Document:

Exhibit

Exhibit 4.1

 
Execution Version
Amended and Restated
Rights Agreement
Dated Effective as of April 12, 2018,
By and Between
KB Home
and
Computershare Inc.,
as Rights Agent
    

    

	
	
	TABLE OF CONTENTS

		
	1.
	Certain Definitions                                        

		
	2.
	Appointment of Rights Agent                                    

		
	3.
	Issue of Right Certificates                                        

		
	4.
	Form of Right Certificates                                        

		
	5.
	Countersignature and Registration                                    

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

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

		
	8.
	Cancellation and Destruction of Right Certificates                                     

		
	9.
	Company Covenants Concerning Securities and Rights                                 

		
	10.
	Record Date                                                     

		
	11.
	Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights                     

		
	12.
	Certificate of Adjusted Purchase Price or Number of Securities                                 

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

		
	14.
	Fractional Rights and Fractional Securities                                         

		
	15.
	Rights of Action                                                     

		
	16.
	Agreement of Rights Holders                                                       

		
	17.
	Right Certificate Holder Not Deemed a Stockholder                                     

		
	18.
	Concerning the Rights Agent                                             

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

		
	20.
	Duties of Rights Agent                                                 

		
	21.
	Change of Rights Agent                                                                      

		
	22.
	Issuance of New Right Certificates                                             

		
	23.
	Redemption                                                               

		
	24.
	Exchange                                

		
	25.
	Notice of Certain Events    

		
	26.
	Notices    

		
	27.
	Supplements and Amendments    

		
	28.
	Successors; Certain Covenants

		
	29.
	Benefits of This Agreement    

		
	30.
	Governing Law    

		
	31.
	Severability    

		
	32.
	Descriptive Headings, Etc.    

		
	33.
	Determinations and Actions by the Board    

		
	34.
	Effective Time    

		
	35.
	Force Majeure    

		
	36.
	Counterparts    

Exhibit A    
Exhibit B    

AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement, dated effective as of April 12, 2018 (this “Agreement”), is made and entered into by and between KB Home, a Delaware corporation, and Computershare Inc., a Delaware corporation, as Rights Agent.
RECITALS
WHEREAS, the Company (as hereinafter defined) and a predecessor of the Rights Agent previously entered into the Rights Agreement, dated as of January 22, 2009 (the “Original Rights Agreement”);  
WHEREAS, in connection with the Original Rights Agreement, on January 22, 2009, the Board of Directors of the Company authorized and declared a dividend distribution of one right (a “Right”) for each share of Common Stock, par value $1.00 per share, of the Company (a “Common Share”) outstanding as of the Close of Business (as hereinafter defined) on March 5, 2009 (the “Record Date”), each Right initially representing the right to purchase one one-hundredth of a Preferred Share (as hereinafter defined), on the terms and subject to the conditions herein set forth, and further authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each Common Share issued or delivered by the Company (whether originally issued or delivered from the Company’s treasury) after the Record Date but prior to the earlier of the Distribution Date (as hereinafter defined) and the Expiration Date (as hereinafter defined), or as provided in Section 22; 
WHEREAS, the Company desires to amend and restate the Original Rights Agreement to extend its term to the Expiration Date (as hereinafter defined) and to make related changes; and
WHEREAS, on April 12, 2018, the Company’s stockholders approved amending and restating the Original Rights Agreement, as set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the parties hereto hereby agree as follows:
1.Certain Definitions.  For purposes of this Agreement, the following terms have the meanings indicated:
(a)“Acquiring Person” means any Person (other than the Company, any Related Person or any Exempt Person) who or which, together with all Affiliates and Associates of such Person, is or becomes the Beneficial Owner of 4.9% or more of the then-outstanding Common Shares; provided, however, that (i) any Person who would otherwise qualify as an Acquiring Person as of the Effective Time will not be deemed to be an Acquiring Person for any purpose of this Agreement unless and until such time as (A) such Person or any Affiliate or Associate of such Person thereafter becomes the Beneficial Owner of any additional Common Shares, other than (1) pursuant to any agreement or regular-way purchase order for Common Shares that is in effect on or prior to the Effective Time and consummated in accordance with its terms after the Effective Time or (2) as a result of a stock dividend, rights dividend, stock split or similar transaction effected by the Company in which all holders of Common Shares are treated equally, or (B) any other Person who is the Beneficial Owner of Common Shares becomes an Affiliate or Associate of such Person, provided that the exclusion in this clause (i) shall cease to apply with respect to any Person at such time as such Person, together with all Affiliates and Associates of such Person, ceases to Beneficially Own 4.9% or more of the then-outstanding Common Shares, (ii) a Person will not be deemed to have become an Acquiring Person solely as a result of a reduction in the number of Common Shares outstanding unless and until such time as (A) such Person or any Affiliate or Associate of such Person thereafter becomes the Beneficial Owner of any additional Common Shares, other than as a result of a stock dividend, rights dividend, stock split or similar transaction effected by the Company in which all holders of Common Shares are treated equally, or (B) any other Person who is the Beneficial Owner of Common Shares thereafter becomes an Affiliate or Associate of such Person, and (iii) a Person will not be deemed to have become an Acquiring Person solely as a result of an Exempt Transaction unless and until such time as (A) such Person or any Affiliate or Associate of such Person thereafter becomes the Beneficial Owner of any additional Common Shares, other than as a result of a stock dividend, rights dividend, stock split or similar transaction effected by the Company in which all holders of Common Shares are treated equally, or (B) any other Person who is the Beneficial Owner of Common Shares thereafter becomes an Affiliate or Associate of 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 as promptly as practicable or agrees in writing with the Company to divest, a sufficient number of Common Shares so that such Person would no longer be 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)“Affiliate” and “Associate” will have the respective meanings ascribed to such terms in Rule 12b‐2 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Agreement, and to the extent not included within the foregoing clause of this Section 1(b), will also include, with respect to any Person, any other Person (other than a Related Person or an Exempt Person) whose Common Shares would be deemed constructively owned by such first Person, owned by a single “entity” as defined in Section 1.382-3(a)(1) of the Treasury Regulations, or otherwise aggregated with Common Shares owned by such first Person pursuant to the provisions of the Code or the Treasury Regulations, provided, however, that a Person will not be deemed to be the Affiliate or Associate of another Person solely because either or both Persons are or were Directors of the Company.
(c)A Person will be deemed the “Beneficial Owner” of, and to “Beneficially Own,” any securities:
(i)which such Person or any of such Person’s Affiliates or Associates is deemed to beneficially own, directly or indirectly, within the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement;
(ii)the beneficial ownership of which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange rights, warrants, options or other rights (in each case, other than upon exercise or exchange of the Rights); provided, however, that a Person will not 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
(iii)which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has or shares the right to vote or dispose of, including pursuant to any agreement, arrangement or understanding (whether or not in writing); or
(iv)of which any other Person is the Beneficial Owner, if such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) with such other Person (or any of such other Person’s Affiliates or Associates) with respect to acquiring, holding, voting or disposing of any securities of the Company;
provided, however, that a Person will not be deemed the Beneficial Owner of, or to Beneficially Own, any security (A) if such Person has the right to vote such security pursuant to an agreement, arrangement or understanding (whether or not in writing) which (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations of the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report), or (B) if such beneficial ownership arises solely as a result of such Person’s status as a “clearing agency,” as defined in Section 3(a)(23) of the Exchange Act; provided further, however, that nothing in this Section 1(c) will cause a Person engaged in business as an underwriter of securities to be the Beneficial Owner of, or to Beneficially Own, any securities acquired through such Person’s participation in good faith in an underwriting syndicate until the expiration of 40 calendar days after the date of such acquisition, or such later date as the Directors of the Company may determine in any specific case.  Notwithstanding anything in this Agreement to the contrary, to the extent not included within the foregoing provisions of this Section 1(c), a Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially own” or have “beneficial ownership” of, any securities which such Person would be deemed to constructively own or which otherwise would be aggregated with securities owned by such Person pursuant to Section 382 of the Code, or any successor provision or replacement provision.
(d)“Business Day” means any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York or New Jersey are authorized or obligated by law or executive order to close.
(e)“Close of Business” on any given date means 5:00 p.m., California time, on such date; provided, however, that if such date is not a Business Day, it means 5:00 p.m., California time, on the next succeeding Business Day.
(f)“Code” means the Internal Revenue Code of 1986, as amended.
(g)“Common Shares” when used with reference to the Company means the shares of Common Stock, par value $1.00 per share, of the Company; provided, however, that if the Company is the continuing or surviving corporation in a transaction described in Section 13(a)(ii), “Common Shares” when used with reference to the Company means shares of the capital stock or units of the equity interests with the greatest aggregate voting power of the Company.  “Common Shares” when used with reference to any corporation or other legal entity other than the Company, including an Issuer, means shares of the capital stock or units of the equity interests with the greatest aggregate voting power of such corporation or other legal entity.

(h)“Company” means KB Home, a Delaware corporation.
(i)“Distribution Date” means the earlier of:  (i) the Close of Business on the tenth calendar day following the Share Acquisition Date (or, if the tenth calendar day after the Share Acquisition Date occurs before the Record Date, the Close of Business on the Record Date), or (ii) the Close of Business on the tenth Business Day (or, unless the Distribution Date shall have previously occurred, such later date as may be specified by the Board of Directors of the Company) after the commencement of a tender or exchange offer by any Person (other than the Company, any Related Person or any Exempt Person), if upon the consummation thereof such Person would be the Beneficial Owner of 4.9% or more of the then‐outstanding Common Shares.
(j)“Effective Time” means immediately prior to the Close of Business on March 5, 2009.
(k)“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(l)“Exempt Person” means a Person whose Beneficial Ownership (together with all Affiliates and Associates of such Person) of 4.9% or more of the then-outstanding Common Shares will not, as determined by the Board of Directors of the Company in its sole discretion, jeopardize or endanger the availability to the Company of any Tax Benefit, provided, however, that such a Person will cease to be an Exempt Person if the Board of Directors of the Company makes a contrary determination in its sole discretion with respect to the effect of such Person’s Beneficial Ownership (together with all Affiliates and Associates of such Person), regardless of the reason for such contrary determination.
(m)“Exempt Transaction” means any transaction that the Board of Directors of the Company determines, in its sole discretion, is exempt for purposes of this Agreement.  
(n)“Expiration Date” means the earliest of (i) the Close of Business on April 30, 2021, (ii) the time at which the Rights are redeemed as provided in Section 23, (iii) the time at which all exercisable Rights are exchanged as provided in Section 24, (iv) the Close of Business on the effective date of the repeal of Section 382 of the Code or any successor provision or replacement provision if the Board of Directors of the Company determines that this Agreement is no longer necessary for the preservation of Tax Benefits, and (v) the Close of Business on the first day of a taxable year of the Company to which the Board of Directors of the Company determines that no Tax Benefits may be carried forward.
(o)“Flip‐in Event” means any event described in clauses (A), (B) or (C) of Section 11(a)(ii).
(p)“Flip‐over Event” means any event described in clauses (i), (ii) or (iii) of Section 13(a).
(q)“Issuer” has the meaning set forth in Section 13(b).
(r)“Person” means any individual, firm, corporation, partnership, limited liability company, limited liability partnership, trust or other legal entity, group of persons making a “coordinated acquisition” of shares or otherwise treated as an entity within the meaning of Section 1.382-3(a)(1) of the Treasury Regulations or otherwise, and includes any successor (by merger or otherwise) of such entity.
(s)“Preferred Shares” means shares of Series A Participating Cumulative Preferred Stock, par value $1.00 per share, of the Company.
(t)“Purchase Price” means initially $85.00 per one one-hundredth of a Preferred Share, subject to adjustment from time to time as provided in this Agreement.
(u)“Record Date” has the meaning set forth in the Recitals to this Agreement.
(v)“Redemption Price” means $0.001 per Right, subject to adjustment by resolution of the Board of Directors of the Company to reflect any stock split, stock dividend or similar transaction occurring after the Record Date.
(w)“Related Person” means (i) any Subsidiary of the Company or (ii) any employee benefit or stock ownership plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan.
(x)“Right” has the meaning set forth in the Recitals to this Agreement.
(y)“Right Certificates” means certificates evidencing the Rights, in substantially the form attached as Exhibit A.
(z)“Rights Agent” means Computershare Inc., unless and until a successor Rights Agent has become such pursuant to the terms of this Agreement, and thereafter, “Rights Agent” means such successor Rights Agent.
(aa)“Securities Act” means the Securities Act of 1933, as amended.
(bb)    “Share Acquisition Date” means the first date of public announcement by the Company (by press release, filing made with the Securities and Exchange Commission or otherwise) that an Acquiring Person has become such.

(cc)    Reserved.
(dd)    “Subsidiary” when used with reference to any Person means any corporation or other legal entity of which a majority of the voting power of the voting equity securities or equity interests is owned, directly or indirectly, by such Person; provided, however, that for purposes of Section 13(b), “Subsidiary” when used with reference to any Person means any corporation or other legal entity of which at least 20% of the voting power of the voting equity securities or equity interests is owned, directly or indirectly, by such Person.
(ee)    “Tax Benefits” means the net operating loss carry-overs, capital loss carry-overs, general business credit carry-overs, alternative minimum tax credit carry-overs and foreign tax credit carry-overs, as well as any “net unrealized built-in loss” within the meaning of Section 382 of the Code or any successor provision or replacement provision, of the Company or any direct or indirect subsidiary thereof.
(ff)    “Trading Day” means any day on which the principal national securities exchange or quotation system on which the Common Shares are listed or admitted to trading is open for the transaction of business or, if the Common Shares are not listed or admitted to trading on any national securities exchange or quotation system, a Business Day.
(gg)    “Treasury Regulations” means final, temporary and proposed income tax regulations promulgated under the Code, including any amendments thereto.
(hh)    “Triggering Event” means any Flip‐in Event or Flip‐over Event.
2.Appointment of Rights Agent.  The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the express terms and conditions of this Agreement (and no implied terms and conditions), and the Rights Agent hereby accepts such appointment.  Upon five (5) calendar days prior written notice to the Rights Agent, the Company may from time to time act as Co‐Rights Agent or appoint such Co‐Rights Agents as it may deem necessary or desirable.  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. Any actions which may be taken by the Rights Agent pursuant to the terms of this Agreement may be taken by any such Co‐Rights Agent; provided that the respective duties of the Rights Agent and any Co-Rights Agent shall be as the Company shall determine, provided that the duties of the Rights Agent are consistent with the terms and provisions of this Agreement and that contemporaneously with such appointment, the Company shall provide written notice thereof to the Rights Agent.  To the extent that any Co‐Rights Agent takes any action pursuant to this Agreement, such Co‐Rights Agent will be entitled to all of the rights and protections of, and subject to all of the applicable duties and obligations imposed upon, the Rights Agent pursuant to the terms of this Agreement.
3.Issue of Right Certificates.  (a) Until the Distribution Date, (i) the Rights will be evidenced by the certificates representing Common Shares registered in the names of the record holders thereof, which certificates representing Common Shares will also be deemed to be Right Certificates (or, if the Common Shares are uncertificated, by the registration of the associated Common Shares on the stock transfer books of the Company), (ii) the Rights will be transferable only in connection with the transfer of the underlying Common Shares, and (iii) the transfer of any Common Shares in respect of which Rights have been issued will also constitute the transfer of the Rights associated with such Common Shares.  Commencing as promptly as practicable after the Record Date, the Company will make available a copy of a Summary of Rights to Purchase Preferred Stock in substantially the form attached as Exhibit B to any holder of Rights who may request it from time to time prior to the Expiration Date.
(b)    Rights will be issued by the Company in respect of all Common Shares (other than Common Shares issued upon the exercise or exchange of any Right) issued or delivered by the Company (whether originally issued or delivered from the Company’s treasury) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date.  Certificates evidencing such Common Shares will have stamped on, impressed on, printed on, written on, or otherwise affixed to them the following legend or such similar legend as the Company may deem appropriate and as is not inconsistent with the provisions of this 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 quotation system on which the Common Shares may from time to time be listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Amended and Restated Rights Agreement between KB Home and Computershare Inc. (or any successor Rights Agent), dated effective as of April 12, 2018 (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 KB Home.  The Rights are not exercisable prior to the occurrence of certain events specified in the Rights Agreement.  Under certain circumstances, as set forth in the Rights Agreement, such Rights may be redeemed, may be exchanged, may expire, may be amended, or may be evidenced by separate certificates and no longer be evidenced by this Certificate.  KB Home will mail to the holder of this Certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor.  Under certain 

circumstances as set forth in the Rights Agreement, Rights that are or were beneficially owned by an Acquiring Person or any Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement) may become null and void.
(c)    Any Right Certificate issued pursuant to this Section 3 that represents Rights beneficially owned by an Acquiring Person or any Associate or Affiliate thereof and any Right Certificate issued at any time upon the transfer of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate and any Right Certificate issued pursuant to Section 6 or 11 hereof upon transfer, exchange, replacement or adjustment of any other Right Certificate referred to in this sentence, shall be subject to and contain the following legend or such similar legend as the Company may deem appropriate and as is not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage:
The Rights represented by this Right Certificate are or were beneficially owned by a Person who was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as such terms are defined in the Rights Agreement). This Right Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 11(a)(ii) or Section 13 of the Rights Agreement.
(d)    As promptly as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign and the Company will send or cause to be sent (and the Rights Agent will, if requested, send, at the expense of the Company and upon receipt of all relevant and information, including the names and addresses of all relevant holders if the Rights Agent is not also the transfer agent and registrar of the Common Shares), by first class, postage prepaid mail, to each record holder of Common Shares 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 so held, subject to adjustment as provided herein.  As of and after the Distribution Date, the Rights will be evidenced solely by such Right Certificates.  The Company shall promptly notify the Rights Agent upon the occurrence of the Distribution Date.  Until such notice is received by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the Distribution Date has not occurred. 
(e)    In the event that the Company purchases or otherwise acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares will be deemed canceled and retired so that the Company will not be entitled to exercise any Rights associated with the Common Shares so purchased or acquired.
4.Form of Right Certificates.  The Right Certificates (and the form of election to purchase and the form of assignment to be printed on the reverse thereof) will be substantially in the form attached as Exhibit B with such changes and marks of identification or designation, and such legends, summaries or endorsements printed thereon, as the Company may deem appropriate (but which do not affect the rights, duties or responsibilities of the Rights Agent) 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 quotation system on which the Rights may from time to time be listed or quoted, or to conform to usage.  Subject to the provisions of Section 22, the Right Certificates, whenever issued, on their face will entitle the holders thereof to purchase such number of one one-hundredths of a Preferred Share as are set forth therein at the Purchase Price set forth therein, but the Purchase Price, the number and kind of securities issuable upon exercise of each Right and the number of Rights outstanding will be subject to adjustment as provided herein.
5.Countersignature and Registration.  (a) The Right Certificates will be executed on behalf of the Company by its Chairman of the Board, its President or any Vice President, either manually or by facsimile signature, and will have affixed thereto the Company’s seal or a facsimile thereof which will be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature.  The Right Certificates will be countersigned by the Rights Agent, either manually or by facsimile signature, and will not be valid for any purpose unless so countersigned.  In case any officer of the Company who signed any of the Right Certificates ceases to be such an officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent, and issued and delivered by the Company with the same force and effect as though the person who signed such Right Certificates had not ceased to be such an officer of the Company; and any Right Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Right Certificate, is a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement any such person was not such an officer.
(b)    Following the Distribution Date, receipt by the Rights Agent of notice to that effect and all other relevant information referred to in Section 3, the Rights Agent will keep or cause to be kept, at the office of the Rights Agent designated for such purpose and at such other offices as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or any quotation system on which the Rights may from time to time be listed or quoted, books for registration and transfer of the Right Certificates issued hereunder.  Such books 

will show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates.
6.Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.  (a) Subject to the provisions of Sections 7(d) and 14, at any time after the Close of Business on the Distribution Date and prior to the Expiration Date, any Right Certificate or Right Certificates representing exercisable Rights may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-hundredths of a Preferred Share (or other securities, as the case may be) as the Right Certificate or Right Certificates surrendered then entitled such holder (or former holder in the case of a transfer) to purchase.  Any registered holder desiring to transfer, split up, combine or exchange any such Right Certificate or Right Certificates must make such request in a writing delivered to the Rights Agent and must surrender, together with any required form of assignment and certificate duly executed and properly completed, the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the office of the Rights Agent designated for such purpose accompanied by a signature guarantee and such other documentation as the Rights Agent may reasonably request.  The Right Certificates are transferable only on the registry books of the Rights Agent.  Thereupon or as promptly as practicable thereafter, subject to the provisions of Sections 7(d) and 14, the Company will prepare, execute and deliver to the Rights Agent, and the Rights Agent will countersign and deliver, 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.  The Rights Agent shall promptly forward any such sum collected by it to the Company or to such Persons as the Company shall specify by written notice.  The Rights Agent shall have no duty or obligation under any Section of this Agreement requiring the payment of taxes and/or charges unless and until it is satisfied that all such taxes and/or charges have been paid.  
(b)    Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate and, in case of loss, theft or destruction, of indemnity or security satisfactory to them, and, if requested by the Company, 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 prepare, execute and deliver a new Right Certificate of like tenor to the Rights Agent and the Rights Agent will countersign and deliver such new Right Certificate to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
7.Exercise of Rights; Purchase Price; Expiration Date of Rights.  (a) 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 and prior to the Expiration Date, upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof properly completed and duly executed, to the Rights Agent at the office or offices of the Rights Agent designated for such purpose, accompanied by a signature guarantee and such other documentation as the Rights Agent may reasonably request, together with payment in cash, in lawful money of the United States of America by certified check or bank draft payable to the order of the Company, equal to the sum of (i) the exercise price for the total number of securities as to which such surrendered Rights are exercised and (ii) an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with the provisions of Section 9(d).
(b)    Upon receipt of a Right Certificate representing exercisable Rights with the form of election to purchase properly completed and duly executed, and a signature guarantee and such other documentation as the Rights Agent may reasonably request, accompanied by payment as described above, the Rights Agent will promptly (i) requisition from any transfer agent of the Preferred Shares (or make available, if the Rights Agent is the transfer agent) certificates representing the number of one one-hundredths of a Preferred Share to be purchased or, in the case of uncertificated shares or other securities, requisition from any transfer agent therefor a notice setting forth such number of shares or other securities to be purchased for which registration will be made on the stock transfer books of the Company (and the Company hereby irrevocably authorizes and directs its transfer agent to comply with all such requests), or, if the Company elects to deposit Preferred Shares issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of one one-hundredths of a Preferred Share as are to be purchased (and the Company hereby irrevocably authorizes and directs such depositary agent to comply with all such requests), (ii) after receipt of such certificates (or notices or depositary receipts, as the case may be), 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, (iii) when necessary to comply with this Agreement, requisition from the Company or any transfer agent therefor (or make available, if the Rights Agent is the transfer agent) certificates representing the number of equivalent common shares (or, in the case of uncertificated shares, a notice of the number of equivalent common shares for which registration will be made on the stock transfer books of the Company) to be issued in lieu of the issuance of Common Shares in accordance with the provisions of Section 11(a)(iii), (iv) when necessary to comply with this Agreement, after receipt of such certificates or notices, 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, (v) when necessary to comply with this Agreement, requisition from the Company the amount of cash to be 

paid in lieu of the issuance of fractional shares in accordance with the provisions of Section 14 or in lieu of the issuance of Common Shares in accordance with the provisions of Section 11(a)(iii), (vi) when necessary to comply with this Agreement, after receipt, deliver such cash to or upon the order of the registered holder of such Right Certificate, and (vii) when necessary to comply with this Agreement, deliver any due bill or other instrument provided to the Rights Agent by the Company for delivery to the registered holder of such Right Certificate as provided by Section 11(l). 
(c)    In case the registered holder of any Right Certificate exercises less than all the Rights evidenced thereby, the Company will prepare, execute and deliver a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised and the Rights Agent will countersign and deliver such new Right Certificate to the registered holder of such Right Certificate or to his duly authorized assigns, subject to the provisions of Section 14.
(d)    Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company will be obligated to undertake any action with respect to any purported transfer, split up, combination or exchange of any Right Certificate pursuant to Section 6 or exercise of a Right Certificate as set forth in this Section 7 unless the registered holder of such Right Certificate has (i) properly completed and duly signed the certificate following the form of assignment or the form of election to purchase, as applicable, set forth on the reverse side of the Right Certificate surrendered for such transfer, split up, combination, exchange or exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company or the Rights Agent may reasonably request.
8.Cancellation and Destruction of Right Certificates.  All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange will, if surrendered to the Company or to any of its stock transfer agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, will be canceled by it, and no Right Certificates will be issued in lieu thereof except as expressly permitted by the provisions of this Agreement.  The Company will deliver to the Rights Agent for cancellation and retirement, and the Rights Agent will so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof.  The Rights Agent will deliver all canceled Right Certificates to the Company, or will, at the written request of the Company, destroy such canceled Right Certificates, and in such case will deliver a certificate of destruction thereof to the Company.
9.Company Covenants Concerning Securities and Rights.  The Company covenants and agrees that:
(a)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, a number of Preferred Shares that will be sufficient to permit the exercise pursuant to Section 7 of all outstanding Rights.
(b)So long as the Preferred Shares (and, following the occurrence of a Triggering Event, Common Shares and/or other securities) issuable upon the exercise of the Rights may be listed on a national securities exchange or quoted on a quotation system, it will endeavor to cause, from and after such time as the Rights become exercisable, all securities reserved for issuance upon the exercise of Rights to be listed on such exchange or quoted on such system, upon official notice of issuance upon such exercise.
(c)It will take all such action as may be necessary to ensure that all Preferred Shares (and, following the occurrence of a Triggering Event, Common Shares and/or other securities) delivered (or evidenced by registration on the stock transfer books of the Company) upon exercise of Rights, at the time of delivery of the certificates for (or registration of) such securities, will be (subject to payment of the Purchase Price and compliance with all other applicable provisions of this Agreement) duly authorized, validly issued, fully paid and nonassessable securities.
(d)It will pay when due and payable any and all taxes and charges that may be payable in respect of the issuance or delivery of the Right Certificates and of any certificates representing securities issued upon the exercise of Rights (or, if such securities are uncertificated, the registration of such securities on the stock transfer books of the Company); provided, however, that the Company will not be required to pay any tax or charge which may be payable in respect of any transfer or delivery of Right Certificates to a person other than, or the issuance or delivery of certificates or depositary receipts representing (or the registration of) securities issued upon the exercise of Rights in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise, or to issue or deliver any certificates, depositary receipts or notices representing securities issued upon the exercise of any Rights until any such tax or charge has been paid (any such tax or charge being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s or the Rights Agent’s reasonable satisfaction that no such tax is due.
(e)It will use its best efforts (i) to file on an appropriate form, as soon as practicable following the later of the Share Acquisition Date and the Distribution Date, a registration statement under the Securities Act with respect to the securities issuable upon exercise of the Rights, (ii) to cause such registration statement to become effective as soon as practicable after such filing, and (iii) to cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities and (B) the Expiration Date.  The Company will also take such action as may be appropriate under, or to ensure 

compliance with, the applicable state securities or “blue sky” laws in connection with the exercisability of the Rights.  The Company may temporarily suspend, for a period of time after the date set forth in clause (i) of the first sentence of this Section 9(e), the exercisability of the Rights in order to prepare and file such registration statement and to permit it to become effective.  Upon any such suspension, the Company will issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect.  In addition, if the Company determines that a registration statement should be filed under the Securities Act or any state securities laws following the Distribution Date, the Company may temporarily suspend the exercisability of the Rights in each relevant jurisdiction until such time as a registration statement has been declared effective and, upon any such suspension, the Company will issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect.  The Company shall notify the Rights Agent whenever it makes a public announcement pursuant to this Section 9(e) and give the Rights Agent a copy of such announcement.  Notwithstanding anything in this Agreement to the contrary, the Rights will not be exercisable in any jurisdiction if the requisite registration or qualification in such jurisdiction has not been effected or the exercise of the Rights is not permitted under applicable law.
(f)Notwithstanding anything in this Agreement to the contrary, after the later of the Share Acquisition Date and the Distribution Date the Company will not take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will eliminate or otherwise diminish the benefits intended to be afforded by the Rights.
(g)In the event that the Company is obligated to issue other securities of the Company and/or pay cash pursuant to Section 11, 13, 14 or 24, it will make all arrangements necessary so that such other securities and/or cash are available for distribution by the Rights Agent, if and when appropriate.
10.Record Date.  Each Person in whose name any certificate representing Preferred Shares (or Common Shares and/or other securities, as the case may be) is issued (or in which such securities are registered upon the stock transfer books of the Company) upon the exercise of Rights will for all purposes be deemed to have become the holder of record of the Preferred Shares (or Common Shares and/or other securities, as the case may be) represented thereby on, and such certificate (or registration) will be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price and all applicable taxes was duly made; provided, however, that if the date of such surrender and payment is a date upon which the transfer books of the Company for the Preferred Shares (or Common Shares and/or other securities, as the case may be) are closed, such Person will be deemed to have become the record holder of such securities on, and such certificate (or registration) will be dated, the next succeeding Business Day on which the transfer books of the Company for the Preferred Shares (or Common Shares and/or other securities, as the case may be) are open.  Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate will not be entitled to any rights of a holder of any security for which the Rights are or may become exercisable, including, without limitation, the right to vote, to receive dividends or other distributions, or to exercise any preemptive rights, and will not be entitled to receive any notice of any proceedings of the Company, except as provided herein.
11.Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights.  The Purchase Price, the number and kind of securities issuable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a)(i)    In the event that the Company at any time after the Record Date (A) declares a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivides the outstanding Preferred Shares, (C) combines the outstanding Preferred Shares into a smaller number of Preferred Shares, or (D) issues any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification and/or the number and/or kind of shares of capital stock issuable on such date upon exercise of a Right, will be proportionately adjusted so that the holder of any Right exercised after such time is entitled to receive upon payment of the Purchase Price then in effect the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the transfer books of the Company for the Preferred Shares were open, the holder of such Right would have owned upon such exercise (and, in the case of a reclassification, would have retained after giving effect to such reclassification) and would have 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 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) or Section 13, the adjustment provided for in this Section 11(a)(i) will be in addition to, and will be made prior to, any adjustment required pursuant to Section 11(a)(ii) or Section 13.

(ii)    Subject to the provisions of Section 24, if:
(A) any Person becomes an Acquiring Person; or
(B) any Acquiring Person or any Affiliate or Associate of any Acquiring Person, directly or indirectly, (1) merges into the Company or otherwise combines with the Company and the Company is the continuing or surviving corporation of such merger or combination (other than in a transaction subject to Section 13), (2) merges or otherwise combines with any Subsidiary of the Company, (3) in one or more transactions (otherwise than in connection with the exercise, exchange or conversion of securities exercisable or exchangeable for or convertible into shares of any class of capital stock of the Company or any of its Subsidiaries) transfers cash, securities or any other property to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class of capital stock of the Company or any of its Subsidiaries or for securities exercisable or exchangeable for or convertible into shares of any class of capital stock of the Company or any of its Subsidiaries, or otherwise obtains from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class of capital stock of the Company or any of its Subsidiaries or securities exercisable or exchangeable for or convertible into shares of any class of capital stock of the Company or any of its Subsidiaries (otherwise than as part of a pro rata distribution to all holders of shares of any class of capital stock of the Company, or any of its Subsidiaries), (4) sells, purchases, leases, exchanges, mortgages, pledges, transfers or otherwise disposes (in one or more transactions) to, from, with or of, as the case may be, the Company or any of its Subsidiaries (otherwise than in a transaction subject to Section 13), any property, including securities, on terms and conditions less favorable to the Company than the Company would be able to obtain in an arm’s-length transaction with an unaffiliated third party, (5) receives any compensation from the Company or any of its Subsidiaries other than compensation as a director or a regular full-time employee, in either case at rates consistent with the Company’s (or its Subsidiaries’) past practices, or (6) receives the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries; or
(C) during such time as there is an Acquiring Person, there is any reclassification of securities of the Company (including any reverse stock split), or any recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries, or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person), other than a transaction subject to Section 13, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries, or of securities exercisable or exchangeable for or convertible into equity securities of the Company or any of its Subsidiaries, of which an Acquiring Person, or any Affiliate or Associate of any Acquiring Person, is the Beneficial Owner;
then, and in each such case, from and after the latest of the Distribution Date, the Share Acquisition Date and the date of the occurrence of such Flip-in Event, proper provision will be made so that each holder of a Right, except as provided below, will thereafter have the right to receive, upon exercise thereof in accordance with the terms of this Agreement at an exercise price per Right equal to the product of the then-current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the occurrence of such Flip-in Event (or, if any other Flip-in Event shall have previously occurred, the product of the then-current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the first occurrence of a Flip-in Event), in lieu of Preferred Shares, such number of Common Shares as equals the result obtained by (x) multiplying the then‐current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the occurrence of such Flip-in Event (or, if any other Flip-in Event shall have previously occurred, multiplying the then-current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the first occurrence of a Flip-in Event), and dividing that product by (y) 50% of the current per share market price of the Common Shares (determined pursuant to Section 11(d)) on the date of the occurrence of such Flip-in Event.  Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Flip‐in Event, any Rights that are Beneficially Owned by (A) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (B) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the occurrence of a Flip‐in Event, or (C) a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or concurrently with the occurrence of a Flip‐in Event pursuant to either (1) a transfer from an Acquiring Person to holders of its equity securities or to any Person with whom it has any continuing agreement, arrangement or understanding regarding the transferred Rights or (2) a transfer which the Directors of the Company have determined is part of a plan, arrangement or understanding which has the purpose or effect of avoiding the provisions of this Section 11(a)(ii), and subsequent transferees of any of such Persons, will be void without any further action and any holder of such Rights will thereafter have no rights whatsoever with respect to such Rights under any provision of this Agreement.  The Company will use all reasonable efforts 

to ensure that the provisions of this Section 11(a)(ii) are complied with, but will have no liability to any holder of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder.  Upon the occurrence of a Flip‐in Event, no Right Certificate that represents Rights that are or have become null and void pursuant to the provisions of this Section 11(a)(ii) will thereafter be issued pursuant to Section 3 or Section 6, and any Right Certificate delivered to the Rights Agent that represents Rights that are or have become null and void pursuant to the provisions of this Section 11(a)(ii) will be canceled.  Upon the occurrence of a Flip-over Event, any Rights that shall not have been previously exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only pursuant to Section 13 and not pursuant to this Section 11(a)(ii).  The Company shall promptly notify the Rights Agent of the identity of any such Acquiring Person, Associate or Affiliate, or any nominee of the foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Associate, Affiliate, or the nominee of any of the foregoing unless and until it shall have received such notice. 
(iii)    Upon the occurrence of a Flip‐in Event, if there are not sufficient Common Shares authorized but unissued or issued but not outstanding to permit the issuance of all the Common Shares issuable in accordance with Section 11(a)(ii) upon the exercise of a Right, the Board of Directors of the Company will use its best efforts promptly to authorize and, subject to the provisions of Section 9(e), make available for issuance additional Common Shares or other equity securities of the Company having equivalent voting rights and an equivalent value (as determined in good faith by the Board of Directors of the Company) to the Common Shares (for purposes of this Section 11(a)(iii), “equivalent common shares”).  In the event that equivalent common shares are so authorized, upon the exercise of a Right in accordance with the provisions of Section 7, the registered holder will be entitled to receive (A) Common Shares, to the extent any are available, and (B) a number of equivalent common shares, which the Board of Directors of the Company has determined in good faith to have a value equivalent to the excess of (x) the aggregate current per share market value on the date of the occurrence of the most recent Flip-in Event of all the Common Shares issuable in accordance with Section 11(a)(ii) upon the exercise of a Right (the “Exercise Value”) over (y) the aggregate current per share market value on the date of the occurrence of the most recent Flip-in Event of any Common Shares available for issuance upon the exercise of such Right; provided, however, that if at any time after 90 calendar days after the latest of the Share Acquisition Date, the Distribution Date and the date of the occurrence of the most recent Flip-in Event, there are not sufficient Common Shares and/or equivalent common shares available for issuance upon the exercise of a Right, then the Company will be obligated to deliver, upon the surrender of such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), equivalent common shares (to the extent available) and then cash (to the extent permitted by applicable law and any agreements or instruments to which the Company is a party in effect immediately prior to the Share Acquisition Date), which securities and cash have an aggregate value equal to the excess of (1) the Exercise Value over (2) the product of the then‐current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the occurrence of the most recent Flip-in Event (or, if any other Flip-in Event shall have previously occurred, the product of the then-current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right would have been exercisable immediately prior to the date of the occurrence of such Flip-in Event if no other Flip-in Event had previously occurred).  To the extent that any legal or contractual restrictions prevent the Company from paying the full amount of cash payable in accordance with the foregoing sentence, the Company will pay to holders of the Rights as to which such payments are being made all amounts which are not then restricted on a pro rata basis and will continue to make payments on a pro rata basis as promptly as funds become available until the full amount due to each such Rights holder has been paid.
(b)In the event that the Company fixes 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 securities having equivalent rights, privileges and preferences as the Preferred Shares (for purposes of this Section 11(b), “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 current per share market price of the Preferred Shares (determined pursuant to Section 11(d)) on such record date, the Purchase Price to be in effect after such record date will be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which is the number of Preferred Shares outstanding on such record date plus the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or equivalent preferred shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current per share market price and the denominator of which is 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 issuable upon exercise of one Right.  In case such subscription price may be paid in a consideration part or all of which is in a form other than cash, the 

value of such consideration will be as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent.  Preferred Shares owned by or held for the account of the Company will not be deemed outstanding for the purpose of any such computation.  Such adjustment will 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 will be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c)In the event that the Company fixes a record date for the making of a distribution to all holders of 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, cash (other than a regular periodic cash dividend), assets, stock (other than a dividend payable in Preferred Shares) or subscription rights, options or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date will be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which is the current per share market price of the Preferred Shares (as determined pursuant to Section 11(d)) on such record date or, if earlier, the date on which Preferred Shares begin to trade on an ex‐dividend or when issued basis for such distribution, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination will be described in a reasonably detailed statement promptly filed with the Rights Agent) of the portion of the evidences of indebtedness, cash, assets or stock so to be distributed or of such subscription rights, options or warrants applicable to one Preferred Share, and the denominator of which is 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 issuable upon exercise of one Right.  Such adjustments will be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price will 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 Common Shares on any date will be deemed to be the average of the daily closing prices per share of such Common Shares 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 Common Shares is determined during a period following the announcement by the issuer of such Common Shares of (A) a dividend or distribution on such Common Shares payable in such Common Shares or securities convertible into such Common Shares (other than the Rights) or (B) any subdivision, combination or reclassification of such Common Shares, and prior to the expiration of 30 Trading Days after the ex‐dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price will be appropriately adjusted to take into account ex‐dividend trading or to reflect the current per share market price per Common Share equivalent.  The closing price for each day will 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 quotation system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Common Shares are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated quotation system with respect to securities listed on the principal national securities exchange on which the Common Shares are listed or admitted to trading or, if the Common Shares 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 such market then in use, or, if on any such date the Common Shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Shares selected by the Board of Directors of the Company.  If the Common Shares are not publicly held or not so listed or traded, or are not the subject of available bid and asked quotes, “current per share market price” will mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent.
(ii)    For the purpose of any computation hereunder, the “current per share market price” of the Preferred Shares will be determined in the same manner as set forth above for Common Shares in Section 11(d)(i), other than the last sentence thereof.  If the current per share market price of the Preferred Shares cannot be determined in the manner provided above, the “current per share market price” of the Preferred Shares will be conclusively deemed to be an amount equal to the current per share market price of the Common Shares multiplied by one hundred (as such number may be appropriately adjusted to reflect events such as stock splits, stock dividends, recapitalizations or similar transactions relating to the Common Shares occurring after the date of this Agreement).  If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, or the subject of available bid and asked quotes, “current per share market price” of the Preferred Shares will mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent.  For all purposes of this Agreement, the current per share market price of one one-hundredth of a Preferred Share will be equal to the current per share market price of one Preferred Share divided by one hundred.

(e)Except as set forth below, no adjustment in the Purchase Price will be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made will be carried forward and taken into account in any subsequent adjustment.  All calculations under this Section 11 will be made to the nearest cent or to the nearest one one-millionth of a Preferred Share or one ten-thousandth of a Common Share or other security, as the case may be.  Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 will be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment and (ii) the Expiration Date.
(f)If as a result of an adjustment made pursuant to Section 11(a), the holder of any Right thereafter exercised becomes entitled to receive any securities of the Company other than Preferred Shares, thereafter the number and/or kind of such other securities so receivable upon exercise of any Right (and/or the Purchase Price in respect thereof) will be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares (and the Purchase Price in respect thereof) contained in this Section 11, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares (and the Purchase Price in respect thereof) will apply on like terms to any such other securities (and the Purchase Price in respect thereof).
(g)All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder will evidence the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths of a Preferred Share issuable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.
(h)Unless the Company has exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price pursuant to Section 11(b) or Section 11(c), each Right outstanding immediately prior to the making of such adjustment will 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 (x) the number of one one-hundredths of a Preferred Share issuable upon exercise of a Right immediately prior to such adjustment of the Purchase Price by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.
(i)The Company may elect, on or after the date of any adjustment of the Purchase Price, to adjust the number of Rights in substitution for any adjustment in the number of one one-hundredths of a Preferred Share issuable upon the exercise of a Right.  Each of the Rights outstanding after such adjustment of the number of Rights will 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 will 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 will 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.  Such record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, will be at least 10 calendar days later than the date of the public announcement.  If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company will, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to the provisions of Section 14, the additional Rights to which such holders are entitled as a result of such adjustment, or, at the option of the Company, will 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 are entitled after such adjustment.  Right Certificates so to be distributed will be issued, executed, and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and will be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.
(j)Without respect to any adjustment or change in the Purchase Price and/or the number and/or kind of securities issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number and kind of securities which were expressed in the initial Right Certificate 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 or below the then par value, if any, of any other securities of the Company issuable upon exercise of the Rights, the Company will 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 or such other securities, as the case may be, at such adjusted Purchase Price.
(l)In any case in which this Section 11 otherwise requires that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of Preferred Shares or other securities of the 

Company, if any, issuable upon such exercise over and above the number of Preferred Shares or other 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 delivers to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional Preferred Shares or other securities upon the occurrence of the event requiring such adjustment.
(m)Notwithstanding anything in this Agreement to the contrary, the Company will be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that in its good faith judgment the Board of Directors of the Company determines to be advisable in order that any (i) consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for cash of Preferred Shares at less than the current per share market price therefor, (iii) issuance wholly for cash of Preferred Shares or securities which by their terms are convertible into or exchangeable for Preferred Shares, (iv) stock dividends, or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred Shares is not taxable to such stockholders.
(n)Notwithstanding anything in this Agreement to the contrary, in the event that the Company at any time after the Record Date prior to the Distribution Date (i) pays a dividend on the outstanding Common Shares payable in Common Shares, (ii) subdivides the outstanding Common Shares, (iii) combines the outstanding Common Shares into a smaller number of shares, or (iv) issues any shares of its capital stock in a reclassification of the outstanding Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), the number of Rights associated with each Common Share then outstanding, or issued or delivered thereafter but prior to the Distribution Date, will be proportionately adjusted so that the number of Rights thereafter associated with each Common Share following any such event equals the result obtained by multiplying the number of Rights associated with each Common Share immediately prior to such event by a fraction the numerator of which is the total number of Common Shares outstanding immediately prior to the occurrence of the event and the denominator of which is the total number of Common Shares outstanding immediately following the occurrence of such event.  The adjustments provided for in this Section 11(n) will be made successively whenever such a dividend is paid or such a subdivision, combination or reclassification is effected.
12.Certificate of Adjusted Purchase Price or Number of Securities.  Whenever an adjustment is made or any event affecting the Rights or their exercisability (including without limitation an event which causes Rights to become null and void) occurs as provided in Section 11 or Section 13, the Company will promptly (a) prepare a certificate setting forth such adjustment or describing such event, and a brief, reasonably detailed statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Preferred Shares and the Common Shares a copy of such certificate, and (c) if such adjustment is made after the Distribution Date, mail a brief summary of such adjustment to each holder of a Right Certificate in accordance with Section 26.  The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment or statement therein contained and shall have no duty or liability with respect to, and shall not be deemed to have knowledge of, any adjustment or any such event unless and until it shall have received such a certificate.
13.Consolidation, Merger or Sale or Transfer of Assets or Earning Power.  (a) In the event that:
(i)at any time after a Person has become an Acquiring Person, the Company consolidates with, or merges with or into, any other Person and the Company is not the continuing or surviving corporation of such consolidation or merger; or
(ii)at any time after a Person has become an Acquiring Person, any Person consolidates with the Company, or merges with or into the Company, and the Company is the continuing or surviving corporation of such merger or consolidation and, in connection with such merger or consolidation, all or part of the Common Shares is changed into or exchanged for stock or other securities of any other Person or cash or any other property; or
(iii)at any time after a Person has become an Acquiring Person, the Company, directly or indirectly, sells or otherwise transfers (or one or more of its Subsidiaries sells or otherwise transfers), in one or more transactions, assets or earning power (including without limitation securities creating any obligation on the part of the Company and/or any of its Subsidiaries) representing in the aggregate more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons other than the Company or one or more of its wholly owned Subsidiaries;
then, and in each such case, proper provision will be made so that from and after the latest of the Share Acquisition Date, the Distribution Date and the date of the occurrence of such Flip-over Event (A) each holder of a Right thereafter has the right to receive, upon the exercise thereof in accordance with the terms of this Agreement at an exercise price per Right equal to the product of the then‐current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the Share Acquisition Date, such number of duly authorized, validly issued, fully paid, nonassessable and freely tradeable Common Shares of the Issuer, free and clear of any liens, encumbrances and other adverse claims and not subject to any rights of call or first refusal, as equals the result obtained by (x) multiplying the then‐current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is exercisable immediately prior to the Share Acquisition Date and dividing that product by (y) 50% of the current per share market price of 

the Common Shares of the Issuer (determined pursuant to Section 11(d)), on the date of the occurrence of such Flip‐over Event; (B) the Issuer will thereafter be liable for, and will assume, by virtue of the occurrence of such Flip‐over Event, all the obligations and duties of the Company pursuant to this Agreement; (C) the term “Company” will thereafter be deemed to refer to the Issuer; and (D) the Issuer will take such steps (including without limitation the reservation of a sufficient number of its Common Shares to permit the exercise of all outstanding Rights) in connection with such consummation as may be necessary to assure that the provisions hereof are thereafter applicable, as nearly as reasonably may be possible, in relation to its Common Shares thereafter deliverable upon the exercise of the Rights.
(b)    For purposes of this Section 13, “Issuer” means (i) in the case of any Flip‐over Event described in Sections 13(a)(i) or (ii) above, the Person that is the continuing, surviving, resulting or acquiring Person (including the Company as the continuing or surviving corporation of a transaction described in Section 13(a)(ii) above), and (ii) in the case of any Flip‐over Event described in Section 13(a)(iii) above, the Person that is the party receiving the greatest portion of the assets or earning power (including without limitation securities creating any obligation on the part of the Company and/or any of its Subsidiaries) transferred pursuant to such transaction or transactions; provided, however, that, in any such case, (A) if (1) no class of equity security of such Person is, at the time of such merger, consolidation or transaction and has been continuously over the preceding 12‐month period, registered pursuant to Section 12 of the Exchange Act, and (2) such Person is a Subsidiary, directly or indirectly, of another Person, a class of equity security of which is and has been so registered, the term “Issuer” means such other Person; and (B) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, a class of equity security of two or more of which are and have been so registered, the term “Issuer” means whichever of such Persons is the issuer of the equity security having the greatest aggregate market value.  Notwithstanding the foregoing, if the Issuer in any of the Flip‐over Events listed above is not a corporation or other legal entity having outstanding equity securities, then, and in each such case, (x) if the Issuer is directly or indirectly wholly owned by a corporation or other legal entity having outstanding equity securities, then all references to Common Shares of the Issuer will be deemed to be references to the Common Shares of the corporation or other legal entity having outstanding equity securities which ultimately controls the Issuer, and (y) if there is no such corporation or other legal entity having outstanding equity securities, (I) proper provision will be made so that the Issuer creates or otherwise makes available for purposes of the exercise of the Rights in accordance with the terms of this Agreement, a kind or kinds of security or securities having a fair market value at least equal to the economic value of the Common Shares which each holder of a Right would have been entitled to receive if the Issuer had been a corporation or other legal entity having outstanding equity securities; and (II) all other provisions of this Agreement will apply to the issuer of such securities as if such securities were Common Shares.
(c)    The Company will not consummate any Flip‐over Event if, (i) at the time of or immediately after such Flip‐over Event, there are or would be any rights, warrants, instruments or securities outstanding or any agreements or arrangements in effect which would eliminate or substantially diminish the benefits intended to be afforded by the Rights, (ii) prior to, simultaneously with or immediately after such Flip‐over Event, the stockholders of the Person who constitutes, or would constitute, the Issuer for purposes of Section 13(a) shall have received a distribution of Rights previously owned by such Person or any of its Affiliates or Associates, or (iii) the form or nature of the organization of the Issuer would preclude or limit the exercisability of the Rights.  In addition, the Company will not consummate any Flip‐over Event unless the Issuer has a sufficient number of authorized Common Shares (or other securities as contemplated in Section 13(b) above) which have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior to such consummation the Company and the Issuer have duly executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in subsections (a) and (b) of this Section 13 and further providing that as promptly as practicable after the consummation of any Flip‐over Event, the Issuer will:
(A) prepare and file a registration statement under the Securities Act with respect to the Rights and the securities issuable upon exercise of the Rights on an appropriate form, and use its best efforts to cause such registration statement to (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 Securities Act) until the Expiration Date;
(B) take all such action as may be appropriate under, or to ensure compliance with, the applicable state securities or “blue sky” laws in connection with the exercisability of the Rights; and
(C) 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.
(d)    The provisions of this Section 13 will similarly apply to successive mergers or consolidations or sales or other transfers.  In the event that a Flip‐over Event occurs at any time after the occurrence of a Flip‐in Event, except for Rights that have become null and void pursuant to Section 11(a)(ii), Rights that shall not have been previously exercised will cease to be exercisable in the manner provided in Section 11(a)(ii) and will thereafter be exercisable in the manner provided in Section 13(a).

14.Fractional Rights and Fractional Securities.  (a) The Company will not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights.  In lieu of such fractional Rights, the Company will pay as promptly as practicable to the registered holders of the Right Certificates with regard to which such fractional Rights otherwise would be issuable, an amount in cash equal to the same fraction of the current market value of one Right.  For the purposes of this Section 14(a), the current market value of one Right is the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights otherwise would have been issuable.  The closing price for any day is 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 quotation 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 quotation system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted 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 such market 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 the Rights are not publicly held or are not so listed or traded, or are not the subject of available bid and asked quotes, the current market value of one Right will mean the fair value thereof as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent.
(b)    The Company will not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares or to register fractional Preferred Shares on the stock transfer books of the Company (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 provides that the holders of such depositary receipts 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 may pay to any Person to whom or which such fractional Preferred Shares would otherwise be issuable an amount in cash equal to the same fraction of the current market value of one Preferred Share.  For purposes of this Section 14(b), the current market value of one Preferred Share is the closing price of the Preferred Shares (as determined in the same manner as set forth for Common Shares in the second sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date of such exercise; provided, however, that if the closing price of the Preferred Shares cannot be so determined, the closing price of the Preferred Shares for such Trading Day will be conclusively deemed to be an amount equal to the closing price of the Common Shares (determined pursuant to the second sentence of Section 11(d)(i)) for such Trading Day multiplied by one hundred (as such number may be appropriately adjusted to reflect events such as stock splits, stock dividends, recapitalizations or similar transactions relating to the Common Shares occurring after the date of this Agreement); provided further, however, that if neither the Common Shares nor the Preferred Shares are publicly held or listed or admitted to trading on any national securities exchange, or the subject of available bid and asked quotes, the current market value of one Preferred Share will mean the fair value thereof as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent.
(c)    Following the occurrence of a Triggering Event, the Company will not be required to issue fractions of Common Shares or other securities issuable upon exercise or exchange of the Rights or to distribute certificates which evidence any such fractional securities or to register any such fractional securities on the stock transfer books of the Company.  In lieu of issuing any such fractional securities, the Company may pay to any Person to whom or which such fractional securities would otherwise be issuable an amount in cash equal to the same fraction of the current market value of one such security.  For purposes of this Section 14(c), the current market value of one Common Share or other security issuable upon the exercise or exchange of Rights is the closing price thereof (as determined in the same manner as set forth for Common Shares in the second sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date of such exercise or exchange; provided, however, that if neither the Common Shares nor any such other securities are publicly held or listed or admitted to trading on any national securities exchange, or the subject of available bid and asked quotes, the current market value of one Common Share or such other security will mean the fair value thereof as determined in good faith by the Board of Directors of the Company, whose determination will mean the fair value thereof as will be described in a statement filed with the Rights Agent.
(d)    Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payments and the prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments.  The Rights Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge 

of any payment for fractional Rights or fractional shares under any Section of this Agreement relating to the payment of fractional Rights or fractional shares unless and until the Rights Agent shall have received such a certificate and sufficient monies.
15.Rights of Action.  All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 and Section 20, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the holder of any Common Shares), 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 by the Company of this Agreement and will be entitled to specific performance of the obligations under this Agreement, and injunctive relief against actual or threatened violations of the obligations of the Company.
16.Agreement of Rights Holders.  Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:
(a)Prior to the Distribution Date, the Rights are transferable only in connection with the transfer of the Common Shares;
(b)After the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer, and with the appropriate forms and certificates properly completed and duly executed;
(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 Share) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the associated Common Share certificate, if any, made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent will be affected by any notice to the contrary;
(d)Such holder expressly waives any right to receive any fractional Rights and any fractional securities upon exercise or exchange of a Right, except as otherwise provided in Section 14.
(e)Notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent will have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, judgment, decree or ruling (whether interlocutory or final) issued by a court of competent jurisdiction or by a governmental, regulatory, self-regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, that the Company will use its best efforts to have any such injunction, order, decree, judgment or ruling lifted or otherwise overturned as soon as possible.
17.Right Certificate Holder Not Deemed a Stockholder.  No holder, as such, of any Right Certificate will be entitled to vote, receive dividends, or be deemed for any purpose the holder of Preferred Shares or any other securities of the Company which may at any time be issuable upon the exercise of the Rights represented thereby, nor will 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), 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 of this Agreement or exchanged pursuant to the provisions of Section 24.
18.Concerning the Rights Agent.  (a) The Company will pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the preparation, delivery, amendment, administration and execution of this Agreement and the exercise and performance of its duties hereunder.  The Company will also indemnify the Rights Agent for, and hold it harmless against, any loss, liability, suit, action, damage, judgment, fine, penalty, claim, demand, settlement, proceeding, cost or expense (including, without limitation, the reasonable fees and expenses of legal counsel) incurred without gross negligence, bad faith, or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction) on the part of the Rights Agent, for any action taken, suffered or omitted to be taken by the Rights Agent in connection with the acceptance, administration, exercise and performance of its 

duties under this Agreement, including the costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly.  The provisions of this Section 18 and Section 20 shall survive the termination of this Agreement, the exercise or expiration of the Rights, and the resignation, replacement, or removal of the Rights Agent.
(b)    The Rights Agent will be authorized and protected and will incur no liability for or in respect of any action taken, suffered, or omitted by it in connection with its acceptance and administration of this Agreement and the exercise and performance of its duties hereunder, in reliance upon any Right Certificate or certificate or other notice evidencing Preferred Shares or Common Shares or 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.  The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to have received notice thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take action in connection therewith unless and until it has received such notice in writing. 
19.Merger or Consolidation or Change of Name of Rights Agent.  (a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent is a party, or any Person succeeding to the shareholder services business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21.  If at the time such successor Rights Agent succeeds 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 if at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates will have the full force provided in the Right Certificates and in this Agreement.
(b)    If at any time the name of the Rights Agent changes and at such time any of the Right Certificates have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and if at that time any of the Right Certificates have not 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 will have the full force provided in the Right Certificates and in this Agreement.
20.Duties of Rights Agent.  The Rights Agent undertakes to perform only the duties and obligations expressly imposed by this Agreement (and no implied duties or obligations) upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, will be bound:
(a)The Rights Agent may consult with legal counsel (who may be legal counsel for the Company or an employee of the Rights Agent), and the advice or opinion of such counsel will be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered, or omitted by it in accordance with such advice or opinion.
(b)Whenever in the performance of its duties under this Agreement the Rights Agent deems it necessary or desirable that any fact or matter be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the President, any Vice President, the Secretary or the Treasurer of the Company and delivered to the Rights Agent, and such certificate will be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it under the provisions of this Agreement in reliance upon such certificate.
(c)The Rights Agent will be liable hereunder only for its own gross negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction).  Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect, consequential or incidental loss or damage of any kind whatsoever (including but not  limited to lost  profits), even if the Rights Agent has been advised of the likelihood of such loss or damage.  Any liability of the Rights Agent under this Agreement will be limited to the amount of fees (not to include reimbursements for costs and expenses) paid by the Company to the Rights Agent during the twelve (12) months immediately preceding the event for which recovery from the Rights Agent is being sought.
(d)The Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and will be deemed to have been made by the Company only.

(e)The Rights Agent will not have any liability for or be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor will it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor will it be responsible for any change in the terms or exercisability of the Rights or adjustment of the Rights (including any adjustment required under the provisions of Sections 11 or 13 hereof or any adjustment which results in Rights becoming null and void) or responsible for the manner, method or amount of any such change or adjustment 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 of any such adjustment); nor will it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of stock or other securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any shares of stock or other securities will, when issued, be duly authorized, validly issued, fully paid and nonassessable.
(f)The Company 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 President, any Vice President, the Secretary or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and such instructions shall be full authorization and protection to the Rights Agent, and the Rights Agent will not be liable for or in respect of any action taken, suffered or omitted to be taken by it in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions.  The Rights Agent shall be fully authorized and protected in relying upon the most recent instructions received by any such officer.
(h)The Rights Agent and any stockholder, affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement.  Nothing herein will preclude the Rights Agent or any such stockholder, affiliate, director, officer, or employee from acting in any other capacity for the Company or for any other Person.
(i)The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself (through its directors, officers and employees) or by or through its attorneys or agents, and the Rights Agent will not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company or any other Person resulting from any such act, default, neglect or misconduct, absent gross negligence, bad faith, or willful misconduct (which gross negligence, bad faith, or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction) in the selection and continued employment thereof.  The Rights Agent will not be under any duty or responsibility to ensure compliance with any applicable federal or state securities laws in connection with the issuance, transfer or exchange of Right Certificates.
(j)If, with respect to any Right Certificate surrendered to the Rights Agent for exercise, transfer, split up, combination or exchange, either (i) the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been properly completed or indicates an affirmative response to clause 1 or 2 thereof, or (ii) any other actual or suspected irregularity exists, the Rights Agent will not take any further action with respect to such requested exercise, transfer, split up, combination or exchange without first consulting with the Company, and will thereafter take further action with respect thereto only in accordance with the Company’s written instructions.  
(k)No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder (other than internal costs incurred by the Rights Agent in providing services to the Company in the ordinary course of its business as Rights Agent) or in the exercise of its rights if it believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.
21.Change of Rights Agent.  The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 calendar days’ notice in writing mailed to the Company and, in the event that the Rights Agent or one of its Affiliates is not also the transfer agent for the Company, to each transfer agent of the Preferred Shares or the Common Shares known to the Rights Agent, and to the holders of the Right Certificates by first class mail.  In the event a transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its duties under this Agreement as of the effective date of such termination, and the Company shall be responsible for sending any required notice hereunder. The Company may remove the Rights Agent or any successor Rights Agent upon 30 calendar days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Preferred Shares and the Common Shares by registered or 

certified mail, and to the holders of the Right Certificates by first class mail.  If the Rights Agent resigns or is removed or otherwise becomes incapable of acting, the Company will appoint a successor to the Rights Agent.  If the Company fails to make such appointment within a period of 30 calendar days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who will, 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, will (a) be a Person organized and doing business under the laws of the United States or of any state of the United States, in good standing, which is authorized under such laws to exercise corporate trust, shareholder services or stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million, or (b) an Affiliate of such a Person.  After appointment, the successor Rights Agent will be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent will 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, provided, that, such predecessor Rights Agent, notwithstanding its resignation, removal or replacement, shall be  reasonably compensated by the Company in connection with the foregoing.  Not later than the effective date of any such appointment, the Company will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Preferred Shares or the Common 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, will not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.
22.Issuance of New Right Certificates.  Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by the Board of Directors of the Company to reflect any adjustment or change in the Purchase Price per share and the number or kind of securities issuable upon exercise of the Rights made in accordance with the provisions of this Agreement.  In addition, in connection with the issuance or sale by the Company of Common Shares following the Distribution Date and prior to the Expiration Date, the Company (a) will, with respect to Common Shares so issued or sold pursuant to the exercise, exchange or conversion of securities (other than Rights) issued prior to the Distribution Date which are exercisable or exchangeable for, or convertible into Common Shares, and (b) may, in any other case, if deemed necessary, appropriate or desirable by the Board of Directors of the Company, issue Right Certificates representing an equivalent number of Rights as would have been issued in respect of such Common Shares if they had been issued or sold prior to the Distribution Date, as appropriately adjusted as provided herein as if they had been so issued or sold; provided, however, that (i) no such Right Certificate will be issued if, and to the extent that, in its good faith judgment the Board of Directors of the Company determines that the issuance of such Right Certificate could have a material adverse tax consequence to the Company or to the Person to whom or which such Right Certificate otherwise would be issued and (ii) no such Right Certificate will be issued if, and to the extent that, appropriate adjustment otherwise has been made in lieu of the issuance thereof.
23.Redemption.  (a) Prior to the Expiration Date, the Board of Directors of the Company may, at its option, redeem all but not less than all of the then‐outstanding Rights at the Redemption Price at any time prior to the Close of Business on the later of (i) the Distribution Date and (ii) Share Acquisition Date.  Any such redemption will be effective immediately upon the action of the Board of Directors of the Company ordering the same, unless such action of the Board of Directors of the Company expressly provides that such redemption will be effective at a subsequent time or upon the occurrence or nonoccurrence of one or more specified events (in which case such redemption will be effective in accordance with the provisions of such action of the Board of Directors of the Company).
(b)    Immediately upon the effectiveness of the redemption of the Rights as provided in Section 23(a), 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 will be to receive the Redemption Price, without interest thereon.  Promptly after the effectiveness of the redemption of the Rights as provided in Section 23(a), the Company will publicly announce such redemption (with prompt notice thereof to the Rights Agent) and, within 10 calendar days thereafter, will give notice of such redemption to the holders of the then‐outstanding Rights by mailing such notice to all such holders at their last addresses as they appear upon the registry books of the Company; provided, however, that the failure to give, or any defect in, any such notice will not affect the validity of the redemption of the Rights.  Any notice that is mailed in the manner herein provided will be deemed given, whether or not the holder receives the notice.  The notice of redemption mailed to the holders of Rights will state the method by which the payment of the Redemption Price will be made.  The Company may, at its option, pay the Redemption Price in cash, Common Shares (based upon the current per share market price of the Common Shares (determined pursuant to Section 11(d)) at the time of redemption), or any other form of consideration deemed appropriate by the Board of Directors of the Company (based upon the fair market value of such other consideration, determined by the Board of Directors of the Company in good faith) or any combination thereof.  The Company may, at its option, combine the payment of the Redemption Price with any other payment being made concurrently to holders of Common Shares and, to the extent that any such other payment is discretionary, may 

reduce the amount thereof on account of the concurrent payment of the Redemption Price.  If legal or contractual restrictions prevent the Company from paying the Redemption Price (in the form of consideration deemed appropriate by the Board of Directors of the Company) at the time of redemption, the Company will pay the Redemption Price, without interest, promptly after such time as the Company ceases to be so prevented from paying the Redemption Price.
24.Exchange.  (a) The Board of Directors of the Company may, at its option, at any time after the later of the Share Acquisition Date and the Distribution Date, exchange all or part of the then‐outstanding and exercisable Rights (which will not include Rights that have become null and void pursuant to the provisions of Section 11(a)(ii)) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the Record Date (such exchange ratio being hereinafter referred to as the “Exchange Ratio”).  Any such exchange will be effective immediately upon the action of the Board of Directors of the Company ordering the same, unless such action of the Board of Directors of the Company expressly provides that such exchange will be effective at a subsequent time or upon the occurrence or nonoccurrence of one or more specified events (in which case such exchange will be effective in accordance with the provisions of such action of the Board of Directors of the Company).  Notwithstanding the foregoing, the Board of Directors of the Company will not be empowered to effect such exchange at any time after any Person (other than the Company or any Related Person), who or which, together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the then‐outstanding Common Shares.
(b)    Immediately upon the effectiveness of the exchange of any Rights as provided in Section 24(a), and without any further action and without any notice, the right to exercise such Rights will terminate and the only right with respect to such Rights thereafter of the holder of such Rights will be to receive that number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio.  Promptly after the effectiveness of the exchange of any Rights as provided in Section 24(a), the Company will publicly announce such exchange (with prompt notice thereof to the Rights Agent) and, within 10 calendar days thereafter, will give notice of such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent; provided, however, that the failure to give, or any defect in, such notice will not affect the validity of such exchange.  Any notice that is mailed in the manner herein provided will 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 for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged.  Any partial exchange will be effected pro rata based on the number of Rights (other than Rights which have become null and void pursuant to the provisions of Section 11(a)(ii)) held by each holder of Rights.
(c)    In any exchange pursuant to this Section 24, the Company, at its option, may substitute for any Common Share exchangeable for a Right (i) equivalent common shares (as such term is used in Section 11(a)(iii)), (ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v) any combination of the foregoing, in any event having an aggregate value, as determined in good faith by the Board of Directors of the Company (whose determination will be described in a statement filed with the Rights Agent), equal to the current market value of one Common Share (determined pursuant to Section 11(d)) on the Trading Day immediately preceding the date of the effectiveness of the exchange pursuant to this Section 24.
25.Notice of Certain Events.  (a) If, after the Distribution Date, the Company proposes (i) to pay any dividend payable in stock of any class to the holders of Preferred Shares or to make any other distribution to the holders of Preferred Shares (other than a regular periodic cash dividend), (ii) to offer to the holders of Preferred Shares rights, options or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Preferred Shares (other than a reclassification involving only the subdivision of outstanding 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 assets or earning power (including, without limitation, securities creating any obligation on the part of the Company and/or any of its Subsidiaries) representing more than 50% of the assets and earning power of the Company and its Subsidiaries, taken as a whole, to any other Person or Persons other than the Company or one or more of its wholly owned Subsidiaries, (v) to effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or reclassification of the Common Shares then, in each such case, the Company will give to the Rights Agent and to each holder of a Right Certificate, to the extent feasible and in accordance with Section 26, a notice of such proposed action, which specifies the record date for the purposes of such stock dividend, distribution or offering of rights, options or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up is to take place and the date of participation therein by the holders of the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice will be so given, in the case of any action covered by clause (i) or (ii) above, at least 10 calendar 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 calendar 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 and/or Preferred Shares, whichever is the earlier.

(b)    In case any Triggering Event occurs, then, in any such case, the Company will as soon as practicable thereafter give to the Rights Agent and each holder of a Right Certificate, in accordance with Section 26, a notice of the occurrence of such event, which specifies the event and the consequences of the event to holders of Rights.
(c)    Notwithstanding anything in this Agreement to the contrary, prior to the Distribution Date, a filing by the Company with the Securities and Exchange Commission shall constitute sufficient notice to the holders of any Rights or of any Common Shares for purposes of this Agreement.
26.Notices.  (a) 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 will be sufficiently given or made if made in writing and sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:
KB Home
10990 Wilshire Boulevard
Los Angeles, California  90024
Attention:  General Counsel
(b)    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 Agent will be sufficiently given or made if made in writing and sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows:
Computershare Inc.
2335 Alaska Avenue
El Segundo CA 90245
Attention:  Relationship Manager
with a copy to:
Computershare Inc.
250 Royall Street
Canton, MA 02021
Attention: Legal Department
(c)    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 (or, if prior the Distribution Date, to the holder of any Common Shares) will be sufficiently given or made if made in writing and sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.
27.Supplements and Amendments.  Prior to the time at which the Rights cease to be redeemable pursuant to Section 23, and subject to the penultimate sentence of this Section 27, the Company may in its sole and absolute discretion, and the Rights Agent will if the Company so directs, supplement or amend any provision of this Agreement in any respect without the approval of any holders of Rights or Common Shares.  From and after the time at which the Rights cease to be redeemable pursuant to Section 23, and subject to the penultimate sentence of this Section 27, the Company may, and the Rights Agent will if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights or Common Shares in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to supplement or amend the provisions hereunder in any manner which the Company may deem desirable; provided, however, that no such supplement or amendment shall adversely affect the interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no such supplement or amendment shall cause the Rights again to become redeemable or cause this Agreement again to become supplementable or amendable otherwise than in accordance with the provisions of this sentence. Without limiting the generality or effect of the foregoing, this Agreement may be supplemented or amended to provide for such voting powers for the Rights and such procedures for the exercise thereof, if any, as the Board of Directors of the Company may determine to be appropriate.  Any supplement or amendment must be evidenced by a writing to be signed by the Company and the Rights Agent.  Upon the delivery of a certificate from an officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent will execute such supplement or amendment.  Notwithstanding anything in this Agreement to the contrary, (a) no supplement or amendment may be made which decreases the stated Redemption Price to an amount less than $0.0005 per Right, and (b) the Rights Agent may, but shall not be obligated to, enter into any supplement or amendment that affects the Rights Agent’s own rights, duties, obligations, or immunities under this Agreement.  Notwithstanding anything in this Agreement to the contrary, the limitations on the ability of the Board of Directors of the Company to amend this Agreement set forth in this Section 27 shall not affect the power or ability of the Board of Directors of the Company to take any other action that is consistent with its fiduciary duties under Delaware law, including without limitation accelerating or extending the Expiration Date or making any 

other amendment to this Agreement that is permitted by this Section 27 or adopting a new stockholder rights plan with such terms as the Board of Directors of the Company determines in its sole discretion to be appropriate.
28.Successors; Certain Covenants.  All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent will be binding on and inure to the benefit of their respective successors and assigns hereunder.
29.Benefits of This Agreement.  Nothing in this Agreement will be construed to give to any Person other than the Company, the Rights Agent, and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement.  This Agreement will be for the sole and exclusive benefit of the Company, the Rights Agent, and the registered holders of the Right Certificates (or prior to the Distribution Date, the Common Shares).
30.Governing Law.  This Agreement, each Right and each Right Certificate issued hereunder will be deemed to be a contract made under the internal substantive laws of the State of Delaware and for all purposes will be governed by and construed in accordance with the internal substantive laws of such State applicable to contracts to be made and performed entirely within such State, provided, however, that all provisions regarding the rights, duties, and obligations of the Rights Agent shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.
31.Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement will remain in full force and effect and will in no way be affected, impaired or invalidated; provided, however, that if such excluded provision shall effect the rights, immunities, duties or obligations of the Rights Agent, the Rights Agent shall be entitled to resign immediately.  Nothing contained in this Section 31 will affect the ability of the Company under the provisions of Section 27 to supplement or amend this Agreement to replace such invalid, void or unenforceable term, provision, covenant or restriction with a legal, valid and enforceable term, provision, covenant or restriction.
32.Descriptive Headings, Etc.  Descriptive headings of the several Sections of this Agreement are inserted for convenience only and will not control or affect the meaning or construction of any of the provisions hereof.  Unless otherwise expressly provided, references herein to Articles, Sections and Exhibits are to Articles, Sections and Exhibits of or to this Agreement.
33.Determinations and Actions by the Board.  For all purposes of this Agreement, any calculation of the number of Common Shares outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Common Shares of which any Person is the Beneficial Owner, will be made in accordance with, as the Board of Directors of the Company deems to be applicable, the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act or the provisions of Section 382 of the Code, or any successor provision or replacement provision.  The Board of Directors of the Company will have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board of Directors of the Company or to the Company, or as may be necessary or advisable in the administration of this Agreement, including without limitation the right and power to (i) interpret the provisions of this Agreement (including without limitation Section 27, this Section 33 and other provisions hereof relating to its powers or authority hereunder) and (ii) make all determinations deemed necessary or advisable for the administration of this Agreement (including without limitation any determination contemplated by Section 1(a) or any determination as to whether particular Rights shall have become null and void).  Without limiting any of the rights of the Rights Agent under this Agreement, all such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, any omission with respect to any of the foregoing) which are done or made by the Board of Directors of the Company in good faith will (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties and (y) not subject the Board of Directors of the Company to any liability to any Person, including without limitation the Rights Agent and the holders of the Rights. The Rights Agent is entitled always to assume that the Company’s Board of Directors acted in good faith and shall be fully protected and incur no liability in reliance thereon.
34.Effective Time.  Notwithstanding anything in this Agreement to the contrary, this Agreement will not be effective until the Effective Time.
35.Force Majeure.  Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunctions of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war or civil unrest.

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

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

By:        /s/ BRIAN J. WORAM               
Name:   Brian J. Woram
Title:     Executive Vice President and
 General Counsel

	 
	 

	 
	COMPUTERSHARE INC.
By:       /s/ DENNIS MOCCIA                  
Name:  Dennis Moccia
Title:    Manager, Contract Administration

    

EXHIBIT A
FORM OF RIGHT CERTIFICATE
Certificate No. R‐____________                                    __________ Rights
NOT EXERCISABLE AFTER APRIL 30, 2021 OR EARLIER IF REDEEMED, EXCHANGED OR AMENDED, OR IN CERTAIN OTHER CIRCUMSTANCES.  THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF MAY BECOME NULL AND VOID.
Right Certificate
KB HOME
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 Amended and Restated Rights Agreement, dated effective as of April 12, 2018 (the “Rights Agreement”), between KB Home, a Delaware corporation (the “Company”), and Computershare Inc. (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 City time) on the Expiration Date (as such term is defined in the Rights Agreement) at the office or offices of the Rights Agent designated for such purpose, one one-hundredth of a fully paid nonassessable share of Series A Participating Cumulative Preferred Stock, par value $1.00 per share (the “Preferred Shares”), of the Company, at a purchase price of $85.00 per one one-hundredth of a Preferred Share (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase and related Certificate duly executed.  If this Right Certificate is exercised in part, the holder will be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.  The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a Preferred Share which may be purchased upon exercise thereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of the date of the Rights Agreement, based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and/or the number and/or kind of securities issuable upon the exercise of the Rights evidenced by this Right Certificate are subject to adjustment upon the occurrence 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 of the Rights Agent, the Company and the holders of the Right Certificates, which limitations of rights include the temporary suspension of the exercisability of the Rights under the circumstances specified in the Rights Agreement.  Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and can be obtained from the Company without charge upon written request therefor.  Terms used herein with initial capital letters and not defined herein are used herein with the meanings ascribed thereto in the Rights Agreement.
Pursuant to the Rights Agreement, from and after the occurrence of a Flip‐in Event, any Rights that are Beneficially Owned by (i) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (ii) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the occurrence of a Flip‐in Event, or (iii) a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or concurrently with the Flip‐in Event pursuant to either (a) a transfer from an Acquiring Person to holders of its equity securities or to any Person with whom it 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 the purpose or effect of avoiding certain provisions of the Rights Agreement, and subsequent transferees of any of such Persons, will be void without any further action and any holder of such Rights will thereafter have no rights whatsoever with respect to such Rights under any provision of the Rights Agreement.  From and after the occurrence of a Flip‐in Event, no Right 

Certificate will be issued that represents Rights that are or have become null and void pursuant to the provisions of the Rights Agreement, and any Right Certificate delivered to the Rights Agent that represents Rights that are or have become null and void pursuant to the provisions of the Rights Agreement will be canceled.
This Right Certificate, with or without other Right Certificates, may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates entitling the holder to purchase a like number of one one-hundredths of a Preferred Share (or other securities, as the case may be) as the Right Certificate or Right Certificates surrendered entitled such holder (or former holder in the case of a transfer) to purchase, upon presentation and surrender hereof at the office of the Rights Agent designated for such purpose, with the Form of Assignment (if appropriate) and the related Certificate duly executed.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $0.0005 per Right or may be exchanged in whole or in part.  The Rights Agreement may be supplemented and amended by the Company, as provided therein.
The Company is not required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share, which may, at the option of the Company, be evidenced by depositary receipts) or other securities issuable upon the exercise of any Right or Rights evidenced hereby.  In lieu of issuing such fractional Preferred Shares or other securities, the Company may make a cash payment, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, will 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 upon the exercise of the Right or Rights represented hereby, nor will anything contained herein or in the Rights Agreement 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 have been exercised in accordance with the provisions of the Rights Agreement.
This Right Certificate will not be valid or obligatory for any purpose until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.  Dated as of ________, ____.
	
		
	ATTEST:
	KB HOME
By:
Name:
Title:

	 
	 

	Countersigned:
COMPUTERSHARE INC. 
By:
Authorized Signature
	 

Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _______________ hereby sells, assigns and transfers unto ______________________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________________ this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint _______________ Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.
Dated:  __________, ____
	
		
	 
	Signature

	Signature Guaranteed:  _____________________________

CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1)    the Rights evidenced by this Right Certificate [  ] are [  ] are not being sold, assigned, transferred, split up, combined or exchanged by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Person (as such terms are defined in the Rights Agreement);
(2)    after due inquiry and to the best knowledge of the undersigned, it [  ] did [  ] did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated:  __________, ____

	
		
	 
	Signature

FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To KB Home:
The undersigned hereby irrevocably elects to exercise __________ Rights represented by this Right Certificate to purchase the one one-hundredths of a Preferred Share or other securities issuable upon the exercise of such Rights and requests that certificates for such securities be issued in the name of and delivered to:
Please insert social security
or other identifying number:                                          

                                                    
(Please print name and address)
                                                    
If such number of Rights is not all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights will be registered in the name of and delivered to:
Please insert social security
or other identifying number:                                          

                                                    
(Please print name and address)
                                                    
Dated:  __________, ____
	
		
	 
	Signature

	Signature Guaranteed:  _____________________________

CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1)    the Rights evidenced by this Right Certificate [  ] are [  ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Person (as such terms are defined pursuant to the Rights Agreement);
(2)    after due inquiry and to the best knowledge of the undersigned, it [  ] did [  ] did not acquire the Rights evidenced by this Right Certificate from any Person who is, was, or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated:  __________, ____
	
		
	 
	Signature

NOTICE
Signatures on the foregoing Form of Assignment and Form of Election to Purchase and in the related Certificates must correspond to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved medallion signature program) pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.

    

EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On January 22, 2009, the Board of Directors of KB Home adopted a rights plan and declared a dividend of one preferred share purchase right for each outstanding share of KB Home’s Common Stock, par value $1.00 per share.  The dividend was payable on March 5, 2009 to our stockholders of record on that date.  On April 12, 2018, the rights plan was amended and restated.  The terms of the rights and the rights plan are set forth in an Amended and Restated Rights Agreement, dated effective as of April 12, 2018, by and between KB Home and Computershare Inc., as rights agent.
Our Board adopted the rights plan in an effort to protect stockholder value by attempting to protect against a possible limitation on our ability to use our deferred tax assets in reducing potential future federal income tax obligations.  We have substantial deferred tax assets in the form of net operating losses, built-in losses and tax credits, and under the Internal Revenue Code and rules promulgated by the Internal Revenue Service, we may “carry forward” these deferred tax assets in certain circumstances to offset any current and future earnings and thus reduce our federal income tax liability, subject to certain requirements and restrictions.  To the extent that these deferred tax assets do not otherwise become limited, we believe that we will be able to carry forward a significant amount of them.  However, if we experience an “ownership change,” as defined in Section 382 of the Internal Revenue Code, our ability to use our deferred tax assets will be substantially limited, and the timing of the usage of could be substantially delayed, which could significantly impair the value of those assets.
In general terms, the rights plan imposes a significant penalty upon any person or group that acquires 4.9% or more of our outstanding common stock without the prior approval of our Board.  A person or group that acquires a percentage of our common stock in excess of that threshold is called an “acquiring person.”  Any rights held by an acquiring person are void and may not be exercised.
This summary of rights provides a general description of the rights plan.  Because it is only a summary, this description should be read together with the entire rights plan, which we incorporate in this summary by reference.  We have filed the rights plan with the Securities and Exchange Commission as an exhibit to our registration statement on Form 8-A/A filed on April 12, 2018.  Upon written request, we will provide a copy of the rights plan free of charge to any stockholder.
The Rights.  Our Board authorized the issuance of one right per each outstanding share of our common stock on March 5, 2009.  If the rights become exercisable, each right would allow its holder to purchase from us one one-hundredth of a share of our Series A Participating Cumulative Preferred Stock for a purchase price of $85.00.  Each fractional share of preferred stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of our common stock.  Prior to exercise, however, a right does not give its holder any dividend, voting or liquidation rights.
Exercisability.  The rights will not be exercisable until the earlier of:
		
	•
	10 days after a public announcement by KB Home that a person or group has become an acquiring person; and

		
	•
	10 business days (or a later date determined by our Board) after a person or group begins a tender or exchange offer that, if completed, would result in that person or group becoming an acquiring person.

We refer to the date that the rights become exercisable as the “distribution date.”  Until the distribution date, our common stock certificates will also evidence the rights and will contain a notation to that effect.  Any transfer of shares of common stock prior to the distribution date will constitute a transfer of the associated rights.  After the distribution date, the rights will separate from the common stock and be evidenced by right certificates, which we will mail to all holders of rights that have not become null and void.  
Flip-in Event.  After the distribution date, if a person or group already is or becomes an acquiring person, all holders of rights, except the acquiring person, may exercise their rights upon payment of the purchase price to purchase shares of our common stock (or other securities or assets as determined by the Board) with a market value of two times the purchase price.  
Flip-over Event.  After the distribution date, if a flip-in event has already occurred and KB Home is acquired in a merger or similar transaction, all holders of rights except the acquiring person may exercise their rights upon payment of the purchase price, to purchase shares of the acquiring corporation with a market value of two times the purchase price of the rights.  

Rights may be exercised to purchase our preferred shares only after the distribution date occurs and prior to the occurrence of a flip-in event as described above.  A distribution date resulting from the commencement of a tender offer or exchange offer described in the second bullet point above could precede the occurrence of a flip-in event, in which case the rights could be exercised to purchase our preferred shares.  A distribution date resulting from any occurrence described in the first bullet point above would necessarily follow the occurrence of a flip-in event, in which case the rights could be exercised to purchase shares of common stock or other securities as described above.
Expiration.  The rights will expire on the earliest of (i) April 30, 2021, (ii) the time at which the rights are redeemed, (iii) the time at which the rights are exchanged, (iv) the effective time of the repeal of Section 382 of the Code or any successor statute if the Board determines that the rights plan is no longer necessary for the preservation of our tax assets, and (v) the first day of a taxable year of the Company to which the Board determines that no NOLs or other tax assets may be carried forward.
Redemption.  Our Board may redeem all (but not less than all) of the rights for a redemption price of $0.0005 per right at any time before the later of the distribution date and the date of the first public announcement or disclosure by KB Home that a person or group has become an acquiring person.  Once the rights are redeemed, the right to exercise rights will terminate, and the only right of the holders of rights will be to receive the redemption price.  The redemption price will be adjusted if we declare a stock split or issue a stock dividend on our common stock.
Exchange.  After the later of the distribution date and the date of the first public announcement by KB Home that a person or group has become an acquiring person, but before an acquiring person owns 50% or more of our outstanding common stock, our Board may exchange each right (other than rights that have become null and void) for one share of common stock or an equivalent security.  
Anti-Dilution Provisions.  Our Board may adjust the purchase price of the preferred shares, the number of preferred shares issuable and the number of outstanding rights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the preferred shares or our common stock.  No adjustments to the purchase price of less than 1% will be made.  
Amendments.  Before the time rights cease to be redeemable, our Board may amend or supplement the rights plan without the consent of the holders of the rights, except that no amendment may decrease the redemption price below $0.0005 per right.  At any time thereafter, our Board may amend or supplement the rights plan only to cure an ambiguity, to alter time period provisions, to correct inconsistent provisions or to make any additional changes to the rights plan, but only to the extent that those changes do not impair or adversely affect any rights holder and do not result in the rights again becoming redeemable.  The limitations on our Board’s ability to amend the rights plan does not affect our Board’s power or ability to take any other action that is consistent with its fiduciary duties, including without limitation accelerating or extending the expiration date of the rights, making any amendment to the rights plan that is permitted by the rights plan or adopting a new rights plan with such terms as our Board determines in its sole discretion to be appropriate.

*       *       *Exhibit

Exhibit 10.1

FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

This Fifth Amended and Restated Credit Agreement (the “Agreement”) is entered into as of 13th day of April, 2018 between FIRST MID-ILLINOIS BANCSHARES, INC., a Delaware corporation (the “Borrower”), and THE NORTHERN TRUST COMPANY, an Illinois banking corporation (the “Lender”).  

The Borrower and the Lender entered into that certain Fourth Amended and Restated Credit Agreement, dated as of September 7, 2016 (the “Original Agreement”), to provide the Borrower with two credit facilities in the aggregate principal amount of TWENTY FIVE MILLION DOLLARS ($25,000,000) consisting of: (a) a term loan (the “Term Loan”) in the principal amount of FIFTEEN MILLION DOLLARS ($15,000,000) (the “Term Loan Commitment”); and (b) a revolving loan (the “Revolving Loan”) in the principal amount of up to TEN MILLION DOLLARS ($10,000,000) (the “Revolving Loan Commitment”).  The Term Loan and the Revolving Loan may be referred to collectively as the “Loans.”

The Borrower and the Lender entered into that certain First Amendment to Fourth Amended and Restated Credit Agreement, dated as of April 14, 2017 to extend the maturity date of the Revolving Loan to April 13, 2018.

The Borrower and the Lender have agreed to enter into this Fifth Amended and Restated Credit Agreement to extend the maturity date of the Revolving Loan to April 12, 2019, and to make certain other amendments to the Original Agreement, as amended, as set forth herein.

		
	1.
	DEFINITIONS.

1.1.    General.  As used herein:

(a)“Anti-Terrorism Law” means any law relating to terrorism or money-laundering, including Executive Order No. 13224 and the USA Patriot Act.

(b)“Business Day” means a day on which the Lender is open at its main office for the purpose of conducting a commercial banking business and is not authorized to close, and in the case of a Business Day which relates to a LIBOR Loan, a day for which a LIBOR Publisher publishes rates for deposits in dollars in London corresponding to selected (or deemed selected) Interest Periods.

(c)“Closing Date” means September 7, 2016.

(d)“Collateral” has the meaning ascribed to such term in the Pledge Agreement.

(e)“Control Agreement” means that certain Securities Account Control Agreement dated as of September 7, 2016, among the Borrower, the Lender and First Tennessee Bank, N.A., as the Intermediary (as amended, restated, supplemented or modified from time to time). 

(f)“Event of Default” has the meaning given such term in Section 8.1.

(g)“FDIC” means the Federal Deposit Insurance Corporation and any successor thereof.

(h)“Federal Funds Rate” means the weighted average of the rates on overnight Federal funds transactions, with members of the Federal Reserve System only, arranged by Federal funds brokers.  The Federal Funds Rate will be determined by the Lender on the basis of reports by Federal funds brokers to, and published daily by, the Federal Reserve Bank of New York in the Composite Closing Quotations for U.S. Government Securities, provided that if such rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.  If such publication is unavailable or the Federal Funds Rate is not set forth therein, the Federal Funds Rate will be determined on the basis of any other source reasonably selected by the Lender.  The Federal Funds Rate applicable each day will be the Federal Funds Rate reported as applicable to Federal Funds transactions on that date.  In the case of Saturday, Sunday or legal holiday, the Federal Funds Rate will be the rate applicable to Federal funds transactions on the immediately preceding day for which the Federal Funds Rate is reported.

(i)“Federal Funds-Based Rate” has the meaning ascribed to such term in Section 3.1(a)(ii)(B).

(j)“Guarantor” means any person or entity, or any persons or entities severally, now or hereafter guarantying payment or collection of all or any part of the Loans or any other liabilities owed by the Borrower to the Lender.

(k)“Interest Period” means, as to any LIBOR Loan, the period commencing on the date such Loan is borrowed or continued as, or converted into, a LIBOR Loan and ending on the date one, two or three months thereafter as selected by the Borrower, as the case may be, provided that:
(i)if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day;

(ii)any Interest Period that begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of the calendar month at the end of such Interest Period;

(iii)The Borrower may not select any Interest Period for a Revolving Loan which would extend beyond the scheduled Revolving Loan Maturity Date; and

(iv)The Borrower may not select any Interest Period for any portion of the Term Loan if, after giving effect to such selection, the aggregate principal amount the Term Loan having an Interest Period ending after any date on which an installment of the Term Loan is scheduled to be repaid would exceed the aggregate principal amount of the Term Loan scheduled to be outstanding after giving effect to such repayment.

(l)“LIBOR-Based Rate” has the meaning ascribed to such term in Section 3.1(b)(ii)(C).

(m)“LIBOR Loan” means any Loan which bears interest at a rate determined by reference to the LIBOR Rate.

(n)“LIBOR Publisher” means ICE Benchmark Administration Limited or another source selected by the Lender and reasonably believed by the Lender to be widely used by commercial lenders to determine the London Interbank Offered Rate.

(o)“LIBOR Rate” means that periodically fixed rate of interest per year for deposits with maturity periods of one, two or three months (which periods the Borrower shall select subject to the terms stated herein) in United States dollars offered to the Lender in or through the London interbank market, as determined by the Lender in accord with its customary practices based on information supplied directly or indirectly by a LIBOR Publisher (provided that if such rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement), for or as of the borrowing, maintenance or conversion date requested by Borrower, divided by one minus any applicable reserve requirement (expressed as a decimal) under regulations issued from time to time by the Federal Reserve Board on Eurodollar deposits of the same amount and maturity.  As to days which are not Business Days, the Lender will determine and apply a rate in accord with its customary practices based on information supplied directly or indirectly as of a recent or subsequent date by a LIBOR Publisher (provided that if any such supplied rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement).  The Lender’s determination of the LIBOR Rate shall be conclusive, absent manifest error and shall remain fixed during such Interest Period.

(p) “Loan Documents” means those documents and instruments (including, without limitation, all agreements, instruments and documents, including, without limitation, hedging agreements, guaranties, mortgages, deeds of trust, pledges (including the Pledge Agreement), powers of attorney, consents, assignments, contracts, notices and all other written matter heretofore, now and/or from time to time hereafter executed by and/or on behalf of the Borrower in connection with this Agreement and the Loans) entered into or delivered in connection with or relating to the Loans.

(q)“Net Chargeoffs” means for any period of four consecutive fiscal quarters, the consolidated total of gross loan charges for such period net of recoveries made during such period.

(r)“Notes” means the Revolving Note and the Term Note, collectively.

(s)“Person” means any natural person, corporation, partnership, trust, limited liability company, association, governmental authority or unit, or any other entity, whether acting in an individual, fiduciary or other capacity.

(t)“Pledge Agreement” means that certain Pledge Agreement dated as of September 7, 2016, between the Borrower and the Lender (as amended as of the date hereof, and as may be further amended, restated, supplemented or modified from time to time), pursuant to which the Collateral is pledged to the Lender.

(u)“Prime Rate” means that rate of interest announced from time to time by the Lender called its prime rate, which rate may not at any time be the lowest rate charged by the Lender.  If such rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.  Changes in the rate of interest on the Loans resulting from a change in the Prime Rate will take effect on the date set forth in each announcement of a change in the Prime Rate.  Notwithstanding the foregoing or any other provision hereof or of any Related Document, in no event shall the interest rate hereunder exceed the maximum interest rate allowed under applicable law.

(v)“Prohibited Person” means: (i) a person that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (ii) a person owned or controlled by, or acting for or on behalf of, any person that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (iii) a person with whom the Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a person who commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224; (v) a person that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov/ofac/t11sdn.pdf or at any replacement website or at any other official publication of such list; and (vi) a person who is owned or controlled by a person listed in clause (iii) or (v).

(w)“Related Party” means any Guarantor, any Subsidiary, and to the extent applicable, any general or limited partner, controlling shareholder, joint venturer, member or manager, of the Borrower.

(x)“Revolving Loan” has the meaning ascribed to such term in the recitals hereto.

(y)“Revolving Loan Commitment” has the meaning ascribed to such term in the recitals hereto.

(z)“Revolving Loan Maturity Date” means April 12, 2019, or such earlier date, pursuant to Section 8.2 of this Agreement.

(aa)“Revolving Note” means a promissory note, in the form attached as Exhibit A hereto in the principal amount of the Revolving Loan Commitment, as amended, restated, supplemented or modified from time to time and each note delivered in substitution or exchange for such note.

(bb)     “Risk-Weighted Assets” means at any date the sum of total risk-weighted balance sheet assets and the total of risk-weighted off-balance sheet credit equivalent amounts as determined under the capital formula currently used at the time of determination by the Federal Reserve Board, FDIC or other primary federal regulator.

(cc)    “Senior Debt” means any indebtedness of the Borrower for money borrowed, but does not include any subordinated indebtedness of the Borrower, any indebtedness incurred in connection with the issuance of trust preferred securities or any indebtedness of any of the Borrower’s subsidiaries.

(dd)     “Subsidiary” means any corporation, partnership, joint venture, trust, or other legal entity of which the Borrower owns directly or indirectly 50% or more of the outstanding voting stock or interest, or of which the Borrower has effective control, by contract or otherwise.  The term Subsidiary includes each Subsidiary Bank unless stated otherwise explicitly.

(ee)    “Subsidiary Bank” means each Subsidiary which is a bank.

(ff)    “Term Loan” has the meaning ascribed to such term in the recitals hereto.

(gg)    “Term Loan Commitment” has the meaning ascribed to such term in the recitals hereto.

(hh)    “Term Loan Maturity Date” means September 7, 2020, or such earlier date, pursuant to Section 8.2 of this Agreement.

(ii)    “Term Note” means that certain promissory note, dated as of September 7, 2016, in the principal amount of the Term Loan Commitment, as may be amended, restated, supplemented or modified from time to time and each note delivered in substitution or exchange for such note.  The parties agree that the reference in the Term Note to the “Fourth Amended and Restated Credit Agreement” shall be deemed to be a reference to this Agreement, as may be amended, restated, supplemented or modified from time to time.

(jj)    “Tier 1 Capital” shall have the definition provided in, and shall be determined in accordance with, the rules, regulations, guidance and instructions of the Federal Reserve Board, FDIC or other primary federal regulator at the time of determination.

(kk)    “Total Capital” shall have the definition provided in, and shall be determined in accordance with, the rules, regulations, guidance and instructions of the Federal Reserve Board, FDIC or other primary federal regulator at the time of determination.

(ll)    “Tier 1 Leverage Ratio” means the ratio of tier 1 capital to average assets within the meaning set forth under applicable regulations of any regulatory agency having authority on the date hereof as such regulations are applicable to the Borrower and the Subsidiary Bank, as the case may be, or if such regulations are amended hereafter to define such ratio more restrictively then as set forth in such later definition.

(mm)    “Tier 1 Risk-Based Capital Ratio” means the ratio of tier 1 capital to total risk weighted assets within the meaning set forth under applicable regulations of any regulatory agency having authority on the date hereof as such regulations are applicable to the Borrower and the Subsidiary Bank, as the case may be, or if such regulations are amended hereafter to define such ratio more restrictively then as set forth in such later definition.

(nn)    “Total Risk-Based Capital Ratio” means the ratio of total risk based capital to total risk weighted assets within the meaning set forth under applicable regulations of any regulatory agency having authority on the date hereof as such regulations are applicable to the Borrower and the Subsidiary Bank, as the case may be, or if such regulations are amended hereafter to define such ratio more restrictively then as set forth in such later definition.

(oo)    “Unmatured Event of Default” means an event or condition which would become an Event of Default with notice or the passage of time or both.

Unless otherwise specifically provided herein, all accounting terms have the meanings given to them by generally accepted accounting principles, as in effect from time to time, and will be applied, and all reports required by this Agreement will be prepared, in a manner consistent with generally accepted accounting principles, as in effect from time to time.
1.2.        Applicability of Subsidiary References.  Terms pertaining to any Subsidiary apply only during such times as the Borrower has any Subsidiary.

2.LOANS.

2.1.    Revolving Loan.  Subject to the terms and conditions of this Agreement, the Lender agrees to make loans to the Borrower, from time to time from the date of this Agreement through the Revolving Loan Maturity Date, at such times and in such amounts, not to exceed the Revolving Loan Commitment at any one time outstanding, as the Borrower may request (each a “Revolving Loan” and collectively, the “Revolving Loans”).

During such periods the Borrower may borrow, repay and reborrow under this Agreement.  Each Loan will be in the amount of at least $100,000 or, the remaining unused amount of the Revolving Loan Commitment if less than $100,000.  The Borrower agrees not to permit the outstanding principal balance of Loans to exceed the Revolving Loan Commitment at any time.

As of the date of this Agreement, any principal amount outstanding from the Lender to the Borrower under the original Agreement is deemed to be a Loan outstanding under this Agreement, and is subject to the terms and conditions contained in this Agreement.

2.2.    Term Loan.  Subject to the terms and conditions of this Agreement, the Lender made a loan to the Borrower on the Closing Date in the amount of the Term Loan Commitment.  The commitment of the Lender to make the Term Loan expired concurrently with the making of the Term Loan on the Closing Date. 

2.3.    Credit Notes.  The Revolving Loan shall be evidenced by the Revolving Note substantially in the form of Exhibit A, dated the date of this Agreement, payable to the order of the Lender in the principal amount of the Revolving Loan Commitment.  The Term Loan shall be evidenced by that certain Term Note, dated as of September 7, 2016, payable to the order of the Lender in the principal amount of the Term Loan Commitment.  The Lender may at any time and from time to time at the Lender's sole option attach a schedule (grid) to any Note and endorse thereon notations with respect to each Loan specifying the date and principal amount thereof, the Interest Period (if applicable), the applicable interest rate and rate option, and the date and amount of each payment of principal and interest made by the Borrower with respect to each such Loan.  The Lender's endorsements as well as its records relating to Loans will be rebuttably presumptive evidence of the outstanding principal and interest on the Loans, and, in the event of inconsistency, will prevail over any records of the Borrower and any written confirmations of Loans given by the Borrower.  The principal of the Revolving Note and the Term Note, plus any other amounts due and payable under the Revolving Note and the Term Note, respectively, shall be paid on or before the Revolving Loan Maturity Date and the Term Loan Maturity Date, respectively.

The Revolving Note shall replace the previously existing note made by the Borrower for the benefit of the Lender, dated April 14, 2017.  Upon the execution of the Revolving Note and its delivery to the Lender, the Lender will destroy the note existing immediately prior to the execution of this Agreement and all of the Lender’s rights under the destroyed note shall thereafter be represented by the Revolving Note.

		
	3.
	INTEREST AND FEES.

3.1.     Interest Rate.  

(a)Revolving Loans.

(i)The Borrower agrees to pay interest on the unpaid principal amount of the Revolving Loan from time to time outstanding under this Agreement at the following rates per year:

(ii)before maturity of any Revolving Loan, whether by acceleration or otherwise, at the option of the Borrower, subject to the terms hereof at a rate equal to:

(A)The Prime Rate; or

(B)The “Federal Funds-Based Rate”, which means the Federal Funds Rate plus 2.25%.

(b)Term Loan.

(i)The Borrower agrees to pay interest on the unpaid principal amount of the Term Loan from time to time outstanding under this Agreement at the following rates per year:

(ii)before maturity of the Term Loan, whether by acceleration or otherwise, at the option of the Borrower, subject to the terms hereof at a rate equal to:

(A)the Prime Rate; 

(B)the “Federal Funds-Based Rate,” which means the Federal Funds Rate plus 2.25%; or

(C)the “LIBOR-Based Rate,” which means the LIBOR Rate plus 2.25%.

(c)Notwithstanding the foregoing, upon written notice from the Lender to the Borrower if an Event of Default has occurred and is continuing, or after the maturity of any Loan, whether by acceleration or otherwise, each Loan will bear interest until paid at a rate equal to 2% in addition to the rate in effect immediately prior to maturity (but not less than the Prime Rate in effect at maturity).

3.2.    Rate Selection.
(a)    Revolving Loans.  

(i)The Borrower will select and change its selection of the interest rate as among the Federal Funds-Based Rate and the Prime Rate, to apply to at least $100,000 of principal and in integral multiples of $100,000 thereafter of any Revolving Loan, subject to the requirements contained in this Agreement:

(ii)At the time any Revolving Loan is made; and

(iii)At any time for the outstanding principal balance of any Revolving Loan currently bearing interest at the Prime Rate or the Federal Funds-Based Rate.

(b)     Term Loan.  The Borrower shall select and change its selection of the interest rate as among the Prime-Based Rate, the LIBOR-Based Rate and the Federal Funds-Based Rate to apply to at least $100,000 of principal and in integral multiples of $100,000 thereafter, subject to the conditions of this Agreement and to the requirements herein stated:

(i)     At the time any Loan is made;

(ii)    At the expiration of the particular Interest Period selected for outstanding principal currently bearing interest at the LIBOR-Based Rate; and

(iii)     At any time for outstanding principal currently bearing interest at the Prime-Based Rate or the Federal Funds-Based Rate.

3.3.    Initial Rate, Rate Changes and Notifications.

(a)    Federal Funds-Based and Prime Rate.  If the Borrower wishes to borrow funds at the Federal Funds-Based Rate or Prime Rate or to change the rate of interest on any Loan or any portion of a Loan, subject to the terms and conditions of this Agreement, to the Federal Funds-Based Rate or Prime Rate, it will, at or before l1:00 A.M., Chicago time, on the date such borrowing or change is to take effect, which will be a Business Day, give written or telephonic notice thereof, which is irrevocable.  Borrowings and changes requested after such time may not be available until the next Business Day.  Each such notice shall be effective upon receipt, and shall specify the date, amount and type of borrowing.  Subject to the other terms and conditions hereof, both the Prime-Based Rate and Federal Funds-Based Rate are subject to change on a daily basis.  

(b)    LIBOR-Based Rate.  If the Borrower wishes to borrow funds under the Term Loan at the LIBOR-Based Rate or to change the rate of interest on the Term Loan or any portion of the Term Loan, subject to the terms and conditions of this Agreement, to the LIBOR-Based Rate, it will, at or before l1:00 A.M., Chicago time, on the date that is at least three (3) Business Days prior to such borrowing or change is to take effect, which will be a Business Day, give written or telephonic notice thereof, which is irrevocable.  Each such notice shall be effective upon receipt by the Lender, shall be irrevocable, and shall specify the date, amount and the Interest Period therefor (but not to extend beyond the Scheduled Maturity Date unless the Lender consents otherwise).  Subject to the other terms and conditions hereof, the LIBOR-Based Rate as selected for any principal shall remain fixed for the particular Interest Period.  

(c)    Failure to Notify.  If upon the expiration of any Interest Period applicable to LIBOR Loans, the Borrower has failed to select timely a new Interest Period to be applicable to such LIBOR Loans, the Borrower shall be deemed to have elected to convert such LIBOR Loans into the Prime Rate effective on the last day of such Interest Period.  If the Borrower does not notify the Lender as to its selection of the interest rate option with respect to any new Loan, the Borrower is deemed to have elected to have such Loan accrue interest at the Prime Rate.

(d)Event of Default.  Notwithstanding any other provision hereof, if an Event of Default has occurred and is continuing, the Borrower may not:  (i) borrow funds at the LIBOR-Based Rate or the Federal Funds-Based Rate; (ii) change the interest rate on outstanding principal to the LIBOR-Based Rate or the Federal Funds-Based Rate; (iii) maintain principal outstanding at the Federal Funds-Based Rate (such principal shall, upon written notice from the Lender to the Borrower, bear interest at the Prime-Based Rate, plus 2% per year as provided in Section 3.1(c)); or (D) maintain principal outstanding at the LIBOR-Based Rate after the end of any applicable current Interest Period (such principal shall, upon written notice from the Lender to the Borrower, bear interest at the Prime-Based Rate, plus 2% per year as provided in Section 3.1(c)).

3.4.    Interest Payment Dates.  Accrued interest will be paid in respect of each portion of principal (a) to which the Federal Funds-Based Rate applies on the last day of each month, beginning with the first such date to occur after the date of the first Loan, at maturity, and upon payment in full, whichever is the earlier or more frequent; (b) to which the Prime Rate applies on the last day of each March, June, September and December of each year, beginning with the first such date to occur after the date of the first Loan, at maturity, and upon payment in full, whichever is earlier or more frequent; 

and (c) to which the LIBOR-Based Rate applies, on the last day of each Interest Period relating to such Loan, at maturity, and upon payment in full, whichever is the earlier or more frequent.  After maturity, interest will be payable upon demand.

3.5.    Taxes.  All payments of principal and interest shall be made free and clear of and without deduction or withholding for any taxes unless required by law.  If any such deduction or withholding is payable, other than with respect to income taxes imposed by the United States or any state thereof on the income of the Lender, Borrower will pay to the Lender additional amounts as shall be necessary to enable Lender to receive the same net amount that it would have received had no such taxes been imposed.

3.6.    Additional Provisions with Respect to Federal Funds-Based Rate Loans.  The selection by the Borrower of the Federal Funds-Based Rate and the maintenance of Loans at such rate is subject to the following additional terms and conditions:

(a)    Availability of Deposits at a Determinable Rate.  If, after the Borrower has elected to borrow or maintain any Loan at the Federal Funds-Based Rate, the Lender notifies the Borrower that:
(i)United States dollar deposits in the amount and for the maturity requested are not available to the Lender; or
(ii)Reasonable means do not exist for the Lender to determine the Federal Funds-Based Rate for the amount and maturity requested;

all as determined by the Lender in its sole discretion, then the principal subject to the Federal Funds-Based Rate will accrue interest at the Prime Rate.
(b)    Prohibition of Making, Maintaining, or Repayment of Principal at the Federal Funds-Based Rate.  If any treaty, statute, regulation, interpretation thereof, or any directive, guideline by a central bank or fiscal authority (whether or not having the force of law) will either prohibit or extend the time at which any principal subject to the Federal Funds-Based Rate may be purchased, maintained, or repaid, then on and as of the date the prohibition becomes effective, the principal subject to that prohibition will accrue interest at the Prime Rate.

3.7.    Additional Provisions with Respect to LIBOR Loans.

(a)    Increased Costs.  

(i)    If, after the date hereof, the adoption of, or any change in, any applicable law, rule or regulation, or any change in the interpretation or administration of any applicable law, rule or regulation by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Lender with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:  (i) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by the Lender as LIBOR Loans 

under this Agreement; or (ii) shall impose on the Lender any other condition affecting its LIBOR Loans, its Note(s) or its obligation to make LIBOR Loans; and the result of anything described in clauses (i) and (ii) above is to increase the cost to (or to impose a cost on) the Lender of making or maintaining any LIBOR Loan, or to reduce the amount of any sum received or receivable by the Lender under this Agreement or under its Note(s) with respect thereto, then upon demand by the Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail), the Borrower shall pay directly to the Lender such additional amount as will compensate the Lender for such increased cost or such reduction.

(ii)    If the Lender shall reasonably determine that any change in, or the adoption or phase-in of, in each case after the date hereof, any applicable law, rule or regulation regarding capital adequacy, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or the compliance by the Lender or any Person controlling the Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the Lender’s or such controlling Person’s capital as a consequence of the Lender’s obligations hereunder to a level below that which the Lender or such controlling Person could have achieved but for such change, adoption, phase-in or compliance (taking into consideration the Lender’s or such controlling Person’s policies with respect to capital adequacy) by an amount deemed by the Lender or such controlling Person to be material, then from time to time, upon demand by the Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail), the Borrower shall pay to the Lender such additional amount as will compensate the Lender or such controlling Person for such reduction.  

The Borrower shall not be required to compensate the Lender under any provision of this Section 3.7(a) for any increased costs incurred, or reductions suffered more than 180 days prior to the date that the Lender notifies the Borrower of the occurrence giving rise to such increased costs or reductions, and of the Lender’s intention to claim compensation therefor.

(b)    Basis for Determining Interest Rate Inadequate or Unfair.  If:

(i)    The Lender determines (which determination shall be binding and conclusive on the Borrower) that by reason of circumstances affecting the interbank LIBOR market adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate; or

(ii)    the LIBOR Rate as determined by the Lender will not adequately and fairly reflect the cost to the Lender of maintaining or funding LIBOR Loans for such Interest Period or that the making or funding of LIBOR Loans has become impracticable as a result of an event occurring after the date of this Agreement which in the opinion of the Lender materially affects such Loans;

then (i) the Lender shall not be under any obligation to make LIBOR Loans and (ii) on the last day of the current Interest Period for each LIBOR Loan, such Loan shall, unless then repaid in full, automatically convert to a Prime Rate Loan.
(c)    Changes in Law Rendering LIBOR Loans Unlawful.  If, after the date hereof, any change in, or the adoption of any new, law or regulation, or any change in the interpretation of any applicable law or regulation by any governmental or other regulatory body charged with the administration thereof, should make it (or in the good faith judgment of the Lender cause a substantial question as to whether it is) unlawful for the Lender to make, maintain or fund LIBOR Loans, then (a) the Lender shall have no obligation to make a LIBOR Loan, and (b) on the last day of the current Interest Period for each LIBOR Loan of the Lender (or, in any event, on such earlier date as may be required by the relevant law, regulation or interpretation), such LIBOR Loan shall, unless then repaid in full, automatically convert to a Prime Rate Loan.
 
(d)    Funding Losses.  The Borrower hereby agrees that upon demand by the Lender (which demand shall be accompanied by a statement setting forth the basis for the amount being claimed, the Borrower will indemnify the Lender against any net loss or expense which the Lender may sustain or incur (including any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by the Lender to fund or maintain any LIBOR Loan), as reasonably determined by the Lender, as a result of (a) any payment, prepayment or conversion (for any reason) of any LIBOR Loan of the Lender on a date other than the last day of an Interest Period for such Loan or (b) any failure of the Borrower to borrow, prepay, convert or continue any Loan on a date specified therefor in a notice of borrowing, prepayment, conversion or continuation pursuant to this Agreement.  For this purpose, all notices to the Lender pursuant to this Agreement shall be deemed to be irrevocable.

(e)Conclusiveness of Statements; Survival of Provisions.  Determinations and statements of the Lender pursuant to this Section shall be conclusive absent manifest error.  The provisions of this Section shall survive repayment of the Loans, cancellation of any Note(s) and termination of this Agreement.

3.8.    Basis of Computation.  Interest will be computed for the actual number of days elapsed on the basis of a year consisting of 360 days, including the date a Loan is made and excluding the date a Loan or any portion thereof is paid or prepaid.  

3.9.    LIBOR.  The applicable LIBOR Rate for each Interest Period shall be determined by the Lender, and notice thereof shall be given by the Lender promptly to the Borrower.  Each determination of the applicable LIBOR Rate by the Lender shall be conclusive and binding upon the parties hereto, in the absence of manifest error.  The Lender shall, upon written request of the Borrower, deliver to the Borrower a statement showing the computations used by the Lender in determining any applicable LIBOR Rate hereunder.

3.10.    Revolving Loan Commitment Fee; Reduction of Revolving Loan Commitment.  The Borrower agrees to pay the Lender a commitment fee (the “Revolving Loan Commitment Fee”) of .30% per year on the average daily unused amount of the Revolving Loan Commitment.  The 

Revolving Loan Commitment Fee will commence to accrue on the date of this Agreement and will be paid on the last day of each March, June, September and December in each year, beginning with the first such date to occur after the date of this Agreement, on the Revolving Loan Maturity Date and upon payment in full.  At any time or from time to time, upon at least ten days prior written notice, which is irrevocable, the Borrower may reduce the Revolving Loan Commitment in the amount of at least $1,000,000 or in full.  Upon any such reduction of any part of the unused Revolving Loan Commitment, the Revolving Loan Commitment Fee on the part reduced will be paid in full as of the date of such reduction. The Revolving Loan Commitment Fee shall compensate, and be deemed to compensate, the Lender in whole or in part for costs incurred by the Lender in being prepared to respond to requests for credit under the Revolving Note.

4.PAYMENTS AND PREPAYMENTS.

4.1.    Prepayments.  The Borrower may from time to time prepay any Loan in whole or in part; provided that the Borrower shall give the Lender notice thereof not later than 11:00 A.M., Chicago time, on the day of such prepayment (which shall be a Business Day), specifying the Loans to be prepaid and the date and amount of prepayment.  Any such partial prepayment shall be in an amount equal to $500,000 or, the outstanding principal amount of such loan if less than $500,000.  Any prepayment of a LIBOR Loan on a day other than the last day of an Interest Period therefor shall include interest on the principal amount being repaid and shall be subject to Section 3.7(d).

4.2.    Repayments.
(a)Revolving Loans.  The Revolving Loans shall be paid in full and the Revolving Loan Commitment shall terminate on the Revolving Loan Maturity Date, unless earlier terminated pursuant to this Agreement.

(b)Term Loan.  The Term Loan shall be paid in installments equal to $937,500 on the last day of each calendar quarter during the term, with the first such installment paid on December 31, 2016.  Unless sooner paid in full, the outstanding principal balance of the Term Loan shall be paid in full on the Term Loan Maturity Date.

4.3.    Funds.  All payments of principal, interest and Revolving Loan Commitment Fee will be made in immediately available funds to the Lender at its banking office indicated above or as otherwise directed by the Lender.

5.REPRESENTATIONS AND WARRANTIES.  To induce the Lender to make each of the Loans, the Borrower represents and warrants to the Lender that:

5.1.    Organization.  The Borrower is existing and in good standing as a duly qualified and organized bank holding company.  The Borrower and any Subsidiary are existing and in good standing under the laws of their state(s) or other jurisdiction(s) of formation, and are duly qualified, in good standing and authorized to do business in each jurisdiction where failure to do so might have a material adverse impact on the consolidated assets, condition or prospects of the Borrower.  The Borrower and any Subsidiary have the power and authority to own their properties and to carry on their businesses as now being conducted.

5.2.    Authorization; No Conflict.  The Borrower is duly authorized to execute and deliver each Loan Document to which it is a party.  The Borrower is duly authorized to borrow monies hereunder and the Borrower is duly authorized to perform its obligations under each Loan Document to which it is a party.  The execution, delivery and performance of this Agreement and all related documents and instruments: (a) are within the Borrower's powers; (b) have been authorized by all necessary corporate action of the Borrower; (c) have received any and all necessary governmental approval required to be obtained by the Borrower and its Subsidiaries; and (d) do not and will not contravene or conflict with any provision of law or charter or by-laws of the Borrower or any agreement affecting the Borrower or its property.

5.3.    Validity and Binding Nature.  Each of this Agreement and each other Loan Document to which the Borrower is a party is the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.

5.4.    Financial Statements.  The Borrower has supplied copies of the following financial or other statements to the Lender:

(a)The Borrower's audited consolidated financial statements as of December 31, 2017; and

(b)A copy of the Call Report furnished to the FDIC with respect to each Subsidiary Bank, as of December 31, 2017.

Such statements have been furnished to the Lender, have been prepared in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding fiscal year, and fairly present the financial condition of the Borrower and any Subsidiary as at such dates and the results of their operations for the respective periods then ended.  Since the date of those financial statements, no material, adverse change in the business, condition, properties, assets, operations, or prospects of the Borrower or any Subsidiary, as determined in the reasonable discretion of the Lender, has occurred of which the Lender has not been advised in writing before this Agreement was signed.  There is no known contingent liability of the Borrower or any Subsidiary which is known to be in an amount in excess of $250,000 (excluding loan commitments, letters of credit, and other contingent liabilities incurred in the ordinary course of the banking business) in excess of insurance for which the insurer has confirmed coverage in writing which is not reflected in such financial statements or of which the Lender has not been advised in writing before this Agreement was signed.

5.5.    Taxes.  Except as would not, individually or in the aggregate, reasonably be expected to have a material adverse impact on the consolidated assets, condition or prospects of the Borrower, the Borrower and any Subsidiary have filed or caused to be filed all federal, state and local tax returns which are required to be filed, and have paid or have caused to be paid all taxes as shown on such returns or on any assessment received by them, to the extent that such taxes have become due (except for current taxes not delinquent and taxes being contested in good faith and by appropriate proceedings for which adequate reserves have been provided on the books of the Borrower or the appropriate Subsidiary, and as to which no foreclosure, sale or similar proceedings have been commenced).  The 

Borrower and any Subsidiary have set up reserves which are adequate for the payment of additional taxes for years which have not been audited by the respective tax authorities.

5.6.    Liens.  None of the assets of the Borrower or any Subsidiary are subject to any mortgage, pledge, title retention lien, or other lien, encumbrance or security interest: except: (a) current taxes not delinquent or taxes being contested in good faith and by appropriate proceedings; (b) liens arising in the ordinary course of business for sums not due or sums being contested in good faith and by appropriate proceedings, but not involving any deposits or Loans or borrowed money or the deferred purchase price of property or services; (c) to the extent specifically shown in the financial statements referred to above; (d) liens in favor of the Lender; and (e) liens and security interests securing deposits of public funds, repurchase agreements, Federal funds purchased, trust assets, and other similar liens granted in the ordinary course of the banking business.

5.7.    Adverse Contracts.  Neither the Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any charter or other corporate restriction, nor is it subject to any judgment, decree or order of any court or governmental body, which may have a material and adverse effect on the business, assets, liabilities, financial condition, operations or business prospects of the Borrower and any Subsidiaries taken as a whole or on the ability of the Borrower to perform its obligations under this Agreement or the Notes.  Neither the Borrower nor any Subsidiary has, nor with reasonable diligence should have had, knowledge of or notice that it is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any such agreement, instrument, restriction, judgment, decree or order.

5.8.    Regulation U.  Neither the Borrower nor its Subsidiaries is engaged principally in, nor is one of the Borrower's or its Subsidiaries’ important activities, the business of extending credit for the purpose of purchasing or carrying “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereinafter in effect.

5.9.    Investment Company.  Neither the Borrower nor its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” or a “subsidiary” of an “investment company,” within the meaning of the Investment Company Act of 1940.

5.10.    Litigation and Contingent Liabilities.  No litigation (including derivative actions), arbitration proceedings or governmental proceedings are pending or, to the knowledge of the Borrower, threatened against the Borrower or any Subsidiary which would (singly or in the aggregate), if adversely determined, have a material and adverse effect on the financial condition, continued operations or prospects of the Borrower or any Subsidiary, except as and if set forth (including estimates of the dollar amounts involved) in a schedule furnished by the Borrower to the Lender before this Agreement was signed.

5.11.    FDIC Insurance.  The deposits of each Subsidiary Bank of the Borrower are insured by the FDIC and no act has occurred which would adversely affect the status of such Subsidiary Bank as an FDIC insured bank.

5.12.    Subsidiaries.  Attached hereto as Exhibit B is a correct and complete list of all Subsidiaries of the Borrower, including prior to and following the Holding Company Merger, as defined herein.

5.13.    Compliance with Laws.  Each of the Borrower and its Subsidiaries is in material compliance with all applicable statutes, regulations and orders of, and all applicable material restrictions imposed by, all governmental bodies, including, without limitation, federal and state securities laws.

5.14.    Insurance.  Each of the Borrower and its Subsidiaries and their properties are insured with financially sound and reputable insurance companies which are not affiliates, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower and its Subsidiaries operate.

5.15.    Intellectual Property.  Each of the Borrower and its Subsidiaries owns and possesses or has a license or other right to use all patents, patent rights, trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights and copyrights as are necessary for the conduct of the businesses, without any infringement upon rights of others which could reasonably be expected to have a material adverse impact on the consolidated assets, condition or prospects of the Borrower.

5.16.    Regulatory Enforcement Actions / Investigations.  Neither the Borrower nor any of its Subsidiaries, nor to the knowledge of the Borrower any of the officers or directors or any of them, is now under investigation by, or operating under any restrictions, agreements, memoranda, or commitments (other than restrictions of general application) imposed by any governmental agency, nor are any such investigations or restrictions to the knowledge of the Borrower threatened or agreements, memoranda or commitments being sought by any governmental agency.

5.17.    Labor Matters.  Neither the Borrower nor its Subsidiaries is subject to any labor or collective bargaining agreement.  There are no existing or, to the knowledge of the Borrower, threatened strikes, lockouts or other labor disputes that singly or in the aggregate could reasonably be expected to have a material adverse impact on the consolidated assets, condition or prospects of the Borrower.  Hours worked by and payment made to employees of the Borrower and its Subsidiaries are not in material violation of the Fair Labor Standards Act or any other applicable law, rule or regulation dealing with such matters.

5.18.    Holding Company Merger.  The parties to the Holding Company Merger have received any and all necessary regulatory, governmental, shareholder and other material required approvals to consummate the transaction on or before June 2, 2018.  The Borrower intends to consummate the Holding Company Merger on or before June 2, 2018, and the Borrower has, nor with reasonable diligence should have, knowledge of or notice of any condition, circumstance or restriction that would result in any delay of the consummation of the Holding Company Merger beyond June 2, 2018.

5.19.    Anti-Terrorism Laws.  

(a)    Neither the Borrower nor any Related Party is in violation of any Anti-Terrorism Law. 

(b)    Neither the Borrower nor any Related Party is a Prohibited Person. 

(c)Neither the Borrower nor any Related Party:  (A) conducts any business or engages in any transaction or dealing with any Prohibited Person, including  making or receiving any contribution of funds, goods or services to or for the benefit of any Prohibited Person; (B) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224; or (C) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.  

(d)The Borrower and each Related Party will ensure that the proceeds of the Loans are not used to violate any foreign asset control regulations of the U.S. Office of Foreign Assets Control (“OFAC”) or of any enabling statute or any Executive Order relating thereto. 

(e)The Borrower has implemented procedures, and will consistently apply those procedures while this Agreement is in effect, to ensure that the representations and warranties in this Section remain true and correct while this Agreement is in effect.

5.20.    Stock of Subsidiaries.  The Borrower owns, directly or indirectly, all of the issued and outstanding capital stock of its Subsidiaries free and clear of any claim, lien or other encumbrance, except for the security interests granted to the Lender pursuant to the Pledge Agreement.  As of the date hereof, except pursuant to the terms of the Borrower’s stock incentive plan, there are no pre-emptive or other outstanding rights, options, warrants, conversion rights or other similar agreements or understandings for the purchase or acquisition of any capital stock of either the Borrower or any Subsidiary.

6.COVENANTS.  Until all obligations of the Borrower under this Agreement and under the Notes are paid and fulfilled in full, the Borrower agrees that it will, and will cause any Subsidiary to, comply with the following covenants, unless the Lender consents otherwise in writing:

6.1.    Existence; Mergers, Etc.  The Borrower and any Subsidiary will preserve and maintain their corporate, partnership or joint venture (as applicable) existence, and will not liquidate, 

dissolve, or merge, or consolidate with or into any other entity, or sell, lease, transfer or otherwise dispose of all or a substantial part of their assets other than in the ordinary course of business as now conducted, except that:

(a)Any Subsidiary may merge or consolidate with or into the Borrower or any one or more wholly-owned Subsidiaries;
(b)

(b)Any Subsidiary may sell, lease, transfer or otherwise dispose of any of its assets to the Borrower or one or more wholly-owned Subsidiaries;

(c)First BancTrust Corporation may merge with and into Project Hawks Merger Sub LLC, a wholly-owned direct subsidiary of the Borrower (the “Holding Company Merger”); and
(d)First Bank & Trust, IL, which is a wholly-owned banking subsidiary of First BancTrust Corporation prior to the Holding Company Merger, will merge with and into First Mid-Illinois Bank & Trust, National Association following the Holding Company Merger.

The Borrower and any Subsidiary will take all steps to become and remain duly qualified, in good standing and authorized to do business in each jurisdiction where failure to do so might have a material adverse impact on the consolidated assets, condition or prospects of the Borrower.  

6.2.    Reports; Certificates and Other Information.  The Borrower will furnish (or cause to be furnished) to the Lender:

(a)    Interim Reports.  Within 45 days after the end of each quarter of each fiscal year of the Borrower, a copy of an unaudited financial statement of the Borrower and its Subsidiaries prepared on a consolidated basis consistent with the consolidated financial statements of the Borrower and any Subsidiary, both subject to year-end adjustments, signed by an authorized officer of the Borrower and consisting of at least: (i) a balance sheet as at the close of such quarter; and (ii) a statement of earnings and source and application of funds for such quarter and for the period from the beginning of such fiscal year to the close of such quarter.

(b)    Audit Report.  Within 90 days after the end of each fiscal year of the Borrower, a copy of an annual report of the Borrower and its Subsidiaries prepared on a consolidated basis and in conformity with generally accepted accounting principles applied on a basis consistent with the consolidated financial statements of the Borrower and any Subsidiary, duly audited by independent certified public accountants of recognized standing satisfactory to the Lender accompanied by an unqualified opinion.

(c)    Certificates.  Contemporaneously with the furnishing of a copy of each annual report and of each quarterly statement provided for in this Section, a certificate dated the date of such annual report or such quarterly statement and signed by either the President, the Chief Financial Officer or the  Treasurer of the Borrower, to the effect that no Event of Default or Unmatured Event of Default has occurred and is continuing, or, if there is any such event, describing it and the steps, if any, being taken to cure it, and containing (except in the case of the certificate dated the date of the 

annual report) a computation of, and showing compliance with, any financial ratio or restriction contained in this Agreement.

(d)    Reports to SEC and to Shareholders.  Copies of each filing and report made by the Borrower or any Subsidiary with or to any securities exchange or the Securities and Exchange Commission, except in respect of any single shareholder, and of each communication from the Borrower or any Subsidiary to shareholders of the Borrower generally, promptly upon the filing or making thereof.

(e)Notice of Default, Litigation and ERISA Matters.  Immediately upon learning of the occurrence of any of the following, written notice describing the same and the steps being taken by the Borrower or any Subsidiary affected in respect thereof: (i) the occurrence of an Event of Default or an Unmatured Event of Default; (ii) the institution of, or any adverse determination in, any litigation, arbitration or governmental proceeding which is material to the Borrower and its Subsidiaries on a consolidated basis; (iii) the occurrence of a reportable event under, or the institution of steps by the Borrower or any Subsidiary to withdraw from, or the institution of any steps to terminate, any employee benefit plans as to which the Borrower or any of its Subsidiaries may have any liability and which may have a material adverse impact on the ability of the Borrower to repay the Loans in full on a timely basis; or (iv) the issuance of any cease and desist order, memorandum of understanding, cancellation of insurance, or proposed disciplinary action from the FDIC or other regulatory entity.

(f)Other Information.  From time to time such other information, financial or otherwise, concerning the Borrower, any Subsidiary or any Guarantor as the Lender may reasonably request, including without limitation personal financial statements of any individual Guarantor (as defined below) on the Lender's then-current form on and as of such dates as the Lender may reasonably request.

6.3.    Inspection.  At the Borrower's expense if an Event of Default or Unmatured Event of Default has occurred or is continuing, the Borrower and any Subsidiary will permit the Lender and its agents at any time during normal business hours to inspect their properties and to inspect and make copies of their books and records.

6.4.    Financial Requirements.

(a)    Senior Debt to Tier 1 Capital.  The Borrower's Senior Debt for borrowed money (specifically excluding the indebtedness for borrowed money of the Borrower's Subsidiaries) will not at any time exceed 40% of consolidated Tier 1 Capital.

(b)    Tier 1 Leverage Ratio.  The Borrower will maintain at all times a Tier 1 Leverage Ratio of at least 5%, calculated on a consolidated basis.  The Borrower will cause each Subsidiary Bank to maintain at all times a Tier 1 Leverage Ratio of at least 5%.

(c)    Tier 1 Risk-Based Capital Ratio.  The Borrower will maintain a Tier 1 Risk-Based Capital Ratio of at least 8%.  The Borrower will cause each Subsidiary Bank to maintain a Tier 1 Risk-Based Capital Ratio of at least 8%. 

(d)    Total Risk-Based Capital Ratio.  The Borrower will maintain at all times a Total Risk-Based Capital Ratio of not less than 10%, at least 60% of which will consist of Tier 1 Capital.  The Borrower will cause each Subsidiary Bank to maintain at all times a Total Risk-Based Capital Ratio of not less than 10%, at least 60% of which will consist of Tier 1 Capital.  

(e)    Return on Average Assets.  The Borrower's consolidated net income will be at least .75% of its average assets, calculated on an annualized basis as at the last day of each fiscal quarter of the Borrower.

(f)    Nonperforming Assets.  All assets of any Subsidiary Banks and other Subsidiaries classified as “non-performing” (which will include all loans in non-accrual status, more than 90 days past due in principal or interest, restructured or renegotiated, or listed as “other restructured” or “other real estate owned”) on the FDIC or other regulatory agency call report will not exceed at any time 3% of the loans of the Borrower and its Subsidiaries on a consolidated basis.

(g)Net Chargeoffs to Loans.  The Borrower and any Subsidiary Banks on a consolidated basis will not incur Net Chargeoffs in an amount greater than 1% of its average loans, calculated on an annualized basis as at the last day of each calendar quarter.

6.5.    Indebtedness; Liens and Taxes.  The Borrower and any Subsidiary will:

(a)    Indebtedness.  Not incur, permit to remain outstanding, assume or in any way become committed for indebtedness in respect of borrowed money (specifically including but not limited to indebtedness in respect of money borrowed from financial institutions but excluding deposits), except: (i) indebtedness incurred under this Agreement or to the Lender; (ii) indebtedness existing on the date of this Agreement shown on the financial statements furnished to the Lender before this Agreement was signed; (iii) indebtedness of the Subsidiary Banks arising in the ordinary course of the banking business of the Subsidiary Banks, and that certain indebtedness set forth on Exhibit C; (iv) the Borrower’s obligations to First Mid-Illinois Statutory Trust I, a Delaware business trust, all of the common securities of which are owned by the Borrower; (v) the Borrower’s obligations to First Mid-Illinois Statutory Trust II, a Delaware business trust, all of the common securities of which are owned by the Borrower; and (vi) the Borrower’s obligations to Clover Leaf Statutory Trust I, a Delaware business trust, all of the common securities of which are owned by the Borrower.  

(b)    Liens.  Except as otherwise expressly permitted in this Agreement, not create, suffer or permit to exist any lien or encumbrance of any kind or nature upon any of their assets now or hereafter owned or acquired (specifically including but not limited to the capital stock of any of the Subsidiary Banks), or acquire or agree to acquire any property or assets of any character under any conditional sale agreement or other title retention agreement, but this Section 6.5(b) does not apply to: (i) liens existing on the date of this Agreement of which the Lender has been advised in writing before this Agreement was signed; (ii) liens of landlords, contractors, laborers or supplymen, tax liens, or liens securing performance or appeal bonds, or other similar liens or charges arising out of the Borrower's business, provided that tax liens are removed before related taxes become delinquent and other liens are promptly removed, in either case unless contested in good faith and by appropriate proceedings, and as to which adequate reserves have been established and no foreclosure, sale or 

similar proceedings have commenced; (iii) liens in favor of the Lender; (iv) liens on the assets of any Subsidiary Bank arising in the ordinary course of the banking business of such Subsidiary Bank; (v) liens securing borrowings or advances from the Borrower by wholly-owned subsidiaries.  The Borrower shall maintain the security interest created by the Pledge Agreement as a perfected security interest and shall defend such security interest against the claims and demands of all Persons whomsoever.

(c)    Taxes.  Pay and discharge all taxes, assessments and governmental charges or levies imposed upon them, upon their income or profits or upon any properties belonging to them, prior to the date on which penalties attach thereto, and all lawful claims for labor, materials and supplies when due, except that no such tax, assessment, charge, levy or claim need be paid which is being contested in good faith by appropriate proceedings as to which adequate reserves have been established, and no foreclosure, sale or similar proceedings have commenced.

(d)    Guaranties.  Not assume, guarantee, endorse or otherwise become or be responsible in any manner (whether by agreement to purchase any obligations, stock, assets, goods or services, or to supply or loan or any portion thereof any funds, assets, goods or services, or otherwise) with respect to the obligation of any other person or entity, except: (i) by the endorsement of negotiable instruments for deposit or collection in the ordinary course of business, issuance of letters of credit or similar instruments or documents in the ordinary course of business; (ii) with respect to certain trust preferred obligations of First Mid-Illinois Statutory Trust I, First Mid-Illinois Statutory Trust II, Clover Leaf Statutory Trust I, and with respect to the certain trust preferred obligations of FBTC Statutory Trust I, which will be assumed by the Borrower upon the closing of the Holding Company Merger; and (iii) except as permitted by this Agreement.

6.6    Investments and Loans.  Neither the Borrower nor any Subsidiary will make any loan, advance, extension of credit or capital contribution to, or purchase or otherwise acquire for a consideration, evidences of indebtedness, capital stock or other securities of any legal entity, except that the Borrower and any Subsidiary may:

(a)    purchase or otherwise acquire and own short-term money market items and agency debt securities;

(b)    invest, by way of purchase of securities or capital contributions, in the Subsidiary Banks or any other bank or banks or any bank holding company, and upon the Borrower's purchase or other acquisition of 50% or more of the stock of any bank or bank holding company, such bank or the subsidiary bank of such bank holding company, as applicable, thereupon becomes a “Subsidiary Bank” for all purposes under this Agreement; and

(c)    invest, by way of loan, advance, extension of credit (whether in the form of lease, conditional sales agreement, or otherwise), purchase of securities, capital contributions, or otherwise, in subsidiaries other than banks or Subsidiary Banks.

Nothing in this Section prohibits the Borrower or any Subsidiary Bank from making loans, advances, or other extensions of credit in the ordinary course of banking upon substantially the same terms as 

heretofore extended by them in such business or upon such terms as may at the time be customary in the banking business.

6.7.    Capital Structure and Dividends.  Neither the Borrower nor any Subsidiary will purchase or redeem, or obligate itself to purchase or redeem, any shares of the Borrower's capital stock, of any class, issued and outstanding from time to time, or any partnership, joint venture or other equity interest in the Borrower or any Subsidiary, except such purchases of the Borrower’s capital stock as may be made from time to time pursuant to the Borrower’s stock repurchase program in existence as of the date hereof and in accordance with any resolutions passed from time to time by the Borrower’s Board of Directors; or declare or pay any dividend (other than dividends payable in its own common stock or to the Borrower) or make any other distribution in respect of such shares or interest other than to the Borrower, except that the Borrower may declare or pay cash dividends to holders of the stock of the Borrower in any fiscal year in an amount not to exceed 40% of the Borrower's consolidated net income for the immediately preceding fiscal year; provided that no Event of Default or Unmatured Event of Default exists as of the date of such declaration or payment or would result therefrom.  The Borrower will continue to own, directly or indirectly, the same (or greater) percentage of the stock and partnership, joint venture, or other equity interest in each Subsidiary that it held on the date of this Agreement, and no Subsidiary will issue any additional stock or partnership, joint venture or other equity interests, options or warrants in respect thereof, or securities convertible into such securities or interests, other than to the Borrower or any wholly-owned subsidiaries of the Borrower.

6.8.    Maintenance of Properties.  The Borrower and any Subsidiary will maintain, or cause to be maintained, in good repair, working order and condition, all their properties (whether owned or held under lease), and from time to time make or cause to be made all needed and appropriate repairs, renewals, replacements, additions, and improvements thereto, so that the business carried on in connection therewith may be properly and advantageously conducted at all times.

6.9.    Insurance.  The Borrower and any Subsidiary will maintain insurance in responsible companies in such amounts and against such risks as is required by law and such other insurance, in such amount and against such hazards and liabilities, as is customarily maintained by bank holding companies and banks similarly situated.  Each Subsidiary Bank will have deposits insured by the FDIC.

6.10.    Use of Proceeds.

(a)    Regulation U.  The Borrower and any Subsidiary will not use or permit any proceeds of the Loans to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying any margin stock” within the meaning of Regulations U or X of the Board of Governors of the Federal Reserve System, as amended from time to time.  If requested by the Lender, the Borrower and any Subsidiary will furnish to the Lender a statement in conformity with the requirements of Federal Reserve Form U-1.  No part of the proceeds of the Loans will be used for any purpose which violates or is inconsistent with the provisions of Regulation U or X of the Board of Governors.

(b)    Tender Offers and Going Private.  Neither the Borrower nor any Subsidiary will use (or permit to be used) any proceeds of the Loans to acquire any security in any transaction which is subject to Section 14 or 15 of the Securities Exchange Act of 1934, as amended, or any regulations or rulings thereunder.

6.11.    Well Capitalized.  Each Subsidiary Bank will at all times be at least “well capitalized” as determined in accordance with, the rules, regulations, guidance and instructions of the Federal Reserve Board, FDIC or other primary federal regulator at the time of determination.

6.12.    Compliance with Law.  The Borrower and each Subsidiary will be in compliance with all laws and regulations (whether federal, state or local and whether statutory, administrative, judicial or otherwise) and with every lawful governmental order or similar actions (whether administrative or judicial), specifically including but not limited to all requirements of the Bank Holding Company Act of 1956, as amended, and with the existing regulations of the Board of Governors of the Federal Reserve System relating to bank holding companies.

7.CONDITIONS OF LENDING.

7.1.    Documentation; No Default.  The obligation of the Lender to make any Loan is subject to the following conditions precedent:

(a)Initial Documentation.  The effectiveness of this Agreement is subject to the conditions precedent that the Lender shall have received all of the following, each duly executed and dated the date hereof, in form and substance satisfactory to the Lender and its counsel, at the expense of the Borrower, and in such number of signed counterparts as the Lender may request:

(i)Loan Documents.  This Agreement and the amendment to the Pledge Agreement, dated as of the date hereof;

(ii)Revolving Note.  The Amended and Restated Revolving Note in the form of Exhibit A attached hereto;

(iii)Resolution.  a copy of a resolution of the Board of Directors of the Borrower authorizing or ratifying the execution, delivery and performance, respectively, of this Agreement and of the other documents provided for in this Agreement, certified by the Secretary of the Borrower; and

(iv)Certificate of Incumbency. A certificate of an appropriate officer of the Borrower, certifying the names of the officer(s) of the Borrower authorized to sign this Agreement, the Note(s) and the other documents provided for in this Agreement, together with a sample of the true signature of each such person (the Lender may conclusively rely on such certificate until formally advised by a like certificate of any changes therein);

(v)Governing Documents.  A copy of the articles of incorporation and by-laws of the Borrower, certified by an appropriate officer of the Borrower;

(vi)Certificate of No Default.  A certificate signed by an appropriate officer of the Borrower to the effect that: (A) no Event of Default or Unmatured Event of Default has occurred and is continuing or will result from the making of the first Loan; and (B) the representations and warranties of the Borrower contained herein are true and correct in all material respects as at the date of the first Loan as though made on that date;

(vii)Good Standing Certificates.  A certificate of good standing for the Borrower and each Subsidiary Bank; 

(viii)Regulatory Approvals for Holding Company Merger.  Any and all necessary regulatory approvals required to consummate the Holding Company Merger.

(ix)Miscellaneous.  Such other documents and certificates as the Lender may reasonably request.

(b)Securities Account and Stock Certificates. At the time of each Loan and at all times during the term of this Agreement and the Pledge Agreement, the Borrower must maintain in a securities account established pursuant to that certain Institutional Custody Agreement, dated as of September 6, 2016, by and between the Borrower and First Tennessee Bank, N.A. (the “Intermediary”), any and all Certificates as defined by the Pledge Agreement.  

(c)Representations and Warranties True.  At the time of each Loan, the Borrower's representations and warranties set forth in this Agreement will be true and correct in all material respects as of such date as though made on such date.

(d)No Default.  At the time of each Loan, and immediately after giving effect to such Loan, no Event of Default or Unmatured Event of Default will have occurred and be continuing at the time of such Loan, or would result from the making of such Loan.

(e)No Material Adverse Change.  At the time of each Loan, no material adverse change in the Borrower’s or any Subsidiary’s financial condition or operations has occurred, as determined by the Lender.

7.2.    Automatic Update of Representations and Warranties and No-Default Certificate; Certificate at the Lender’s Option.  The request by the Borrower for any Loan is deemed a representation and warranty by the Borrower that the statements in Sections 7.1(c) and 7.1(d) are true and correct on and as at the date of each succeeding Loan, as the case may be.  Upon receipt of each Loan request the Lender in its sole discretion will have the right to request that the Borrower provide to the Lender, prior to the Lender's funding of the Loan, a certificate executed by the Borrower's President, Treasurer, or Chief Financial Officer to such effect.

8.DEFAULT.

8.1.    Events of Default.  The occurrence of any of the following will constitute an “Event of Default”:

(a)Failure to pay, when and as due, any principal, interest or other amounts payable under this Agreement; or failure to furnish (or cause to be furnished to) the Lender when and as requested by the Lender (but not more often than once every twelve months) fully completed personal financial statement(s) of any individual Guarantor on the Lender's then-standard form together with such supporting information as the Lender may reasonably request; or

(b)Any default, event of default, or similar event occurs or continues under any other instrument, document, note, agreement, guaranty, the Pledge Agreement or any other Loan Document delivered to the Lender in connection with this Agreement, or any such instrument, document, note, agreement, or guaranty is not, or ceases to be, enforceable in accordance with its terms; or

(c)There occurs any default or event of default, or any event or condition that might become such with notice or the passage of time or both, or any similar event, or any event that requires the prepayment of borrowed money or the acceleration of the maturity thereof, under the terms of any other evidence of indebtedness in an aggregate amount in excess of $250,000 issued or assumed or entered into by the Borrower, any Subsidiary or any Guarantor, or under the terms of any other indenture, agreement, or instrument under which any such evidence of indebtedness in an aggregate amount in excess of $250,000 is issued, assumed, secured, or guaranteed, and such event continues beyond any applicable period of grace; or

(d)Any representation, warranty, schedule, certificate, financial statement, report, notice, or other writing furnished by or on behalf of the Borrower, any Subsidiary or any Guarantor to the Lender is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified; or

(e)Any guaranty of the Loans or pledge of Collateral is repudiated or becomes unenforceable or incapable of performance; or

(f)The Borrower or any Subsidiary fails to comply with Section 7.1; or failure to comply with or perform any agreement or covenant of the Borrower contained herein, which failure does not otherwise constitute an Event of Default, and such failure continues unremedied for ten days; or
(g)Any Guarantor dies, becomes incompetent, dissolves, liquidates, merges, consolidates, or ceases to be in existence for any reason; or

(h)[Intentionally omitted]; or

(i)Any proceeding (judicial or administrative) is commenced against the Borrower, any Subsidiary or any Guarantor, or with respect to any assets of the Borrower, any Subsidiary or any Guarantor which threatens to have a material and adverse effect on the assets, condition or prospects of the Borrower, any Subsidiary or any Guarantor; or final judgment(s) and/or settlement(s) in an aggregate amount in excess of $250,000 in excess of insurance for which the insurer has confirmed coverage in writing, a copy of which writing has been furnished to the Lender, 

is entered or agreed to in any suit or action commenced against the Borrower, any Subsidiary or any Guarantor; or

(j)The Borrower grants or any person (other than the Lender) obtains a security interest in any securities of any Subsidiary Bank of the Borrower, or any notice of a federal tax lien against the Borrower in an aggregate amount in excess of $250,000 is filed with any public recorder; or
(k)The FDIC or other regulatory entity issues or agrees to enter into a letter agreement, memorandum of understanding, or a cease and desist order against the Borrower or any Subsidiary; or the FDIC or other regulatory entity issues or enters into an agreement, order, or take any similar action against the Borrower or any Subsidiary materially adverse to the business or operation of the Borrower or any Subsidiary; or

(l)Any bankruptcy, insolvency, reorganization, arrangement, readjustment, liquidation, dissolution, or similar proceeding, domestic or foreign, is instituted by or against the Borrower, any Subsidiary or any Guarantor; or the Borrower, any Subsidiary or any Guarantor takes any steps toward, or to authorize, such a proceeding, and in the case of any such proceeding instituted against the Borrower or any Subsidiary or any Guarantor, such proceeding is not dismissed within sixty (60) days; or

(m)The Borrower, any Subsidiary or any Guarantor becomes insolvent, generally fails or is unable to pay its debts as they mature, admits in writing its inability to pay its debts as they mature, makes a general assignment for the benefit of its creditors, enters into any composition or similar agreement, or suspends the transaction of all or a substantial portion of its usual business.

8.2.    Default Remedies.

(a)    Upon the occurrence and during the continuance of any Event of Default specified in Section 8.1(a) through Section 8.1(k), the Lender at its option may declare the Note(s) (principal, interest and other amounts) and any other amounts owed to the Lender, including without limitation any accrued but unpaid Revolving Loan Commitment Fee, immediately due and payable without notice or demand of any kind.  Upon the occurrence of any Event of Default specified in Section 8.1(l) through Section 8.1(m), the Note(s) (principal, interest and other amounts) and any other amounts owed to the Lender, including without limitation any accrued but unpaid Revolving Loan Commitment Fee, will be immediately and automatically due and payable without action of any kind on the part of the Lender.  Upon the occurrence and during the continuance of any Event of Default, any obligation of the Lender to make any Loan will immediately and automatically terminate without action of any kind on the part of the Lender, and the Lender may exercise any rights and remedies under this Agreement, the Note(s), any related document or instrument (including without limitation any pertaining to collateral), and at law or in equity.

(b)    The Lender may, by written notice to the Borrower, at any time and from time to time, waive any Event of Default or Unmatured Event of Default, which will be for such period and subject to such conditions as are specified in any such notice.  In the case of any such waiver, the Lender and the Borrower will be restored to their former position and rights under this Agreement, 

and any Event of Default or Unmatured Event of Default so waived is deemed to be cured and not continuing; but no such waiver will extend to or impair any subsequent or other Event of Default or Unmatured Event of Default.  No failure to exercise, and no delay in exercising, on the part of the Lender of any right, power or privilege under this Agreement will preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies of the Lender herein provided are cumulative and not exclusive of any rights or remedies provided by law.  

9.NO INTEREST OVER LEGAL RATE.  The Borrower does not intend or expect to pay, nor does the Lender intend or expect to charge, accept or collect any interest which, when added to any fee or other charge upon the principal which may legally be treated as interest, in excess of the highest lawful rate.  If acceleration, prepayment or any other charges upon the principal or any portion thereof, or any other circumstance, result in the computation or earning of interest in excess of the highest lawful rate, then any and all such excess is hereby waived and will be applied against the remaining principal balance.  Without limiting the generality of the foregoing, and notwithstanding anything to the contrary contained herein or otherwise, no deposit of funds are required in connection with this Agreement which will, when deducted from the principal amount outstanding under this Agreement, cause the rate of interest under this Agreement to exceed the highest lawful rate.

10.PAYMENTS, ETC.  All payments under this Agreement will be made in immediately available funds, and will be applied first to accrued interest and then to principal; however, if an Event of Default occurs and is continuing, the Lender may, in its sole discretion, and in such order as it may choose, apply any payment to interest, principal and/or lawful charges and expenses then accrued.  The Borrower will receive immediate credit on payments received during the Lender's normal banking hours if made in cash, immediately available funds, or by debit to available balances in an account at the Lender; otherwise payments will be credited after clearance through normal banking channels.  The Borrower authorizes the Lender to charge any account of the Borrower maintained with the Lender for any amounts of principal, interest, taxes, duties, or other charges or amounts due or payable under this Agreement, with the amount of such payment subject to availability of collected balances in the Lender's discretion; unless the Borrower instructs otherwise, all Loans will be credited to an account(s) of the Borrower with the Lender.  THE LENDER AT ITS OPTION MAY MAKE LOANS UNDER THIS AGREEMENT UPON TELEPHONIC INSTRUCTIONS AND IN SO DOING WILL BE FULLY ENTITLED TO RELY SOLELY UPON INSTRUCTIONS, INCLUDING INSTRUCTIONS TO MAKE TRANSFERS TO THIRD PARTIES, REASONABLY BELIEVED BY THE LENDER TO HAVE BEEN GIVEN BY AN AUTHORIZED PERSON, WITHOUT INDEPENDENT INQUIRY OF ANY TYPE.  FOR ITSELF AS WELL AS ANY RELATED PARTY AND ANY AGENT, DIRECTOR, EMPLOYEE, MANAGER, MEMBER, OFFICER, OR PARTNER OF THE BORROWER, AS APPLICABLE, THE BORROWER IRREVOCABLY CONSENTS TO THE LENDER’S RECORDING OF ANY TELEPHONE CONVERSATION PERTAINING TO LOANS HEREUNDER.  All payments will be made without deduction for or on account of any present or future taxes, duties or other charges levied or imposed on this Agreement, the Notes, the Loans or the proceeds, the Lender or the Borrower by any government or political subdivision thereof.  The Borrower will, upon request of the Lender, pay all such taxes, duties or other charges in addition to principal and interest, including without limitation all documentary stamp and intangible taxes, but excluding income taxes based solely on the Lender's income to the extent required under Section 3.5.

11.LENDER’S EXPENSES.  The Borrower agrees to pay to the Lender its fees and expenses incurred by the Lender through the date hereof in connection with the transactions contemplated herein, such as attorneys’ fees and costs and other fees and reasonable expenses paid or payable to any other parties. 

12.SETOFF.  At any time and without notice of any kind, any account, deposit or other indebtedness owing by the Lender to the Borrower, and any securities or other property of the Borrower delivered to or left in the possession of the Lender or its nominee or bailee, may be set off against and applied in payment of any obligation under this Agreement, whether due or not.

13.NOTICES.  All notices, requests and demands to or upon the respective parties to this Agreement are deemed to have been given or made when deposited in the mail, postage prepaid, addressed if to the Lender to its office indicated above (Attention:  Peter J. Hallan, Corporate Banking Group), and if to the Borrower to its address set forth below, or to such other address as may be designated in writing by the respective parties hereto or, as to the Borrower, may appear in the Lender's records.

14.GOVERNING LAW.  This Agreement and any document or instrument executed in connection with this Agreement will be governed by and construed in accordance with the internal law of the State of Illinois, and are deemed to have been executed in the State of Illinois.

15.MISCELLANEOUS.  Captions herein are for convenience of reference only and do not define or limit any of the terms or provisions of this Agreement; references herein to Sections or provisions without reference to the document in which they are contained are references to this Agreement.  This Agreement binds the Borrower, its successors and assigns, and inures to the benefit of the Lender, its successors and assigns, except that the Borrower may not transfer or assign any of its rights or interest under this Agreement without the prior written consent of the Lender.  The Borrower agrees to pay upon demand all expenses (including without limitation reasonable attorneys' fees, legal costs and expenses, and reasonable time charges of attorneys who may be employees of the Lender, in each case whether in or out of court, in original or appellate proceedings or in bankruptcy) incurred or paid by the Lender or any holder hereof in connection with the enforcement or preservation of its rights under this Agreement or under any document or instrument executed in connection with this Agreement.  Except as otherwise specifically provided herein, the Borrower expressly and irrevocably waives presentment, protest, demand and notice of any kind in connection with this Agreement.  

16.WAIVER OF JURY TRIAL, ETC.  THE BORROWER HEREBY IRREVOCABLY AGREES THAT, SUBJECT TO THE LENDER'S SOLE AND ABSOLUTE ELECTION, ALL SUITS, ACTIONS OR OTHER PROCEEDINGS WITH RESPECT TO, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT OR INSTRUMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT WILL BE SUBJECT TO LITIGATION IN COURTS HAVING SITUS WITHIN OR JURISDICTION OVER COOK COUNTY, ILLINOIS.  THE BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED IN OR HAVING JURISDICTION OVER SUCH COUNTY, AND HEREBY IRREVOCABLY WAIVES ANY RIGHT 

IT MAY HAVE TO REQUEST OR DEMAND TRIAL BY JURY, TO TRANSFER OR CHANGE THE VENUE OF ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT BY THE LENDER IN ACCORDANCE WITH THIS PARAGRAPH, OR TO CLAIM THAT ANY SUCH PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

17.TRUST PREFERRED DEBT.  Notwithstanding any provision of this Agreement, including without limitation Sections 6.5(a), 6.5(b), 6.6 and 6.7, the Lender hereby consents to: (1) (a) the existence of a subordinated debenture or debentures issued by the Borrower to First-Mid Illinois Statutory Trust I, a Delaware business trust (“Trust I”) in the aggregate principal amount of $10,310,000, and (b) the guarantee by the Borrower of the obligations of Trust I under those certain trust preferred securities of Trust I issued in the aggregate original amount of $10,000,000; (2) (a) the existence of a subordinated debenture or debentures issued by the Borrower to First-Mid Illinois Statutory Trust II, a Delaware business trust (“Trust II”) in the aggregate principal amount of $10,310,000, and (b) the guarantee by the Borrower of the obligations of Trust II under those certain trust preferred securities of Trust II issued in the aggregate original amount of $10,000,000; (3) (a) the existence of a subordinated debenture or debentures issued by the Borrower to Clover Leaf Statutory Trust I, a Delaware business trust (“Clover Trust I”) in the aggregate principal amount of $4,124,000, and (b) the guarantee by the Borrower of the obligations of Clover Trust I under those certain trust preferred securities of Clover Trust I issued in the aggregate original amount of $4,000,000; (4) upon the closing of the Holding Company Merger, the existence of a subordinated debenture or debentures issued by the Borrower to FBTC Statutory Trust I, a Delaware business trust (“FBTC Trust I”) in the aggregate principal amount of $6,186,000, and (b) the guarantee by the Borrower of the obligations of FBTC Trust I under those certain trust preferred securities of FBTC Trust I issued in the aggregate original amount of $6,000,000; and (5) the related transactions contemplated by the each of the foregoing issuances of trust securities.  This paragraph shall be limited to its terms and shall not constitute a waiver of any other rights that the Lender may have under this Agreement from time to time.

18.NO PUNITIVE DAMAGES.  No party hereto may seek or recover punitive damages in any proceeding brought under or in connection with this agreement or any related document.  This provision is a material inducement to the Lender to extend credit.

19.ANTI-TERRORISM LAW.  The Lender hereby notifies the Borrower and any Related Party that, pursuant to the requirements of the USA Patriot Act, the Lender may be required to obtain, verify and record information that identifies the Borrower and any Related Party, which information may include the name and address of the Borrower and any Related Party and other information that will allow the Lender to identify the Borrower and any Related Party in accord with the USA Patriot Act.  The Borrower hereby agrees to take any action necessary to enable the Lender to comply with the requirements of the USA Patriot Act.

20.AMENDMENT.  No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or any other Loan Documents shall in any event be effective unless the same shall be in writing and acknowledged by the Lender, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

21.AMENDMENT & RESTATEMENT.  This Agreement amends, restates, and replaces in its entirety the Fourth Amended and Restated Revolving Credit Agreement dated September 7, 2016, as amended April 14, 2017, by and among the same parties.  All amounts outstanding under the Original Agreement shall be deemed automatically outstanding under this Agreement.

Signature page follows.

Signature page to Fifth Amended and Restated Credit Agreement

IN WITNESS WHEREOF, this Agreement has been signed as of the date first above appearing.

FIRST MID-ILLINOIS BANCSHARES, INC.

By: /s/ Joseph R. Dively        
Title: Chief Executive Officer    

By: /s/ Michael L. Taylor        
Title: Senior Executive Vice President 
          and Chief Operating Officer

Address for notices:
1515 Charleston Avenue
Mattoon, Illinois  61938
Attention:  Chief Financial Officer
Telephone:  217/258-3306
Fax No.:  217/258-0485

THE NORTHERN TRUST COMPANY

By: /s/ Peter J. Hallan            
Title: Vice President            

Address for notices:    
50 South LaSalle Street
Chicago, IL  60603
Attention:  Mr. Peter J. Hallan, Corporate Banking
Telephone:  312/444-2434
Fax No.:  312/557-1425

EXHIBIT A

AMENDED AND RESTATED REVOLVING NOTE

$10,000,000                                           Chicago, Illinois
April 13, 2018

FOR VALUE RECEIVED, on or before the Revolving Loan Maturity Date (as such term is defined in the Fifth Amended and Restated Credit Agreement by and between First Mid‐Illinois Bancshares, Inc. and The Northern Trust Company, of even date herewith (the “Agreement”)), FIRST MID-ILLINOIS BANCSHARES, INC., a Delaware corporation (the “Borrower”), promises to pay to the order of THE NORTHERN TRUST COMPANY, an Illinois banking corporation (hereafter, together with any subsequent holder hereof, called the “Lender”), at its main banking office at 50 South LaSalle Street, Chicago, Illinois 60675, or at such other place as the Lender may direct, the aggregate unpaid principal balance of each advance (a “Loan” and collectively the “Loans”) made by the Lender to the Borrower under this Revolving Note.  The total principal amount of Loans outstanding at any one time under this Revolving Note will not exceed TEN MILLION AND NO/100 UNITED STATES DOLLARS ($10,000,000).

This Revolving Note is in replacement of, and substitution for, but not in repayment of, that certain First Amended Revolving Note dated as of April 14, 2017, in the principal amount of TEN MILLION AND NO/100 UNITED STATES DOLLARS ($10,000,000) made by the Borrower and payable to the order of the Lender (the “Prior Note”), pursuant to that certain Fourth Amended and Restated Revolving Credit Agreement dated as of September 7, 2016, as amended, between the Borrower and the Lender, and this Revolving Note shall not be deemed a novation thereof.  Any and all amounts outstanding under the Prior Note as of the date of this Revolving Note shall be deemed to be amounts outstanding under this Revolving Note.
The Lender is hereby authorized by the Borrower at any time and from time to time at the Lender's sole option to attach a schedule (grid) to this Revolving Note and to endorse thereon notations with respect to each Loan specifying the date and principal amount thereof, and the date and amount of each payment of principal and interest made by the Borrower with respect to each such Loan.  The Lender's endorsements as well as its records relating to Loans is rebuttably presumptive evidence of the outstanding principal and interest on the Loans, and, in the event of inconsistency, will prevail over any records of the Borrower and any written confirmations of Loans given by the Borrower.

The Borrower agrees to pay interest on the unpaid principal amount from time to time outstanding under this Revolving Note on the dates and at the rate or rates as set forth in the Agreement.

Payments of both principal and interest are to be made in immediately available funds in lawful money of the United States of America.

This Revolving Note evidences indebtedness incurred under the Agreement, to which Agreement reference is hereby made for a statement of its terms and provisions, including without limitation those under which this Revolving Note may be paid prior to its due date or have its due date accelerated.

This Revolving Note and any document or instrument executed in connection with this Revolving Note are governed by and construed in accordance with the internal law of the State of Illinois, and are deemed to have been executed in the State of Illinois.  This Revolving Note binds the Borrower, its successors and assigns, and inures to the benefit of the Lender, its successors and assigns, except that the Borrower may not transfer or assign any of its rights or interest under this Revolving Note without the prior written consent of the Lender.

FIRST MID-ILLINOIS BANCSHARES, INC.

By: /s/ Joseph R. Dively        
Title: Chief Executive Officer    

By: /s/ Michael L. Taylor        
Title: Senior Executive Vice President 
          and Chief Operating Officer

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