitled thereto under the terms of this Contract.  Escrow Agent shall invest the Deposit in such short-term, high-grade securities, interest-bearing bank accounts, money market funds or accounts, bank certificates of deposit or bank repurchase contracts as Escrow Agent, in its discretion, deems suitable, and all interest and income thereon shall become part of the Deposit and shall be remitted to the party entitled to the Deposit pursuant to this Contract.

2.3.2    Escrow Agent shall hold the Deposit until the earlier occurrence of (i) the Closing Date, at which time the Deposit shall be applied against the Purchase Price, or released to Seller pursuant to
Section 10.1, or (ii) the date on which Escrow Agent shall be authorized to disburse the Deposit as set forth in
Section 2.3.3.  The tax identification numbers of the parties shall be furnished to Escrow Agent upon request.

2.3.3    If prior to the Closing Date either party makes a written demand upon Escrow Agent for payment of the Deposit, Escrow Agent shall give written notice to the other party of such demand.  If Escrow Agent does not receive a written objection from the other party to the proposed payment within 5 Business Days after the giving of such notice, Escrow Agent is hereby authorized to make such payment.  If Escrow Agent does receive such written objection within such 5-Business Day period, Escrow Agent shall continue to hold such amount until otherwise directed by written instructions from the parties to this Contract or a final judgment or arbitrator’s decision.  However, Escrow Agent shall have the right at any time to deliver the Deposit and interest thereon, if any, with a court of competent jurisdiction in the state in which the Property is located.  Escrow Agent shall give written notice of such deposit to Seller and Purchaser.  Upon such deposit, Escrow Agent shall be relieved and discharged of all further obligations and responsibilities hereunder.  Any return of the Deposit to Purchaser provided for in this Contract shall be subject to Purchaser’s obligations set forth in
Section 3.5.2.
 2.3.4    The parties acknowledge that Escrow Agent is acting solely as a stakeholder at their request and for their convenience, and that Escrow Agent shall not be deemed to be the agent of either of the parties for any act or omission on its part unless taken or suffered in bad faith in willful disregard of this Contract or involving gross negligence.  Seller and Purchaser jointly and severally shall indemnify and hold Escrow Agent harmless from and against all costs, claims and expenses, including reasonable attorney’s fees, incurred in connection with the performance of Escrow Agent’s duties hereunder, except with respect to actions or omissions taken or suffered by Escrow Agent in bad faith, in willful disregard of this Contract or involving gross negligence on the part of the Escrow Agent.

2.3.5    The parties shall deliver to Escrow Agent an executed copy of this Contract.  Escrow Agent shall execute the signature page for Escrow Agent attached hereto which shall confirm Escrow Agent’s agreement to comply with the terms of Seller’s closing instruction letter delivered at Closing and the provisions of this
Section 2.3.
 
2.3.6    Escrow Agent, as the person responsible for closing the transaction within the meaning of Section 6045(e)(2)(A) of the Internal Revenue Code of 1986, as amended (the “
Code”), shall file all necessary information, reports, returns, and statements regarding the transaction required by the Code including, but not limited to, the tax reports required pursuant to Section 6045 of the Code.  Further, Escrow Agent agrees to indemnify and hold Purchaser, Seller, and their respective attorneys and brokers harmless from and against any Losses resulting from Escrow Agent’s failure to file the reports Escrow Agent is required to file pursuant to this section.

ARTICLE III

FEASIBILITY PERIOD
 
3.1       Feasibility Period.

  Subject to the terms of Sections 
3.3 and 3.4 and the rights of Tenants under the Leases, from the Effective Date to and including August 5, 2009 (the “
Feasibility Period”), Purchaser, and its agents, contractors, engineers, surveyors, attorneys, and employees (collectively, “
Consultants”) shall, at no cost or expense to Seller, have the right from time to time to enter onto the Property to conduct and make any and all customary studies, tests, examinations, inquiries, inspections and investigations of or concerning the Property, review the Materials and otherwise confirm any and all matters which Purchaser may reasonably desire to confirm with respect to the Property and Purchaser’s intended use thereof (collectively, the “
Inspections”).
 
3.2       Expiration of Feasibility Period.

  If any of the matters in Section 
3.1 or any other title or survey matters are unsatisfactory to Purchaser for any reason, or for no reason whatsoever, in Purchaser’s sole and absolute discretion, then Purchaser shall have the right to terminate this Contract by giving written notice to that effect to Seller and Escrow Agent no later than 5:00 p.m. on or before the date of expiration of the Feasibility Period.  If Purchaser provides such notice, this Contract shall terminate and be of no further force and effect subject to and except for the Survival Provisions, and Escrow Agent shall return the Initial Deposit to Purchaser.  If Purchaser fails to provide Seller with written notice of termination prior to the expiration of the Feasibility Period, Purchaser’s right to terminate under this Section 
3.2 shall be permanently waived and this Contract shall remain in full force and effect, the Deposit shall be non-refundable, and Purchaser’s obligation to purchase the Property shall be conditional only as provided in Section 
8.1.
 
3.3       Conduct of Investigation.

  Purchaser shall not permit any mechanics’ or materialmen’s liens or any other liens to attach to the Property by reason of the performance of any work or the purchase of any materials by Purchaser or any other party in connection with any Inspections conducted by or for Purchaser.  Purchaser shall give reasonable advanced notice to Seller prior to any entry onto the Property and shall permit Seller to have a representative present during all Inspections conducted at the Property.  Purchaser shall take all reasonable actions and implement all protections necessary to ensure that all actions taken in connection
with the Inspections, and all equipment, materials and substances generated, used or brought onto the Property pose no material threat to the safety of persons, property or the environment.

3.4       Purchaser Indemnification.

3.4.1    Purchaser shall indemnify, hold harmless and, if requested by Seller (in Seller’s sole discretion), defend (with counsel approved by Seller) Seller, together with Seller’s affiliates, parent and subsidiary entities, successors, assigns, partners, managers, members, employees, officers, directors, trustees, shareholders, counsel, representatives, agents, Property Manager, Regional Property Manager, and AIMCO (collectively, including Seller, “
Seller’s Indemnified Parties”), from and against any and all damages, mechanics’ liens, materialmen’s liens, liabilities, penalties, interest, losses, demands, actions, causes of action, claims, costs and expenses (including reasonable attorneys’ fees, including the cost of in-house counsel and appeals) (collectively, “
Losses”) arising from or related to Purchaser’s or its Consultants’ entry onto the Property, and any Inspections or other acts by Purchaser or Purchaser’s Consultants with respect to the Property during the Feasibility Period or otherwise.

3.4.2    Notwithstanding anything in this Contract to the contrary, Purchaser shall not be permitted to perform any invasive tests on the Property without Seller’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  If Purchaser desires to perform any invasive tests, Purchaser shall give prior written notice thereof to Seller, which notice shall be accompanied by a reasonably detailed description and plan of the invasive tests Purchaser desires to perform (including the location of any soil penetrations, borings and the like).  Seller shall, within three (3) Business Days after receiving such notice from Purchaser, approve or disapprove such invasive testing.  If Seller fails to respond to Purchaser’s request within such three (3) Business Day period, Seller shall be deemed to have disapproved Purchaser’s request to perform such invasive testing.  Further, Seller shall have the right, without limitation, to disapprove any and all entries, surveys, tests (including, without limitation, a Phase II environmental study of the Property), investigations and other matters that in Seller’s reasonable judgment could result in any injury to the Property or breach of any contract, or expose Seller to any Losses or violation of applicable law, or otherwise adversely affect the Property or Seller’s interest therein.  Purchaser shall use reasonable efforts to minimize disruption to Tenants in connection with Purchaser’s or its Consultants’ activities pursuant to this Section.  No consent by Seller to any such activity shall be deemed to constitute a waiver by Seller or assumption of liability or risk by Seller.  Purchaser hereby agrees to restore, at Purchaser’s sole cost and expense, the Property to the same condition existing immediately prior to Purchaser’s exercise of its rights pursuant to this
Article III.  Purchaser shall maintain and cause its third party consultants to maintain (a) casualty insurance and commercial general liability insurance with coverages of not less than $1,000,000.00 for injury or death to any one person and $3,000,000.00 for injury or death to more than one person and $1,000,000.00 with respect to property damage, and (b) worker’s compensation insurance for all of their respective employees in accordance with the law of the state in which the Property is located.  Purchaser shall deliver proof of the insurance coverage required pursuant to this
Section 3.4.2 to Seller (in the form of a certificate of insurance) prior to the earlier to occur of (i) Purchaser’s or Purchaser’s Consultants’ entry onto the Property, or (ii) the expiration of 5 days after the Effective Date.

3.5       Property Materials.

3.5.1    Within 5 Business Days after the Effective Date, and to the extent the same exist and are in Seller’s possession or reasonable control (subject to Section 3.5.2) and have not been heretofore provided by Seller to Purchaser, Seller agrees to deliver to Purchaser the documents set forth on Schedule 4 (together with any other documents or information provided by Seller or its agents to Purchaser with respect to the Property, the “
Materials”), or, at Seller’s option, make the same available to Purchaser at the Property for review and copying by Purchaser at Purchaser’s sole cost and expense.  To the extent that Purchaser determines that any of the Materials have not been made available or delivered to Purchaser pursuant to this Section 3.5.1, Purchaser shall notify Seller and Seller shall use commercially reasonable efforts to deliver the same to Purchaser within 5 Business Days after such notification is received by Seller.

3.5.2    In providing the Materials to Purchaser, other than Seller’s Representations, Seller makes no representation or warranty, express, written, oral, statutory, or implied, and all such representations and warranties are hereby expressly excluded and disclaimed.  All Materials are provided for informational purposes only and, together with all Third-Party Reports, shall be returned by Purchaser to Seller (or the destruction thereof shall be certified in writing by Purchaser to Seller) as a condition to return of the Deposit to Purchaser if this Contract is terminated for any reason.   

3.5.3    In addition to the items set forth on Schedule 4, no later than 5 Business Days after the Effective Date, Seller shall deliver to Purchaser (or otherwise make available to Purchaser as provided under
Section 3.5.1) the most recent rent roll for the Property, which rent roll is that which Seller uses in the ordinary course of operating the Property (the “
Rent Roll”).  Seller makes no representations or warranties regarding the Rent Roll other than the express representation set forth in
Section 6.1.5.
 
3.5.4    In addition to the items set forth on Schedule 4, no later than 5 Business Days after the Effective Date, and to the extent same have not been heretofore provided by Seller to Purchaser, Seller shall deliver to Purchaser (or otherwise make available to Purchaser as provided under
Section 3.5.1) a list of all current Property Contracts (the “Property Contracts List”).  Seller makes no representations or warranties regarding the Property Contracts List other than the express representations set forth in
Section 6.1.6.
 
3.6       Property Contracts.

  On or before the expiration of the Feasibility Period, Purchaser may deliver written notice to Seller (the “
Property Contracts Notice”) specifying any Property Contracts which Purchaser desires to terminate at the Closing (the “
Terminated Contracts”); provided that (a) the effective date of such termination on or after Closing shall be subject to the express terms of such Terminated Contracts, (b) if any such Property Contract cannot by its terms be terminated at Closing, it shall be assumed by Purchaser and not be a Terminated Contract, and (c) to the extent that any such Terminated Contract requires payment of a penalty, premium, or damages, including liquidated damages, for cancellation, Purchaser shall be solely responsible for the payment of any such cancellation fees, penalties, or damages, including liquidated damages.  If Purchaser fails to deliver the Property Contracts Notice on or before the expiration of the Feasibility Period, there shall be no Terminated Contracts and Purchaser shall assume all Property Contracts at the Closing.  If Purchaser delivers the Property
Contracts Notice to Seller on or before the expiration of the Feasibility Period, then simultaneously therewith, Purchaser shall deliver to Seller a vendor termination notice (in the form attached hereto as Exhibit F) for each Terminated Contract informing the vendor(s) of the termination of such Terminated Contract as of the Closing Date (subject to any delay in the effectiveness of such termination pursuant to the express terms of each applicable Terminated Contract) (the “
Vendor Terminations”).  Seller shall sign the Vendor Terminations prepared by Purchaser, and deliver them to all applicable vendors.  To the extent that any Property Contract to be assigned to Purchaser requires vendor consent, then, prior to the Closing, Purchaser may attempt to obtain from each applicable vendor a consent (each a “
Required Assignment Consent”) to such assignment.  Purchaser shall indemnify, hold harmless and, if requested by Seller (in Seller’s sole discretion), defend (with counsel approved by Seller) Seller’s Indemnified Parties from and against any and all Losses arising from or related to Purchaser’s failure to obtain any Required Assignment Consent.

ARTICLE IV

TITLE
 
4.1       Title Documents.

  Purchaser acknowledges that prior to the Effective Date, Purchaser has received from Seller a commitment (“
Title Commitment”) for owner’s title insurance issued by Title Insurer and identified as File No. F220792, effective as of January 14, 2009, to provide a standard American Land Title Association owner’s title insurance policy for the Property, using the current policy jacket customarily provided by the Title Insurer, in an amount equal to the Purchase Price (the "
Title Policy"), together with copies of all instruments identified as exceptions therein (together with the Title Commitment, referred to herein as the "
Title Documents"). Seller shall be responsible only for payment of the base premium for the Title Policy.  Purchaser shall be solely responsible for payment of all other costs relating to procurement of the Title Commitment, the Title Policy, and any requested endorsements, including for “extended” coverage.

4.2       Survey.

  Purchaser acknowledges that prior to the Effective Date, Seller has delivered to Purchaser a copy of the existing survey of the Property, dated February 19, 2008, prepared by Bock & Clark. (the “
Existing Survey”).  Purchaser may, at its sole cost and expense, order a new or updated survey of the Property either before or after the Effective Date (such new or updated survey together with the Existing Survey, is referred to herein as the “
Survey”).
 
4.3       Permitted Exceptions.

  Purchaser shall purchase and accept title to the Property subject to the following, all of which shall be
deemed “Permitted Exceptions”:
 4.3.1    (i) All matters set forth on
Schedule 5 to this Contract, (ii) the title exceptions that the Title Insurer shall be willing to (A) omit as exceptions to coverage or (B) except with affirmative insurance (at no cost to Purchaser) against collection out of or enforcement against the Property with respect to the Title Policy, and omit as exceptions to coverage with respect to any lender’s mortgage insurance policy, (iii) the standard exceptions and provisions contained in the form of insuring agreement employed by the Title Insurer, and (iv) any exceptions and matters that are approved, waived or deemed to have been approved or waived by Purchaser under this Contract;

4.3.2    All Leases;
 4.3.3    The Assumed Encumbrances;

4.3.4    Applicable zoning and governmental regulations and ordinances; and

4.3.5    Any defects in or objections to title to the Property, or title exceptions or encumbrances, arising by, through or under Purchaser.

4.4       Subsequently Disclosed Exceptions.

 If at any time after the Effective Date, any update to the Title Commitment or Existing Survey discloses any additional item that materially adversely affects title to the Property which was not disclosed on any version of the Title Commitment or Existing Survey delivered to Purchaser and which is not a Permitted Exception (the "
New Exception"), Purchaser shall have a period of 5 days from the date of its receipt of such update (the "
New Exception Review Period") to review and notify Seller in writing of Purchaser's approval or disapproval of the New Exception.  If Purchaser disapproves of the New Exception, Seller may, in Seller's sole discretion, notify Purchaser as to whether it is willing to cure (or cause the Title Insurer omit as an exception to title insurance coverage or otherwise insure against collection against the Property) the New Exception.  If Seller elects to cure the New Exception, Seller shall be entitled to reasonable adjournments of the Closing Date to cure the New Exception.  If Seller fails to deliver a notice to Purchaser within 3 days after the expiration of the New Exception Review Period, Seller shall be deemed to have elected not to cure the New Exception.  If Purchaser is dissatisfied with Seller's response, or lack thereof, Purchaser may, as its exclusive remedy elect either:  (i) to terminate this Contract, in which event the Deposit shall be promptly returned to Purchaser or (ii) to waive the New Exception and proceed with the transactions contemplated by this Contract, in which event Purchaser shall be deemed to have approved the New Exception.  If Purchaser fails to notify Seller of its election to terminate this Contract in accordance with the foregoing sentence within 6 days after the expiration of the New Exception Review Period, Purchaser shall be deemed to have elected to approve and irrevocably waive any objections to the New Exception.

4.5       Assumed Encumbrances.

4.5.1    Purchaser recognizes and agrees that, in connection with two (2) loans (collectively, the "
Loans", each a “Loan”) made to Seller by Lender, the Property presently is encumbered by the Assumed Deeds of Trust and certain other security and related documents in connection with the Loans (collectively, the "
Assumed Encumbrances").  The Loans are evidenced by the Notes.  After the Effective Date, Seller agrees that it will deliver to Purchaser (in the same manner in which Seller is permitted to make the Materials available to Purchaser under
Section 3.5.1) copies of the Assumed Loan Documents (subject to Section 3.5.2).

4.5.2    Purchaser agrees that, at the Closing, (a) Purchaser shall assume Seller's obligations under the Notes and all of the other Assumed Loan Documents and accept title to the Property subject to the Assumed Deeds of Trust and the Assumed Encumbrances,
and (b) the Lender shall release Seller, as well as any guarantors and other obligated parties under the Assumed Loan Documents, from all obligations under the Assumed Loan Documents (and any related guarantees or letters of credit), including, without limitation, any obligation to make 
payments of principal and interest under the Notes (collectively, the foregoing (a) and (b) referred to herein as the "
Loan Assumption and Release").  Purchaser acknowledges and agrees that (x) certain of the provisions of the Assumed Loan Documents may have been negotiated for the exclusive benefit of Seller, AIMCO or their respective affiliates (the "
Specific AIMCO Provisions"), and (y) unless Lender otherwise agrees in Lender's sole and arbitrary discretion, Purchaser will not be permitted to assume the benefit of the Specific AIMCO Provisions and the same shall be of no further force or effect from and after the Closing Date.

4.5.3    Purchaser further acknowledges that the Assumed Loan Documents require the satisfaction by Purchaser of certain requirements as set forth therein to allow for the Loan Assumption and Release.  Accordingly, Purchaser, at its sole cost and expense and within 15 days after the Effective Date (the "
Loan Assumption Application Submittal Deadline"), shall satisfy the requirements set forth in the Assumed Loan Documents to allow for the Loan Assumption and Release, including, without limitation, submitting one or more complete application(s) to Lender for assumption of the Loans together with all documents and information required in connection therewith (collectively, the "
Loan Assumption Application").  Purchaser agrees to provide Seller with a copy of the Loan Assumption Application no later than 2 Business Days prior to the Loan Assumption Application Submittal Deadline and shall provide evidence of its submission to Lender on or before the Loan Assumption Application Submittal Deadline.  Purchaser acknowledges and agrees that Purchaser is solely responsible for the preparation and submittal of the Loan Assumption Application, including the collection of all materials, documents, certificates, financials, signatures, and other items required to be submitted to Lender in connection with the Loan Assumption Application.

4.5.4    Purchaser shall comply with Lender's assumption guidelines in connection with the Loan Assumption and Release and, if required by the Lender, Purchaser shall cause such other person or entity reasonably acceptable to the Lender to execute and deliver a “non-recourse carve-out” guaranty and environmental indemnity in favor of Lender.  Purchaser shall be responsible at its sole cost and expense for correcting and re-submitting any deficiencies noted by Lender in connection with the Loan Assumption Application no later than 3 Business Days after notification from Lender of such deficiency.  Purchaser also shall provide Seller with a copy of any correspondence from Lender with respect to the Loan Assumption Application no later than 3 Business Days after receipt of such correspondence from Lender.  Purchaser acknowledges that Lender's assumption guidelines may not be consistent with the provisions of the Assumed Loan Documents concerning the Loan Assumption and Release.  Purchaser shall coordinate with the Lender to comply with the appropriate provisions of both the Assumed Loan Documents and Lender assumption guidelines in order to allow for the Loan Assumption and Release.

4.5.5    Purchaser shall pay all fees and expenses (including, without limitation, all servicing fees and charges, transfer fees, assumption fees, title fees, endorsement fees, and other fees to release Seller of all liability under the Loans) imposed or charged by the Lender or its counsel (such fees and expenses collectively being referred to as the "
Lender Fees"), in connection with the Loan Assumption Application and the Loan Assumption and Release.

 4.5.6    Seller shall assign all of its right, title and interest in and to all reserves, impounds and other accounts held by Lender in connection with the Loans, and at Closing,
Purchaser shall pay to Seller an amount equal to the balance of such reserves, impounds and accounts so assigned.  Additionally, Purchaser shall be responsible for funding any additional or increased reserves, impounds or accounts required by Lender to be maintained by Purchaser in connection with the Loans after the Loan Assumption and Release (the "
Required Loan Fund Amounts").
 4.5.7    Purchaser agrees promptly to deliver to the Lender all documents and information required by the Assumed Loan Documents, and such other information or documentation as the Lender reasonably may request, including, without limitation, financial statements, income tax returns and other financial information for Purchaser and any required guarantor.  Seller agrees that it will cooperate with Purchaser and Lender in connection with Purchaser’s application to Lender for approval of the Loan Assumption and Release.

4.5.8    No later than 10 days after the Effective Date, Purchaser shall order a Phase I Environmental study and a property condition report (each prepared by engineers and/or consultants reasonably acceptable to Lender), and covenants that such Phase I Environmental study and property condition report shall be delivered to Seller and Lender no later than 10 days prior to the Closing Date in connection with and as a precondition to the Loan Assumption and Release.

4.5.9    If (a) Purchaser complies in all material respects with its obligations under this Contract (including this
Section 4.5) and the requirements of the Assumed Loan Documents in connection with obtaining the Loan Assumption and Release, (b) Purchaser uses commercially reasonable efforts to diligently obtain the Loan Assumption and Release, and (c) Purchaser is unable to obtain the consent of the Lender to the Loan Assumption and Release on or before August 31, 2009 (the “
Loan Assumption Approval Period”), then Purchaser shall have the right, on or before the expiration of the Loan Assumption Approval Period to give Seller and Escrow Agent notice terminating this Contract based solely on the fact that the Loan Assumption and Release has not been approved by the Lender, in which event this Contract shall be of no further force and effect, subject to and except for the Survival Provisions, and Escrow Agent shall forthwith return the Deposit to Purchaser.

4.5.10  Purchaser shall be in default hereunder if (i) Purchaser fails to submit a complete Loan Assumption Application by the Loan Assumption Application Submittal Deadline, (ii) Purchaser fails to use commercially reasonable efforts to diligently obtain Lender's consent to the Loan Assumption and Release during the Loan Assumption Approval Period or (iii) the Loan Assumption Approval Period expires, Purchaser is entitled to, but does not terminate this Contract, and thereafter Purchaser fails to obtain the Loan Assumption and Release prior to the Closing Date, in which event Seller may terminate this Contract and the Deposit shall be immediately released by the Escrow Agent to Seller.

4.6       Subsequently Disclosed Exceptions.

  If at any time after the expiration of the Feasibility Period, any update to the Title Commitment discloses any additional item that materially adversely affects title to the Property which was not disclosed on any version of or update to the Title Commitment delivered to Purchaser during the Feasibility Period (the “
New Exception”), Purchaser shall have a period of 5 days from the date of its receipt of such update (the “
New Exception Review Period”) to review and notify Seller in writing of Purchaser’s
approval or disapproval of the New Exception.  If Purchaser disapproves of the New Exception, Seller may, in Seller’s sole discretion, notify Purchaser as to whether it is willing to cure (or cause the Title Insurer to omit as an exception to title insurance coverage or otherwise insure against collection against the Property) the New Exception.  If Seller elects to cure the New Exception, Seller shall be entitled to reasonable adjournments of the Closing Date to cure the New Exception.  If Seller fails to deliver a notice to Purchaser within 3 days after the expiration of the New Exception Review Period, Seller shall be deemed to have elected not to cure the New Exception.  If Purchaser is dissatisfied with Seller’s response, or lack thereof, Purchaser may, as its exclusive remedy elect either:  (i) to terminate this Contract, in which event the Deposit shall be promptly returned to Purchaser or (ii) to waive the New Exception and proceed with the transactions contemplated by this Contract, in which event Purchaser shall be deemed to have approved the New Exception.  If Purchaser fails to notify Seller of its election to terminate this Contract in accordance with the foregoing sentence within 6 days after the expiration of the New Exception Review Period, Purchaser shall be deemed to have elected to approve and irrevocably waive any objections to the New Exception.

4.7       Purchaser Financing. 

  Except as otherwise provided in
Section 4.5.9 above with respect to the Loan Assumption and Release, Purchaser assumes full responsibility to obtain the funds required for settlement, and Purchaser’s acquisition of such funds shall not be a contingency to the Closing.

ARTICLE V

CLOSING
 
5.1       Closing Date.

  The Closing shall occur on the date (the “
Closing Date”) which is fifteen (15) days after the date of Purchaser’s receipt of Lender’s approval of the Loan Assumption and Release, but in no event shall the Closing occur later than September 30, 2009.  The Closing shall occur at the time set forth in
Section 2.2.4 through an escrow with Escrow Agent, whereby Seller, Purchaser and their attorneys need not be physically present at the Closing and may deliver documents by overnight air courier or other means.  Notwithstanding the foregoing to the contrary, Seller shall have the option, by delivering written notice to Purchaser, to extend the Closing Date to the last Business Day of the month in which the Closing Date otherwise would occur pursuant to the preceding sentence, in connection with the Loan Assumption and Release.
  Further, the Closing Date may be extended without penalty at the option of Seller to a date following the Closing Date specified in the first sentence of this paragraph above (or, if applicable, as extended by Seller pursuant to the second sentence of this paragraph) in order to finalize the drafting with Lender and Lender’s counsel of all documents necessary or desirable to accomplish the Loan Assumption and Release.

5.2       Seller Closing Deliveries.

  On or before the Closing Date, Seller shall deliver to Escrow Agent, each of the following items:

5.2.1    Special Warranty Deed (the “Deed”) in the form attached as
Exhibit B to Purchaser, subject to the Permitted Exceptions.
 5.2.2    A Bill of Sale in the form attached as
Exhibit C.
 
5.2.3    A General Assignment in the form attached as
Exhibit D (the “General Assignment”).
 
5.2.4    An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the “Leases Assignment”).
 5.2.5    Seller’s countersigned counterpart to the closing statement prepared by Title Insurer.

5.2.6    A title affidavit or an indemnity form reasonably acceptable to Seller, which is sufficient to enable Title Insurer to delete the standard pre-printed exceptions to the title insurance policy to be issued pursuant to the Title Commitment.

5.2.7    A certification of Seller’s non-foreign status pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended.

5.2.8    Resolutions, certificates of good standing, and such other organizational documents as Title Insurer shall reasonably require evidencing Seller’s authority to consummate this transaction.

5.2.9    An updated Rent Roll effective as of a date no more than 3 Business Days prior to the Closing Date; provided, however, that the content of such updated Rent Roll shall in no event expand or modify the conditions to Purchaser’s obligation to close as specified under
Section 8.1.
 
5.2.10  An updated Property Contracts List effective as of a date no more than 3 Business Days prior to the Closing Date; provided, however, that the content of such updated Property Contracts List shall in no event expand or modify the conditions to Purchaser’s obligation to close as specified under
Section 8.1.
 5.2.11  All real estate transfer tax declarations and returns, in accordance with state and local requirements.

5.2.12  Such other documents as are reasonably necessary to consummate the transactions herein contemplated in accordance with the terms of the Contract.

5.3       Purchaser Closing Deliveries.

  On or before the Closing Date, Purchaser shall deliver to the Escrow Agent (for disbursement to Seller upon the Closing) the following items:

5.3.1    The full Purchase Price (with credit for the Deposit and, if applicable, the Loan Balance), plus or minus the adjustments or prorations required by this Contract.

5.3.2    Purchaser’s countersigned counterpart to the closing statement prepared by Title Insurer..

5.3.3    A countersigned counterpart of the General Assignment.

5.3.4    A countersigned counterpart of the Leases Assignment.

5.3.5    Notification letters to all Tenants prepared and executed by Purchaser in the form attached hereto as
Exhibit G, which shall be delivered to all Tenants by Purchaser immediately after Closing.  

5.3.6    Any cancellation fees or penalties due to any vendor under any Terminated Contract as a result of the termination thereof.

5.3.7    Resolutions, certificates of good standing, and such other organizational documents as Title Insurer shall reasonably require evidencing Purchaser’s authority to consummate this transaction.

5.3.8    All documents, instruments, guaranties, Lender Fees, Required Loan Fund Amounts, and other items or funds required by the Lender to cause the Loan Assumption and Release.

5.3.9    All real estate transfer tax declarations and returns, in accordance with state and local requirements.

5.3.10  Such other documents as are reasonably necessary to consummate the transactions herein contemplated in accordance with the terms of the Contract.

5.4       Closing Prorations and Adjustments.

5.4.1    General.  All normal and customarily proratable items, including, without limitation, collected rents, operating expenses, personal property taxes, other operating expenses and fees, shall be prorated as of the Closing Date, Seller being charged or credited, as appropriate, for all of same attributable to the period up to the Closing Date (and credited for any amounts paid by Seller attributable to the period on or after the Closing Date, if assumed by Purchaser) and Purchaser being responsible for, and credited or charged, as the case may be, for all of the same attributable to the period on and after the Closing Date.  Seller shall prepare a proration schedule (the “
Proration Schedule”) of the adjustments described in this Section 5.4 prior to Closing.

5.4.2    Operating Expenses.  All of the operating, maintenance, taxes (other than real estate taxes), and other expenses incurred in operating the Property that Seller customarily pays, and any other costs incurred in the ordinary course of business for the management and operation of the Property, shall be prorated on an accrual basis.  Seller shall pay all such expenses that accrue prior to the Closing Date and Purchaser shall pay all such expenses that accrue from and after the Closing Date.

5.4.3   
Utilities.  The final readings and final billings for utilities will be made if possible as of the Closing Date, in which case Seller shall pay all such bills as of the Closing Date and no proration shall be made at the Closing with respect to utility bills.  Otherwise, a proration shall be made based upon the parties’ reasonable good faith estimate.  Seller shall be entitled to the return of any deposit(s) posted by it with any utility company, and Seller shall notify each utility company serving the Property to terminate Seller’s account, effective as of noon on the Closing Date.

5.4.4    Real Estate Taxes.  Unpaid real estate taxes with respect to the Property shall be prorated to the date of Closing based upon the actual days of ownership of the Property.  Seller shall pay to the applicable taxing authority, or credit to Purchaser at Closing, an amount equal to unpaid real estate taxes for the calendar year immediately prior to the year in which Closing occurs.  In addition, Seller shall credit to Purchaser at Closing an amount equal to the number of days Seller owned the Property during the year in which Closing occurs multiplied by the per diem amount of real estate taxes for such year; provided, however, that in the event actual real estate taxes for the year in which Closing occurs are not known as of the Closing Date, the credit to Purchaser at Closing for prorated real estate taxes for the year in which Closing occurs shall be determined using the per diem amount of real estate taxes from the preceding year (assuming payment at the earliest time to allow for the maximum possible discount).  The proration of real property taxes or installments of assessments shall be final and not subject to adjustment after Closing. 

5.4.5   
Property Contracts.  Purchaser shall assume at Closing the obligations under the Property Contracts assumed by Purchaser; however, operating expenses shall be prorated under
Section 5.4.2.
 5.4.6   
Leases.
 
5.4.6.1 All collected rent (whether fixed monthly rentals, additional rentals, escalation rentals, retroactive rentals, operating cost pass-throughs or other sums and charges payable by Tenants under the Leases), income and expenses from any portion of the Property shall be prorated as of the Closing Date.  Purchaser shall receive all collected rent and income attributable to dates from and after the Closing Date.  Seller shall receive all collected rent and income attributable to dates prior to the Closing Date.  Notwithstanding the foregoing, no prorations shall be made in relation to either (a) non-delinquent rents which have not been collected as of the Closing Date, or (b) delinquent rents existing, if any, as of the Closing Date (the foregoing (a) and (b) referred to herein as the “
Uncollected Rents”).  In adjusting for Uncollected Rents, no adjustments shall be made in Seller’s favor for rents which have accrued and are unpaid as of the Closing, but Purchaser shall pay Seller such accrued Uncollected Rents as and when collected by Purchaser.  Purchaser agrees to bill Tenants of the Property for all Uncollected Rents and to take reasonable actions to collect Uncollected Rents.  Notwithstanding the foregoing, Purchaser’s obligation to collect Uncollected Rents shall be limited to Uncollected Rents of not more than 90 days past due, and Purchaser’s collection of rents shall be applied, first, towards current rent due and owing under the Leases, and second, to Uncollected Rents.  After the Closing, Seller shall continue to have the right, but not the obligation, in its own name, to demand payment of and to collect Uncollected Rents owed to Seller by any Tenant, which right shall include, without limitation, the right to continue or commence legal actions or proceedings against any Tenant and the delivery of the Leases Assignment shall not constitute a waiver by Seller of such right; provided however, that the foregoing right of Seller shall be limited to actions seeking monetary damages and, in no event, shall Seller seek to evict any Tenants in any action to collect Uncollected Rents.  Purchaser agrees to cooperate with Seller in connection with all efforts by Seller to collect such Uncollected Rents and to take all steps, whether before or after the Closing Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to Seller, within 7 days after a written request, of any relevant books and records (including, without limitation, rent statements, 
receipted bills and copies of tenant checks used in payment of such rent), the execution of any and all consents or other documents, and the undertaking of any act reasonably necessary for the collection of such Uncollected Rents by Seller; provided, however, that Purchaser’s obligation to cooperate with Seller pursuant to this sentence shall not obligate Purchaser to terminate any Tenant lease with an existing Tenant or evict any existing Tenant from the Property.

5.4.6.2 At Closing, Purchaser shall receive a credit against the Purchase Price in an amount equal to the received and unapplied balance of all cash (or cash equivalent) Tenant Deposits, including, but not limited to, security, damage, pet or other refundable deposits paid by any of the Tenants to secure their respective obligations under the Leases, together, in all cases, with any interest payable to the Tenants thereunder as may be required by their respective Tenant Lease or state law (the “
Tenant Security Deposit Balance”).  Any cash (or cash equivalents) held by Seller which constitutes the Tenant Security Deposit Balance shall be retained by Seller in exchange for the foregoing credit against the Purchase Price and shall not be transferred by Seller pursuant to this Contract (or any of the documents delivered at Closing), but the obligation with respect to the Tenant Security Deposit Balance nonetheless shall be assumed by Purchaser.  The Tenant Security Deposit Balance shall not include any non-refundable deposits or fees paid by Tenants to Seller, either pursuant to the Leases or otherwise.

5.4.7   
Existing Loan.  Seller shall be responsible for all principal required to be paid under the terms of the Notes prior to Closing, together with all interest accrued under the Notes prior to Closing, all of which may be a credit against the Purchase Price as provided in
Section 2.2.3.  Purchaser shall be responsible for all Lender Fees and all other fees, penalties, interest and other amounts due and owing under the Assumed Loan Documents as a result of the Loan Assumption and Release.  As set forth in
Section 4.5.6, any existing reserves, impounds and other accounts maintained in connection with the Loans shall be assigned to Purchaser, and at Closing, Purchaser shall pay to Seller an amount equal to the balance of such reserves, impounds and accounts so assigned.

5.4.8   
Insurance.  No proration shall be made in relation to insurance premiums and insurance policies will not be assigned to Purchaser.  Seller shall have the risk of loss of the Property until 11:59 p.m. the day prior to the Closing Date, after which time the risk of loss shall pass to Purchaser and Purchaser shall be responsible for obtaining its own insurance thereafter.

5.4.9   
Employees.  All of Seller’s and Seller’s manager’s on-site employees shall have their employment at the Property terminated as of the Closing Date.

5.4.10 
Closing Costs.  Purchaser shall pay (i) all sales, use, gross receipts or similar taxes, (ii) all fees required to be paid by Purchaser with respect to the Title Policy pursuant to
Section 4.1, including all costs relating to procurement of the Title Commitment, the Title Policy, and any requested endorsements, (iii) all premium and fees for any mortgagee title policy or endorsements the Lender requires, (iv) all City of Naperville real estate transfer taxes imposed on the conveyance and the recording of the Deed  and (v) one-half of the customary closing costs of the Escrow Agent.  Seller shall pay (a) the base premium for the Title Policy to the extent required by
Section 4.1, (b) all State of Illinois real estate transfer taxes imposed on the conveyance of the Property and (c) one-half of the customary closing costs of the Escrow Agent.  

5.4.11  Utility Contracts.  If Seller has entered into an agreement for the purchase of electricity, gas or other utility service for the Property or a group of properties (including the Property) (a “
Utility Contract”), or an affiliate of Seller has entered into a Utility Contract, then, at the option of Seller, either (a) Purchaser either shall assume the Utility Contract with respect to the Property, or (b) the reasonably calculated costs of the Utility Contract attributable to the Property from and after the Closing shall be paid to Seller at the Closing and Seller shall remain responsible for payments under the Utility Contract.  

5.4.12  Possession.  Possession of the Property, subject to the Leases, Property Contracts, other than Terminated Contracts, and Permitted Exceptions, shall be delivered to Purchaser at the Closing upon release from escrow of all items to be delivered by Purchaser pursuant to
Section 5.3.  To the extent reasonably available to Seller, originals or copies of the Leases and Property Contracts, lease files, warranties, guaranties, operating manuals, keys to the property, and Seller’s books and records (other than proprietary information) (collectively, “
Seller’s Property-Related Files and Records”) regarding the Property shall be made available to Purchaser at the Property after the Closing.  Purchaser agrees, for a period of not less than three (3) years after the Closing (the “
Records Hold Period”), to (a) provide and allow Seller reasonable access to Seller’s Property-Related Files and Records for purposes of inspection and copying thereof, and (b) reasonably maintain and preserve Seller’s Property-Related Files and Records.  If at any time after the Records Hold Period, Purchaser desires to dispose of Seller’s Property-Related Files and Records, Purchaser must first provide Seller prior written notice (the “
Records Disposal Notice”).  Seller shall have a period of 30 days after receipt of the Records Disposal Notice to enter the Property (or such other location where such records are then stored) and remove or copy those of Seller’s Property-Related Files and Records that Seller desires to retain. 

5.5       Post Closing Adjustments.

  Purchaser or Seller may request that Purchaser and Seller undertake to re-adjust any item on the Proration Schedule (or any item omitted therefrom), with the exception of real property taxes which shall be final and not subject to readjustment, in accordance with the provisions of
Section 5.4 of this Contract; provided, however, that neither party shall have any obligation to re-adjust any items (a) after the expiration of 60 days after Closing, or (b) subject to such 60-day period, unless such items exceed $5,000.00 in the aggregate.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
 
6.1       Seller’s Representations.

  Except, in all cases, for any fact, information or condition disclosed in the Title Documents, the Permitted Exceptions, the Property Contracts, or the Materials, or which is otherwise known by Purchaser prior to the Closing, Seller represents and warrants to Purchaser the following (collectively, the “
Seller’s Representations”) as of the Effective Date and as of the Closing Date; provided that Purchaser’s remedies if any such Seller’s Representations are untrue as of the Closing Date are limited to those set forth in
Section 8.1:
 6.1.1    Seller is validly existing and in good standing under the laws of the state of its formation set forth in the initial paragraph of this Contract; and, subject to any approvals
required from Lender for the Loan Assumption and Release, has or at the Closing shall have the entity power and authority to sell and convey the Property and to execute the documents to be executed by Seller and prior to the Closing will have taken as applicable, all corporate, partnership, limited liability company or equivalent entity actions required for the execution and delivery of this Contract, and the consummation of the transactions contemplated by this Contract.  The compliance with or fulfillment of the terms and conditions hereof will not conflict with, or result in a breach of, the terms, conditions or provisions of, or constitute a default under, any contract to which Seller is a party or by which Seller is otherwise bound, which conflict, breach or default would have a material adverse affect on Seller’s ability to consummate the transaction contemplated by this Contract or on the Property.  This Contract is a valid and binding agreement against Seller in accordance with its terms;

6.1.2    Seller is not a “foreign person,” as that term is used and defined in the Internal Revenue Code, Section 1445, as amended;

6.1.3    Except for (a) any actions by Seller to evict Tenants under the Leases, or (b) any matter covered by Seller’s current insurance policy(ies), to Seller’s knowledge, there are no material actions, proceedings, litigation or governmental investigations or condemnation actions either pending or threatened in writing against the Property which will adversely impact Seller’s ability to convey the Property;

6.1.4    To Seller’s knowledge, Seller has not received any written notice of any material default by Seller under any of the Property Contracts that will not be terminated on the Closing Date;

6.1.5    To Seller’s knowledge, the Rent Roll (as updated pursuant to
Section 5.2.9) is accurate in all material respects; and
 
6.1.6    To Seller’s knowledge, the Property Contracts List (as updated pursuant to
Section 5.2.10) is accurate in all material respects.
 
6.2       AS-IS.

  Except for Seller’s Representations, the Property is expressly purchased and sold “AS IS,” “WHERE IS,” and “WITH ALL FAULTS.”  The Purchase Price and the terms and conditions set forth herein are the result of arm’s-length bargaining between entities familiar with transactions of this kind, and said price, terms and conditions reflect the fact that Purchaser shall have the benefit of, but is not relying upon, any information provided by Seller or Broker or statements, representations or warranties, express or implied, made by or enforceable directly against Seller or Broker, including, without limitation, any relating to the value of the Property, the physical or environmental condition of the Property, any state, federal, county or local law, ordinance, order or permit; or the suitability, compliance or lack of compliance of the Property with any regulation, or any other attribute or matter of or relating to the Property (other than any covenants of title contained in the Deed conveying the Property and Seller’s Representations).  Purchaser agrees that Seller shall not be responsible or liable to Purchaser for any defects, errors or omissions in the Materials, or on account of any conditions affecting the Property.  Purchaser, its successors and assigns, and anyone claiming by, through or under Purchaser, hereby fully releases Seller’s Indemnified Parties from, and irrevocably waives its right to maintain, any and all claims and causes of action that it or they may now have or
hereafter acquire against Seller’s Indemnified Parties with respect to any and all Losses arising from or related to any defects, errors, omissions in the Materials or other conditions affecting the Property.  Purchaser represents and warrants that, as of the date hereof and as of the Closing Date, it has and shall have reviewed and conducted such independent analyses, studies (including, without limitation, environmental studies and analyses concerning the presence of lead, asbestos, water intrusion and/or fungal growth and any resulting damage, PCBs and radon in and about the Property), reports, investigations and inspections as it deems appropriate in connection with the Property.  If Seller  provides or has provided any documents, summaries, opinions or work product of consultants, surveyors, architects, engineers, title companies, governmental authorities or any other person or entity with respect to the Property, including, without limitation, the offering prepared by Broker, Purchaser and Seller agree that Seller has done so or shall do so only for the convenience of both parties, Purchaser shall not rely thereon and the reliance by Purchaser upon any such documents, summaries, opinions or work product shall not create or give rise to any liability of or against Seller’s Indemnified Parties.  Purchaser acknowledges and agrees that no representation has been made and no responsibility is assumed by Seller with respect to current and future applicable zoning or building code requirements or the compliance of the Property with any other laws, rules, ordinances or regulations, the financial earning capacity or expense history of the Property, the continuation of contracts, continued occupancy levels of the Property, or any part thereof, or the continued occupancy by tenants of any Leases or, without limiting any of the foregoing, occupancy at Closing.  Prior to Closing, Seller shall have the right, but not the obligation, to enforce its rights against any and all Property occupants, guests or tenants.  Purchaser agrees that the departure or removal, prior to Closing, of any of such guests, occupants or tenants shall not be the basis for, nor shall it give rise to, any claim on the part of Purchaser, nor shall it affect the obligations of Purchaser under this Contract in any manner whatsoever; and Purchaser shall close title and accept delivery of the Deed with or without such tenants in possession and without any allowance or reduction in the Purchase Price under this Contract. 

6.3       Survival of Seller’s Representations.

  Seller and Purchaser agree that Seller’s Representations shall survive Closing for a period of 6 months (the “
Survival Period”).  Seller shall have no liability after the Survival Period with respect to Seller’s Representations contained herein except to the extent that Purchaser has requested arbitration against Seller during the Survival Period for breach of any of Seller’s Representations.  Under no circumstances shall Seller be liable to Purchaser for more than $300,000 in any individual instance or in the aggregate for all breaches of Seller’s Representations, nor shall Purchaser be entitled to bring any claim for a breach of Seller’s Representations unless the claim for damages (either in the aggregate or as to any individual claim) by Purchaser exceeds $5,000.  In the event that Seller breaches any representation contained in
Section 6.1 and Purchaser had knowledge of such breach prior to the Closing Date, and elected to close regardless, Purchaser shall be deemed to have waived any right of recovery, and Seller shall not have any liability in connection therewith.

6.4       Definition of Seller’s Knowledge.

  Any representations and warranties made “to the knowledge of Seller” shall not be deemed to imply any duty of inquiry.  For purposes of this Contract, the term Seller’s “
knowledge” shall mean and refer only to actual knowledge of the Regional Property Manager and shall not be construed to refer to the knowledge of any other partner, officer, director, agent, employee or representative of Seller, or any affiliate of Seller, or
to impose upon such Regional Property Manager any duty to investigate the matter to which such actual knowledge or the absence thereof pertains, or to impose upon such Regional Property Manager any individual personal liability.  As used herein, the term “
Regional Property Manager” shall refer to Ken Sloma who is the regional property manager handling this Property.

6.5       Representations and Warranties of Purchaser.

  For the purpose of inducing Seller to enter into this Contract and to consummate the sale and purchase of the Property in accordance herewith, Purchaser represents and warrants to Seller the following as of the Effective Date and as of the Closing Date:

6.5.1    Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of Illinois.

6.5.2    Purchaser, acting through any of its or their duly empowered and authorized officers or members, has all necessary entity power and authority to own and use its properties and to transact the business in which it is engaged, and has full power and authority to enter into this Contract, to execute and deliver the documents and instruments required of Purchaser herein, and to perform its obligations hereunder; and no consent of any of Purchaser’s partners, directors, officers or members are required to so empower or authorize Purchaser.  The compliance with or fulfillment of the terms and conditions hereof will not conflict with, or result in a breach of, the terms, conditions or provisions of, or constitute a default under, any contract to which Purchaser is a party or by which Purchaser is otherwise bound, which conflict, breach or default would have a material adverse affect on Purchaser’s ability to consummate the transaction contemplated by this Contract.  This Contract is a valid, binding and enforceable agreement against Purchaser in accordance with its terms.

6.5.3    No pending or, to the knowledge of Purchaser, threatened litigation exists which if determined adversely would restrain the consummation of the transactions contemplated by this Contract or would declare illegal, invalid or non-binding any of Purchaser’s obligations or covenants to Seller.

6.5.4    Other than Seller’s Representations, Purchaser has not relied on any representation or warranty made by Seller or any representative of Seller (including, without limitation, Broker) in connection with this Contract and the acquisition of the Property.

6.5.5    The Broker and its affiliates do not, and will not at the Closing, have any direct or indirect legal, beneficial, economic or voting interest in Purchaser (or in an assignee of Purchaser, which pursuant to
Section 13.3, acquires the Property at the Closing), nor has Purchaser or any affiliate of Purchaser granted (as of the Effective Date or the Closing Date) the Broker or any of its affiliates any right or option to acquire any direct or indirect legal, beneficial, economic or voting interest in Purchaser.

6.5.6    Purchaser is not a Prohibited Person.

6.5.7    To Purchaser’s knowledge, none of its investors, affiliates or brokers or other agents (if any), acting or benefiting in any capacity in connection with this Contract is a Prohibited Person.

6.5.8    The funds or other assets Purchaser will transfer to Seller under this Contract are not the property of, or beneficially owned, directly or indirectly, by a Prohibited Person.

6.5.9    The funds or other assets Purchaser will transfer to Seller under this Contract are not the proceeds of specified unlawful activity as defined by 18 U.S.C. § 1956(c)(7).

ARTICLE VII

OPERATION OF THE PROPERTY
 
7.1       Leases and Property Contracts.

  During the period of time from the Effective Date to the Closing Date, in the ordinary course of business Seller may enter into new Property Contracts, new Leases, renew existing Leases or modify, terminate or accept the surrender or forfeiture of any of the Leases, modify any Property Contracts, or institute and prosecute any available remedies for default under any Lease or Property Contract without first obtaining the written consent of Purchaser; provided, however, Seller agrees that any such new Property Contracts shall be terminable, without payment of a penalty, premium or fee, on not more than thirty (30) days notice or any new or renewed Leases shall not have a term in excess of 1 year, in either case, without the prior written consent of Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed.

7.2       General Operation of Property.

  Except as specifically set forth in this
Article VII, Seller shall operate the Property after the Effective Date in the ordinary course of business, and except as necessary in Seller’s sole discretion to address (a) any life or safety issue at the Property or (b) any other matter which in Seller’s reasonable discretion materially adversely affects the use, operation or value of the Property, Seller will not make any material alterations to the Property or remove any material Fixtures and Tangible Personal Property without the prior written consent of Purchaser which consent shall not be unreasonably withheld, denied or delayed.

7.3       Liens.

  Other than utility easements and temporary construction easements granted by Seller in the ordinary course of business, Seller covenants that it will not voluntarily create or cause any lien or encumbrance to attach to the Property between the Effective Date and the Closing Date (other than Leases and Property Contracts as provided in Section 
7.1) unless Purchaser approves such lien or encumbrance, which approval shall not be unreasonably withheld, conditioned or delayed.  If Purchaser approves any such subsequent lien or encumbrance, the same shall be deemed a Permitted Encumbrance for all purposes hereunder.

7.4       Tax Appeals.
   If any tax reduction proceedings, tax protest proceedings or tax assessment appeals for the Property, relating to any fiscal years through and including fiscal year 2009, are pending at the time of Closing, Seller reserves and shall have the right to continue to prosecute and/or settle the same without the consent of Purchaser.  Seller hereby reserves and shall have the exclusive right, at any time after the Closing Date, to institute a tax reduction proceeding, tax protest proceeding or tax assessment appeal for the Property with respect to real estate taxes attributable to fiscal years 2007, 2008 and/or 2009 and Seller shall have the right to prosecute and/or settle the same without the consent of Purchaser.  Purchaser agrees that it shall
not independently institute any tax reduction proceedings, tax protest proceedings, or tax assessment appeals for the Property with respect to the 2007, 2008 and/or the 2009 tax years.  Purchaser shall cooperate with Seller in connection with the prosecution and/or settlement of any such tax reduction proceedings, tax protest proceedings or tax assessment appeals, including executing such documents as Seller may reasonably request in order for Seller to prosecute and/or settle any such proceedings.  Any refunds or savings in the payment of taxes resulting from any tax reduction proceedings, tax protest proceedings or tax assessment appeals applicable to the period prior to the Closing Date shall belong to Seller and any refunds or savings in the payment of taxes applicable to the period from and after the Closing Date shall belong to Purchaser.  All attorneys’ fees and other expenses incurred in obtaining such refunds or savings shall be apportioned between Seller and Purchaser in proportion to the gross amount of such refunds or savings payable to Seller and Purchaser, respectively.

ARTICLE VIII

CONDITIONS PRECEDENT TO CLOSING
 
8.1       Purchaser’s Conditions to Closing.

  Purchaser’s obligation to close under this Contract shall be subject to and conditioned upon the fulfillment of the following conditions precedent:

8.1.1    All of the documents required to be delivered by Seller to Purchaser at the Closing pursuant to the terms and conditions hereof shall have been delivered;

8.1.2    Each of Seller’s Representations shall be true in all material respects as of the Closing Date;

8.1.3    Seller shall have complied with, fulfilled and performed in all material respects each of the covenants, terms and conditions to be complied with, fulfilled or performed by Seller hereunder; and

8.1.4    Neither Seller nor Seller’s general partner shall be a debtor in any bankruptcy proceeding nor shall have been in the last 6 months a debtor in any bankruptcy proceeding.

Notwithstanding anything to the contrary, there are no other conditions to Purchaser’s obligation to Close except as expressly set forth in this
Section 8.1.  If any condition set forth in Sections 8.1.1, 8.1.3 or 8.1.4 is not met, Purchaser may (a) waive any of the foregoing conditions and proceed to Closing on the Closing Date with no offset or deduction from the Purchase Price, or (b) if such failure constitutes a default by Seller, exercise any of its remedies pursuant to
Section 10.2.  If the condition set forth in Section 8.1.2 is not met, Seller shall not be in default pursuant to
Section 10.2, and Purchaser may, as its sole and exclusive remedy, (i) notify Seller of Purchaser’s election to terminate this Contract and receive a return of the Deposit from the Escrow Agent, or (ii) waive such condition and proceed to Closing on the Closing Date with no offset or deduction from the Purchase Price.  

8.2       Seller’s Conditions to Closing.

  Without limiting any of the rights of Seller elsewhere provided for in this Contract, Seller’s obligation to close with respect to conveyance
of the Property under this Contract shall be subject to and conditioned upon the fulfillment of the following conditions precedent:

8.2.1    All of the documents and funds required to be delivered by Purchaser to Seller at the Closing pursuant to the terms and conditions hereof shall have been delivered;

8.2.2    Each of the representations, warranties and covenants of Purchaser contained herein shall be true in all material respects as of the Closing Date;

8.2.3    Purchaser shall have complied with, fulfilled and performed in all material respects each of the covenants, terms and conditions to be complied with, fulfilled or performed by Purchaser hereunder;

8.2.4    There shall not be any pending litigation or, to the knowledge of either Purchaser or Seller, any litigation threatened in writing, which, if adversely determined, would restrain the consummation of any of the transactions contemplated by this Contract or declare illegal, invalid or nonbinding any of the covenants or obligations of the Purchaser; and

8.2.5    The Loan Assumption and Release shall have occurred.

If any of the foregoing conditions to Seller’s obligation to close with respect to conveyance of the Property under this Contract are not met, Seller may (a) waive any of the foregoing conditions and proceed to Closing on the Closing Date, or (b) terminate this Contract, and, if such failure constitutes a default by Purchaser, exercise any of its remedies under
Section 10.1.  
 
ARTICLE IX

BROKERAGE
 
9.1       Indemnity.

  Seller represents and warrants to Purchaser that it has dealt only with Moran and Company, One North Franklin, Suite 700, Chicago, Illinois 60606, Attention: Tom Moran (“
Seller’s Broker”) in connection with this Contract.  Purchaser represents and warrants to Seller that it has dealt only with Placer Premier Real Estate Services, Inc., 6538 Lonetree Boulevard, Rocklin, California 95765, Attention: Daniel Leman (“
Purchaser’s Broker”) in connection with this Contract.  Seller and Purchaser each represents and warrants to the other that, other than the Brokers, it has not dealt with or utilized the services of any other real estate broker, sales person or finder in connection with this Contract, and each party agrees to indemnify, hold harmless, and, if requested in the sole and absolute discretion of the indemnitee, defend (with counsel approved by the indemnitee) the other party from and against all Losses relating to brokerage commissions and finder’s fees arising from or attributable to the acts or omissions of the indemnifying party.

9.2       Broker Commission.

  If the Closing occurs, Seller agrees to pay each Broker as follows:  (a) Seller shall pay Seller’s Broker a commission according to the terms of a separate contract and (b) Seller shall pay Purchaser’s Broker a commission of $245,000.00; provided, however, that as a condition to Seller’s payment of such commission to Purchaser’s Broker, Purchaser’s Broker shall execute a release (in form and substance reasonable acceptable to Seller) fully releasing Seller from, and irrevocably waiving Purchaser’s Broker right to maintain,
any and all claims and causes of action against Seller with respect to any and all brokerage commissions and finder’s fees arising from or attributable to this Contract in excess of the foregoing commissions.  Further, Purchaser covenants and agrees to pay Purchaser’s Broker any and all other brokerage commission and finder’s fees arising from or attributable to this Contract and Purchaser agrees to indemnify, hold harmless, and, if requested in the sole and absolute discretion of Seller, defend (with counsel approved by Seller) Seller from and against all claims made by Purchaser’s Broker relating to brokerage commissions and finder’s fees arising from or attributable to this Contract in excess of the foregoing commissions.  Each Broker shall not be deemed a party or third party beneficiary of this Contract.  As a condition to Seller’s obligation to pay the foregoing commissions, each Broker shall execute the signature page for each Broker attached hereto solely for purposes of confirming the matters set forth therein.

ARTICLE X

DEFAULTS AND REMEDIES
 

10.1     Purchaser Default.
   If Purchaser defaults in its obligations hereunder to (a) deliver the Initial Deposit or Additional Deposit (or any other deposit or payment required of Purchaser hereunder), (b) deliver to Seller the deliveries specified under Section 
5.3 on the date required thereunder, or (c) deliver the Purchase Price at the time required by Section 
2.2.4 and close on the purchase of the Property on the Closing Date, then, immediately and without the right to receive notice or to cure pursuant to Section 
2.2.3, Purchaser shall forfeit the Deposit, and the Escrow Agent shall deliver the Deposit to Seller, and neither party shall be obligated to proceed with the purchase and sale of the Property.  If, Purchaser defaults in any of its other representations, warranties or obligations under this Contract, and such default continues for more than 10 days after written notice from Seller, then Purchaser shall forfeit the Deposit, and the Escrow Agent shall deliver the Deposit to Seller, and neither party shall be obligated to proceed with the purchase and sale of the Property.  The Deposit is liquidated damages and recourse to the Deposit is, except for Purchaser’s indemnity and confidentiality obligations hereunder and in addition to Seller’s right to recover its reasonable attorneys’ fees and expenses in accordance with the provisions of Section 13.16, Seller’s sole and exclusive remedy for Purchaser’s failure to perform its obligation to purchase the Property or breach of a representation or warranty.  Seller expressly waives the remedies of specific performance and additional damages for such default by Purchaser.  SELLER AND PURCHASER ACKNOWLEDGE THAT SELLER’S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF SELLER’S DAMAGES RESULTING FROM A DEFAULT BY PURCHASER IN ITS OBLIGATION TO PURCHASE THE PROPERTY.  SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION
10.1 IS INTENDED TO AND DOES LIQUIDATE THE AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER’S EXCLUSIVE REMEDY AGAINST PURCHASER, BOTH AT LAW AND IN EQUITY, ARISING FROM OR RELATED TO A BREACH BY PURCHASER OF ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT, OTHER THAN WITH RESPECT TO PURCHASER’S INDEMNITY AND CONFIDENTIALITY OBLIGATIONS HEREUNDER AND SELLER’S RIGHT TO RECOVER ITS REASONABLE ATTORNEYS’ FEES AND EXPENSES.

10.2     Seller Default.
   If Seller, prior to the Closing, defaults in its covenants or obligations under this Contract, including to sell the Property as required by this Contract and such default continues for more than 10 days after written notice from Purchaser, then, at Purchaser’s election and as Purchaser’s sole and exclusive remedy, either (a) this Contract shall terminate, and all payments and things of value, including the Deposit, provided by Purchaser hereunder shall be returned to Purchaser and Purchaser may recover, as its sole recoverable damages (but without limiting its right to receive a refund of the Deposit), its direct and actual out-of-pocket expenses and costs (documented by paid invoices to third parties) in connection with this transaction, which damages shall not exceed $50,000 in aggregate, or (b) subject to the conditions below, Purchaser may seek specific performance of Seller’s obligation to deliver the Deed pursuant to this Contract (but not damages).  Purchaser may seek specific performance of Seller’s obligation to deliver the Deed pursuant to this Contract only if, as a condition precedent to initiating such litigation for specific performance, Purchaser first shall (i) not otherwise be in default under this Contract; and (ii) file suit therefor with the court on or before the 90th day after the Closing Date; if Purchaser fails to file an action for specific performance within 90 days after the Closing Date, then Purchaser shall be deemed to have elected to terminate the Contract in accordance with subsection (a) above.  Purchaser agrees that it shall promptly deliver to Seller an assignment of all of Purchaser’s right, title and interest in and to (together with possession of) all plans, studies, surveys, reports, and other materials paid for with the out-of-pocket expenses reimbursed by Seller pursuant to the foregoing sentence.  SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION 10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE PURCHASER AND THE REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER’S EXCLUSIVE REMEDY AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY SELLER OF ITS COVENANTS OR ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT.  UNDER NO CIRCUMSTANCES MAY PURCHASER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER SPECIFICALLY WAIVES, FROM SELLER FOR ANY BREACH BY SELLER, OF ITS COVENANTS OR ITS OBLIGATIONS UNDER THIS CONTRACT.  PURCHASER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS OR ANY LIEN AGAINST THE PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AND IS DILIGENTLY PURSUING AN ACTION SEEKING SUCH REMEDY.

ARTICLE XI

RISK OF LOSS OR CASUALTY
 
11.1     Major Damage.

  In the event that the Property is damaged or destroyed by fire or other casualty prior to Closing, and the cost for demolition, site cleaning, restoration, replacement, or other repairs (collectively, the “
Repairs”), is more than $2,475,000.00, then Seller shall have no obligation to make such Repairs, and shall notify Purchaser in writing of such damage or destruction (the “
Damage Notice”).  Within 10 days after Purchaser’s receipt of the Damage Notice, Purchaser may elect at its option to terminate this Contract by delivering written notice to Seller in which event the Deposit shall be refunded to Purchaser.  In the event
Purchaser fails to terminate this Contract within the foregoing 10-day period, this transaction shall be closed in accordance with
Section 11.3 below.
 
11.2     Minor Damage.

  In the event that the Property is damaged or destroyed by fire or other casualty prior to the Closing, and the cost of Repairs is equal to or less than $2,475,000.00, this transaction shall be closed in accordance with
Section 11.3, notwithstanding such casualty.  In such event, Seller may at its election endeavor to make such Repairs to the extent of any recovery from insurance carried on the Property, if such Repairs can be reasonably effected before the Closing.  Regardless of Seller’s election to commence such Repairs, or Seller’s ability to complete such Repairs prior to Closing, this transaction shall be closed in accordance with
Section 11.3 below.
 
11.3     Closing.

  In the event Purchaser ails to terminate this Contract following a casualty as set forth in
Section 11.1, or in the event of a casualty as set forth in Section 11.2, then this transaction shall be closed in accordance with the terms of the Contract, at Seller’s election, either (i) for the full Purchase Price, notwithstanding any such casualty, in which case Purchaser shall, at Closing, execute and deliver an assignment and assumption (in a form reasonably required by Seller) of Seller’s rights and obligations with respect to the insurance claim related to such casualty, and thereafter Purchaser shall receive all insurance proceeds pertaining to such claim, less any amounts which may already have been spent by Seller for Repairs (plus a credit against the Purchase Price at Closing in the amount of any deductible payable by Seller in connection therewith); or (ii) for the full Purchase Price less a credit to Purchaser in the amount necessary to complete such Repairs (less any amounts which may already have been spent by Seller for Repairs).

11.4     Repairs.

  To the extent that Seller elects to commence any Repairs prior to Closing, then Seller shall be entitled to receive and apply available insurance proceeds to any portion of such Repairs completed or installed prior to Closing, with Purchaser being responsible for completion of such Repairs after Closing.  To the extent that any Repairs have been commenced prior to Closing, then the Property Contracts shall include, and Purchaser shall assume at Closing, all construction and other contracts entered into by Seller in connection with such Repairs.

ARTICLE XII

EMINENT DOMAIN
 
12.1     Eminent Domain.
   In the event that, at the time of Closing, any material part of the Property is (or previously has been) acquired, or is about to be acquired, by any governmental agency by the powers of eminent domain or transfer in lieu thereof (or in the event that at such time there is any notice of any such acquisition or intent to acquire by any such governmental agency), Purchaser shall have the right, at Purchaser’s option, to terminate this Contract by giving written notice within 10 days after Purchaser’s receipt from Seller of notice of the occurrence of such event, and if Purchaser so terminates this Contract, Purchaser shall recover the Deposit hereunder.  If Purchaser fails to terminate this Contract within such 10-day period, this transaction shall be closed in accordance with the terms of this Contract for the full Purchase Price and Purchaser shall receive the full benefit of any condemnation award.  It is
expressly agreed between the parties hereto that this section shall in no way apply to customary dedications for public purposes which may be necessary for the development of the Property.

ARTICLE XIII

MISCELLANEOUS
 
13.1     Binding Effect of Contract.

  This Contract shall not be binding on either party until executed by both Purchaser and Seller.  Neither the Escrow Agent’s nor the Broker’s execution of this Contract shall be a prerequisite to its effectiveness.  Subject to
Section 13.3, this Contract shall be binding upon and inure to the benefit of Seller and Purchaser, and their respective successors and permitted assigns.

13.2     Exhibits and Schedules.

  All Exhibits and Schedules, whether or not annexed hereto, are a part of this Contract for all purposes.

13.3     Assignability.

  Except to the extent required to comply with the provisions of
Section 13.18 related to a 1031 Exchange, this Contract is not assignable by Purchaser without first obtaining the prior written approval of Seller.  Notwithstanding the foregoing, Purchaser may assign this Contract, without first obtaining the prior written approval of Seller, to one or more entities so long as (a) Purchaser is an affiliate of the purchasing entity(ies), (b) Purchaser is not released from its liability hereunder, and (c) Purchaser provides written notice to Seller of any proposed assignment no later than 10 days prior to the Closing Date.  As used herein, an affiliate is a person or entity controlled by, under common control with, or controlling another person or entity.

13.4     Captions.
   The captions, headings, and arrangements used in this Contract are for convenience only and do not in any way affect, limit, amplify, or modify the terms and provisions hereof.

13.5     Number and Gender of Words.

  Whenever herein the singular number is used, the same shall include the plural where appropriate, and words of any gender shall include each other gender where appropriate.

13.6     Notices.
   All notices, demands, requests and other communications required or permitted hereunder shall be in writing, and shall be (a) personally delivered with a written receipt of delivery; (b) sent by a nationally-recognized overnight delivery service requiring a written acknowledgement of receipt or providing a certification of delivery or attempted delivery; (c) sent by certified or registered mail, return receipt requested; or (d) sent by confirmed facsimile transmission or electronic delivery with an original copy thereof transmitted to the recipient by one of the means described in subsections (a) through (c) no later than 3 Business Days thereafter.  All notices shall be deemed effective when actually delivered as documented in a delivery receipt; provided, however, that if the notice was sent by overnight courier or mail as aforesaid and is affirmatively refused or cannot be delivered during customary business hours by reason of the absence of a signatory to acknowledge receipt, or by reason of a change of address with respect to which the addressor did not have either knowledge or written notice delivered in accordance with this paragraph, then the first attempted delivery shall be deemed to constitute delivery.  Each party shall be entitled to change its address for notices from
time to time by delivering to the other party notice thereof in the manner herein provided for the delivery of notices.  All notices shall be sent to the addressee at its address set forth following its name below:

To Purchaser:

Peter Fazio

26 Jade Place
 San Francisco, California 94131

Attention: Peter Fazio

Phone: (415) 826-8347

Fax: (415) 826-8347

Email:  psfazio@att.net 

 
 with a copy to:

Borst & Associates

6538 Lonetree Boulevard

Rocklin, California 95765

Attention:  Todd Borst

Phone: (916) 781-3800

Fax: (916) 781-3525

Email: Tborst@borstassoc.com

 
 and a copy to:

Placer Premier Real Estate Services, Inc.
6538 Lonetree Boulevard
 Rocklin, California 95765

Attention:  Daniel Leman

Phone: (916) 781-3800

Fax: (916) 781-3525

Email: dleman@borstassoc.com 

To Seller:

c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado  80237
Attention:  Mark Reoch and Brian Bornhorst

Telephone:  303-757-8101 (Mark Reoch) and 303-691-4472 (Brian Bornhorst)
Facsimile:  303-300-3261 (Mark Reoch and Brian Bornhorst)

Email:  mark.reoch@aimco.com and brian.bornhorst@aimco.com

And:

c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado  80237

Attention:  Mr. Harry Alcock
Telephone:  303-691-4344
Facsimile:  303-300-3282

Email:  harry.alcock@aimco.com

with copy to:

AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado  80237
Attention:  John Spiegleman, Esq.

Telephone: 303-691-4303
Facsimile:  720-200-6882
 Email:  john.spiegleman@aimco.com

and a copy to:

Bryan Cave LLP

1290 Avenue of the Americas
New York, New York 10104
Attention:  Sandor A. Green, Esq.

Telephone: 212-541-2049
Facsimile:  212-541-1449
 Email:  sagreen@bryancave.com

 
 and a copy to:

Moran and Company
One North Franklin, Suite 700
Chicago, Illinois 60606

Attention:          Tom Moran
Telephone:        312-407-6700

Facsimile:         312-407-6717
Email:               tommoran@moranandco.com  

Any notice required hereunder to be delivered to the Escrow Agent shall be delivered in accordance with above provisions as follows:

Fidelity National Title Insurance Company

8450 E. Crescent Parkway, Suite 410

Greenwood Village, CO 80111

Attention:  Valena Bloomquist 

Phone: (303) 244-9198

Fax: (720) 489-7593

Email:  Valena.bloomquist@fnf.com:

Unless specifically required to be delivered to the Escrow Agent pursuant to the terms of this Contract, no notice hereunder must be delivered to the Escrow Agent in order to be effective so long as it is delivered to the other party in accordance with the above provisions.

13.7     Governing Law and Venue.

  The laws of the State of Illinois shall govern the validity, construction, enforcement, and interpretation of this Contract, unless otherwise specified herein except for the conflict of laws provisions thereof.  Subject to
Section 13.23, all claims, disputes and other matters in question arising out of or relating to this Contract, or the breach thereof, shall be decided by proceedings instituted and litigated in a court of competent jurisdiction in the state in which the Property is situated, and the parties hereto expressly consent to the venue and jurisdiction of such court.

13.8     Entire Agreement.

  This Contract embodies the entire Contract between the parties hereto concerning the subject matter hereof and supersedes all prior conversations, proposals, negotiations, understandings and contracts, whether written or oral.

13.9     Amendments.
   This Contract shall not be amended, altered, changed, modified, supplemented or rescinded in any manner except by a written contract executed by all of the parties; provided, however, that, (a) the signature of the Escrow Agent shall not be required as to any amendment of this Contract other than an amendment of
Section 2.3, and (b) the signature of the Broker shall not be required as to any amendment of this Contract

13.10   Severability.
   In the event that any part of this Contract shall be held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be reformed, and enforced to the maximum extent permitted by law.  If such provision cannot be reformed, it shall be severed from this Contract and the remaining portions of this Contract shall be valid and enforceable.

13.11   Multiple Counterparts/Facsimile Signatures.

  This Contract may be executed in a number of identical counterparts.  This Contract may be executed by facsimile signatures or electronic delivery of signatures which shall be binding on the parties hereto, with original signatures to be delivered as soon as reasonably practical thereafter.

13.12   Construction.
   No provision of this Contract shall be construed in favor of, or against, any particular party by reason of any presumption with respect to the drafting of this Contract; both parties, being represented by counsel, having fully participated in the negotiation of this instrument.

13.13   Confidentiality.
   Purchaser shall not disclose the terms and conditions contained in this Contract and shall keep the same confidential, provided that Purchaser may disclose the terms and conditions of this Contract (a) as required by law, (b) to consummate the terms of this Contract, or any financing relating thereto, or (c) to Purchaser’s or Seller’s lenders, attorneys and
accountants.  Any information obtained by Purchaser in the course of its inspection of the Property, and any Materials provided by Seller to Purchaser hereunder, shall be confidential and Purchaser shall be prohibited from making such information public to any other person or entity other than its Consultants, without Seller’s prior written authorization, which may be granted or denied in Seller’s sole discretion.  In addition, Purchaser shall use its reasonable efforts to prevent its Consultants from divulging any such confidential information to any unrelated third parties except as reasonably necessary to third parties engaged by Purchaser for the limited purpose of analyzing and investigating such information for the purpose of consummating the transaction contemplated by this Contract.  Unless and until the Closing occurs, Purchaser shall not market the Property (or any portion thereof) to any prospective purchaser or lessee without the prior written consent of Seller, which consent may be withheld in Seller’s sole discretion.  Notwithstanding the provisions of
Section 13.8 Purchaser agrees that the covenants, restrictions and agreements of Purchaser contained in any confidentiality agreement executed by Purchaser prior to the Effective Date shall survive the execution of this Contract and shall not be superseded hereby.

13.14   Time of the Essence.
   It is expressly agreed by the parties hereto that time is of the essence with respect to this Contract and any aspect thereof.

13.15   Waiver.
   No delay or omission to exercise any right or power accruing upon any default, omission, or failure of performance hereunder shall impair any right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient.  No waiver, amendment, release, or modification of this Contract shall be established by conduct, custom, or course of dealing and all waivers must be in writing and signed by the waiving party.

13.16   Attorneys’ Fees.
   In the event either party hereto commences litigation or arbitration against the other to enforce its rights hereunder, the prevailing party in such litigation shall be entitled to recover from the other party its reasonable attorneys’ fees and expenses incidental to such litigation and arbitration, including the cost of in-house counsel and any appeals.

13.17 Time Zone/Time Periods.
   Any reference in this Contract to a specific time shall refer to the time in the time zone where the Property is located.  (For example, a reference to 3:00 p.m. refers to 3:00 p.m. MST if the Property is located in Denver, Colorado.)  Should the last day of a time period fall on a weekend or legal holiday, the next Business Day thereafter shall be considered the end of the time period.

13.18   1031 Exchange.
   Seller and Purchaser acknowledge and agree that the purchase and sale of the Property may be part of a tax-free exchange for either Purchaser or Seller pursuant to Section 1031 of the Code, the regulations promulgated thereunder, revenue procedures, pronouncements and other guidance issued by the Internal Revenue Service.  Each party hereby agrees to cooperate with each other and take all reasonable steps on or before the Closing Date to facilitate such exchange if requested by the other party, provided that (a) no party making such accommodation shall be required to acquire any substitute property, (b) such exchange shall not affect the representations, warranties, liabilities and obligations of the parties to each other under this Contract, (c) no party making such accommodation shall incur any
additional cost, expense or liability in connection with such exchange (other than expenses of reviewing and executing documents required in connection with such exchange), and (d) no dates in this Contract will be extended as a result thereof, except as specifically provided herein.  

13.19   No Personal Liability of Officers, Trustees or Directors of Seller’s Partners.

  Purchaser acknowledges that this Contract is entered into by Seller which is a Delaware limited partnership, and Purchaser agrees that none of Seller’s Indemnified Parties shall have any personal liability under this Contract or any document executed in connection with the transactions contemplated by this Contract.

13.20   ADA Disclosure.

  Purchaser acknowledges that the Property may be subject to the federal Americans With Disabilities Act (the “
ADA”) and the federal Fair Housing Act (the “FHA”).  The ADA requires, among other matters, that tenants and/or owners of “public accommodations” remove barriers in order to make the Property accessible to disabled persons and provide auxiliary aids and services for hearing, vision or speech impaired persons.  Seller makes no warranty, representation or guarantee of any type or kind with respect to the Property’s compliance with the ADA or the FHA (or any similar state or local law), and Seller expressly disclaims any such representations.

13.21   No Recording.
   Purchaser shall not cause or allow this Contract or any contract or other document related hereto, nor any memorandum or other evidence hereof, to be recorded or become a public record without Seller’s prior written consent, which consent may be withheld at Seller’s sole discretion.  If Purchaser records this Contract or any other memorandum or evidence thereof, Purchaser shall be in default of its obligations under this Contract.  Purchaser hereby appoints Seller as Purchaser’s attorney-in-fact to prepare and record any documents necessary to effect the nullification and release of the Contract or other memorandum or evidence thereof from the public records.  This appointment shall be coupled with an interest and irrevocable.

13.22   Relationship of Parties.
   Purchaser and Seller acknowledge and agree that the relationship established between the parties pursuant to this Contract is only that of a seller and a purchaser of property.  Neither Purchaser nor Seller is, nor shall either hold itself out to be, the agent, employee, joint venturer or partner of the other party.

13.23   Dispute Resolution.

  Any controversy, dispute, or claim of any nature arising out of, in connection with, or in relation to the interpretation, performance, enforcement or breach of this Contract (and any closing document executed in connection herewith), including any claim based on contract, tort or statute, shall be resolved at the written request of any party to this Contract by binding arbitration.  The arbitration shall be administered in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association.  Any matter to be settled by arbitration shall be submitted to the American Arbitration Association in the state in which the Property is located.  The parties shall attempt to designate one arbitrator from the American Arbitration Association.  If they are unable to do so within 30 days after written demand therefor, then the American Arbitration Association shall designate an arbitrator.  The arbitration shall be final and binding, and enforceable in any court of competent jurisdiction.  The arbitrator shall award attorneys’ fees (including those of in-house counsel) and costs to the prevailing party and charge the cost of arbitration to the party which is not the prevailing party. 
Notwithstanding anything herein to the contrary, this Section 13.23 shall not prevent Purchaser or Seller from seeking and obtaining equitable relief on a temporary or permanent basis, including, without limitation, a temporary restraining order, a preliminary or permanent injunction or similar equitable relief, from a court of competent jurisdiction located in the state in which the Property is located (to which all parties hereto consent to venue and jurisdiction) by instituting a legal action or other court proceeding in order to protect or enforce the rights of such party under this Contract or to prevent irreparable harm and injury.  The court’s jurisdiction over any such equitable matter, however, shall be expressly limited only to the temporary, preliminary, or permanent equitable relief sought; all other claims initiated under this Contract between the parties hereto shall be determined through final and binding arbitration in accordance with this
Section 13.23.
 
13.24   AIMCO Marks.
   Purchaser agrees that Seller, the Property Manager or AIMCO, or their respective affiliates, are the sole owners of all right, title and interest in and to the AIMCO Marks (or have the right to use such AIMCO Marks pursuant to license agreements with third parties) and that no right, title or interest in or to the AIMCO Marks is granted, transferred, assigned or conveyed as a result of this Contract.  Purchaser further agrees that Purchaser will not use the AIMCO Marks for any purpose.

13.25   Non-Solicitation of Employees.

  Prior to the expiration of the Feasibility Period, Purchaser acknowledges and agrees that, without the express written consent of Seller, neither Purchaser nor any of Purchaser’s employees, affiliates or agents shall solicit any of Seller’s employees or any employees located at the Property (or any of Seller’s affiliates’ employees located at any property owned by such affiliates) for potential employment.

13.26   Survival.

  Except for (a) all of the provisions of this Article XIII (other than
Sections 13.18 and 13.20); (b) Sections 2.3, 3.3, 3.4, 3.5, 4.5.5, 4.5.6,
5.4, 5.5, 6.2, 6.5, 9.1, 9.2, 11.4, and 14.1; (c) any other provisions in this Contract, that by their express terms survive the termination or Closing (as the case may be); and (d) any payment obligation of Purchaser under this Contract (the foregoing (a), (b), (c) and (d) referred to herein as the “
Survival Provisions”), none of the terms and provisions of this Contract shall survive the termination of this Contract or the Closing (as the case may be), and if the Contract is not so terminated, all of the terms and provisions of this Contract (other than the Survival Provisions, which shall survive the Closing) shall be merged into the Closing documents and shall not survive Closing.

13.27   Multiple Purchasers.
   As used in this Contract, the term “
Purchaser” means all entities acquiring any interest in the Property at the Closing, including, without limitation, any assignee(s) of the original Purchaser pursuant to Section 
13.3 of this Contract.  In the event that “Purchaser” has any obligations or makes any covenants, representations or warranties under this Contract, the same shall be made jointly and severally by all entities being a Purchaser hereunder.

ARTICLE XIV

LEAD–BASED PAINT DISCLOSURE
 
14.1     Disclosure.

  Seller and Purchaser hereby acknowledge delivery of the Lead Based Paint Disclosure attached as Exhibit H hereto.

[Remainder of Page Intentionally Left Blank]

NOW, THEREFORE, the parties hereto have executed this Contract as of the date first set forth above.

Seller:

CENTURY PROPERTIES GROWTH FUND XXII, LP, a Delaware limited partnership

 
 By:  FOX PARTNERS IV, a California general partnership, its general partner

 
 By:  FOX CAPITAL MANAGEMENT CORPORATION, a California corporation, its general partner

 
 By: 
/s/John Spiegleman
 Name:  John Spiegleman

Title:  Senior Vice President

 
 Purchaser:

AUTUMN RUN APARTMENTS, LLC, an Illinois limited liability company

By:  10 BOULEVARD LLC, a New York limited liability company, its sole member

By: 
/s/Peter S. Fazio
Name:  Peter S. Fazio
Title:  Managing Memberexhibit4_1.htm

    EXHIBIT
4.1

     

    Rights
Agreement

     

    CAPITOL
BANCORP LTD.

     

    AND

     

    MELLON
INVESTOR SERVICES LLC

     

    AS
RIGHTS AGENT

     

    DATED
AS OF JULY 21, 2009

     

    

     

     

     

     

    
 

    

    

    

    

    

    
      

      

    

    

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    
 

    
      
        
          
            
              
                
                  	 	 	
                          Page

                        
	 	 	 
	
                          1.

                        	
                          Certain
      Definitions. 

                        	
                          1

                        

                

              

            

          

        

      

    

    
      
        	
                2.

              	
                Appointment
      of Rights Agent. 

              	
                4

              

      

    

    
      
        	
                3.

              	
                Issuance
      of Right Certificates. 

              	
                4

              

      

    

    
      
        	
                4.

              	
                Form
      of Right Certificates. 

              	
                6

              

      

    

    
      
        	
                5.

              	
                Countersignature
      and Registration. 

              	
                7

              

      

    

    
      
        	
                6.

              	
                Transfer,
      Split Up, Combination and Exchange of Right
      Certificates;

                Mutilated,
      Destroyed, Lost or Stolen Right Certificates. 

              	
                 

                7

              

      

    

    
      
        	
                7.

              	
                Exercise
      of Rights, Purchase Price; Expiration Date of Rights. 

              	
                8

              

      

    

    
      
        	
                8.

              	
                Cancellation
      and Destruction of Right Certificates. 

              	
                10

              

      

    

    
      
        	
                9.

              	
                Availability
      of Shares of Series
      X Preferred
      Stock. 

              	
                10

              

      

    

    
      
        	
                10.

              	
                Series
      X Preferred
      Stock Record Date. 

              	
                11

              

      

    

    
      
        	
                11.

              	
                Adjustment
      of Purchase Price, Number and Kind of Shares and Number
      of

                Rights. 

              	
                12

              

      

    

    
      
        	
                12.

              	
                Certificate
      of Adjusted Purchase Price or Number of Shares. 

              	
                19

              

      

    

    
      
        	
                13.

              	
                Consolidation,
      Merger or Sale or Transfer of Assets or Earnings Power. 

              	
                19

              

      

    

    
      
        	
                14.

              	
                Fractional
      Rights and Fractional Shares. 

              	
                23

              

      

    

    
      
        	
                15.

              	
                Rights
      of Action. 

              	
                24

              

      

    

    
      
        	
                16.

              	
                Agreement
      of Right Holders. 

              	
                25

              

      

    

    
      
        	
                17.

              	
                Right
      Certificate Holder Not Deemed a Stockholder. 

              	
                25

              

      

    

    
      
        	
                18.

              	
                Concerning
      the Rights Agent. 

              	
                26

              

      

    

    
      
        	
                19.

              	
                Merger
      or Consolidation or Change of Mellon
      Investor Services LLC LLC. 

              	
                26

              

      

    

    
      
        	
                20.

              	
                Duties
      of Rights Agent. 

              	
                27

              

      

    

    
      
        	
                21.

              	
                Change
      of Rights Agent. 

              	
                29

              

      

    

    
      
        	
                22.

              	
                Issuance
      of New Right Certificates. 

              	
                30

              

      

    

    
      
        	
                23.

              	
                Redemption. 

              	
                30

              

      

    

    
      
        	
                24.

              	
                Exchange. 

              	
                31

              

      

    

    
      
        	
                25.

              	
                Notice
      of Certain Events. 

              	
                32

              

      

    

    
      
        	
                26.

              	
                Notices. 

              	
                33

              

      

    

    
      
        	
                27.

              	
                Supplements
      and Amendments. 

              	
                33

              

      

    

    
      
        	
                28.

              	
                Successors. 

              	
                34

              

      

    

    
      
        	
                29.

              	
                Benefits
      of this Rights Agreement. 

              	
                34

              

      

    

    
      
        	
                30.

              	
                Determinations
      and Actions by the Board of Directors. 

              	
                34

              

      

    

    
      
        	
                31.

              	
                Severability. 

              	
                35

              

      

    

    
      
        	
                32.

              	
                Governing
      Law. 

              	
                35

              

      

    

    
      
        	
                33.

              	
                Counterparts. 

              	
                35

              

      

    

    
      
        	
                34.

              	
                Descriptive
      Headings. 

              	
                35

              

      

    

    

    EXHIBITS

    Exhibit A
– Form of Certificate of Designations                                                                    A-1

    Exhibit B
– Form of Right Certificate                                                                        B-1

    Exhibit C
– Form of Summary of Rights                                                                       C-1

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    INDEX
OF DEFINED TERMS

    
 

    
      
        
          
            
              
                
                  	
                           

                        	
                          Page

                        
	
                          Acquiring
      Person

                        	
                          1

                        
	
                          Affiliate

                        	
                          2

                        
	
                          Associate

                        	
                          2

                        
	
                          Authorized
      Officer

                        	
                          27

                        
	
                          Beneficial
      Owner

                        	
                          2

                        
	
                          Beneficial
      Ownership

                        	
                          2

                        
	
                          beneficially
      own

                        	
                          2

                        
	
                          Business
      Day

                        	
                          3

                        
	
                          close
      of business

                        	
                          3

                        
	
                          Common
      Stock

                        	
                          3

                        
	
                          Common
      Stock equivalents

                        	
                          14

                        
	
                          Company

                        	
                          1

                        
	
                          Current
      Value

                        	
                          13

                        
	
                          Distribution
      Date

                        	
                          5

                        
	
                          equivalent
      preferred shares

                        	
                          15

                        
	
                          Exchange
      Act

                        	
                          2

                        
	
                          Exchange
      Ratio

                        	
                          31

                        
	
                          Exempted
      Entity

                        	
                          9

                        
	
                          Expiration
      Date

                        	
                          9

                        
	
                          Final
      Expiration Date

                        	
                          13

                        
	
                          invalidation
      time

                        	
                          4

                        
	
                          NASDAQ

                        	
                          4

                        
	
                          NYSE

                        	
                          4

                        
	
                          Original
      Rights

                        	
                          2

                        
	
                          Person

                        	
                          4

                        
	
                          Principal
      Party

                        	
                          21

                        
	
                          Purchase
      Price

                        	
                          9

                        
	
                          Record
      Date

                        	
                          1

                        
	
                          Redemption
      Date

                        	
                          9

                        
	
                          Redemption
      Price

                        	
                          30

                        
	
                          Right

                        	
                          1

                        
	
                          Right
      Certificate

                        	
                          5

                        
	
                          Rights
      Agent

                        	
                          1

                        
	
                          Rights
      Agreement

                        	
                          6

                        
	
                          Section
      11(a)(ii) Trigger Date

                        	
                          14

                        
	
                          Securities
      Act

                        	
                          4

                        
	
                          Security

                        	
                          16

                        
	
                          Series
      X Preferred Stock

                        	
                          4

                        
	
                          Spread

                        	
                          13

                        
	
                          Stock
      Acquisition Date

                        	
                          4

                        
	
                          Subsidiary

                        	
                          4

                        
	
                          Substitution
      Period

                        	
                          14

                        
	
                          Summary
      of Rights

                        	
                          5

                        
	
                          then
      outstanding

                        	
                          2

                        
	
                          Trading
      Day

                        	
                          16

                        

                

              

            

          

        

      

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

    Rights
Agreement

     

    Rights
Agreement, dated as of July 21, 2009 (as amended, supplemented or otherwise
modified from time to time, the “Rights
Agreement”) between Capitol Bancorp Ltd., a Michigan corporation (the
“Company”),
and Mellon Investor Services LLC, a New Jersey limited liability company (the
“Rights
Agent”).

     

    W
I T N E S S E T H

     

    WHEREAS,
the Board of Directors of the Company has on July 20, 2009 authorized and
declared a dividend of one preferred share purchase right (a “Right”)
for each share of Common Stock (as defined below) of the Company outstanding as
of the close of business (as defined below) on July 31, 2009 (the “Record
Date”), each Right representing the right to purchase one one-thousandth
(subject to adjustment) of a share of Series X Preferred Stock (as defined
below), upon the terms and subject to the conditions herein set forth, and the
Board of Directors has further authorized and directed the issuance of one Right
(subject to adjustment as provided herein) with respect to each share of Common
Stock that shall become outstanding between the Record Date and the earlier of
the Distribution Date and the Expiration Date (as such terms are hereinafter
defined); provided, however, that Rights may be issued with respect to shares of
Common Stock that shall become outstanding after the Distribution Date and prior
to the Expiration Date in accordance with Section
22.

     

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

     

    1. Certain
Definitions.  For
purposes of this Rights Agreement, the following terms have the meaning
indicated:

     

    (a) “Acquiring
Person” shall mean any Person (as defined below) who or which shall be
the Beneficial Owner (as defined below) of 10% or more of the shares of Common
Stock then outstanding, but shall not include an Exempted Entity (as defined
below); provided, however, that if the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an “Acquiring
Person” has become such inadvertently (including, without limitation,
because (A) such Person was unaware that it beneficially owned a percentage of
Common Stock that would otherwise cause such Person to be an “Acquiring
Person” or (B) such Person was aware of the extent of its Beneficial
Ownership of Common Stock but had no actual knowledge of the consequences of
such Beneficial Ownership under this Rights Agreement) and without any intention
of changing or influencing control of the Company, then such Person shall not be
deemed to be or to have become an “Acquiring
Person” for any purposes of this Rights Agreement unless and until such
Person shall have failed to divest itself, as soon as practicable, if the
Company so requests, of Beneficial Ownership of a sufficient number of shares of
Common Stock so that such Person would no longer otherwise qualify as an “Acquiring
Person”. Notwithstanding the foregoing, no Person shall be deemed an
“Acquiring Person” as the result of an acquisition of shares of Common Stock by
the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 10% or more
of the shares of Common Stock then 

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    outstanding;
provided, however, that if a
Person shall become the Beneficial Owner of 10% or more of the shares of Common
Stock then outstanding by reason of such share acquisitions by the Company and
thereafter becomes the Beneficial Owner of any additional shares of Common Stock
(other than pursuant to a dividend or distribution paid or made by the Company
on the outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an “Acquiring
Person,” subject to the proviso set forth in the first sentence of this Section 1(a), unless
upon the consummation of the acquisition of such additional shares of Common
Stock such Person does not beneficially own 10% or more of the shares of Common
Stock then outstanding. The phrase “then
outstanding”, when used with reference to a Person’s Beneficial Ownership
of securities of the Company, shall mean the number of such securities then
issued and outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to own
beneficially hereunder.

     

    (b) “Affiliate”
and “Associate”
shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended and in effect on the date of the Agreement (the “Exchange
Act”).

     

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

     

    (i) which
such Person or any of such Person’s Affiliates or Associates is deemed to
beneficially own, directly or indirectly, within the meaning of Rule 13d-3 of
the General Rules and Regulations under the Exchange Act as in effect on the
date of this Rights Agreement;

     

    (ii) which
such Person or any of such Person’s Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), written or
otherwise, or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own, (w)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, (x) securities which
such Person has a right to acquire on the exercise of Rights at any time prior
to the time a Person becomes an Acquiring Person, or (y) securities issuable
upon exercise of Rights from and after the time a Person becomes an Acquiring
Person if such Rights were acquired by such Person or any of such Person’s
Affiliates or Associates prior to the Distribution Date or pursuant to Section 3 or Section 22 hereof
(the “Original
Rights”) or pursuant to Section 11(i) or
Section 11(n)
with respect to an adjustment to the Original Rights or (z) securities which
such Person or any of such Person’s Affiliates or Associates may acquire, does
or do acquire or may be deemed to acquire or may be deemed to have the right to
acquire, pursuant to any merger or other acquisition agreement between the
Company and such Person (or one or more of such Person’s Affiliates or
Associates) if prior to such Person becoming an Acquiring Person the Board of
Directors of the Company has approved such agreement and determined that such
Person shall not be or be deemed to be the beneficial 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    owner of
such securities within the meaning of this Section 1.3; (B) the
right to vote pursuant to any agreement, arrangement or understanding, written
or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own, any
security by reason of such agreement, arrangement or understanding if the
agreement, arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or

     

    (iii) which are
beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of such Person’s
Affiliates or Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to this Section 1(c)(ii)(B))
or disposing of such securities of the Company;

     

    provided, however, that (x)
that nothing in this Section 1(c) shall
cause a Person engaged in business as an underwriter of securities to be the
“Beneficial Owner” of, or to “beneficially own,” any securities acquired through
such Person’s participation in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such acquisition, and then
only if such securities continue to be owned by such Person at such expiration
of forty days; (y) no Person who is an officer, director, or employee of an
Exempted Entity shall be deemed, solely by reason of such Person’s status or
authority as such, to be the “Beneficial Owner” of, to have “Beneficial
Ownership” of or to “beneficially own” any securities that are “beneficially
owned” (as defined in this Section 1(c)),
including, without limitation, in a fiduciary capacity, by an Exempted Entity or
by any other such officer, director or employee of an Exempted Entity; and (z) a
Person shall not be deemed the Beneficial Owner of, to have “Beneficial
Ownership” of or to beneficially own, shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) held by
such Person in trust accounts, managed accounts and the like, or otherwise held
in a fiduciary capacity, that are Beneficially Owned by third Persons who are
not Affiliates or Associates of such Person.

     

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

     

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

     

    (f) “Common
Stock” when used with reference to the Company shall mean the common
stock, no par value per share, of the Company. “Common
Stock” when used with reference to any Person other than the Company
shall mean the capital stock (or, in the case of an unincorporated entity, the
equivalent equity interest) with the greatest voting power of such other Person
or, if such other Person is a subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (g) “Exempted
Entity” shall mean (1) the Company, (2) any Subsidiary (as defined below)
of the Company (in the case of subclauses (1) and (2) including, without
limitation, in its fiduciary capacity), (3) any employee benefit plan of the
Company or of any Subsidiary of the Company, and (4) any entity or trustee
holding 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.

     

    (h) “NASDAQ”
shall mean The NASDAQ Stock Market LLC.

     

    (i) “NYSE”
shall mean the New York Stock Exchange, Inc.

     

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

     

    (k) “Securities
Act” shall mean the Securities Act of 1933, as amended.

     

    (l) “Series X
Preferred Stock” shall mean the Series X Junior Participating Preferred
Stock, no par value per share, of the Company having the rights and preferences
set forth in the Certificate of Designations attached to this Rights Agreement
as Exhibit A and, to the extent that there are not a sufficient number of shares
of Series X Junior Participating Preferred Stock authorized to permit the full
exercise of the Rights, any other series of preferred stock of the Company
designated for such purpose containing terms substantially similar to the terms
of the Series X Junior Participating Preferred Stock.

     

    (m) “Stock Acquisition
Date” shall mean the first date of public announcement (which for
purposes of this definition shall include, without limitation, a report filed
pursuant to Section
13(d) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such or such earlier date as a majority of the Board
of Directors shall become aware of the existence of an Acquiring
Person.

     

    (n) “Subsidiary”
of any Person shall mean any corporation or other entity of which securities or
other ownership interests having ordinary voting power sufficient to elect a
majority of the board of directors or other persons performing similar functions
are beneficially owned, directly or indirectly, by such Person, and any
corporation or other entity that is otherwise controlled by such
Person.

     

    2. Appointment of Rights
Agent.  The
Company hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable upon ten (10) days’ prior
notice to the Rights Agent. The Rights Agent shall have no duty to supervise,
and shall in no event be liable for the acts or omissions of any such co-Rights
Agent.

     

    3. Issuance of Right
Certificates.

     

    (a) Until the
close of business on the earlier of (i) the tenth day after the Stock
Acquisition Date or (ii) the tenth Business Day (or such later date as may be
determined by 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    action of
the Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than an Exempted
Entity) of, or of the first public announcement of the intention of such Person
(other than an Exempted Entity) to commence, a tender or exchange offer the
consummation of which would result in any Person (other than an Exempted Entity)
becoming the Beneficial Owner of 10% or more of the shares of Common Stock then
outstanding (including, in the case of both clause (i) and (ii), any such date
which is after the date of this Rights Agreement and prior to the issuance of
the Rights) (the earlier of such dates being herein referred to as the “Distribution
Date”), (x) the Rights will be evidenced (subject to the provisions of
Section 3(b)
hereof) by the certificates for Common Stock registered in the names of the
holders thereof and not by separate Right Certificates (as defined below), and
(y) the Rights will be transferable only in connection with the transfer of
Common Stock. As soon as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if requested and
provided with all necessary information, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Stock as of the close of
business on the Distribution Date (other than any Acquiring Person or any
Associate or Affiliate of an Acquiring Person), at the address of such holder
shown on the records of the Company, a Right Certificate, in substantially the
form of Exhibit B hereto (a “Right
Certificate”), evidencing one Right (subject to adjustment as provided
herein) for each share of Common Stock so held. As of and after the Distribution
Date, the Rights will be evidenced solely by such Right
Certificates.

     

    The
Company shall promptly notify the Rights Agent in writing upon the occurrence of
the Distribution Date and, if such notification is given orally, the Company
shall confirm same in writing on or prior to the Business Day next
following.  Until such notice is received by the Rights Agent, the
Rights Agent may presume conclusively for all purposes that the Distribution
Date has not occurred.

     

    (b) As
promptly as practicable following the Record Date, the Company will send a copy
of a Summary of Rights to Purchase Shares of Series X Preferred Stock, in
substantially the form of Exhibit C hereto (the “Summary of
Rights”), by electronic mail, to each record holder of Common Stock as of
the close of business on the Record Date (other than any Acquiring Person or any
Associate or Affiliate of any Acquiring Person), at the address of such holder
shown on the records of the Company; provided, however, the Company
will send a copy of the Summary of Rights by first-class, postage-prepaid mail
to each record holder who so requests upon receipt of the electronic mail or who
has not consented to receive communications by electronic delivery. With respect
to shares of Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights associated with such shares will be evidenced by
the share certificate for such shares of Common Stock registered in the names of
the holders thereof together with the Summary of Rights. Until the Distribution
Date (or, if earlier, the Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby.

     

    (c) Rights
shall be issued in respect of all shares of Common Stock issued or disposed of
(including, without limitation, upon disposition of Common Stock out of treasury
stock or issuance or reissuance of Common Stock out of authorized but unissued
shares) after the 

     

    
      
        
        

      

      
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    Record
Date but prior to the earlier of the Distribution Date and the Expiration Date,
or in certain circumstances provided in Section 22 hereof,
after the Distribution Date. Certificates issued for Common Stock (including,
without limitation, upon transfer of outstanding Common Stock, disposition of
Common Stock out of treasury stock or issuance or reissuance of Common Stock out
of authorized but unissued shares) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date shall have impressed
on, printed on, written on or otherwise affixed to them a legend in
substantially the following form:

     

    “THIS
CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS
SET FORTH IN A RIGHTS AGREEMENT BETWEEN CAPITOL BANCORP LTD.  AND
MELLON INVESTOR SERVICES LLC, AS RIGHTS AGENT, DATED AS OF JULY 21, 2009, AS THE
SAME MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME (THE
“RIGHTS
AGREEMENT”), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY
REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF
CAPITOL BANCORP LTD. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO
LONGER BE EVIDENCED BY THIS CERTIFICATE. CAPITOL BANCORP LTD. WILL MAIL TO THE
HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH
IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR
BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.”

     

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

     

    Notwithstanding
this paragraph (c), the omission of a legend shall not affect the enforceability
of any part of this Rights Agreement or the rights of any holder of the
Rights.

     

    4. Form of Right
Certificates.  The
Right Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be substantially in the
form set forth in Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company 

     

    
      
        
        

      

      
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    may deem
appropriate (which do not affect the rights, duties or responsibilities of the
Rights Agent) and as are not inconsistent with the provisions of this Rights
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of NYSE
or of any other stock exchange or automated quotation system on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections
11 and
22 hereof, the Right Certificates shall entitle the holders thereof to
purchase such number of one one-thousandths of a share of Series X Preferred
Stock as shall be set forth therein at the Purchase Price (as determined
pursuant to Section
7), but the amount and type of securities purchasable upon the exercise
of each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.

     

    5. Countersignature and
Registration.

     

    (a) The Right
Certificates shall be executed on behalf of the Company by the Chief Executive
Officer, the President, any of the Vice Presidents or the Treasurer of the
Company, either manually or by facsimile signature, shall have affixed thereto
the Company’s seal or a facsimile thereof and shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned by the Rights Agent,
either manually or by facsimile signature, and shall not be valid for any
purpose unless countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the Person who signed such Right Certificates had not ceased to
be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any Person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Rights
Agreement any such Person was not such an officer.

     

    (b) Following
the Distribution Date, receipt by the Rights Agent of notice to that effect and
all other relevant information referred to in Section 3(a), the Rights Agent
will keep or cause to be kept, at its office designated for such purpose, books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.

     

    6. Transfer, Split Up,
Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates.

     

    (a) Subject
to the provisions of this Rights Agreement, at any time after the close of
business on the Distribution Date, and prior to the close of business on the
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates (other than Right Certificates representing Rights that have become
null and void pursuant to Section 11(a)(ii) hereof or that have been exchanged
pursuant to Section 24 hereof), entitling the registered holder to purchase a
like number of one one-thousandths of a share of Series X Preferred Stock (or,
following such 

     

     

    
      
        
        

      

      
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    time,
other securities, cash or assets as the case may be) as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent designated for such purpose.  The Right Certificates
are transferable only on the registry books of the Rights Agent. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate or
Certificates until the registered holder thereof shall have (i) properly
completed and duly signed the certificate contained in the form of assignment
set forth on the reverse side of each such Right Certificate, (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
and Associates of such Beneficial Owner (or former Beneficial Owner) as the
Company or the Rights Agent shall reasonably request, and (iii) paid a sum
sufficient to cover any tax or charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates as required by
Section 9(e) hereof.  Thereupon the Rights Agent, subject to the
provisions of this Rights Agreement, shall countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested, registered in such name or names as may be designated by the
surrendering registered holder. The Company may require payment of a sum
sufficient to cover any tax or charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates. The Rights
Agent shall have no duty or obligation to take action under any Section of this
Agreement that requires the payment of taxes and/or charges unless and until the
Rights Agent is satisfied that all such taxes and/or charges have been
paid.

     

    (b) Subject
to the provisions of this Rights Agreement, at any time after the Distribution
Date and prior to the Expiration Date, upon receipt by the Company and the
Rights Agent of evidence satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.

     

    7. Exercise of Rights, Purchase
Price; Expiration Date of Rights.

     

    (a) Except as
otherwise provided herein, the Rights shall become exercisable on the
Distribution Date, and thereafter the registered holder of any Right Certificate
may, subject to Section 11(a)(ii)
hereof and except as otherwise provided herein, exercise the Rights evidenced
thereby in whole or in part upon surrender of the Right Certificate, with the
form of election to purchase on the reverse side thereof properly completed and
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Purchase Price for each one
one-thousandth of a share of Series X Preferred Stock (or other securities, cash
or assets, as the case may be) as to which the Rights are exercised and an
amount equal to any tax or charge required to be paid under Section 9(e) hereof,
by certified check, cashier’s check, bank draft or money order payable to the
order of the Company, 

     

     

    
      
        
        

      

      
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    at any
time which is both after the Distribution Date and prior to the time (the “Expiration
Date”) that is the earliest of (i) the close of business on July 21, 2014
(the “Final
Expiration Date”), (ii) the time at which the Rights are redeemed as
provided in Section
23 hereof (the “Redemption
Date”) or (iii) the time at which such Rights are exchanged as provided
in Section 24
hereof.  Except for those provisions herein which expressly survive
the termination of this Agreement, this Agreement shall terminate at such time
as the Rights are no longer exercisable hereunder.

     

    (b) The
purchase price (the “Purchase
Price”) shall be initially $5.00 for each one one-thousandth of a share
of Series X Preferred Stock purchasable upon the exercise of a Right. The
Purchase Price and the number of one one-thousandths of a share of Series X
Preferred Stock or other securities or property to be acquired upon exercise of
a Right shall be subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) of this Section
7.

     

    (c) Except as
otherwise provided herein, upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase properly completed and
duly executed, accompanied by payment of the aggregate Purchase Price for the
number of shares of Series X Preferred Stock to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9(e) hereof,
by certified check, cashier’s check, bank draft or money order payable to the
order of the Company, subject to Section 20(j), the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the Series X Preferred
Stock or make available if the Rights Agent is the transfer agent for the Series
X Preferred Stock certificates for the number of shares of Series X Preferred
Stock to be purchased (and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests), or (B) requisition from the
depositary agent appointed by the Company depositary receipts representing
interests in such number of one one-thousandths of a share of Series X Preferred
Stock as are to be purchased, in which case certificates for the Series X
Preferred Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent (and the Company hereby directs the depositary
agent to comply with such request), (ii) when necessary to comply with this
Rights Agreement, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) promptly after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by such
holder and (iv) when necessary to comply with this Rights Agreement, after
receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.

     

    (d) Except as
otherwise provided herein, in case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the exercisable Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14
hereof.

     

     

    
      
        
        

      

      
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    (e) Notwithstanding
anything in this Rights Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a
registered holder of Rights or other securities upon the occurrence of any
purported transfer or exercise of Rights pursuant to Section 6 hereof or
this Section 7
unless such registered holder shall have (i) properly completed and duly signed
the certificate contained in the form of assignment or election to purchase set
forth on the reverse side of the Right Certificate surrendered for such transfer
or exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) thereof and of the Rights
evidenced thereby and of the Affiliates and Associates of such Beneficial Owner
(or former Beneficial Owner) as the Company or the Rights Agent shall reasonably
request.

     

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

     

    9. Availability of Shares of
Series X Preferred Stock.

     

    (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Series X Preferred Stock
or any shares of Series X Preferred Stock held in its treasury, the number of
shares of Series X Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights.

     

    (b) So long
as the shares of Series X Preferred Stock (and, following the time that a Person
becomes an Acquiring Person, shares of Common Stock and other securities)
issuable upon the exercise of Rights may be listed or admitted to trading on
NYSE or listed on any other national securities exchange or quotation system,
the Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be listed or
admitted to trading on NYSE or listed on any other exchange or quotation system
upon official notice of issuance upon such exercise.

     

    (c) From and
after such time as the Rights become exercisable, the Company shall use its best
efforts, if then necessary to permit the issuance of shares of Series X
Preferred Stock (and following the time that a Person first becomes an Acquiring
Person, shares of Common Stock and other securities) upon the exercise of
Rights, to register and qualify such shares of Series X Preferred Stock (and
following the time that a Person first becomes an Acquiring Person, shares of
Common Stock and other securities) under the Securities Act and any applicable
state securities or “Blue Sky” laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier 

     

    
      
        
        

      

      
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    of (x)
the date as of which the Rights are no longer exercisable for such securities
and (y) the Expiration Date. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days, the exercisability of the Rights in
order to prepare and file a registration statement under the Securities Act and
permit it to become effective. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect.  The Company shall notify the
Rights Agent whenever it makes a public announcement pursuant to this Section
9(c) and give the Rights Agent a copy of such
announcement.  Notwithstanding any provision of this Rights Agreement
to the contrary, the Rights shall not be exercisable in any jurisdiction unless
the requisite qualification or exemption in such jurisdiction shall have been
obtained and until a registration statement under the Securities Act (if
required) shall have been declared effective.

     

    (d) The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all shares of Series X Preferred Stock (and, following
the time that a Person becomes an Acquiring Person, shares of Common Stock and
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates therefor (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.

     

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

     

    10. Series X Preferred Stock
Record Date.  Each
Person in whose name any certificate for Series X Preferred Stock is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the shares of Series X Preferred Stock represented thereby
on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable taxes or charges) was duly made; provided,
however, that if the date of such surrender and payment is a date upon which the
Series X Preferred 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 shall be dated, the next succeeding Business Day on which such
transfer books are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to any rights of a
holder of Series X Preferred Stock for which the Rights shall be exercisable,
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    dividends
or other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

     

    11. Adjustment of Purchase
Price, Number and Kind of Shares and Number of Rights.  The
Purchase Price, the number of shares of Series X Preferred Stock or other
securities or property purchasable upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section
11.

     

    (a) 

     

    (i) In the
event the Company shall at any time after the date of this Agreement (A) declare
a dividend on the Series X Preferred Stock payable in shares of Series X
Preferred Stock, (B) subdivide the outstanding shares of Series X Preferred
Stock, combine the outstanding shares of Series X Preferred Stock into a smaller
number of shares of Series X Preferred Stock or (D) issue any shares of its
capital stock in a reclassification of the shares of Series X Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, as the
case may be, and the number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the Series X Preferred Stock
transfer books of the Company were open, the holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification.

     

    (ii) Subject
to Section 24
of this Rights Agreement and except as otherwise provided in this Section 11(a)(ii) and
Section
11(a)(iii), in the event that any Person becomes an Acquiring Person,
each holder of a Right shall thereafter have the right to receive, upon exercise
thereof at a price equal to the then-current Purchase Price, in accordance with
the terms of this Rights Agreement and in lieu of shares of Series X Preferred
Stock, such number of shares of Common Stock (or at the option of the Company,
such number of one one-thousandths of a share of Series X Preferred Stock) as
shall equal the result obtained by (x) multiplying the then-current Purchase
Price by the number of one one-thousandths of a share of Series X Preferred
Stock for which a Right is then exercisable and dividing that product by (y) 50%
of the then-current per share market price of the Company’s Common Stock
(determined pursuant to Section 11(d) hereof)
on the date of the occurrence of such event; provided, however, that the
Purchase Price (as so adjusted) and the number of shares of Common Stock so
receivable upon exercise of a Right shall thereafter be subject to further
adjustment as appropriate in accordance with Section 11(f) hereof.
Notwithstanding anything in this Rights Agreement to the contrary, however, from
and after the time (the “invalidation
time”) when any Person first becomes an Acquiring Person, any Rights that
are beneficially owned by (x) any Acquiring Person (or any Affiliate or
Associate of any Acquiring Person), (y) a transferee of any Acquiring Person (or
any such Affiliate or Associate) who becomes a transferee after the invalidation
time or (z) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who became a transferee prior to or concurrently with the
invalidation time pursuant to either (I) a transfer from the Acquiring Person to
holders of its equity securities or to any Person with whom it has any

     

     

    
      
        
        

      

      
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    continuing
agreement, arrangement or understanding, written or otherwise, regarding the
transferred Rights or (II) a transfer that the Board of Directors has determined
is part of a plan, arrangement or understanding, written or otherwise, which has
the purpose or effect of avoiding the provisions of this paragraph, and
subsequent transferees of such Persons, shall be null and void without any
further action and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this Rights
Agreement. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11(a)(ii) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. From and after the invalidation time, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 hereof that
represents Rights that are or have become null and void pursuant to the
provisions of this paragraph, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become null and void pursuant to
the provisions of this paragraph shall be cancelled. From and after the
occurrence of an event specified in Section 13(a) hereof,
any Rights that theretofore have not been exercised pursuant to this Section 11(a)(ii)
shall thereafter be exercisable only in accordance with Section 13 and not
pursuant to this Section
11(a)(ii).  The Company shall give the Rights Agent written
notice of the identity of any such Acquiring Person, Associate or Affiliate, or
the nominee of any of the foregoing, and the Rights Agent may rely on such
notice in carrying out its duties under this Agreement and shall be deemed not
to have any knowledge of the identity of any such Acquiring Person, Associate or
Affiliate, or the nominee of any of the foregoing unless and until it shall have
received such notice.

     

    (iii) The
Company may at its option substitute for a share of Common Stock issuable upon
the exercise of Rights in accordance with the foregoing subparagraph (ii) such
number or fractions of shares of Series X Preferred Stock having an aggregate
current market value equal to the current per share market price of a share of
Common Stock. In the event that there shall be an insufficient number of Common
Stock authorized but unissued (and unreserved) to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the Board of
Directors shall, with respect to such deficiency, to the extent permitted by
applicable law and any material agreements then in effect to which the Company
is a party (A) determine the excess of (x) the value of the shares of Common
Stock issuable upon the exercise of a Right in accordance with the foregoing
subparagraph (ii) (the “Current
Value”) over (y) the then-current Purchase Price multiplied by the number
of one one-thousandths of shares of Series X Preferred Stock for which a Right
was exercisable immediately prior to the time that the Acquiring Person became
such (such excess, the “Spread”),
and (B) with respect to each Right (other than Rights which have become null and
void pursuant to Section 11(a)(ii)),
make adequate provision to substitute for the shares of Common Stock issuable in
accordance with subparagraph (ii) upon exercise of the Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in such Purchase Price, (3)
shares of Series X Preferred Stock or other equity securities of the Company
(including, without limitation, shares or fractions of shares of preferred stock
which, by virtue of having dividend, voting and liquidation rights substantially
comparable to those of the shares of Common Stock, are deemed in good faith by
the Board of Directors to have substantially the same value as the shares of
Common Stock (such shares of preferred stock and shares or fractions of shares
of preferred stock are hereinafter referred to as “Common Stock
equivalents”), (4) debt securities of the Company, (5) other assets or
(6) any combination of the foregoing, having a value which, when added to the
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    Common
Stock actually issued upon exercise of such Right, shall have an aggregate value
equal to the Current Value (less the amount of any reduction in such Purchase
Price), where such aggregate value has been determined by the Board of Directors
upon the advice of a nationally recognized investment banking firm selected in
good faith by the Board of Directors; provided, however, if the
Company shall not make adequate provision to deliver value pursuant to clause
(B) above within thirty (30) days following but not including the date that the
Acquiring Person became such (the “Section 11(a)(ii)
Trigger
Date”), then the Company shall be obligated to deliver, to the extent
permitted by applicable law and any material agreements then in effect to which
the Company is a party, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of shares of Series
X Preferred Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If within the
thirty (30) day period referred to above the Board of Directors shall determine
in good faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the Rights,
then, if the Board of Directors so elects, such thirty (30) day period may be
extended to the extent necessary, but not more than ninety (90) days after but
not including the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such thirty (30) day period, as it may
be extended, is hereinafter called the “Substitution
Period”). To the extent that the Company determines that some action need
be taken pursuant to the second and/or third sentence of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 11(a)(ii)
hereof and the last sentence of this Section 11(a)(iii)
hereof, that such action shall apply uniformly to all outstanding Rights and (y)
may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such second sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section
11(a)(iii), the value of the shares of Common Stock shall be the current
per share market price (as determined pursuant to Section 11(d)(i)) on
the Section
11(a)(ii) Trigger Date and the per share or fractional value of any
Common Stock equivalent shall be deemed to equal the current per share market
price of the Common Stock. The Board of Directors of the Company may, but shall
not be required to, establish procedures to allocate the right to receive shares
of Common Stock upon the exercise of the Rights among holders of Rights pursuant
to this Section
11(a)(iii).

     

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

     

    
      
        
        

      

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

     

    (c) In case
the Company shall fix a record date for the making of a distribution to all
holders of the Series X Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness or assets (other than a
regular quarterly cash dividend or a dividend payable in Series X Preferred
Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then-current per
share market price of the Series X Preferred Stock (determined pursuant to Section 11(d) hereof)
on such record date, less the fair market value (as determined in good faith by
the Board of Directors of the Company whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent) of the portion of such assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one share
of Series X Preferred Stock, and the denominator of which shall be such current
per share market price of the Series X Preferred Stock.  Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.

     

    (d) 

     

    (i) Except as
otherwise provided herein, for the purpose of any computation hereunder, the
“current per share market price” of any security (a “Security”
for the purpose of this Section 11(d)(i)) on
any date shall be deemed to be the average of the daily closing prices per share
of such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to but not including such date; provided, however, that in

     

    
      
        
        

      

      
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    the event
that the current per share market price of the Security is determined during a
period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security, and prior to the expiration of 30 Trading
Days after but not including the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported by (w) the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on NYSE or, (x) if the
Security is not listed or admitted to trading on NYSE, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if (y) the Security is not listed or admitted
to trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NYSE or such other system then in use,
or, (z) if on any such date the Security is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of Directors
of the Company. The term “Trading
Day” shall mean a day on which the principal national securities exchange
on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day.

     

    (ii) For the
purpose of any computation hereunder, if the Series X Preferred Stock is
publicly traded, the “current per share market price” of the Series X Preferred
Stock shall be determined in accordance with the method set forth in Section 11(d)(i). If
the Series X Preferred Stock is not publicly traded but the Common Stock is
publicly traded, the “current per share market price” of the Series X Preferred
Stock shall be conclusively deemed to be the current per share market price of
the Common Stock, as determined pursuant to Section 11(d)(i),
multiplied by one thousand (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof). If
neither the Common Stock nor the Series X Preferred Stock is publicly traded,
“current per share market price” shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent.

     

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

     

     

    
      
        
        

      

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

     

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

     

    (h) Unless
the Company shall have exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the calculations made in
Section 11(b) and
(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandths of a share of Series X
Preferred Stock (calculated to the nearest one ten- thousandth of a share of
Series X Preferred Stock) obtained by (i) multiplying (x) the number of one
one-thousandths of a share of Series X Preferred Stock purchasable upon the
exercise of a Right immediately prior to such adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

     

    (i) The
Company may elect on or after the date of any adjustment of the Purchase Price
pursuant to Sections
11(b) or 11(c) hereof to adjust the number of Rights, in substitution for
any adjustment in the number of one one-thousandths of a share of Series X
Preferred Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-thousandths of a share of Series X Preferred Stock for
which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement (with prompt
written notice thereof to the Rights Agent) of its election to adjust the number
of Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company may, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section
14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates 

     

    
      
        
        

      

      
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    held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled as a result of such adjustment. Right
Certificates so to be distributed shall be issued, executed and delivered by the
Company, and countersigned and delivered by the Rights Agent in the manner
provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.

     

    (j) Irrespective
of any adjustment or change in the Purchase Price or the number of one
one-thousandths of a share of Series X Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-thousandths
of a share of Series X Preferred Stock which were expressed in the initial Right
Certificates issued hereunder.

     

    (k) Reserved.

     

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

     

    (m) Notwithstanding
anything in this Section 11 to the
contrary, the Company shall be entitled to make such adjustments in the Purchase
Price, in addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Series X Preferred Stock,
issuance (wholly for cash) of any shares of Series X Preferred Stock at less
than the current market price, issuance (wholly for cash) of Series X Preferred
Stock or securities which by their terms are convertible into or exchangeable
for Series X Preferred Stock, dividends on Series X Preferred Stock payable in
shares of Series X Preferred Stock or issuance of rights, options or warrants
referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of its Series X Preferred Stock shall
not be taxable to such stockholders.

     

    (n) Notwithstanding
anything in this Rights Agreement to the contrary, in the event that at any time
after the date of this Rights Agreement and prior to the Distribution Date, the
Company shall (i) declare or pay any dividend on the Common Stock payable in
Common Stock or (ii) effect a subdivision, combination or consolidation of the
Common Stock (by reclassification or otherwise than by payment of a dividend
payable in Common Stock) into a greater or lesser number of shares of Common
Stock, then in any such case, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by 

     

    
      
        
        

      

      
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    multiplying
the number of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to the occurrence
of the event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such
event.

     

    (o) The
Company agrees that, after the earlier of the Distribution Date or the Stock
Acquisition Date, it will not, except as permitted by Sections 23, 24 or 27
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the
Rights.

     

    12. Certificate of Adjusted
Purchase Price or Number of Shares.  Whenever
an adjustment is made or any event affecting the Rights or their exercisability
(including, without limitation, an event which causes the Rights to become null
and void) occurs as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment or describing such event, and a brief, reasonably detailed statement
of the facts, computations and methodology accounting for such adjustment, (b)
file with the Rights Agent and with each transfer agent for the Common Stock or
the Series X Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof (if
so required under Section 25 hereof).
The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment or statement therein contained and shall have no liability
with respect to, and shall not be deemed to have knowledge of any such
adjustment or any such event unless and until it shall have received such
certificate.

     

    13. Consolidation, Merger or
Sale or Transfer of Assets or Earnings Power.

     

    (a) In the
event, directly or indirectly, at any time after any Person has become an
Acquiring Person, (i) the Company shall merge with and into any other Person
(other than one or more of its wholly-owned Subsidiaries), (ii) any Person
(other than one or more of its wholly-owned Subsidiaries), shall consolidate
with the Company, or any Person (other than one or more of its wholly-owned
Subsidiaries), shall merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Stock shall be changed into or exchanged
for stock or other securities of any other Person (or of the Company) or cash or
any other property, or (iii) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power aggregating to 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person (other than the Company or one or more of its wholly-owned
Subsidiaries), then, and in each such case, proper provision shall be made so
that:

     

    (A) each
holder of record of a Right (other than Rights which have become null and void
pursuant to Section
11(a)(ii)) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then-current Purchase Price multiplied by the
number of one one-thousandths of a share of Series X Preferred Stock for which a
Right was 

     

    
      
        
        

      

      
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    exercisable
(whether or not such Right was then exercisable) immediately prior to the time
that any Person first became an Acquiring Person (each as subsequently adjusted
thereafter pursuant to Section 11(a)(i), 11(b),
11(c), 11(f), 11(h), 11(i) and 11(m)), in accordance with the terms of
this Rights Agreement and in lieu of Series X Preferred Stock, such number of
validly issued, fully paid and non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as defined below) not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then-current Purchase Price by the
number of one one-thousandths of a share of Series X Preferred Stock for which a
Right was exercisable immediately prior to the time that any Person first became
an Acquiring Person (as subsequently adjusted thereafter pursuant to Section 11(a)(i), 11(b), 11
(c), 11(f), 11(h), 11(i) and 11(m)) and (2) dividing that product by 50%
of the then-current per share market price of the Common Stock of such Principal
Party (determined pursuant to Section 11(d)(i)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; provided that the Purchase Price and the number of shares of Common
Stock of such Principal Party issuable upon exercise of each Right shall be
further adjusted as provided in Section 11(f) of this
Rights Agreement to reflect any events occurring in respect of such Principal
Party after the date of such consolidation, merger, sale or
transfer;

     

    (B) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Rights Agreement;

     

    (C) the term
“Company” as used herein shall thereafter be deemed to refer to such Principal
Party; and

     

    (D) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of its Common Stock) in
connection with such consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; provided that, upon the subsequent
occurrence of any consolidation, merger, sale or transfer of assets or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price as provided in this Section 13(a), such
cash, shares, rights, warrants and other property which such holder would have
been entitled to receive had such holder, at the time of such transaction, owned
the Common Stock of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13 (a), and
such Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.

     

    (b) “Principal
Party” shall mean:

     

    (i) in the
case of any transaction described in clauses (i) or (ii) of the first sentence
of Section
13(a) hereof: (A) the Person that is the issuer of the securities into
which the shares of Common Stock are converted in such merger or consolidation,
or, if there is more than one such issuer, the issuer of the shares of Common
Stock of which have the greatest 

     

    
      
        
        

      

      
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    aggregate
market value of shares outstanding, or (B) if no securities are so issued, (x)
the Person that is the other party to the merger, if such Person survives said
merger, or, if there is more than one such Person, the Person the shares of
Common Stock of which have the greatest aggregate market value of shares
outstanding or (y) if the Person that is the other party to the merger does not
survive the merger, the Person that does survive the merger (including the
Company if it survives) or (z) the Person resulting from the consolidation;
and

     

    (ii) in the
case of any transaction described in clause (iii) of the first sentence in Section 13(a) hereof,
the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions, or, if
each Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning power cannot be
determined, whichever of such Persons is the issuer of Common Stock having the
greatest aggregate market value of shares outstanding; provided, however, that in any
such case described in the foregoing clause (b)(i) or (b)(ii), if the Common
Stock of such Person is not at such time or has not been continuously over the
preceding 12-month period registered under Section 12 of the
Exchange Act, then (1) if such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the term
“Principal Party” shall refer to such other Person, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one Person, and the Common
Stock of all of such persons have been so registered, the term “Principal Party”
shall refer to whichever of such Persons is the issuer of Common Stock having
the greatest aggregate market value of shares outstanding, or (3) if such Person
is owned, directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in clauses (1) and (2) above shall apply to each of the owners
having an interest in the venture as if the Person owned by the joint venture
was a Subsidiary of both or all of such joint venturers, and the Principal Party
in each such case shall bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total of such
interests.

     

    (c) The
Company shall not consummate any consolidation, merger, sale or transfer
referred to in Section
13(a) hereof unless prior thereto the Company and the Principal Party
involved therein shall have executed and delivered to the Rights Agent an
agreement confirming that the requirements of Sections 13(a) and
(b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Rights Agreement as the same shall
have been assumed by the Principal Party pursuant to Sections 13(a) and
(b) hereof and providing that, as soon as practicable after executing
such agreement pursuant to this Section 13, the
Principal Party will:

     

    (i) prepare
and file a registration statement under the Securities Act, if necessary, with
respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing and use
its best efforts to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Securities Act) until
the Expiration Date, and similarly comply with applicable state securities
laws;

     

    
      
        
        

      

      
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    (ii) use its
best efforts, if the Common Stock of the Principal Party shall be listed or
admitted to trading on NYSE or on another national securities exchange, to list
or admit to trading (or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on NYSE or such securities exchange, or,
if the Common Stock of the Principal Party shall not be listed or admitted to
trading on NYSE or a national securities exchange, to cause the Rights and the
securities receivable upon exercise of the Rights to be reported by such other
system then in use;

     

    (iii) deliver
to holders of the Rights historical financial statements for the Principal Party
which comply in all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act; and

     

    (iv) obtain
waivers of any rights of first refusal or preemptive rights in respect of the
Common Stock of the Principal Party subject to purchase upon exercise of
outstanding Rights.

     

    (d) In case
the Principal Party has a provision in any of its authorized securities or in
its certificate of incorporation or by-laws or other instrument governing its
affairs, which provision would have the effect of (i) causing such Principal
Party to issue (other than to holders of Rights pursuant to this Section 13), in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of
Common Stock or Common Stock equivalents of such Principal Party at less than
the then-current market price per share thereof (determined pursuant to Section 11(d) hereof)
or securities exercisable for, or convertible into, Common Stock or Common Stock
equivalents of such Principal Party at less than such then-current market price,
or (ii) providing for any special payment, tax or similar provision in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13, then, in
such event, the Company hereby agrees with each holder of Rights that it shall
not consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.

     

    (e) The
Company covenants and agrees that it shall not, at any time after a Person first
becomes an Acquiring Person enter into any transaction of the type contemplated
by Sections
13(a)(i)-(iii) hereof if (x) at the time of or immediately after such
consolidation, merger, sale, transfer or other transaction there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights, (y) prior to, simultaneously with or immediately
after such consolidation, merger, sale, transfer or other transaction, the
stockholders of the Person who constitutes, or would constitute, the Principal
Party for purposes of Section 13(b) hereof
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates or Associates or (z) the form or nature of organization of
the Principal Party would preclude or limit the exercisability of the
Rights.

     

    
      
        
        

      

      
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    14. Fractional Rights and
Fractional Shares.

     

    (a) The
Company shall not be required to issue fractions of Rights (except prior to the
Distribution Date in accordance with Section 11(n) hereof)
or to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price for any day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported by (w) the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on NYSE or, (x)
if the Rights are not listed or admitted to trading on NYSE, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or, (y) if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NYSE or such other system then in use
or, (z) if on any such date the Rights are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.

     

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

     

    (c) The
Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock upon
the exercise or exchange of Rights. In lieu of such fractional shares of Common
Stock, the Company shall pay to the registered holders of the Right Certificates
at the time such Rights are 

     

    
      
        
        

      

      
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    exercised
or exchanged for shares of Common Stock as herein provided an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock (as determined in accordance with Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such exercise or
exchange.

     

    (d) The
holder of a Right by the acceptance of the Right expressly waives the right to
receive any fractional Rights or any fractional shares upon exercise or exchange
of a Right (except as provided above).

     

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

     

    15. Rights of
Action.

     

    (a)           All
rights of action in respect of this Rights Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof,
are vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock); and
any registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
the Common Stock), on such holder’s own behalf and for such holder’s own
benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, such
holder’s right to exercise the Rights evidenced by such Right Certificate (or,
prior to the Distribution Date, such Common Stock) in the manner provided in
such Right Certificate and in this Rights 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 Rights 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 Rights
Agreement.

     

    (b)           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 order, judgment,
decree or ruling (whether interlocutory or final) issued by a court or by a
governmental, regulatory, self-regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company must use all
reasonable 

     

    
      
        
        

      

      
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    efforts
to have any such injunction, order, judgment, decree or ruling lifted or
otherwise overturned as soon as possible.

     

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

     

    (a) prior to
the Distribution Date, the Rights will be transferable only in connection with
the transfer of the Common Stock;

     

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

     

    (c) the
Company and the Rights Agent may deem and treat the Person in whose name the
Right Certificate (or, prior to the Distribution Date, the Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to Section 7(e) hereof,
shall be affected by any notice to the contrary.

     

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

     

    18. Concerning the Rights
Agent.

     

    (a) The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, negotiation, delivery, amendment, administration
and execution of this Rights 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, damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent
(which gross negligence, bad faith or willful misconduct must be determined by a
final, non-appealable judgment of a court of competent jurisdiction), for any
action taken, suffered or omitted to be taken by the Rights Agent in connection
with the acceptance, administration, exercise and performance of this Rights

     

    
      
        
        

      

      
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    Agreement,
including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly.  The costs and expenses
incurred in enforcing this right of indemnification shall be paid by the
Company.  The provisions of this Section 18 and Section 20 below shall
survive the termination of this Agreement, the exercise or expiration of the
Rights and the resignation, replacement or removal of the Rights
Agent.

     

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

     

    19. Merger or Consolidation or
Change of Mellon Investor Services LLC.

     

    (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 shall be a
party, or any Person succeeding to the shareholder services business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Rights 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
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In
case at the time such successor Rights Agent shall succeed to the agency created
by this Rights Agreement, any of the Right Certificates shall have been
countersigned but not delivered, such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of such successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.

     

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

     

    
      
        
        

      

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

     

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

     

    (b) Whenever
in the performance of its duties under this Rights Agreement the Rights Agent
shall deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of an Acquiring Person and the determination of the
current per share market price of any security) be proved or established by the
Company prior to taking, suffering  or omitting to take any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chief Executive Officer,
President, any Vice President, the Treasurer or the Secretary of the Company
(each, an “Authorized
Officer”) and delivered to the Rights Agent; and such certificate shall
be full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted to be taken by it under the provisions of this Rights
Agreement in reliance upon such certificate.

     

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

     

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

     

    (e) The
Rights Agent shall not be liable for or be under any responsibility in respect
of the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming null and void pursuant to Section 11(a)(ii)
hereof) or any change or adjustment in the terms of the Rights (including the
manner, method or amount thereof) 

     

    
      
        
        

      

      
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    provided
for in Sections 3, 11,
13, 23 and 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after receipt of a certificate furnished
pursuant to Section
12, upon which the Rights Agent may rely, describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Series X Preferred Stock or other securities to be issued pursuant to this
Rights Agreement or any Right Certificate or as to whether any shares of Series
X Preferred Stock or other securities will, when issued, be validly authorized
and issued, fully paid and nonassessable.

     

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

     

    (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 one of the Authorized Officers, and to apply to such
Authorized Officers for advice or instructions in connection with its duties,
and such instructions shall be full and complete authorization and protection to
the Rights Agent and the Rights Agent shall not be liable for any action taken,
suffered or omitted by it in accordance with instructions of any such Authorized
Officer or for any delay in acting while waiting for those instructions. The
Rights Agent shall be fully authorized and protected in relying upon the most
recent instructions received by any such officer.  Any application by
the Rights Agent for written instructions from the Company may, at the option of
the Rights Agent, set forth in writing any action proposed to be taken, suffered
or omitted to be taken by the Rights Agent under this Rights Agreement and the
date on and/or after which such action shall be taken or suffered or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken or suffered by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any Authorized Officer of the Company actually receives such application, unless
any such Authorized Officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken, suffered or
omitted.

     

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

     

    (i) The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself (through its directors,
officers and employees) or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for 

     

    
      
        
        

      

      
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    any loss
to the Company or any other Person resulting from any such act, default, neglect
or misconduct, absent gross negligence, willful misconduct or bad faith in the
selection and continued employment thereof (which gross negligence, willful
misconduct or bad faith must be determined by a final, non-appealable judgment
of a court of competent jurisdiction).

     

    (j) If, with
respect to any Right Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate contained in the form of assignment or the form of
election to purchase set forth on the reverse thereof, as the case may be, has
not been completed to certify the holder is not an Acquiring Person (or an
Affiliate or Associate thereof) or a transferee thereof, the Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.

     

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

     

    21. Change of Rights
Agent.  The
Rights Agent or any successor Rights Agent may resign and be discharged from its
duties under this Rights Agreement upon 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Stock or the Series X Preferred
Stock by registered or certified mail, and, following the Distribution Date, to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock or the Series X Preferred
Stock by registered or certified mail, and, following the Distribution Date, to
the holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (A) a Person organized and doing business under the laws
of the United States or any State thereof, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (B) an affiliate of a Person described in clause (A) of
this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock or the Series X Preferred Stock, and, following the
Distribution Date, mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for in this Section 

     

    
      
        
        

      

      
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    21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.

     

    22. Issuance of New Right
Certificates.  Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing Rights
in such forms as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Rights Agreement. In addition, in
connection with the issuance or sale of Common Stock following the Distribution
Date and prior to the Expiration Date, the Company may with respect to shares of
Common Stock so issued or sold pursuant to (i) the exercise of stock options,
(ii) under any employee plan or arrangement, (iii) the exercise, conversion or
exchange of securities, notes or debentures issued by the Company or (iv) a
contractual obligation of the Company, in each case existing prior to the
Distribution Date, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale.

     

    23. Redemption.

     

    (a) The Board
of Directors of the Company may, at any time prior to such time as any Person
first becomes an Acquiring Person, redeem all but not less than all the
then-outstanding Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (the “Redemption
Price”). The redemption of the Rights 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. The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the current market price of the
Common Stock at the time of redemption as determined pursuant to Section 11(d)(i)
hereof) or any other form of consideration deemed appropriate by the Board of
Directors.

     

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

     

     

    
      
        
        

      

      
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    24. Exchange.

     

    (a) The Board
of Directors of the Company may, at its option, at any time after any Person
first becomes an Acquiring Person, exchange all or part of the then-outstanding
and exercisable Rights (which shall not include Rights that have not become
effective or that have become null and void pursuant to the provisions of Section 11(a)(ii)
hereof) for shares of Common Stock at an exchange ratio of one share of Common
Stock (or one-thousandth of a share of Series X Preferred Stock) per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such amount per Right being
hereinafter referred to as the “Exchange
Ratio”). Notwithstanding the foregoing, the Board of Directors shall not
be empowered to effectuate such exchange at any time after an Acquiring Person
becomes the Beneficial Owner of shares of Common Stock aggregating 50% or more
of the shares of Common Stock then outstanding. From and after the occurrence of
an event specified in Section 13(a) hereof,
any Rights that theretofore have not been exchanged pursuant to this Section 24(a) shall
thereafter be exercisable only in accordance with Section 13 and may
not be exchanged pursuant to this Section 24(a). 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.

     

    (b) Immediately
upon the effectiveness of the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange (with prompt written
notice thereof to the Rights Agent); provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company shall promptly mail a notice of any such exchange to
all of the holders of the Rights so exchanged at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by which
the exchange of the shares of Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become null and void pursuant to the provisions of
Section
11(a)(ii) hereof) held by each holder of Rights.

     

    (c) The
Company may at its option substitute and, in the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or authorized but
unissued (and unreserved) to permit an exchange of Rights as contemplated in
accordance with this Section 24, the
Company shall substitute to the extent of such insufficiency, for each share of
Common Stock that would otherwise be issuable upon exchange of a Right, a number
of shares of Series X Preferred Stock or fraction thereof (or equivalent
preferred shares as such term is defined in Section 11(b)) such
that the current per share market price (determined pursuant to Section 11(d) hereof)
of one share of Series X Preferred Stock (or equivalent preferred share)
multiplied by such number or fraction is equal to the current per share market
price of one share of Common Stock (determined pursuant to Section 11(d) hereof)
as of the date of such exchange.

     

    
      
        
        

      

      
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    25. Notice of Certain
Events.

     

    (a) In case
the Company shall at any time after the earlier of the Distribution Date or the
Stock Acquisition Date propose (i) to pay any dividend payable in stock of any
class to the holders of its Series X Preferred Stock or to make any other
distribution to the holders of its Series X Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Series X
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Series X Preferred Stock or shares of stock of any class or
any other securities, rights or options, (iii) to effect any reclassification of
its Series X Preferred Stock (other than a reclassification involving only the
subdivision or combination of outstanding Series X Preferred Stock), (iv) to
effect the liquidation, dissolution or winding up of the Company, or (v) to
declare or pay any dividend on the Common Stock payable in Common Stock or to
effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, or distribution or offering of rights or
warrants, or the date on which such liquidation, dissolution, reclassification,
subdivision, combination, consolidation or winding up is to take place and the
date of participation therein by the holders of the Common Stock and/or Series X
Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of the Series X Preferred
Stock for purposes of such action, and in the case of any such other action, at
least 10 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Stock and/or Series X
Preferred Stock, whichever shall be the earlier.

     

    (b) In case
any event described in Section 11(a)(ii) or
Section 13
shall occur then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Common Stock) in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii) and
Section 13
hereof.

     

    26. Notices.

     

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

     

    Capitol Bancorp Ltd.

    Capitol Bancorp Center

    200 Washington Square
North

    Lansing,
MI  48933

    Attention: Cristin K. Reid

     

     

    
      
        
        

      

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

     

    Mellon Investor Services
LLC

    200 W. Monroe Street, Suite
1590

    Chicago,
IL  60606

    Attention:  Relationship
Manager

    

    with a copy to:

    

    Mellon Investor Services
LLC

    Newport Office Center VII

    480 Washington Boulevard

    Jersey City, New
Jersey  07310

    Attention:  General
Counsel

    

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

     

    27. Supplements and
Amendments.  Except
as otherwise provided in this Section 27, for so
long as the Rights are then redeemable, the Company may in its sole and absolute
discretion, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of this Rights Agreement in any respect without the approval
of any holders of the Rights. At any time when the Rights are no longer
redeemable, except as otherwise provided in this Section 27, the
Company may, and the Rights Agent shall, if the Company so directs, supplement
or amend this Rights Agreement without the approval of any holders of Rights in
order to (i) cure any ambiguity, (ii) correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) shorten or lengthen any time period hereunder, or (iv)
change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable; provided, however, that no such
supplement or amendment shall adversely affect the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person), and no such amendment may cause the Rights again to become
redeemable or cause this Rights Agreement again to become amendable other than
in accordance with this sentence. Notwithstanding anything contained in this
Rights Agreement to the contrary, (a) no supplement or amendment shall be made
which decreases the Redemption Price and (b) the Rights Agent may, but shall not
be obligated to, enter into any supplement or amendment that affects the Rights
Agent’s own rights, duties, obligations and immunities under this Agreement.
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the supplement or amendment is in compliance with the terms of
this Section
27, and, subject to the preceding sentence, the Rights Agent shall
execute such supplement or amendment and the Rights Agent shall not be bound by
any amendment or supplement not executed by it.

     

    
      
        
        

      

      
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    28. Successors.  All
the covenants and provisions of this Rights 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.

     

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

     

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

     

    31. Severability.  If
any term, provision, covenant or restriction of this Rights Agreement or
applicable to this Rights Agreement is held by a court of competent jurisdiction
or other authority to be invalid, null and void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this Rights Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or restriction
is held by such court or authority to be invalid, null and void or unenforceable
and the Board determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or effect of
this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated (with prompt notice to the Rights Agent) and shall not
expire until the close of business on the tenth Business Day following the date
of such determination by the Board. Without limiting the foregoing, if any
provision requiring a specific group of Directors of the Company to act is held
to by any court of competent jurisdiction or other authority to be invalid, null
and void or unenforceable, such determination shall then be made by the Board in
accordance with applicable law and the Company’s Articles of Incorporation and
Bylaws; provided further, however, that if such excluded provision shall affect
the rights, immunities, duties or obligations of the Rights Agent, then the
Rights Agents shall be entitled to resign immediately.

     

    
      
        
        

      

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

     

    33. Counterparts.  This
Rights 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.

     

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

     

    35. Force
Majeure. 
Notwithstanding anything to the contrary contained herein, the Rights Agent
shall not be liable for any delays or failures in performance resulting from
acts beyond its reasonable control including, without limitation, acts of God,
terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or
malfunctions of computer facilities, or loss of data due to power failures or
mechanical difficulties with information storage or retrieval systems, labor
difficulties, war or civil unrest.

     

     

    Signatures
on the Following Page

     

    

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

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

     

    CAPITOL
BANCORP LTD.

    

     

    Attest: ______________________                                                      
By:  /s/ Cristin K.
Reid                          
                                                                     

    Name:
Cristin K.
Reid                            

    Title: Corporate
President                    

    

    

    MELLON INVESTOR SERVICES
LLC,

    as Rights Agent

    

    

    

    Attest: ______________________                                                      
By: Peter
Sablich                                                                                                         

    Name: Peter
Sablich                  
            

    Title: Vice
President                
              

    

    

     

    
      
        
          Signature
Page to Rights Agreement

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    Form
of

    Certificate
of Designations

    of

    Series
X Junior Participating Preferred Stock

    of

    Capitol
Bancorp Ltd.

    

    (Pursuant
to Section 450.1302 of the Michigan Business Corporation Act)

    

    Capitol
Bancorp Ltd. (the “Corporation”), a
corporation organized and existing under the Michigan Business Corporation Act,
as amended (the “Michigan
Act”), hereby
certifies that, pursuant to authority granted by Article III of the
Articles of Incorporation of the Corporation, as amended (the “Articles of
Incorporation”),
and in accordance with the provisions of Section 450.1302 of the Michigan
Act, the Board of Directors of the Corporation (hereinafter being referred to as
the “Board of
Directors” or the
“Board”) has adopted the following
resolutions, on July 20, 2009:

     

    RESOLVED,
that pursuant to the authority vested in the Board of Directors of the
Corporation  in accordance with the provisions of the Articles of
Incorporation, the Board of Directors hereby creates a series of preferred
stock, no par value per share, of the Corporation, to be designated the “Series
X Junior Participating Preferred Stock” and hereby adopts the resolution
establishing the designations, number of shares, preferences, voting powers and
other rights and the restrictions and limitations thereof, of the shares of such
Series X Junior Participating Stock as set forth below:

     

    
      1.  Designation and
Amount.  The
shares of such series shall be designated as “Series X Junior Participating
Preferred Stock” (the “Series X
Preferred Stock”)
and the number of shares constituting the Series X Preferred Stock shall be
20,000. Such number of shares may be increased or decreased by resolution of the
Board of Directors; provided, that no
decrease shall reduce the number of shares of the Series X Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into the Series X Preferred Stock.

    

     

    
      2.  Dividends and
Distributions.

    

     

    (a) Subject
to the rights of the holders of any shares of any series of preferred stock of
the Corporation (the “Preferred
Stock”) (or any
similar stock) ranking prior and superior to the Series X Preferred Stock with
respect to dividends, the holders of shares of the Series X Preferred Stock, in
preference to the holders of common stock, no par value per share, of the
Corporation (the “Common
Stock”) and of any other stock of the Corporation ranking junior to the
Series X Preferred Stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the last day of January, April, July, and
October in each year (each such date being 

     

    
      
        
        

      

      
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    referred
to herein as a “Dividend Payment
Date”), commencing on the first Dividend Payment Date after the first
issuance of a share or fraction of a share of the Series X Preferred Stock (the
“Issue
Date”), in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $1.00 or (b) subject to the provision for adjustment hereinafter
set forth, 1,000 times the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Common Stock, declared on the Common Stock since the immediately preceding
Dividend Payment Date or, with respect to the first Dividend Payment Date, since
the first issuance of any share or fraction of a share of Series X Preferred
Stock. In the event the Corporation shall at any time after the Issue Date
declare and pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders of
shares of Series X Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

     

    (b) The
Corporation shall declare a dividend or distribution on the Series X Preferred
Stock as provided in paragraph (a) of this Section 2 immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Dividend Payment Date and the next subsequent
Dividend Payment Date, a dividend of $1.00 per share on the Series X Preferred
Stock shall nevertheless be payable, when, as and if declared, on such
subsequent Dividend Payment Date.

     

    (c) Dividends
shall begin to accrue and be cumulative, whether or not earned or declared, on
outstanding shares of Series X Preferred Stock from the Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
X Preferred Stock entitled to receive a quarterly dividend and before such
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series X
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series X Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.

     

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

    

     

    
      
        
        

      

      
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    (a) Subject
to the provision for adjustment hereinafter set forth and except as otherwise
provided in the Articles of Incorporation or required by law, each share of
Series X Preferred Stock shall entitle the holder thereof to 1,000 votes on all
matters upon which the holders of the Common Stock of the Corporation are
entitled to vote. In the event the Corporation shall at any time after the Issue
Date declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes per share
to which holders of shares of Series X Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.

     

    (b) Except as
otherwise provided herein, in the Articles of Incorporation or in any other
certificate of designations creating a series of Preferred Stock or any similar
stock, and except as otherwise required by law, the holders of shares of Series
X Preferred Stock and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.

     

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

     

    (d) If, at
the time of any annual meeting of stockholders for the election of directors,
the equivalent of six quarterly dividends (whether or not consecutive) payable
on any share or shares of Series X Preferred Stock are in default, the number of
directors constituting the Board of Directors of the Corporation shall be
increased by two. In addition to voting together with the holders of Common
Stock for the election of other directors of the Corporation, the holders of
record of the Series X Preferred Stock, voting separately as a class to the
exclusion of the holders of Common Stock shall be entitled at said meeting of
stockholders (and at each subsequent annual meeting of stockholders), unless all
dividends in arrears on the Series X Preferred Stock have been paid or declared
and set apart for payment prior thereto, to vote for the election of two
directors of the Corporation, the holders of any Series X Preferred Stock being
entitled to cast a number of votes per share of Series X Preferred Stock as is
specified in paragraph (a) of this Section 3. Each such
additional director shall serve until the next annual meeting of stockholders
for the election of directors, or until his successor shall be elected and shall
qualify, or until his right to hold such office terminates pursuant to the
provisions of this Section 3(d). Until
the default in payments of all dividends which permitted the election of said
directors shall cease to exist, any director who shall have been so elected
pursuant to the provisions of this Section 3(d) may be
removed at any time, without cause, only by the affirmative vote of the holders
of the shares of Series X Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled 

     

     

    
      
        
        

      

      
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    by the
vote of such holders. If and when such default shall cease to exist, the holders
of the Series X Preferred Stock shall be divested of the foregoing special
voting rights, subject to revesting in the event of each and every subsequent
like default in payments of dividends. Upon the termination of the foregoing
special voting rights, the terms of office of all persons who may have been
elected directors pursuant to said special voting rights shall forthwith
terminate, and the number of directors constituting the Board of Directors shall
be reduced by two. The voting rights granted by this Section 3(d) shall be
in addition to any other voting rights granted to the holders of the Series X
Preferred Stock in this Section
3.

     

    
      4.  Certain
Restrictions.

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    
      5.  Reacquired
Shares.  Any
shares of Series X Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their retirement
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to any conditions and
restrictions on issuance set forth herein.

    

     

    
      6.  Liquidation, Dissolution or
Winding Up.  (a)     Upon
any liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (i) to the holders of the Common Stock or of shares of any other
stock of the Corporation ranking junior, upon liquidation, dissolution or
winding up, to the Series X Preferred Stock unless, prior thereto, the holders
of shares of Series X Preferred Stock shall have received $1,000 per share, plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not earned or declared, to the date of such payment, provided that
the holders of shares of Series X Preferred Stock shall be entitled to receive
an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (ii) to the
holders of shares of stock ranking on a parity upon liquidation, dissolution or
winding up with the Series X Preferred Stock, except distributions made ratably
on the Series X Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event, however, that there are
not sufficient assets available to permit payment in full of the Series X
Preferred Stock liquidation preference and the liquidation preferences of all
other classes and series of stock of the Corporation, if any, that rank on a
parity with the Series X Preferred Stock in respect thereof, then the assets
available for such distribution shall be distributed ratably to the holders of
the Series X Preferred Stock and the holders of such parity shares in the
proportion to their respective liquidation preferences. In the event the
Corporation shall at any time after the Issue Date declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series X Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(i) of this Section
6(a) shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.

    

     

    (b)           Neither
the merger or consolidation of the Corporation into or with another entity nor
the merger or consolidation of any other entity into or with the Corporation
(nor the sale of all or substantially all of the assets of the Corporation)
shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section
6.

     

    
      7.  Consolidation, Merger,
etc.  In
case the Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are converted into,
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series X Preferred Stock shall at
the same time be similarly converted into, exchanged for or changed into an
amount per share (subject to the 

       

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

       

      provision
for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is converted or
exchanged. In the event the Corporation shall at any time after the Issue Date
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the conversion, exchange or change of shares
of Series X Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

    

     

    
      8.  No
Redemption.  The
shares of Series X Preferred Stock shall not be redeemable from any
holder.

    

     

    
      9.  Rank.  The
Series X Preferred Stock shall rank, with respect to the payment of dividends
and the distribution of assets upon liquidation, dissolution or winding up of
the Corporation, senior to the Common Stock.

    

     

    
      10.  Amendment.  If
any proposed amendment to the Articles of Incorporation (including this
Certificate of Designations) would alter, change or repeal any of the
preferences, powers or special rights given to the Series X Preferred Stock so
as to affect the Series X Preferred Stock adversely, then the holders of the
Series X Preferred Stock shall be entitled to vote separately as a class upon
such amendment, and the affirmative vote of two-thirds of the outstanding shares
of the Series X Preferred Stock, voting separately as a class, shall be
necessary for the adoption thereof, in addition to such other vote as may be
required by the Michigan Act.

    

     

    
      11.  Fractional
Shares.  Series
X Preferred Stock may be issued in fractions of a share that shall entitle the
holder, in proportion to such holder’s fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series X Preferred Stock.

    

     

    

    In Witness
Whereof, the
undersigned have signed and attested this Certificate of Designations on the
20th day of July, 2009.

    

    Capitol Bancorp Ltd.

    

    By: /s/ Cristin K.
Reid                
                                                                

    Name: Cristin K.
Reid                 
                      

    Title: Corporate
President         
                     

    

    Attest:

    

    /s/
David
O'Leary                

    David O’
Leary, Secretary

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

     

    EXHIBIT
B

     

    Form of Right
Certificate

     

    Certificate
No.
R-________                                                                                 _____
Rights                                                                                            

    

    NOT
EXERCISABLE AFTER JULY 21, 2014 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE
RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH 1N THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR
BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.

     

    Right
Certificate

     

    CAPITOL
BANCORP LTD.

     

    This
certifies that ________ or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement, dated
as of July 21, 2009 as the same may be amended from time to time (the “Rights
Agreement”), between Captiol Bancorp Ltd., a Michigan corporation (the
“Company”),
and Mellon Investor Services LLC, a New Jersey limited liability company (the
“Rights
Agent”), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
Lansing, Michigan time, on July 21, 2014 at the office of the Rights Agent
designated for such purpose, or of its successor as Rights Agent, one
one-thousandth of a fully paid non-assessable share of Series X Junior
Participating Preferred Stock, no par value per share (the “Series X
Preferred Stock”), of the Company, at a purchase price of $5.00 per one
one-thousandth of a share of Series X Preferred Stock (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed. The number of Rights evidenced
by this Right Certificate (and the number of one one-thousandths of a share of
Series X Preferred Stock which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price
as of July 31, 2009, based on the Series X Preferred Stock as constituted at
such date. As provided in the Rights Agreement, the Purchase Price, the number
of one one-thousandths of a share of Series X Preferred Stock (or other
securities or property) which may be purchased upon the exercise of the Rights
and the number of Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.

     

    This
Right Certificate is subject to all of the terms, provisions and conditions of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a 

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company. The Company will mail to the holder of this
Right Certificate a copy of the Rights Agreement without charge after receipt of
a written request therefor.

     

    This
Right Certificate, with or without other Right Certificates, upon surrender at
the office or agency of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of shares of Series X Preferred Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        B-2

        
          

        

      

      
         

      

    

    WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal. Dated as of _________ __, 2009.

     

    ATTEST:                                                                                   CAPITOL
BANCORP LTD.

    

    

    

    By: _________________________                                                        By: ________________________                                                                     

    

    

    Countersigned:

    

     ____________________________,

    MELLON
INVESTOR SERVICES LLC

    as Rights
Agent

    

    

    By:  _________________________                                                         

           Authorized
Signatory

    

    
      
         

      

      
        B-3

        
          

        

      

      
         

      

    

    Form
of Reverse Side of Right Certificate

     

    FORM OF
ASSIGNMENT

     

    (To
be executed by the registered holder if such

      holder
desires to transfer the Right Certificate)

     

    FOR VALUE
RECEIVED __________________ hereby sells, assigns and transfer unto
__________________________

     

    
      
        

      

    

    (Please
print name and address of transferee)

     

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

     

    Dated:
_________, ____

     

    __________________

    Signature

    

     

    Signature
Guaranteed:

     

    Signatures
must be guaranteed by a bank, trust company, broker, dealer or other eligible
institution participating in a recognized signature guarantee medallion
program.

     

    The
undersigned hereby certifies that the Rights evidenced by this Right Certificate
are not beneficially owned by, were not acquired by the undersigned from, and
are not being sold, assigned or transferred to, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights
Agreement).

     

    ______________________________

    Signature

    

      
        
           

        

        
          B-4

          
            

          

        

        
           

        

      

    Form of
Reverse Side of Right Certificate — continued

    FORM OF ELECTION TO
PURCHASE

    

    (To
be executed if holder desires to exercise

     Rights
represented by the Rights Certificate)

    

    To the
Rights Agent:

     

    The
undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Right Certificate to purchase the shares of Series X Junior
Participating Preferred Stock (or other securities or property) issuable upon
the exercise of such Rights and requests that certificates for such shares of
Series X Junior Participating Preferred Stock (or such other securities) be
issued in the name of:

     

     

    
      
        

      

    

    (Please
print name and address of transferee)

     

    

     

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

     

    Please
insert social security or other identifying number:
___________________

     

     

    
      
        

      

    

    (Please
print name and address of transferee)

     

    

     

    Dated:
_________,
____                                                                                     ________________________________

     

                                                                    Signature

    

    (Signature
must conform to holder

    specified
on Right Certificate)

    Signature
Guaranteed:

     

    Signatures
must be guaranteed by a bank, trust company, broker, dealer or other eligible
institution participating in a recognized signature guarantee medallion
program.

     

    The
undersigned hereby certifies that the Rights evidenced by this Right Certificate
are not beneficially owned by, were not acquired by the undersigned from, and
are not being sold, assigned or transferred to, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights
Agreement).

     

    ______________________________

    Signature

    
      
         

      

      
        B-5

        
          

        

      

      
         

      

    

    Form of
Reverse Side of Right Certificate — continued

     

    Notice

     

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

     

    In the
event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, such Assignment or
Election to Purchase will not be honored.

     

    ______________

    

     

    
      
         

      

      
        B-6

        
          

        

      

      
         

      

    

    EXHIBIT
C

     

    SUMMARY
OF RIGHTS TO PURCHASE

    Shares
of Series X Junior Participating Stock

    

     

    UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR
TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID
AND WILL NO LONGER BE TRANSFERABLE.

     

    On July
20, 2009 the Executive Committee of the Board of Directors of Capitol Bancorp
Ltd., a Michigan corporation (the “Company”),
declared a dividend of one preferred share purchase right (a “Right”)
for each outstanding share of common stock, no par value per share, of the
Company (the “Common
Stock”). The dividend is payable on July 31, 2009 to the stockholders of
record as of the close of business on July 31, 2009 (the “Record
Date”). Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series X Junior Participating Preferred
Stock, no par value per share (the “Series X
Preferred Stock”), of the Company at a price of $5.00 per one
one-thousandth of a share of Series X Preferred Stock (as the same may be
adjusted, the “Purchase
Price”). The description and terms of the Rights are set forth in a
Rights Agreement, dated as of July 21, 2009 (as the same may be amended from
time to time, the “Rights
Agreement”), between the Company and Mellon Investor Services LLC, as
Rights Agent (the “Rights
Agent”).

     

    Until the
close of business on the earlier of (i) the tenth day after the first date of a
public announcement that a person (other than an Exempted Entity (as defined
below)), entity, or group of affiliated or associated persons (an “Acquiring
Person”) has acquired beneficial ownership of 10% or more of the shares
of Common Stock then outstanding, or (ii) the tenth business day (or such later
date as may be determined by action of the Board of Directors of the Company
prior to such time as any person, entity, or group of affiliated persons becomes
an Acquiring Person) after the date of commencement of, or the first public
announcement of an intention to commence, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person
(other than an Exempted Entity), entity, or group of 10% or more of the shares
of Common Stock then outstanding (the earlier of such dates being herein
referred to as the “Distribution
Date”), the Rights will be evidenced by the shares of Common Stock
represented by certificates for Common Stock outstanding as of the Record Date,
together with a copy of the Summary of Rights to Purchase disseminated in
connection with the original dividend of Rights.

     

    “Exempted
Entity” shall mean (1) the Company, (2) any subsidiary of the Company or
(in the case of subclauses (1) and (2) including, without limitation, in its
fiduciary capacity), (3) any employee benefit plan of the Company or of any
Subsidiary of the Company, and (4) any entity or trustee holding 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.

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

     

    The
Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferable only in
connection with the transfer of Common Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender or transfer of
any certificates for shares of Common Stock outstanding as of the Record Date,
even without a legend incorporating the Rights Agreement by reference or a copy
of this Summary of Rights to Purchase, will also constitute the transfer of the
Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (“Right
Certificates”) will be mailed to holders of record of the Common Stock as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.

     

    The
Rights are not exercisable until the Distribution Date. The Rights will expire
on July 21, 2014 (the “Final Expiration
Date”), unless the Final Expiration Date is extended or unless the Rights
are earlier redeemed or exchanged by the Company, in each case as described
below.

     

    The
Purchase Price payable, and the number of shares of Series X Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Series X
Preferred Stock, (ii) upon the grant to holders of the Series X Preferred Stock
of certain rights or warrants to subscribe for or purchase Series X Preferred
Stock at a price, or securities convertible into Series X Preferred Stock with a
conversion price, less than the then-current market price of the Series X
Preferred Stock, or (iii) upon the distribution to holders of the Series X
Preferred Stock of evidence of indebtedness or assets (excluding regular
periodic cash dividends or dividends payable in Series X Preferred Stock) or of
subscription rights or warrants (other than those referred to
above).

     

    The
Rights are also subject to adjustment in the event of a stock dividend on the
Common Stock payable in shares of Common Stock or subdivisions, consolidations
or combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.

     

    Shares of
Series X Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Series X Preferred Stock will be entitled, when, as
and if declared, to a minimum preferential quarterly dividend payment of the
greater of (a) $1.00 per share and (b) an amount equal to 1,000 times the
dividend declared per share of Common Stock.  In the event of
liquidation, dissolution or winding up of the Company, the holders of the Series
X Preferred Stock will be entitled to a minimum preferential liquidation payment
of $1,000 per share (plus any accrued but unpaid dividends) and will also be
entitled to receive an aggregate payment equal to 1,000 times the payment made
per share of Common Stock. Each share of Series X Preferred Stock will have
1,000 votes, voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which shares of Common Stock are
converted or exchanged, each share of Series X Preferred Stock will be entitled
to receive 1,000 times the amount received per share of Common Stock. These
rights are protected by customary anti-dilution provisions.

     

    Because
of the nature of the dividend, liquidation and voting rights of the Series X
Preferred Stock, the value of the one one-thousandth interest in a share of
Series X Preferred 

     

    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

     

    Stock
purchasable upon exercise of each Right should approximate the value of one
share of Common Stock.

     

    In the
event that any person, entity, or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become null and
void), will thereafter have the right to receive upon exercise of a Right and
payment of the Purchase Price, that number of shares of Common Stock having a
market value of two times the Purchase Price.

     

    In the
event that, after a person, entity, or group has become an Acquiring Person, the
Company is acquired in a merger or other business combination transaction or 50%
or more of its consolidated assets or earning power are sold, proper provision
will be made so that each holder of a Right (other than Rights beneficially
owned by an Acquiring Person which will have become null and void) will
thereafter have the right to receive, upon the exercise thereof at the
then-current exercise price of the Right, that number of shares of common stock
of the person with whom the Company has engaged in the foregoing transaction (or
its parent), which number of shares at the time of such transaction will have a
market value of two times the Purchase Price.

     

    At any
time after any person or group becomes an Acquiring Person and prior to the
acquisition by such person, entity, or group of 50% or more of the outstanding
shares of Common Stock or the occurrence of an event described in the prior
paragraph, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group which will have become null and void),
in whole or in part, at an exchange ratio of one share of Common Stock, or a
fractional share of Series X Preferred Stock (or of a share of a similar class
or series of the Company’s preferred stock having similar rights, preferences
and privileges) of equivalent value, per Right, subject to
adjustment.

     

    With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional shares of Series X Preferred Stock will be issued (other
than fractions which are integral multiples of one one-thousandth of a share of
Series X Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Series X Preferred Stock on the
last trading day prior to the date of exercise.

     

    At any
time prior to the time an Acquiring Person becomes such, the Board of Directors
of the Company may redeem the Rights in whole, but not in part, at a price of
$0.01 per Right (the “Redemption
Price”). The redemption of the Rights may be made effective at such time,
on such basis and with such conditions as the Board of Directors of the Company
in its sole discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.

     

    For so
long as the Rights are then redeemable, the Company may, except with respect to
the Redemption Price, amend the Rights Agreement in any manner. After the Rights
are no longer redeemable, the Company may, except with respect to the Redemption
Price, amend the 

     

    
      
        
        

      

      
        C-3

        
          

        

      

      
        
        

      

    

     

    Rights
Agreement in any manner that does not adversely affect the interests of holders
of the Rights.

     

    Until a
Right is exercised or exchanged, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.

     

    A copy of
the Rights Agreement has been filed with the Securities and Exchange Commission
as an Exhibit to Form 8-K, dated July 21, 2009, as amended. A copy of the Rights
Agreement is available free of charge from the Company. This Summary of Rights
of Purchase does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, as the same may be amended from time to time,
which is hereby incorporated herein by reference.

     

    
      
         

      

      
        C-4

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