exv4w5






Exhibit 4.5




FORM OF




DISCOVERY COMMUNICATIONS, INC.




and




Computershare Trust Company, N.A., as Rights Agent




RIGHTS AGREEMENT




Dated as of [                    ], 2008




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	Section 1. Certain Definitions
	 	 	1	 
	 
	 	 	 	 
	Section 2. Appointment of Rights Agent
	 	 	10	 
	 
	 	 	 	 
	Section 3. Issue of Right Certificates
	 	 	11	 
	 
	 	 	 	 
	Section 4. Form of Right Certificates
	 	 	13	 
	 
	 	 	 	 
	Section 5. Countersignature and Registration
	 	 	13	 
	 
	 	 	 	 
	Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates
	 	 	14	 
	 
	 	 	 	 
	Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights
	 	 	14	 
	 
	 	 	 	 
	Section 8. Cancellation and Destruction of Right Certificates
	 	 	16	 
	 
	 	 	 	 
	Section 9. Availability of Shares of Preferred Stock
	 	 	16	 
	 
	 	 	 	 
	Section 10. Preferred Stock Record Date
	 	 	17	 
	 
	 	 	 	 
	Section 11. Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights
	 	 	17	 
	 
	 	 	 	 
	Section 12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	27	 
	 
	 	 	 	 
	Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	28	 
	 
	 	 	 	 
	Section 14. Fractional Rights and Fractional Shares
	 	 	31	 
	 
	 	 	 	 
	Section 15. Rights of Action
	 	 	32	 
	 
	 	 	 	 
	Section 16. Agreement of Right Holders
	 	 	32	 
	 
	 	 	 	 
	Section 17. Right Certificate Holder Not Deemed a Stockholder
	 	 	33	 
	 
	 	 	 	 
	Section 18. Concerning the Rights Agent
	 	 	33	 
	 
	 	 	 	 
	Section 19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	34	 
	 
	 	 	 	 
	Section 20. Duties of Rights Agent
	 	 	34	 
	 
	 	 	 	 
	Section 21. Change of Rights Agent
	 	 	36	 
	 
	 	 	 	 
	Section 22. Issuance of New Right Certificates
	 	 	37	 






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	 	 	Page	 
	Section 23. Redemption
	 	 	37	 
	 
	 	 	 	 
	Section 24. Exchange
	 	 	38	 
	 
	 	 	 	 
	Section 25. Notice of Certain Events
	 	 	39	 
	 
	 	 	 	 
	Section 26. Notices
	 	 	40	 
	 
	 	 	 	 
	Section 27. Supplements and Amendments
	 	 	41	 
	 
	 	 	 	 
	Section 28. Successors
	 	 	41	 
	 
	 	 	 	 
	Section 29. Benefits of this Agreement
	 	 	41	 
	 
	 	 	 	 
	Section 30. Determinations and Actions by the Board of Directors
	 	 	41	 
	 
	 	 	 	 
	Section 31. Severability
	 	 	42	 
	 
	 	 	 	 
	Section 32. Governing Law
	 	 	42	 
	 
	 	 	 	 
	Section 33. Counterparts
	 	 	42	 
	 
	 	 	 	 
	Section 34. Descriptive Headings
	 	 	42	 
	 
	 	 	 	 
	Section 35. Force Majeure
	 	 	42	 






ii









 






RIGHTS AGREEMENT




          Rights Agreement, dated as of [                    ], 2008 (“Agreement”), between Discovery
Communications, Inc., a Delaware corporation (the “Company”), and Computershare Trust
Company, N.A., a national banking association, as Rights Agent (the “Rights Agent”).




          WHEREAS, the Company is a party to the Merger Agreement, dated as of June 4, 2008 (the
“Merger Agreement”), by and among Discovery Holding Company, a Delaware corporation
(“DHC”), the Company and DHC Merger Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Company (“Merger Sub”), pursuant to which, among other things, Merger
Sub will merge (the “Merger”) with and into DHC with DHC as the surviving corporation in
the Merger, and, in the Merger, each outstanding share of common stock of DHC will be converted
into shares of common stock of the Company.




          WHEREAS, the Board of Directors of the Company has, subject to the consummation of the Merger,
declared a dividend of preferred share purchase rights to holders of the Company’s Common Stock and
Convertible Preferred Stock of record as of immediately after the effectiveness of the Merger (the
“Record Date”). The dividend consists of one Series A Right for each share of Series A
Common Stock and each share of Series A Convertible Preferred Stock outstanding on the Record Date,
one Series B Right for each share of Series B Common Stock outstanding on the Record Date and one
Series C Right for each share of Series C Common Stock and Series C Convertible Preferred Stock
outstanding on the Record Date, respectively. The Board has also directed the issuance of one
Series A Right, Series B Right or Series C Right, as applicable, with respect to each share of
Series A Common Stock, Series A Convertible Preferred Stock, Series B Common Stock, Series C Common
Stock or Series C Convertible Preferred Stock, as applicable, that shall become outstanding between
the Record Date and the earlier of the Distribution Date and the Expiration Date. All capitalized
terms used in this paragraph are defined in Section 1 of this Agreement, and the foregoing
provisions are subject to adjustment as provided herein.




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




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




          (a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who
or which shall be the Beneficial Owner (as such term is hereinafter defined) of 10% or more of the
number of shares of Common Stock then outstanding, but shall not include an Exempt Person, but only
so long as such Person continues to be an Exempt Person; provided, however, that if
such Exempt Person fails to meet the requirements set forth herein as an Exempt Person, then such
Person shall, to the extent such Person Beneficially Owns 10% or more of the shares of Common Stock
at the time outstanding, be deemed to be an Acquiring Person for purposes of this Agreement, unless
such Person ceased to be an Exempt Person as a result of a Transfer (as such term is defined in the
Certificate of Incorporation) of all of the shares of Series
A Convertible Preferred Stock (and Series A Conversion Shares) Beneficially Owned by such
Person, in which case such Person shall not be deemed to be or to have become an “Acquiring




 









 







Person”
for any purposes of this Agreement unless and until such Person shall, following such Transfer,
become the Beneficial Owner of any additional shares of Common Stock (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding Common Stock or pursuant to
a split or subdivision of the outstanding Common Stock)); provided, however, that
(i) if the Board of Directors of the Company determines in good faith that a Person who would
otherwise be an “Acquiring Person” became the Beneficial Owner of a number of shares of Common
Stock such that the Person would otherwise qualify as an “Acquiring Person” inadvertently
(including, without limitation, because (A) such Person was unaware that it Beneficially Owned a
percentage of Common Stock that would otherwise cause such Person to be an “Acquiring Person” or
(B) although such Person was aware of the extent of its Beneficial Ownership of Common Stock, such
Person had no actual knowledge of the consequences of such Beneficial Ownership under this
Agreement) and without any intention of changing or influencing control of the Company, then such
Person shall not be deemed to be or to have become an “Acquiring Person” for any purposes of this
Agreement unless and until such Person shall have failed to divest itself, as soon as practicable
(as determined, in good faith, by the Board of Directors of the Company), of Beneficial Ownership
of a sufficient number of shares of Common Stock so that such Person would no longer otherwise
Beneficially Own 10% or more of the number of shares of Common Stock then outstanding; (ii) if, as
of the effectiveness of the Merger, any Person is the Beneficial Owner of 10% or more of the number
of shares of Common Stock outstanding, such Person shall not be deemed to be or to become an
“Acquiring Person” unless and until such time as such Person shall, after the effectiveness of the
Merger, become the Beneficial Owner of any additional shares of Common Stock (other than pursuant
to a dividend or distribution paid or made by the Company on the outstanding Common Stock or
pursuant to a split or subdivision of the outstanding Common Stock), unless, upon becoming the
Beneficial Owner of such additional shares of Common Stock, such Person is not then the Beneficial
Owner of 10% or more of the number of shares of Common Stock then outstanding; and (iii) no Person
shall become an “Acquiring Person” as the result of an acquisition of shares of Common Stock by the
Company which, by reducing the number of shares outstanding, increases the proportionate number of
shares of Common Stock Beneficially Owned by such Person to 10% or more of the number of shares of
Common Stock then outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 10% or more of the number of shares of Common Stock then outstanding by reason
of such share acquisitions by the Company and shall thereafter become the Beneficial Owner of any
additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made
by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an “Acquiring Person” unless upon
becoming the Beneficial Owner of such additional shares of Common Stock such Person does not
beneficially own 10% or more of the number of shares of Common Stock then outstanding. For all
purposes of this Agreement, any calculation of the number of shares of Common Stock outstanding at
any particular time, including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the “Exchange Act
”), as in effect on the
date hereof.




          (b) “Adjusted Maximum Amount” with respect to any Limited ANPP Permitted Transferee
shall mean the Maximum Amount reduced by the number of outstanding




2









 







shares of Series C Convertible
Preferred Stock (and Series C Conversion Shares) Beneficially Owned by the ANPP Stockholder Group
or a Limited ANPP Permitted Transferee immediately after giving effect to the acquisition of
outstanding shares of Convertible Preferred Stock by such Limited ANPP Permitted Transferee.




          (c) “Affiliate” and “Associate” shall 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 hereof.




          (d) “ANPP” shall mean Advance/Newhouse Programming Partnership, a New York general
partnership.




          (e) “ANPP Permitted Transferee” shall mean (i) ANPP or the member of the ANPP
Stockholder Group that acquires record and Beneficial Ownership of shares of Convertible Preferred
Stock from the Company upon the effectiveness of the Merger and such other member or members of the
ANPP Stockholder Group acquiring record and Beneficial Ownership of shares of Convertible Preferred
Stock (or Conversion Shares) from another member of the ANPP Stockholder Group, or (ii) the Person
that acquires record and Beneficial Ownership from a member of the ANPP Stockholder Group or
another ANPP Permitted Transferee of (x) all of the outstanding shares of Series A Convertible
Preferred Stock (and Series A Conversion Shares), including any shares of Convertible Preferred
Stock (and Conversion Shares) that are Escrow Shares and (y) a number of outstanding shares of
Series C Convertible Preferred Stock (or Series C Conversion Shares) so that, immediately after
such acquisition, the number of shares of Common Stock Beneficially Owned by the ANPP Stockholder
Group or the ANPP Permitted Transferee from whom such Person acquires such shares, does not exceed
9.9% of the shares of Common Stock outstanding immediately after such acquisition, in each case, so
long as after giving effect to such acquisition by such Person, the shares of Common Stock
Beneficially Owned by such Person and its Affiliates immediately following such acquisition (other
than Escrow Shares) do not result in such Person (and its Affiliates) collectively Beneficially
Owning a number of shares of Common Stock in excess of the Maximum Amount.




          (f) “ANPP Stockholder Group” shall mean Advance Publications, Inc., Newhouse
Broadcasting Corporation and, as of the date of determination, any direct or indirect Subsidiary
(which, for this purpose, has the meaning ascribed to it in the Certificate of Incorporation) of
Advance Publications, Inc. or Newhouse Broadcasting Corporation.




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




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




                (ii) which such Person or any of such Person’s Affiliates or Associates has (A) the right to
acquire (whether such right is exercisable immediately or only after the passage of time or
occurrence of conditions) pursuant to any agreement, arrangement or




3









 







understanding (other than
customary agreements with and between underwriters and selling group members with respect to a bona
fide public offering of securities), or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, (x) 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, (y) securities which such
Person has a right to acquire upon the exercise of Rights at any time prior to the time that any
Person becomes an Acquiring Person or (z) securities issuable upon the exercise of Rights from and
after the time that any Person becomes an Acquiring Person if such Rights were acquired by such
Person or any of such Person’s Affiliates or Associates prior to the Distribution Date or pursuant
to Section 3(a) or Section 22 hereof (“Original Rights”) or pursuant to Section 11(i) or
Section 11(n) with respect to an adjustment to Original Rights; or (B) the right to vote pursuant
to any agreement, arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any security by reason of such
agreement, arrangement or understanding if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules
and regulations promulgated under the Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report);




                (iii) which are Beneficially Owned, directly or indirectly, by any other Person and with
respect to which such Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso to Section
1(g)(ii)(B)) or disposing of such securities of the Company; provided, however, in
each such case, that (A) no Person who is an officer, director or employee of an Exempt Person
shall be deemed, solely by reason of such Person’s status or authority as such, to be the
“Beneficial Owner” of, to have “Beneficial Ownership” of or to “beneficially own” any securities
that are “Beneficially Owned” (as defined in this Section l(g)), including, without limitation, in
a fiduciary capacity, by an Exempt Person or by any other such officer, director or employee of an
Exempt Person; and (B) no Person who is an officer, director or employee of an Exempt Person shall
be deemed to be the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “beneficially
own” any securities that are “Beneficially Owned” (as so defined) by any other Person or Persons
that acquired such securities, or that has or have agreed to acquire such securities, from the
Company or any Subsidiary of the Company, solely by reason of any agreement, arrangement or
understanding between such officer, director or employee and such other Person; or




                (iv) which are Beneficially Owned, directly or indirectly, by any other Person, if such Person
and such other Person are members of the same Group.




          (h) “Business Day” shall mean any day other than a Saturday, a Sunday or a day on
which banking institutions in the State of New York or the city in which the principal office of
the Rights Agent is located are authorized or obligated by law or executive order to close.




4









 








          (i) “Certificate of Incorporation” shall mean the Restated Certificate of
Incorporation of the Company, as filed with the Secretary of State of the State of Delaware on
[                    ], 2008.




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




          (k) “Common Stock” when used with reference to the Company shall mean the common
stock, presently par value $0.01 per share, of the Company or any other stock resulting from
successive changes or reclassifications of common stock, and includes, without limitation, the
Series A Common Stock, Series B Common Stock and Series C Common Stock. “Common Stock”
when used with reference to any Person other than the Company shall mean the common stock (or, in
the case of an unincorporated entity, the equivalent equity interest) with the greatest voting
power of such other Person or, if such other Person is a Subsidiary (as such term is hereinafter
defined) of another Person, of the Person or Persons which ultimately control such first-mentioned
Person.




          (l) “Conversion Shares” shall mean the Series A Conversion Shares and the Series C
Conversion Shares, collectively.




          (m) “Convertible Preferred Stock” shall mean, collectively, the Series A Convertible
Preferred Stock and the Series C Convertible Preferred Stock.




          (n) “Common Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii)
hereof.




          (o) “Current Values” shall have the meaning set forth in Section 11(a)(iii) hereof.




          (p) “DHC” shall have the meaning set forth in the recitals hereto.




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




          (r) “Equivalent Preferred Shares” shall have the meaning set forth in Section 11(b)
hereof.




          (s) “Escrow Shares” shall mean any shares of Convertible Preferred Stock (or
Conversion Shares) that, on any date of determination, are held by [                    ], as Escrow Agent,
pursuant to the Escrow Agreement, dated as of [                    ], 2008 (the “Escrow Agreement”), by
and among ANPP, the Company and the Escrow Agent.




          (t) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.




          (u) “Exempt Person” shall mean each of (i) the Company or any Subsidiary of the
Company, in each case including, without limitation, in its fiduciary capacity, or any




5









 







employee
benefit plan of the Company or of any Subsidiary of the Company, or any entity or trustee holding
Common Stock for or pursuant to the terms of any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees of the Company or of any Subsidiary of the
Company, (ii) any ANPP Permitted Transferee and (iii) any Limited ANPP Permitted Transferee;
provided, however, that an Exempt Person shall cease to be an Exempt Person upon
the disposition by such Person of all of the outstanding shares of Series A Convertible Preferred
Stock (and Series A Conversion Shares) Beneficially Owned by such Person; provided,
further, however, that, with respect to clause (ii) of this paragraph, such Exempt
Person shall be considered an Exempt Person only to the extent that the number of shares of Common
Stock Beneficially Owned by such Exempt Person does not exceed the Maximum Amount;
provided, further, however, that, with respect to clause (iii) of this
paragraph, such Exempt Person shall be considered an Exempt Person only to the extent that the
number of shares of Common Stock Beneficially Owned by such Exempt Person does not exceed the
Adjusted Maximum Amount applicable to such Exempt Person. Notwithstanding any other provision of
this Agreement, the exercise or exchange of Rights held by any Exempt Person pursuant to the terms
of this Agreement shall not have any effect on such Person’s status as an Exempt Person, and any
change in ownership resulting from such exercise or exchange shall have no effect on the Maximum
Amount or Adjusted Maximum Amount applicable to such Person.




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




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




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




          (y) “Flip-In Event” shall have the meaning set forth in Section 11(a)(ii) hereof.




          (z) “Group” shall mean any group within the meaning of Section 13(d)(3) of the
Exchange Act.




          (aa) “Limited ANPP Permitted Transferee” shall mean the Person, other than an ANPP
Permitted Transferee, that acquires record and beneficial ownership of all of the outstanding
shares of Series A Convertible Preferred Stock (and Series A Conversion Shares), including any
shares of Convertible Preferred Stock (or Conversion Shares) that are Escrow Shares, from a member
of the ANPP Stockholder Group or another Permitted Transferee, so long as after giving effect to
such acquisition by it, the shares of Common Stock Beneficially Owned by such Person and its
Affiliates immediately following such acquisition (other than Escrow Shares) do not result in such
Person (and its Affiliates) collectively Beneficially Owning a number of shares of Common Stock in
excess of the Adjusted Maximum Amount.




          (bb) “Maximum Amount” shall mean a number of shares of Common Stock equal to (i) 7.5%
of the sum of (A) the number of shares of Common Stock of the Company outstanding (with Conversion
Shares (other than Conversion Shares issuable in respect of Escrow Shares) deemed outstanding for
this purpose) immediately following the effectiveness of




6









 







the Merger, (B) the number of Conversion
Shares issued or issuable in respect of Released Shares as of the date of determination, and (C)
the number of shares of Common Stock issuable upon exercise of the Converted Options (as defined in
the Merger Agreement); plus (ii) the number of Conversion Shares issuable upon conversion of shares
of Convertible Preferred Stock issued to an ANPP Permitted Transferee upon the effectiveness of the
Merger (other than any such Conversion Shares issuable in respect of Escrow Shares); plus (iii) the
number of Conversion Shares issued or issuable in respect of Released Shares as of the date of
determination; provided, that, in the event any Permitted Transferee Transfers
shares of Convertible Preferred Stock or Conversion Shares following the effectiveness of the
Merger (other than in a (1) in a Transfer that constitutes a Permitted Transfer under the
Certificate of Incorporation or (2) in a Transfer to the Company as a result of the retirement or
cancellation of any Escrow Shares pursuant to the terms of the Escrow Agreement) then the amount of
shares calculated above will be reduced by such number of shares of Conversion Shares issuable upon
conversion of shares of Convertible Preferred Stock, or Conversion Shares, so Transferred.
Notwithstanding the foregoing, in the event any Permitted Transferee or any of its Affiliates (x)
acquires, or enters into any agreement, arrangement or understanding to acquire, Beneficial
Ownership of shares of Common Stock following the effectiveness of the Merger, or (y) Transfers or
enters into any agreement, arrangement or understanding to Transfer, Beneficial Ownership of shares
of Convertible Preferred Stock to any third party, then such acquisition or Transfer, as the case
may be, will be deemed, upon the execution or entry of any such agreement, arrangement or
understanding or the consummation of any such acquisition or Transfer, to result in the Maximum
Amount being exceeded to the extent that after giving effect to such acquisition of Beneficial
Ownership of shares of Common Stock or such Transfer of Beneficial Ownership of shares of
Convertible Preferred Stock (other than the Transfer of any Escrow Shares to the Company as a
result of the retirement or cancellation of any Escrow Shares pursuant to the terms of the Escrow
Agreement), the aggregate voting power (stated as a percentage) of all shares of Common Stock
Beneficially Owned by the Permitted Transferee and its Affiliates, or such third-party Transferee
and its Affiliates (including for these purposes Conversion Shares, other than Conversion Shares
issued or issuable in respect of any Escrow Shares), as applicable, would exceed by more than one
percentage point the aggregate voting power of the ANPP Permitted Transferee to vote with the
holders of the Common Stock, voting together as a single class, on matters that may be submitted to
a vote of stockholders of the Company (other than the election of directors) immediately following
the effectiveness of the Merger; provided, that Escrow Shares will be excluded for purposes
of calculating whether the one percentage point voting power threshold has been exceeded, and (x)
any Released Series A Shares or Series A Conversion Shares and (y) any shares of Common Stock
issuable upon exercise of the Converted Options, will, in each case, be deemed to have been
outstanding immediately following the effectiveness of the Merger for purposes of calculating
whether the one percentage point voting power threshold has been exceeded. For purposes of this
definition, “Transfer” and any derivation thereof shall have the meaning ascribed to it in the
Certificate of Incorporation. The appropriate components of the Maximum Amount (including, without
limitation, the number in clause (i)(A) of this Section 1(bb)) shall be appropriately adjusted from
time to time to reflect the
effect
 of any stock split, reverse split, stock dividend, combination, reclassification or
similar event that occurs after the effectiveness of the Merger.




          (cc) “Merger” shall have the meaning set forth in the recitals hereto.




7









 








          (dd) “Merger Agreement” shall have the meaning set forth in the recitals hereto.




          (ee) “Merger Sub” shall have the meaning set forth in the recitals hereto.




          (ff) “NASDAQ” shall mean The Nasdaq Stock Market.




          (gg) “Permitted Transferee” shall mean an ANPP Permitted Transferee or a Limited ANPP
Permitted Transferee.




          (hh) “Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated organization,
government or agency or political subdivision thereof, or other entity, whether acting in an
individual, fiduciary or other capacity, and shall include any successor (by merger or otherwise).




          (ii) “Preferred Stock” shall mean collectively or severally, as the context shall
require, the Series A Junior Preferred Stock, the Series B Junior Preferred Stock and/or the Series
C Junior Preferred Stock, and to the extent that there is not a sufficient number of shares of
Series A Junior Preferred Stock, Series B Junior Preferred Stock or Series C Junior Preferred Stock
authorized to permit the full exercise of the Rights, any other series of preferred stock of the
Company designated for such purpose containing terms substantially similar to the Series A Junior
Preferred Stock, the Series B Junior Preferred Stock or the Series C Junior Preferred Stock, as the
case may be.




          (jj) “Principal Party” shall have the meaning set forth in Section 13(b) hereof.




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




          (ll) “Record Date” shall have the meaning set forth in the recitals hereto.




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




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




          (oo) “Released Shares” shall mean any issued and outstanding shares of Convertible
Preferred Stock (or Conversion Shares) that were Escrow Shares, which, as of the date of
determination, are no longer subject to the Escrow Agreement.




          (pp) “Rights” shall mean collectively or severally, as the context shall require, the
Series A Rights, the Series B Rights and/or the Series C Rights.




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




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




8









 








          (ss) “Section 11(a)(ii) Trigger Date” shall have the meaning set forth in Section
11(a)(iii) hereof.




          (tt) “Series A Common Stock” shall mean the Series A Common Stock, par value $0.01 per
share, of the Company.




          (uu) “Series B Common Stock” shall mean the Series B Common Stock, par value $0.01 per
share, of the Company.




          (vv) “Series C Common Stock” shall mean the Series C Common Stock, par value $0.01 per
share, of the Company.




          (ww) “Series A Conversion Shares” shall mean the shares of Series A Common Stock or
other securities of the Company issued or issuable upon conversion of the Series A Convertible
Preferred Stock.




          (xx) “Series C Conversion Shares” shall mean the shares of Series C Common Stock or
other securities of the Company issued or issuable upon conversion of the Series C Convertible
Preferred Stock.




          (yy) “Series A Convertible Preferred Stock” shall mean the Series A Convertible
Participating Preferred Stock, par value $0.01 per share, of the Company.




          (zz) “Series C Convertible Preferred Stock” shall mean the Series C Convertible
Participating Preferred Stock, par value $0.01 per share, of the Company.




          (aaa) “Series A Junior Preferred Stock” shall mean the Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the rights and preferences set
forth in the Form of Certificate of Designation attached to this Agreement as Exhibit A.




          (bbb) “Series B Junior Preferred Stock” shall mean the Series B Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the rights and preferences set
forth in the Form of Certificate of Designation attached to this Agreement as Exhibit B.




          (ccc) “Series C Junior Preferred Stock” shall mean the Series C Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the rights and preferences set
forth in the Form of Certificate of Designation attached to this Agreement as Exhibit C.




          (ddd) “Series A Rights” shall mean preferred share purchase rights, each such Series A
Right representing the right to purchase one one-thousandth (subject to adjustment) of a
share of the Series A Junior Preferred Stock, upon the terms and subject to the conditions set
forth in this Agreement.




          (eee) “Series A Rights Certificate” shall have the meaning set forth in Section 3(a)
hereof.




9









 








          (fff) “Series B Rights” shall mean preferred share purchase rights, each such Series B
Right representing the right to purchase one one-thousandth (subject to adjustment) of a share of
the Series B Junior Preferred Stock, upon the terms and subject to the conditions set forth in this
Agreement.




          (ggg) “Series B Rights Certificate” shall have the meaning set forth in Section 3(a)
hereof.




          (hhh) “Series C Rights” shall mean preferred share purchase rights, each such Series C
Right representing the right to purchase one one-thousandth (subject to adjustment) of a share of
the Series C Junior Preferred Stock, upon the terms and subject to the conditions set forth in this
Agreement.




          (iii) “Series C Rights Certificate” shall have the meaning set forth in Section 3(a)
hereof.




          (jjj) “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof.




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




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




          (mmm) “Substitution Period” shall have the meaning set forth in Section 11(a)(iii)
hereof.




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




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




          Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as
agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to
the Distribution Date be the holders of Common Stock or Convertible Preferred Stock) in
accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days’ prior written notice to the Rights Agent. The Rights
Agent shall have no duty to supervise, and in no event be liable for, the acts or omissions of any
such co-Rights Agent.




10









 








          Section 3. Issue of Right Certificates.




          (a) Until the Close of Business on the earlier of (i) the tenth day after the Stock
Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined by action
of the Board of Directors of the Company prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the Company for or pursuant to the terms of
any such plan) of, or of the first public announcement of the intention of such Person to commence,
a tender or exchange offer the consummation of which would result in any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) becoming the Beneficial Owner of shares of
Common Stock aggregating 10% or more of the Common Stock then outstanding (the earlier of such
dates being herein referred to as the “Distribution Date”), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Stock
or Convertible Preferred Stock, or, in the case of uncertificated shares, the balances indicated in
the book-entry account system of the transfer agent for the Common Stock or Convertible Preferred
Stock, registered in the names of the holders thereof and not by separate Right Certificates, and
(y) the Rights will be transferable only in connection with the transfer of Common Stock or
Convertible Preferred Stock. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign and the Company will send or cause to be
sent (and the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail,
(A) to each record holder of Series A Common Stock or Series A Convertible Preferred Stock as of
the close of business on the Distribution Date (other than any Acquiring Person or any Associate or
Affiliate of an Acquiring Person), at the address of such holder shown on the records of the
Company, a Series A Right Certificate, in substantially the form of Exhibit D hereto (a “Series
A Right Certificate”), evidencing one Series A Right (subject to adjustment as provided herein)
for each share of Series A Common Stock or Series A Convertible Preferred Stock so held; (B) to
each record holder of Series B Common Stock as of the close of business on the Distribution Date
(other than any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the
address of such holder shown on the records of the Company, a Series B Right Certificate, in
substantially the form of Exhibit E hereto (a “Series B Right Certificate”), evidencing one
Series B Right (subject to adjustment as provided herein) for each share of Series B Common Stock
so held; and (C) to each record holder of Series C Common Stock or Series C Convertible Preferred
Stock as of the close of business on the Distribution Date (other than any Acquiring Person or any
Associate or Affiliate of an Acquiring Person), at the address of such holder shown on the
records of the Company, a Series C Right Certificate, in substantially the form of Exhibit F
hereto (a “Series C Right Certificate,” and collectively with the Series A Right
Certificates and the Series B Rights Certificates or severally, as the context shall require, the
“Rights Certificates”), evidencing one Series C Right (subject to adjustment as provided
herein) for each share of Series C Common Stock or Series C Convertible Preferred Stock so held.
From and after the Distribution Date, the Rights will be evidenced solely by Right Certificates.




          (b) The Company will mail, as promptly as practicable following the Record Date, a copy of a
Summary of Rights, in substantially the form attached hereto as Exhibit G (the




11









 







“Summary of
Rights”) to all holders of record of Common Stock or Convertible Preferred Stock as of the
Record Date at such holder’s address as shown in the records of the Company. With respect to shares
of Common Stock or Convertible Preferred Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by the certificates for Common Stock or Convertible
Preferred Stock, or in the case of uncertificated shares, the balances indicated in the book-entry
account system of the transfer agent for the Common Stock or Convertible Preferred Stock,
registered in the names of the holders thereof together with the Summary of Rights. Until the
Distribution Date (or, if earlier, the Expiration Date), the transfer of any shares of Common Stock
or Convertible Preferred Stock outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the transfer of the Rights associated with such shares of
Common Stock or Convertible Preferred Stock.




          (c) Rights shall be issued in respect of all shares of Common Stock or Convertible Preferred
Stock issued or disposed of (including, without limitation, upon disposition of Common Stock out of
treasury stock or issuance or reissuance of Common Stock out of authorized but unissued shares)
after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date, or
under the circumstances provided in clauses (i), (ii), (iii) and (iv) of Section 22 hereof, after
the Distribution Date. Certificates issued for Common Stock or Convertible Preferred Stock
(including, without limitation, upon transfer of outstanding Common Stock or Convertible Preferred
Stock, disposition of Common Stock out of treasury stock or issuance or reissuance of Common Stock
out of authorized but unissued shares) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:





     (i) This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement between
Discovery Communications, Inc. (the “Company”) and
Computershare Trust Company, N.A., as Rights Agent, dated as of
[                    ], 2008 and as amended from time to time (the
“Rights Agreement”), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at
the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder
of this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be redeemed, may
become exercisable for securities or assets of the Company or
securities of another entity, may be exchanged for shares of Common
Stock or other securities or assets of the Company or may expire,
and Rights owned by or transferred to any Person who is or becomes
an Acquiring Person (as defined in the Rights Agreement) and certain
transferees thereof will become null and void and will no longer be
transferable.



12









 




With respect to such certificates containing the foregoing legend, until the Distribution Date, the
Rights associated with the Common Stock or Convertible Preferred Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender for transfer of any
such certificate, except as otherwise provided herein, shall also constitute the transfer of the
Rights associated with the Common Stock or Convertible Preferred Stock represented thereby. In the
event that the Company purchases or otherwise acquires any Common Stock or Convertible Preferred
Stock (including, without limitation, in connection with the surrender of shares of Series B Common
Stock or Convertible Preferred Stock upon conversion thereof) after the Record Date but prior to
the Distribution Date, any Rights associated with such Common Stock or Convertible Preferred Stock
shall be deemed canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Stock or Convertible Preferred Stock, which are no longer
outstanding.




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




          Section 4. Form of Right Certificates. The Series A Right Certificates, the Series B Right
Certificates and the Series C Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be substantially in the forms set forth in
Exhibit D, Exhibit E and Exhibit F hereto, respectively, and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange or interdealer 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 this Agreement, the Right Certificates shall entitle the holders thereof to purchase
such number of one-thousandths of a share of the applicable series of Preferred Stock as shall be
set forth therein at the applicable Purchase Price, but the number of such one-thousandths of a
share of Preferred Stock and such Purchase Price shall be subject to adjustment as provided herein.




          Section 5. Countersignature and Registration.




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




13









 








          (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at an
office or agency designated for such purpose, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.




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




          (a) Subject to the provisions of this Agreement, at any time after the Distribution Date and
prior to the Expiration Date, any Right Certificate or Right Certificates 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-thousandths of a share of the applicable series
of Preferred Stock as the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office or agency of the Rights Agent designated for such purpose.
Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right Certificates.




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




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




          (a) Except as otherwise provided herein, the Rights shall become exercisable on the
Distribution Date, and thereafter the registered holder of any Right Certificate may, subject to
Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced
thereby in whole or in part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the office or agency of
the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price
with respect to the total number of one-thousandths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which the Rights are exercised, at any
time which is both after the Distribution Date and prior to the time (the “Expiration
Date”) that is the earliest of (i) the tenth anniversary of the effectiveness of the Merger
(the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided




14









 







in Section 23 hereof (the “Redemption Date”) or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.




          (b) The purchase price to be paid upon the exercise of the Rights (the “Purchase
Price”) shall be initially (i) $100 for each one-thousandth of a share of Series A Junior
Preferred Stock purchasable upon the exercise of a Series A Right, (ii) $100 for each
one-thousandth of a share of Series B Junior Preferred Stock purchasable upon the exercise of a
Series B Right and (iii) $100 for each one-thousandth of a share of Series C Junior Preferred Stock
purchasable upon the exercise of a Series C Right. The Purchase Price and the number of
one-thousandths of a share of Preferred Stock or other securities or property to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America in accordance with
paragraph (c) of this Section 7.




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




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




          (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder of
Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6
hereof or this Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such transfer or




15









 







exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
thereof as the Company shall reasonably request.




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




          Section 9. Availability of Shares of Preferred Stock.




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




          (b) So long as the shares of any series of Preferred Stock issuable upon the exercise of
Rights may be listed or admitted to trading on any national securities exchange the Company shall
use its best efforts to cause, from and after such time as the Rights become exercisable, all
shares of such series reserved for such issuance to be listed or admitted to trading on such
exchange, upon official notice of issuance upon such exercise.




          (c) From and after such time as the Rights become exercisable, the Company shall use its best
efforts, if then necessary to permit the issuance of shares of Preferred Stock upon the exercise of
Rights, to register and qualify such shares of Preferred Stock under the Securities Act and any
applicable state securities or “Blue Sky” laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications effective (with a
prospectus at all times meeting the requirements of the Securities Act) until the earlier of the
date as of which the Rights are no longer exercisable for such securities and the Expiration Date.
The Company may temporarily suspend, for a period of time not to exceed 90 days, the exercisability
of the Rights in order to prepare and file a registration statement under the Securities Act and
permit it to become effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer in effect. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have been obtained and
until a registration statement under the Securities Act shall have been declared effective, unless
an exemption therefrom is available.




16









 








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




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




          Section 10. Preferred Stock Record Date. Each Person in whose name any certificate for Preferred
Stock is issued upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the shares of Preferred Stock represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder
of Preferred Stock for which the Rights shall be exercisable, including, without limitation,
the right to vote or to receive dividends or other distributions, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.




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




          (a) (i) In the event the Company shall at any time after the date of this Agreement declare
and pay a dividend on any series of the Preferred Stock, such distribution may be declared and paid
only as follows: a distribution consisting of (x) shares of Series A Junior Preferred Stock may be
declared and paid to holders of Series A Junior Preferred Stock, on an equal per share basis, (y)
shares of Series B Junior Preferred Stock may be declared and paid to holders of Series B Junior
Preferred Stock, on an equal per share basis, and (z) shares of Series C Junior Preferred Stock may
be declared and paid to holders of Series C Junior Preferred Stock, on an equal per share basis,
and, except as otherwise provided in this Section 11(a), the number and kind of shares of capital
stock issuable upon exercise of a Right with respect to that series as of the record date for such
dividend shall be proportionately adjusted so that the holder




17









 







of any such Right exercised after
such time shall be entitled to receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, the holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend; provided,
however, that in no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In the event the Company shall at any time after the date of this Agreement
(A) subdivide any series of the outstanding Preferred Stock, (B) combine any series of the
outstanding Preferred Stock into a smaller number of shares of Preferred Stock of that series or
(C) issue any shares of its capital stock in a reclassification of any series of the Preferred
Stock (including any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as otherwise provided in this
Section 11(a), the number and kind of shares of capital stock issuable upon exercise of a Right
with respect to that series as of the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the holder of any such Right exercised
after such time shall be entitled to receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, the holder would have owned upon such
exercise and been entitled to receive by virtue of such subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. So long as Series A Rights, Series B
Rights and Series C Rights are outstanding, the Company shall not effect any of the actions set
forth in Clauses (A), (B) or (C) of this paragraph with respect to any series of Preferred Stock
without subdividing, combining or reclassifying each other series of Preferred Stock on an equal
per share basis. In the event that any transaction described in this Section 11(a)(i) is effected
with
respect to one or more such series but no such shares of any other series are outstanding, the
number and kind of shares of capital stock issuable upon such date, shall be proportionately
adjusted with respect to the holders of Rights exercisable for shares of such series that are not
outstanding as if such a dividend, subdivision, combination or reclassification had been effected
with respect to the shares of such series.




          (ii) Subject to Section 24 of this Agreement, in the event any Person becomes an Acquiring
Person (the first occurrence of such event being referred to hereinafter as the “Flip-In
Event”), then (A) (x) in the case of a Series A Right, the Purchase Price shall be adjusted to
be the Purchase Price in effect immediately prior to the Flip-In Event multiplied by the number of
one-thousandths of a share of Series A Junior Preferred Stock for which a Series A Right was
exercisable immediately prior to such Flip-In Event, whether or not such Series A Right was then
exercisable, and (y) each holder of a Series A Right, except as otherwise provided in this Section
11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the right to receive, upon exercise
thereof at a price equal to the Purchase Price (as so adjusted), in accordance with the terms of
this Agreement and in lieu of shares of Series A Junior Preferred Stock, such number of shares of
Series A Common Stock as shall equal the result obtained by dividing the Purchase Price (as so
adjusted) by 50% of the current per share market price of the Series A Common Stock (determined
pursuant to Section 11(d) hereof) on the date of such Flip-In Event; (B) (x) in the case of a
Series B Right, the Purchase Price shall be adjusted to be the Purchase Price in effect immediately
prior to the Flip-In Event multiplied by the number of one-




18









 







thousandths of a share of Series B
Junior Preferred Stock for which a Series B Right was exercisable immediately prior to such Flip-In
Event, whether or not such Series B Right was then exercisable, and (y) each holder of a Series B
Right, except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall
thereafter have the right to receive, upon exercise thereof at a price equal to the Purchase Price
(as so adjusted), in accordance with the terms of this Agreement and in lieu of shares of Series B
Junior Preferred Stock, such number of shares of Series B Common Stock as shall equal the result
obtained by dividing the Purchase Price (as so adjusted) by 50% of the current per share market
price of the Series B Common Stock (determined pursuant to Section 11(d) hereof) on the date of
such Flip-In Event; and (C) (x) in the case of a Series C Right, the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior to the Flip-In Event multiplied by
the number of one-thousandths of a share of Series C Junior Preferred Stock for which a Series C
Right was exercisable immediately prior to such Flip-In Event, whether or not such Series C Right
was then exercisable, and (y) each holder of a Series C Right, except as otherwise provided in this
Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the right to receive, upon
exercise thereof at a price equal to the Purchase Price (as so adjusted), in accordance with the
terms of this Agreement and in lieu of shares of Series C Junior Preferred Stock, such number of
shares of Series C Common Stock as shall equal the result obtained by dividing the Purchase Price
(as so adjusted) by 50% of the current per share market price of the Series C Common Stock
(determined pursuant to Section 11(d) hereof) on the date of such Flip-In Event; provided,
however, in each case, that the Purchase Price (as so adjusted) and the number of shares of
Common Stock so receivable upon exercise of a Right shall, following the Flip-In Event, be subject
to further adjustment as appropriate in accordance with Section 11(f) hereof. Notwithstanding
anything in this Agreement to the contrary, however, from and after the Flip-In Event, any Rights
that are Beneficially Owned by (x) any Acquiring Person (or any Affiliate or Associate of any
Acquiring Person), (y) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the Flip-In Event or (z) 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 (I) a transfer from the 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 (II) 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 the provisions of this paragraph, and subsequent transferees of
such Persons, shall be void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such Rights under any provision of this
Agreement. The Company shall use all reasonable efforts to ensure that the provisions of this
Section 11(a)(ii) are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any determinations with respect to
an Acquiring Person or its Affiliates, Associates or transferees hereunder. From and after the
Flip-In Event, no Right Certificate shall be issued pursuant to
Section 3 or Section 6 hereof that
represents Rights that are or have become void pursuant to the provisions of this paragraph, and
any Right Certificate delivered to the Rights Agent that represents Rights that are or have become
void pursuant to the provisions of this paragraph shall be canceled. From and after the occurrence
of an event specified in Section 13(a) hereof, any Rights that theretofore have not been exercised
pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in accordance with Section
13 and not pursuant to this Section 11(a)(ii).





19









 








          (iii) The Company may at its option substitute for a share of Common Stock issuable upon the
exercise of Rights in accordance with the foregoing subparagraph (ii) a number of shares of the
applicable series of Preferred Stock or fraction thereof such that the current per share market
price of one share of the applicable series of Preferred Stock multiplied by such number or
fraction is equal to the current per share market price of one share of the applicable series of
Common Stock. In the event that there shall not be sufficient shares of any series of Common Stock
issued but not outstanding or authorized but unissued to permit the exercise in full of the Rights
in accordance with the foregoing subparagraph (ii), the Board of Directors of the Company shall,
with respect to such deficiency, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, (A) determine the excess (such excess,
the “Spread”) of (1) the value of the shares of Common Stock issuable upon the exercise of
each Series A Right, Series B Right and Series C Right in accordance with the foregoing
subparagraph (ii) (the “Current Values”) over (2) the applicable Purchase Price (as
adjusted in accordance with the foregoing subparagraph (ii)), and (B) with respect to each Right
(other than Rights which have become void pursuant to the foregoing subparagraph (ii)), make
adequate provision to substitute for the shares of Series A Common Stock, Series B Common Stock or
Series C Common Stock, as the case may be, issuable in accordance with the foregoing subparagraph
(ii) upon exercise of the Right and payment of the applicable Purchase Price (as adjusted in
accordance therewith), (1) cash, (2) a reduction in the applicable Purchase Price, (3) shares of
Preferred Stock or other equity securities of the Company (including, without limitation, shares or
fractions of shares of preferred stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of the applicable series of Common Stock,
are deemed in good faith by the Board of Directors of the Company to have substantially the same
value as the shares of Series A Common Stock (in the case of a Series A Right), Series B Common
Stock (in the case of a Series B Right) or Series C Common Stock (in the case of a Series C Right)
(such shares of Preferred
Stock and shares or fractions of shares of preferred stock are hereinafter referred to as
“Common Stock Equivalents”)), (4) debt securities of the Company, (5) other assets, or (6)
any combination of the foregoing, having a value which, when added to the value of the shares of
Common Stock issued upon exercise of such Right, shall have an aggregate value equal to the Current
Value (less the amount of any reduction in such Purchase Price), where such aggregate value has
been determined by the Board of Directors of the Company upon the advice of a nationally recognized
investment banking firm selected in good faith by the Board of Directors of the Company;
provided, however, that if the Company shall not make adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following the Flip-In Event (the date of
the Flip-In Event being the “Section 11(a)(ii) Trigger Date”), then the Company shall be
obligated to deliver, to the extent permitted by applicable law and any material agreements then in
effect to which the Company is a party, upon the surrender for exercise of a Right and without
requiring payment of such Purchase Price, shares of Series A Common Stock (in the case of a Series
A Right), Series B Common Stock (in the case of a Series B Right) or Series C Common Stock (in the
case of a Series C Right) (to the extent available), and then, if necessary, such number or
fractions of shares of the applicable series of Preferred Stock (to the extent available) and then,
if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If, upon
the occurrence of the Flip-In Event, the Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional shares of the applicable series of Common Stock
could be authorized for issuance upon exercise in full of the Rights, then, if the Board of




20









 







Directors of the Company so elects, the thirty (30) day period set forth above may be extended to
the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date,
in order that the Company may seek stockholder approval for the authorization of such additional
shares (such thirty (30) day period, as it may be extended, is herein called the “Substitution
Period”). To the extent that the Company determines that some action need be taken pursuant to
the second and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject
to Section 11(a)(ii) hereof and the last sentence of this Section 11(a)(iii) hereof, that such
action shall apply uniformly to all outstanding Series A Rights, Series B Rights and/or Series C
Rights, as applicable, and (y) may suspend the exercisability of the Series A Rights, Series B
Rights and/or Series C Rights, as applicable, until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such second sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public announcement stating that the
exercisability of the Series A Rights, Series B Rights and/or Series C Rights, as applicable, has
been temporarily suspended, as well as a public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the value of the shares of Series A
Common Stock (in the case of a Series A Right), the Series B Common Stock (in the case of a Series
B Right) or Series C Common Stock (in the case of a Series C Right), shall be the current per share
market price (as determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and
the per share or fractional value of any “Common Stock Equivalent” shall be deemed to equal the
current per share market price of the Series A Common Stock (in the case of a Series A Right), the
Series B Common Stock (in the case of a Series B Right) and the Series C Common Stock (in the case
of a Series C Right). The Board of Directors of the Company may, but shall not be required to,
establish procedures to allocate the right to receive (x) shares of Series A Common Stock upon the
exercise of the Series A Rights among holders of Series A Rights, (y) shares of Series B Common
Stock upon the exercise of the Series B Rights among
holders of the Series B Rights and (z) shares of Series C Common Stock upon the exercise of
the Series C Rights among holders of the Series C Rights, in each case, pursuant to this Section
11(a)(iii).




          (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of any series of Preferred Stock entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase shares of the
applicable series of Preferred Stock (or shares having the same rights, privileges and preferences
as the applicable series of Preferred Stock (“Equivalent Preferred Shares”)) or securities
convertible into the applicable series of Preferred Stock or Equivalent Preferred Shares at a price
per share of Preferred Stock or Equivalent Preferred Shares (or having a conversion price per
share, if a security convertible into shares of Preferred Stock or Equivalent Preferred Shares)
less than the then current per share market price of the applicable series of Preferred Stock
(determined pursuant to Section 11(d) hereof) on such record date, the applicable Purchase Price to
be in effect after such record date shall be determined by multiplying the applicable Purchase
Price in effect immediately prior to such record date by a fraction, the numerator of which shall
be the number of shares of such series of Preferred Stock and Equivalent Preferred Shares
outstanding on such record date plus the number of shares of such series of Preferred Stock and
Equivalent Preferred Shares which the aggregate offering price of the total number of shares of
such series of Preferred Stock 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




21









 







at such current market price, and the denominator of which shall be the number of shares of such
series of Preferred Stock and Equivalent Preferred Shares outstanding on such record date plus the
number of additional shares of such series of Preferred Stock and/or Equivalent Preferred Shares to
be offered for subscription or purchase (or into which the convertible securities so to be offered
are initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. So long as Series A
Rights, Series B Rights and Series C Rights are outstanding, the Company shall not effect any such
issuance of rights, options or warrants with respect to any series of Preferred Stock if (x) the
rights, options or warrants to be received by the holders of the Series C Junior Preferred Stock in
such transaction (and any securities issuable upon exchange, exercise or conversion thereof) are
entitled to vote with respect to matters upon which security holders of the issuer thereof are
generally entitled to vote (other than to an extent no greater than the holders of Series C Common
Stock are entitled to vote upon matters as provided in the Certificate of Incorporation), or (y)
the rights, options or warrants to be received by the holders of Preferred Stock (and any
securities issuable upon exchange, exercise or conversion thereof) entitle the holders thereof to
vote generally upon matters that may be submitted to a vote of security holders of the issuer
thereof, unless the rights, options or warrants to be received by the holders of Series B Junior
Preferred Stock in such transaction (and any securities issuable upon exchange, exercise or
conversion thereof) at all times have voting power with respect to matters upon which security
holders of the issuer thereof are generally entitled to vote per share or other unit of not less
than ten times such per share voting power of the rights, options or warrants (and any securities
issuable upon exchange, exercise or conversion thereof) to be received in such transaction by the
holders of each other series of Preferred Stock receiving rights, options or warrants entitled to
such voting power, if any. In case such subscription price may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent. Shares of Preferred Stock and Equivalent
Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made successively whenever such
a record date is fixed; and in the event that such rights, options or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.




          (c) In case the Company shall fix a record date for the making of a distribution to all
holders of any series of Preferred Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the applicable Purchase Price to be in effect after such record date shall
be determined by multiplying the applicable Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then current per share market price
of such series of Preferred Stock (determined pursuant to Section 11(d) hereof) on such record
date, less the fair market value (as determined in good faith by the Board of Directors of the
Company whose determination shall be described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of such series of




22









 







Preferred Stock, and the denominator
of which shall be such current per share market price (determined pursuant to Section 11(d) hereof)
of such series of Preferred Stock; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon exercise of one Right. So long as Series
A Rights, Series B Rights and Series C Rights are outstanding, the Company shall not effect any
such distribution with respect to any series of Preferred Stock if (x) the securities to be
received by the holders of the Series C Junior Preferred Stock in such transaction (and any
securities issuable upon exchange, exercise or conversion thereof) are entitled to vote with
respect to matters upon which security holders of the issuer thereof are generally entitled to vote
(other than to an extent no greater than the holders of Series C Common Stock are entitled to vote
upon matters as provided in the Certificate of Incorporation), or (y) the securities to be received
by the holders of Preferred Stock (and any securities issuable upon exchange, exercise or
conversion thereof) entitle such holders to vote generally upon matters that may be submitted to a
vote of security holders of the issuer thereof, unless the securities to be received by the holders
of Series B Junior Preferred Stock in such transaction (and any securities issuable upon exchange,
exercise or conversion thereof) at all times have voting power with respect to matters upon which
security holders of the issuer thereof are generally entitled to vote per share or other unit of
not less than ten times such per share voting power of the securities (and any securities issuable
upon exchange, exercise or conversion thereof) to be received in such transaction by the holders of
each other series of Preferred Stock receiving securities entitled to such voting power, if any.
Such adjustments shall be made successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the applicable Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not been fixed.




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




23









 







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




               (ii) For the purpose of any computation hereunder, if any series of Preferred Stock is
publicly traded, the “current per share market price” of such series of Preferred Stock shall be
determined in accordance with the method set forth in Section 11(d)(i). If any series of Preferred
Stock is not publicly traded but the corresponding series of Common Stock is publicly traded, the
“current per share market price” of such series of Preferred Stock shall be conclusively deemed to
be the current per share market price of the corresponding series of Common Stock as determined
pursuant to Section 11(d)(i) multiplied by the then applicable Adjustment Number (as defined in and
determined in accordance with the Certificate of Designation for the Preferred Stock). If neither
the Common Stock nor the corresponding Preferred Stock of any series is publicly traded, “current
per share market price” shall mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a statement filed with
the Rights Agent.



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




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




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




24









 








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




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




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




          (k) Before taking any action that would cause an adjustment reducing the applicable Purchase
Price below the then par value, if any, of the fraction of the applicable series




25









 







of Preferred Stock
or other shares of capital stock issuable upon exercise of a Right, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable shares of the applicable series of
Preferred Stock or other such shares at such adjusted Purchase Price.




          (l) In any case in which this Section 11 shall require that an adjustment in the applicable
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 issuing to the holder of any Right exercised after such
record date the applicable series of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise on the basis of the
applicable Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing
such holder’s right to receive such additional shares upon the occurrence of the event requiring
such adjustment.




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




          (n) (i) In the event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (1) declare and pay any dividend on any series of shares of
Common Stock payable in Common Stock or (2) effect a subdivision, combination or consolidation of
any series of Common Stock (by reclassification or otherwise than by payment of a dividend payable
in Common Stock) into a greater or lesser number of shares of Common Stock, then, in each such
case, (A) the number of Rights associated with each share of the applicable series of Common Stock
then outstanding, or issued or delivered thereafter, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of the applicable series of Common Stock
following any such event shall equal the result obtained by (x) in the case of the Series A Rights,
multiplying the number of Series A Rights associated with each share of Series A Common Stock
immediately prior to such event by a fraction the numerator of which shall be the total number of
shares of Series A Common Stock outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of Series A Common Stock outstanding
immediately following the occurrence of such event, (y) in the case of the Series B Rights,
multiplying the number of Series B Rights associated with each share of Series B Common Stock
immediately prior to such event by a fraction the numerator of which shall be the total number of
shares of Series B Common Stock outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of Series B Common Stock outstanding
immediately following the occurrence of such event and (z) in the case of the Series C Rights,
multiplying the number of




26









 







Series C Rights associated with each share of Series C Common Stock
immediately prior to such event by a fraction the numerator of which shall be the total number of
shares of Series C Common Stock outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of Series C Common Stock outstanding
immediately following the occurrence of such event; and (B) the number of Rights associated with
each share of Convertible Preferred Stock then outstanding, or issued or delivered thereafter,
shall remain the same. The adjustments provided for in this Section 11(n)(i) shall be made
successively to any series of Common Stock whenever such a dividend is declared or paid or such
subdivision, combination or consolidation is effected on such series of Common Stock.




               (ii) In the event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (1) declare and pay any dividend on any series of shares of
Convertible Preferred Stock payable in Convertible Preferred Stock or (2) effect a subdivision,
combination or consolidation of any series of Convertible Preferred Stock (by reclassification or
otherwise than by payment of a dividend payable in Convertible Preferred Stock) into a greater or
lesser number of shares of Convertible Preferred Stock, then, in each such case, (A) the number of
Rights associated with each share of the applicable series of Convertible Preferred Stock then
outstanding, or issued or delivered thereafter, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of the applicable series of Convertible
Preferred Stock following any such event shall equal the result obtained by (x) in the case of the
Series A Rights, multiplying the number of Series A Rights associated with each share of Series A
Convertible Preferred Stock immediately prior to such event by a fraction the numerator of which
shall be the total number of shares of Series A Convertible Preferred Stock outstanding immediately
prior to the occurrence of the event and the denominator of which shall be the total number of
shares of Series A Convertible Preferred Stock outstanding immediately following the occurrence of
such event, and (y) in the case of the Series C Rights, multiplying the number of Series C Rights
associated with each share of Series
C Convertible Preferred Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Series C Convertible Preferred Stock outstanding
immediately prior to the occurrence of the event and the denominator of which shall be the total
number of shares of Series C Convertible Preferred Stock outstanding immediately following the
occurrence of such event; and (B) the number of Rights associated with each share of Common Stock
then outstanding, or issued or delivered thereafter, shall remain the same. The adjustments
provided for in this Section 11(n)(ii) shall be made successively to any series of Convertible
Preferred Stock whenever such a dividend is declared or paid or such subdivision, combination or
consolidation is effected on such series of Convertible Preferred Stock.



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




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




27









 







such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof (if so
required under Section 25 hereof). The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall not be deemed to have knowledge
of any such adjustment unless and until it shall have received such certificate.




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




          (a) In the event, directly or indirectly, at any time after the Flip-In Event (i) the Company
shall consolidate with or shall merge into any other Person, (ii) any Person shall merge with and
into the Company and the Company shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or of the Company) or cash or any
other property, or (iii) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more wholly-owned
Subsidiaries of the Company), then upon the first occurrence of such event, proper provision shall
be made so that: (A) each holder of a Right (other than Rights which have become void pursuant to
Section 11(a)(ii) hereof) shall thereafter have the right to receive, upon the exercise thereof at
the applicable Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof), in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock or
Common Stock of the Company, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall equal the result obtained by dividing the
Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof) by 50% of the
current per share market price of the Common Stock of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer;
provided, however, that the Purchase Price (as theretofore adjusted in accordance
with Section 11(a)(ii) hereof) and the number of shares of Common Stock of such Principal Party so
receivable upon exercise of a Right shall be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof to reflect any events occurring in respect of the Common Stock
of such Principal Party after the occurrence of such consolidation, merger, sale or transfer; (B)
such Principal Party shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to
this Agreement; (C) the term “Company” shall thereafter be deemed to refer to such Principal Party;
and (D) such Principal Party shall take such steps (including, but not limited to, the reservation
of a sufficient number of its shares of Common Stock in accordance with Section 9 hereof) in
connection with such consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to
the shares of its Common Stock thereafter deliverable upon the exercise of the Rights; provided
that, upon the subsequent occurrence of any consolidation, merger, sale or transfer of assets or
other extraordinary transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the applicable Purchase
Price as provided in this Section 13(a), such cash, shares, rights, warrants and other




28









 







property
which such holder would have been entitled to receive had such holder, at the time of such
transaction, owned the Common Stock of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13(a), and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit the subsequent exercise
of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other
property.




          (b) “Principal Party” shall mean:




               (i) in the case of any transaction described in (i) or (ii) of the first sentence of Section
13(a) hereof: (A) the Person that is the issuer of the securities into which the shares of Common
Stock are converted in such merger or consolidation, or, if there is more than one such issuer, the
issuer of the shares of Common Stock of which have the greatest aggregate market value of shares
outstanding, or (B) if no securities are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one such Person, the Person
the shares of Common Stock of which have the greatest aggregate market value of shares outstanding
or (y) if the Person that is the other party to the merger does not survive the merger, the Person
that does survive the merger (including the Company if it survives) or (z) the Person resulting
from the consolidation; and



               (ii) in the case of any transaction described in (iii) of the first sentence of Section 13(a)
hereof, the Person that is the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each Person that is a party to
such transaction or transactions receives the same portion of the assets or earning power
so transferred or if the Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding;


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




          (c) The Company shall not consummate any consolidation, merger, sale or transfer referred to
in Section 13(a) hereof unless prior thereto the Company and the Principal Party involved therein
shall have executed and delivered to the Rights Agent an agreement confirming that the requirements
of Sections 13(a) and (b) hereof shall promptly be performed in




29









 







accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in a default by the
Principal Party under this Agreement as the same shall have been assumed by the Principal Party
pursuant to Sections 13(a) and (b) hereof and providing that, as soon as practicable after
executing such agreement pursuant to this Section 13, the Principal Party will:




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



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



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



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



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




30









 








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




          Section 14. Fractional Rights and Fractional Shares.




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




          (b) The Company shall not be required to issue fractions of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) or to
distribute certificates which evidence fractional shares of Preferred Stock (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred Stock) upon the exercise
or exchange of Rights. Interests in fractions of Preferred Stock in integral multiples of one
one-thousandth of a share of Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by such depositary receipts. In




31









 







lieu of fractional shares of Preferred Stock that are not integral multiples of one one-thousandth
of a share of Preferred Stock, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised or exchanged as herein provided an amount in
cash equal to the same fraction of the current market value of a whole share of Preferred Stock (as
determined in accordance with Section 14(a) hereof) for the Trading Day immediately prior to the
date of such exercise or exchange.




          (c) The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock upon the exercise or
exchange of Rights. In lieu of such fractional shares of Common Stock, the Company shall pay to
the registered holders of the Right Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock (as determined in accordance with Section
14(a) hereof) for the Trading Day immediately prior to the date of such exercise or exchange.




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




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




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




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




          (b) after the Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the office or agency of the Rights Agent




32









 







designated for
such purpose, duly endorsed or accompanied by a proper instrument of transfer; and




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




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




          Section 18. Concerning the Rights Agent.




          (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability or expense,
incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending against any claim
of liability arising therefrom, directly or indirectly.




          (b) The Rights Agent shall be protected and shall incur no liability for, or in respect of any
action taken, suffered or omitted by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the Preferred Stock, Convertible Preferred
Stock or Common Stock or, in the case of uncertificated shares, the associated balance indicated in
the book-entry account system of the transfer agent for the Preferred Stock, Convertible Preferred
Stock or Common Stock, or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,




33









 







notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.




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




          (a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust powers of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the part of any
of the parties hereto; provided that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right Certificates and in
this Agreement.




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




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




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




          (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the President and the Secretary of




34









 







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




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




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




          (e) The Rights Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights provided for in
Sections 3, 11, 13, 23 and 24, or the ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after receipt of a certificate furnished pursuant to Section 12, describing such
change or adjustment); nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Preferred Stock or other
securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of Preferred Stock or other securities will, when issued, be validly authorized and issued,
fully paid and nonassessable.




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




          (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any person reasonably believed by the Rights Agent to
be one of the President, Secretary or Assistant Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall not be liable for
any action taken or suffered by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions. Any application by the
Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action (or the




35









 







effective
date in the case of an omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or omitted.




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




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




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




          Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Stock, Convertible Preferred Stock or Preferred
Stock by registered or certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. In the event the transfer agency relationship in effect
between the Company and the Rights Agent terminates, the Rights Agent will be deemed to resign
automatically on the effective date of such termination; and any required notice will be sent by
the Company. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock or Preferred Stock by registered or certified mail, and,
following the Distribution Date, to the holders of the Right Certificates by first-class mail. If
the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any Right Certificate may
apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation
organized and doing business under the laws of the United States or the laws of any state of the
United States or the District of Columbia, in good standing, having an office in the State of
Delaware or the State of New York, which is authorized under such laws to exercise corporate trust
or stock transfer




36









 







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




          Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such forms as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or class or series of
shares or other securities or property purchasable under the Right Certificates made in accordance
with the provisions of this Agreement. In addition, in connection with the issuance or sale of
Common Stock following the Distribution Date and prior to the Expiration Date, the Company shall
with respect to shares of Common Stock so issued or sold pursuant to (i) the exercise of stock
appreciation rights or stock options, (ii) under any employee plan or arrangement, (iii) upon the
exercise, conversion or exchange of securities, notes or debentures issued by the Company (other
than any such security, note or debenture, including, without limitation, the Convertible Preferred
Stock, that as of the Distribution Date had a Right associated with it) or (iv) a contractual
obligation of the Company, in each case existing prior to the Distribution Date, issue Rights
Certificates representing the appropriate number of Rights in connection with such issuance or
sale.




          Section 23. Redemption.




          (a) The Board of Directors of the Company may, at any time prior to the Flip-In Event, redeem
all but not less than all the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring
in respect of the Common Stock or Convertible Preferred Stock, as applicable, after the date hereof
(the redemption price being hereinafter referred to as the “Redemption Price”). The
redemption of the Rights may be made effective at such time, on such basis and with such conditions
as the Board of Directors of the Company in its sole discretion may establish. The Redemption
Price shall be payable, at the option of the Company, in cash, shares of Common Stock, or such
other form of consideration as the Board of Directors of the Company shall determine.




          (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at such later time as the
Board of Directors of the Company may establish for the effectiveness of such redemption), and
without any further action and without any notice, the right to exercise the




37









 







Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board of Directors of the
Company ordering the redemption of the Rights (or such later time as the Board of Directors of the
Company may establish for the effectiveness of such redemption), the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Stock or the Convertible Preferred Stock,
as applicable. Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.




          Section 24. Exchange.




          (a) The Board of Directors of the Company may, at its option, at any time after the Flip-In
Event, exchange all or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common
Stock at an exchange ratio of one share of Series A Common Stock per Series A Right, one share of
Series B Common Stock per Series B Right and one share of Series C Common Stock per Series C Right
in each case appropriately adjusted to reflect any stock split, stock dividend or similar
transaction with respect to the applicable series of Common Stock or Convertible Preferred Stock
occurring after the date hereof (such amount per Right being hereinafter referred to as the
“Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors of the Company
shall not be empowered to effect such exchange at any time after an Acquiring Person shall have
become the Beneficial Owner of shares of Common Stock representing, in the aggregate, 50% or more
of the outstanding voting power of the Company. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have not been exchanged pursuant to
this Section 24(a) shall thereafter be exercisable only in accordance with Section 13 and may not
be exchanged pursuant to this Section 24(a). The exchange of the Rights by the Board of Directors
of the Company may be made effective at such time, on such basis and with such conditions as the
Board of Directors of the Company in its sole discretion may establish. So long as Series A Rights,
Series B Rights and Series C Rights are outstanding, the Company shall not effect any exchange with
respect to any of the Series A Rights, the Series B Rights or the Series C Rights unless the
Company shall also contemporaneously effect a like transaction with respect to each other such
series.




          (b) Immediately upon the effectiveness of the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall promptly mail a notice of any such exchange to all of
the holders of the Rights so exchanged at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein provided





38











 




shall be deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of Common Stock for Rights will
be effected and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange of (i) Series A Rights shall be effected pro rata based on the
number of Series A Rights (other than Series A Rights which have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Series A Rights, (ii) Series B
Rights shall be effected pro rata based on the number of Series B Rights (other than Series B
Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Series B Rights and (iii) Series C Rights shall be effected pro rata based on the number
of Series C Rights (other than Series C Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Series C Rights.




          (c) In the event that there shall not be sufficient shares of Series A Common Stock, Series B
Common Stock or Series C Common Stock, as the case may be, issued but not outstanding or authorized
but unissued to permit an exchange of Series A Rights, Series B Rights or Series C Rights, as the
case may be, for Series A Common Stock, Series B Common Stock or Series C Common Stock as
contemplated in accordance with this Section 24, the Company may, in its discretion, take such
action as may be necessary to authorize additional shares of Series A Common Stock, Series B Common
Stock or Series C Common Stock for issuance upon exchange of the Series A Rights, the Series B
Rights or the Series C Rights. In the event that the Company shall determine not to take such
action or shall, after good faith effort, be unable to take such action as may be necessary to
authorize such additional shares of Series A Common Stock, Series B Common Stock or Series C Common
Stock, the Company shall substitute, to the extent of such insufficiency, for each share of Series
A Common Stock, Series B Common Stock or Series C Common Stock that would otherwise be issuable
upon exchange of a Series A Right, Series B Right or Series C Right, a number of shares of Series A
Junior Preferred Stock, Series B Junior Preferred Stock, or Series C Junior Preferred Stock or
fractions thereof (or Equivalent Preferred Shares as such term is defined in Section 11(b)) such
that the current per share market price (determined pursuant to Section 11(d) hereof) of one share
of Preferred Stock (or Equivalent Preferred Share) multiplied by such number or fraction is equal
to the current per share market price of one share of the applicable series of Common Stock
(determined pursuant to Section 11(d) hereof) as of the date of such exchange.




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




          Section 25. Notice of Certain Events.




39









 








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




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




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



Discovery Communications, Inc.

[ADDRESS]

[ADDRESS]

Attention: General Counsel



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



Computershare Trust Company, N.A.

250 Royall Street




40









 







Canton, MA 02021

Attention: Client Administration



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




          Section 27. Supplements and Amendments. Except as provided in the penultimate
sentence of this Section 27, for so long as the Rights are then redeemable, the Company may in its
sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of this Agreement in any respect without the approval of any holders of the
Rights. At any time when the Rights are no longer redeemable, except as provided in the
penultimate sentence of this Section 27, the Company may, and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of any holders of
Rights, provided that no such supplement or amendment may (a) 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), (b) cause this Agreement again to become amendable other than in accordance with
this sentence or (c) cause the Rights again to become redeemable. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall be made which changes
the Redemption Price. Upon the delivery of a certificate from an appropriate officer of the
Company which states that the supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.




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




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




          Section 30. Determinations and Actions by the Board of Directors. The Board of
Directors of the Company or any committee thereof authorized by the Board for such purpose shall
have the exclusive power and authority to administer this Agreement and to exercise the rights and
powers specifically granted to the Board of Directors of the Company or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including, without limitation,
the right and power to (a) interpret the provisions of this Agreement and (b) make all
determinations deemed necessary or advisable for the administration of this Agreement (including,
without limitation, a determination to redeem or not redeem the Rights or to amend or not amend
this Agreement). All such actions, calculations, interpretations and determinations that are done
or made by the Board of Directors of the Company in good




41









 







faith shall be final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights, as such, and all other parties.




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




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




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




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




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




42









 





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



	 	 	 	 	 	 	 	 	 
	 	 	DISCOVERY COMMUNICATIONS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	COMPUTERSHARE TRUST COMPANY, N.A. as Rights Agent	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 





 









 






Exhibit A




FORM OF

CERTIFICATE OF DESIGNATION




of



SERIES A JUNIOR PARTICIPATING PREFERRED STOCK



of



DISCOVERY COMMUNICATIONS, INC.




Pursuant to Section 151 of the General Corporation Law

of the State of Delaware




               Discovery Communications, Inc. a corporation organized and existing under the General
Corporation Law of the State of Delaware (the “Corporation”), in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:



               That, upon the filing of the Restated Certificate of Incorporation of the Corporation with the
Secretary of State of the State of Delaware on [                    ], 2008, pursuant to the authority vested in
the Board of Directors of the Corporation (the “Board of Directors”) in accordance with the
provisions of the Restated Certificate of Incorporation of the Corporation, the Board of Directors
adopted the following resolution of the Board of Directors creating a series of [                    ] shares of
Preferred Stock designated as “Series A Junior Participating Preferred Stock” became effective:




     RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of
the Restated Certificate of Incorporation, a series of Preferred
Stock, par value $.01 per share, of the Corporation be and hereby is
created, and that the designation and number of shares thereof and
the voting and other powers, preferences and relative,
participating, optional or other rights of the shares of such series
and the qualifications, limitations and restrictions thereof are as
follows:



Series A Junior Participating Preferred Stock




          1. Designation and Amount. There shall be a series of Preferred Stock that shall be
designated as “Series A Junior Participating Preferred Stock” (the “Series A Junior Preferred
Stock”), and the number of shares constituting such series shall be [___]. Such number of
shares may be increased or decreased by resolution of the Board of Directors; provided, however,
that no decrease shall reduce the number of shares of Series A Junior Preferred Stock to less than
the number of shares then issued and outstanding plus the number of shares issuable upon exercise
of outstanding rights, options or warrants or upon conversion of outstanding securities issued by
the Corporation.




A-1









 








          2. Dividends and Distribution.




               (A) Subject to the prior and superior rights of the holders of any shares of any class or
series of capital stock of the Corporation ranking prior and superior to the Series A Junior
Preferred Stock with respect to dividends, the holders of shares of Series A Junior Preferred Stock
outstanding at the close of business on the business day immediately preceding each Quarterly
Dividend Payment Date (as defined below) (or such other record date as the Board of Directors may
specify), in preference to the holders of shares of Series A Common Stock, par value $.01 per
share, of the Corporation (“Series A Common Stock”), Series B Common Stock, par value $.01
per share, of the Corporation (“Series B Common Stock”) and Series C Common Stock, par
value $.01, of the Corporation (“Series C Common Stock,” and collectively with the Series A
Common Stock and Series B Common Stock, the “Common Stock”) and of any class or series of
any other capital stock of the Corporation hereafter established ranking junior to the Series A
Junior Preferred Stock in respect thereof, and on a pari passu basis with the Series B Junior
Participating Preferred Stock, par value $.01 per share, of the Corporation (the “Series B
Junior Preferred Stock”) and the Series C Junior Participating Preferred Stock, par value $.01
per share, of the Corporation (the “Series C Junior Preferred Stock”, and collectively with
the Series A Junior Preferred Stock and Series B Junior Preferred Stock, the “Preferred
Stock”), shall be entitled to receive, when, as and if declared (except as provided in
paragraph (B) below) by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash (except as provided below) on the last day of March, June,
September and December, in each year (each such date being referred to herein as a “Quarterly
Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the date
upon which a share or fraction of a share of Series A Junior Preferred Stock is first outstanding
(the “First Issuance Date”), in an amount per share (rounded to the nearest cent) equal to
the greater of (i) $10.00 and (ii) the sum of (x) the Adjustment Number (as defined below) times
the aggregate per share amount of all cash dividends, and (y) the Adjustment Number times the fair
value (as determined by the Board of Directors) of the aggregate per share amount of all non-cash
dividends or other distributions payable in kind as provided herein, other than a dividend payable
in shares of Series A Common Stock or a subdivision of the outstanding shares of Series A Common
Stock (by reclassification or otherwise), in the case of clauses (x) and (y) declared on the Series
A Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date following the First Issuance Date, from (but not
including) the Quarterly Dividend Payment Date immediately preceding the First Issuance Date;
provided, that to the extent the holders of shares of Series A Junior Preferred Stock are
entitled to payment of such dividend pursuant to clause (ii) of this sentence in whole or in part
as a result of a non-cash dividend or distribution referred to in clause (ii)(y) above, such
holders will receive per share of Series A Preferred Stock, in lieu of the cash value of such
non-cash dividend or distribution, an amount of the securities or other property equal to the
Adjustment Number times the amount of such securities or other property distributed per share of
Series A Common Stock. The “Adjustment Number” shall initially be 1,000. In the event the
Corporation shall at any time after [                    ], 2008 (1) declare and pay any dividend on Series A
Common Stock payable in shares of Series A Common Stock, (2) subdivide the outstanding Series A
Common Stock or (3) combine the outstanding Series A Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number
of shares of Series A Common Stock



A-2









 




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




               (B) The Board of Directors shall declare a dividend or distribution on the Series A Junior
Preferred Stock as provided in paragraph (A) above immediately after each declaration of a dividend
or distribution on the Series A Common Stock (other than a dividend or distribution payable in
shares of Series A Common Stock); provided that no such dividend will be required to be
declared until the aggregate amount of cash dividends and the fair value of all non-cash dividends
and distributions on the Series A Common Stock, in each case multiplied by the Adjustment Number,
during the period following the last Quarterly Dividend Payment Date (or if applicable, the
Quarterly Dividend Payment Date preceding the First Issuance Date), exceeds the amount set forth in
clause (i) of paragraph (A) above.



               (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior
Preferred Stock from (but not including) the Quarterly Dividend Payment Date next preceding the
First Issuance Date, unless such First Issuance Date is a Quarterly Dividend Payment Date or is
after the record date for such Quarterly Dividend Payment Date and prior to such Quarterly Dividend
Payment Date, in which event such dividends shall begin to accrue and be cumulative from (but not
including) such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time outstanding.




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



               (A) Each share of Series A Junior Preferred Stock shall entitle the holder thereof to a number
of votes equal to the Adjustment Number times the number of votes which each share of Series A
Common Stock is entitled to vote, on all matters upon which the holders of the Series A Common
Stock are entitled to vote.



               (B) Except as otherwise provided herein or in the Restated Certificate of Incorporation, and
except as otherwise required by law, the holders of shares of Series A Junior Preferred Stock will
vote as one class together with the holders of shares of Series A Common Stock and the holders of
any other class or series of capital stock or other securities of the Corporation entitled to vote
with the holders of the Series A Common Stock generally upon all matters submitted to a vote of the
stockholders of the Corporation.



               (C) Except as required by law and by Section 10 hereof, holders of Series A Junior Preferred
Stock shall have no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Series A Common Stock as set forth herein) for
taking any corporate action.




     4. Certain Restrictions.



               (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A
Junior Preferred Stock as provided in Section 2 are in arrears, thereafter and until



A-3









 




all accrued and unpaid dividends and distributions, whether or not declared, on shares of
Series A Junior Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:




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



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



                    (iii) purchase or otherwise acquire for consideration any shares of Series A Junior Preferred
Stock, or any shares of capital stock ranking on a parity with the Series A Junior Preferred Stock
(including, without limitation, the redemption of any such parity stock), except (x) in accordance
with a purchase offer made in writing or by publication (as determined by the Board of Directors)
to all holders of Series A Junior Preferred Stock, or to such holders and holders of any such
shares ranking on a parity therewith, upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes and (y) that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock (other than any shares of
Series B or Series C Junior Preferred Stock) in exchange for shares of any capital stock of the
Corporation ranking junior (as to dividends and upon dissolution, liquidation or winding up) to the
Series A Junior Preferred Stock or rights, warrants or options to acquire such junior stock.



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




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




     6. Liquidation, Dissolution or Winding Up.



               (A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or
otherwise, no distribution shall be made to the holders of shares of capital stock



A-4









 




ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Preferred Stock unless, prior thereto, the holders of shares of Series A Junior
Preferred Stock shall have received an amount per share (the “Series A Liquidation
Preference”) equal to the greater of (i) $10.00 plus an amount equal to all accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of such payment, and
(ii) the Adjustment Number times the amount of all cash and the fair value of all other property to
be distributed in respect of a single share of Series A Common Stock upon such liquidation,
dissolution or winding up of the Corporation.




               (B) In the event, however, that there are not sufficient assets available to permit payment in
full of the Series A Liquidation Preference and the liquidation preferences of all other classes
and series of capital stock of the Corporation, if any, that rank on a parity with the Series A
Junior Preferred Stock in respect thereof, then the assets available for such distribution shall be
distributed ratably to the holders of the Series A Junior Preferred Stock and the holders of such
parity shares in proportion to their respective liquidation preferences.



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




     7. Consolidation, Merger, Etc. In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the outstanding shares of Series A Common
Stock are exchanged for or changed into other capital stock or securities, cash and/or any other
property, then in any such case each share of Series A Junior Preferred Stock shall at the same
time be similarly exchanged or changed into an amount per share equal to the Adjustment Number
times the aggregate amount of capital stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Series A Common Stock is
changed or exchanged.




     8. No Redemption. Shares of Series A Junior Preferred Stock shall not be subject to
redemption by the Corporation.




     9. Ranking. The Series A Junior Preferred Stock shall rank with respect to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution or winding up of
the Corporation, pari passu with the Series B Junior Preferred Stock and the Series C Junior
Preferred Stock, senior to the Convertible Preferred Stock (as defined in the Corporation’s
Restated Certificate of Incorporation), junior to all other series of preferred stock unless the
terms of any such series of preferred stock shall provide otherwise, and senior to any class or
series of common stock of the Corporation.




     10. Amendment. At any time that any shares of Series A Junior Preferred Stock are
outstanding, the affirmative vote of the holders of at least two-thirds of the outstanding
shares of Series A Junior Preferred Stock, voting as a separate class, shall be required in
order for the Corporation (including, in each case, directly or indirectly and whether effected
by or in connection with a merger, consolidation, recapitalization, reclassification of shares,
reorganization or by any other means) to amend, alter or repeal any provision of the Restated



A-5









 






Certificate of Incorporation to alter or change the powers, preferences or special rights
of shares of Series A Junior Preferred Stock so as to affect them adversely.




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



                       IN WITNESS WHEREOF, the undersigned has executed this Certificate this                      day of
                                        , 2008.



	 	 	 	 	 
	 	DISCOVERY COMMUNICATIONS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A-6









 






	 	 	 	 	 



Exhibit B




FORM OF

CERTIFICATE OF DESIGNATION




of



SERIES B JUNIOR PARTICIPATING PREFERRED STOCK




of




DISCOVERY COMMUNICATIONS, INC.




Pursuant to Section 151 of the General Corporation Law

of the State of Delaware




          Discovery Communications, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the “Corporation”), in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:




          That, upon the filing of the Restated Certificate of Incorporation of the Corporation with the
Secretary of State of the State of Delaware on [                    ], 2008, pursuant to the authority vested in
the Board of Directors of the Corporation (the “Board of Directors”) in accordance with the
provisions of the Restated Certificate of Incorporation of the Corporation, the Board of Directors
adopted the following resolution of the Board of Directors creating a series of [                    ] shares of
Preferred Stock designated as “Series B Junior Participating Preferred Stock” became effective:






     RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of
the Restated Certificate of Incorporation, a series of Preferred
Stock, par value $.01 per share, of the Corporation be and hereby is
created, and that the designation and number of shares thereof and
the voting and other powers, preferences and relative,
participating, optional or other rights of the shares of such series
and the qualifications, limitations and restrictions thereof are as
follows:



Series B Junior Participating Preferred Stock




     1. Designation and Amount. There shall be a series of Preferred Stock that shall be
designated as “Series B Junior Participating Preferred Stock” (the “Series B Junior Preferred
Stock”), and the number of shares constituting such series shall be [                    ]. Such number of
shares may be increased or decreased by resolution of the Board of Directors; provided, however,
that no decrease shall reduce the number of shares of Series B Junior Preferred Stock to less than
the number of shares then issued and outstanding plus the number of shares issuable upon exercise
of outstanding rights, options or warrants or upon conversion of outstanding securities issued by
the Corporation.



B-1









 





     2. Dividends and Distribution.



          (A) Subject to the prior and superior rights of the holders of any shares of any class or
series of capital stock of the Corporation ranking prior and superior to the Series B Junior
Preferred Stock with respect to dividends, the holders of shares of Series B Junior Preferred Stock
outstanding at the close of business on the business day immediately preceding each Quarterly
Dividend Payment Date (as defined below) (or such other record date as the Board of Directors may
specify), in preference to the holders of shares of Series A Common Stock, par value $.01 per
share, of the Corporation (“Series A Common Stock”), Series B Common Stock, par value $.01
per share, of the Corporation (“Series B Common Stock”) and Series C Common Stock, par
value $.01, of the Corporation (“Series C Common Stock,” and collectively with the Series A
Common Stock and Series B Common Stock, the “Common Stock”) and of any class or series of
any other capital stock of the Corporation hereafter established ranking junior to the Series B
Junior Preferred Stock in respect thereof, and on a pari passu basis with the Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Corporation (the “Series A
Junior Preferred Stock”) and the Series C Junior Participating Preferred Stock, par value $.01
per share, of the Corporation (the “Series C Junior Preferred Stock,” and collectively with
the Series A Preferred Stock and Series B Preferred Stock, the “Preferred Stock”), shall be
entitled to receive, when, as and if declared (except as provided in paragraph (B) below) by the
Board of Directors out of funds legally available for the purpose, quarterly dividends payable in
cash (except as provided below) on the last day of March, June, September and December, in each
year (each such date being referred to herein as a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the date upon which a share or
fraction of a share of Series B Preferred Stock is first outstanding (the “First Issuance
Date”), in an amount per share (rounded to the nearest cent) equal to the greater of (i) $10.00
and (ii) the sum of (x) the Adjustment Number (as defined below) times the aggregate per share
amount of all cash dividends, and (y) the Adjustment Number times the fair value (as determined by
the Board of Directors) of the aggregate per share amount of all non-cash dividends or other
distributions payable in kind as provided herein, other than a dividend payable in shares of Series
B Common Stock or a subdivision of the outstanding shares of Series B Common Stock (by
reclassification or otherwise), in the case of clauses (x) and (y) declared on the Series B Common
Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date following the First Issuance Date, from (but not including)
the Quarterly Dividend Payment Date immediately preceding the First Issuance Date;
provided, that to the extent the holders of shares of Series B Junior Preferred Stock are
entitled to payment of such dividend pursuant to clause (ii) of this sentence in whole or in part
as a result of a non-cash dividend or distribution referred to in clause (ii)(y) above, such
holders will receive per share of Series B Preferred Stock, in lieu of the cash value of such
non-cash dividend or distribution, an amount of the securities or other property equal to the
Adjustment Number times the amount of such securities or other property distributed per share of
Series B Common Stock. The “Adjustment Number” shall initially be 1,000. In the event the
Corporation shall at any time after [                    ], 2008 (1) declare and pay any dividend on Series B
Common Stock payable in shares of Series B Common Stock, (2) subdivide the outstanding Series B
Common Stock or (3) combine the outstanding Series B Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number
of shares of Series B Common Stock outstanding immediately after such




B-2









 







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




          (B) The Board of Directors shall declare a dividend or distribution on the Series B Junior
Preferred Stock as provided in paragraph (A) above immediately after each declaration of a dividend
or distribution on the Series B Common Stock (other than a dividend or distribution payable in
shares of Series B Common Stock); provided, that no such dividend will be required to be
declared until the aggregate amount of cash dividends and the fair value of all non-cash dividends
and distributions on the Series B Common Stock, in each case multiplied by the Adjustment Number,
during the period following the last Quarterly Dividend Payment Date (or, if applicable, the
Quarterly Dividend Payment Date preceding the First Issuance Date), exceeds the amount set forth in
clause (i) of paragraph (A) above.




          (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Junior
Preferred Stock from (but not including) the Quarterly Dividend Payment Date next preceding the
First Issuance Date, unless such First Issuance Date is a Quarterly Dividend Payment Date or is
after the record date for such Quarterly Dividend Payment Date and prior to such Quarterly Dividend
Payment Date, in which event such dividends shall begin to accrue and be cumulative from (but not
including) such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Junior Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time outstanding.




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



          (A) Each share of Series B Junior Preferred Stock shall entitle the holder thereof to a number
of votes equal to the Adjustment Number times the number of votes which each share of Series B
Common Stock is entitled to vote, on all matters upon which the holders of the Series B Common
Stock are entitled to vote.




          (B) Except as otherwise provided herein or in the Restated Certificate of Incorporation, and
except as otherwise required by law, the holders of shares of Series B Junior Preferred Stock will
vote as one class together with the holders of shares of Series B Common Stock and the holders of
any other class or series of capital stock or other securities of the Corporation entitled to vote
with the holders of the Series B Common Stock generally upon all matters submitted to a vote of the
stockholders of the Corporation.




          (C) Except as required by law and by Section 10 hereof, holders of Series B Junior Preferred
Stock shall have no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Series B Common Stock as set forth herein) for
taking any corporate action.




     4. Certain Restrictions.



          (A) Whenever quarterly dividends or other dividends or distributions payable on the Series B
Junior Preferred Stock as provided in Section 2 are in arrears, thereafter and until




B-3









 







all accrued and unpaid dividends and distributions, whether or not declared, on shares of
Series B Junior Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:




               (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series B Junior Preferred Stock;



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



               (iii) purchase or otherwise acquire for consideration any shares of Series B Junior Preferred
Stock, or any shares of capital stock ranking on a parity with the Series B Junior Preferred Stock
(including, without limitation, the redemption of any such parity stock), except (x) in accordance
with a purchase offer made in writing or by publication (as determined by the Board of Directors)
to all holders of Series B Junior Preferred Stock, or to such holders and holders of any such
shares ranking on a parity therewith, upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes and (y) that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock (other than any shares of
Series A or Series C Junior Preferred Stock) in exchange for shares of any capital stock of the
Corporation ranking junior (as to dividends and upon dissolution, liquidation or winding up) to the
Series B Junior Preferred Stock or rights, warrants or options to acquire such junior stock.



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




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



     6. Liquidation, Dissolution or Winding Up.



          (A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or
otherwise, no distribution shall be made to the holders of shares of capital stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the Series




B-4









 







B Junior Preferred Stock unless, prior thereto, the holders of shares of Series B Junior
Preferred Stock shall have received an amount per share (the “Series B Liquidation
Preference”) equal to the greater of (i) $10.00 plus an amount equal to all accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of such payment, and (ii)
the Adjustment Number times the per share amount of all cash and the fair value of all other
property to be distributed in respect of a single share of Series B Common Stock upon such
liquidation, dissolution or winding up of the Corporation.




          (B) In the event, however, that there are not sufficient assets available to permit payment in
full of the Series B Liquidation Preference and the liquidation preferences of all other classes
and series of capital stock of the Corporation, if any, that rank on a parity with the Series B
Junior Preferred Stock in respect thereof, then the assets available for such distribution shall be
distributed ratably to the holders of the Series B Junior Preferred Stock and the holders of such
parity shares in proportion to their respective liquidation preferences.




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




     7. Consolidation, Merger, Etc. In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the outstanding shares of Series B Common Stock
are exchanged for or changed into other capital stock or securities, cash and/or any other
property, then in any such case each share of Series B Junior Preferred Stock shall at the same
time be similarly exchanged or changed into an amount per share equal to the Adjustment Number
times the aggregate amount of capital stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Series B Common Stock is changed
or exchanged.



     8. No Redemption. Shares of Series B Junior Preferred Stock shall not be subject to
redemption by the Corporation.



     9. Ranking. The Series B Junior Preferred Stock shall rank with respect to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution or winding up of the
Corporation, pari passu with the Series A Junior Preferred Stock and the Series C Junior Preferred
Stock, senior to the Convertible Preferred Stock (as defined in the Corporation’s Restated
Certificate of Incorporation), junior to all other series of preferred stock unless the terms of
any such series of preferred stock shall provide otherwise, and senior to any class or series of
common stock of the Corporation.



     10. Amendment. At any time that any shares of Series B Junior Preferred Stock are
outstanding, the affirmative vote of the holders of at least two-thirds of the outstanding shares
of Series B Junior Preferred Stock, voting as a separate class, shall be required in order for the
Corporation (including, in each case, directly or indirectly and whether effected by or in
connection with a merger, consolidation, recapitalization, reclassification of shares,
reorganization or by any other means) to amend, alter or repeal any provision of the Restated



B-5









 




Certificate of Incorporation to alter or change the powers, preferences or special rights of
shares of Series B Junior Preferred Stock so as to affect them adversely.




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



          IN WITNESS WHEREOF, the undersigned has executed this Certificate this                      day of
                                        , 2008.



	 	 	 	 	 
	 	DISCOVERY COMMUNICATIONS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



B-6









 






	 	 	 	 	 



Exhibit C




FORM OF

CERTIFICATE OF DESIGNATION




of




SERIES C JUNIOR PARTICIPATING PREFERRED STOCK




of




DISCOVERY COMMUNICATIONS, INC.




Pursuant to Section 151 of the General Corporation Law

of the State of Delaware




          Discovery Communications, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the “Corporation”), in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:




          That, upon the filing of the Restated Certificate of Incorporation of the Corporation with the
Secretary of State of the State of Delaware on [___], 2008, pursuant to the authority vested in
the Board of Directors of the Corporation (the “Board of Directors”) in accordance with the
provisions of the Restated Certificate of Incorporation of the Corporation, the Board of Directors
adopted the following resolution of the Board of Directors creating a series of [___] shares
of Preferred Stock designated as “Series C Junior Participating Preferred Stock” became effective:






     RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of
the Restated Certificate of Incorporation, a series of Preferred
Stock, par value $.01 per share, of the Corporation be and hereby is
created, and that the designation and number of shares thereof and
the voting and other powers, preferences and relative,
participating, optional or other rights of the shares of such series
and the qualifications, limitations and restrictions thereof are as
follows:



Series C Junior Participating Preferred Stock




     1. Designation and Amount. There shall be a series of Preferred Stock that shall be
designated as “Series C Junior Participating Preferred Stock” (the “Series C Junior Preferred
Stock”), and the number of shares constituting such series shall be [___]. Such number of
shares may be increased or decreased by resolution of the Board of Directors; provided, however,
that no decrease shall reduce the number of shares of Series C Junior Preferred Stock to less than
the number of shares then issued and outstanding plus the number of shares issuable upon exercise
of outstanding rights, options or warrants or upon conversion of outstanding securities issued by
the Corporation.



C-1









 





     2. Dividends and Distribution.



          (A) Subject to the prior and superior rights of the holders of any shares of any class or
series of capital stock of the Corporation ranking prior and superior to the Series C Junior
Preferred Stock with respect to dividends, the holders of shares of Series C Junior Preferred Stock
outstanding at the close of business on the business day immediately preceding each Quarterly
Dividend Payment Date (as defined below) (or such other record date as the Board of Directors may
specify), in preference to the holders of shares of Series A Common Stock, par value $.01 per
share, of the Corporation (“Series A Common Stock”), Series B Common Stock, par value $.01
per share, of the Corporation (“Series B Common Stock”) and Series C Common Stock, par
value $.01, of the Corporation (“Series C Common Stock,” and collectively with the Series A
Common Stock and Series B Common Stock, the “Common Stock”) and of any class or series of
any other capital stock of the Corporation hereafter established ranking junior to the Series C
Junior Preferred Stock in respect thereof, and on a pari passu basis with the Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Corporation (the “Series A
Junior Preferred Stock”) and the Series B Junior Participating Preferred Stock, par value $.01
per share, of the Corporation (the “Series B Junior Preferred Stock,” and collectively with
the Series A Junior Preferred Stock and Series C Junior Preferred Stock, the “Preferred
Stock”), shall be entitled to receive, when, as and if declared (except as provided in
paragraph (B) below) by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash (except as provided below) on the last day of March, June,
September and December, in each year (each such date being referred to herein as a “Quarterly
Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the date
upon which a share or fraction of a share of Series C Junior Preferred Stock is first outstanding
(the “First Issuance Date”), in an amount per share (rounded to the nearest cent) equal to
the greater of (i) $10.00 and (ii) the sum of (x) the Adjustment Number (as defined below) times
the aggregate per share amount of all cash dividends, and (y) the Adjustment Number times the fair
value (as determined by the Board of Directors) of the aggregate per share amount of all non-cash
dividends or other distributions payable in kind as provided herein, other than a dividend payable
in shares of Series C Common Stock or a subdivision of the outstanding shares of Series C Common
Stock (by reclassification or otherwise), in the case of clauses (x) and (y) declared on the Series
C Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date following the First Issuance Date, from (but not
including) the Quarterly Dividend Payment Date immediately preceding the First Issuance Date;
provided, that to the extent the holders of shares of Series C Junior Preferred Stock are
entitled to payment of such dividend pursuant to clause (ii) of this sentence in whole or in part
as a result of a non-cash dividend or distribution referred to in clause (ii)(y) above, such
holders will receive per share of Series C Junior Preferred Stock, in lieu of the cash value of
such non-cash dividend or distribution, an amount of the securities or other property equal to the
Adjustment Number times the amount of such securities or other property distributed per share of
Series C Common Stock. The “Adjustment Number” shall initially be 1,000. In the event the
Corporation shall at any
 time after [                    ], 2008 (1) declare and pay any dividend on Series C
Common Stock payable in shares of Series C Common Stock, (2) subdivide the outstanding Series C
Common Stock or (3) combine the outstanding Series C Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number
of shares of Series C Common Stock




C-2









 







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




          (B) The Board of Directors shall declare a dividend or distribution on the Series C Junior
Preferred Stock as provided in paragraph (A) above immediately after each declaration of a dividend
or distribution on the Series C Common Stock (other than a dividend or distribution payable in
shares of Series C Common Stock); provided, that no such dividend will be required to be
declared until the aggregate amount of cash dividends and the fair value of all non-cash dividends
and distributions on the Series C Common Stock, in each case multiplied by the Adjustment Number,
during the period following the last Quarterly Dividend Payment Date (or, if applicable, the
Quarterly Dividend Payment Date preceding the First Issuance Date), exceeds the amount set forth in
clause (i) of paragraph (A) above.




          (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series C Junior
Preferred Stock from (but not including) the Quarterly Dividend Payment Date next preceding the
First Issuance Date, unless such First Issuance Date is a Quarterly Dividend Payment Date or is
after the record date for such Quarterly Dividend Payment Date and prior to such Quarterly Dividend
Payment Date, in which event such dividends shall begin to accrue and be cumulative from (but not
including) such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series C Junior Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time outstanding.




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



          (A) Each share of Series C Junior Preferred Stock shall entitle the holder thereof to a number
of votes equal to the Adjustment Number times the number of votes which each share of Series C
Common Stock is entitled to vote, on all matters upon which the holders of the Series C Common
Stock are entitled to vote.




          (B) Except as otherwise provided herein or in the Restated Certificate of Incorporation, and
except as otherwise required by law, the holders of shares of Series C Junior Preferred Stock will
vote as one class together with the holders of shares of Series C Common Stock and the holders of
any other class or series of capital stock or other securities of the Corporation entitled to vote
with the holders of the Series C Common Stock generally upon all matters submitted to a vote of the
stockholders of the Corporation.




          (C) Except as required by law and by Section 10 hereof, holders of Series C Junior Preferred
Stock shall have no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Series C Common Stock as set forth herein) for
taking any corporate action.




     4. Certain Restrictions.



          (A) Whenever quarterly dividends or other dividends or distributions payable on the Series C
Junior Preferred Stock as provided in Section 2 are in arrears, thereafter and until




C-3









 







all accrued and unpaid dividends and distributions, whether or not declared, on shares of
Series C Junior Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:




               (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of capital stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series C Junior Preferred Stock;



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



               (iii) purchase or otherwise acquire for consideration any shares of Series C Junior Preferred
Stock, or any shares of capital stock ranking on a parity with the Series C Junior Preferred Stock
(including, without limitation, the redemption of any such parity stock), except (x) in accordance
with a purchase offer made in writing or by publication (as determined by the Board of Directors)
to all holders of Series C Junior Preferred Stock, or to such holders and holders of any such
shares ranking on a parity therewith, upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes and (y) that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock (other than any shares of
Series A or Series B Junior Preferred Stock) in exchange for shares of any capital stock of the
Corporation ranking junior (as to dividends and upon dissolution, liquidation or winding up) to the
Series C Junior Preferred Stock or rights, warrants or options to acquire such junior stock.



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




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



     6. Liquidation, Dissolution or Winding Up.



          (A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or
otherwise, no distribution shall be made to the holders of shares of capital stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the Series





C-4












 




C Junior Preferred Stock unless, prior thereto, the holders of shares of Series C Junior
Preferred Stock shall have received an amount per share (the “Series C Liquidation
Preference”) equal to the greater of (i) $10.00 plus an amount equal to all accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of such payment, and (ii)
the Adjustment Number times the amount of all cash and the fair value of all other property to be
distributed in respect of a single share of Series C Common Stock upon such liquidation,
dissolution or winding up of the Corporation.




          (B) In the event, however, that there are not sufficient assets available to permit payment in
full of the Series C Liquidation Preference and the liquidation preferences of all other classes
and series of capital stock of the Corporation, if any, that rank on a parity with the Series C
Junior Preferred Stock in respect thereof, then the assets available for such distribution shall be
distributed ratably to the holders of the Series C Junior Preferred Stock and the holders of such
parity shares in proportion to their respective liquidation preferences.




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




     7. Consolidation, Merger, Etc. In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the outstanding shares of Series C Common Stock
are exchanged for or changed into other capital stock or securities, cash and/or any other
property, then in any such case each share of Series C Junior Preferred Stock shall at the same
time be similarly exchanged or changed into an amount per share equal to the Adjustment Number
times the aggregate amount of capital stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Series C Common Stock is changed
or exchanged.



     8. No Redemption. Shares of Series C Junior Preferred Stock shall not be subject to
redemption by the Corporation.



     9. Ranking. The Series C Junior Preferred Stock shall rank with respect to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution or winding up of the
Corporation, pari passu with the Series A Junior Preferred Stock and the Series B Junior Preferred
Stock, senior to the Convertible Preferred Stock (as defined in the Corporation’s Restated
Certificate of Incorporation), junior to all other series of preferred stock unless the terms of
any such series of preferred stock shall provide otherwise, and senior to any class or series of
common stock of the Corporation.



     10. Amendment. At any time that any shares of Series A Junior Preferred Stock are
outstanding, the affirmative vote of the holders of at least two-thirds of the outstanding shares
of Series A Junior Preferred Stock, voting as a separate class, shall be required in order for the
Corporation (including, in each case, directly or indirectly and whether effected by or in
connection with a merger, consolidation, recapitalization, reclassification of shares,
reorganization or by any other means) to amend, alter or repeal any provision of the Restated



C-5









 





Certificate of Incorporation to alter or change the powers, preferences or special rights of
shares of Series A Junior Preferred Stock so as to affect them adversely.




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



          IN
WITNESS WHEREOF, the undersigned has executed this Certificate this ___ day of
                    , 2008.



	 	 	 	 	 
	 	DISCOVERY COMMUNICATIONS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




C-6









 








Exhibit D




Form of Series A Right Certificate




Certificate No. R-                    





NOT EXERCISABLE AFTER [                     ___], 2018 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE SERIES A RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER SERIES A RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, SERIES A RIGHTS OWNED BY OR TRANSFERRED
TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE
RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.



SERIES A RIGHT CERTIFICATE




DISCOVERY COMMUNICATIONS, INC.




     This certifies that                                          or registered assigns, is the registered
owner of the number of Series A Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement, dated as of
[                     ___], 2008, as the same may be amended from time to time (the “Rights
Agreement”), between Discovery Communications, Inc., a Delaware corporation (the
“Company”), and Computershare Trust Company, N.A., as Rights Agent (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 [                     ___],
2018 at the office or agency of the Rights Agent designated for such purpose, or of its successor
as Rights Agent, one one-thousandth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the “Series A Junior Preferred
Stock”), of the Company at a purchase price of $100 per one one-thousandth of a share of
Preferred Stock (the “Purchase Price”), upon presentation and surrender of this Series A
Right Certificate with the Form of Election to Purchase duly executed. The number of Series A
Rights evidenced by this Series A Rights Certificate (and the number of one-thousandths of a share
of Series A Junior Preferred Stock which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of [                     ___],
2008, based on the Series A Junior Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price, the number of one-thousandths of a share of Series A Junior
Preferred Stock (or other securities or property) which may be purchased upon the exercise of the
Series A Rights and the number of Series A Rights evidenced by this Series A Right Certificate are
subject to modification and adjustment upon the happening of certain events.



     This Series A 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



D-1









 




reference is hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of
the Series A Right Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Series A Right Certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.




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



     Subject to the provisions of the Rights Agreement, the Series A Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price of $.01 per Series A Right or
(ii) may be exchanged in whole or in part for shares of the Company’s Series A Common Stock, par
value $.01 per share (“Series A Common Stock”), or shares of Series A Junior Preferred
Stock.



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



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



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



D-2









 





          WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of                      ___, 200___.



	 	 	 	 	 
	 	DISCOVERY COMMUNICATIONS, INC.

 	 
	 	By:  	 	 
	 	 	     [Title] 	 
	 	 	 	 
	 



ATTEST:




	 	 	 
	 
	 

[Title]

	 	 






Countersigned:




                                        , as Rights Agent




	 	 	 	 	 
	 
	By
	 	 	 	 
	 

	 	 	 	 
	 

	 	  [Title]
	 	 





D-3









 






Form of Reverse Side of Series A Right Certificate




FORM OF ASSIGNMENT




(To be executed by the registered holder if such

holder desires to transfer the Series A Right Certificate)




     FOR
VALUE RECEIVED
                                        
hereby sells, assigns and transfers
unto 




 


(Please print name and address of transferee)



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




Dated:                                         




	 	 	 	 	 
	 

	 	 

Signature
	 	 






Signature Guaranteed:




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



(To be completed)




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




	 	 	 	 	 
	 
	 

	 	 

Signature
	 	 






D-4









 






Form of
Reverse Side of Series A Right Certificate – continued




FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to exercise Series A

Rights represented by the Series A Rights Certificate)




To DISCOVERY COMMUNICATIONS, INC.:




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



 




(Please print name and address)




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



Please insert social security

or other identifying number




 




(Please print name and address)




Dated:                                        




	 	 	 	 	 
	 
	 

	 	 

	 	 
	 

	 	Signature	 	 






(Signature must conform to holder specified on Right Certificate)




Signature Guaranteed:




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



D-5









 





Form of
Reverse Side of Series A Right Certificate – continued




 




(To be completed)




     The undersigned certifies that the Series A Rights evidenced by this Series A Right
Certificate are not Beneficially Owned by, and were not acquired by the undersigned from, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement).



	 	 	 	 	 
	 
	 

	 	 

Signature
	 	 






 





NOTICE




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



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




D-6









 








Exhibit E




Form of Series B Right Certificate




Certificate No. R-                    




NOT EXERCISABLE AFTER [                     ___], 2018 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE SERIES B RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE
RIGHTS AGREEMENT, SERIES B RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON
WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND
WILL NO LONGER BE TRANSFERABLE.



SERIES B RIGHT CERTIFICATE




DISCOVERY COMMUNICATIONS, INC.




     This certifies that                                          or registered assigns, is the registered
owner of the number of Series B Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement, dated as of
[                     ___], 2008, as the same may be amended from time to time (the “Rights
Agreement”), between Discovery Communications, Inc., a Delaware corporation (the
“Company”), and Computershare Trust Company, N.A., as Rights Agent (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 [                     ___],
2018 at the office or agency of the Rights Agent designated for such purpose, or of its successor
as Rights Agent, one one-thousandth of a fully paid non-assessable share of Series B Junior
Participating Preferred Stock, par value $.01 per share (the “Series B Junior Preferred
Stock”), of the Company at a purchase price of $100 per one one-thousandth of a share of
Preferred Stock (the “Purchase Price”), upon presentation and surrender of this Series B
Right Certificate with the Form of Election to Purchase duly executed. The number of Series B
Rights evidenced by this Series B Rights Certificate (and the number of one-thousandths of a share
of Series B Junior Preferred Stock which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of [                     ___],
2008, based on the Series B Junior Participating Preferred Stock as constituted at such date. As
provided in the Rights Agreement, the Purchase Price, the number of one-thousandths of a share of
Series B Junior Preferred Stock (or other securities or property) which may be purchased upon the
exercise of the Series B Rights and the number of Series B Rights evidenced by this Series B Right
Certificate are subject to modification and adjustment upon the happening of certain events.



     This Series B Right Certificate is subject to all of the terms, provisions and conditions of
the Rights Agreement, which terms, provisions and conditions are hereby



E-1









 




incorporated herein by reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights, limitations of rights, obligations,
duties and immunities hereunder of the Rights Agent, the Company and the holders of the Series B
Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned office or agency of the Rights Agent. The Company will mail
to the holder of this Series B Right Certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor.




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



     Subject to the provisions of the Rights Agreement, the Series B Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price of $.01 per Series B Right or
(ii) may be exchanged in whole or in part for shares of the Company’s Series B Common Stock, par
value $.01 per share (“Series B Common Stock”), or shares of Series B Junior Preferred
Stock.



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



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



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



E-2









 





          WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of                      ___, 200___.



	 	 	 	 	 
	 	DISCOVERY COMMUNICATIONS, INC.

 	 
	 	By:  	 	 
	 	 	[Title] 	 
	 	 	 	 
	 



ATTEST:




	 
	 	 	 
	 

[Title]

	 	 






Countersigned:




                                        , as Rights Agent




	 	 	 	 	 
	 
	By
	 	 	 	 
	 

	 	 
  [Title]
	 	 





E-3









 






Form of Reverse Side of Series B Right Certificate




FORM OF ASSIGNMENT




(To be executed by the registered holder if such

holder desires to transfer the Series B Right Certificate)




     FOR
VALUE RECEIVED
                                        
hereby sells, assigns and transfers
unto 




 


(Please print name and address of transferee)



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




Dated:                                         




	 	 	 	 	 
	 
	 

	 	 

Signature
	 	 






Signature Guaranteed:




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



(To be completed)




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



	 	 	 	 	 
	 

	 	 

Signature
	 	 






E-4









 






Form of
Reverse Side of Series B Right Certificate – continued




FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to exercise Series B

Rights represented by the Series B Rights Certificate)




To DISCOVERY COMMUNICATIONS, INC.:




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



 





(Please print name and address)



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




Please insert social security

or other identifying number




 




(Please print name and address)




Dated:                                        




	 	 	 	 	 
	 
	 

	 	 

Signature
	 	 






(Signature must conform to holder specified on Right Certificate)




Signature Guaranteed:




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



E-5









 





Form of
Reverse Side of Series B Right Certificate – continued




 




(To be completed)




     The undersigned certifies that the Series B Rights evidenced by this Series B Right
Certificate are not Beneficially Owned by, and were not acquired by the undersigned from, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement).



	 	 	 	 	 
	 
	 

	 	 

Signature
	 	 






 





NOTICE




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



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




E-6









 








Exhibit F




Form of Series C Right Certificate




Certificate No. R-                    




NOT EXERCISABLE AFTER [                     ___], 2018 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE SERIES C RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SERIES
C RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.



SERIES C RIGHT CERTIFICATE




DISCOVERY COMMUNICATIONS, INC.




     This certifies that                                          or registered assigns, is the registered
owner of the number of Series C Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement, dated as of
[                     ___], 2008, as the same may be amended from time to time (the “Rights
Agreement”), between Discovery Communications, Inc., a Delaware corporation (the
“Company”), and Computershare Trust Company, N.A., as Rights Agent (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 [                     ___],
2018 at the office or agency of the Rights Agent designated for such purpose, or of its successor
as Rights Agent, one one-thousandth of a fully paid non-assessable share of Series C Junior
Participating Preferred Stock, par value $.01 per share (the “Series C Junior Preferred
Stock”), of the Company at a purchase price of $100 per one one-thousandth of a share of
Preferred Stock (the “Purchase Price”), upon presentation and surrender of this Series C
Right Certificate with the Form of Election to Purchase duly executed. The number of Series C
Rights evidenced by this Series C Rights Certificate (and the number of one-thousandths of a share
of Series C Junior Preferred Stock which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of [                     ___],
2008, based on the Series C Junior Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price, the number of one-thousandths of a share of Series C Junior
Preferred Stock (or other securities or property) which may be purchased upon the exercise of the
Series C Rights and the number of Series C Rights evidenced by this Series C Right Certificate are
subject to modification and adjustment upon the happening of certain events.



     This Series C 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,



F-1









 




duties and immunities hereunder of the Rights Agent, the Company and the holders of the Series
C Right Certificates. Copies of the Rights Agreement are on file at the principal executive
offices of the Company and the above-mentioned office or agency of the Rights Agent. The Company
will mail to the holder of this Series C Right Certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor.




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



     Subject to the provisions of the Rights Agreement, the Series C Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price of $.01 per Series C Right or
(ii) may be exchanged in whole or in part for shares of the Company’s Series C Common Stock, par
value $.01 per share (“Series C Common Stock”), or shares of Series C Junior Preferred
Stock.



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



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



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



F-2









 





          WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of                      ___, 200___.



	 	 	 	 	 
	 	DISCOVERY COMMUNICATIONS, INC.

 	 
	 	By:  	 	 
	 	 	[Title] 	 
	 	 	 	 
	 



ATTEST:




	 
	 	 	 
	 

[Title]

	 	 






Countersigned:




                                        , as Rights Agent




	 	 	 	 	 
	 
	By
	 	 	 	 
	 

	 	 
  [Title]
	 	 





F-3









 






Form of Reverse Side of Series C Right Certificate




FORM OF ASSIGNMENT



(To be executed by the registered holder if such

holder desires to transfer the Series C Right Certificate)




     FOR
VALUE RECEIVED
                                        
hereby sells, assigns and transfers
unto 




 


(Please print name and address of transferee)



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




Dated:                                         




	 	 	 	 	 
	 
	 

	 	 

Signature
	 	 






Signature Guaranteed:




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



(To be completed)




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



	 	 	 	 	 
	 
	 

	 	 

Signature
	 	 






F-4









 






Form of
Reverse Side of Series C Right Certificate – continued




FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to exercise Series C

Rights represented by the Series C Rights Certificate)




To DISCOVERY COMMUNICATIONS, INC.:




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



 




(Please print name and address)



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




Please insert social security

or other identifying number




 




(Please print name and address)




Dated:                                        




	 	 	 	 	 
	 
	 

	 	 

Signature
	 	 






(Signature must conform to holder specified on Right Certificate)




Signature Guaranteed:




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



F-5









 





Form of
Reverse Side of Series C Right Certificate – continued




 




(To be completed)




     The undersigned certifies that the Series C Rights evidenced by this Series C Right
Certificate are not Beneficially Owned by, and were not acquired by the undersigned from, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement).



	 	 	 	 	 
	 
	 

	 	 

Signature
	 	 






 





NOTICE




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



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



F-6









 





Exhibit G




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



SUMMARY OF RIGHTS TO PURCHASE

SHARES OF PREFERRED STOCK OF

DISCOVERY COMMUNICATIONS, INC




     On [DATE], the Board of Directors of Discovery Communications, Inc. (the “Company”)
declared a dividend of preferred share purchase rights to holders of the Company’s Common Stock of
record and holders of the Company’s Convertible Preferred Stock of record as of immediately after
the effectiveness of the Merger (the “Record Date”). The dividend consisted of one Series
A Right for each share of Series A Common Stock outstanding or Series A Convertible Preferred Stock
outstanding on the Record Date, one Series B Right for each share of Series B Common Stock
outstanding on the Record Date and one Series C Right for each share of Series C Common Stock
outstanding or Series C Convertible Preferred Stock outstanding on the Record Date. Each Series A
Right represents the right to purchase 1/1000th of a share of the Company’s Series A Junior
Participating Preferred Stock, par value $.01 per share (the “Series A Junior Preferred
Stock”), each Series B Right represents the right to purchase 1/1000th of a share of the
Company’s Series B Junior Participating Preferred Stock, par value $.01 per share (the “Series
B Junior Preferred Stock”) and each Series C Right collectively with the Series A Rights and
the Series B Rights, the “Rights”) represents the right to purchase 1/1000th of a share of
the Company’s Series C Junior Participating Preferred Stock, par value $.01 per share (the
“Series C Junior Preferred Stock” and, collectively with the Series A Junior Preferred
Stock and the Series B Junior Preferred Stock, the “Preferred Stock”). The description and
terms of the Rights are set forth in a Rights Agreement, dated as of [                     ___], 2008, as the
same may be amended from time to time (the “Rights Agreement”), between the Company and
Computershare Trust Company, N.A., as Rights Agent (the “Rights Agent”).



     Until the earlier to occur of (i) 10 days following a public announcement that a person or
group of affiliated or associated persons (with certain exceptions, an “Acquiring Person”)
has acquired beneficial ownership of 10% or more of the outstanding shares of Common Stock or (ii)
10 business days (or such later date as may be determined by action of the Board of Directors of
the Company prior to such time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial ownership by a person or
group of 10% or more of the outstanding shares of Common Stock (the earlier of such dates being
called the “Distribution Date”), the Rights will be evidenced, with respect to any of the
Common Stock certificates or Convertible Preferred Stock certificates outstanding as of the Record
Date, by such Common Stock certificate or Convertible Preferred Stock certificate together with
this Summary of Rights, or in the case of uncertificated shares, the balances indicated in the
book-entry account system of the transfer agent for the Common Stock or the Convertible Preferred
Stock.



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     The Rights Agreement provides that, until the Distribution Date (or earlier expiration of the
Rights), the Rights will be transferred with and only with the Common Stock or the Convertible
Preferred Stock. Until the Distribution Date (or earlier expiration of the Rights), new Common
Stock certificates or Convertible Preferred Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock or Convertible Preferred Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier
expiration of the Rights), the transfer of any shares of Common Stock or Convertible Preferred
Stock outstanding as of the Record Date, even without such notation or a copy of this Summary of
Rights, will also constitute the transfer of the Rights associated with such shares of Common Stock
or Convertible Preferred Stock. As soon as practicable following the Distribution Date, separate
certificates evidencing the Series A Rights (“Series A Right Certificates”), the Series B
Rights (“Series B Rights Certificates”) and the Series C Rights (“Series C Rights
Certificates” and, collectively with the Series A Right Certificates and the Series B Right
certificates, the “Right Certificates”) will be mailed to holders of record of the Series A
Common Stock, the Series B Common Stock, the Series C Common Stock, the Series A Convertible
Preferred Stock and the Series C Convertible Preferred Stock, respectively, as of the close of
business on the Distribution Date, and thereafter such separate Rights Certificates alone will
evidence the Rights.



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



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



     The number of outstanding Rights associated with each share of Common Stock is subject to
adjustment in the event of a stock dividend on the Common Stock payable in shares of Common Stock
or subdivisions, consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date. The number of outstanding Rights associated with each share of
Convertible Preferred Stock is subject to adjustment in the event of a stock dividend on the
Convertible Preferred Stock payable in shares of Convertible Preferred Stock or subdivisions,
consolidations or combinations of the Convertible Preferred Stock occurring, in any such case,
prior to the Distribution Date.



     Shares of Preferred Stock purchasable upon exercise of the Rights will not be redeemable.
Each share of Preferred Stock will be entitled, when, as and if declared, to a minimum preferential
quarterly dividend payment of the greater of (a) $10.00 per share of



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Preferred Stock, and (b) an amount per share of Preferred Stock equal to 1,000 times the
dividend declared per share of the applicable series of Common Stock. In the event of liquidation,
dissolution or winding up of the Company, the holders of the Preferred Stock will be entitled to a
minimum preferential payment of the greater of (a) $10.00 per share (plus any accrued but unpaid
dividends), and (b) an amount equal to 1,000 times the payment made per share of the applicable
series of Common Stock. Each share of Preferred Stock will have 1,000 times the number of votes
each share of the applicable series of Common Stock has on matters such series is entitled to vote
on, which shall be voted together with the applicable series of Common Stock (and, accordingly, the
Series C Junior Preferred Stock, like the Series C Common Stock, will not ordinarily have any
voting power). Finally, in the event of any merger, consolidation or other transaction in which
outstanding shares of Common Stock are converted or exchanged, each share of Preferred Stock will
be entitled to receive 1,000 times the amount received per share of the applicable series of Common
Stock. These rights are protected by customary antidilution provisions.




     Because of the nature of the Preferred Stock’s dividend, liquidation and voting rights, the
value of the 1/1000th interest in a share of Preferred Stock purchasable upon exercise of each
Series A Right, Series B Right and Series C Right should approximate the value of one share of
Series A Common Stock, Series B Common Stock and Series C Common Stock, respectively.



     In the event that any person or group of affiliated or associated persons becomes an Acquiring
Person, each holder of a Right, other than Rights Beneficially Owned by the Acquiring Person (which
will thereupon become void), will thereafter have the right to receive upon exercise of a Right
that number of shares of Series A Common Stock (in the case of a Series A Right), Series B Common
Stock (in the case of a Series B Right) or Series C Common Stock (in the case of a Series C Right),
having a market value equal to two times the exercise price of the Right.



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



     At any time after any person or group becomes an Acquiring Person and prior to the earlier of
one of the events described in the previous paragraph or the acquisition by such Acquiring Person
of shares of Common Stock representing 50% or more of the total number of votes entitled to be cast
generally by the holders of the Common Stock then outstanding, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such Acquiring Person, which will have
become void), in whole or in part, for shares of Common Stock or Preferred Stock (or a series of
the Company’s preferred stock having equivalent rights, preferences and privileges), at an exchange
ratio of one share of Common Stock, or a fractional share of Preferred Stock (or other preferred
stock) equivalent in value thereto, per Right.



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     With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares of
Preferred Stock or Common Stock will be issued (other than fractions of Preferred Stock which are
integral multiples of 1/1000th of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), and in lieu thereof an adjustment in cash will be
made based on the current market price of the Preferred Stock or the Common Stock.



     At any time prior to the time an Acquiring Person becomes such, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
“Redemption Price”) payable, at the option of the Company, in cash, shares of Common Stock
or such other form of consideration as the Board of Directors of the Company shall determine. The
redemption of the Rights may be made effective at such time, on such basis and with such conditions
as the Board of Directors of the Company in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.



     For so long as the Rights remain redeemable, the Company may, except with respect to the
Redemption Price, amend the Rights Agreement in any manner. After the Rights are no longer
redeemable, the Company may, except with respect to the Redemption Price, amend the Rights
Agreement in any manner that does not adversely affect the interests of holders of the Rights.



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



     A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form S-4 dated [                    ], 2008. A copy of the Rights
Agreement is available free of charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is hereby incorporated herein by
reference.




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