Document:

Exhibit 4.1

 

Execution Version

 

 

LOUISIANA-PACIFIC
CORPORATION

 

and

 

COMPUTERSHARE TRUST COMPANY, N.A.,

 

Rights
Agent

 

Rights
Agreement

 

Dated
as of May 23, 2008

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  Certain Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Appointment of Rights Agent

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Issue of Right Certificates

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Form of Right Certificates

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Countersignature and Registration

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 6.

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

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Exercise of Rights; Purchase Price; Expiration Date of Rights

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Cancellation and Destruction of Right Certificates

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Availability of Preferred Shares

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Preferred Shares Record Date

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Adjustment of Purchase Price, Number of Shares or Number of Rights

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Certificate of Adjusted Purchase Price or Number of Shares

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 13.

  	
  Consolidation, Merger or Sale or Transfer of Assets or Earning Power

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Fractional Rights and Fractional Shares

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Rights of Action

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Agreement of Right Holders

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 17.

  	
  Right Certificate Holder Not Deemed a Stockholder

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Concerning the Rights Agent

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  Merger or Consolidation or Change of Name of Rights Agent

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  Duties of Rights Agent

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Change of Rights Agent

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Issuance of New Right Certificates

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 23.

  	
  Redemption

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 24.

  	
  Exchange

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  Notice of Certain Events

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  Notices

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 27.

  	
  Supplements and Amendments

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 28.

  	
  Successors

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 29.

  	
  Benefits of this Rights Agreement

  	
  53

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 30.

  	
  Severability

  	
  54

  
	
   

  	
   

  	
   

  
	
  Section 31.

  	
  Governing Law

  	
  54

  
	
   

  	
   

  	
   

  
	
  Section 32.

  	
  Counterparts

  	
  54

  
	
   

  	
   

  	
   

  
	
  Section 33.

  	
  Determinations and Actions by the Board

  	
  54

  
	
   

  	
   

  	
   

  
	
  Section 34.

  	
  Descriptive Headings

  	
  55

  
	
   

  	
   

  	
   

  
	
  Section 35.

  	
  Force Majeure

  	
  55

  
	
   

  	
   

  	
   

  
	
  Exhibit A -

  	
  Form of Right
  Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit B -

  	
  Summary of Rights to Purchase Preferred Shares

  	
   

  

 

ii

 

Agreement, dated
as of May 23, 2008, between Louisiana-Pacific Corporation, a Delaware
corporation (the “Company”), and Computershare Trust Company, N.A. (the “Rights Agent”).

 

The Board of
Directors of the Company has authorized and declared a dividend of one
preferred share purchase right (a “Right”) for each Common Share of the
Company outstanding on June 6, 2008 (the “Record Date”), each Right
representing the right to purchase one one-hundredth of a Preferred Share, upon
the terms and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to each Common
Share of the Company that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date.

 

Accordingly, 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 Rights Agreement, the following terms have the meanings
indicated:

 

(a)           “Acquiring
Person” shall mean any Person who or which, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding, but shall not include the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any entity holding Common
Shares of the Company for or pursuant to the terms of any such plan.  Notwithstanding the foregoing, (i) any
Person who would otherwise qualify as an Acquiring Person on the date of this
Agreement will not be deemed to be an Acquiring Person for any purpose of this
Agreement unless and until such time as (A) such Person or any Affiliate
or Associate of such Person thereafter becomes the Beneficial Owner of any
additional Common 

 

 

Shares of the Company, other than as a result of a stock dividend,
rights dividend, stock split or similar transaction effected by the Company in
which all holders of Common Shares are treated equally, or (B) any other
Person who is the Beneficial Owner of any additional Common Shares of the
Company thereafter becomes an Affiliate or Associate of such Person, provided
that the foregoing exclusion shall cease to apply with respect to any Person at
such time as such Person, together with all Affiliates and Associates of such
Person, ceases to Beneficially Own 15% or more of the Common Shares then
outstanding, and (ii) no Person shall become an Acquiring Person as the
result of an acquisition of Common Shares by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares
Beneficially Owned by such Person to 15% or more of the Common Shares of the
Company then outstanding; provided, however, that if a Person
shall become the Beneficial Owner of 15% or more of the Common Shares of the
Company then outstanding by reason of an acquisition of Common Shares by the
Company and, after such acquisition of Common Shares by the Company, (A) such
person shall become the Beneficial Owner of any additional Common Shares of the
Company other than as a result of a stock dividend, stock split or similar
transaction effected by the Company in which all holders of Common Shares are
treated equally, or (B) any other Person who is the Beneficial Owner of
any additional Common Shares of the Company thereafter becomes an Affiliate or
Associate of such Person, then such Person shall be deemed to be an “Acquiring
Person.”  Notwithstanding the
foregoing, if the Board of Directors of the Company 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, and such Person divests as promptly as practicable or enters
into a written agreement with the Company to divest a sufficient number of
Common Shares of the Company 

 

2

 

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 or to have been an “Acquiring Person” for
any purposes of this Rights Agreement.

 

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

 

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

 

(d)           A
Person shall be deemed the “Beneficial Owner” of and shall be deemed
to “Beneficially
Own” any Common Shares:

 

(i)            the
beneficial ownership of which such Person or any of such Person’s Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable 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, warrants, options or
other rights; or

 

(ii)           which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has or shares the right to vote or dispose of, including pursuant
to any agreement, arrangement or understanding (whether or not in writing); or

 

(iii)          of which any other Person is the Beneficial
Owner, if such Person or any of such Person’s Affiliates or Associates has any
agreement, arrangement 

 

3

 

or understanding (whether or not in writing) with such
other Person (or any of such other Person’s Affiliates or Associates) with
respect to acquiring, holding, voting or disposing of any securities of the
Company; or

 

(iv)          in
respect of which such Person or any of such Person’s Affiliates or Associates
has a Synthetic Long Position that has been disclosed in a filing by such
Person or any of such Person’s Affiliates or Associates with the Securities and
Exchange Commission pursuant to Regulation 13D-G or Regulation 14D under the
Exchange Act in respect of which Common Shares are the “subject security” (as
such term is used in such Regulations);

 

provided,
however, that a Person will not be deemed the Beneficial Owner of, or to
Beneficially Own, any security (A) that may be acquired upon the exercise
of Rights prior to the exercise of such Rights, (B) tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person’s Affiliates or Associates until such tendered security is accepted for
purchase or exchange, (C) solely as a result of such Person having the
right to vote such security pursuant to an agreement, arrangement or
understanding (whether or not in writing) which (1) arises solely from a
revocable proxy given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report), or
(D) if such beneficial ownership arises solely as a result of such Person’s
status as a “clearing agency,” as defined in Section 3(a)(23) of the
Exchange Act; provided  further, however, that nothing in
this Section 1(d) will cause a Person engaged in business as an
underwriter of securities to be the Beneficial Owner of, or to Beneficially
Own, any securities acquired through such Person’s participation in good faith
in an 

 

4

 

underwriting
syndicate until the expiration of 40 calendar days after the date of such
acquisition, or such later date as the Board of Directors of the Company may
determine in any specific case.

 

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

 

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

 

(g)           “Common
Shares” when used with reference to the Company shall mean the shares of
common stock, par value $1.00 per share, of the Company.  “Common Shares” when used with
reference to any Person other than the Company shall mean the capital stock (or
equity interest) with the greatest voting power of such other Person or, if
such other Person is a Subsidiary of another Person, the Person or Persons
which ultimately control such first-mentioned Person.

 

(h)           “Company”
shall have the meaning set forth in the preamble hereof.

 

(i)            “current
per share market price” shall have the meaning set forth in Section 11(d)(i) hereof.

 

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

 

(k)           “equivalent
preferred shares” shall have the meaning set forth in Section 11(b) hereof.

 

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

 

(m)          “Exchange
Ratio” shall have the meaning set forth in Section 24(a) hereof.

 

5

 

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

 

(o)           “NASDAQ”
shall mean The NASDAQ Stock Market.

 

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

 

(q)           “Preferred
Shares” shall mean shares of Series A Junior Participating Cumulative
Preferred Stock, $1.00 par value, of the Company.

 

(r)            “Purchase
Price” shall have the meaning set forth in Section 7(b) hereof.

 

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

 

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

 

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

 

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

 

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

 

(x)            “Rights
Agent” shall have the meaning set forth in the preamble hereof.

 

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

 

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

 

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

 

6

 

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

 

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

 

(dd)         “Synthetic
Long Position” shall mean any option, warrant, convertible security, stock
appreciation right or other contractual right, whether or not presently
exercisable, which has an exercise or conversion privilege or a settlement
payment or mechanism at a price related to Common Shares or a value determined
in whole or part with reference to, or derived in whole or in part from, the
market price or value of Common Shares, whether or not such right is subject to
settlement in whole or in part in Common Shares, and which increases in value
as the value of Common Shares increases or which provides to the holder of such
right an opportunity, directly or indirectly, to profit or share in any profit
derived from any increase in the value of Common Shares, but shall not include:

 

(i)            rights
of a pledgee under a bona fide pledge of Common Shares;

 

(ii)           rights
of all holders of Common Shares to receive Common Shares pro rata, or
obligations to dispose of Common Shares, as a result of a merger, exchange
offer, or consolidation involving the Company;

 

(iii)          rights or obligations to surrender Common
Shares, or have Common Shares withheld, upon the receipt or exercise of a
derivative security or the receipt or vesting of equity securities, in order to
satisfy the exercise price or the tax withholding consequences of receipt,
exercise or vesting;

 

7

 

(iv)          interests
in broad-based index options, broad-based index futures, and broad-based
publicly traded market baskets of stocks approved for trading by the
appropriate federal governmental authority;

 

(v)           interests
or rights to participate in employee benefit plans of the Company held by
employees or former employees of the Company; or

 

(vi)          options
granted to an underwriter in a registered public offering for the purpose of
satisfying over-allotments in such offering.

 

The number of Common
Shares in respect of which a Person has a Synthetic Long Position shall be the
notional or other number of Common Shares specified in a filing by such Person
or any of such Person’s Affiliates or Associates with the Securities and
Exchange Commission pursuant to Regulation 13D-G or Regulation 14D under the
Exchange Act in respect of which Common Shares are the “subject security” (as
such term is fined in such Regulations) or in the documentation evidencing the
Synthetic Long Position as being subject to be acquired upon the exercise or
settlement of the applicable right or as the basis upon which the value or
settlement amount of such right, or the opportunity of the holder of such right
to profit or share in any profit, is to be calculated in whole or in part or,
if no such number of Common Shares is specified in such filing or
documentation, as determined by the Board of Directors of the Company in good
faith to be the number of Common Shares to which the Synthetic Long Position
relates.

 

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

 

Section 2. 
Appointment of 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 

 

8

 

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

 

Section 3. 
Issue of Right Certificates. 
(a) Until the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the tenth Business Day (or such later date as may
be determined by action 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 by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares of the Company for or pursuant to
the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares of the Company for or pursuant to the terms of
any such plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the Beneficial Owner of Common Shares
of the Company aggregating 15% or more of the then outstanding Common Shares of
the Company (including any such date which is after the date of this Rights
Agreement and prior to the issuance of the Rights; the earlier of such dates
being herein referred to as the “Distribution Date”), (x) the
Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares of the Company registered in the names of
the holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and Rights associated
with any uncertificated Common Shares of the 

 

9

 

Company will be evidenced (subject to the provisions of Section 3(b) hereof)
by the registration of the Common Shares in the Company’s share register in the
names of the holders thereof (which registration shall also be deemed to be
registration of ownership of the associated Rights) and not by separate Rights
Certificates, and (y) the Rights will be transferable only in connection
with the transfer of Common Shares of the Company.  As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent will, if
requested, at the expense of the Company, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares of the Company as
of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit A hereto (a “Right Certificate”),
evidencing one Right for each Common Share of the Company so held.  As of the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.

 

(b)           On
the Record Date, or as soon as practicable thereafter, the Company will make
available a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit B hereto (the “Summary of Rights”),
to any holder of Rights who may request it from time to time prior to the Final
Expiration Date.  With respect to
certificates for Common Shares of the Company outstanding as of the Record
Date, until the Distribution Date (or the earlier of the Redemption Date and
Final Expiration Date), the Rights will be evidenced by such certificates
registered in the names of the holders. 
With respect to uncertificated Common Shares of the Company outstanding
as of the Record Date, until the Distribution Date (or the earlier of the
Redemption Date and Final Expiration Date), the Rights will be evidenced by the
registration of the Common Shares in the Company’s share register in the names
of the holders 

 

10

 

thereof.  Until the Distribution
Date (or the earlier of the Redemption Date and the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares of the Company outstanding
on the Record Date shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby, and the registration of transfer of
ownership of any uncertificated Common Shares of the Company outstanding on the
Record Date shall also constitute the transfer of the Rights associated with
the Common Shares the ownership of which is so transferred.

 

(c)           With respect to
Common Shares of the Company which become outstanding (including, without
limitation, reacquired Common Shares referred to in the last sentence of this
paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date, the
certificates (if any), evidencing such Common Shares of the Company shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend or such similar legend as the Company may deem appropriate and as is not
inconsistent with the provisions of this Rights Agreement, or as may be
required to comply with any applicable law or with any rule or regulation
or made pursuant thereto or with any rule or regulation of any stock
exchange or automated quotation system on which the Common Shares of the
Company may from time to time be listed or quoted, or to conform to usage:

 

This
certificate also evidences and entitles the holder hereof to certain rights as
set forth in a Rights Agreement between Louisiana-Pacific Corporation and Computershare Trust Company, N.A.,
dated as of May 23, 2008 (the “Rights  Agreement”), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Louisiana-Pacific Corporation.  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.  Louisiana-Pacific Corporation will mail to
the holder of this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. 
Under certain circumstances, as set forth in 

 

11

 

the
Rights Agreement, Rights issued to any Person who becomes an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are defined
in the Rights Agreement) may become null and void.

 

and, in the case of the
initial transaction statement or subsequent periodic statements with respect to
uncertificated Common Shares of the Company, the following legend:

 

The
registration in the share register of Louisiana-Pacific Corporation of the
shares of common stock to which this initial transaction or subsequent periodic
statement relates also evidences and entitles the registered holder of such
shares to certain rights as set forth in a Rights Agreement between
Louisiana-Pacific Corporation and Computershare Trust Company, N.A., dated as of May 23, 2008
(the “Rights Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of Louisiana-Pacific Corporation. 
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 such registration. 
Louisiana-Pacific Corporation will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor.  Under certain
circumstances, as set forth in the Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement) may become
null and void.

 

With respect to such
certificates containing the foregoing legend, until the Distribution Date (or
the earlier of the Redemption Date and Final Expiration Date), the Rights
associated with the Common Shares of the Company represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Shares of the Company represented
thereby.  With respect to such initial
transaction statement or subsequent periodic statements containing the foregoing
legend, until the Distribution Date, the Rights associated with the Common
Shares of the Company with respect to which such statements are issued shall be
evidenced solely by the registration of ownership of such Common Shares of the
Company in the share register of the Company, and the registration of transfer
of ownership in such share register shall also constitute the transfer of the
Rights associated with the Common Shares of the Company the ownership of which
is so transferred.  In the event that the
Company purchases or acquires any Common 

 

12

 

Shares of the Company
after the Record Date but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed canceled and retired so that the
Company shall not be entitled to exercise any Rights associated with the Common
Shares which are no longer outstanding.

 

Section 4. 
Form of Right Certificates. 
The Right Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit A hereto 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 Rights Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or automated
quotation system on which the Rights may from time to time be listed or quoted,
or to conform to usage.  Subject to the
provisions of Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the price per one one-hundredth of a
Preferred Share set forth therein, but the number of such one one-hundredths of
a Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.

 

Section 5. 
Countersignature and Registration.  The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its Chief Executive
Officer, its President, any of its Vice Presidents, or its Treasurer, either
manually or by facsimile signature, shall have affixed thereto the Company’s
seal or a facsimile thereof, and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature.  The Right Certificates shall
be countersigned by the Rights Agent, either manually or by 

 

13

 

facsimile signature, and shall not be valid for any purpose unless
countersigned.  In case any officer of
the Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the Person who signed such
Right Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any Person who, at
the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate although at the date of
the execution of this Rights Agreement any such Person was not such an officer.

 

Following the
Distribution Date, the Rights Agent will keep or cause to be kept, at its
principal office and at such other offices 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 or automated quotation
system on which the Rights may from time to time be listed or quoted, books for
registration and transfer of the Right Certificates issued hereunder.  Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and the date of each of
the Right Certificates.

 

Section 6. 
Transfer, Split Up, Combination and Exchange of Right
Certificates;  Mutilated, Destroyed, Lost
or Stolen Right Certificates. 
Subject to the provisions of Section 14 hereof, at any time after
the Close of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date and the Final Expiration Date,
any Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have 

 

14

 

become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split
up, combined or exchanged for another Right Certificate or Right Certificates
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder (or former holder in case of a transfer) to
purchase.  Any registered holder desiring
to transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent.  Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect
to the transfer, split up, combination or exchange of any such surrendered
Right Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of Affiliates or
Associates thereof as the Company shall reasonably request.  Thereupon, or as promptly as practicable
thereafter, subject to the provisions of Section 14 hereof, the Company
will make, execute and deliver to the Rights Agent and the Rights Agent shall
countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested.  The Company may require payment 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 Right
Certificates.

 

Upon receipt by
the Company and the Rights Agent of evidence reasonably satisfactory to them of
the loss, theft, destruction or mutilation of a Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to them, and, at the 

 

15

 

Company’s request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make, execute and deliver
a new Right Certificate of like tenor to the Rights Agent and the Rights Agent
will countersign and deliver such new Right Certificate to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.

 

Section 7. 
Exercise of Rights; Purchase Price; Expiration Date of Rights.  (a) The registered holder of any Rights
may exercise the Rights (except as otherwise provided herein), in whole or in
part, at any time after the Distribution Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, and any additional evidence of the identity of the Beneficial
Owner or Affiliates or Associates thereof as reasonably requested by the
Company so provided, to the Rights Agent at the principal office of the Rights
Agent, together with payment of the Purchase Price for each one one-hundredth
of a Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on June 6, 2018 (the “Final
Expiration Date”), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the “Redemption Date”) or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.

 

(b)           The
Purchase Price (the “Purchase Price”) for each one one-hundredth of a
Preferred Share purchasable pursuant to the exercise of a Right shall initially
be $100.00, and shall be subject to adjustment from time to time as provided in
Section 11 or 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.

 

16

 

(c)           Upon
receipt of a Right Certificate representing exercisable Rights, with the form
of election to purchase duly executed, accompanied by payment of the Purchase
Price for the shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof by certified check, cashier’s check or
money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares certificates for the number of Preferred Shares to be
purchased or, in the case of uncertificated Preferred Shares, requisition from
any transfer agent therefor a notice setting forth such number of Preferred
Shares to be purchased for which registration will be made in the Company’s
share register and the Company hereby irrevocably authorizes and directs any
such transfer agent to comply with all such requests, or (B) requisition
from the depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent of the Preferred Shares with such depositary
agent) and the Company hereby irrevocably authorizes and directs such
depositary agent to comply with such request; (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof; (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder; (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate, and (v) when
appropriate, deliver any due bill or other instrument provided to the Rights
Agent by the Company for delivery to the registered holder of such Right
Certificate as provided by Section 11(l).

 

17

 

(d)           In
case the registered holder of any Right Certificate shall exercise less than
all the Rights evidenced thereby, the Company will make, execute and deliver a
new Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised to the Rights Agent and the Rights Agent will countersign and
deliver such new Right Certificate to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of Section 14
hereof.

 

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

 

Section 9. 
Availability of Preferred Shares. 
The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Preferred Shares or any
Preferred Shares held in its treasury, the number of Preferred Shares that will
be sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7.  The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered (or evidenced by
registration in the Company’s share 

 

18

 

register) upon exercise of Rights shall, at the time of delivery of the
certificates for (or registration of) such Preferred Shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable shares.

 

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 Right Certificates or of any certificates
representing Preferred Shares (or, if such securities are uncertificated, the
registration of such securities in the Company’s share register) 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 Right Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for
the (or registration of the) Preferred Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or to deliver any certificates, depositary receipts or
notices for Preferred Shares upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company’s reasonable satisfaction that no such tax is due.

 

The Company will
use its best efforts (i) to file on an appropriate form, as soon as
practicable following the later of the Share Acquisition Date and the
Distribution Date, a registration statement under the Securities Act with
respect to the securities of the Company issuable upon exercise of the Rights, (ii) to
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights
are no longer exercisable for such securities and (B) 

 

19

 

the Final Expiration
Date.  The Company will also take such
action as may be appropriate under, or to ensure compliance with, the
applicable state securities or “blue sky” laws in connection with the
exercisability of the Rights.  The
Company may temporarily suspend, for a period of time after the date set forth
in clause (i) of the first sentence of this paragraph, the exercisability
of the Rights in order to prepare and file such registration statement and to
permit it to become effective.  Upon any
such suspension, the Company will issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.  In addition, if the Company determines that a
registration statement should be filed under the Securities Act or any state
securities laws following the Distribution Date, the Company may temporarily
suspend the exercisability of the Rights in each relevant jurisdiction until
such time as a registration statement has been declared effective and, upon any
such suspension, the Company will issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.  Notwithstanding anything in this Rights
Agreement to the contrary, the Rights will not be exercisable in any
jurisdiction if the requisite registration or qualification in such
jurisdiction has not been effected or the exercise of the Rights is not
permitted under applicable law.

 

Section 10. 
Preferred Shares Record Date. 
Each Person in whose name any certificate for Preferred Shares is issued
(or in which such securities are registered in the Company’s share register)
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Shares represented thereby on, and such
certificate (or registration) shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was 

 

20

 

made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Shares transfer books
of the Company are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate (or registration) shall
be dated, the next succeeding Business Day on which the Preferred Shares
transfer books of the Company are open. 
Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a holder of Preferred
Shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.

 

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

 

(a)           (i) In
the event the Company shall at any time after the date of this Rights Agreement
(A) declare a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue
any shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and/or the number and/or
kind of shares of capital stock issuable on such date upon exercise of a Right,
shall be proportionately adjusted so that the holder of any Right 

 

21

 

exercised after such time shall be entitled to receive upon payment of
the then current Purchase Price the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares transfer books of the Company were
open, the holder of the Right would have owned upon such exercise (and, in the
case of a reclassification, would have retained after giving effect to such
reclassification) 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.

 

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

 

From and after the
occurrence of such event, any Rights that are or were acquired or Beneficially
Owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring 

 

22

 

Person) shall be void and
any holder of such Rights shall thereafter have no right to exercise such
Rights under any provision of this Rights Agreement.  No Right Certificate shall be issued pursuant
to Section 3 that represents Rights Beneficially Owned by an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
shall be canceled.

 

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

 

(b)           In
case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares 

 

23

 

having the same rights, privileges and preferences as the Preferred
Shares (“equivalent preferred shares”)) or securities convertible into
Preferred Shares or equivalent preferred shares at a price per Preferred Share
or equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred Shares (determined
pursuant to Section 11(d)) on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.  In
case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, 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.  Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation.  Such adjustment shall
be made successively whenever such a record date is 

 

24

 

fixed; and in the event that such rights, options or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.

 

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

 

25

 

(d)           (i)            For the purpose of any
computation hereunder, the “current per share market price” of any
security (a “Security” for the purpose of this Section 11(d)(i)) on
any date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days immediately prior to
such date; provided, however, that in the event that the current
per share market price of the Security is determined during a period following
the announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares (other than the Rights), or (B) any
subdivision, combination or reclassification of such Security and prior to the
expiration of 30 Trading Days 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 per share market
price shall be appropriately adjusted to take into account ex-dividend trading
or to reflect the current market price per share equivalent of such Security.  The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case,
as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price 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
NASDAQ or such other system then in use, or, if on any such date the Security
is not quoted by any such organization, the average of the closing bid and
asked 

 

26

 

prices as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the Company.  The term “Trading Day” shall mean a
day on which the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national securities
exchange, a Business Day.

 

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

 

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

 

27

 

Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii) the
date of the expiration of the right to exercise any Rights.

 

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

 

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

 

(h)           Unless
the Company shall have exercised its election as provided in Section 11(i),
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-hundredths of
a Preferred Share (calculated to the nearest one millionth of a Preferred
Share) obtained by (A) multiplying (x) the number of one
one-hundredths of a share 

 

28

 

covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (B) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.

 

(i)            The
Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights in substitution for any adjustment in the number
of one one-hundredths of a Preferred Share purchasable upon the exercise of a
Right.  Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment.  Each Right held of record prior to such
adjustment of the 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 Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. 
If Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and 

 

29

 

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

 

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

 

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

 

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

 

30

 

deliver to such holder a due bill or other appropriate instrument
evidencing such holder’s right to receive such additional shares upon the
occurrence of the event requiring such adjustment.

 

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

 

(n)           In
the event that at any time after the Record Date and prior to the Distribution
Date, the Company shall (i) declare or pay any dividend on the Common
Shares of the Company payable in Common Shares of the Company or (ii) effect
a subdivision, combination or consolidation of the Common Shares of the Company
(by reclassification or otherwise than by payment of dividends in Common Shares
of the Company) into a greater or lesser number of Common Shares of the
Company, then in any such case (A) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of Common Shares of the Company
outstanding immediately before such event and the denominator of which is the
number of Common Shares of the Company outstanding immediately after such
event, and (B) each Common Share of the Company outstanding 

 

31

 

immediately after such event shall have issued with respect to it that
number of Rights which each Common Share of the Company outstanding immediately
prior to such event had issued with respect to it.  The adjustments provided for in this Section 11(n) shall
be made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.

 

Section 12. 
Certificate of Adjusted Purchase Price or Number of Shares.  Whenever an adjustment is made as provided in
Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment and (b) file with the Rights Agent and with
each transfer agent for the Common Shares of the Company or the Preferred
Shares a copy of such certificate.  The
Rights Agent shall be fully protected in relying on such certificate and on any
adjustment therein contained, and shall not be obligated or responsible for
calculating any adjustment, nor shall it be deemed to have knowledge of such an
adjustment unless and until it shall have received such certificate.

 

Section 13. 
Consolidation, Merger or Sale or Transfer of Assets or Earning Power.  In the event, directly or indirectly, at any
time after a Person has become an Acquiring Person, (a) the Company shall
consolidate with, or merge with and into, any other Person, or (b) any
Person shall (x) consolidate with the Company, or (y) merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such merger, or consummate a share exchange with the Company,
and, in connection with such merger or share exchange, all or part of the
Common Shares of the Company shall be changed into or exchanged for stock or
other securities of any other Person (or the Company) or cash or any other
property, or (c) the Company, directly or indirectly, shall sell or
otherwise transfer (or one or more of its 

 

32

 

Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise thereof at a
price equal to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the Share Acquisition Date, in accordance with the terms
of this Rights Agreement and in lieu of Preferred Shares, such number of duly
and validly authorized and issued and fully paid and nonassessable Common Shares
of such other Person (including the Company as successor thereto or as the
surviving corporation) as shall equal the result obtained by (A) multiplying
the then current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is exercisable immediately prior to the Share
Acquisition Date and dividing that product by (B) 50% of the then current
per share market price of the Common Shares of such other Person (determined
pursuant to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, share exchange, sale or transfer; (ii) the issuer
of such Common Shares 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 Rights Agreement; (iii) the
term “Company” shall thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including, but not limited to, the reservation of
a sufficient number of its Common Shares in accordance with Section 9
hereof) in connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the 

 

33

 

Common Shares thereafter deliverable upon the exercise of the
Rights.  The Company shall not consummate
any such consolidation, merger, share exchange, sale or transfer unless prior
thereto the Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing.  The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the time of
such transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements 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, share exchanges or consolidations or sales or other
transfers.

 

Section 14. 
Fractional Rights and Fractional Shares.  (a) The Company shall not be required to
issue fractions of Rights or to distribute Right Certificates which evidence
fractional Rights.  In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right.  For the purposes
of this Section 14(a), the current market value of a whole Right shall be
the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable.  The closing price for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case,
as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to 

 

34

 

trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use or, if on any such date the
Rights are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company.  If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with the Rights Agent,
shall be used.

 

(b)           The
Company shall not be required to issue fractions of Preferred Shares (other
than fractions which are integral multiples of one one-hundredth of a Preferred
Share) upon exercise of the Rights or to distribute certificates which evidence
fractional Preferred Shares or to register fractional Preferred Shares in the
Company’s share register (other than fractions which are integral multiples of
one one-hundredth of a Preferred Share). 
Fractions of Preferred Shares in integral multiples of one one-hundredth
of a Preferred Share may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it; provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as Beneficial Owners of
the Preferred Shares represented by such depositary receipts.  In lieu of fractional Preferred Shares that
are not integral multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Rights at the time such Rights
are exercised as herein provided an amount in cash equal to the 

 

35

 

same fraction of the current per share market price of the Preferred
Shares (determined pursuant to Section 11(d)(ii)) immediately prior to the
date of such exercise.

 

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

 

Section 15. 
Rights of Action.  All
rights of action in respect of this Rights Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are vested in
the respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares of the Company);
and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares of the Company), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares of the Company), 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 Right
Certificate in the manner provided in such Right Certificate and in this Rights
Agreement.  Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Rights Agreement and will be entitled to
specific performance of the obligations under, and injunctive relief against
actual or threatened violations of the obligations of any Person subject to,
this Rights Agreement.

 

Section 16. 
Agreement of Right Holders. 
(a) 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:

 

36

 

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

 

(ii)           after
the Distribution Date, the Right Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the principal office of
the Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer, and with the appropriate forms and certificates fully completed and
executed; and

 

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

 

(b)           Notwithstanding
anything in this Rights Agreement to the contrary, neither the Company nor the
Rights Agent will 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
Rights 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

 

37

 

obligation; provided, however, that the Company will use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.

 

Section 17. 
Right Certificate Holder Not Deemed a Stockholder.  No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the Preferred Shares or any other securities of the Company which may
at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights of
a stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof or exchanged pursuant to the
provisions of Section 24.

 

Section 18.  Concerning the Rights Agent.  The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Rights Agreement and the exercise and performance of its
duties hereunder.  The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability or expense incurred without gross 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 Rights Agreement, including the costs and expenses of
defending against any claim of liability in 

 

38

 

the premises.  The indemnity provided for herein shall
survive the expiration of the Rights, the termination of this Rights Agreement
and the resignation or removal of the Rights Agent.  The costs and expenses of enforcing this
right of indemnification shall also be paid by the Company.

 

The Rights Agent
may conclusively rely upon and 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 Rights Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares of the
Company 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.  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 stock transfer or corporate trust powers of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Rights Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto; provided
that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof.  In case at the time such successor Rights
Agent shall succeed to the agency created by this Rights Agreement, any of the
Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the 

 

39

 

countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.

 

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

 

Section 20. 
Duties of Rights Agent. 
The Rights Agent undertakes the duties and obligations imposed by this
Rights Agreement upon the following terms and conditions, and no implied duties
or obligations shall be read into this Rights Agreement against the Rights
Agent, by all of which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:

 

(a)           Before
the Rights Agent acts or refrains from acting, the Rights Agent may consult
with legal counsel (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.

 

40

 

(b)           Whenever in the
performance of its duties under this Rights Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter 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 any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Treasurer or the 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 Rights Agreement in reliance upon such
certificate.

 

(c)           The
Rights Agent shall be liable hereunder to the Company and any other Person only
for its own gross negligence, bad faith or willful misconduct.

 

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

 

(e)           The
Rights Agent shall not be under any responsibility in respect of the validity
of this Rights Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution
of any Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Rights Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or 

 

41

 

the ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Rights Agreement or any Right
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.

 

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

 

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

 

42

 

shall not be less than ten Business Days after the date any officer of
the Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date, in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
subject to the proposed action or omission and/or specifying the action to be
taken or omitted.

 

(h)           The
Rights Agent and any stockholder, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Rights Agreement.  Nothing herein shall
preclude the Rights Agent 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, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.

 

(j)            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.

 

43

 

(k)           The
Rights Agent shall not be required to take notice or be deemed to have notice
of any fact, event or determination (including, without limitation, any dates
or events defined in this Agreement or the designation of any Person as an
Acquiring Person, Affiliate or Associate) under this Agreement unless and until
the Rights Agent shall be specifically notified in writing by the Company of
such fact, event or determination.

 

Section 21. 
Change of Rights Agent. 
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Rights Agreement upon 30 days’ notice in
writing mailed to the Company and to each transfer agent of the Common Shares
of the Company or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail.  In the event the transfer agency relationship in effect between the
Company and the Rights Agent terminates, the Rights Agent will be deemed to
have resigned automatically and be discharged from its duties under this
Agreement as of the effective date of such termination, and the Company shall
be responsible for sending any required notice. 
The Company may remove the Rights Agent or any successor Rights
Agent, as the case may be, upon 30 days’ notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares of the Company or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail.  If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent.  If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit such holder’s Right Certificate for
inspection by the Company), then the registered holder of any Right 

 

44

 

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 corporation or trust company organized and doing business under the
laws of the United States; in good standing, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has
individually or combined with an affiliate at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million
dollars.  After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without further
act or deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary
for the purpose.  Not later than the
effective date of any such appointment the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares of the Company or Preferred Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates.  Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.

 

Section 22. 
Issuance of New Right Certificates.  Notwithstanding any of the provisions of this
Rights Agreement or of the Rights to the contrary, the Company may, at its
option, issue new Right Certificates evidencing Rights in such form as may be
approved by the Board of Directors of the Company to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right 

 

45

 

Certificates made in accordance with the provisions of this Rights
Agreement.  In addition, in connection
with the issuance or sale by the Company of Common Shares of the Company
following the Distribution Date and prior to the Final Expiration Date, the
Company (a) will, with respect to Common Shares of the Company so issued
or sold pursuant to the exercise, exchange or conversion of securities (other
than Rights) issued prior to the Distribution Date which are exercisable or
exchangeable for, or convertible into Common Shares of the Company, and (b) may,
in any other case, if deemed necessary, appropriate or desirable by the Board
of Directors of the Company, issue Right Certificates representing an
equivalent number of Rights as would have been issued in respect of such Common
Shares of the Company if they had been issued or sold prior to the Distribution
Date, as appropriately adjusted as provided herein as if they had been so
issued or sold; provided, however, that (i) no such Right Certificate will
be issued if, and to the extent that, in its good faith judgment the Board of
Directors of the Company determines that the issuance of such Right Certificate
could have a material adverse tax consequence to the Company or to the Person
to whom or which such Right Certificate otherwise would be issued and (ii) no
such Right Certificate will be issued if, and to the extent that, appropriate
adjustment otherwise has been made in lieu of the issuance thereof.

 

Section 23. 
Redemption.  (a) The
Board of Directors of the Company may, at its option, at any time prior to the
later of the Shares Acquisition Date and the Distribution 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 of
Directors of the Company 

 

46

 

may be made effective at such time, on such basis and with such
conditions as the Board of Directors of the Company, in its sole discretion,
may establish.

 

(b)           Immediately
upon the action of the Board of Directors of the Company ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23,
and without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price, without interest thereon.  The Company shall promptly give public notice
of any such redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of such
redemption.  Within 10 days after such
action of the Board of Directors of the Company ordering the redemption of the
Rights, the Company shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares of the Company.  Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice, and the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. 
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. 
The Company may, at its option, pay the Redemption Price in cash, Common
Shares of the Company (based upon the current per share market price of the
Common Shares of the Company (determined pursuant to Section 11(d)) at the
time of redemption), or any other form of consideration deemed appropriate by
the Board of Directors of the Company (based upon the fair market value of such
other consideration, as determined by the Board of Directors of the Company in
good faith) or any combination thereof. 
The Company may, at its option, combine the payment of the Redemption
Price with any other payment being

 

47

 

made concurrently to holders of Common Shares of the Company and, to
the extent that any such other payment is discretionary, may reduce the amount
thereof on account of the concurrent payment of the Redemption Price.  If legal or contractual restrictions prevent
the Company from paying the Redemption Price (in the form of consideration
deemed appropriate by the Board of Directors) at the time of redemption, the
Company will pay the Redemption Price, without interest, promptly after such
time as the Company ceases to be so prevented from paying the Redemption
Price.  Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in this
Section 23 or in Section 24 hereof, and other than in connection with
the purchase of Common Shares of the Company prior to the Distribution Date.

 

Section 24. 
Exchange.  (a) The
Board of Directors of the Company may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii) hereof)
for Common Shares of the Company at an exchange ratio of one Common Share 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”).  The exchange of the Rights by the Board of
Directors of the Company may be made effective at such time, on such basis and
with such conditions as the Board of Directors of the Company, in its sole
discretion, may establish.  Notwithstanding
the foregoing, the Board of Directors of the Company shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares of the Company for or pursuant
to the terms of any such plan), together 

 

48

 

with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares of the Company then
outstanding.

 

(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 Common Shares of the Company 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, and the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption.  Each such notice of exchange will state the
method by which the exchange of the Common Shares of the Company 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 void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.

 

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

 

49

 

exchange of the Rights.  In the
event the Company shall, after good faith effort, be unable to take all such
action as may be necessary to authorize such additional Common Shares of the
Company, the Company shall substitute, for each Common Share of the Company
that would otherwise be issuable upon exchange of a Right, a number of
Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share of the Company as of the
date of issuance of such Preferred Shares or fraction thereof.

 

(d)           The
Company shall not be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional Common Shares.  In lieu of such fractional Common Shares of
the Company, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares would otherwise
be issuable an amount in cash equal to the same fraction of the current market
value of a whole Common Share.  For the
purposes of this paragraph (d), the current market value of a whole Common
Share shall be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.

 

Section 25. 
Notice of Certain Events.  (a) In
case the Company shall propose, after the Distribution Date, (i) to pay
any dividend payable in stock of any class to the holders of its Preferred
Shares or to make any other distribution to the holders of its Preferred Shares
(other than a regular quarterly cash dividend), (ii) to offer to the
holders of its Preferred Shares rights, options or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding 

 

50

 

Preferred Shares), (iv) to effect any consolidation or merger into
or with, or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person or Persons other than
the Company or one or more of its wholly-owned Subsidiaries, (v) to effect
the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares of the Company payable in
Common Shares of the Company or to effect a subdivision, combination or
consolidation of the Common Shares of the Company (by reclassification or
otherwise than by payment of dividends in Common Shares of the Company), then,
in each such case, the Company shall give to each holder of a Right
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, or distribution of rights, options 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 Common Shares of the
Company and/or Preferred Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least 10 days prior to the record date for determining holders
of the Preferred Shares for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares of the Company and/or Preferred Shares, whichever shall be the
earlier.

 

(b)           In
case the event set forth in Section 11(a)(ii) hereof shall occur,
then the Company shall as soon as practicable thereafter give to the Rights
Agent and each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, 

 

51

 

which notice shall describe such event and the consequences of such
event to holders of Rights under Section 11(a)(ii) hereof.

 

(c)           Notwithstanding
anything in this Agreement to the contrary, prior to the Distribution Date, a
filing by the Company with the Securities and Exchange Commission shall
constitute sufficient notice to the holders of any Rights or of any Common Shares
of the Company for purposes of this Agreement.

 

Section 26. 
Notices.  Notices or
demands authorized by this Rights Agreement to be given or made by the Rights
Agent or by the holder of any Rights to or on the Company shall be sent by
registered or certified mail, or by first-class mail, and shall be deemed given
upon receipt, addressed (until another address is filed in writing with the
Rights Agent) as follows:

 

LOUISIANA-PACIFIC CORPORATION

414 Union Street, Suite 2000

Nashville, Tennessee  37219

Attention:  Corporate Secretary

 

Subject to the provisions
of Section 21 hereof, any notice or demand authorized by this Rights
Agreement to be given or made by the Company or by the holder of any Rights to
or on the Rights Agent shall be sent by registered or certified mail and shall
be deemed given upon receipt, addressed (until another address is filed in
writing with the Company) as follows:

 

COMPUTERSHARE TRUST COMPANY, N.A.

250 Royall Street

Canton, MA 02021

Attention: Client Services

 

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

 

52

 

Section 27. 
Supplements and Amendments. 
The Company may from time to time supplement or amend this Rights
Agreement without the approval of any holders of Rights or Common Shares of the
Company in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as the
Rights cease to be redeemable pursuant to Section 23, this Rights
Agreement shall not be amended in any manner which would adversely affect the
interests of the holders of Rights. 
Notwithstanding anything in this Rights Agreement to the contrary, no
supplement or amendment that changes the rights and duties of the Rights Agent
under this Agreement shall be effective against the Rights Agent without the
execution of such supplement or amendment by the Rights Agent.

 

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

 

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

 

53

 

Section 30. 
Severability.  If any term,
provision, covenant or restriction of this Rights 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 Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated; provided, however,
that nothing contained in this Section 30 will affect the ability of the
Company under the provisions of Section 27 to supplement or amend this
Rights Agreement to replace such invalid, void or unenforceable term,
provision, covenant or restriction with a valid, legal and enforceable term,
provision, covenant or restriction.

 

Section 31. 
Governing Law.  This
Agreement and each Right 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 to be made and performed entirely within such State.

 

Section 32. 
Counterparts.  This Rights
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.

 

Section 33. 
Determinations and Actions by the Board.  For all purposes of this Agreement, any
calculation of the number of Common Shares of the Company outstanding at any
particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares of the Company of which any Person
is the Beneficial Owner, will be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act.  The Board of Directors of the Company will
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors
of the Company or to the Company, or as may be 

 

54

 

necessary or advisable in the administration of this Agreement,
including without limitation the right and power to (i) interpret the
provisions of this Agreement (including without limitation Section 27,
this Section 33 and other provisions hereof relating to its powers or
authority hereunder) and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including without
limitation any determination contemplated by Section 1(a) or any
determination as to whether particular Rights shall have become void).  All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
any omission with respect to any of the foregoing) which are done or made by
the Board of Directors of the Company in good faith will (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties and (y) not subject the Board of Directors of
the Company to any liability to any Person, including without limitation the
Rights Agent and the holders of the Rights.

 

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

 

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

 

55

 

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

 

	
  ATTEST: 

  	
  LOUISIANA-PACIFIC CORPORATION  

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
    Name:

  	
  Name:

  
	
   

  	
    Title:

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  COMPUTERSHARE TRUST
  COMPANY, 

  
	
  ATTEST:   

  	
  N.A., as Rights
  Agent 

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
    Name:

  	
  Name:

  
	
   

  	
    Title:

  	
  Title:

  
								

 

56

 

Exhibit A

 

Form of Right
Certificate

 

Certificate No. R-                                                                          Rights

 

NOT EXERCISABLE AFTER
JUNE 6, 2018 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.  THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

 

Right Certificate

 

LOUISIANA-PACIFIC CORPORATION

 

This certifies
that                               ,
or registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof; subject to the terms,
provisions and conditions of the Rights Agreement, dated as of May 23,
2008 (the “Rights Agreement”), between Louisiana-Pacific Corporation, a
Delaware corporation (the “Company”), and Computershare Trust Company, 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., New York time, on June 6, 2018 at the principal office
of the Rights Agent, or at the office of its successor as Rights Agent, one
one-hundredth of a fully paid non-assessable share of Series A Junior
Participating Cumulative Preferred Stock, $1.00 par value, of the Company, (the
“Preferred Shares”), at a purchase price of $100.00 per one
one-hundredth of a Preferred Share (the “Purchase Price”), upon
presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed.  The
number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of June 6, 2008, based on the Preferred Shares as
constituted at

 

A-1

 

such date.  As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.

 

This Right
Certificate is subject to all of the terms, provisions and conditions of the
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 Right Certificates.  Copies of the Rights Agreement are on file at
the principal executive offices of the Company and the offices of the Rights
Agent and can be obtained from the Company without charge upon written request
therefor.  Terms used herein with initial
capital letters and not defined herein are used herein with the meanings
ascribed thereto in the Rights Agreement..

 

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

 

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

 

A-2

 

(ii) may be
exchanged, in whole or in part, for Preferred Shares or shares of the Company’s
Common Stock, par value $1.00 per share.

 

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

 

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

 

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

 

A-3

 

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

 

	
  ATTEST:

  	
  LOUISIANA-PACIFIC CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
    Name: 

  	
  Name: 

  
	
   

  	
    Title:

  	
  Title:

  
	
   

  	
   

  
	
  COUNTERSIGNED:

  	
   

  
	
   

  	
   

  
	
  COMPUTERSHARE TRUST
  COMPANY, 

  	
   

  
	
  N.A., as Rights
  Agent 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
    Name: 

  	
   

  
	
   

  	
    Title:

  	
   

  
							

 

A-4

 

Form of Reverse Side
of Right Certificate

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)

 

FOR VALUE RECEIVED                                        hereby
sells, assigns and transfers unto

 

(Please print name and address of transferee)

 

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

 

	
  Dated:

  	
   

  	
   

  

 

 

                               Signature

 

Signature
Guaranteed:

 

Signatures must be
guaranteed by a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the
United States.

 

A-5

 

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

 

 

Signature

 

FORM OF ELECTION TO PURCHASE

 

(To be executed if holder desires to exercise

Rights represented by the Right Certificate.)

 

To:  LOUISIANA-PACIFIC CORPORATION

 

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

 

Please insert social security 

or other identifying number

 

 

(Please print name and address)

 

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

 

A-6

 

Please insert social security 

or other identifying number

 

A-7

 

(Please print name and
address)

 

Dated:

 

Signature

 

Signature Guaranteed:

 

Signatures must be
guaranteed by a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the
United States.

 

A-8

 

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

 

 

Signature

 

NOTICE

 

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

 

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

 

A-9

 

Exhibit B

 

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED SHARES

 

On May 23, 2008, the Board of Directors of
Louisiana-Pacific Corporation (the “Company”) declared a dividend of one
preferred share purchase right (a “Right”) for each outstanding share of
common stock of the Company, par value $1.00 per share (the “Common Shares”).  The dividend is payable on June 6, 2008
(the “Record Date”) to the stockholders of record on that date.  Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A Junior
Participating Cumulative Preferred Stock, par value $1.00 per share, of the
Company, (the “Preferred Shares”), at a price of $100.00 per one
one-hundredth of a Preferred Share (the “Purchase Price”), subject to
adjustment.  The definitive terms of the
Rights are set forth in a Rights Agreement, dated as of May 23, 2008 (the “Rights
Agreement”), between the Company and Computershare Trust Company, N.A. as Rights Agent (the “Rights  Agent”).

 

Until the earlier to occur of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an “Acquiring Person”) have acquired beneficial
ownership of 15% or more of the outstanding Common Shares or (ii) 10
business days (or such later date as may be determined by action of the Board
of Directors of the Company prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of the outstanding Common Shares (the earlier of such
dates being the “Distribution Date”), the Rights will be evidenced (i) with
respect to any of the Common Share certificates outstanding as of the Record
Date, by such Common Share certificate, and (ii) with respect to any
uncertificated Common Shares outstanding as of the Record Date, by the
registration of the Common Shares in the Company’s share register in the names
of the holders thereof.

 

The Rights Agreement provides that, until the
Distribution Date (or the earlier of the Redemption Date and the Final
Expiration Date), the Rights will be transferred with and only with the Common
Shares.  Until the Distribution Date (or
the earlier of the Redemption Date and the Final Expiration Date), new Common
Share certificates, if any, issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference.  Until the
Distribution Date (or the earlier of the Redemption Date and the Final
Expiration Date), the surrender for transfer of any certificates for Common
Shares outstanding as of the Record Date will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate,
and the registration of transfer of ownership of any uncertificated Common
Share outstanding as of the Record Date will also constitute the transfer of
the Rights associated with such Common Shares. 
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (“Right Certificates”) will be mailed
to holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.

 

B-1

 

The Rights are not exercisable until the Distribution
Date.  The Rights will expire on June 6,
2018 (the “Final Expiration Date”), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed or exchanged by the Company,
in each case, as described below.

 

The Purchase Price payable, and the number of
Preferred Shares 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 Shares; (ii) upon the grant to holders
of the Preferred Shares of certain rights or warrants to subscribe for or
purchase Preferred Shares at a price, or securities convertible into Preferred
Shares with a conversion price, less than the then-current market price of the
Preferred Shares; or (iii) upon the distribution to holders of the
Preferred Shares of evidences of indebtedness, assets, cash or stock (excluding
regular periodic cash dividends paid out of earnings or retained earnings or
dividends payable in Preferred Shares) or of subscription rights, options or
warrants (other than those referred to above).

 

The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Shares
or a stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common Shares occurring, in
any such case, prior to the Distribution Date.

 

Preferred Shares purchasable upon exercise of the
Rights will not be redeemable.  Each
Preferred Share will be entitled to a minimum preferential quarterly dividend
payment of $1.00 per share but will be entitled to an aggregate dividend of 100
times the dividend declared per Common Share. 
In the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100.00 per share but
will be entitled to an aggregate payment of 100 times the payment made per
Common Share.  Each Preferred Share will
have 100 votes, voting together with the Common Shares.  Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the amount received per
Common Share.  These rights are protected
by customary anti-dilution provisions.

 

Because of the nature of the Preferred Shares’
dividend, liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share.

 

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

 

B-2

 

will
thereafter have the right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the Right.

 

At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person or group of
beneficial ownership of 50% or more of the outstanding Common Shares, the Board
of Directors of the Company may exchange the Rights (other than Rights owned by
such person or group which will have become void), in whole or in part, at an
exchange ratio of one Common Share, or one one-hundredth of a Preferred Share
(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 such Purchase Price.  No
fractional Preferred Shares will be issued (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts) and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of exercise.

 

At any time prior to the later of the Shares
Acquisition Date and the Distribution Date, the Board of Directors of the
Company may redeem the Rights, in whole but not in part, at a price of $.01 per
Right (the “Redemption Price”). 
The redemption of the Rights may be made effective at such time on such
basis with such conditions as the Board of Directors, in its sole discretion,
may establish.  Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price, without interest thereon.

 

The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights or
Common Shares.

 

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

 

The term “beneficial ownership” is defined in the
Rights Agreement and includes, among other things, certain derivative or
synthetic arrangements having characteristics of a long position in Common
Shares.  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 dated May 23, 2008.  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, which is hereby
incorporated herein by reference.

 

B-3Exhibit 4.1

 

THIS PROMISSORY NOTE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES (COLLECTIVELY, THE “ACTS”).  THE PROMISSORY NOTE MAY NOT BE SOLD,
DISTRIBUTED, OFFERED, PLEDGED, ENCUMBERED, ASSIGNED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF THE FOLLOWING: (1) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE PROMISSORY NOTE UNDER THE ACTS COVERING THE TRANSACTION, (2) THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACTS, OR (3) THE COMPANY
OTHERWISE SATISFIES ITSELF THAT REGISTRATION IS NOT REQUIRED UNDER THE ACTS.

 

GANDER MOUNTAIN COMPANY

 

PROMISSORY
NOTE

 

	
  Due: December 31, 2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $5,000,000.00

  	
   

  	
  Original Issue
  Date: June 9, 2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Promissory Note
  No.: 1

  

 

For value received, the
undersigned, Gander Mountain Company, a Minnesota corporation (the “Company”), hereby promises to pay to the order of GRATCO LLC (the “Lender”), at
the Company’s principal office in the City of Saint Paul, Minnesota, the
principal sum of $5,000,000.00, plus all accrued and unpaid interest thereon,
in lawful money of the United States on December 31, 2008 (the “Maturity Date”), together with interest on the unpaid principal
amount thereof, as more fully provided below.

 

The interest rate per
annum for this Promissory Note (the “Note”) will
initially be as set forth on SCHEDULE I. 
The amount of interest for each day this Note is outstanding (the “Daily Interest Amount”) will be calculated by dividing the
interest rate in effect for that day by 360 and multiplying the result by the
principal amount of this Note.  The
amount of interest to be paid on this Note for each Interest Period (as defined
below) will be calculated by adding the Daily Interest Amounts for each day in
the Interest Period.

 

Interest on this security
will be paid on each October 31 and April 30, commencing on the first
of such dates following issuance of this security, and at maturity.  Each of these dates on which interest will be
paid is referred to as an “Interest Payment Date.”  If an
Interest Payment Date would fall on a day that is not a Business Day, such
Interest Payment Date will be postponed to the following day that is a Business
Day.

 

On each Interest Payment
Date, the Company will pay interest for the period commencing on the next day
immediately following the most recent Interest Payment Date and ending on the
then-current Interest Payment Date.  This
period is referred to as an “Interest Period.”  The first Interest Period will begin on and
include the date of issuance of this security and, subject to the immediately
preceding paragraph, will end on and include the first Interest Payment Date.

 

All percentages resulting
from any of the above calculations will be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upwards (e.g., 4.876545% (or .04876545) being
rounded to 4.87655% (or .0487655)) and all dollar amounts used in or resulting
from such calculations will be rounded to the nearest cent (with one-half cent
being rounded upwards).

 

The interest rate on this
Note will in no event be higher than the maximum rate permitted by Minnesota
law as the same may be modified by United States law of general application.

 

All calculations of the
Company, in the absence of manifest error, shall be conclusive for all
purposes.

 

Any amounts to be paid on
this Note will be payable by the Company in cash, by check or by wire transfer
to the holder of this Note to such account as the holder may request.

 

This Note has been issued
under the terms and provisions of a Term Loan Agreement (the “Loan  Agreement”),
dated as of June 9, 2008, among the Company and the Lenders named on the
signature pages thereto, as may be amended from time to time.  Capitalized terms used but not defined in
this Note shall have the meanings ascribed to them in the Loan Agreement.

 

 

1

 

Upon the occurrence of
any one or more of the Events of Default specified in Article VI of the
Loan Agreement, all amounts then remaining unpaid on this Note, including any
accrued but unpaid interest, may be declared to be or shall become immediately
due and payable as provided in the Loan Agreement.  In addition, from and after receipt of
written notice to the Company from the holder following the occurrence of an
Event of Default, and during the continuation thereof, the rate per annum at
which interest shall accrue on the unpaid principal balance hereof shall
increase by 2%.

 

This Note is subject to
the following additional provisions, terms and conditions:

 

1.             CHANGE IN CONTROL.  In the event of a Change in Control, the
holder hereof shall have the option (the “Change in Control Option”)
to (a) have this Note assumed by the surviving entity or (b) require
that this Note be redeemed by the Company in whole (but not in part) at 100% of
the outstanding unpaid principal amount, plus all unpaid interest accrued
thereon to the effective date of the Change in Control.  The Company shall give the holder of this
Note written notice of such impending transaction not later than 20 days prior
to the shareholders’ meeting of the Company called to approve such transaction,
or 20 days prior to the closing of such transaction, whichever is earlier.  The notice shall give the proposed effective
date of the transaction (the “Effective Date”)
and shall describe the material terms and conditions of the transaction.  Any election to exercise the Change in
Control Option shall be made by the holder hereof giving written notice thereof
to the Company at least five days before the Effective Date (if no such notice
is given, the Company shall be entitled to elect one of these options).  Upon receipt of such notice, the Company
shall, on the Effective Date, take the action selected or applicable under this
Section.

 

2.             RESALE RESTRICTIONS.  The holder of this Note covenants and agrees
that it is subject to the resale restrictions set forth in Section 2.8 of
the Loan Agreement.

 

3.             PREPAYMENT.  The Company may prepay this Note, upon
providing the holder five calendar days written notice prior to the date of
prepayment, in whole or in part at any time without penalty; provided, that any
such prepayment will be applied first to interest accrued and unpaid on the
principal amount being repaid and second, if the amount of prepayment exceeds
the amount of all such accrued and unpaid interest, to the repayment of the
unpaid principal amount.

 

4.             WAIVER OF PRESENTMENT.  Presentment
or other demand for payment, notice of dishonor and protest are expressly waived.

 

5.             MISCELLANEOUS.

 

(a)           NOTICES.  Any notice, request or other communication
required or permitted hereunder will be given in accordance with the Loan Agreement.

 

(b)           NO RIGHTS AS SHAREHOLDERS.  This Note will not entitle any holder hereof
to any of the rights of a shareholder of the Company.

 

(c)           GOVERNING LAW; JURISDICTION.  This Agreement will be governed by and
interpreted in accordance with the laws of the State of Minnesota without
regard to the principles of conflict of laws. 
The parties hereto hereby submit to the exclusive jurisdiction of the
United States federal and state courts located in the State of Minnesota with
respect to any dispute arising under this Note. 
The parties also agree that any disputes arising under this Note will be
exclusively venued in the United States federal and state courts located in the
State of Minnesota, except for actions or proceedings regarding the enforcement
of awards or judgments.

 

(d)           HEADINGS.  The headings of this Note are for convenience
of reference only, are not part of this Note and do not affect its
interpretation.

 

(e)           SUITS FOR ENFORCEMENT.  In case any one or more Events of Default
shall have occurred and be continuing, the holder of this Note may proceed to
protect and enforce its rights under this Note by suit in equity or action at
law.  It is agreed that in the event of
such action the holder of the Note shall be entitled to receive all reasonable
fees, costs and expenses incurred, including without limitation such reasonable
fees and expenses of attorneys (whether or not litigation is commenced) and
reasonable fees, costs and expenses of appeals.

 

[Reminder of Page Left
Blank Intentionally — Signature Page Follows]

 

 

2

 

IN WITNESS WHEREOF, the
undersigned has caused this Note to be duly executed as of the issue date.  Receipt of this Note constitutes the Lender’s
acceptance of the terms hereof.

 

	
   

  	
   

  	
  GANDER MOUNTAIN COMPANY

  
	
   

  	
   

  	
  a Minnesota corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Robert J. Vold

  
	
   

  	
   

  	
   

  	
  Senior Vice President and Chief
  Financial Officer

  

 

 

 

 

SCHEDULE I

TO PROMISSORY NOTE

 

INTEREST
RATE SCHEDULE

 

	
  Period

  	
   

  	
  Interest Rate (per annum)

  
	
  June 9, 2008
  through August 2, 2008

  	
   

  	
  5.16%

  
	
  August 3, 2008
  through November 1, 2008

  	
   

  	
  1 year LIBOR as of
  August 2, 2008, plus 1.0%

  
	
  November 2, 2008
  through December 31, 2008

  	
   

  	
  1 year LIBOR as of
  November 1, 2008, plus 1.0%

  
	
  After December 31,
  2008

  	
   

  	
  1 year LIBOR as of the
  last day of the most recently completed fiscal quarter of the Company, plus
  1.0%

  

 

 

I-1

 

THIS PROMISSORY NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES (COLLECTIVELY, THE “ACTS”).  THE PROMISSORY NOTE MAY NOT BE SOLD,
DISTRIBUTED, OFFERED, PLEDGED, ENCUMBERED, ASSIGNED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF THE FOLLOWING: (1) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
PROMISSORY NOTE UNDER THE ACTS COVERING THE TRANSACTION, (2) THE COMPANY
RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACTS, OR (3) THE COMPANY OTHERWISE
SATISFIES ITSELF THAT REGISTRATION IS NOT REQUIRED UNDER THE ACTS.

 

GANDER
MOUNTAIN COMPANY

 

PROMISSORY NOTE

 

	
  Due: December 31, 2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $5,000,000.00

  	
   

  	
  Original Issue Date: June 9, 2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Promissory Note No.: 2

  

 

For value
received, the undersigned, Gander Mountain Company, a Minnesota corporation
(the “Company”), hereby promises to pay to the
order of HOLIDAY COMPANIES  (the “Lender”), at
the Company’s principal office in the City of Saint Paul, Minnesota, the
principal sum of $5,000,000.00, plus all accrued and unpaid interest thereon,
in lawful money of the United States on December 31, 2008 (the “Maturity Date”), together with interest on the unpaid
principal amount thereof, as more fully provided below.

 

The interest rate per annum for this Promissory Note
(the “Note”) will initially be as set forth on
SCHEDULE I.  The amount of interest for each day this Note
is outstanding (the “Daily Interest Amount”)
will be calculated by dividing the interest rate in effect for that day by 360
and multiplying the result by the principal amount of this Note.  The amount of interest to be paid on this
Note for each Interest Period (as defined below) will be calculated by adding
the Daily Interest Amounts for each day in the Interest Period.

 

Interest on this security will be paid on each October
31 and April 30, commencing on the first of such dates following issuance of
this security, and at maturity.  Each of
these dates on which interest will be paid is referred to as an “Interest Payment Date.” 
If an Interest Payment Date would
fall on a day that is not a Business Day, such Interest Payment Date will be
postponed to the following day that is a Business Day.

 

On each Interest Payment Date, the Company will pay
interest for the period commencing on the next day immediately following the
most recent Interest Payment Date and ending on the then-current Interest
Payment Date.  This period is referred to
as an “Interest Period.”  The first Interest Period will begin on and
include the date of issuance of this security and, subject to the immediately
preceding paragraph, will end on and include the first Interest Payment Date.

 

All percentages resulting from any of the above
calculations will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point,
with five one-millionths of a percentage point rounded upwards (e.g., 4.876545%
(or .04876545) being rounded to 4.87655% (or .0487655)) and all dollar amounts
used in or resulting from such calculations will be rounded to the nearest cent
(with one-half cent being rounded upwards).

 

The interest rate on this Note will in no event be
higher than the maximum rate permitted by Minnesota law as the same may be
modified by United States law of general application.

 

All calculations
of the Company, in the absence of manifest error, shall be conclusive for all
purposes.

 

Any amounts
to be paid on this Note will be payable by the Company in cash, by check or by
wire transfer to the holder of this Note to such account as the holder may
request.

 

This Note has
been issued under the terms and provisions of a Term Loan Agreement (the “Loan  Agreement”),
dated as of June 9, 2008, among the Company and the Lenders named on the
signature pages thereto, as may be amended from time to time.  Capitalized terms used but not defined in
this Note shall have the meanings ascribed to them in the Loan Agreement.

 

 

1

 

Upon the
occurrence of any one or more of the Events of Default specified in Article VI
of the Loan Agreement, all amounts then remaining unpaid on this Note,
including any accrued but unpaid interest, may be declared to be or shall
become immediately due and payable as provided in the Loan Agreement.  In addition, from and after receipt of written notice to the
Company from the holder following the occurrence of an Event of Default, and
during the continuation thereof, the rate per annum at which interest shall
accrue on the unpaid principal balance hereof shall increase by 2%.

 

This Note is
subject to the following additional provisions, terms and conditions:

 

1.             CHANGE IN  CONTROL.  In the event of a Change in Control, the holder hereof
shall have the option (the “Change in Control Option”) to (a) have this Note assumed by
the surviving entity or (b) require that this Note be redeemed by the Company
in whole (but not in part) at 100% of the outstanding unpaid principal amount,
plus all unpaid interest accrued thereon to the effective date of the Change in
Control.  The Company shall give the
holder of this Note written notice of such impending transaction not later than
20 days prior to the shareholders’ meeting of the Company called to approve
such transaction, or 20 days prior to the closing of such transaction,
whichever is earlier.  The notice shall
give the proposed effective date of the transaction (the “Effective
Date”) and shall describe the material terms and conditions of the
transaction.  Any election to exercise
the Change in Control Option shall be made by the holder hereof giving written
notice thereof to the Company at least five days before the Effective Date (if
no such notice is given, the Company shall be entitled to elect one of these
options).  Upon receipt of such notice,
the Company shall, on the Effective Date, take the action selected or
applicable under this Section.

 

2.             RESALE RESTRICTIONS.  The holder of this Note covenants and
agrees that it is subject to the resale restrictions set forth in Section 2.8
of the Loan Agreement.

 

3.             PREPAYMENT.  The Company may prepay this Note, upon
providing the holder five calendar days written notice prior to the date of
prepayment, in whole or in part at any time without penalty; provided, that any
such prepayment will be applied first to interest accrued and unpaid on the
principal amount being repaid and second, if the amount of prepayment exceeds
the amount of all such accrued and unpaid interest, to the repayment of the
unpaid principal amount.

 

4.             WAIVER OF PRESENTMENT.  Presentment
or other demand for payment, notice of dishonor and protest are expressly
waived.

 

5.             MISCELLANEOUS.

 

(a)           NOTICES. 
Any notice, request or other communication required or permitted
hereunder will be given in accordance with the Loan Agreement.

 

(b)           NO
RIGHTS  AS  SHAREHOLDERS.  This
Note will not entitle any holder hereof to any of the rights of a shareholder
of the Company.

 

(c)           GOVERNING LAW; JURISDICTION.  This Agreement will be governed by and
interpreted in accordance with the laws of the State of Minnesota without regard to the principles of conflict of
laws.  The parties hereto hereby submit
to the exclusive jurisdiction
of the United States federal and state courts located in the State of Minnesota with respect to any dispute arising
under this Note.  The parties also agree
that any disputes arising under this Note will be exclusively
venued in the United States federal and state courts located in the State of
Minnesota, except for actions or proceedings regarding the enforcement of
awards or judgments.

 

(d)           HEADINGS. 
The headings of this Note are for convenience of reference only, are not
part of this Note and do not affect its interpretation.

 

(e)           SUITS FOR ENFORCEMENT.  In case any one or more Events of Default
shall have occurred and be continuing, the holder
of this Note may proceed to protect and enforce its rights under this Note by suit in equity
or action at law.  It is agreed that in
the event of such action the holder of the Note shall be entitled to receive
all reasonable fees, costs and expenses incurred, including without limitation
such reasonable fees
and expenses of attorneys (whether or not litigation is commenced) and
reasonable fees, costs and expenses of appeals.

 

[Reminder of Page Left
Blank Intentionally – Signature Page Follows]

 

 

2

 

IN WITNESS
WHEREOF, the undersigned has caused this Note to be duly executed as of the
issue date.  Receipt of this Note
constitutes the Lender’s acceptance of the terms hereof.

 

	
   

  	
   

  	
  GANDER MOUNTAIN COMPANY

  
	
   

  	
   

  	
  a Minnesota
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Robert J. Vold

  
	
   

  	
   

  	
   

  	
  Senior Vice President and Chief
  Financial Officer

  

 

 

 

 

SCHEDULE I

TO PROMISSORY NOTE

 

INTEREST RATE
SCHEDULE

 

	
  Period

  	
   

  	
  Interest Rate (per annum)

  
	
  June 9, 2008 through August 2, 2008

  	
   

  	
  5.16%

  
	
  August 3, 2008 through November 1, 2008

  	
   

  	
  1 year LIBOR as of August 2, 2008, plus
  1.0%

  
	
  November 2, 2008 through December 31,
  2008

  	
   

  	
  1 year LIBOR as of November 1, 2008,
  plus 1.0%

  
	
  After December 31, 2008

  	
   

  	
  1 year LIBOR as of the last day of the
  most recently completed fiscal quarter of the Company, plus 1.0%

  

 

 

I-1

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