Document:

Exhibit
10.3

    

    DEVELOPMENT AND CONSTRUCTION
SERVICES AGREEMENT

    

    This
Development and Construction Services Agreement (“Contract”) is entered into
this 6th day of November, 2009 by and between Grant County Wind, LLC, a
Minnesota limited liability company (“GCW”) and the ten additional signature
parties hereto who are each individual wind generator companies and the members
of GCW (each a “Generator LLC”; the Generator LLCs and GCW, collectively
“Owner”) and Juhl Energy Development, Inc., a Minnesota corporation
(“Contractor” and collectively with the Owner, the “Parties”).  This
Contract is intended to supersede any prior written or oral agreements or
understandings between the Parties and their respective predecessors and/or
affiliates with respect to the subject matter hereof.

    

    RECITALS

    

    A.           Owner
wishes to obtain the services of Contractor for the development, design,
engineering, construction, procurement, installation, erection, and financing of
a commercial wind energy generation project (the “Project”) on property in which
Owner will have control or ownership interest (the “Project Site”), which
Project shall include, but is not limited to, the ten (10) [brand omitted] Wind
Turbine Generators and related equipment supplied pursuant to the Turbine Supply
Agreement (collectively, the “Turbine Equipment”), meteorological stations,
foundations (including those for transformers, met masts and Wind Turbines), a
collection system, a substation, all facilities necessary to interconnect the
Turbine Equipment to the Project’s substation, all access roads, interconnection
facilities, switchgear, transformers, pad transformers, grid interconnects,
electrical works (whether above ground or below ground), control works, cable
and pipe ducting, a communications system, communications system cables and
interface hardware, maintenance buildings, fiber-optic cabling, staging areas,
crane pads, fencing, barriers, and FAA warning lights.

    

    B.           Contractor
is willing to provide such services on the terms and for the consideration
described herein.

    

    C.           The
Parties wish to set forth the basic terms on which they will proceed with
development of the Project.

    

    NOW, THEREFORE, in
consideration of the above premises, the mutual promises and covenants set forth
herein, and for other good and valuable consideration, receipt and sufficiency
of which are hereby acknowledged, the Parties hereto agree as
follows:

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    AGREEMENTS

    

    1.           Contractor’s
Obligations.

     

    
      	
               
      

            	
              (a)

            	
              Performance of the
      Work.  Contractor hereby covenants and agrees that it
      shall, and shall cause its subcontractors and sub-subcontractors
      (collectively, “Subcontractors”) to provide all of the items and services
      necessary (collectively, the “Work”) for the proper and timely
      development, design, engineering, construction, procurement, installation,
      erection, financing and completion of the Project, all in accordance with
      the terms of this Contract.  Such Work shall also be done in
      accordance with and as required by (a) the obligations of Owner under its
      Amended and Restated Renewable Energy  Purchase Agreement dated
      May 12, 2009 (the “REPA”) and the Amended and Restated Small Generator
      Interconnection Agreement dated as of September 23, 2009 (the “SGIA”)
      including, but not limited to, achieving the Commercial Operation Date (as
      such term is defined in the REPA) by March 25, 2010, and achieving a
      nameplate capacity of 20 MW; and (b) the Turbine Specifications, [name
      intentionally omitted] manuals, all applicable laws, codes, ordinances,
      rules and regulations of Governmental Authorities (as defined below)
      having jurisdiction over the Project and the Work (“Applicable
      Law”).  The Contractor further covenants and agrees that it
      shall provide and pay for all items or services necessary for the proper
      execution and completion of the Work and the Project (subject to the
      Contract Price provisions contained herein), whether temporary or
      permanent and whether or not incorporated or to be incorporated into the
      Project, including, but not limited to, all development, design,
      engineering, construction, procurement, installation, erection, financing
      services, all administration, management, safety training for all persons
      who enter the Project Site and coordination services
      with  respect to the Subcontractors and [name intentionally
      omitted], all labor, materials, fixtures, equipment, supplies, insurance,
      licenses, bonds (including road bonds), Permits, tests, inspections,
      tools, machinery, water, heat, utilities and transportation, and all other
      items, facilities and services necessary to complete the Project,
      including, but not limited to, those items set forth in the Scope of Work
      attached as Exhibit A hereto; provided, however, that the Work
      specifically excludes the acquisition of Wind Turbine Generator (“WTG” or
      “Turbine”) equipment which is subject to the Turbine Supply Agreement (the
      “Turbine Supply Agreement”) between Owner and [name intentionally
      omitted], but shall include the unloading, installation, erection, and
      mechanical completion of such WTGs.  Without limiting the
      foregoing, Contractor shall be responsible for the
    following:

            

    

     

    
      	
               
      

            	
              (i)

            	
              Collecting
      wind data at the Project Site.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Negotiating
      options/leases with site owners to allow development of the Project,
      including related transmission and interconnection
    facilities.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              Assisting
      Owner in structuring direct ownership of the Project through a corporate
      or other entity of which Owner is in control of ownership and operation
      pursuant to which the Project will maintain its C-BED status pursuant to
      Minnesota law.

            

    

     

    
      	
               
      

            	
              (iv)

            	
              Applying
      for, obtaining and maintaining throughout the course of the Project all
      permits, certificates, licenses and approvals required by any Governmental
      Authority for the performance of Work under this Contract and for the
      operation of the Project as contemplated by the REPA and SGIA (the
      “Permits”), including typical, local construction permits required for
      Contractor’s performance of the
Work.

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              (v)

            	
              Performing
      or causing its Subcontractors to perform the balance of plant construction
      services identified in the scope of work attached hereto as Exhibit A (the
      “BOP Work”) .

            

    

     

    
      	
               
      

            	
              (vi)

            	
              Initiating,
      maintaining and supervising all safety precautions and programs in
      connection with the performance of the Work, including, without
      limitation, appropriate precautions and programs for areas in and around
      the Project Site.  Contractor shall comply with all legal
      requirements relating to safety and shall take all reasonable actions to
      avoid injury, loss or damage to persons or property by taking reasonable
      steps to protect employees and other persons at the Project Site,
      materials and equipment stored at the Project Site or off-site locations
      for use in performance of the Work, and the Project and all property
      located at the Project Site and adjacent to work areas, whether or not
      said property or structures are part of the Project or involved in the
      Work.  Contractor shall cooperate and coordinate with all other
      contractors at the Project Site on safety precautions and programs for the
      Project.  Contractor shall report immediately in writing all
      significant accidents and injuries occurring at the Project Site related
      to the Work or in the performance of the Work to Owner.  When
      Contractor is required to file an accident report with any state, federal,
      or local government agency or entity (“Governmental Authority”),
      Contractor shall furnish a copy of the report to
      Owner.  Contractor shall comply with the requirements of any
      Governmental Authority having jurisdiction over the safety related to the
      Work, Project Site or Contractor.  Contractor’s responsibility
      for safety under this Section is not intended in any way to relieve the
      Owner of its own contractual and legal obligations and responsibility for
      complying with all legal
requirements.

            

    

     

    
      	
               
      

            	
              (vii)

            	
              Installing
      temporary or permanent telephone and data communication services to the
      Project, as mutually agreed upon by the Owner and Contractor prior to the
      completion of the Work.

            

    

     

    
      	
               
      

            	
              (viii)

            	
              Obtaining
      all maps, surveys, and other site information necessary for Contractor or
      its Subcontractors to perform the
Work.

            

    

     

    
      	
               
      

            	
              (ix)

            	
              Developing,
      designing, engineering, constructing, procuring, installing, financing,
      completing and designating the layout and setting of, as applicable, the
      substations, collection system, each Turbine and other Project facilities,
      including but not limited to roadways, entrances, and
      crossings.  Contractor shall ensure that Owner has secured all
      necessary property rights with respect to
  thereto.

            

    

     

    
      	
               
      

            	
              (x)

            	
              Purchasing
      and having delivered to the Project any necessary equipment, which
      equipment will be delivered in general accordance with the
      Schedule.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (xi)

            	
              Securing
      private equity partners to fund up to ninety-nine percent (99%) of the
      Project costs.

            

    

     

    
      	
               
      

            	
              (xii)

            	
              Coordinating
      and preparing application materials, negotiating and obtaining sources of
      vendor, construction and permanent financing for the Project including,
      but not limited to, funds available pursuant to the United States
      Department of Agriculture’s loan guarantee programs, the U.S. Department
      of Energy, the U.S. Department of Treasury or any other Governmental
      Authority.

            

    

     

    
      	
               
      

            	
              (xiii)

            	
              Negotiating
      power purchase or sale agreements and related amendments and ancillary
      agreements (as applicable) with utilities or others to purchase the entire
      output of the Project at prices and terms which permit accomplishment of
      the Project’s financial
obligations.

            

    

     

    
      	
               
      

            	
              (xiv)

            	
              Negotiating
      turbine supply, subcontract, design and warranty agreements and related
      insurance and financing documents including, but not limited to, the
      Turbine Supply Agreement and the related Financing Agreement with [name
      intentionally omitted] dated as of the date hereof (as the same may be
      refinanced, the “Financing Agreement”) and in designing the
      Project.

            

    

     

    
      	
               
      

            	
              (xv)

            	
              Obtaining
      transmission capacity needed to deliver the Project output to the
      provider, as necessary.

            

    

     

    
      	
               
      

            	
              (xvi)

            	
              Negotiating,
      executing and recording (as applicable) of financing and security
      instruments and ancillary agreements and arrangements including, but not
      limited to, consents and coordination agreements as may be
      applicable.

            

    

     

    
      	
               
      

            	
              (xvii)

            	
              Applying
      and qualifying for available federal and state tax credits, incentive
      payments, grants or other sources of revenue or capital to support the
      Project.

            

    

     

    
      	
               
      

            	
              (xviii)

            	
              Establishing
      or contracting for necessary operation, maintenance and management
      capabilities for the Project.

            

    

     

    
      	
               
      

            	
              (xix)

            	
              Unloading
      the Turbine Equipment.  Owner shall provide Contractor with at
      least five (5) days (on an estimated basis) prior written notice of the
      date of delivery of any Turbine Equipment.  If Contractor
      receives such notice and any Turbine Equipment is delivered to the Project
      Site prior to 5:30 p.m. CST on the date indicated in the notice,
      Contractor shall unload (or cause to be unloaded) such Turbine Equipment
      during the same calendar day.  If any Turbine Equipment is
      delivered to the Project Site after 5:30 p.m. CST, Contractor shall unload
      such Turbine Equipment within four (4) hours of the start of the next day
      that is a business day.  For purposes of this Section, the start
      of the day shall be no later than 7:00 a.m. CST.  All costs and
      expenses associated with Contractor’s failure to timely unload the Turbine
      Equipment (including, without limitation, all unloading, storage,
      demurrage and insurance costs) shall be borne solely by Contractor, and
      Contractor shall reimburse Owner for all such costs and expenses within
      ten (10) days of receipt of an invoice for the same from
      Owner.

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              Compliance with
      Laws.  Contractor shall comply with all Applicable Laws
      in performing its obligations under this Contract.  The
      Contractor covenants and agrees that all drawings, specifications and
      other documents developed by Owner, or its Subcontractors in connection to
      the Work (the “Project Documents”) shall be accurate and free from any
      errors or omissions, and shall be in compliance with and accurately
      reflect all Applicable Laws.  The Contractor shall, at no
      expense to the Owner, promptly modify any such documents which are not in
      accordance with such legal requirements or are inaccurate or contain
      errors or omissions.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Performance and
      Payment Bond.

            

    

     

    
      	
               
      

            	
              (i)

            	
              If
      requested by Owner, Contractor shall deliver to Owner a performance and
      payment bond (the “Bond”) in an initial amount equivalent to the Contract
      Price (as hereinafter defined).  Within five (5) days of Owner’s
      request, Owner shall pay all costs of obtaining such bond, plus pay
      Contractor a fee of seven and one half percent (7.5%) for obtaining such
      bond, such fee to be calculated by multiplying seven and one half percent
      (7.5%) times the cost of the bond.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              The
      Bond shall (i) secure Contractor’s obligations to complete the Work in
      accordance with this Contract and (ii) shall secure Contractor’s
      obligations to pay its
Subcontractors.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Contractor’s Project
      Manager.  Contractor shall appoint a representative to
      act as the manager and coordinator of the Contract on Owner’s behalf
      (“Contractor’s
      Project Manager”).  The Contractor’s Project Manager
      shall act as the liaison for Owner’s communications with Contractor and
      its Subcontractors, and [name intentionally omitted].  As of the
      date of this Contract, Jeff Bendel will be the Contractor’s Project
      Manager (subject to Contractor having the discretion to identify a
      replacement Contractor Project
Manager).

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (e)

            	
              Substantial
      Completion.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Turbine Mechanical
      Completion.  When Contractor believes it has achieved
      Turbine Mechanical Completion for any Turbine, Contractor shall notify
      Owner with the submittal of a Turbine Mechanical Completion Certificate in
      the form of Exhibit B
      applicable to the identified Turbine, stating the date of Turbine
      Mechanical Completion and identifying the Turbine completed, which shall
      include the Turbine Mechanical Completion Checklist, in the form of Exhibit
      B.  Thereafter, Owner and [name intentionally omitted]
      shall determine whether Turbine Mechanical Completion has in fact been
      achieved for such Turbine pursuant to the Turbine Supply Agreement and
      Owner shall thereafter either (i) notify Contractor that Turbine
      Mechanical Completion for the identified Turbine has been achieved or (ii)
      notify Contractor that Turbine Mechanical Completion has not been achieved
      and stating the reasons therefor.  In the event Owner provides
      written notice that Turbine Mechanical Completion has not been achieved,
      Contractor shall take action to correct any defective work adversely
      affecting the achievement of Turbine Mechanical Completion of such
      Turbine.  Upon completion of such corrective and remedial
      actions, if any are necessary, Contractor shall notify Owner that it
      believes Turbine Mechanical Completion has been achieved and the foregoing
      procedures shall be repeated until Turbine Mechanical Completion has in
      fact been achieved for such Turbine.  In the event Turbine
      Mechanical Completion has not been achieved and the reason(s) the Turbine
      Mechanical Completion has not been achieved is the result of defects in
      the Turbine, the negligent acts or omissions of Owner,  or any
      Person under its control (other than Contractor and its Subcontractors),
      or events of Force Majeure which so prevent Turbine Mechanical Completion
      from being achieved for the Turbine(s) covered by the notice, Contractor
      shall be entitled to a Change Order with respect to the Schedule and the
      Contract Price.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              If
      Contractor fails to achieve Turbine Mechanical Completion of (i) at least
      four (4) Turbines by December 31, 2009 (the “Initial Scheduled Mechanical
      Completion Date”), as such date may be extended in accordance with the
      terms of this Contract, or (ii) the remaining Turbines by February 25,
      2010 (the “Scheduled Mechanical Completion Date”), as such date may be
      extended in accordance with the terms of this Contract, and the reason for
      such delay is solely attributable to Contractor or Subcontractor caused
      delays, then after taking into account any adjustments to the Schedule,
      Contractor shall pay to Owner an amount equal to One Hundred Dollars
      ($100.00) per day for each Turbine that Contractor has failed to achieve
      Turbine Mechanical Completion (“Delay Liquidated Damages”).  The
      Delay Liquidated Damages are Owner’s sole and exclusive remedy and
      Contractor’s sole and exclusive liability with respect to Contractor’s
      failure to timely achieve Turbine Mechanical Completion.  This
      remedy shall include damages which Owner may incur for lost revenues, lost
      profits, additional project management costs, extended or increased
      overhead of Owner and all other delay or time related
      costs.  Owner and Contractor further agree that (i) the Delay
      Liquidated Damages are a good faith estimate of the damages Owner would
      suffer; and (ii) Contractor shall in no event be responsible for payment
      of any other liquidated damages, of any kind, to
  Owner.

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iii)

            	
              When
      Substantial Completion is achieved, Contractor shall deliver to Owner an
      executed “Certificate of Substantial Completion” a form of which is
      attached hereto as Exhibit C, which certificate shall be set forth the
      date of Substantial Completion and be accompanied by the Punch List.
      Within three (3) business days after the receipt of the Certificate of
      Substantial Completion, Owner shall either (i) notify Contractor that
      Substantial Completion has been achieved, or (ii) notify Contractor that
      Substantial Completion has not been achieved and state the reasons
      therefore.

            

    

     

    
      	
               
      

            	
              (iv)

            	
              “Substantial
      Completion” of the Work shall be achieved when each of the following has
      occurred:  (i) Contractor has achieved Turbine Mechanical
      Completion of all of the Turbines, (ii) the underground collection system
      is complete in accordance with the terms and standards set forth in this
      Contract, (iii) the substation is completed in accordance in accordance
      with the terms and standards set forth in this Contract; (vi) the
      remainder of the Work has been fully and properly completed (excluding
      Punch List Items), (v) the Project is capable of safe, reliable and
      continuous commercial operation, (vi) all associated performance tests
      required under the Contract have been successfully performed with respect
      to the Project, (vii) the project has been permanently energized,
      synchronized to the utility’s grid, and capable of safe, reliable and
      continuous commercial operation, (viii) the Owner and Contractor have
      mutually agreed as to the corresponding Punch List (as defined below),
      (ix) all Permits necessary to use the Project for its intended purpose
      have been obtained by Contractor, (x) all deliverables required to have
      been delivered to the Owner have been so delivered to the Owner; and (xi)
      Contractor has submitted a draft Certificate of Project Substantial
      Completion to Owner.  For purposes of this Contract, “Punch
      List” means that list to be prepared by Contractor and Owner of any minor
      items of Work designated as remaining to be performed or corrected by the
      date of Final Completion and which will not affect the safe and reliable
      operation of the Project.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Final
      Completion.

            

    

     

    
      	
               
      

            	
              (i)

            	
              When
      Final Completion has been achieved, Contractor shall submit the Final
      Completion Certificate, stating the date of Final
      Completion.  Within three (3) business days after the receipt of
      the Final Completion Certificate, Owner shall either (i) notify Contractor
      that Final Completion has been achieved, or (ii) notify Contractor that
      Final Completion has not been achieved stating the reasons
      therefore.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              “Final
      Completion” of the Work shall be achieved when each of the following has
      occurred: (i) Substantial Completion has occurred; (ii) all construction
      debris, rubbish and foreign material, and all of Contractor’s and its
      Subcontractors’ tools and equipment, have been removed from and around the
      Project Site, except as otherwise reasonably agreed to by the Parties
      resulting from seasonal weather conditions; (iii) all items on the Punch
      List have been completed to Owner’s reasonable satisfaction, except those
      which must be delayed as a result of seasonal weather conditions; and (iv)
      Contractor has delivered an executed Certificate of Final Completion to
      Owner, a form of which is set forth in Exhibit
  D.

            

    

     

    
      
         

      

      
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              (g)

            	
              Legal
      Requirements.  The Contractor shall comply, and shall
      cause its Subcontractors, architects, and engineers to comply, with all
      Applicable Laws and shall give all applicable notices pertaining
      thereto.

            

    

     

    
      	
               
      

            	
              (h)

            	
              Cooperation and
      Coordination.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Contractor
      shall be responsible for coordinating, managing, and communications
      related to: (i) the performance of the services and provision of equipment
      under the Turbine Supply Agreement and all other the Project contracts,
      including obtaining information and consents as needed from the Owner
      thereunder; and (ii) the application process for all Permits, including
      obtaining information and consents as needed from the Owner as part of
      such process.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              On
      or before the expiration date or each calendar month throughout the
      duration of this Contract, Contractor shall prepare and submit to the
      Owner a status report, which report shall include, but shall not be
      limited to: (i) a detailed description of the progress of the Project;
      (ii) a statement of any significant issues with the development or
      construction of the Project (including, but not limited to issues that
      could impact the cost or schedule of the development of the Project); and
      (iii) a summary of the Permits obtained and
  outstanding.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Cooperation.  Contractor
      shall be responsible for coordinating and managing Owner’s obligations
      under the various agreements with suppliers, government and
      quasi-government agencies, power companies, insurance companies and
      Subcontractors.  Contractor shall provide Owner with all
      information concerning these agreements and Owner’s obligations
      thereunder.

            

    

     

    
      	
               
      

            	
              (j)

            	
              Performance of
      Duties. Contractor agrees that it shall perform at all times
      faithfully, industriously, and to the best of its ability, experience, and
      talents all of the duties that may reasonably be assigned to it hereunder
      and, shall devote such time to the performance of such duties as may be
      necessary therefore.

            

    

     

    
      	
               
      

            	
              (k)

            	
              Equipment.  Contractor
      shall be responsible for the purchase and delivery of all equipment
      necessary for the completion of the Project, including, without
      limitation, electrical and communications equipment and related
      controls.  For this purpose, the equipment shall not include the
      WTGs and related towers, blades, and turbine components which shall be the
      responsibility of [name intentionally
omitted].

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (l)

            	
              No
      Liens.  Contractor shall not assume, create or suffer to
      exist or be created any mechanics, materialmen’s or other lien on (i) the
      Work, the Project Site, the Project, or any portion thereof, by, through
      or under Contractor or any Subcontractor (or any of their respective
      employees).   If there arises a lien by, through or under
      Contractor, any Subcontractor or any of their respective employees that
      violates Contractor’s obligations under this Section, then Contractor
      shall:  (i) promptly, following receipt of written notice of
      such lien or of Contractor’s becoming aware of the existence of such lien,
      provide written notice thereof to the Owner; and (ii) as soon as
      reasonably practicable, but in no event later than thirty (30) days after
      the date that Contractor receives written notice that such lien was filed,
      recorded or asserted or otherwise becomes aware of such lien, pay or
      discharge, and discharge of record, any such lien.  Upon the
      failure of Contractor to perform its obligations under this Section, the
      Owner may, but shall not be obligated to, either (i) obtain a bond, letter
      of credit or other security for such lien and, upon posting of such
      security therefor, shall be entitled to recover promptly from Contractor
      the reasonable costs and expenses incurred by the Owner in connection
      therewith, or (ii) offset the amount of any such lien (and all associated
      costs) from any amounts otherwise due to Contractor hereunder and
      thereafter pay, release, satisfy and discharge such
  lien.

            

    

     

    
      	
               
      

            	
              (m)

            	
              Taxes.  The
      Contractor shall pay all sales, consumer, use, excise, transit, district,
      real estate, personal property and other taxes, duties and tariffs
      (whether direct or indirect) relating to, or incurred in connection with,
      the performance of the Work and/or the occupancy, possession, ownership
      and/or use of the Project.  Notwithstanding the foregoing, the
      Parties acknowledge and agree that the Contract Price does not include any
      amounts for the payment of sales tax with respect to any materials or
      equipment to be incorporated into the Project that fall within the wind
      energy conversion systems (“WECS”) category for which an exemption is
      available under Minnesota law.

            

    

     

    
      	
               
      

            	
              (n)

            	
              Responsibility.  The
      Contractor shall be responsible to the Owner for acts and omissions of the
      Contractor, and the Contractor’s Subcontractor, architects, engineers, and
      their respective subcontractors, agents and employees, and any other
      persons performing portions of the Work under a contract or other
      arrangement with the Contractor, or claiming by, through or under the
      Contractor, and for any damages, losses, costs and expenses resulting from
      such acts or omissions.

            

    

     

    
      	
               
      

            	
              (o)

            	
              Cleaning
      Up.  The Contractor shall at all times keep the Project
      Site and surrounding streets, properties, sidewalks and other areas free
      from waste materials, rubbish, debris and other garbage, and shall employ
      adequate dust control measures.  Prior to Substantial Completion
      of the Work, the Contractor shall (except as otherwise reasonably agreed
      to by the Parties resulting from seasonal weather conditions) remove from
      the Project Site all tools, equipment, machinery, surplus and waste
      materials, and rubbish.  If the Contractor fails to clean up as
      provided herein, the Owner may do so and the cost thereof shall be charged
      to the Contractor.

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    2.           Owner’s Rights;
Obligations.

     

    
      	
               
      

            	
              (a)

            	
              Owner’s
      Obligations.  To enable Contractor and its Subcontractors
      to complete the Work in accordance with the construction schedule agreed
      to by the Parties (which is attached hereto as Exhibit E) (the
      “Schedule”), Owner, at its sole cost and expense, shall perform the
      following:

            

    

     

    
      	
               
      

            	
              (i)

            	
              Administer
      payment requests and cause the Contract Price (as hereinafter defined) to
      be paid;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Acquire
      the Turbines and cause [name intentionally omitted] to deliver the
      Turbines to the Project Site at the specified Turbine pad, in accordance
      with the schedule set forth in the Turbine Supply
    Agreement;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              Provide
      Contractor and its Subcontractors access to the Project Site and
      sufficient land within the Project Site to enable Contractor to perform
      the Work; and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              Communicate
      and coordinate with respect to any and all issues or concerns raised by
      the owners of the real estate comprising the Project Site (collectively
      the “Landowners”) with respect to the
Work.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Schedule
      Requirements.  Owner and Contractor acknowledge that the
      milestone dates agreed to by the Parties in the Schedule are of material
      importance to the success of completing the Work, and the timely
      completion of the Work is based on the timely delivery of the WTGs in
      accordance with the delivery schedule in the Turbine Supply Agreement, and
      that Contractor may be entitled, in accordance with the change order
      provisions of this Contract, to an adjustment to the Contract Price (as
      hereinafter defined) or the Schedule to the extent the WTGs are not
      delivered by the dates set forth in the Turbine Supply
      Agreement.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Inspection of the Work
      by Owner.

            

    

     

    
      	
               
      

            	
              (i)

            	
              During
      the term of this Contract, Contractor shall permit Owner and its engineers
      and representatives (including [name intentionally omitted) (a) to inspect
      the Work and the progress of the Work in order to verify material
      compliance with the requirements for the
Work.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              The
      Owner shall have the right and the authority to reject Work which is
      defective or deficient, or which otherwise does not conform to this
      Contract.  If the Contractor fails to correct defective or
      nonconforming Work as and when required under this Contract, or fails to
      carry out the Work in accordance with this Contract, the Owner may, by a
      written directive, order the Contractor to stop the Work, or any portion
      thereof, until the cause for such order has been
      eliminated.  The Contractor shall not have any claim for a
      reimbursement of costs or expenses from the Owner, or any extension in the
      Schedule, due to a stoppage in the Work as provided in this
      Section.

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    3.           Contract
Price.  In consideration for complete, proper and timely
performance of the Work, Owner shall pay Contractor the following fees (the
“Contract Price”):

     

    
      	
               
      

            	
              (a)

            	
              A
      fixed fee for development services that are not directly related to BOP
      Work and provision of turbines in the amount of $1,847,000 (the “Deferred
      Fee”).

            

    

     

    
      	
               
      

            	
              (b)

            	
              A
      fixed fee for the performance of the scope of work set forth in Exhibit A
      in the amount of $8,544,735 (the “BOP
Fee”).

            

    

     

    The
Parties acknowledge and agree that the Deferred Fee and the BOP Fee represent
Contractor’s aggregate compensation for the performance of the Work and
completion of the Project.  Such amounts are subject to adjustment
only: (i) pursuant to the change order process set forth in Section 5 herein;
and (ii) with respect to the Deferred Fee only, may be adjusted (without a
change order) to include reasonable out-of-pocket travel expenses of Contractor
or other fees which become payable to third parties that: (x) are actually
incurred by Contractor, (y) are not included in the Deferred Fee because they
could not have been reasonably foreseen by Contractor as of the date of this
Contract and (z) in no circumstance exceed $80,000 in the individual or $150,000
in the aggregate.

     

    4.           Timing and Method of
Payment.  Furthermore, the Parties acknowledge
that:

     

    
      	
               
      

            	
              (a)

            	
              The
      Deferred Fee shall not become due and payable and shall in no way be
      deemed earned by Contractor unless and until (i) the Project has achieved
      Substantial Completion, (ii) all amounts owed by Owner under the Financing
      Agreement have been paid in full and there are no amounts remaining due
      and outstanding under the Financing Agreement, and (iii) any other payment
      subordination restrictions on the payment of the Deferred Fee have been
      satisfied; provided that, at such time as conditions (i), (ii) and (iii)
      are satisfied, Contractor may, if the BOP Fee has been paid in cash in
      full or converted into equity of each Generator LLC as contemplated
      hereunder, convert the Deferred Fee into equity in a form and subject to
      terms and conditions to be mutually agreed by the Parties at the time of
      such conversion.

            

    

     

    
      	
               
      

            	
              (b)

            	
              (i)  Payment
      of the BOP Fee shall be paid partially by a junior secured convertible
      promissory note from Owner to Contractor (the “Note”) in the form as
      attached in Exhibit F, the amount to become due and owing shall be
      advanced to a maximum amount of $8,200,000 (the “Maximum Amount”) (and
      thus the advanced amount shall become the balance due under the Note)
      solely through Applications for Payment (as defined below) in accordance
      with the following:

            

    

     

    
      	
               
      

            	
              (1)

            	
              An
      initial Application for Payment in the amount of Seven Hundred Fifty
      Thousand Dollars ($750,000), as a mobilization fee, upon execution of this
      Contract.

            

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (2)

            	
              On
      or before the tenth (10th) day of each subsequent month, Contractor shall
      request payment (the “Application for Payment”) for all Work performed and
      not paid for during the previous calendar month (the “Pay
      Period”).  Each Application for Payment shall be accompanied by
      the following, all in form and substance satisfactory to Owner: (A) a duly
      executed and acknowledged sworn statement showing all Subcontractors with
      whom Contractor or any Subcontractor of Contractor has entered into
      subcontracts, the amount of any such subcontracts and the amount to be
      paid for such Pay Period as part of the BOP Fee from any such
      Subcontractors; (B) Duly executed waivers of mechanics’, materialmen’s and
      construction liens in the form of Exhibit G (“Partial Lien Waivers”)
      related to the amount requested in the Application for Payment,
      conditioned solely, and immediately effective, upon the Owner’s payment of
      such amount due; and (C) Partial Lien Waivers from each of the
      Subcontractors and suppliers for the BOP Work establishing satisfaction of
      payment for the Application for Payment that immediately preceded the Pay
      Period.

            

    

     

    
      	
               
      

            	
              (3)

            	
              The
      Application for Payment shall constitute Contractor’s representation that
      the Work has been performed consistent with this Contract and the Project
      Documents (collectively, the “Contract Documents”) and has progressed to
      the point indicated in the Application for
  Payment.

            

    

     

    
      	
               
      

            	
              (4)

            	
              Within
      ten (10) days after Owner’s receipt of each Application for Payment, Owner
      shall make a payment to Contractor of all amounts properly due, but in
      each case less the total of payments previously made to
      Contractor.

            

    

     

    
      	
               
      

            	
              (5)

            	
              The
      Application for Payment may request payment for: (i) completed Work; and
      (ii) prepayments for materials or equipment for the Project when such
      prepayment request is accompanied by an invoice from the manufacturer or
      supplier of such materials or equipment demonstrating that prepayment is
      required for such materials or
equipment.

            

    

     

    
      	
               
      

            	
              (6)

            	
              Notwithstanding
      the foregoing, an Application for Payment may not be made for amounts
      associated with the following: engineering work and drawings completed by
      Contractor prior to the date hereof, payment made by contractor for a
      transmission interconnection switch acquired prior to the date hereof;
      work related to the SWPPP permit that was not a portion of the original
      scope of the work; and a Contractor construction hold-back in the amount
      of $639,500.  Such amounts shall become due and owing, and shall
      be eligible for conversion in accordance with, the provisions set forth
      Section 4(a).

            

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (7)

            	
              On
      or before the then applicable payment date set forth in Subsection
      4(b)(i)(2), Owner shall pay Contractor all amounts properly due for which
      an Application for Payment has been provided.  If Owner
      reasonably believes that Contractor is not entitled to all or part of an
      Application for Payment, Owner will notify Contractor in writing at least
      five (5) days prior to the date payment is due.  The notice
      shall indicate the specific amounts Owner intends to withhold, the reasons
      and contractual basis for the withholding, and the specific measures
      Contractor must take to rectify Owner’s concerns.  Contractor
      and Owner will attempt to resolve the concerns prior to the date payment
      is due.  If the Parties cannot resolve such concerns, Contractor
      may pursue its rights under the Contract
      Documents.  Notwithstanding anything to the contrary in the
      Contract Documents, Owner shall pay Contractor all undisputed amounts in
      an Application for Payment within the times required
      hereunder.

            

    

     

    
      	
               
      

            	
              (8)

            	
              Contractor
      shall deliver to Owner a request for final payment (the “Final Application
      for Payment”) when Final Completion has been achieved in accordance with
      the Contract Documents, including Application for Payment for all amounts
      due Subcontractors. Owner shall make final payment within ten (10) days
      following receipt of the Final Application for Payment (“Final
      Payment”).  Such Final Payment may only be made pursuant to the
      Note.

            

    

     

    
      	
               
      

            	
              (9)

            	
              The
      Final Application for Payment shall be accompanied by the following, all
      in form and substance satisfactory to Owner: (A) a duly executed and
      acknowledged sworn statement showing all Subcontractors with whom
      Contractor or any Subcontractor of Contractor has entered into
      subcontracts, the amount of any such subcontracts and the amount to be
      paid as part of the BOP Fee from any such Subcontractors; (B) Duly
      executed waivers of mechanics’, materialmen’s and construction liens in
      the form of Exhibit G (“Final Lien Waivers”) related to the amount
      requested in the Final Application for Payment,; and (C) Final Lien
      Waivers from each of the Subcontractors and suppliers for the BOP Work
      establishing satisfaction of payment for the Final Application for
      Payment.

            

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (ii)           Notwithstanding
Subsection 4(b)(i), the Parties agree that the BOP Fee up to the Maximum Amount
shall be deemed paid pursuant to a borrowing under the Note, in a corresponding
amount of the payment due under each Application for Payment as the same become
due pursuant to Subsection 4(b)(i).  The portion of the BOP Fee up to
the Maximum Amount shall (and may only) be paid via the Note and all amounts due
under the Note shall be secured by a security agreement between Owner and
Contractor, in the form attached hereto as Exhibit H (the “Security
Agreement”).  The Note and Security Agreement shall be subordinate to
the Financing Agreement, as the same may be refinanced by any means, extended,
renewed, defeased, supplemented, restructured, replaced, refunded or repaid or
replaced with other indebtedness in exchange or replacement for such
indebtedness, in whole or in part, whether with the same or different lenders,
arrangers or agents, including but not limited to replacement in whole or in
party by any “take-out” financing (collectively,
the “Senior Obligations”) by [name intentionally omitted] or any other person
(the “Senior Lender”) and a pledge of Contractor’s proportionate share
(as such share has been determined by and between [name intentionally omitted]
and Contractor in a separate Intercreditor and Subordination Agreement (the
“Intercreditor Agreement”)) of amounts due from the United States Treasury
Department as a tax grant under Section 65 of the Internal Revenue
Code.  For the avoidance of doubt, Contractor covenants with Owner
that Contractor will not grant [name intentionally omitted] a security interest
in the Note.  In addition, Contractor
shall request and Owner shall grant, subject to the terms and conditions
of the Financing Agreement and related Security Documents (as such term is
defined therein) within ten (10) days of the date hereof, a second leasehold
mortgage on the real property that comprises the Project Site to Contractor to
secure the Note (the “Junior Mortgage”).  The Junior Mortgage shall be
in a form agreed to by Contractor, Owner and [name intentionally omitted] (in
their reasonable discretion) and shall be, at all times, subordinate to any
mortgage, lien, pledge, security interest, charge or encumbrance held by [name
intentionally omitted] or and any other Senior Lender.

     

    (iii)  In
addition Contractor may, pursuant to the terms and conditions of the Note and
Security Agreement, convert the portion of the BOP Fee that is paid via a Note
into equity of each of the Generator LLCs as provided below; provided, however,
that: (A) absent the express written consent of [name intentionally
omitted] to such conversion and the documents related to such conversion,
including the member controlagreement, which consent, so long as Contractor
shall include a pledge of such equity interest to [name intentionally omitted]
incident to such conversion, shall not be unreasonably withheld, no such
conversion shall occur unless and until all amounts owed by Owner to [name
intentionally omitted] under the Financing Agreement have been paid in full and
there are no amounts remaining due and outstanding under the Financing
Agreement; and (B) no conversion may take place prior to the time the Note is in
default pursuant to the terms thereof if, in the reasonable opinion of Owner,
such conversion would have a material adverse impact on the ability of the Owner
to receive financing or additional equity investment for the
Project.  The following provisions shall apply to any permitted
conversion of the Note by Contractor (pursuant to this paragraph):

     

    
      	
               
      

            	
              A.

            	
              Owner
      hereby irrevocably consents to the transfer and assignment of Contractor’s
      rights under this Contract, the Note and the Security
      Agreement.  Such transfer and assignment shall not, however,
      relieve Contractor of any of its obligations hereunder.  Any
      transferee or assignee under the Note shall have the same rights with
      respect to this Contract, the Note and the Security Agreement as
      Contractor has and as are set forth in the Note and Security
      Agreement;

            

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              B.

            	
              Each
      Generator LLC hereby covenants with Contractor that it shall, upon written
      request from Contractor and subject to the restrictions set forth above
      and in the Financing Agreement, as conditioned by the Intercreditor
      Agreement, issue such equity in a manner equivalent and on a par with
      other equity investors providing cash investment into the Project and
      shall credit Contractor with the total amount due under the Note in such
      conversion, including any interest due or payable under the
      Note.  Such equity shall be delivered in the name designated by
      Contractor or its transferee or assignee of this Contract, the Note and
      the Security Agreement.  Owner shall not take any action (or
      fail to take any action) that would prevent the issuance of such equity as
      contemplated under the Note and Security
  Agreement.

            

    

    

    5.           Change
Orders.   Contractor may only seek changes to the Work,
the Contract Price, and Schedule (each a “Change Order”) pursuant to the
provisions and conditions set forth in Sections 5(a) and 5(d) of this
Contract.  In the event there shall be a Change Order, the Parties
hereto shall work to minimize the economic and Schedule impact of any such
change.  All Change Orders shall be set forth in a written change
order stating: (i) the change in the Work; (ii) the amount of the adjustment in
the Contract Price  broken out as part of the Deferred Fee and, if
applicable, the BOP Fee, and (iii) the adjustment to the
Schedule.  The Change Order will be agreed upon by the Parties and
executed by both Parties prior to either Party being bound by any
change.  For the avoidance of doubt, it is understood and agreed by
the parties hereto that there shall be no permissible Change Order for the
provision of an additional Manitowac 999 crane that Contractor has agreed to
supply as a portion of the Work pursuant to this Agreement.

     

    
      	
               
      

            	
              (a)

            	
              Change Order
      Process.  Owner or Contractor may request changes in the
      Work within the general scope of this Contract consisting of additions,
      deletions, or other revisions.  Should either Party so desire to
      change the Work or observe a change to the Work such Party shall submit a
      change request to the other Party in writing.  If Contractor
      requests a change, it shall propose the change to Owner who may either
      accept or reject the request for a change in its discretion, and such
      decision shall be final with respect to such request.  If Owner
      requests a change, within five (5) business days of
      receipt of such request or such reasonable time as required to complete an
      estimate, Contractor shall submit a proposal to the Owner stating the
      adjustment to the Contract Price which would result from such change, and
      the effect, on the Schedule by reason of such proposed
      change.  The Owner shall promptly accept or reject in writing
      Contractor’s proposals in relation to the change.  If the Owner
      agrees with the proposal for the change, the Parties shall execute a
      Change Order reflecting the change in the Work and proposed adjustments to
      the Contract Price (stating which adjustments are Deferred Fee amounts and
      which are BOP Fee amounts, respectively) and the Schedule.  In
      the event that the Owner rejects Contractor’s proposal for the change, the
      Owner may notify Contractor that the Owner has decided to withdraw or
      modify its requested change.  Should the Owner fail to respond
      to Contractor in writing within five (5) business days of Owner’s receipt
      of the proposal, the Owner shall be deemed to have withdrawn its requested
      change, if such was the circumstances that initiated the
      discussion.

            

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              [Name intentionally
      omitted] Consent.  Notwithstanding the foregoing, in the
      event that: (i) any single Change Order could have the result of (X)
      changing any of the Schedule milestones within this Contract by ten (10)
      or more business days or (Y) increase the Contract Price by $80,000 or
      more; or (ii) that the cumulative effect of all Change Orders under the
      Contract could have the result of (X) changing any of the Schedule
      milestones within this Contract by fifteen (15) or more business days or
      (Y) increase the Contract Price by $150,000 or more, then, except if the
      Change Order is a result of a delay in Turbine delivery, such Change Order
      shall not be effective under this Contract absent the prior written
      consent of [name intentionally omitted].  Such consent shall be
      granted in [name intentionally omitted] reasonable discretion, based on
      its evaluation of the change and the impacts on the Schedule and economics
      of the Project; provided, if [name intentionally omitted] has not provided
      its consent or written evidence of its rejection of such change within two
      (2) business days after [name intentionally omitted] receipt of written
      notice of the same, [name intentionally omitted] shall be deemed to have
      consented to such change.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Disputes Regarding
      Change Orders.  If Owner requests a Change Order, but the
      Parties are unable to mutually agree upon a Change Order, Contractor shall
      (if Owner so directs) perform the Work on a cost-reimbursable basis to
      comply with Owner’s requested requirements (and identify whether the costs
      are Deferred Fee amounts or BOP Fee amounts) and be entitled to an
      equitable adjustment in the Schedule, including reimbursement for all
      costs, including labor costs, (all at Contractor’s cost) actually incurred
      by Contractor (“Reimbursable
Costs”).

            

    

     

    
      	
               
      

            	
              (d)

            	
              Procedures upon a
      Force Majeure Event.  If Owner or Contractor is rendered
      wholly or partially unable to perform its obligations under the Contract
      Documents (defined below) as a result of an act of God, Weather Delays (as
      defined below) or other unforeseen condition beyond the reasonable control
      of such Party which could not have been avoided, prevented or resolved by
      such Party’s commercially reasonable efforts and which was not caused by
      such Party’s negligence or a breach or failure to perform its obligations
      hereunder (a “Force Majeure Event”), such Party shall comply with the
      following conditions precedent to the right to seek an equitable
      adjustment:

            

    

     

    
      	
               
      

            	
              (i)

            	
              The
      affected Party shall give the other Party written notice describing the
      particulars of the occurrence, such notice to be given promptly after the
      occurrence of the Force Majeure Event and no more than three (3) calendar
      days after the affected Party becomes aware of such occurrence, which
      notice shall include an estimate of the Force Majeure Event’s expected
      duration and probable impact on the performance of the affected Party’s
      obligations hereunder, and the affected Party shall continue to furnish
      timely, regular reports during the continuation of the Force Majeure
      Event;

            

    

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (ii)

            	
              The
      suspension of performance shall be of no greater scope and of no longer
      duration than is reasonably required by the Force Majeure Event and all
      Parties shall work to minimize the impact of the Force Majeure
      Event;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              No
      liability of any Party which arose before the occurrence of the Force
      Majeure Event causing the suspension of performance shall be excused as a
      result of the occurrence;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              The
      affected Party shall exercise all reasonable efforts to mitigate or limit
      damages to the other Party as a result of the Force Majeure Event by
      promptly taking appropriate and sufficient corrective action, including
      the expenditure of all reasonable sums of
money;

            

    

     

    
      	
               
      

            	
              (v)

            	
              The
      affected Party shall use reasonable efforts to continue to perform its
      obligations hereunder and to correct or cure the Force Majeure Event
      excusing performance;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              When
      the affected Party is able to resume performance of the Work, the affected
      Party shall give the other Party written notice to that effect, and a
      Change Order shall be executed by Owner and Contractor to account for the
      adverse effects, if any, on Contractor’s performance of its obligations by
      the Force Majeure Event; and

            

    

     

    
      	
               
      

            	
              (vii)

            	
              Calculation
      of the change to the Contract Price as a result of a Force Majeure Event
      shall be computed as Contractor’s total additional out-of-pocket costs,
      including labor costs, without additional
  mark-up.

            

    

     

    For the
purposes of this Contract, “Weather Delays” shall be defined as delays that
impact the performance at the Project Site caused by any of the following
weather conditions at the Project Site:  natural disasters, fire,
hurricanes, unusually severe and not reasonably anticipatable rain or other
inclement weather, tornadoes, extreme high winds, dust or sand storms,
mudslides, subsidence, lightning, floods or earthquakes, which create (or are
reasonably anticipated to create) unsafe conditions or otherwise prevent
performance of the Work.

     

    
      	
               
      

            	
              (e)

            	
              Weather
      Delay.  Notwithstanding anything to the contrary in
      Section 5(d), the Parties acknowledge and agree that, in the event of a
      Force Majeure Event which is in the nature of a Weather Delay, Contractor
      shall be entitled to a Change Order solely with respect to the Schedule
      and shall not be entitled to any adjustment in the Contract
      Price.

            

    

     

    6.           Owner’s Right to Terminate
for Cause.

     

    
      	
               
      

            	
              (a)

            	
              The
      occurrence of any one of more of the following matters constitutes a
      default by the Contractor under this Contract (a “Contractor Event of
      Default”):

            

    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (i)

            	
              Contractor
      becomes insolvent or generally fails to pay, or admits in writing its
      inability or unwillingness to pay, its debts as they become
      due;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Contractor
      makes a general assignment for the benefit of its
    creditors;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              Contractor
      shall commence or consent to any case, proceeding or other action (x)
      seeking reorganization, arrangement, adjustment, liquidation, dissolution
      or composition of Contractor or of Contractor’s debts, under any law
      relating to bankruptcy, insolvency, reorganization or relief of debts, or
      (y) seeking appointment of a receiver, trustee or similar official for
      Contractor, or for all or any part of Contractor’s
    property;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              any
      case, proceeding or other action against Contractor shall be commenced (x)
      seeking to have an order for relief entered against Contractor as debtor,
      (y) seeking reorganization, arrangement, adjustment, liquidation,
      dissolution or composition of Contractor or of Contractor’s debts, under
      any law relating to bankruptcy, insolvency, reorganization or relief of
      debtors, or (z) seeking appointment of a receiver, trustee or similar
      official for Contractor or for all or any part of Contractor’s
      property;

            

    

     

    
      	
               
      

            	
              (v)

            	
              the
      breach of any representation or warranty made by Contractor
      herein;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              Contractor
      attempts to assign, convey or transfer this Contract or any interest
      herein in any manner inconsistent with the terms of this
      Contract;

            

    

     

    
      	
               
      

            	
              (vii)

            	
              Contractor
      fails to pay any monies or other funds when due and payable under this
      Contract; or

            

    

     

    
      	
               
      

            	
              (viii)

            	
              Contractor
      fails to observe or perform any other covenant, agreement, obligation,
      duty or provision of this Contract, and such failure continues for five
      (5) days after Contractor’s receipt of written notice thereof from
      Owner.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Upon
      the occurrence of a Contractor Event of Default, Owner shall provide
      written notice to Contractor that a Contractor Event of Default has
      occurred and Contractor must correct such deficiency within five (5) days
      of Contractor’s receipt of such notice.  If Contractor fails to
      cure within such five (5) day period, then Owner may, without prejudice to
      any other right or remedy the Owner may have under this Contract or at law
      and/or equity, declare the Contract terminated for default by providing
      written notice to Contractor of such
  declaration.

            

    

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              Upon
      declaring the Contract terminated for default, pursuant to Section 6(b),
      Owner may, without prejudice to any other right or remedy, enter upon the
      premises and take possession, for the purpose of completing the Work, of
      the Project Site and all materials and equipment which have been purchased
      by Owner for the performance of the Work, all of which Contractor hereby
      transfers, assigns and sets over to Owner for such purpose, and to employ
      a qualified third party to complete the Work.  Materials and
      equipment noted here do not include any equipment rented or owned by
      Contractor.  If the cost of finishing the Work exceeds the
      unpaid balance of the Contract Price, the Contractor shall immediately pay
      the difference to the Owner.  The cost of Owner completing the
      Work shall include, without limitation, the cost of any additional design,
      engineering, managerial and administrative services required thereby,
      reasonable attorneys’ fees and expenses, and any other costs, expenses or
      damages the Owner may incur in order to complete the
  Work.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Owner’s Right to
      Termination for Convenience.  Upon ten (10) days’ prior
      written notice to Contractor, Owner may, for its convenience and without
      cause, elect to terminate this Contract.  In such event, Owner
      shall pay Contractor for the following: (i) to the extent not already
      paid, all Work executed, and for proven loss, cost or expense in
      connection with the Work; (ii) the reasonable costs and expenses
      attributable to such termination, including demobilization costs; and
      (iii) out-of-pocket costs and amounts due in settlement of terminated
      contracts with Subcontractors and suppliers.  All such amounts
      shall not be subject to payment by installments or pursuant to the Note,
      but rather must be paid on the date of termination by wire
      transfer.  A schedule outlining the aggregate termination
      payments is attached hereto as Exhibit
J.

            

    

     

    7.           Insurance.

     

    
      	
               
      

            	
              (a)

            	
              Owner’s
      Insurance. Contractor shall procure and maintain, for and on behalf
      of Owner, from insurance companies authorized to do business in the state
      in which the Project is located, and maintain through Final Completion,
      All-Risk Builder’s Risk property insurance upon the entire
      Project.  The policy shall be primary to all other insurance
      supplied by Contractor or its Subcontractors.  The Builder’s
      Risk policy shall include Owner, Contractor, Contractor’s Subcontractors
      and [name intentionally omitted] as additional insureds.  [Name
      intentionally omitted] shall be named as a loss payee under the Builder’s
      Risk Policy.  Such policy shall insure against the perils of
      fire and extended coverage, theft, vandalism, malicious mischief,
      collapse, flood, earthquake, debris removal and other perils or causes of
      loss and without application of any deductible, retention or retrospective
      premium.  The builder’s risk policy shall be written on a
      replacement cost basis.  The property insurance shall be
      endorsed to cover physical loss or damage to the Work and all goods in
      transit including the Turbines, materials and equipment in transit, at the
      Project Site or at another location.  Contractor shall provide a
      copy of the All-Risk Builder’s Risk policy to Owner upon execution of this
      Contract.  Any loss covered under Owner’s property insurance
      shall be adjusted by [name intentionally omitted] and made payable to the
      insureds in accordance with the terms of the
  Financing.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Contractor’s
      Insurance.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Contractor
      shall procure and maintain in force through the Final Completion Date the
      following insurance coverages with the policy limits indicated, and
      otherwise in compliance with the provisions of this
    Contract:

            

    

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    
      
        
          
            	
                    Commercial
      General Liability:

                  	 	 	 
	
                    General
      Aggregate

                  	 	$	2,000,000	 
	
                    Products-Comp/Op
      AGG

                  	 	$	2,000,000	 
	
                    Personal
      & Adv Injury

                  	 	$	1,000,000	 
	
                    Each
      Occurrence

                  	 	$	1,000,000	 
	
                    Fire
      Damage (Any one fire)

                  	 	$	50,000	 
	
                    Med
      Exp (Any one person)

                  	 	$	5,000	 
	 
      	 	 	 	 
	
                    Automobile
      Liability:

                  	 	 	 	 
	
                    Combined
      Single Limit

                  	 	 	 	 
	
                    Each
      Occurrence

                  	 	$	1,000,000	 
	 
      	 	 	 	 
	
                    Excess
      Liability – Umbrella Form:

                  	 	 	 	 
	
                    Each
      Occurrence

                  	 	$	9,000,000	 
	
                    Aggregate

                  	 	$	9,000,000	 

          

        

      

    

    

    Workers’
Compensation - Statutory limits as required by the state in which the Work is
performed.

    

    
      
        
          
            	
                    Employers’
      Liability:

                  	 	 	 
	
                    Each
      Accident

                  	 	$	1,000,000	 
	
                    Disease-Policy
      Limit

                  	 	$	1,000,000	 
	
                    Disease-Each
      Employee

                  	 	$	1,000,000	 
	 
      	 	 	 	 
	
                    Professional
      Errors and Omissions:

                  	 	 	 	 
	
                    Per
      Claim

                  	 	$	1,000,000	 
	
                    Annual

                  	 	$	1,000,000	 

          

        

      

    

    

    Owner and
[name intentionally omitted] shall be named as an additional insureds under the
preceding Commercial General Liability, Employers’ Liability and Excess Umbrella
Policies.

     

    
      	
               
      

            	
              (ii)

            	
              Insurance
      Certificates. Contractor shall provide Owner upon Owner’s request
      with copies of the insurance certificates reflecting coverages evidencing
      that (i) Contractor’s insurance obligations are in full force and in
      effect and will remain in effect until Contractor has completed all of the
      Work and has received the final payment from Owner, and (ii) no insurance
      coverage will be canceled, renewal refused, or changed unless at least
      thirty (30) days prior written notice is given to Owner.  All
      insurance certificates provided by Contractor pursuant to this Contract
      shall, as applicable, clearly identify in writing as additional insureds
      (and expressly include the interests of) Owner and [name intentionally
      omitted].

            

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    8.           Warranties.

     

    
      	
               
      

            	
              (a)

            	
              Contractor
      agrees to provide the following
warranties:

            

    

     

    
      	
               
      

            	
              (i)

            	
              All
      materials, supplies and equipment furnished under this Contract will be of
      good quality and new, that the Work will be of good and workmanlike
      quality and free from faults, defects and deficiencies, and that the Work
      will conform with the requirements of this Contract (the “Project
      Warranty”);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Each
      Turbine will be properly assembled, erected, installed, and mechanically
      completed on the Project Site in accordance with the Turbine
      Specifications and the instruction manual provided by [name intentionally
      omitted] (the “Turbine Installation Warranty”);
  and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              The
      Work (i) will be performed in accordance with generally accepted
      professional standards for each such relevant profession and will be
      performed in a good and workmanlike manner (including, without limitation,
      the construction work, which shall also be performed in accordance with
      sound construction practices), (ii) will conform to, and be performed in
      accordance with, all Applicable Laws, (iii) will be performed in
      accordance with prudent utility practices and the requirements, and (iv)
      will meet the requirements and specifications provided by Contractor, the
      Permits, the Turbine specifications, the REPA (including Appendix C) and
      the SGIA (the “Work Warranty”, and together with the Project Warranty and
      the Turbine Installation Warranty, the
  “Warranty”).

            

    

     

    
      	
               
      

            	
              (b)

            	
              Contractor
      shall, after discovery of any breach of the Warranty during the Warranty
      Period or notice of the same to Contractor by Owner or Owner’s contractors
      during the Warranty Period, at its sole cost and expense (including the
      cost of labor and equipment) and as promptly as reasonably practicable,
      correct such breach of Warranty and repair or replace any defective Work,
      material, or equipment with materials of new and good quality and correct
      any material damage caused by such breach of the Warranty.  The
      Warranty shall commence on the date the Work is completed and shall remain
      in full force and effect for a period of twelve (12) months from the date
      the Work is completed (the “Warranty Period”).  Any portion of
      the Work which has been repaired, replaced or otherwise corrected during
      the preceding Warranty Period shall be warranted by the Contractor for an
      additional twelve (12) month period from the date of completion of such
      repair, replacement or correction.  If Contractor does not so
      commence and diligently pursue a remedy within seven (7) business days
      after receipt of written notice from Owner, Owner may, at Contractor’s
      expense, perform or have performed by a qualified and experienced third
      party the necessary remedy consistent with the requirements set forth in
      this Contract with respect to the Work.  Contractor shall have
      no warranty obligation for warranty claims that are caused by: (i) normal
      wear and tear; (ii) Owner’s or subsequent Owner’s misuse or negligence;
      (iii) Owner’s use, without Contractor’s approval, of spare parts other
      than those supplied or recommended by Contractor or [name intentionally
      omitted]; (iv) use or services of the facility (or any relevant part
      thereof) other than in conformance in all material respects with [name
      intentionally omitted] operations
manuals.

            

    

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Contractor shall use its best efforts to obtain warranties for the benefit
      of the Contractor and the Owner from the Subcontractors and material and
      equipment suppliers in relation to their respective portions of the
      Work.  The Contractor shall similarly use its best efforts to
      obtain warranties from such individuals which (i) warrant against defects
      and deficiencies in each such party’s work, and (ii) are ultimately
      assignable to the Owner if they do not run to the Owner in the first
      instance.  Contractor shall assign to Owner any warranty it
      receives from the Subcontractors, including, without limitation, the
      warranty provided as part of its contract with its primary
      Subcontractor.

            

    

     

    
      	
               
      

            	
              (d)

            	
              The
      Contractor shall have primary liability with respect to the warranties set
      forth in this Contract, whether or not any defect, deficiency or other
      matter is also covered by a warranty of another party, and the Owner need
      only look to the Contractor for corrective action.  In addition
      thereto, the Contractor’s warranties expressed herein shall not be
      restricted in any manner by any warranty of a third party and the refusal
      of any third party to correct defective, deficient or nonconforming Work
      shall not excuse the Contractor from its liability as to the warranties
      provided herein.

            

    

     

    
      	
               
      

            	
              (e)

            	
              ALL
      OTHER CONTRACT PROVISIONS NOTWITHSTANDING, THE WARRANTIES SET FORTH IN
      THIS AGREEMENT ARE EXCLUSIVE AND IN LIEU OF ALL WARRANTIES, EXPRESS OR
      IMPLIED, OF PERFORMANCE, MERCHANTABILITY, FITNESS FOR A PARTICULAR
      PURPOSE, CUSTOM, USAGE OR OTHERWISE AND ALL OTHER CAUSES OF
      ACTION.  CONTRACTOR DOES NOT WARRANT OR GUARANTEE THAT THE
      DESIGN, ENGINEERING, SPECIFICATIONS, EQUIPMENT OR MATERIALS, INCLUDING THE
      TURBINES, SUPPLIED OR SPECIFIED BY OTHERS WILL PRODUCE ANY INTENDED RESULT
      OR ACHIEVE ANY INTENDED PURPOSE.

            

    

     

    
      	
               
      

            	
              (f)

            	
              The
      Warranty provided herein shall survive the termination or expiration of
      this Contract.

            

    

     

    9.           Representations and
Warranties of Contractor.  Contractor hereby represents and
warrants the following to the Owner, which representations and warranties shall
survive the execution and delivery of this Contract, any termination of this
Contract and the final completion of the Work:

     

    
      	
               
      

            	
              (a)

            	
              Contractor
      is able to furnish the tools, materials, supplies, equipment, labor and
      development, design, engineering, construction procurement, installation,
      erection, and financing services required to complete the Work and perform
      its obligations hereunder, and has sufficient experience and competence to
      do so;

            

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              Contractor
      is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Minnesota, and is duly qualified to do
      business in the State of Minnesota;

            

    

     

    
      	
               
      

            	
              (c)

            	
              Contractor
      is authorized to do business in the State of Minnesota and properly
      licensed by all Governmental Authorities having jurisdiction over
      Contractor, the Work and/or the
Project;

            

    

     

    
      	
               
      

            	
              (d)

            	
              Contractor
      has familiarized itself with the Project Site and the local
      conditions.  Any cost risk related thereto (including that
      associated with concealed, latent or unknown conditions) shall be borne by
      the Contractor and Contractor shall not be entitled to an adjustment in
      the Contract Price or the Schedule as a result of the same;
      and

            

    

     

    
      	
               
      

            	
              (e)

            	
              The
      execution, delivery and performance of each of the Contract and any the
      contracts between Contractor and its Subcontractor, is or is to be a party
      as contemplated hereby, will not (i) violate or conflict with any
      application, eligibility or other requirement of any loan guarantee,
      grants or other similar government funding opportunity available or
      already obtained from the United States Department of Agriculture, the
      U.S. Department of Energy, the U.S. Department of Energy or any other
      Governmental Authority (each, a "Governmental Support
      Opportunity"), (ii) result
      in the disqualification of Owner, any of its affiliates, or the Project
      from eligibility for any Governmental Support Opportunity, (iii) result in
      the loss of any potential Governmental Support Opportunity for which
      Owner, any of its affiliates or the Project is eligible as of the date
      hereof, or (iv) result in the requirement that the Owner shall incur any
      additional costs or delay as a condition for Owner, any of its Affiliates,
      or the Project to be awarded any Governmental Support
      Opportunity

            

    

     

    10.         Indemnification.

     

    
      	
               
      

            	
              (a)

            	
              The
      Contractor shall (and shall cause its Subcontractors to) indemnify, defend
      and hold harmless the Owner, [name intentionally omitted] and their
      officers, directors, board members, employees, agents, affiliates and
      representatives, from and against any and all claims, demands, suits,
      liabilities, injuries (personal or bodily), property damage, causes of
      action, losses, expenses, damages or penalties, including, without
      limitation, court costs and reasonable attorneys’ fees, arising or
      resulting from, or occasioned by or in connection with (i) the performance
      by the Contractor of its duties and obligations under this Contract, (ii)
      the inaccuracy of any warranty or representation of the Contractor
      contained in this Contract, (iii) the use, generation, storage, release,
      threatened release, discharge, disposal, existence or presence of any
      Hazardous Substances or underground storage tanks in, under, at, upon or
      from the Project Site, (iv) the placement upon or against any property of
      the Owner of any liens, claims, security interests, mortgages or other
      encumbrances as a result of this Contract, and/or (v) any negligent,
      willful or wrongful act or omission to act by the Contractor, its
      Subcontractors, architects, engineers, anyone directly or indirectly
      employed by any of them or anyone for whose acts they may be
      liable.  This indemnification, defense and hold harmless
      obligation shall survive the termination or expiration of this
      Contract.

            

    

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              In
      claims against any person or entity indemnified under Section 10(a) by an
      employee of the Contractor, a Subcontractor, anyone directly or indirectly
      employed by any of them or anyone for whose acts they may be liable, the
      indemnification obligation under such Section 10(a) shall not be limited
      by a limitation on the amount or type of damages, compensation or benefits
      payable by or for the Contractor, the Subcontractor or any other
      above-referenced party under workers’ or workmen’s compensation acts,
      disability benefit acts, other employee benefit acts, or by common law or
      case law.

            

    

     

    
      	
               
      

            	
              (c)

            	
              For
      purposes of this Section, “Hazardous Substances” means (a) any substance
      which is listed, defined, designated or classified under any Environmental
      Law as a (i) hazardous material, substance, constituent or waste, (ii)
      toxic material, substance, constituent or waste, (iii) radioactive
      material, substance, constituent or waste, (iv) dangerous material,
      substance, constituent or waste, (v) pollutant, (vi) contaminant, or (vii)
      special waste; (b) an material (including radioactive material),
      substance, constituent or waste regulated under any Environmental Laws; or
      (c) petroleum, petroleum products, polychlorinated biphenyl, pesticides,
      asbestos, or asbestos-containing materials.  “Environmental Law”
      means any law which relates to environmental quality, health, safety,
      pollution, contamination, cleanup, or the protection of human health,
      ambient air, waters (including ground waters) or land; including the
      Comprehensive Environmental Response, Compensation and Liability Act, as
      amended, 42 U.S.C. Section 9601 et seq; the Resource Conservation and
      Recovery Act, as amended, 42 U.S.C. Section 6901 et seq; the Toxic
      Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq; the
      Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq; the Clean Water
      Act, as amended, 33 U.S.C. Section 1251 et seq; and the Occupational
      Safety and Health Act, as amended, 29 U.S.C. Section 651 et
      seq.

            

    

     

    11.         Limitation of
Liability.

     

    
      	
               
      

            	
              (a)

            	
              Overall Limitation of
      Liability.  The aggregate liability of Contractor, its
      Subcontractors, agents and employees, to Owner (or any successor thereto
      or assignee thereof) for any and all claims and/or liabilities arising out
      of or relating in any manner to the BOP Work as is set forth on Exhibit A
      or to Contractor’s performance or non-performance of its obligations with
      respect to the BOP Work, whether based in contract, tort (including
      negligence), strict liability, or otherwise, shall not exceed, in the
      aggregate, fifteen percent (15%) of the Contract Price; provided, however,
      that upon Substantial Completion, such aggregate liability shall be
      limited to ten percent (10%) of the Contract
      Price.  Notwithstanding the foregoing, the preceding limits of
      liability shall (i) exclude any liability satisfied by the proceeds of
      insurance maintained by Contractor in accordance with this Contract, or
      which would have been satisfied by insurance had Contractor maintained
      proper insurance in accordance with this Contract; (ii) not apply to any
      claims for fraud, gross negligence or willful misconduct, or failure to
      pay Subcontractors; (iii) not apply with respect to the indemnification
      obligations pursuant to Section 10; and (iv) exclude the Contractor's
      warranty obligations under Section
8.

            

    

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              Consequential
      Damages.  Owner and Contractor hereby waive all claims
      against each other (and against each other’s parent company and affiliates
      and [name intentionally omitted]) for any consequential, incidental,
      indirect, special, exemplary or punitive damages (including, but not
      limited to, loss of actual or anticipated profits, revenues or product;
      loss by reason of shutdown or non-operation; increased expense of
      operation, borrowing or financing; loss of use or productivity; or
      increased cost of capital), and regardless of whether any such claim
      arises out of breach of contract or warranty, tort (including negligence),
      product liability, contribution, strict liability or any other legal
      theory.

            

    

     

    12.         Offset
Right.  In the event Contractor fails to perform any obligation
or covenant under this Contract and such failure causes Owner to incur any cost
or expense, Owner shall be authorized, to the fullest extent permitted by law,
to set off and apply the amount of any and all such costs and expenses against
any and all obligations due and owing under the Note.  Owner, upon
making any such setoff and application pursuant to this Section 12, shall
promptly notify Contractor thereof.

     

    13.         Title and Risk of
Loss.  Title, with respect to all Work and the various
materials, equipment and other components of the Work (including, for the
avoidance of doubt the Work and various materials, equipment and other
components of the Work provided pursuant to the contract between Contractor and
its primary Subcontractor) shall transfer to Owner upon the incorporation of
such equipment into the Project.  Regardless of the passage of title,
upon the delivery of such equipment to the Project Site, care, custody and
control of, and risk of loss or damage to, such component or part shall
thereupon transfer to Owner.

     

    14.         Documents.  The
Project Documents and any other drawings, including “as built” drawings,
specifications, designs, plans, logos, trademarks, names, service marks,
photographs, marketing materials or other documents, prepared by or on behalf of
the Owner and/or the Contractor in relation to this Project shall be deemed the
property of the Owner.  Contractor hereby assigns, transfers,
releases, and conveys to Owner (and shall cause Owner’s Subcontractor and each
sub-subcontractors to assign, transfer, release and convey to Owner) all right,
title and interest in the Project Documents (including any
copyrights).  All copies of such documents shall be delivered to the
Owner upon Substantial Completion.  The preceding documents and copies
thereof are for use solely with respect to this Project.

     

    15.         Royalties.  The
Contractor shall pay all royalties and other fees for any patents, trademarks,
copyrights or other proprietary rights necessary for the execution and
completion of the Work.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    16.         Independent Agent. In
performing services and duties hereunder, Contractor shall do so as independent
agent for the Owner and is not, and is not to be deemed an employee of Owner, or
any other person acting on behalf of Owner.  Contractor shall be
responsible for meeting any legal requirements imposed on Contractor as a result
of this Contract, including but not limited to the filing of income tax returns
and the payment of taxes; and Contractor agrees to indemnify Owner for the
failure to do so.

     

    17.         No Third-Party
Beneficiary.  Except with respect to [name intentionally
omitted] as provided herein, no provision of the Contract is intended to nor
shall it in any way inure to the benefit of any customer, property owner or any
other third party, so as to constitute any such person a third-party beneficiary
under the Contract, or of any one or more of the terms hereof, or otherwise give
rise to any cause of action in any person not a Party
hereto.  Notwithstanding the foregoing, [name intentionally omitted]
is intended to be and is a third party beneficiary of this
Contract.

     

    18.          Previous Agreement.
This Contract supersedes the Development Agreement dated December 30, 2005
between Grant County Wind and DanMar & Associates, Inc., which agreement has
been terminated in all respects.

     

    19.         Governing
Law.  The Contract is made in the State of Minnesota and shall
be interpreted and governed by the laws of the State of Minnesota and/or the
laws of the United States, as applicable, without regard to choice of law
principles.

     

    20.         Entire
Agreement.  This Contract represents the entire agreement
between the Owner and Contractor with respect to the subject matter hereof, and
supersedes all prior negotiations, representations or agreements, whether
written or oral.  No amendment hereto shall be valid or binding unless
it is in writing and signed by the Parties.

     

    21.         Successors and
Assigns.  Except as otherwise set forth herein with respect to
the Note and Security Agreement or otherwise, Contractor may not assign, convey
or transfer this Contract or any part hereof, or delegate any of its duties or
obligations hereunder, without the Owner’s prior written
consent.  This Contract shall be binding upon, and inure to the
benefit of, the successors and permitted assigns of the Parties
hereto.  Contractor acknowledges and understands that the Owner
intends to collaterally assign the Contract to various financing sources, and
hereby agrees that it shall execute a consent to the Owner’s collateral
assignment of the Contract to any such financing sources; further Contractor
hereby expressly consents to the assignment of this Contract to [name
intentionally omitted] pursuant to the financing arrangements set forth in the
Financing Agreement and related documents.

     

    22.         Intercreditor
Agreement.   Anything herein to the contrary
notwithstanding, the liens and security interests securing the obligations
evidenced hereby, the exercise of any right or remedy with respect thereto, and
certain of the rights of the holder hereof are subject to the provisions of the
Intercreditor Agreement.  In the event of any conflict between the
terms hereof and the Intercreditor Agreement, the terms of the Intercreditor
Agreement shall govern and control.

     

    23.         Severability.  In
case any provision in this Contract is held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not be affected.

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    24.         Headings.  The
headings and captions used in this Contract are inserted for reference and
convenience only and the same shall not limit or construe the sections, articles
or paragraphs to which they apply or otherwise affect the interpretation
thereof.

     

    25.         Authority to
Execute.  Each Party represents and warrants to the other that
this Contract has been duly authorized, executed and delivered by and on behalf
of each such Party, and constitutes the legal, valid and binding agreement of
said Parties.

     

    26.         Execution in
Counterparts.  This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall he deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     

    27.         Signatures.  The
exchange of copies of this Agreement and of signature pages by facsimile or
other electronic transmission shall constitute effective execution and delivery
of this Agreement as to the parties and may be used in lieu of the original
Agreement for all purposes.  Signatures of the parties transmitted by
facsimile or other electronic means shall be deemed to be their original
signatures for all purposes.

     

    28.         Time is of the
Essence.  Time is of the essence with regard to the achievement
of the Initial Mechanical Completion Date, Scheduled Mechanical Completion Date,
Scheduled Substantial Completion Date and Scheduled Final Completion Date, as
such date may be extended herein, where “Scheduled Substantial Completion Date”
means February 25, 2010 and “Scheduled Final Completion Date” means March 31,
2010.

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have caused this Contract to be executed by their
duly authorized officers as of the day and year first written
above.

    

    
      
        	
                GRANT
      COUNTY WIND, LLC

              	 
      	
                JUHL
      ENERGY DEVELOPMENT, INC.

              
	
                a
      Minnesota limited liability company

              	 
      	
                a
      Minnesota corporation

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Edgar Persons

              	 
      	
                By:

              	
                /s/ Dan Juhl

              
	
                Its:

              	
                Chief Manager

              	 
      	
                Its:

              	
                Chief Executive Officer

              
	 
      	 
      	 
      	 
      	 
      
	
                Roseville Wind 1
      L.L.C.,

              	 
      	
                Western Minnesota Wind 1
      LLC,

              
	
                a
      Minnesota limited liability company

              	 
      	
                a
      Minnesota limited liability company

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Dale N. Blume

              	 
      	
                By:

              	
                /s/Ronald Prahl

              
	
                Name:

              	
                Dale N. Blume

              	 
      	
                Name:

              	
                Ronald Prahl

              
	
                Its:

              	
                Manager

              	 
      	
                Its:

              	
                Manager

              
	 
      	 
      	 
      	 
      	 
      
	
                Roseville Wind 2
      LLC,

              	 
      	
                Western Minnesota Wind 2
      LLC,

              
	
                a
      Minnesota limited liability company

              	 
      	
                a
      Minnesota limited liability company

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/David Starner

              	 
      	
                By:

              	
                /s/James Aanerud

              
	
                Name:

              	
                David Starner

              	 
      	
                Name:

              	
                James Aanerud

              
	
                Its:

              	
                Chief Manager

              	 
      	
                Its:

              	
                Manager

              
	 
      	 
      	 
      	 
      	 
      
	
                Roseville Wind #3,
      LLC,

              	 
      	
                Western Minn Wind 3
      LLC,

              
	
                a
      Minnesota limited liability company

              	 
      	
                a
      Minnesota limited liability company

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/Randy C. Larson

              	 
      	
                By:

              	
                /s/Vernell H. Wagner

              
	
                Name:

              	
                Randy C. Larson

              	 
      	
                Name:

              	
                Vernell H. Wagner

              
	
                Its:

              	
                Manager

              	 
      	
                Its:

              	
                Manager

              
	 
      	 
      	 
      	 
      	 
      
	
                Roseville Wind 4,
      LLC,

              	 
      	
                Western Minn Wind 4
      LLC,

              
	
                a
      Minnesota limited liability company

              	 
      	
                a
      Minnesota limited liability company

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/James Prahl

              	 
      	
                By:

              	
                /s/Chad Westrom

              
	
                Name:

              	
                James Prahl

              	 
      	
                Name:

              	
                Chad Westrom

              
	
                Its:

              	
                Manager

              	 
      	
                Its:

              	
                Manager

              

      

    

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    

    
      
        	
                Rafter P Wind,
      LLC,

              	 
      	
                Western Minn Wind 5
      LLC,

              
	
                a
      Minnesota limited liability company

              	 
      	
                a
      Minnesota limited liability company

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/Edgar Persons

              	 
      	
                By:

              	
                /s/Myron L. Westrom

              
	
                Name:

              	
                Edgar Persons

              	 
      	
                Name:

              	
                Myron L. Westrom

              
	
                Its:

              	
                Chief Manager

              	 
      	
                Its:

              	
                Manager

              

      

    

     

    
      
         

      

      
        29EXHIBIT 4.1

--------------------------------------------------------------------------------

                               RIGHTS AGREEMENT

                                by and between

                           AGREE REALTY CORPORATION

                                     and

                               BANKBOSTON, N.A.

                                      as

                                 Rights Agent

                         Dated as of December 7, 1998

--------------------------------------------------------------------------------

<PAGE>

        This Agreement, dated as of December 7, 1998, is by and between Agree
Realty Corporation, a Maryland corporation (the "Company"), and BankBoston,
N.A., a national banking association (the "Rights Agent").

                                   RECITAL

        The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common
Share (as such term is hereinafter defined) of the Company outstanding as of
the close of business on December 22, 1998 or such earlier date as may be
determined by the Board of Directors of the Company (the "Record Date"), each
Right representing the right to purchase one one-hundredth of a Preferred
Share (as such term is hereinafter defined), upon the terms and subject to
the conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).

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

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

               (a) "Acquiring Person" shall mean any Person (as such term is
        hereinafter defined) who or which, together with all Affiliates and
        Associates (as such terms are hereinafter defined) of such Person,
        shall hereafter become a Beneficial Owner (as such term is
        hereinafter defined) of 15% or more of the Common Shares of the
        Company then outstanding, but shall not include the Company, any
        Subsidiary (as such term is hereinafter defined) of the Company, any
        employee benefit plan of the Company or any Subsidiary of the
        Company, or any entity holding Common Shares for or pursuant to the
        terms of any such

<PAGE>

        plan. Notwithstanding the foregoing, no Person shall be deemed to
        have become an "Acquiring Person" as the result of an acquisition of
        Common Shares by the Company which, by reducing the number of Common
        Shares outstanding, increases the proportionate number of Common
        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 Common Share
        purchases by the Company and shall, after such Common Share purchases
        by the Company, become the Beneficial Owner of any additional Common
        Shares of the Company, then such Person shall be deemed to be an
        "Acquiring Person" as of the time of the acquisition of such
        additional Common Shares by such 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
        Section 1(a), has become such inadvertently, and such Person divests
        (within such period as of the Board of Directors may deem
        appropriate) a sufficient number of Common Shares so that such Person
        is no longer an "Acquiring Person," as defined pursuant to the
        foregoing provisions of this Section 1(a), then such Person shall not
        be deemed to be an "Acquiring Person" for any purposes of this
        Agreement.

               (b) "Act" shall mean the Securities Act of 1933, as amended.

               (c) "Affiliate" and "Affiliates" shall have the meaning
        ascribed to such terms in Rule l2b-2 promulgated under the Exchange
        Act (as such term is hereinafter defined), as in effect on the date
        of this Agreement.

               (d) "Agreement" shall mean this agreement, as it may be
        amended or supplemented from time to time pursuant to Section 27
        hereof.

                                    - 2 -

<PAGE>

               (e) "Associate" and "Associates" shall have the meaning
        ascribed to such terms in Rule l2b-2 promulgated under the Exchange
        Act, as in effect on the date of this Agreement.

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

                      (i) which such Person or any of such Person's
               Affiliates or Associates beneficially owns, directly or
               indirectly, as determined pursuant to Rule l3d-3 promulgated
               under the Exchange Act;

                      (ii) which such Person or any of such Person's
               Affiliates or Associates has (A) the right to acquire (whether
               such right is exercisable immediately or only after the
               passage of time) pursuant to any agreement, arrangement or
               understanding (other than customary agreements with and
               between underwriters and selling group members with respect to
               a bona fide public offering of securities), or upon the
               exercise of conversion rights, exchange rights, rights (other
               than these Rights), warrants or options, or otherwise;
               provided, however, that a Person shall not (pursuant to this
               Section 1(f)(ii)(A)) be deemed the Beneficial Owner of, or to
               beneficially own, securities tendered pursuant to a tender or
               exchange offer made by or on behalf of such Person or any of
               such Person's Affiliates or Associates until such tendered
               securities are accepted for purchase or exchange; or (B) the
               right to vote pursuant to any agreement, arrangement or
               understanding; provided, however that a Person shall not be
               deemed the Beneficial Owner of, or to beneficially own, any
               security if the agreement, arrangement or understanding to
               vote such security (1) arises solely from a revocable proxy or
               consent given to such Person in response

                                    - 3 -

<PAGE>

               to a public proxy or consent solicitation made pursuant to,
               and in accordance with, the applicable rules and regulations
               promulgated under the Exchange Act (as such term is
               hereinafter defined) and (2) is not also then reportable on
               Schedule 13D (or any comparable or successor report)
               promulgated under the Exchange Act; or

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

               Notwithstanding anything in this definition of Beneficial
        Ownership to the contrary, the phrase "then outstanding," when used
        with reference to a Person's Beneficial Ownership of securities of
        the Company, shall mean the number of such securities then issued and
        outstanding together with the number of such securities not then
        actually issued and outstanding which such Person would be deemed to
        own beneficially hereunder.

               (g) "Business Day" shall mean any day other than a Saturday, a
        Sunday or a day on which banking institutions in The Commonwealth of
        Massachusetts are authorized or obligated by law or executive order
        to close.

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

                                    - 4 -

<PAGE>

               (i) "Common Share" and "Common Shares" when used with
        reference to the Company shall mean, as applicable, one or more of
        the shares of common stock, par value $0.0001 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.

               (j) "Company" shall have the meaning ascribed to such term in
        the first paragraph of this Agreement.

               (k) "Current per share market price" shall have the meaning
        ascribed to such term in Section 11(d)(i) of this Agreement.

               (l) "Distribution Date" shall have the meaning ascribed to
        such term in Section 3 hereof

               (m) "Equivalent preferred shares" shall have the meaning
        ascribed to such term in Section 11(b) hereof

               (n) "Exchange Act" shall mean the Securities Exchange Act of
        1934, as amended.

               (o) "Exchange Ratio" shall have the meaning ascribed to such
        term in Section 24(a) hereof

               (p) "Final Expiration Date" shall have the meaning ascribed to
        such term in Section 7(a) hereof.

               (q) "Flip-In Event" shall have the meaning ascribed to such
        term in Section 11(a)(ii) hereof.

                                    - 5 -

<PAGE>

               (r) "Payment Date" shall mean December 22, 1998 or such
        earlier date as may be determined by the Board of Directors of the
        Company.

               (s) "Person" and "Persons" shall mean any individual, firm,
        corporation or other entity, and shall include any successor (by
        merger or otherwise) of such entity or entities.

               (t) "Preferred Shares" shall mean shares of Series A Junior
        Participating Preferred Stock, par value $0.0001 per share, of the
        Company having the rights and preferences set forth in the Form of
        Articles Supplementary attached to this Agreement as Exhibit A.

               (u) "Purchase Price" shall have the meaning ascribed to such
        term in Section 4(a) hereof.

               (v) "Record Date" shall be deemed to have the meaning ascribed
        to such term in the Recital to this Agreement.

               (w) "Redemption Date" shall have the meaning ascribed to such
        term in Section 7(a) hereof.

               (x) "Redemption Price" shall have the meaning ascribed to such
        term in Section 23(a) hereof

               (y) "Right" and "Rights" shall be deemed to have the meaning
        ascribed to such terms in the Recital to this Agreement.

               (z) "Right Certificate" shall be deemed to mean the form of
        certificate evidencing the ownership of Rights in substantially the
        form of Exhibit B hereto.

                                    - 6 -

<PAGE>

               (aa) "Rights Agent" shall be deemed to have the meaning
        ascribed to such term in the first paragraph of this Agreement and
        shall include any additional or substitute rights agents hereafter
        appointed pursuant to the terms of this Agreement.

               (bb) "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.

               (cc) "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 beneficially owned, directly
        or indirectly, by such Person.

               (dd) "Summary of Rights" shall have the meaning ascribed to
        such term in Subsection 3(b) hereof.

               (ee) "Trading Day" and "Trading Days" shall have the meaning
        ascribed to such terms in Section 11(d)(i) of this Agreement.

        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 Shares of the Company) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Board of Directors of the Company may, in
accordance with the provisions of Section 21 hereof, from time to time
appoint such substitute 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-Rights Agent.

                                    - 7 -

<PAGE>

        Section 3.    Issuance of Right Certificates.

               (a) One Right shall be associated with each Common Share
        outstanding on the Record Date, each additional Common Share that
        shall become outstanding between the Record Date and the earliest of
        the Distribution Date, the Redemption Date and the Final Expiration
        Date, and each additional Common Share with which Rights are issued
        after the Distribution Date and prior to the earlier of the
        Redemption Date and the Final Expiration Date; provided, however,
        that, if the number of outstanding Rights are combined into a smaller
        number of outstanding Rights pursuant to Section 11 hereof, the
        appropriate fractional Right determined pursuant to such Section
        shall thereafter be associated with each such Common Share.

               (b) 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 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 an Acquiring Person (including any such date which is after
        the date of this Agreement and prior to the issuance of the Rights;
        the earlier of such dates being herein referred to as the
        "Distribution Date"),

                                    - 8 -

<PAGE>

        (A) the Rights will be evidenced (subject to the provisions of
        Section 3(c) 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 (B) the right to receive Right
        Certificates will be transferable only in connection with the
        transfer of Common Shares of the Company. If the Distribution Date
        would, pursuant to the foregoing provisions of this Section 3(b),
        occur prior to the Payment Date (but for the provisions of this
        sentence), the Distribution Date shall, notwithstanding the foregoing
        provisions of this Section 3(b), not be deemed to occur until the
        Payment Date.

               As soon as practicable after the Distribution Date, the
        Company will prepare and execute, the Rights Agent will countersign
        and the Company (or the Rights Agent, if requested by the Company)
        will send or cause to be sent 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 evidencing one Right for each Common Share of the Company
        so held. As of and after the Distribution Date, the Rights will be
        evidenced solely by such Right Certificates.

               (c) On the Record Date, or as soon as practicable thereafter,
        the Company will send a copy of a Summary of Rights to Purchase
        Preferred Shares, in substantially the form of Exhibit C hereto (the
        "Summary of Rights"), by first-class, postage-prepaid mail, to each
        record holder of Common Shares of the Company as of the close of
        business on the Record Date, at the address of such holder shown on
        the records of the Company. With respect to certificates for Common
        Shares of the Company outstanding as of the Record Date, until the
        Distribution Date, the Rights will be evidenced by such certificates
        registered in the names

                                    - 9 -

<PAGE>

        of the holders thereof together with a copy of the Summary of Rights
        attached thereto. Until the Distribution Date (or the earlier of the
        Redemption Date or the Final Expiration Date), the surrender for
        transfer of any certificate for Common Shares of the Company
        outstanding on the Record Date, with or without a copy of the Summary
        of Rights attached thereto, shall also constitute the transfer of the
        Rights associated with the Common Shares of the Company represented
        thereby.

               (d) Certificates for Common Shares of the Company which become
        outstanding (including, without limitation, certificates issued upon
        the transfer of Common Shares of the Company and certificates
        representing reacquired Common Shares of the Company referred to in
        the last sentence of this Section 3(d)) after the Record Date but
        prior to the earliest of the Distribution Date, the Redemption Date
        or the Final Expiration Date shall have impressed on, printed on,
        written on or otherwise affixed to such certificates a legend in
        substantially the following form:

               This certificate also evidences and entitles the holder hereof
               to certain rights as set forth in a Rights Agreement between
               Agree Realty Corporation and BankBoston, N.A., dated as of
               December 7, 1998 (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 Agree
               Realty 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. Agree Realty 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
               (as defined in the Rights Agreement) may become null and void.

               With respect to such certificates containing the foregoing
        legend, until the Distribution Date, the Rights associated with the
        Common Shares of the Company represented by such certificates shall
        be evidenced by such certificates alone, and the

                                    - 10 -

<PAGE>

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

        Section 4.    Form of Right Certificates.

               (a) The Right Certificates (and the forms of election to
        purchase Preferred Shares and of assignment to be printed on the
        reverse thereof) shall be substantially the same as Exhibit B hereto
        and may have such marks of identification or designation and such
        legends, summaries or endorsements printed thereon as the Board of
        Directors of the Company may deem appropriate and as are not
        inconsistent with the provisions of this Agreement, or as may be
        required to comply with any applicable law or with any rule or
        regulation made pursuant thereto or with any rule or regulation of
        any stock exchange or automated quotation system on which the Rights
        may from time to time be listed or traded, or to conform to usage.
        Subject to the provisions of Section 22 hereof, the Right
        Certificates shall entitle the holders thereof to purchase such
        number of one one-hundredths of a Preferred Share as shall be set
        forth therein at the price per one one-hundredth of a Preferred Share
        set forth therein (the "Purchase Price"), but the number of such one
        one-hundredths of a Preferred Share and the Purchase Price shall be
        subject to adjustment as provided herein.

               (b) Any Right Certificate issued pursuant hereto that
        represents (i) Rights beneficially owned by an Acquiring Person or
        any Associate or Affiliate of an Acquiring Person, (ii) Rights
        transferred to a transferee by an Acquiring Person (or of any such

                                    - 11 -

<PAGE>

        Associate or Affiliate) who becomes such a transferee after the
        Acquiring Person becomes such or (iii) Rights transferred to a
        transferee of an Acquiring Person (or of any such Associate or
        Affiliate) who becomes such a transferee prior to or concurrently
        with the Acquiring Person becoming such and receives such Rights
        pursuant to either (A) a transfer (whether or not for consideration)
        from the Acquiring Person to holders of equity interests in such
        Acquiring Person or to any Person with whom such Acquiring Person has
        any continuing agreement, arrangement or understanding regarding the
        transferred Rights or (B) a transfer which the Board of Directors of
        the Company has determined is part of a plan, arrangement or
        understanding which has as a primary purpose or effect avoidance of
        the second paragraph of Section 11(a)(ii) hereof, and any Right
        Certificate issued pursuant hereto upon transfer, exchange,
        replacement or adjustment of any other Right Certificate referred to
        in this sentence, shall contain (to the extent feasible) the
        following legend:

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

               In the case of a determination made pursuant to clause (iii)
        of this Section 4(b) the Company shall notify the Rights Agent of
        such determination.

        Section 5. Countersignature and Registration. From and after the
distribution of Right Certificates pursuant to the second paragraph of
Section 3(a) hereof, (a) the Right Certificates shall be executed on behalf
of the Company by its Chairman of the Board, its President or any of its
Executive Vice Presidents, either manually or by facsimile signature, shall
have affixed thereto the Company's seal or a facsimile thereof and shall be
attested by the Treasurer or an Assistant

                                    - 12 -

<PAGE>

Treasurer, or Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature; (b) the Right Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless countersigned; (c) 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 thereof, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered 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 (d) 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, 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, the
certificate number of each Rights 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 or the Final Expiration Date,
any Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have 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,

                                    - 13 -

<PAGE>

entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
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
Rights Agent's offices in Canton, Massachusetts. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificates until the registered
holder shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall 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 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 and
deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.

                                    - 14 -

<PAGE>

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

               (a) Except as otherwise provided herein (including Section 24
        hereof), each Right shall entitle the registered holder thereof, upon
        exercise thereof as provided herein, to purchase for the Purchase
        Price, at any time after the Distribution Date and at or prior to the
        earliest of (i) the close of business on December 22, 2008 (the
        "Final Expiration Date"), (ii) the time at which the Rights are
        redeemed as provided in Section 23 hereof (the "Redemption Date") and
        (iii) the time at which such Rights are exchanged as provided in
        Section 24 hereof, one one-hundredth of a Preferred Share, subject to
        adjustment from time to time as provided in Section 11 or 13 hereof.

               (b) The registered holder of any Right Certificate may
        exercise the Rights evidenced thereby (except as otherwise provided
        herein) in whole or in part at any time after the Distribution Date
        upon surrender of the Right Certificate, with the form of election to
        purchase on the reverse side thereof duly executed, 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 the Final Expiration Date,
        (ii) the Redemption Date or (iii) the time at which such Rights are
        exchanged as provided in Section 24 hereof.

               (c) The Purchase Price for each one one-hundredth of a
        Preferred Share purchasable pursuant to the exercise of a Right shall
        initially be $70.00, 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
        Section 7(d) below.

               (d) 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

                                    - 15 -

<PAGE>

        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 Common Shares of the Company and/or
        Preferred Shares certificates for the number of Common Shares of the
        Company and/or Preferred Shares to be purchased and the Company
        hereby irrevocably authorizes and directs its 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 with the depositary
        agent) and the Company hereby authorizes and directs the 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 and (iv) when appropriate, after receipt,
        deliver such cash to or upon the order of the registered holder of
        such Right Certificate.

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

                                    - 16 -

<PAGE>

        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, if
surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Company.

        Section 9.    Availability of Preferred Shares.

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

               (b) In the event that there shall not be sufficient Preferred
        Shares issued but not outstanding or authorized but unissued to
        permit the exercise or exchange of Rights in accordance with Section
        11 or 24 hereof, as the case may be, the Company covenants and

                                    - 17 -

<PAGE>

        agrees that it will take all such action as may be necessary to
        authorize additional Preferred Shares for issuance upon the exercise
        or exchange of Rights pursuant to Section 11 or 24 hereof, as the
        case may be; provided, however, that if the Company is unable to
        cause the authorization of additional Preferred Shares, then the
        Company shall, or in lieu of seeking any such authorization, the
        Company may, to the extent necessary and permitted by applicable law
        and any agreements or instruments in effect prior to the Distribution
        Date to which it is a party, (i) upon surrender of a Right, pay cash
        equal to the Purchase Price in lieu of issuing Preferred Shares and
        requiring payment therefor, (ii) upon due exercise of a Right and
        payment of the Purchase Price for each Preferred Share as to which
        such Right is exercised, issue equity securities having a value equal
        to the value of the Preferred Shares which otherwise would have been
        issuable pursuant to Section 11 or 24 hereof, which value shall be
        determined by a nationally recognized investment banking firm
        selected by the Board of Directors of the Company or (iii) upon due
        exercise of a Right and payment of the Purchase Price for each
        Preferred Share as to which such Right is exercised, distribute a
        combination of Preferred Shares, cash and/or other equity and/or debt
        securities having an aggregate value equal to the value of the
        Preferred Shares which otherwise would have been issuable pursuant to
        Section 11 or 24 hereof, which value shall be determined by a
        nationally recognized investment banking firm selected by the Board
        of Directors of the Company. To the extent that any legal or
        contractual restrictions (pursuant to agreements or instruments in
        effect prior to the Distribution Date to which it is a party) prevent
        the Company from paying the full amount payable in accordance with
        the foregoing sentence, the Company shall pay to holders of the
        Rights as to which such payments are being made all amounts

                                    - 18 -

<PAGE>

        which are not then restricted on a pro rata basis as such payments
        become permissible under such legal or contractual restrictions until
        such payments have been paid in full.

               (c) So long as the Common Shares of the Company and/or
        Preferred Shares issuable and deliverable upon the exercise of the
        Rights may be listed or traded on any national securities exchange or
        automated quotation system, the Company shall use its best efforts to
        cause, from and after such time as the Rights become exercisable, all
        Common Shares of the Company and/or Preferred Shares reserved for
        such issuance to be listed on such exchange or automated quotation
        system upon official notice of issuance upon such exercise.

               (d) The Company shall use its best efforts to (i) file, as
        soon as practicable following the earliest date after the first
        occurrence of a Flip-In Event, a registration statement under the Act
        with respect to the securities purchasable upon exercise of the
        Rights on an appropriate form and (ii) cause such registration
        statement to become effective (with a prospectus at all times meeting
        the requirements of the Act) until the earlier of (A) the date as of
        which the Rights are no longer exercisable for such securities and
        (B) the date of the expiration of the Rights. The Company will also
        take such action as may be appropriate under, or to ensure compliance
        with, the securities or "blue sky" laws of the various states in
        connection with the exercisability of the Rights. The Company may
        temporarily suspend, for a period of time not to exceed ninety (90)
        days after the date set forth in clause (i) of the first sentence of
        this Section 9(d), the exercisability of the Rights in order to
        prepare and file such registration statement and permit it to become
        effective. The Company will notify the Rights Agent of any such
        suspension. Upon any such suspension, the Company shall issue a
        public announcement stating that the exercisability of the Rights has
        been temporarily

                                    - 19 -

<PAGE>

        suspended, as well as a public announcement at such time as the
        suspension is no longer in effect. In addition, if the Company shall
        determine that a registration statement is required following the
        Distribution Date, the Company may temporarily suspend the
        exercisability of the Rights until such time as a registration
        statement has been declared effective. Notwithstanding any provision
        of this Agreement to the contrary, the Rights shall not be
        exercisable in any jurisdiction if the exercise thereof shall not be
        permitted under applicable law.

               (e) From and after the Distribution Date, 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 Common Shares of the Company and/or Preferred Shares 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
        Common Shares of the Company and/or Preferred Shares in a name other
        than that of, the registered holder of the Right Certificate
        evidencing Rights surrendered for exercise or to issue or to deliver
        any certificates or depositary receipts for Common Shares of the
        Company and/or 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.

        Section 10. Preferred Shares Record Date. Each Person in whose name
any certificate for Common Shares of the Company and/or Preferred Shares is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Common Shares of the

                                    - 20 -

<PAGE>

Company and/or Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the transfer books of the
Company relating to the Common Shares of the Company and/or Preferred Shares
are closed, such Person shall be deemed to have become the record holder of
such shares on, and such certificate shall be dated, the next succeeding day
on which such transfer books are open.

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

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

                                    - 21 -

<PAGE>

               when the Preferred Shares transfer books of the Company were
               open, such Person would have owned upon such exercise and been
               entitled to receive by virtue of such dividend, subdivision,
               combination or reclassification; provided, however, that in no
               event shall the consideration to be paid upon the exercise of
               one Right be less than the aggregate par value of the shares
               of capital stock of the Company issuable upon exercise of one
               Right. If an event occurs which would require an adjustment
               under both this Section 11(a)(i) and Section 11(a)(ii) hereof,
               the adjustment provided for in this Section 11(a)(i) shall be
               in addition to and shall be made prior to any adjustment
               required pursuant to Section 11(a)(ii) hereof.

                      (ii) Subject to Sections 23 and 24 of this Agreement,
               in the event any Person becomes an Acquiring Person (the
               "Flip-In Event"), each holder of a Right shall thereafter have
               a right to receive, upon exercise thereof at a price equal to
               the then current Purchase Price multiplied by the number of
               one one-hundredths of a Preferred Share for which a Right is
               then exercisable, in accordance with the terms of this
               Agreement and in lieu of Preferred Shares, such number of
               Common Shares of the Company as shall equal the result
               obtained by (A) multiplying the then current Purchase Price by
               the number of one one-hundredths of a Preferred Share for
               which a Right is then exercisable and (B) dividing that
               product by 50% of the then "current per share market price" of
               the Common Shares of the Company 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, except as permitted by Section 23 hereof,
               take any action which would eliminate or diminish

                                    - 22 -

<PAGE>

               the benefits intended to be afforded by this Agreement or the
               benefits intended to be afforded by the Rights.

                      From and after the occurrence of a Flip-In Event, any
               Rights (1) that are or were acquired or beneficially owned by
               any Acquiring Person (or any Associate or Affiliate of such
               Acquiring Person), (2) transferred to a transferee by an
               Acquiring Person (or of any such Associate or Affiliate) who
               becomes such a transferee after the Acquiring Person becomes
               such or (3) transferred to a transferee of an Acquiring Person
               (or of any such Associate or Affiliate) who becomes such a
               transferee prior to or concurrently with the Acquiring Person
               becoming such and receives such Rights pursuant to either (x)
               a transfer (whether or not for consideration) from the
               Acquiring Person to holders of equity interests in such
               Acquiring Person or to any Person with whom the Acquiring
               Person has any continuing agreement, arrangement or
               understanding regarding the transferred Rights or (y) a
               transfer which the Board of Directors of the Company has
               determined is part of a plan, arrangement or understanding
               which has a primary purpose or effect the avoidance of this
               second paragraph of Section 11(a)(ii) shall be void and any
               holder and/or subsequent holder of such Rights shall
               thereafter have no right to exercise such Rights under any
               provision of this Agreement or to exercise any rights under
               this Agreement with respect to such Rights. The Company shall
               use all reasonable efforts to insure that the provisions of
               this Section 11(a)(ii) and Section 4(b) hereof are complied
               with, but shall have no liability to any holder of Right
               Certificates or other Person as a result of its failure to
               make any determination with respect to an Acquiring Person or
               its Affiliates, Associates or transferees hereunder. No Right
               Certificate shall be issued

                                    - 23 -

<PAGE>

               pursuant to Section 3 hereof that represents Rights
               beneficially owned by an Acquiring Person whose Rights would
               be void pursuant to the second 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
               second 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 second preceding sentence shall
               be cancelled.

                      (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 Section 11(a)(ii) hereof (the
               difference between the number of Common Shares of the Company
               issuable upon the full exercise of the Rights and the actual
               number of Common Shares available for issuance at such time
               being referred to herein as the "Adjustment Shares"), the
               Company shall, to the extent permitted by applicable law and
               regulation: (A) determine the excess of (1) the value of the
               Common Shares of the Company issuable upon the exercise of a
               Right (the "Current Value") over (2) the Purchase Price (such
               excess to be referred to hereinafter as the "Spread"), and (B)
               with respect to each Right, make adequate provision to
               substitute for the Common Shares of the Company, upon payment
               of the applicable Purchase Price, (1) cash, (2) a reduction in
               the Purchase Price, (3) other equity securities of the Company
               (including, without limitation, shares, or units of shares, of
               preferred stock which the Board of Directors

                                            - 24 -

<PAGE>

               of the Company has deemed to have the same value as the Common
               Shares (such shares of preferred stock being referred to
               herein as "common share equivalents")), (4) debt securities of
               the Company, (5) other assets or (6) any combination of the
               foregoing, having an aggregate value equal to the Current
               Value as determined by the Board of Directors of the Company;
               provided, however, that if the Company shall not have made
               adequate provision to deliver value pursuant to clause (b)
               above within 30 days following the first occurrence of a
               Flip-In Event (the "Flip-In Trigger Date"), then the Company
               shall be obligated to deliver, upon the surrender for exercise
               of a Right and without requiring payment of the Purchase
               Price, Common Shares (to the extent available) and then, if
               necessary, cash, which shares and/or cash have an aggregate
               value equal to the Spread. If the Board of Directors of the
               Company determines in good faith that it is likely that
               sufficient additional Common Shares of the Company could be
               authorized for issuance upon exercise in full of the Rights,
               the 30-day period set forth above may be extended to the
               extent necessary, but no to more than 120 days after the
               Flip-In Trigger Date, in order that the Company may seek
               stockholder approval for the authorization of such additional
               shares (such period, as it may be extended, the "Substitution
               Period"). To the extent the Company determines that some
               action need be taken pursuant to the first and/or second
               sentences of this Section 11(a)(iii), the Company (x) shall
               provide, subject to Section 7(e) hereof, that such action
               shall apply uniformly to all outstanding Rights, and (y) may
               suspend the exercisability of the Rights until the expiration
               of the Substitution Period in order to seek any authorization
               of additional shares and/or to decide the appropriate form of
               distribution to be made pursuant to such first

                                    - 25 -

<PAGE>

               sentence and to determine the value thereof. In the event of
               any such suspension, the Company shall deliver a notice to the
               Rights Agent and issue a public announcement stating that the
               exercisability of the Rights has been temporarily suspended,
               as well as a notice to the Rights Agent and a public
               announcement at such time as the suspension is no longer in
               effect. For purposes of this Section 11(a)(iii), the value of
               the Common Shares of the Company shall be the current per
               share market price (as determined pursuant to Section 11(d)
               hereof) of the Common Shares of the Company on the Flip-In
               Trigger Date, and the value of any common share equivalent
               shall be deemed to have the same value as the Common Shares of
               the Company on such date.

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

                                    - 26 -

<PAGE>

        the aggregate initial conversion price of the convertible securities
        so to be offered) would purchase at such current per share 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. Preferred Shares owned by or
        held for the account of the Company shall not be deemed outstanding
        for the purpose of any such computation. Such adjustment shall be
        made successively whenever such a record date is fixed; and in the
        event that such rights, options or warrants are not so issued, the
        Purchase Price shall be adjusted to be the Purchase Price which would
        then be in effect if such record date had not been fixed.

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

                                    - 27 -

<PAGE>

        prior to such record date by a fraction, the numerator of which shall
        be the then current per share market price of the Preferred Shares on
        such record date, less the fair market value (as determined in good
        faith by the Board of Directors of the Company, whose determination
        shall be described in a statement filed with the Rights Agent) of the
        portion of the assets or evidences of indebtedness so to be
        distributed or of such subscription rights or warrants applicable to
        one Preferred Share and the denominator of which shall be such
        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.

                      (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, 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

                                    - 28 -

<PAGE>

               such case, the current per share market price shall be
               appropriately adjusted to reflect the current market price per
               share equivalent of such Security. The closing price for each
               day shall be the last sale price, regular way, or, in case no
               such sale takes place on such day, the average of the closing
               bid and asked prices, regular way, in either case as reported
               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 National Association of Securities Dealers,
               Inc. Automated Quotations System ("NASDAQ") or such other
               system then in use, or, if on any such date the Security is
               not quoted by any such organization, the average of the
               closing bid and asked prices as furnished by a professional
               market maker making a market in the Security selected by the
               Board of Directors 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

                                    - 29 -

<PAGE>

               method set forth in Section 11(d)(i) hereof. 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) hereof
               (appropriately adjusted to reflect any stock split, stock
               dividend or similar transaction occurring after the date
               hereof), multiplied by one hundred. If neither the Common
               Shares 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 one-millionth of a
        Preferred Share or one ten-thousandth of any other share or security
        as the case may be. Notwithstanding the first sentence of this
        Section 11(e), any adjustment required by this Section 11 shall be
        made no later than the earlier of (i) three years from the date of
        the transaction which requires such adjustment or (ii) the date of
        the expiration of the right to exercise any Rights.

               (f) If as a result of an adjustment made pursuant to Section
        11(a) hereof, the holder of any Right thereafter exercised shall
        become entitled to receive any shares of capital stock of the Company
        other than Preferred Shares, thereafter the number of such other
        shares

                                    - 30 -

<PAGE>

        so receivable upon exercise of any Right shall be subject to
        adjustment from time to time in a manner and on terms as nearly
        equivalent as practicable to the provisions with respect to the
        Preferred Shares contained in Sections 11(a) through (c) hereof,
        inclusive, and the provisions of Sections 7, 9, 10 and 13 hereof with
        respect to the Preferred Shares shall apply on like terms to any such
        other shares.

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

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

               (i) The Company may elect on or after the date of any
        adjustment of the Purchase Price to adjust the number of Rights, in
        substitution for any adjustment in the number of one one-hundredths
        of a Preferred Share purchasable upon the exercise of a Right. Each
        of the

                                    - 31 -

<PAGE>

        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 Distribution Date shall have occurred, shall
        be at least 10 days later than the date of the public announcement.
        If the Distribution Date shall have occurred, upon each adjustment of
        the number of Rights pursuant to this Section 11(i), the Company
        shall, as promptly as practicable, cause to be distributed to holders
        of record of Right Certificates on such record date Right
        Certificates evidencing, subject to Section 14 hereof, the additional
        Rights to which such holders shall be entitled as a result of such
        adjustment, or, at the option of the Company, shall cause to be
        distributed to such holders of record in substitution and replacement
        for the Right Certificates held by such holders prior to the date of
        adjustment, and upon surrender thereof, if required by the Company,
        new Right Certificates evidencing all the Rights to which such
        holders shall be entitled after such adjustment. Right Certificates
        so to be distributed shall be issued, executed and countersigned in
        the manner provided for herein and shall be registered in the names
        of the holders of record of Right Certificates on the record date
        specified in the public announcement.

                                    - 32 -

<PAGE>

               (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 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 Board of Directors of 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

                                    - 33 -

<PAGE>

        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 in Section 11(b) hereof, 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 date of this
        Agreement and prior to the Distribution Date, the Company shall (i)
        declare or pay any dividend on its Common Shares payable in Common
        Shares of the Company or (ii) effect a subdivision, combination or
        consolidation of its Common Shares (by reclassification or otherwise
        than by payment of dividends in Common Shares of the Company) into a
        greater or lesser number of its Common Shares, then in any such case
        (A) the number of one one-hundredths of a Preferred Share purchasable
        after such event upon proper exercise of each Right shall be
        determined by multiplying the number of one one-hundredths of a
        Preferred Share so purchasable immediately prior to such event by a
        fraction, the numerator of which is the number of Common Shares 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 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

                                    - 34 -

<PAGE>

        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, (b) file with the Rights Agent and
        with each transfer agent for the Common Shares or the Preferred
        Shares a copy of such certificate and (c) mail a brief summary
        thereof to each holder of a Right Certificate in accordance with
        Section 25 hereof.

        Section 13. Consolidation, Merger or Sale or Transfer of Assets or
        Earning Power.

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

                                    - 35 -

<PAGE>

        a Preferred Share for which a Right is then exercisable, in
        accordance with the terms of this Agreement and, in lieu of Preferred
        Shares, such number of Common Shares of the Principal Party (as such
        term is hereinafter defined) as shall equal the result obtained by
        (1) 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 (2) 50% of the then current
        per share market price of the Common Shares of the Principal Party
        (determined pursuant to Section 11(d) hereof) on the date of
        consummation of such consolidation, merger, sale or transfer; (B) the
        issuer of such Common Shares shall thereafter be liable for, and
        shall assume, by virtue of such consolidation, merger, sale or
        transfer, all the obligations and duties of the Company pursuant to
        this Agreement; (C) the term "Company" shall thereafter be deemed to
        refer to such Principal Party; and (D) such Principal Party shall
        take such steps (including, but not limited to, the reservation of a
        sufficient number of its Common Shares in accordance with Section 9
        hereof) in connection with such consummation as may be necessary to
        assure that the provisions hereof shall thereafter be applicable, as
        nearly as reasonably may be, in relation to the Common Shares
        thereafter deliverable upon the exercise of the Rights. The Company
        shall not consummate any such consolidation, merger, sale or transfer
        unless prior thereto the Company and such issuer shall have executed
        and delivered to the Rights Agent a supplemental agreement so
        providing and further providing that, as soon as practicable after
        the date of any such consolidation, merger or sale of assets, the
        issuer will:

                      (x) prepare and file a registration statement under the
               Act with respect to the Rights and the securities purchasable
               upon exercise of the Rights on an appropriate form, and will
               use its best efforts to cause such registration statement to

                                    - 36 -

<PAGE>

               (1) become effective as soon as practicable after such filing
               and (2) remain effective (with a prospectus at all times
               meeting the requirements of the Act) until the Expiration
               Date; and

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

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

               (b)    "Principal Party" shall mean:

                      (i) In the case of any transaction described in clause
               (i) or (ii) of the first sentence of Section 13(a) hereof, the
               Person that is the issuer of any securities into which Common
               Shares of the Company are converted in such transaction, or if
               there is more than one issuer, the issuer of the Common Shares
               with the greatest aggregate market value, and if no securities
               are so issued, the Person that is the other party to such
               transaction, or if there is more than one such Person, the
               Person having Common Shares with the greatest aggregate market
               value; and

                      (ii) In the case of any transaction described in clause
               (iii) of the first sentence of Section 13(a) hereof, the
               Person that is the party receiving the greatest portion of the
               assets or earning power transferred pursuant to such
               transaction or

                                            - 37 -

<PAGE>

               transactions; provided, however, that in any such case, (A) if
               the Common Shares of such Person are not at such time and have
               not been continuously over the preceding twelve-month period
               registered under Section 12 of the Exchange Act, and such
               Person is a direct or indirect Subsidiary of any Person the
               Common Shares of which are and have been so registered,
               "Principal Party" shall refer to such other Person; and (B) in
               case such Person is a Subsidiary, directly or indirectly, of
               more than one Person, the Common Shares of two or more of
               which are and have been so registered, "Principal Party" shall
               refer to whichever of such Persons is the issuer of the Common
               Shares having the greatest aggregate market value.

        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

                                    - 38 -

<PAGE>

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

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

                                    - 39 -

<PAGE>

        market value of one Preferred Share. For the purposes of this Section
        14(b), the current market value of a Preferred Share shall be the
        closing price of a Preferred Share (as determined pursuant to the
        second sentence of Section 11(d)(i) hereof) for the Trading Day
        immediately prior to the date of such exercise.

               (c) The holder of a Right by the acceptance of the Right
        expressly waives 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
Agreement, except 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 Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person
subject to, this Agreement.

                                    - 40 -

<PAGE>

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

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

               (b) 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;

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

               (d) Notwithstanding anything in this Agreement to the
        contrary, neither the Company nor the Rights Agent shall have any
        liability to any holder of a Right or other Person as a result of the
        Company's or Rights Agent's inability to perform any of its
        obligations under this Agreement by reason of any preliminary or
        permanent injunction or other order, decree or ruling issued by a
        court of competent jurisdiction or by a governmental, regulatory or
        administrative agency or commission, or any statute, rule, regulation
        or executive order promulgated or enacted by any governmental
        authority, prohibiting or otherwise restraining performance of such
        obligation; provided, however, the

                                    - 41 -

<PAGE>

        Company must use its best efforts to have any such order, decree or
        ruling lifted or otherwise overturned as soon as possible.

        Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends 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

        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 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 Agreement,
including the costs and expenses of defending against any claim of liability
in the premises.

                                    - 42 -

<PAGE>

        The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any 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 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 Agreement any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the

                                    - 43 -

<PAGE>

name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.

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

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

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

               (b) Whenever in the performance of its duties under this
        Agreement the Rights Agent shall deem it necessary or desirable that
        any fact or matter 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 Executive Vice President, the
        Treasurer or the Secretary of the Company and delivered to the Rights
        Agent; and such

                                    - 44 -

<PAGE>

        certificate shall be full authorization to the Rights Agent for any
        action taken or suffered in good faith by it under the provisions of
        this Agreement in reliance upon such certificate.

               (c) The Rights Agent shall be liable hereunder 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 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 Agreement or the execution and
        delivery hereof (except the due execution hereof by the Rights Agent)
        or in respect of the validity or execution of any Right Certificate
        (except its countersignature thereof); nor shall it be responsible
        for any breach by the Company of any covenant or condition contained
        in this Agreement or in any Right Certificate; nor shall it be
        responsible for any change in the exercisability of the Rights
        (including the Rights becoming 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 hereof, or the ascertaining of the existence of facts that
        would require any such change or adjustment (except with respect to
        the exercise of Rights evidenced by Right Certificates after actual
        notice that such change or adjustment is required); nor shall it by
        any act hereunder be deemed to make any representation or warranty as
        to the authorization or reservation of any Preferred Shares to be
        issued pursuant to this Agreement or any Right Certificate or as to
        whether any Preferred Shares will, when issued, be validly authorized
        and issued, fully paid and nonassessable.

                                    - 45 -

<PAGE>

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

               (g) The Rights Agent is hereby authorized and directed to
        accept instructions with respect to the performance of its duties
        hereunder from any one of the Chairman of the Board, the Chief
        Executive Officer, the President, any Executive 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.

               (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
        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.

                                    - 46 -

<PAGE>

        Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares of the Company or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Board of Directors of the Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' prior written notice,
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 his Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of The Commonwealth
of Massachusetts (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the
State of Michigan) in good standing, having an office in the State of
Michigan, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50 million. After
appointment, the successor Rights Agent shall be vested with

                                    - 47 -

<PAGE>

the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares or Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.

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

        Section 23.   Redemption.

               (a) The Board of Directors of the Company may at its option,
        at any time prior to the earlier of (i) the close of business on the
        tenth Business Day following the date on which any Person becomes an
        Acquiring Person (or if such date shall have occurred prior to the
        Record Date, the close of business on the tenth Business Day
        following the Record Date) or (ii) the Final Expiration Date, redeem
        all but not less than all the then outstanding Rights at a redemption
        price of $.001 per Right, appropriately adjusted to reflect any stock
        split,

                                    - 48 -

<PAGE>

        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 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 Section
        23(a) hereof, and without any further action and without any notice,
        the right to exercise the Rights will terminate and the only right
        thereafter of the holders of Rights shall be to receive the
        Redemption Price. The Company shall promptly give public notice of
        any such redemption; provided, however, that the failure to give, or
        any defect in, any such notice shall not affect the validity of such
        redemption. Within 10 days after such action of the Board of
        Directors 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. Each such notice of redemption will state the
        method by which the payment of the Redemption Price will be made.
        Neither the Company nor any of its Affiliates or Associates may
        redeem, acquire or purchase for value any Rights at any time in any
        manner other than that specifically set forth in this Section 23 or
        in Section 24 hereof and other than in connection with the purchase
        of Common Shares prior to the Distribution Date.

                                    - 49 -

<PAGE>

        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 such 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").
        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 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 Section
        24(a) hereof 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

                                    - 50 -

<PAGE>

        books of the Rights Agent. Any notice which is mailed in the manner
        herein provided shall be deemed given, whether or not the holder
        receives the notice. Each such notice of exchange will state the
        method by which the exchange of the Common Shares 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 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 such Preferred Shares or
        fraction thereof 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
        its Common Shares or to distribute certificates which evidence
        fractional Common Shares of the Company. 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 of the Company would otherwise be issuable
        an amount in cash equal to the same

                                    - 51 -

<PAGE>

        fraction of the current market value of a whole Common Share of the
        Company. For the purposes of this Section 24(d), the current market
        value of a whole Common Share of the Company shall be the closing
        price of a Common Share of the Company (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) If at any time subsequent to the Shares Acquisition Date,
        the Company shall propose (i) to pay any dividend payable in stock of
        any class to the holders of the Preferred Shares or to make any other
        distribution to the holders of the Preferred Shares (other than a
        regular quarterly cash dividend), (ii) to offer to the holders of the
        Preferred Shares rights or warrants to subscribe for or to purchase
        any additional Preferred Shares or shares of stock of any class or
        any other securities, rights or options, (iii) to effect any
        reclassification of the Preferred Shares (other than a
        reclassification involving only the subdivision of outstanding
        Preferred Shares), (iv) to effect any consolidation or merger into or
        with, or to effect any sale or other transfer (or to permit one or
        more of its Subsidiaries to effect any sale or other transfer), in
        one or more transactions, of 50% or more of the assets or earning
        power of the Company and its Subsidiaries (taken as a whole) to, any
        other Person, (v) to effect the liquidation, dissolution or winding
        up of the Company or (vi) to declare or pay any dividend on the
        Common Shares of the Company payable in its Common Shares 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 its Common Shares), then, in each such case,
        the Company shall give to each holder of a Right Certificate, in
        accordance with Section 26 hereof, a notice of such proposed action,
        which shall specify the record date

                                    - 52 -

<PAGE>

        for the purposes of such stock dividend, or distribution of rights or
        warrants, or the date on which such reclassification, consolidation,
        merger, sale, transfer, liquidation, dissolution or winding up is to
        take place and the date of participation therein by the holders of
        the 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 a Flip-In Event shall occur, then the Company
        shall as soon as practicable thereafter give to each holder of a
        Right Certificate, in accordance with Section 26 hereof, a notice of
        the occurrence of such event, which notice shall describe such event
        and the consequences of such event to holders of Rights under Section
        11(a)(ii) hereof.

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

               Agree Realty Corporation
               31850 Northwestern Highway
               Farmington Hills, Michigan  48334

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

                                    - 53 -

<PAGE>

Agent shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:

               BankBoston, N.A.
               c/o EquiServe Limited Partnership
               150 Royall Street
               Canton, MA  02021
               Attention:  Client Administration

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

        Section 27. Supplements and Amendments. The Board of Directors of the
Company may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any ambiguity,
to correct or supplement any provision contained 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 Board of Directors of
the Company may deem necessary or desirable, any such supplement or amendment
to be evidenced by a writing signed by the Company and the Rights Agent;
provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person); and
provided further, however, that this Agreement may not be supplemented or
amended to lengthen (a) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable or (b) any other
time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of
Rights. Upon the delivery of a certificate from an appropriate officer of the

                                    - 54 -

<PAGE>

Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment; provided, however, that the Rights Agent may,
but shall not be obligated to, enter into any such supplement or amendment
which affects its own rights, duties or immunities under this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made that (i) reduces the Redemption Price
(except as required hereunder by appropriate adjustment to reflect any stock
split, stock dividend or similar transaction occurring after the date of this
Agreement) or (ii) provides for an earlier Final Expiration Date.

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

        Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation 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 Agreement;
but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares of the
Company).

        Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant

                                    - 55 -

<PAGE>

or restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of
such determination by the Board of Directors.

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

        Section 34. Determinations and Actions by the Board of Directors. The
Board of Directors of the Company shall have the exclusive power and
authority to administer this 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 necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (a)
interpret the provisions of this Agreement and (b) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend
this Agreement). All such actions, calculations, interpretations and
determinations (including, for the

                                    - 56 -

<PAGE>

purposes of clause (ii) below, all omissions with respect to the foregoing)
which are done or made by the Board of Directors of the Company in good faith
and in accordance with the provisions of this Agreement, shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
rights and all other parties, and (ii) not subject the Board to any liability
to the holder of the Rights.

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

By:  /s/ Kenneth Howe                    By:  /s/ Richard Agree
    ------------------------                 --------------------------
     Kenneth Howe                             Richard Agree
     Chief Financial Officer                  President

Attest:                                  BANKBOSTON, N.A.

By:  /s/ John Muha                       By:  /s/ Katherine S. Anderson
    ------------------------                 --------------------------
     John Muha                                Katherine S. Anderson
     Account Manager                          Administrative Manager

                                    - 57 -

<PAGE>

                                                                    Exhibit A

                                     FORM
                                      OF
                      ARTICLES SUPPLEMENTARY CLASSIFYING
                         AND DESIGNATING A SERIES OF
                      PREFERRED STOCK AS SERIES A JUNIOR
                        PARTICIPATING PREFERRED STOCK
                         AND FIXING DISTRIBUTION AND
                 OTHER PREFERENCES AND RIGHTS OF SUCH SERIES

        Agree Realty Corporation, a Maryland corporation, having its
principal office in the State of Maryland in the City of Baltimore (the
"Corporation"), hereby certifies to the State of Department of Assessments
and Taxation of Maryland that:

        Pursuant to authority conferred upon the Board of Directors by the
Articles of Incorporation, as amended (the "Articles"), and Bylaws of the
Corporation, the Board of Directors adopted resolutions authorizing the
creation and issuance of a series of __________ shares of preferred stock,
par value $.0001 per share designated as "Series A Junior Participating
Preferred Stock" with preferences and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption of the shares of such series as follows:

        Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be _____________________ Thousand (______________).
Such number of shares may be increased or decreased by resolution of the
Board of Directors; provided, that no decrease shall reduce the number of
shares of Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the

                                     A-1

<PAGE>

conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

        Section 2.    Dividends and Distributions.

               (a) Subject to the rights of the holders of any shares of any
        series of Preferred Stock (or any similar stock) ranking prior and
        superior to the Series A Preferred Stock with respect to dividends,
        the holders of shares of Series A Preferred Stock, in preference to
        the holders of Common Stock, par value $0.0001 per share (the "Common
        Stock"), of the Corporation, and of any other junior stock, shall be
        entitled to receive, when, as and if declared by the Board of
        Directors out of funds legally available for the purpose, quarterly
        dividends payable in cash on the first day of March, June, September
        and December in each year (each such date being referred to herein as
        a "Quarterly Dividend Payment Date"), commencing on the first
        Quarterly Dividend Payment Date after the first issuance of a share
        or fraction of a share of Series A Preferred Stock, in an amount per
        share (rounded to the nearest cent) equal to the greater of (i) One
        Dollar and No/100 ($1.00) or (ii) subject to the provision for
        adjustment hereinafter set forth, 100 times the aggregate per share
        amount of all cash dividends, and 100 times the aggregate per share
        amount (payable in kind) of all non-cash dividends or other
        distributions, other than a dividend payable in shares of Common
        Stock or a subdivision of the outstanding shares of Common Stock (by
        reclassification or otherwise), declared on the Common Stock since
        the immediately preceding Quarterly Dividend Payment Date or, with
        respect to the first Quarterly Dividend Payment Date, since the first
        issuance of any share or fraction of a share of Series A Preferred
        Stock. In the event the Corporation shall at any time declare or pay
        any dividend on the Common Stock payable in shares of Common Stock,
        or effect a subdivision or

                                     A-2

<PAGE>

        combination or consolidation of the outstanding shares of Common
        Stock (by reclassification or otherwise than by payment of a dividend
        in shares of Common Stock) into a greater or lesser number of shares
        of Common Stock, then in each such case the amount to which holders
        of shares of Series A Preferred Stock were entitled immediately prior
        to such event under clause (ii) of the preceding sentence shall be
        adjusted by multiplying such amount by a fraction, the numerator of
        which is the number of shares of Common Stock outstanding immediately
        after such event and the denominator of which is the number of shares
        of Common Stock that were outstanding immediately prior to such
        event.

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

               (c) Dividends shall begin to accrue and be cumulative on
        outstanding shares of Series A Preferred Stock from the Quarterly
        Dividend Payment Date next preceding the date of issue of such
        shares, unless the date of issue of such shares is prior to the
        record date for the first Quarterly Dividend Payment Date, in which
        case dividends on such shares shall begin to accrue from the date of
        issue of such shares, or unless the date of issue is a Quarterly
        Dividend Payment Date or is a date after the record date for the
        determination of holders of shares of Series A Preferred Stock
        entitled to receive a quarterly dividend and before such

                                     A-3

<PAGE>

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

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

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

                                     A-4

<PAGE>

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

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

        Section 4. Certain Restrictions.

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

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

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

                                     A-5

<PAGE>

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

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

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

        Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of

                                     A-6

<PAGE>

Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Incorporation, or in any other Articles
Supplementary creating a series of Preferred Stock or any similar stock or as
otherwise required by law.

        Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (a) to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (b) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except distributions made ratably on
the Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (a) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding

                                     A-7

<PAGE>

immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

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

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

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

                                     A-8

<PAGE>

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

        IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its President this _______ day of
______________, 1998.

                                                 AGREE REALTY CORPORATION

                                                 By:
                                                     --------------------
                                                       Richard Agree
                                                       President

                                     A-9

<PAGE>

                                                                    Exhibit B

                          Form of Right Certificate
Certificate No. R-                                               ______ Rights
CUSIP ________

        NOT EXERCISABLE AFTER ___________________, 2008, OR EARLIER IF
        REDEEMED OR EXCHANGED. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001
        PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
        AGREEMENT PURSUANT TO WHICH THIS RIGHT CERTIFICATE HAS BEEN ISSUED.
        UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
        ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
        (AS SUCH TERMS AND DEFINITIONS IN THE RIGHTS AGREEMENT) OR ANY
        SUBSEQUENT HOLDER WILL BECOME NULL AND VOID.

                              Right Certificate

                           AGREE REALTY 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 __________________, 1998 (the "Rights
Agreement"), between Agree Realty Corporation, a Maryland corporation (the
"Company"), and, ____________________, 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, New York] time, on __________________, 2008, 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 Preferred Stock, par value $.0001 per share (the
"Preferred Shares"), of the Company, at a purchase price of $____________ 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

                                     B-1

<PAGE>

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 ________________, based on the Preferred
Shares as constituted at 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 above-mentioned offices of the Rights Agent.
]
        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 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 Certificate (i) may be redeemed by the Company at a
redemption price of $.001 per Right or (ii) may be

                                     B-2

<PAGE>

exchanged in whole or in part for Preferred Shares or shares of the Company's
common stock, par value $0.0001 per share.

        No fractional Preferred Shares or shares of the Company's common
stock will be issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions of Preferred Shares 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 or exchange hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in
the Rights Agreement.

                                     B-3

<PAGE>

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

        WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ___________________, 199__.

ATTEST:                                          AGREE REALTY CORPORATION

_______________________________                  ___________________________

Countersigned:

_______________________________

By
   ____________________________
       Authorized Signature

                                     B-4

<PAGE>

                  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, address and taxpayer identification number or social
               security number (as applicable) 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.

_____________________________________________________________________________

                                     B-5

<PAGE>

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 _____________________

                                     B-6

<PAGE>

Form of Reverse Side of Right Certificate -- continued

                         FORM OF ELECTION TO PURCHASE
                (To be executed if holder desires to exercise
                Rights represented by the Right Certificate.)

To:     AGREE REALTY CORPORATION

The undersigned hereby irrevocably elects to exercise __________ Rights

represented by this Right Certificate to purchase the securities issuable

upon the exercise of such Rights and requests that certificates for such

securities be issued in the name of:

        Please insert social security or other identifying number

_____________________________________________________________________________
                       (Please print name and address)

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

Please insert social security or other identifying number

_____________________________________________________________________________
                       (Please print name and address)

_____________________________________________________________________________

The undersigned elects to purchase (check one) _______ Preferred Shares or
______ Common Shares of the Company.

Dated: _____________________ , ___

                                     B-7

<PAGE>
                                          _________________________________
                                          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.

                                     B-8

<PAGE>

Form of Reverse Side of Right Certificate -- continued

_____________________________________________________________________________

        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.

                                     B-9

<PAGE>

                                                                    Exhibit C

                        SUMMARY OF RIGHTS TO PURCHASE
                               PREFERRED SHARES

        On __________________, 1998, the Board of Directors of Agree Realty
Corporation (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par
value $0.0001 per share (the "Common Shares"), of the Company. The dividend
is payable to all holders of record of Common Shares as of the close of
business on _____________________, 1998 (or such earlier date as may be
determined by the Board of Directors of the Company (the "Record Date"). Each
Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock,
par value $0.0001 per share (the "Preferred Shares"), of the Company at a
price of $__________ per one one-hundredth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement) between
the Company and ____________________________________, 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") has 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

                                     C-1

<PAGE>

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 called the "Distribution Date"), the Rights will
be evidenced by the certificates representing Common Shares with a copy of
this Summary of Rights attached thereto.

        The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Shares. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Share
certificates 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 earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for Common
Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of business
on the Distribution Date and thereafter, such separate Right Certificates
alone will evidence the Rights.

        The Rights are not exercisable until the Distribution Date. The
Rights will expire on ______________, 2008 (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.

        At any time following the Distribution Date, Rights (other than
Rights owned by an Acquiring Person and the Acquiring Person's affiliates and
associates, which will have become void)

                                     C-2

<PAGE>

may be exercised (subject to their earlier termination, expiration or
exchange) to acquire, in lieu of Preferred Shares, at the then current
Purchase Price of the Right, that number of Common Shares (or if there are
insufficient Common Shares, Preferred Shares or fractions thereof) which at
such time will have a market value of two times the Purchase Price of the
Right.

        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 or assets (excluding regular periodic cash dividends paid out
of earnings or retained earnings or dividends payable in Preferred Shares) or
of subscription rights 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 equal to the greater of (i) One Dollar and No/100
($1.00) per share or (ii) 100 times the dividend declared per Common Share.
In the event of liquidation, the holders of the Preferred Shares will be
entitled to

                                     C-3

<PAGE>

a minimum preferential liquidation payment of $100 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 antidilution 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 (other
than an Acquiring Person and the affiliates and associates of such Acquiring
Person, whose Rights will have become void) will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which
at the time of such transaction will have a market value of two times the
Purchase 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 or the affiliates and associates
of such Acquiring Persons (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common Shares having a
market value of two times the Purchase 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 50% or more of the
outstanding Common Shares, the Board

                                     C-4

<PAGE>

of Directors of the Company may exchange the Rights (other than Rights owned
by such person or group and their respective affiliates and associates 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 or within 10 business days following the
acquisition by a person or group of affiliated or associated persons of
beneficial ownership of [15%] or more of the outstanding Common Shares, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.001 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 of the Company in its sole discretion
may establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.

        The Board of Directors may supplement or amend the Rights Agreement
without the approval of the holders of Rights. From and after such time as
any person or group of affiliated or associated persons become an Acquiring
Person, the Rights Agreement may not be amended in any manner which would
adversely affect the interests of the holders of the Rights (other than the

                                     C-5

<PAGE>

Acquiring Person or an affiliate or associated of an Acquiring Person). The
terms of the Rights may not be amended to (i) reduce the Redemption Price
(except as required by antidilution provisions) or (ii) provide for an
earlier Final Expiration Date.

        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. Pursuant to the Rights Agreement,
certain actions (e.g. redeeming outstanding Rights, amending the Rights
Agreement. etc.) may only be made with the approval of the Board of Directors
of the Company.

        A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A. A
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.

                                     C-6

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