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Exhibit 4.1    
  

COMMUNITY FIRST BANKSHARES, INC.  

 and  

 WELLS FARGO BANK MINNESOTA, N.A.

Rights Agent  

AMENDED AND RESTATED RIGHTS AGREEMENT  

 Dated as of August 13, 2002  

  

 
 

TABLE OF CONTENTS    
  

	Section
 
	 
	 	Page

	

Section 1.	

Certain Definitions	
 	

1
	

Section 2.	

Appointment of the Rights Agent	
 	

4
	

Section 3.	

Issue of Rights Certificates	
 	

4
	

Section 4.	

Form of Rights Certificates	
 	

6
	

Section 5.	

Countersignature and Registration	
 	

6
	

Section 6.	

Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates	
 	

7
	

Section 7.	

Exercise of Rights; Purchase Price; Expiration Date of Rights	
 	

7
	

Section 8.	

Cancellation and Destruction of Rights Certificates	
 	

9
	

Section 9.	

Reservation and Availability of Capital Stock	
 	

10
	

Section 10.	

Preferred Stock Record Date	
 	

10
	

Section 11.	

Adjustment of Purchase Price, Number and Kind of Stock or Number of Rights	
 	

11
	

Section 12.	

Certificate of Adjusted Purchase Price or Number of Stock	
 	

16
	

Section 13.	

Consolidation, Merger, Statutory Share Exchange or Sale or Transfer of Assets, Cash Flow or Earning Power	
 	

17
	

Section 14.	

Fractional Rights and Fractional Stock	
 	

18
	

Section 15.	

Rights of Action	
 	

20
	

Section 16.	

Agreement of Rights Holders	
 	

20
	

Section 17.	

Rights Certificate Holder Not Deemed a Shareholder	
 	

21
	

Section 18.	

Concerning the Rights Agent	
 	

21
	

Section 19.	

Merger or Consolidation or Change of Name of Rights Agent	
 	

21
	

Section 20.	

Duties of Rights Agent	
 	

22
	

Section 21.	

Change of Rights Agent	
 	

23
	

Section 22.	

Issuance of New Rights Certificates	
 	

24
	

Section 23.	

Redemption and Termination	
 	

24
	

Section 24.	

Exchange	
 	

25
	

Section 25.	

Notice of Certain Events	
 	

26
	

Section 26.	

Notices	
 	

26
	

Section 27.	

Supplements and Amendments	
 	

27
	

Section 28.	

Successors	
 	

27
	

Section 29.	

Benefits of this Agreement	
 	

27
	

Section 30.	

Administration of Agreement	
 	

27
	
 	

 	
 	

 

i

 

	

Section 31.	

Severability	
 	

28
	

Section 32.	

Governing Law	
 	

28
	

Section 33.	

Counterparts	
 	

28
	

Section 34.	

Descriptive Headings	
 	

28
	

Form of Rights Certificate	
 	

30
	

EXHIBIT C SUMMARY OF SHAREHOLDERS' RIGHTS PLAN	
 	

40

ii

RIGHTS AGREEMENT  

        RIGHTS AGREEMENT, amended and restated as of August 13, 2002 (the "Agreement"), between Community First Bankshares, Inc., a Delaware corporation
(the "Company"), and Wells Fargo Bank Minnesota, N.A., a Minnesota corporation (the "Rights Agent"). 

W I T N E S S E T H  

        WHEREAS, on January 5, 1995, the Board of Directors of the Company (the "Board") authorized and declared a dividend distribution of one Right (as such term
is hereinafter defined) for each outstanding share of the Company's Common Stock, par value $.01 per share (the "Common Stock") outstanding at the close of business on January 19, 1995 (the
"Record Date"), each Right representing the right to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock of the Company having the rights, powers
and preferences set forth in the form of Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock attached hereto as Exhibit A, upon the terms
and subject to the conditions hereinafter set forth (the "Rights"), and further authorized the issuance of one Right with respect to each share of Common Stock that would become outstanding after the
close of business on the Record Date in accordance with the terms and subject to the conditions hereinafter set forth; 

        WHEREAS,
the Company and the Rights Agent entered into a Rights Agreement on January 5, 1995, which permitted the amendment thereof; 

        WHEREAS,
the Board of Directors of the Company authorized the amendment and restatement of the Rights Agreement on August 13, 2002; 

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

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

        (a)  "Act"
shall have the meaning set forth in Section 9(c) hereof. 

        (b)  "Acquiring
Person" shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates (as such term is hereinafter defined) and
Associates (as such term is hereinafter defined) of such Person, without the prior approval of a majority of the members of the Board of Directors of the Company, shall be the Beneficial Owner (as
such term is hereinafter defined) of voting securities having fifteen percent (15%) or more of the then voting power of the Company, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company or of any Subsidiary of the Company, or (iv) any entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan; provided, however, that if a Person is the Beneficial Owner at the close of business on the date of this
Agreement of fifteen percent (15%) or more of the voting power of the Company, such Person shall not be deemed an Acquiring Person unless and until such Person acquires any additional Common Stock in
any manner other than pursuant to a stock dividend, stock split, recapitalization or similar transaction that does not affect the percentage of outstanding Common Stock beneficially owned by such
Person. Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as the result of an acquisition of Common Stock by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person to fifteen percent (15%) or more of the then voting power of the Company then outstanding;  provided, however, that if a
Person shall become the Beneficial Owner of fifteen percent (15%) or more of the then voting power of the Company then
outstanding by reason of shares purchased by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional Common Stock of the Company, then such
Person shall be deemed to be an "Acquiring Person." Notwithstanding the foregoing, if the majority of the members of the Board of Directors of the Company then in office determines in good faith that
a Person who would otherwise be an "Acquiring Person", as defined pursuant to 

 

the foregoing provisions of this paragraph (a), has become such inadvertently, without any intention of changing or influencing control of the Company, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that such Person would no longer be an Acquiring Person, as defined pursuant to the foregoing provisions of this paragraph (a), then
such Person shall not be deemed to be an "Acquiring Person" for any purposes of this Agreement. 

        (c)  "Acquisition
Event" shall mean the Flip-In Event or any event described in Section 13(a) hereof. 

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

        (e)  A
Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," any securities: 

        (i)    which
such Person or any of such Person's Affiliates or Associates beneficially owns, directly or indirectly, including without limitation securities with respect to
which such Person or any such Person's Affiliates or Associates has "beneficial ownership" pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement; 

        (ii)  which
such Person or any of such Person's Affiliates or Associates has (A) the right or obligation to acquire (whether such right or obligation is exercisable or
effective immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights at any time prior to the occurrence of an Acquisition Event, but thereafter including the Rights acquired from and after the Distribution Date (as defined in
Section 3(a) below) other than pursuant to Section 3(a) below), warrants or options, or otherwise; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or (B) the right to vote pursuant to any agreement, arrangement or understanding (whether or not in writing);  provided, however, that
a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any security under this clause (B) if
the agreement, arrangement or understanding to vote such security: (1) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act, and (2) is not also then reportable by such Person 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 and other than customary agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in clause (B) of subparagraph
(ii) of this paragraph (d)) or disposing of any voting securities of the Company. 

        Notwithstanding
the foregoing, a Person shall not be deemed to be the "Beneficial Owner" of or to "beneficially own" any securities that are issued, or proposed to be issued, to such
Person pursuant to any stock option plan or other employee compensation plan or arrangement of the Company or any of its Subsidiaries or any securities for which such Person serves as trustee pursuant
to an employee stock ownership or similar plan of the Company or 

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any of its Subsidiaries. Furthermore, directors and officers of the Company shall not be deemed to beneficially own each others Common Stock solely due to their status as a director or officer of the
Company. 

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

        (f)    "Board"
shall have meaning set forth in the preamble. 

        (g)  "Business
Day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the States of North Dakota, Minnesota or New York are
authorized or obligated by law or executive order to close. 

        (h)  "Close
of business" on any given date shall mean 5:00 P.M., Fargo, North Dakota time, on such date; provided, however, that if such date is not a Business Day it
shall mean 5:00 P.M., Fargo, North Dakota time, on the next succeeding Business Day. 

        (i)    "Common
Stock" shall mean the Common Stock, par value $.01 per share, of the Company (as such term is defined in the introductory paragraphs above) or any other shares
of capital stock of the Company into which the Common Stock shall be reclassified or changed, except that "Common Stock" when used with reference to any Person other than the Company shall mean the
shares of capital stock of such Person (if such Person is a corporation) of any class or series, or units of equity interests in such Person (if such Person is not a corporation) of any class or
series, the terms of which do not limit (as a fixed amount and not merely in proportional terms) the amount of dividends or income payable or distributable on such class or series or the amount of
assets distributable on such class or series upon any voluntary or involuntary liquidation, dissolution or winding up of such Person and do not provide that such class or series is subject to
redemption at the option of such Person, or any shares of capital stock or units of equity interests into which the foregoing shall be reclassified or changed; provided, however, that if at any time
there shall be more than one such class or series of capital stock or equity interests of such Person, "Common Stock" of such Person shall include all such classes and series substantially in the
proportion of the total number of shares or other units of each class or series outstanding at such time. 

        (j)    "common
stock equivalent" shall have the meaning set forth in Section 11(a)(iii) hereof. 

        (k)  "Company"
shall have the meaning set forth in the preamble. 

        (l)    "current
market price" shall have the meaning set forth in Section 11(d) hereof. 

        (m)  "Distribution
Date" shall have the meaning set forth in Section 3 hereof. 

        (n)  "equivalent
preferred stock" shall have the meaning set forth in Section 11(b) hereof. 

        (o)  "Exchange
Act" shall have the meaning set forth in Section 1(c) hereof. 

        (p)  "Exchange
Ratio" shall have the meaning set forth in Section 24(a) hereof. 

        (q)  "Expiration
Date" and "Final Expiration Date" shall have the meanings set forth in Section 7 hereof. 

        (r)  "Flip-In
Event" shall have the meaning set forth in Section 11(a)(ii) hereof. 

        (s)  "Nasdaq"
shall have the meaning set forth in Section 11(d) hereof. 

3

 

        (t)    "Person"
shall mean any individual, firm, corporation, partnership, limited partnership, business trust, limited liability company, unincorporated association or other
entity and shall include any successor (by merger or otherwise) of such entity. 

        (u)  "Preferred
Stock" shall mean shares of Series A Junior Participating Preferred Stock, par value $.01 per share, of the Company. 

        (v)  "Purchase
Price" shall have the meaning set forth in Section 4(a) hereof. 

        (w)  "Principal
Party" shall have the meaning set forth in Section 13(b) hereof. 

        (x)  "Record
Date" shall have the meaning set forth in the preamble. 

        (y)  "Redemption
Price" shall have the meaning set forth in Section 23 hereof. 

        (z)  "Rights"
shall have the meaning set forth in the preamble. 

        (aa) "Rights
Agent" shall have the meaning set forth in the preamble. 

        (bb) "Rights
Certificate" shall have the meaning set forth in Section 3(a) hereof. 

        (cc) "Stock
Acquisition Date" shall mean the first date of public announcement by the Company or an Acquiring Person that an Acquiring Person has become such. 

        (dd) "Subsidiary"
shall mean, with reference to any other Person, any corporation of which a majority of any class of equity security is beneficially owned, directly or
indirectly, by such other Person. 

        (ee) "Summary
of Rights" shall have the meaning set forth in Section 3(b) hereof. 

        (ff)  "Trading
Day" shall have the meaning set forth in Section 11(d) hereof. 

        (gg) "Voting
power of the Company" shall mean the collective voting power of the Common Stock of the Company. 

        Any
determination required by the definitions contained in this Section 1 shall be made by the Board of Directors of the Company in its good faith judgment, which determination
shall be final and binding on the Rights Agent. 

        Section 2.    Appointment of the Rights Agent.    The Company hereby appoints the Rights Agent to act as agent
for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Stock) 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. In
the event the Company appoints one or more Co-Rights Agents, the respective duties of the Rights Agent and any Co-Rights Agent shall be as the Company shall determine. 

        Section 3.    Issue of Rights Certificates.    

        (a)  Until
the earlier of (i) the close of business on the tenth (10th) Business Day after the Stock Acquisition Date, or (ii) the close of business on the
tenth (10th) Business Day (or such later date as may be determined by action of the majority of the members of the Board of Directors of the Company prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement of, or first public announcement of the intent of any Person (other than the Company, any Subsidiary of the Company or any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity organized, appointed or established by the Company for or pursuant to the terms of any such plan), to commence, a tender or exchange offer
which would result in such person becoming an Acquiring Person (including any such date which is after the date of this Agreement and prior to the issuance of the Rights) (the earliest of
(i) and 

4

 

(ii) being herein referred to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Stock registered in the names of the holders of the Common Stock (which certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights (and the right to receive certificates therefor) will be transferable only in connection with the transfer of the underlying shares of Common Stock (including a
transfer to the Company). As soon as practicable after the Distribution Date, the Rights Agent will send by first-class, postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Distribution Date, at the address of such holder shown on the records of the Company, one or more rights certificates, in substantially the form of Exhibit B hereto (the
"Rights Certificates"), evidencing one Right for each share of Common Stock so held. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates. 

        (b)  On
the Record Date, or as soon as practicable thereafter, the Company will send a copy of a Summary of the Shareholders' Rights Plan, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), by first-class, postage prepaid mail, to each record holder of the Common Stock as of the close of business on the Record Date, at the address of
such holder shown on the records of the Company. With respect to certificates for the Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common Stock shall also be the registered holders of the associated Rights. Until the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section 7 hereof), the surrender for transfer of any of the certificates for the Common Stock outstanding on the Record Date shall also constitute
the transfer of the Rights associated with the Common Stock represented by such certificate. 

        (c)  Certificates
for the Common Stock issued after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date, shall be deemed also to be
certificates for Rights, and shall bear the following legend: 

This
certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between Community First Bankshares, Inc. and Wells Fargo Bank Minnesota,
N.A. as amended and restated as of August 13, 2002, as such may subsequently be amended (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal offices of Community First Bankshares, Inc. 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. Community First Bankshares, Inc. will mail to the holder of this certificate a copy of the Rights Agreement without charge
promptly after receipt of a written request therefor. Under certain circumstances, Rights issued to, or held by, an Acquiring Person, or an Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement) and any subsequent holder of such Rights may become null and void. 

With
respect to such certificates containing the foregoing legend, until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates alone and the registered holders of Common Stock shall also be the registered holders of the associated Rights, and the
surrender for transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates. In the event the Company
purchases or acquires any Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such Common Stock shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Stock which is no longer outstanding. 

5

   
        Section 4.    Form of Rights Certificates.    

        (a)  The
Rights Certificates (and the forms of election to exercise and of assignment to be printed on the reverse thereof) shall each be substantially in the form attached
hereto as Exhibit B and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this 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 any
stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face shall entitle the holders thereof to purchase such number of shares of Preferred Stock (or Common Stock, as the case may
be) as shall be set forth therein at the price per share set forth therein (the "Purchase Price"), but the number of such shares and the Purchase Price shall be subject to adjustment as provided
herein. 

        (b)  Any
Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes
such, except a transferee purchasing from or through a nationally recognized broker-dealer where such transferee and such transferee's Associates and Affiliates do not collectively acquire, and will
not have acquired during the preceding twenty (20) calendar days, in combination with the proposed transfer, an amount of Common Stock equal to more than one percent (1%) of the outstanding
shares of Common Stock, and (iii) a transferee of an Acquiring Person (or any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to or on behalf of holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the majority of the
members of the Board of Directors of the Company otherwise conclude in good faith is part of a plan, arrangement or understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent feasible and reasonably identifiable as such) the following legend: 

The
Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of such
Agreement. 

        The
provisions of Section 7(e) of the Rights Agreement shall be operative whether or not the foregoing legend is contained on any such Rights Certificate. 

        Section 5.    Countersignature and Registration.    

        (a)  The
Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, President, its Chief Financial Officer or any Executive Vice President
either manually or by facsimile signature, which shall be attested by the Secretary or any Assistant Secretary of the Company, either manually or by facsimile signature. The Rights Certificates shall
be manually countersigned by the Rights Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the 

6

 

Rights Agent, and issued and delivered by the Company with the same force and effect as though the person who signed such Rights Certificates had not ceased to be such officer of the Company; and any
Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of the Company to sign such
Rights 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, the Rights Agent will keep or cause to be kept, at its offices in South St. Paul, Minnesota or New York, New York, books for
registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of each of the Rights Certificates. 

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

        (a)  Subject
to the provisions of Section 14 hereof, at any time after the close of business on the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates (other than Rights Certificates representing rights that have become null and void pursuant to Section 11(a)(ii) hereof or that
have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Rights Certificate or Certificates, entitling the registered holder to
purchase a like number of shares of Preferred Stock as the Rights Certificate or Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Rights Certificates to be transferred, split
up, combined or exchanged at the office or offices of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate or Certificates until
the registered holder shall have completed and signed the certificate in the form of assignment on the reverse side of such Rights Certificate or Certificates and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e), Section 14 and Section 24, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange
of Rights Certificates. 

        (b)  Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably 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 Rights Certificate if mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated. 

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

        (a)  The
registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein including without limitation, the
restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to exercise on the reverse side thereof duly executed, to the Rights Agent at the office or offices 

7

 

of the Rights Agent designated for such purpose, together with payment of the Purchase Price for each one one-hundredth of a share of Preferred Stock (or, if applicable, such other number
of shares or other securities) as to which the Rights are exercised, at or prior to the earlier of (i) the close of business on January 5, 2005 (the "Final Expiration Date"), or
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof (such earlier time being herein referred to as the "Expiration Date"). Any Person who prior to the
Distribution Date becomes a record holder of shares of Common Stock may exercise all of the rights of a registered holder of a Rights Certificate with respect to the Rights associated with such shares
of Common Stock in accordance with and subject to the provisions of this Agreement, including the provisions of Section 7(e) hereof, as of the date such Person becomes a record holder of shares
of Common Stock. 

        (b)  The
Purchase Price for each one one-hundredth of a share of Preferred Stock pursuant to the exercise of a Right shall initially be sixty-three Dollars ($63),
and shall be subject to adjustment from time to time as provided in Section 11 hereof and shall be payable in lawful money of the United States of America in accordance with
paragraph (c) below. 

        (c)  Upon
receipt of a Rights Certificate representing exercisable Rights, with the form of election to exercise duly executed, accompanied by payment of the Purchase Price
for the shares to be purchased and an amount equal to any applicable transfer tax to be paid by the holder of such Right Certificate in accordance with Section 9, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates for
the number of shares of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company, in its sole
discretion, shall have elected to deposit the shares of Preferred Stock issuable upon exercise of the Rights hereunder into a depositary, requisition from the depositary agent depositary receipts
representing such number of one one-hundredth of a share of Preferred Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct the depositary agent to comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) 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 Rights Certificate, registered in such name or names as may be designated by such holder, and
(iv) when appropriate, after receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified check, cashier's check, bank draft or money order payable to the order of the Company,
except that if so provided by the Board of Directors of the Company, the payment of the Purchase Price following the Flip-In Event and until the first occurrence of an event described in
Section 13 may be made wholly or in part by delivery of a certificate or certificates (with appropriate stock powers executed in blank attached thereto) evidencing a number of shares of Common
Stock of the Company equal to the then Purchase Price divided by the closing price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on the Trading Day immediately
preceding the date of such exercise. In the event that the Company is obligated to issue other securities of the Company, pay cash and/or distribute other property pursuant to
Section 11(a)(iii) hereof, the Company will make all arrangements necessary so that such other securities, cash, and/or property are available for distribution by the Rights Agent, if
and when appropriate. In addition, in the case of an exercise of the Rights by a holder pursuant to Section 11(a)(ii), the Rights Agent shall return such Rights Certificate to the registered
holder thereof after imprinting, stamping or otherwise indicating thereon that the rights represented by such Rights Certificate no longer include the rights provided by
Section 11(a)(ii) of the Rights Agreement and if less than all the Rights represented by such Rights Certificate were so exercised, 

8

 

the Rights Agent shall indicate on the Rights Certificate the number of Rights represented thereby which continue to include the rights provided by Section 11(a)(ii). 

        (d)  In
case the registered holder of any Rights Certificate shall exercise (except pursuant to Section 11(a)(ii)) less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to the registered holder of such Rights Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof. 

        (e)  Notwithstanding
anything in this Agreement to the contrary, from and after the occurrence of a Flip-In Event, any Rights beneficially owned by (a) an
Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (b) except as provided below or in Section 4(b), a transferee of an Acquiring Person (or any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, and (c) except as provided below, a transferee of an Acquiring Person (or any such Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either (i) a transfer (whether or not for consideration) from the Acquiring Person to or on behalf of holders of equity
interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (ii) a transfer
which the majority of the members of the Board of Directors of the Company otherwise conclude in good faith is part of a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of this Section 7(e), shall become null and void without any further action, and any holder of such Rights shall thereupon have no right to exercise such Rights under any provision of
this Agreement. A majority of the members of the Board of Directors of the Company may in appropriate circumstances waive application of this Section 7(e) and the requirements of
Section 4(b) to any transfer by an Acquiring Person in connection with a transfer or series of transfers which cause an Acquiring Person to become the Beneficial Owner of voting securities
having less than fifteen percent (15%) of the voting power of the Company. The Company shall use all reasonable efforts to insure that the provisions of this Section 7(e) hereof are complied
with, but shall have no liability to any holder of Rights for the inability to make any determinations with respect to an Acquiring Person or any of their respective Affiliates, Associates or
transferees hereunder. 

        (f)    Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a
registered holder of any Rights Certificate upon the occurrence of any purported exercise as set forth in this Section 7 unless the certificate contained in the appropriate form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise shall have been completed and signed by the registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of such Rights Certificate or Affiliates or Associates thereof as the Company shall
reasonably request. 

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

9

   
        Section 9.    Reservation and Availability of Capital 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 Preferred Stock (and, following the
occurrence of an Acquisition Event, Common Stock and/or other securities) or any authorized and issued shares of Preferred Stock (and following the occurrence of an Acquisition Event, Common Stock
and/or other securities) held in its treasury, the number of shares of Preferred Stock (and, following the occurrence of an Acquisition Event, Common Stock and/or other securities) that, except as
provided in Section 11(a)(iii) and subject to Section 7(e) hereof, will be sufficient to permit the exercise in full of all outstanding Rights. 

        (b)  So
long as the shares of Preferred Stock (and, following the occurrence of an Acquisition Event, Common Stock and/or other securities) issuable upon the exercise of the
Rights may be listed on any national securities exchange, 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 on such exchange upon official notice of issuance upon such exercise. 

        (c)  The
Company shall use its best efforts to (i) file, as soon as practicable following the Distribution Date, a registration statement under the Securities Act of
1933 (the "Act"), with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the date of the
expiration of the Rights. The Company will also take such action as may be appropriate under the Blue Sky laws of the various states. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) calendar days, the exercisability of the Rights in order to prepare and file any required registration statement. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily suspended. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the qualification in such jurisdiction shall have been obtained, the exercise thereof shall be permitted under applicable law and a registration statement 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 Preferred Stock (and, following the occurrence of an
Acquisition Event, Common Stock and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and nonassessable shares or securities. 

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

        Section 10.    Preferred Stock Record Date.    Each person in whose name any certificate for shares of
Preferred Stock (or Common Stock, as the case may be) is issued upon the exercise of Rights shall for 

10

 

all purposes be deemed to have become the holder of record of the shares of Preferred Stock (or Common Stock, as the case may be) represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock (or Common Stock, as the case may be) transfer books of the Company are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common Stock, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a shareholder of the Company with respect to shares for which
the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein. 

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

        (a)  (i)    In
the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital
stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and in Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted
so that the
holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior
to any adjustment required pursuant to Section 11(a)(ii). 

        (ii)  Subject
to Section 24 of this Agreement, at the close of business on the tenth (10th) Business Day after the Stock Acquisition Date (the "Flip-In
Event"), proper provision shall be made so that each holder of a Right, except as provided below and in Section 7(e) hereof, shall thereafter have a right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement, in lieu of shares of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number of one one-hundredths of a share of Preferred Stock for which a Right is then exercisable and dividing
that product by (y) fifty percent (50%) of the current market price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date on which the first of the events
listed above in this subparagraph (ii) occurs. In the event that any Person shall become an Acquiring 

11

 

Person and the Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights. 

        (iii)  In
lieu of issuing shares of Common Stock in accordance with Section 11(a)(ii) hereof, the Company may, if the majority of the Board of Directors of the
Company then in office determine that such action is necessary or appropriate and not contrary to the interests of holders of Rights, elect to issue or pay, upon the exercise of the Rights, cash,
property, shares of Common Stock, other securities or any combination thereof having an aggregate value equal to the value of the shares of Common Stock which otherwise would have been issuable
pursuant to Section 11(a)(ii), which value shall be determined by a nationally recognized investment banking firm selected by a majority of the members of the Board of Directors of the Company
then in office. For purposes of the preceding sentence, the value of any preferred stock which a majority of the members of the Board of Directors of the Company determines to be a "common stock
equivalent" shall be deemed to have the same value as the Common Stock. Any such election by the Board of Directors of the Company must be made and publicly announced within sixty (60) calendar
days of the Flip-In Event. Following the occurrence of the Flip-In Event, a majority of the members of the Board of Directors of the Company then in office may suspend the
exercisability of the Rights for a period of up to sixty (60) calendar days following the occurrence of such Flip-In Event to the extent that the Board of Directors of the Company
has not determined whether to exercise their rights of election under this paragraph (a)(iii). 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. 

        (b)  In
case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase
(for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the current market price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering
price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 Preferred Stock outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by
the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 or warrants are not so issued, the Purchase 

12

 

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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per one one-hundredth of a share of Preferred Stock on such record date,
less the fair market value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such current market price (as determined
pursuant to Section 11(d) hereof) per one one-hundredth of a share of Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been
fixed. 

        (d)  (i)    For
the purpose of any computation hereunder, the "current market price" per share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in
the event that the current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to the expiration of the thirty (30) Trading Day period after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in each such case, the "current market price" shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted sale 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 the National
Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq") or such other system then in use, or, if on any such date the shares of Common Stock 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 Common Stock selected by the Board. If on any such date no market maker
is making a market in the Common Stock, the fair value of such shares on such date as determined in 

13

 

good faith by the majority of the members of the Board of Directors of the Company then in office shall be used. The term "Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, "current market price" per share 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 conclusive for all purposes. 

        (ii)  For
the purpose of any computation hereunder, the "current market price" per share of Preferred Stock shall be determined in the same manner as set forth above for the
Common Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If the current market price per share of Preferred Stock cannot be determined in the manner
provided above, the "current market price" per share of Preferred Stock shall be conclusively deemed to be an amount equal to one hundred (100) times the current market price per share of
Common Stock, as appropriately adjusted for stock splits, stock dividends or similar transactions after the date hereof. If neither the Common Stock nor the Preferred Stock is publicly held or so
listed or traded, "current market price" per share 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 conclusive for all purposes. 

        (e)  Anything
herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at
least one percent (1%) in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a share of Common Stock or other share or one-millionth of a share of Preferred Stock, 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 (3) years from the date of the transaction which mandates
such adjustment, or (ii) the Expiration Date. 

        (f)    If
as a result of an adjustment made pursuant to Section 11(a) or Section 13, the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock other than Preferred Stock, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions contained in Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13
and 14 hereof with respect to the 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 shares of Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. 

14

  

        (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 Sections 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-hundredth of a share of Preferred Stock (calculated to the nearest one-millionth) obtained by (i) multiplying (x) the number of one one-hundredth
of a share covered by the Right immediately prior to this adjustment, by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. 

        (i)    The
Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in substitution for any adjustment in the number of
shares of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of one
one-hundredth of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten (10) calendar days later than the date of the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such
record date Rights 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 Rights Certificates held by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of
record of Rights 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-hundredth of a share of Preferred Stock issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price per share and the number of shares which were expressed in the initial Rights
Certificates issued hereunder. 

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

        (l)    In
any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the shares of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above the shares of Preferred Stock and other capital 

15

 

stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment. 

        (m)  Anything
in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that in their sole discretion a majority of the members of the Board of Directors of the Company then in office shall
determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less than the
current market price, (iii) issuance wholly for cash of shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such shareholders. 

        (n)  The
Company covenants and agrees that it shall not, at any time after the Distribution Date, (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one or more transactions, assets, cash flow or earning power aggregating more than fifty percent (50%) of the assets,
cash flow or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person if at the time of or immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or agreement in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights. 

        (o)  The
Company covenants and agrees that, after 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 the purpose or effect of which is to diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights. 

        (p)  Anything
in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the date of this Agreement and prior to the
Distribution Date (i) declare a dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, (iii) combine
the outstanding Common Stock into a smaller number of shares, or (iv) issue any shares of its capital stock in a reclassification of the outstanding Common Stock, the number of Rights
associated with each share of Common Stock shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction the numerator of which shall be the total number of shares
of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the
occurrence of such event. 

        (q)  The
exercise of Rights under Section 11(a)(ii) shall only result in the loss of rights under Section 11(a)(ii) to the extent so exercised and
shall not otherwise affect the rights represented by the Rights under this Rights Agreement, including the rights represented by Section 13. 

        Section 12.    Certificate of Adjusted Purchase Price or Number of Stock.    Whenever an adjustment is made as
provided in Sections 11 and 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the Preferred Stock and the Common Stock a copy of such certificate, and (c) mail a brief summary thereof to each
holder of a 

16

 

Rights Certificate in accordance with Section 26 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained. 

        Section 13.    Consolidation, Merger, Statutory Share Exchange or Sale or Transfer of Assets, Cash Flow or Earning
Power.    

        (a)  In
the event that, following the Stock Acquisition Date, directly or indirectly, (w) the Company shall effect a statutory share exchange with the outstanding
Common Stock of the Company being exchanged for stock or other securities of any other Person, money or other property, (x) the Company shall consolidate with, or merge with and into, any other
Person, and the Company shall not be the continuing or surviving corporation of such consolidation or merger, (y) any Person shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (z) 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, cash flow or earning power aggregating more than fifty percent (50%) of the assets, cash flow or earning power of
the Company and its Subsidiaries (taken as a whole) to any Person or Persons (other than the Company or any Subsidiary of the Company), then, and in each such case,
proper provision shall be made so that: (i) each holder of a Right, shall thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of validly authorized and issued, fully paid, non-assessable and freely tradable shares of Common Stock of the Principal Party (as hereinafter
defined), free and clear of liens, rights of call or first refusal, encumbrances or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then current Purchase
Price by the then number of one one-hundredth of a share of Preferred Stock for which a Right is then exercisable (without giving effect to the occurrence, if any, of any transaction
described in Section 11(a)(ii) hereof) and (2) dividing that product by fifty percent (50%) of the current market price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party on the date of consummation of such consolidation, merger, share exchange, sale or transfer;
(ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, share exchange, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11
hereof shall apply to such Principal Party; and (iv) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the 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 possible, in
relation to its shares of Common Stock thereafter deliverable upon the exercise of the Rights. 

        (b)  "Principal
Party" shall mean: 

        (i)    in
the case of any transaction described in (w), (x) or (y) of the first sentence of Section 13(a), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are converted in such merger, share exchange or consolidation, and if no securities are so issued, the Person that is the other party to such merger,
share exchange or consolidation; and 

        (ii)  in
the case of any transaction described in (z) of the first sentence in Section 13(a), the Person that is the party receiving the greatest portion of the
assets, cash flow or earning power transferred pursuant to such transaction or transactions; 

17

 

provided, however, that in any such case, (1) if the Common Stock of such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person; (2) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stocks of two or
more of which are and have been so registered, "Principal Party" shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value; and
(3) in case 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
(1) and (2) above shall apply to each of the chains of ownership having an interest in such joint venture as if such party were a "Subsidiary" of both or all of such joint venturers and
the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio as their direct or indirect interests in such Person bear to the total of such interests. 

        (c)  The
Company shall not consummate any such consolidation, merger, sale or transfer unless the Principal Party shall have a sufficient number of authorized shares of its
common stock which have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and
further providing that, as soon as practicable after the date of any consolidation, merger or sale of assets mentioned in paragraph (a) of this Section 13, the Principal Party will: 

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

        (ii)  take
all other actions as may be necessary to enable the Principal Party to issue the securities upon exercise of the Rights, including but not limited to the
registration or qualification of such securities under all requisite securities laws of jurisdictions of the various states and the listing of such securities on such exchanges and trading markets as
may be necessary or appropriate; and 

        (iii)  will
deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all material respects with the
requirements for registration on Form 10 under the Exchange Act. 

The
Company shall not enter into any transaction of the kind referred to in this Section 13 if at the time of such transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights.
The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or share exchanges or other transfers. The rights under this Section 13 shall be
in addition to the rights to exercise Rights and adjustments under Section 11(a)(ii) and shall survive any exercise thereof. 

        Section 14.    Fractional Rights and Fractional Stock.    

        (a)  The
Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered 

18

 

holders of the Rights 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 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 of the Rights for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading, or if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted sale price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors 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 shall be used. 

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

        (c)  Following
the occurrence of an Acquisition Event, the Company shall not be required to issue fractions of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock. In lieu of fractional shares of Common Stock, the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one (1) share of Common Stock shall be the closing sale price of a share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise. 

        (d)  The
holder of a Right by the acceptance of the Rights expressly waives his right to receive any fractional Rights or any fractional shares upon exercise of a Right,
except as permitted by this Section 14. 

19

 

        Section 15.    Rights of Action.    All rights of action in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders
of the Common Stock); and any registered holder of any Rights 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 Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may in his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement. Holders of Rights shall be entitled to recover the reasonable costs and expenses, including attorneys' fees, incurred by them in any action to
enforce the provisions of this Agreement. 

        Section 16.    Agreement of Rights 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 Common Stock; 

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

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

        (d)  notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person 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, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided, however, that the Company
shall use reasonable efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as possible. 

20

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

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

        (b)  The
Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any Rights Certificate or certificate for 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 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. 

        Section 19.    Merger or Consolidation or Change of Name of Rights Agent.    

        (a)  Any
corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto;  provided,
however, 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 Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 

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

21

 

Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement. 

        Section 20.    Duties of Rights Agent.    The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound: 

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

        (b)  Whenever
in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the determination of "current market price") be proved or established by the Company prior to taking or suffering any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chief Executive Officer,
the President, the Chief Financial Officer or any Vice President, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. 

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

        (d)  The
Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates or be
required to verify the same (except as to its countersignature on such Rights Certificates), 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 under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof
by the Rights Agent) or in respect of the validity or execution of any Rights Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for any adjustment required under the provisions of Sections 11 or 13 hereof or responsible
for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such 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 Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable. 

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

        (g)  The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chief Executive Officer, the
President, the Chief Financial Officer or any Vice President, the Secretary or any Assistant Secretary of the Company, and to apply to such officers for advice or instructions in connection with its
duties, and it shall 

22

 

not be liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer. 

        (h)  The
Rights Agent and any shareholder, 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 Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity. 

        (i)    The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or accountable for any act, or omission, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting
from any such act, or omission, default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof. 

        (j)    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 there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it. 

        Section 21.    Change of Rights Agent.    The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon thirty (30) calendar days' notice in writing mailed to the Company, and to each transfer agent of the Common Stock and Preferred Stock, by
registered or certified mail, and to the holders of the Rights Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) calendar
days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail,
and to the holders of the Rights 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 thirty (30) calendar 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 Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then the registered holder of any Rights 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 corporation organized and doing business under the laws of the United States or of the States of North Dakota, Minnesota or New York
(or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the States of North Dakota, Minnesota or New York), in good standing,
having a principal office in the States of North Dakota, Minnesota or New York, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an Affiliate controlled by a corporation
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 and the Preferred Stock, and mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to
give any notice provided for in this Section 21, however, or any 

23

 

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

        Section 22.    Issuance of New Rights Certificates.    Notwithstanding any of the provisions of this Agreement
or of the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board to reflect any adjustment or change in
the Purchase Price per share and the number or kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, the Company may, if deemed necessary or appropriate by the Board, issue Rights Certificates in connection with the sale of shares of Common Stock following the Distribution
Date. 

        Section 23.    Redemption and Termination.    

        (a)  (i)    By
a decision of a majority of the members of the Board of Directors of the Company, the Board may, at its option, at any time prior to the close of
business on the earlier of (i) the Flip-In Event, or (ii) the Final Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption price of
$.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price"). The redemption of the Rights by the Board may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. 

        (ii)  In
addition, the majority of the members of the Board of Directors of the Company may redeem all but not less than all of the then outstanding Rights at the Redemption
Price following the occurrence of a Stock Acquisition Date but prior to any event described in Section 13(a) either (x) if each of the following shall have occurred and remain in effect:
(1) a Person who is an Acquiring Person shall have transferred or otherwise disposed of a number of shares of Common Stock in a manner satisfactory to the Board of Directors of the Company such
that such Person is thereafter a Beneficial Owner of voting securities having less than fifteen percent (15%) of the voting power of the Company, and (2) there is no other Person, immediately
following the occurrence of the event described in clause (1), who is an Acquiring Person, or (y) in connection with any transaction not involving an Acquiring Person or an Affiliate or
Associate of an Acquiring Person. 

        (b)  In
the case of a redemption permitted under Section 23(a)(i), immediately upon the action of the Board of Directors of the Company ordering the redemption of the
Rights, evidence of which shall have been filed with the Rights Agent 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. In the case of a redemption permitted only under Section 23(a)(ii), evidence of which shall have been filed with
the Rights Agent, the right to exercise the Rights will terminate and represent only the right to receive the Redemption Price only after ten (10) Business Days following the giving of notice
of such redemption to the holders of such Rights. Within ten (10) Business Days after the action of the Board of Directors of the Company ordering any such redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to the Rights Agent and to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the Transfer Agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. 

24

 

        Section 24.    Exchange.    

        (a)  The
Board of Directors of the Company may, at its option, at any time after the occurrence of an Acquisition Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Stock for or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of fifty percent (50%) or more of the voting power of the Company. 

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

        (c)  In
any exchange pursuant to this Section 24, the Company, at its option, may substitute Preferred Stock (or equivalent preferred stock, as such term is defined in
Section 11(b) hereof) for some or all of the Common Stock exchangeable for Rights, at the initial rate of one one-hundredth of a share of Preferred Stock (or equivalent preferred
stock) for each share of Common Stock, as appropriately adjusted to reflect adjustments in the voting rights of the Preferred Stock pursuant to the terms thereof, so that the fraction of a share of
Preferred Stock delivered in lieu of each share of Common Stock shall have the same voting rights as one share of Common Stock. 

        (d)  In
the event that there shall not be sufficient shares of Common Stock or Preferred Stock issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall take all such action as may be necessary to authorize additional Common Stock or Preferred Stock for issuance upon
exchange of the Rights. 

        (e)  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. In lieu of
such fractional shares of Common Stock, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market value of a whole share of Common Stock. For the purposes of this paragraph (e), the current market value of a whole
share of Common Stock shall be the closing price of a share of Common Stock (as determined pursuant 

25

 

to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. 

        Section 25.    Notice of Certain Events.    In case the Company shall propose, at any time after the
Distribution Date, (a) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a
regular quarterly cash dividend out of earnings or retained earnings of the Company), or (b) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options, or (c) to effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of Preferred Stock), or (d) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of more than fifty percent (50%) of the assets, cash flow or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, or (e) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible and 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, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of 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 (a)
or (b) above at least twenty (20) calendar days prior to the record date for determining holders of the shares of Preferred Stock for purposes of such action, and in the case of any such
other action, at least twenty (20) calendar days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Preferred Stock
whichever shall be the earlier. 

        In
case any of the events set forth in Section 11(a)(ii) of this Agreement shall occur, then, in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Preferred Stock shall be deemed
thereafter to refer to Common Stock and/or, if appropriate, other securities. 

        Section 26.    Notices.    Notices or demands authorized by this Agreement to be given or made by the Rights
Agent or by the holder of any Rights 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: 

Community
First Bankshares, Inc.

520 Main Avenue

Fargo, North Dakota 58124

Attention: President 

26

   
Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Rights 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: 

Wells
Fargo Bank Minnesota, N.A.

161 N. Concord Exchange

South St. Paul, Minnesota 55075

Attention: Account Management 

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

        Section 27.    Supplements and Amendments.    The Board and the Rights Agent shall from time to time, if the
Board so directs, supplement or amend this Agreement without the approval of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) prior to the Distribution Date, to change or supplement any of the provisions hereunder
which the Board may deem necessary or desirable or (iv) following the Distribution Date, to change or supplement any of the provisions hereunder in any manner which the Board may deem necessary
or desirable and which shall not adversely affect the interests of the holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);  provided,
however, that, following the Distribution Date, this Agreement shall not be supplemented or
amended to lengthen any time period relating to the Rights, including, without limitation, the time period during which the Rights may be redeemed, unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of and benefits to the holders of the Rights (excluding in each case Rights held by an Acquiring Person or an Associate or Affiliate of an Acquiring
Person whose Rights have or may become null and void pursuant to Section 7(e) hereof). Upon the delivery of a certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment unless the Rights Agent shall have determined in
good faith that such supplement or amendment would adversely affect its interests under this Agreement. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock. 

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

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

        Section 30.    Administration of Agreement.    The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board of Directors or the Company or as may be necessary or advisable in the
administration of this Agreement, including without limitation the right and power to interpret the Agreement and to make all determinations deemed necessary or advisable for the administration of
this Agreement. All such acts, interpretations and determinations done or made by the Board in good faith shall be final, conclusive and binding on the Company, the Rights Agent and the holders of the
Rights. 

27

 

Accordingly, the Board of Directors of the Company shall not be liable to the holders of Rights, Rights Certificates or any other party for any determination made, action taken, or action omitted to
be taken pursuant to the terms of this Agreement, if such determination, action or omitted action was made or taken in good faith. 

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

        Section 32.    Governing Law.    This Agreement, each Right and each Rights Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State. 

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

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

28

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

	

 	
 	

 	
 	

COMMUNITY FIRST BANKSHARES, INC.
	

Attest:	
 	

 	
 	

 
	

By:	
 	

/s/ Patrick Delaney
 Its Secretary	
 	

By	
 	

/s/ Mark A. Anderson
 Its Chief Executive Officer
	

 	
 	

 	
 	

WELLS FARGO BANK MINNESOTA, N.A.
	

Attest:	
 	

 	
 	

 
	

By	
 	

/s/ John Baker
 Its Assistant Vice President	
 	

By	
 	

/s/ Darren Larson
 Its Assistant Vice President

29

   Exhibit A  

FORM OF

CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS

OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK  

 of  

 COMMUNITY FIRST BANKSHARES, INC.  

 Pursuant to Section 151 of the General Corporation Law

of the State of Delaware  

        We, Donald R. Mengedoth, President, and Mark A. Anderson, Secretary, of Community First Bankshares, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY: 

        That
pursuant to the authority conferred upon the Board of Directors by the Certificate of Incorporation of the said Corporation, the said Board of Directors on January 5, 1995
adopted the following resolution creating a series of One Hundred Fifty Thousand (150,000) shares of preferred stock designated as Series A Junior Participating Preferred Stock: 

        RESOLVED,
that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Certificate of Incorporation, a series of preferred
stock of the Corporation be, and it hereby is, created, and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof, are as follows: 

        Section 1.    Designation and Amount.    The shares of such series shall be designated as "Series A
Junior Participating Preferred Stock," par value $.01 per share, and the number of shares constituting such series shall be One Hundred Fifty Thousand (150,000). Such number of shares may be increased
or decreased by resolution of the Board of Directors; provided that no decrease shall reduce the number of shares of Series A Junior Participating Preferred Stock to a number less than that of
the shares then outstanding plus the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Corporation. 

        Section 2.    Dividends and Distributions.    

        (A)  Subject
to the prior and superior rights of the holders of any shares of any series of preferred stock now or hereafter ranking prior and superior to the shares of
Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock, in preference to the holders of shares of
Common Stock, par value $.01 per share (the "Common Stock") of the Corporation and any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in
an amount per whole share (rounded to the nearest cent), subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time 

30

 

declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision (by stock split or otherwise) or combination (by reverse stock split or otherwise) or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders
of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event 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
(and rounding the result to the nearest whole number); and provided further that if at any time after January 19, 1995, the Corporation shall issue any shares of its capital stock in a
reclassification or change of the outstanding shares of Common Stock (including any such reclassification or change in connection with a merger in which the Corporation is the surviving corporation),
then in such event the amount to which holders of Series A Junior Participating Preferred Stock are entitled shall be appropriately adjusted to reflect such reclassification or change. 

        (B)  The
Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock). 

        (C)  The
holders of shares of Series A Junior Participating Preferred Stock shall not be entitled to receive any dividends or other distributions except as provided
herein. 

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

        (A)  Each
share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to one hundred (100) votes, subject to adjustment in the
manner set forth in Section 2(A), on all matters on which holders of the Common Stock or shareholders generally are entitled to vote. 

        (B)  Except
as otherwise provided herein or by applicable law, the holders of shares of Series A Junior Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote of shareholders of the Corporation. 

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

        Section 4.    Certain Restrictions.    

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

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

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

31

 

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

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

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

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

        Section 6.    Liquidation, Dissolution or Winding Up.    

        (A)  Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless,
prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Liquidation Preference"). Following the payment of the full amount of the Liquidation Preference, no additional distributions shall
be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph C below to reflect such
events as stock splits, stock dividends and recapitalization with respect to the Common Stock) (such number in clause (ii) being herein referred to as the "Adjustment Number"). Following the
payment of the full amount of the Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Preferred Stock and Common Stock, respectively,
holders of Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall proportionately share in the remaining assets in the ratio of the Adjustment Number (per
share of Preferred Stock) to 1 (per share of Common Stock). 

        (B)  In
the event there are not sufficient assets available to permit payment in full of the Liquidation Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets
shall be distributed ratably to the holders of Common Stock. 

32

 

        (C)  In
the event the Corporation shall at any time (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to such event. 

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

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

        Section 9.    Ranking.    The Series A Junior Participating Preferred Stock shall rank junior to all
other series of the Corporation's preferred stock which may hereafter be authorized as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide
otherwise. 

        Section 10.    Amendment.    The Certificate of Incorporation of the Corporation shall not be amended in any
manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds (2/3) or more of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class. 

        Section 11.    Fractional Stock.    Series A Junior Participating Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in liquidating distributions and to
have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock. 

        IN
WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm the foregoing as true under the penalties of perjury this            day of January, 1995. 

	 	 	
 Donald R. Mengedoth, President
	

Attest:	
 	

 
	    	 	 
	

 Mark A. Anderson, Secretary	
 	

 

33

   Exhibit B  

        [Form
of Rights Certificate] 

	Certificate No. R-                        	 	                        Rights

NOT
EXERCISABLE AFTER January 5, 2005, OR EARLIER IF REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT REFERRED TO HEREIN. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.](1) 

	(1)
	The
portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence. 

Rights Certificate  

 COMMUNITY FIRST BANKSHARES, INC.  

        This certifies that            , or registered assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights Agreement dated as of January 5, 1995, as amended and restated by that certain Amended and Restated Rights Agreement dated
as of August 13, 2002 (the "Rights Agreement"), between Community First Bankshares, Inc., a Delaware corporation (the "Company"), and Wells Fargo Bank Minnesota, N.A. (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. (Fargo, North Dakota time) on
January 5, 2005 at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one one-hundredth of a fully paid,
non-assessable share of Series A Junior Participating Preferred Stock (the "Preferred Stock") of the Company, at a purchase price of sixty-three Dollars ($63) per one
one-hundredth of a share (the "Purchase Price"), upon presentation and surrender of this Rights Certificate with the Form of Election to Exercise duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of January 19, 1995, based on the Preferred Stock as constituted at such date. 

        If
the Rights evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person or Associate or Affiliate of such Acquiring Person except as provided in Section 4(b) of the Rights
Agreement, or (iii) under certain circumstances, a transferee of persons who became an Acquiring Person or Affiliate or Associate of such Acquiring Person following such transfer, such Rights
shall become null and void upon the occurrence of a Flip-In Event described in Section 11(a)(ii) of the Rights Agreement and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such event. 

34

 

        As
provided in the Rights Agreement, the Purchase Price and the number and kind of shares of Preferred Stock or other securities which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of certain events. 

        This
Rights 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 full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under certain circumstances
specified in such Rights Agreement. Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and are also available upon written request to the Rights Agent or the
Company. 

        This
Rights Certificate, with or without other Rights Certificates, upon surrender at the office or offices of the Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares of Preferred Stock as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised (other than pursuant to
Section 11(a)(ii) of the Rights Agreement) in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised. If this Rights Certificate shall be exercised in whole or in part pursuant to Section 11(a)(ii) of the Rights Agreement, the holder shall be entitled to
receive this Rights Certificate duly marked to indicate that such exercise has occurred as set forth in the Rights Agreement. 

        Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $.01 per Right. 

        No
fractional shares of Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one
one-hundredth of a share of 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 Rights Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the
rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights Agreement. 

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

35

 

        WITNESS
the facsimile signature of the proper officers of the Company. 

Dated:
             

	 	 	 	COMMUNITY FIRST BANKSHARES, INC.
	

 	

 	
 	

By	

 
	 	 	 	 	
 Title:
	

ATTEST:	
 	

 	

 
	

 Secretary	
 	

 	

 
	

Countersigned:	
 	

 	

 
	

WELLS FARGO BANK MINNESOTA, N.A.	
 	

 	

 
	

By	

 	
 	

 	

 
	 	
 Authorized Signature	 	 	 

36

   [Form of Reverse Side of Rights Certificate] 

FORM OF ASSIGNMENT  

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate.) 

	FOR VALUE RECEIVED ____________________________________ hereby sells, assigns and transfers unto
	

	

 (Please print name and address of transferee)

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

        The
undersigned hereby certifies (after due inquiry and to the best of its knowledge) by checking the appropriate boxes that: 

        (1)  this
Rights Certificate 

[    ]
is 

or 

[    ]
is not 

being
sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement); and 

        (2)  the
undersigned 

[    ]
did 

or

[    ]
did not 

acquire
the Rights evidenced by this Rights Certificate from any person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person. 

Dated:
____________ 

____________________________________

Signature 

Signature
Medallion Guaranteed: 

NOTICE

        The
signature to the foregoing Assignment must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any
change whatsoever. 

37

   FORM OF ELECTION TO EXERCISE  

(To be executed if holder desires to

exercise Rights represented by the

Rights Certificate.) 

To:
COMMUNITY FIRST BANKSHARES, INC.: 

        The
undersigned hereby irrevocably elects to exercise ____________ Rights represented by this Rights Certificate to purchase the shares of Preferred Stock issuable upon the exercise of
the Rights (or such other securities of the Company or of any other person which may be issuable upon the exercise of the Rights) and requests that certificates for such shares be issued in the name
of: 

	    	 	 
	
	 	 
	    	 	 
	
	 	 
	    	 	 
	
 (Please print name and address)	 	 
	    	 	 
	
	 	 
	    	 	 
	
 (Please insert social security

or other identifying number)	 	 

        The
Rights Certificate indicating the balance, if any, of such Rights which may still be exercised pursuant to Section 11(a)(ii) of the Rights Agreement shall be returned
to the undersigned unless such person requests that the Rights Certificate be registered in the name of and delivered to: (complete only if Rights Certificate is to be registered in a name other than
the undersigned) 

	    	 	 
	
 (Please print name and address)	 	 
	    	 	 
	
	 	 
	    	 	 
	
 (Please insert social security

or other identifying number)	 	 

38

 

        The
undersigned hereby certifies (after due inquiry and to the best of its knowledge) by checking the appropriate boxes that: 

        (1)  the
Rights evidenced by this Rights Certificate 

[    ]
are 

or 

[    ]
are not 

being
exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement); and 

        (2)  the
undersigned 

[    ]
did 

or

[    ]
did not 

acquire
the Rights evidenced by this Rights Certificate from any person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person. 

Dated:
____________ 

____________________________________

Signature 

Signature
Medallion Guaranteed: 

NOTICE  

        The signature to the foregoing Election to Exercise must correspond to the name as written upon the face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever. 

39

   EXHIBIT C  

 SUMMARY OF SHAREHOLDERS' RIGHTS PLAN  

        On January 5, 1995 the Board of Directors of Community First Bankshares, Inc. (the "Company") adopted a shareholder rights plan by declaring a
dividend of one Right for each outstanding share of the Company's Common Stock, par value $.01 per share (the "Common Stock"), to the Company's shareholders of record at the close of business on
January 19, 1995 (the "Record Date"). Except as set forth below, each Right entitles the registered holder to purchase from the Company one one-hundredth (1/100) of a share of
Series A Junior Participating Preferred Stock, par value $.01 per share (the "Preferred Stock"), at a price of $63 per one one-hundredth of a share (the "Purchase Price"). The terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement") as amended and restated as of August 13, 2002 between the Company and Wells Fargo Bank Minnesota, N.A., as Rights
Agent. 

        Initially,
the Rights will be attached implicitly to all Common Stock certificates representing shares then outstanding, and no separate Right certificates will be distributed. Until the
earlier to occur of ten (10) Business Days following (i) a public announcement that, without the prior consent of the Board of Directors, a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the right to acquire, beneficial ownership of voting securities having 15% or more of the voting power of the Company (the "Stock Acquisition
Date"), or (ii) the commencement of (or a public announcement of an intention to make) a tender offer or exchange offer which would result in any person or group and related persons having
beneficial ownership of voting securities having 15% or more of the voting power of the Company (the earlier of such dates referred to in (i) and (ii) above being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the Common Stock certificates outstanding as of the Record Date, by such Common Stock certificates. 

        The
Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with Common Stock certificates. From as soon as practicable after the Record
Date and until the Distribution Date (or earlier redemption or expiration of the Rights), new Common Stock certificates issued after the Record Date upon transfer or new issuance of the Common Stock
will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer of any certificates
for Common Stock outstanding as of the Record Date will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the Distribution Date, and the separate Rights Certificates alone will evidence the Rights. 

        The
Rights are not exercisable until the Distribution Date. The Rights will expire on January 5, 2005, unless earlier redeemed by the Company as described below. 

        In
the event that any person becomes the beneficial owner of 15% or more of the voting power of the Company, ten (10) days thereafter (the "Flip-In Event") each holder
of a Right will thereafter have the right to receive, upon exercise thereof at the then current Purchase Price of the Right, Common Stock (or, in certain circumstances, a combination of cash, other
property, Common Stock or other securities) which has a value of two times the Purchase Price of the Right (such right being called the "Flip-In Right"). In the event that the Company is
acquired in a merger or other business combination transaction where the Company is not the surviving corporation or in the event that 50% or more of its assets, cash flow or earning power is sold,
proper provision shall be made so that each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price of the Right, common stock of the
acquiring entity which has a value of two times the Purchase Price of the Right (such right being called the "Flip-Over Right"). The holder of a Right will continue to have the
Flip-Over Right whether or not such holder exercises the Flip-In Right. Upon the 

40

 

occurrence of the Flip-In Event, any Rights that are or were at any time owned by an Acquiring Person shall become null and void insofar as they relate to the Flip-In Right. 

        For
example, at a Purchase Price of $63 per Right, if any person becomes the beneficial owner of 15% or more of the voting power of the Company, ten (10) Business Days thereafter
each Right other than a Right owned by such 15% beneficial owner would entitle its holder to purchase $126 worth of the Company's Common Stock (or other consideration, as noted above) for $63.
Assuming that the Common Stock had a per share value of $14 at such time, the holder of each Right would effectively be entitled to purchase 9 shares of Common Stock for $63. 

        Similarly,
assuming, following the Stock Acquisition Date, the occurrence of a business combination with another entity in which the Company's Common Stock is converted or exchanged, or
a sale of 50% or more of the Company's assets, cash flow or earning power, each Right would entitle its holder to purchase $126 worth of the acquiring entity's stock for $63. 

        The
Purchase Price payable, and the number of shares of 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 Preferred Stock, (ii) upon the grant to holders of the Preferred
Stock of certain rights or warrants to subscribe for Preferred Stock or convertible securities at less than the current market price of the Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above). 

        At
any time after the acquisition by a person or group of affiliated or associated persons of beneficial ownership of 15% or more of the voting power of the Company and prior to the
acquisition by such person or group of 50% or more of the voting power of the Company, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group
which have become null and void), in whole or in part, at an exchange ratio of one share of Common Stock, or one one-hundredth of a share of Preferred Stock (or of a share of a class or
series of the Company's preferred stock having equivalent rights, preferences and privileges), 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 the Purchase Price. No fractions of
shares will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise. 

        At
any time prior to the earlier to occur of (i) the tenth (10th) Business Day after the Stock Acquisition Date, or (ii) the expiration of the Rights, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption Price"), which redemption shall be effective at such time as the Board of Directors of the
Company shall establish. Additionally, the majority of the members of the Board of Directors of the Company may, following the tenth (10th) Business Day after the Stock Acquisition Date, redeem the
then outstanding Rights in whole, but not in part, at the Redemption Price provided that either (a) the Acquiring Person reduces his beneficial ownership to less than 15% of the voting power of
the Company in a manner which is satisfactory to the majority of the members of the Board of Directors of the Company and there are no other Acquiring Persons, or (b) such redemption is
incidental to a merger or other business combination transaction or series of transactions involving the Company but not involving an Acquiring Person or any person who was an Acquiring Person. The
redemption of Rights described in the preceding sentence shall be effective only after ten (10) Business Days prior notice. Upon the effective date of the 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. 

41

 

        The
Preferred Stock purchasable upon exercise of the Rights will be nonredeemable. Each share of Preferred Stock will have a preferential quarterly dividend in an amount equal to 100
times the dividend declared on each share of Common Stock. In the event of liquidation, the holders of Preferred Stock will receive a preferred liquidation payment of $100 per whole share of Preferred
Stock. Each whole share of Preferred Stock will have 100 votes, voting together with the Common Stock. In the event of any merger, consolidation or other transaction in which Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 100 times the amount and type of consideration received per share of Common Stock. The rights of the Preferred Stock as to
dividends and liquidations, and in the event of mergers and consolidations, are protected by customary anti-dilution provisions. Fractional shares of Preferred Stock in integral multiples
of one one-hundredth of a share of Preferred Stock will be issued unless the Company elects to distribute depositary receipts in lieu of such fractional shares. In lieu of fractional
shares other than fractions that are multiples of
one one-hundredth of a share, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise. 

        Until
a Right is exercised, it will not entitle the holder to any rights as a shareholder of the Company (other than those as an existing shareholder), including, without limitation, the
right to vote or to receive dividends. 

        The
terms of the Rights may be amended by the Board of Directors of the Company (i) prior to the Distribution Date in any manner, and (ii) on or after the Distribution Date
to cure any ambiguity, to correct or supplement any provision of the Rights Agreement which may be defective or inconsistent with any other provisions, or in any manner not adversely affecting the
interests of the holders of the Rights. 

        A
copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A/A. A copy of the Rights
Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement. 

42

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Exhibit 4.1

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EXHIBIT 4.2    
  

 
 

UNSECURED SUBORDINATED NOTE    
  

in
the original principal amount of $141,300,000 

issued
by 

BROOKFIELD HOMES HOLDINGS INC.  

in favour of 

BROOKFIELD HOMES (US) INC.  

November 12, 2002 

 
 
 

BROOKFIELD HOMES HOLDINGS INC.
  
    (Incorporated under the laws of Delaware)
  
    NOTE    
  

        Brookfield Homes Holdings Inc. (the "Borrower") for value received hereby acknowledges itself indebted to
and unconditionally promises to pay to or to the order of Brookfield Homes (US) Inc. (the "Lender") on December 31, 2005, or such earlier
or later date as all of the principal amount hereof may become due in accordance with the provisions hereof (such date being the "Maturity Date"), the
aggregate principal sum of ONE HUNDRED AND FORTY ONE MILLION, THREE HUNDRED THOUSAND DOLLARS ($141,300,000) (the "Principal Amount") in lawful money of
the United States, on presentation and surrender of this Note (in the case of payment of all of the principal amount hereof) to the Borrower at its address set forth herein, and to pay interest on the
principal amount of this Note outstanding from time to time at the rate and times and in the manner set forth herein. 

 
 

ARTICLE 1.
  INTERPRETATION    
  

1.1.  Definitions  

        For the purposes of this Note: 

1.1.1.
"Applicable Law" means, in respect of any person, property, transaction, event or course of conduct, all applicable laws, statutes, rules,
by-laws and regulations, regulatory policies and all applicable official directives, orders, judgments and decrees of Governmental Authorities; 

1.1.2.
"BHC" means Brookfield Homes Corporation, a Delaware corporation, and its successors and assigns; 

1.1.3.
"Borrower" means Brookfield Homes Holdings Inc., a corporation incorporated under the laws of California, and its successors and assigns; 

1.1.4.
"Business Day" means a day (other than Saturday or Sunday) on which banks are generally open for business in New York, New York; 

1.1.5.  "Default" means any event or condition which, upon notice, lapse of time, or both, would constitute an Event of Default; 

1.1.6.
"Event of Default" has the meaning attributed to such term in Section 3.1; 

1.1.7.
"Governmental Authority" means any government, legislature, regulatory authority, agency, department, commission, board, instrumentality or
rule-making entity of any government, legislature, or any court, tribunal, arbitration board or arbitrator or (without limitation to the foregoing) other law, regulation or rule making
entity having or purporting to have jurisdiction in the relevant circumstances, or any person acting or purporting to act under the authority of any of the foregoing (including, without limitation,
any arbitrator); 

1.1.8.
"Interest Payment Date" has the meaning attributed to such term in Section 2.2; 

1.1.9.
"Issue Date" means November 12, 2002; 

1.1.10.
"Lender" means Brookfield Homes (US) Inc., a corporation incorporated under the laws of Delaware, and its successors and assigns; 

1.1.11.
"Maturity Date" has the meaning attributed to such term in the recital of this Note; 

1.1.12.  "Note" means this unsecured subordinated note; the expressions "hereof",  "herein",
"hereto", "hereunder",  "hereby" and similar expressions refer to this unsecured subordinated Note as a whole
and not to any particular Article or Section, or other portion
hereof or thereof; 

1.1.13.
"Obligations" means all indebtedness, liabilities and other obligations owed to the Lender under this Note whether actual or contingent, matured
or not; 

2

 

1.1.14.
"person" means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or
without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative or Governmental Authority; 

1.1.15.
"Principal Amount" means the principal amount outstanding under this Note from time to time, being originally $141,300,000; 

1.1.16.  "Senior Indebtedness" means all existing and future indebtedness for borrowed money of BHC, the Borrower and any of their Subsidiaries, whether
or not secured; and 

1.1.17.
"Subsidiary" means a material subsidiary of the Borrower as identified from time to time in the regulatory filings of BHC and "Subsidiaries"
means all of them. 

1.2.  Gender and Number  

        Words importing the singular include the plural and vice versa and words importing gender include all genders. 

1.3.  Interpretation Not Affected by Headings, etc.  

        The division of this Note into Articles, Sections, subsections and paragraphs and the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Note. 

1.4.  Monetary References  

        Any reference in this Note to "Dollars", "dollars" or the sign "$" shall be deemed to be a reference to lawful money of the United States. 

1.5.  References  

        Except as otherwise specifically provided, reference in this Note to any contract, agreement, document or any other instrument shall be deemed to include
references to the same as varied, amended, supplemented, restated or replaced from time to time and reference in this Note to any enactment, including without
limitation, any statute, law, by-law, regulation, ordinance or order, shall be deemed to include references to such enactment as re-enacted, amended or extended from time to
time. 

1.6.  Invalidity of Provisions  

        Each of the provisions contained in this Note is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof
by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof. 

1.7.  Actions on Days Other Than Business  

        Except as otherwise specifically provided herein, where any payment is required to be made or any other action is required to be taken on a particular day and
such day is not a Business Day and, as a result, such payment cannot be made or action cannot be taken on such day, then this Note shall be deemed to provide that such payment shall be made or such
action shall be taken on the first Business Day after such day. 

 
 

ARTICLE 2.
  PAYMENTS    
  

2.1.  Interest Rate  

        Interest shall accrue from and including the Issue Date on the Principal Amount at a rate of 10.0% per annum. 

3

 

2.2.  Calculation and Payment of Interest  

        Interest on the Principal Amount shall accrue from day to day, both before and after default, demand, maturity and judgment, and shall be calculated on the basis
of the actual number of days elapsed and on the basis of a year of 365 days and shall be compounded and payable to the Lender in arrears on March 31, June 30, September 30
and December 31 (each an "Interest Payment Date") in each year (or, if not a Business Day on the immediately following Business Day), with the first Interest Payment Date being March 31,
2003. 

2.3.  Repayment of the Note  

        Subject to the terms and conditions of this Note, the Borrower shall not be required to make payments of principal on this Note until the Maturity Date. On the
Maturity Date, the principal amount of this Note then outstanding, together with all accrued and unpaid interest and other amounts payable under this Note, shall be due and payable in full. The
Borrower may at its option prepay this Note, in whole or in part, at any time prior to the Maturity Date on two days prior notice to the Lender. 

2.4.  Issuance of Equity Securities by Borrower  

        Except as agreed to in writing by the Lender, the net proceeds of the issue of any equity securities by BHC or by any Subsidiary of BHC, including the Borrower,
(other than equity securities issued to BHC or any of its Subsidiaries) shall be promptly applied to repay the Principal Amount of the Note, subject to Section 2.5. 

2.5.  Application of Payments  

        Any amounts prepaid or repaid shall not be reborrowed. All amounts prepaid or repaid shall be applied firstly in reduction of the accrued and unpaid interest then
outstanding and thereafter in reduction of the Principal Amount being prepaid or repaid. 

2.6.  Subordination  

        Notwithstanding anything in this Note to the contrary, the Borrower covenants and agrees and the Lender, by its acceptance of this Note, likewise covenants and
agrees, that the payment of principal and interest on this Note shall be expressly made subordinate to and postponed in right of payment to the prior payment of any Senior Indebtedness to the extent
that such Senior Indebtedness is at any time due or payable (whether at maturity, by acceleration or otherwise) provided, however, that the amount of Senior Indebtedness maintained by BHC, the
Borrower and their Subsidiaries shall not at any time exceed $900,000,000 in the aggregate. The Lender covenants and agrees to take such actions and to execute and deliver such documents as may be
reasonably necessary and appropriate from time to time to effect the postponement and subordination provided for in this Section. 

 
 

ARTICLE 3.
  EVENTS OF DEFAULT AND REMEDIES    
  

3.1.  Events of Default  

        The occurrence of any of the following events shall constitute an Event of Default: 

        3.1.1.    Default in Payment.    If the Borrower defaults in the payment when due of any of
the Obligations which require the payment of money to the Lender; or 

        3.1.2.    Other Covenants.    If the Borrower defaults in the performance or observance of any
term, condition, covenant, or obligation contained in this Note that does not require the payment of money to the Lender unless such default is remedied within 15 Business Days after notice thereof by
the Lender to the Borrower; or 

        3.1.3.    Default in other Indebtedness.    If the Borrower or any of the Subsidiaries is in
default under any Senior Indebtedness in excess of $10,000,000 where such default would entitle the holder to accelerate repayment of the debt, and, in each case, such default is not cured in any
applicable grace period or waived in writing; or 

4

 

        3.1.4.    Enforceability.    If this Note or any part thereof shall, at any time after its
respective execution and delivery and for any reason, cease in any way to be in full force and effect or to be a legal, valid, binding and enforceable obligation of the Borrower or if it is or becomes
unlawful for the Borrower to perform or comply with any or all of its obligations under any of this Note, or if the validity or enforceability of any of this Note is disputed in any manner by the
Borrower; or 

        3.1.5.    Voluntary Insolvency Actions.    If the Borrower or any of the Subsidiaries
institutes proceedings for its winding up, liquidation or dissolution, or takes action to become a voluntary bankrupt, or consents to the filing of a bankruptcy proceeding against it, or
files a proposal, a notice of intention to make a proposal, a petition or answer or consent seeking reorganization, readjustment, arrangement, composition or similar relief under any bankruptcy
law or any other similar applicable law or consents to the filing of any such petition, or consents to the appointment of a receiver, liquidator, trustee or assignee in bankruptcy or insolvency of all
or any material part of the property of the Borrower or any of the Subsidiaries or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as
they become due or commits any other act of bankruptcy, or suspends or threatens to suspend transaction of its usual business, or any action is taken by the Borrower or any of the Subsidiaries in
furtherance of any of the aforesaid; or 

        3.1.6.    Involuntary Insolvency Proceedings.    If proceedings are instituted in any court of
competent jurisdiction by any person other than the Borrower or any of the Subsidiaries for the winding up, liquidation or dissolution of the Borrower or any of the Subsidiaries or for any
reorganization, readjustment, arrangement, composition or similar relief with respect to the Borrower or any of the Subsidiaries under any bankruptcy law or any other applicable insolvency law, or for
the appointment of a receiver, liquidator, trustee or
assignee in bankruptcy or insolvency of all or any material part of the property of the Borrower or any of the Subsidiaries, and 

3.1.6.1.
at any time thereafter (a) such proceeding is not being contested in good faith by the Borrower or any of the Subsidiaries, or (b) the effect of such proceeding has not been
stayed; or 

3.1.6.2.
such proceeding has not been dismissed within 60 days from and including the day on which it was commenced; or 

3.1.6.3.
any order sought in any such proceeding is granted or issued; or 

        3.1.7.    Appointment of Receiver.    If a receiver, manager, receiver and manager, trustee,
custodian or other similar official is appointed in respect of the Borrower or any of the Subsidiaries or any material part of the property of the Borrower or any of the Subsidiaries and, in the case
of any such involuntary appointment, at any time thereafter (a) such appointment is not being contested in good faith by the Borrower or any of the Subsidiaries, or (b) the effect of
such appointment has not been stayed; or 

        3.1.8.    Bankruptcy Statutes.    If any proceeding, voluntary or involuntary, is commenced,
or an order or petition is issued, respecting the Borrower or any of the Subsidiaries pursuant to any statute relating to bankruptcy, insolvency, reorganization of debts, liquidation,
winding-up or dissolution, and, in the case of any such involuntary proceeding, 

3.1.8.1.
at any time thereafter (a) such proceeding is not being contested in good faith by the Borrower or any of the Subsidiaries, or (b) the effect of such proceeding has not been
stayed; or 

3.1.8.2.
such proceeding has not been dismissed within 60 days from and including the day on which it was commenced; or 

3.1.8.3.
any order or petition sought in any such involuntary proceeding is granted or issued; or 

        3.1.9.    Judgments.    If a final judgment is rendered against the Borrower or any of the
Subsidiaries for an amount if excess of $10,000,000 and, within 30 Business Days after entry thereof, such judgment has not been discharged or execution thereof stayed pending appeal or if, within
five Business Days after the expiration of any such stay, such judgment has not been discharged; or 

        3.1.10.    Encumbrances.    If an encumbrancer takes possession of any material part of the
property of the Borrower or any of the Subsidiaries or if a distress or execution or any similar process is levied or enforced against any material part of the property of the Borrower or any of the
Subsidiaries; or 

5

 

        3.1.11.    Merger, Sale or Disposition of Assets.    If the Borrower shall (a) enter
into any transaction or series of related transactions whereby all or substantially all of its property and assets would become the property of any other person whether by way of reorganization,
consolidation, amalgamation, arrangement, winding-up, merger, transfer, sale, sale-leaseback or otherwise, or (b) enter into any transaction to amalgamate or merge with
any other person. 

3.2.  Remedies Upon Default  

        Upon the occurrence of any Event of Default, the Lender may by notice given to the Borrower declare all Obligations to be immediately due and payable and the
Lender may take such actions and commence such proceedings as may be permitted at law or in equity at such times and in such manner as the Lender in its sole discretion may consider expedient, all
without, except as may be required by Applicable Law, any additional notice, presentment, demand, protest, notice of protest, dishonour or any other action. The rights and remedies of the Lender
hereunder are cumulative and are in addition to and not in substitution for any other rights or remedies provided by Applicable Law. The Borrower agrees to indemnify the Lender for all costs and
expenses incurred in connection with the collection of any of the obligations or other actions taken under this Section. 

3.3.  Set-Off  

        Upon the occurrence and during the continuance of an Event of Default the Lender may, at any time and from time to time, without notice to the Borrower or to any
other person, set off, appropriate and apply any indebtedness and liability of the Lender to the Borrower, matured or unmatured, against and on account of the Obligations when due. 

3.4.  Distributions  

        All distributions under or in respect of this Note shall be held by the Lender on account of the Obligations without prejudice to any claim by the Lender for any
deficiency after such distributions are received by the Lender and the Borrower shall remain liable for any such deficiency. All such distributions may be applied to such part of the Obligations as
the Lender may see fit in its sole discretion, and the Lender may at any time change any appropriation of any such distributions or other moneys received by it and reapply the same on any other part
of the Obligations as the Lender may see fit, in its sole discretion, notwithstanding any previous application. 

3.5.  Overdue Amounts  

        All overdue amounts owing or deemed to be owing hereunder ("overdue amounts"), whether in respect of principal, interest, or otherwise, both before and after
judgment shall (to the extent permitted by law) bear interest thereon at the rate specified in Section 2.1 plus 2%. Such interest on overdue amounts shall accrue from day to day, be payable in
arrears on demand and shall be compounded monthly on the last Business Day of each calendar month. 

3.6.  Forbearance  

        Upon the occurrence of an Event of Default the Lender may elect, in its sole discretion (but shall not in any manner whatsoever be obligated to), forebear from
taking any action as a result of such Event of Default. 

 
 

ARTICLE 4.
  GENERAL    
  

4.1.  Reliance and Non-Merger  

        All covenants and agreements of the Borrower made herein shall be deemed to have been relied upon by the Lender notwithstanding any investigation heretofore or
hereafter made by the Lender or counsel to or any employee or other representative of the Lender and shall survive the execution and delivery of this Note until all Obligations shall have been
satisfied and performed. 

6

 

4.2.  Amendment and Waiver  

        No amendment or waiver of any provision of this Note or consent to any departure by the Borrower from any provision hereof or thereof is effective unless it is in
writing and signed by an officer of the Lender and the Borrower. Such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which it is given. 

4.3.  Notices  

        Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given by facsimile or other means of electronic
communication or by hand-delivery as hereinafter provided. Any such notice, if sent by facsimile or other means of electronic communication, shall be deemed to have been received on the
day of sending, or if delivered by hand shall be deemed to have been received at the time it is delivered to the applicable address noted below. Notices of change of address shall also be governed by
this Section. Notices and other communications shall be addressed as follows: 

	(a)
	if
to the Borrower: 

Brookfield
Homes Holdings Inc.

12865 Pointe Del Mar

Suite 200

Del Mar, California

Facsimile number: (858) 794-6111 

	(b)
	if
to the Lender: 

Brookfield
Homes (US) Inc.

8500 Executive Park Avenue

Suite 300

Fairfax, Virginia 22031

Facsimile number: (703) 270-1401 

4.4.  Time  

        Time is of the essence of this Note. 

4.5.  Further Assurances  

        Whether before or after the happening of an Event of Default, the Borrower shall at its own expense do, make, execute or deliver, or cause to be done, made,
executed or delivered, all such further acts, things, agreements, documents and instruments in connection with this Note as the Lender may reasonably request from time to time for the purpose of
giving effect to the terms of this Note. 

4.6.  Assignment  

4.6.1.
This Note shall enure to the benefit of and be binding upon the parties hereto and thereto, their respective successors and any permitted assignee of some or all of the parties' rights or
obligations under this Note as permitted under this Section. 

4.6.2.
The Borrower shall not assign all or any part of its rights, benefits or obligations under this Note without the prior written consent of the Lender. 

4.6.3.
The Lender may at any time assign, or transfer its rights, benefits and obligations under this Note to any person without the consent of the Borrower. Upon any such assignment, transfer or
encumbrance, the Borrower acknowledges that customary agency arrangements may need to be implemented between the Lender and the assignee and certain intercreditor arrangements may need to be
implemented between the holders of this Note and the assignee, transferee or beneficiary of the encumbrance, and the Borrower shall 

7

 

enter into any documents reasonably requested by the Lender to implement such arrangements. Where such assignment or transfer relates only to part of the Principal Amount, the Lender and the assignee
or transferee shall be each entitled to receive (upon surrender of this Note to the Borrower for cancellation) a Note representing the part of the Principal Amount then owned by each of them. 

4.7.  Entire Agreement  

        This Note constitute the entire agreement between the parties pertaining to the subject matter described herein and therein. There are no warranties, conditions
or representations (including any that may be implied by statute), and there are no agreements in connection with such subject matter except as specifically set forth or referred to in this Note. 

4.8.  Governing Law  

        This Note shall be governed by and construed in accordance with the laws of the State of Delaware and the federal laws of the United States applicable therein. 

4.9.  Attornment  

        The parties hereto irrevocably submit and attorn to the non-exclusive jurisdiction of the courts of the State of Delaware for all matters arising out
of or in connection with this Note. 

        IN WITNESS WHEREOF the Borrower has executed this Note under seal, this 12 day of November, 2002. 

	

 	
 	
BROOKFIELD HOMES HOLDINGS INC.
	

 	
 	
By:	

 Name: Ian G. Cockwell

Title: President
	

 	
 	

By:	

 Name: Paul Kerrigan

Title: Chief Financial Officer

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QuickLinks

EXHIBIT 4.2

UNSECURED SUBORDINATED NOTE

BROOKFIELD HOMES HOLDINGS INC. (Incorporated under the laws of Delaware) NOTE

ARTICLE 1. INTERPRETATION

ARTICLE 2. PAYMENTS

ARTICLE 3. EVENTS OF DEFAULT AND REMEDIES

ARTICLE 4. GENERAL

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}]]