exv4w3






EXHIBIT 4.3




FORM OF




RIGHTS AGREEMENT




between




Ascent Media Corporation




and




Computershare Trust Company




Dated as of [_______], 2008




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	 
	1. Certain Definitions
	 	 	1	 
	2. Appointment of Rights Agent
	 	 	7	 
	3. Issue of Right Certificates
	 	 	7	 
	4. Form of Right Certificates
	 	 	9	 
	5. Countersignature and Registration
	 	 	9	 
	6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates
	 	 	10	 
	7. Exercise of Rights, Purchase Price; Expiration Date of Rights
	 	 	10	 
	8. Cancellation and Destruction of Right Certificates
	 	 	11	 
	9. Availability of Shares of Preferred Stock
	 	 	12	 
	10. Preferred Stock Record Date
	 	 	13	 
	11. Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights
	 	 	13	 
	12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	22	 
	13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	22	 
	14. Fractional Rights and Fractional Shares
	 	 	25	 
	15. Rights of Action
	 	 	26	 
	16. Agreement of Right Holders
	 	 	27	 
	17. Right Certificate Holder Not Deemed a Stockholder
	 	 	27	 
	18. Concerning the Rights Agent
	 	 	27	 
	19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	28	 
	20. Duties of Rights Agent
	 	 	28	 
	21. Change of Rights Agent
	 	 	30	 
	22. Issuance of New Right Certificates
	 	 	31	 
	23. Redemption
	 	 	31	 
	24. Exchange
	 	 	32	 
	25. Notice of Certain Events
	 	 	33	 
	26. Notices
	 	 	34	 
	27. Supplements and Amendments
	 	 	35	 
	28. Successors
	 	 	35	 
	29. Benefits of this Agreement
	 	 	35	 






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	 	 	Page
	 
	30. Determinations and Actions by the Board of Directors
	 	 	35	 
	31. Severability
	 	 	36	 
	32. Governing Law
	 	 	36	 
	33. Counterparts
	 	 	36	 
	34. Descriptive Headings
	 	 	36	 
	35. Force Majeure
	 	 	36	 







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RIGHTS AGREEMENT




     This RIGHTS AGREEMENT (together with all Exhibits hereto, this “Agreement”), dated as
of [_____], 2008, is entered into by and between Ascent Media Corporation, 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 direct or indirect wholly-owned Subsidiary of Discovery Holding
Company, a Delaware corporation (“DHC”), and immediately prior to the effectiveness of the
Spin-off Transaction, will be a direct wholly-owned Subsidiary of DHC;



     WHEREAS the Board of Directors of DHC has approved the Spin-off Transaction; and



     WHEREAS the Board of Directors of the Company has, subject to the consummation of the Spin-off
Transaction, declared a dividend of preferred share purchase rights to holders of record of the
Company’s Common Stock as of the close of business on [_____], 2008 (the “Record
Date”), which dividend consists of (i) one Series A Right for each share of Series A Common
Stock outstanding on the Record Date, (ii) one Series B Right for each share of Series B Common
Stock outstanding on the Record Date, (iii) one Series A Right or Series B Right, as applicable,
for each share of Series A Common Stock or Series B Common Stock, as applicable, that shall become
outstanding between the Record Date and the earlier of the Distribution Date and the Expiration
Date and (iv) in the event that shares of Series C Common Stock are issued, one Series C Right for
each share of Series C Common Stock issued, in each case with such Rights subject to adjustment as
provided in this Agreement.



     All capitalized terms used but not defined in the foregoing recitals are defined in Section 1
of this Agreement.



     NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements contained herein, the parties to this Agreement hereby agree as follows:



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



     “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 (as such
term is hereinafter defined); 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 qualify
as an “Acquiring Person”; (ii) if, as of the Spin-off Date, 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
Spin-Off Date, become the Beneficial Owner of 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.



     “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.



     “Agreement” shall have the meaning set forth in the preamble.



     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) pursuant
to any agreement, arrangement or understanding (other than customary



2









 







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(c)(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(c)), 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.



     “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.



3









 





     “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.



     “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 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.



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



     “Company” shall have the meaning set forth in the preamble.



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



     “DHC” shall have the meaning set forth in the recitals.



     “Distribution Date” shall have the meaning set forth in Section 3 hereof.



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



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



     “Exchange Ratio” shall have the meaning set forth in Section 24 hereof.



     “Expiration Date” shall have the meaning set forth in Section 7 hereof.



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



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



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



     “NASDAQ” shall mean The Nasdaq Global Market.



     “New York Stock Exchange” shall mean the New York Stock Exchange, Inc.



4









 





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



     “Preferred Stock” shall mean collectively or severally, as the context shall require,
the Series A Preferred Stock, the Series B Preferred Stock and/or the Series C Preferred Stock, and
to the extent that there is not a sufficient number of shares of Series A Preferred Stock, Series B
Preferred Stock or Series C 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 Preferred Stock, the Series B Preferred Stock or the Series C
Preferred Stock, as the case may be.



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



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



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



     “Redemption Date” shall have the meaning set forth in Section 7 hereof.



     “Redemption Price” shall have the meaning set forth in Section 23 hereof.



     “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.



     “Rights Agent” shall have the meaning set forth in the preamble.



     “Right Certificate” shall have the meaning set forth in Section 3 hereof.



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



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



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



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



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



     “Series A 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.



5









 





     “Series B 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.



     “Series C 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.



     “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 Preferred Stock, upon the terms and subject to the conditions set forth in this Agreement.



     “Series A Rights Certificate” shall have the meaning set forth in Section 3.



     “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 Preferred Stock, upon the terms and subject to the conditions set forth in this Agreement.



     “Series B Rights Certificate” shall have the meaning set forth in Section 3.



     “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 Preferred Stock, upon the terms and subject to the conditions set forth in this Agreement.



     “Series C Rights Certificate” shall have the meaning set forth in Section 3.



     “Spin-off Date” shall mean the date upon which the Spin-off Transaction is
consummated.



     “Spin-off Transaction” shall mean the transaction involving the pro rata distribution
by DHC of its equity ownership in the Company to holders of common stock of DHC.



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



     “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.



     “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.



6









 





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



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



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



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



     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 an Exempt Person) of, or of
the first public announcement of the intention of such Person (other than an Exempt Person) to
commence, a tender or exchange offer the consummation of which would result in any Person (other
than an Exempt Person) becoming the Beneficial Owner of shares of Common Stock comprising in the
aggregate 10% or more of the number of shares of 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, in the case of uncertificated shares, the balances indicated in the book-entry account system
of the transfer agent for the Common 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. 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 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
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
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



7









 







shall require, the “Rights Certificates”), evidencing one Series C Right (subject to
adjustment as provided herein) for each share of Series C Common Stock so held. From and after the
Distribution Date, the Rights will be evidenced solely by Right Certificates.



          (b) A copy of the Summary of Rights to Purchase Shares of Preferred Stock, in substantially
the form of Exhibit G hereto (the “Summary of Rights”), has been included in the
Information Statement attached as an exhibit to the Company’s Registration Statement on Form 10
(the “Information Statement”) filed by the Company with the Securities and Exchange
Commission on [_____], 2008 and a copy of the Information Statement will be made
available to each record holder of Common Stock as of the Close of Business on the Record Date.
With respect to shares of Common Stock outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by the certificates for Common 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, 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 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.



          (c) Rights shall be issued in respect of all shares of Common 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 (including, without limitation, upon transfer of outstanding
Common 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 Ascent Media Corporation (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, 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.


With respect to such certificates containing the foregoing legend, until the Distribution Date, the
Rights associated with the Common 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


8









 






Stock represented thereby. In the event that the Company purchases or otherwise acquires any
Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with
such Common Stock shall be deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Stock which 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.



     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 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.



     5. Countersignature and Registration.



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



          (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at 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.



9









 





     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 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.



     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 Spin-off Date (the “Final
Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the “Redemption Date”) or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.



          (b) The Purchase Price shall be initially (i) [$100 for each one-thousandth] of a share of
Series A Preferred Stock purchasable upon the exercise of a Series A Right, (ii) [$100 for each
one-thousandth] of a share of Series B Preferred Stock purchasable upon the exercise of



10









 







a Series B Right and (iii) [$100 for each one-thousandth] of a share of Series C 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 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.



     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,



11









 







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.



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



          (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



12









 







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.



     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.



     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 (A)
declare and pay a dividend on any series of the Preferred Stock payable in shares of Preferred
Stock, (B) subdivide any series of the outstanding Preferred Stock, (C) combine any series of the
outstanding Preferred Stock into a smaller number of shares of Preferred Stock or (D) 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 as of the record date
for such dividend or the effective date of such subdivision, combination or reclassification shall
be proportionately adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital stock which, if such Right
had been exercised immediately prior to such date and at a time 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, 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 Corporation shall not effect any of the actions set forth in



13









 







Clauses (A), (B), (C) or (D) of this paragraph with respect to either the Series A Preferred
Stock, the Series B Preferred Stock or the Series C Preferred Stock unless the Corporation shall
also contemporaneously effect a like transaction with respect to each other such series;
provided, however, that in the event that such a transaction is effected with
respect to one such series but no such shares of the 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 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 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-thousandths of a share of Series B 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 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 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 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 and kind of shares of capital 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 (or otherwise) to
the contrary, however, from and



14









 







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, title or interest 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).



               (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



15









 







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
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



16









 







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
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. 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



17









 







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
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. 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 the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices on NASDAQ or 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 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



18









 







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.



          (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.



19









 





          (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 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



20









 







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) Anything in this Agreement to the contrary notwithstanding, in the event that at any time
after the date of this Agreement and prior to the Distribution Date, the Company shall (i) declare
and pay any dividend on any series of shares of Common Stock payable in Common Stock or (ii) 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, 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 (A)
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, (B) 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 (C) in the case of the Series C
Rights, multiplying the number of 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. The adjustments provided for in
this Section 11(n) 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.



          (o) The Company agrees that, after the earlier of the Distribution Date or the Stock
Acquisition Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take (or



21









 







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.



     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 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.



     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



22









 







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 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


23









 






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 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 the New York Stock Exchange 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 the New York Stock Exchange or such securities exchange, or, if the
Common Stock of the Principal Party shall not be listed or admitted to trading on the New York
Stock Exchange or a national securities exchange, to cause the Rights and the securities receivable
upon exercise of the Rights to be authorized for quotation on NASDAQ or on such other 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



24









 







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.



          (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.



     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 the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices on NASDAQ or 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.



25









 





          (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
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).



     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); and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the Common 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) 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.



26









 





     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;



          (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 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 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) 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, in the case of uncertificated shares, the associated balance
indicated in the book-entry account system of the transfer agent for the Common 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.



     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.



     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.



27









 





          (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 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 or Common Stock, or for other securities of
the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or document believed by
it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20
hereof.



     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.



     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.



28









 





          (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 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 or the 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



29









 







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
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.



     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 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



30









 







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 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, along with its Affiliates, 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.



     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 may with
respect to shares of Common Stock so issued or sold pursuant to (i) the exercise of 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 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.



     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 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



31









 







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
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. 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.



     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
appropriately adjusted to reflect any stock split, stock dividend or similar transaction with
respect to the applicable series of Common 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.



          (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 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



32









 







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) The Company may at its option substitute, and, 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 Preferred Stock, Series B Preferred Stock, or Series C
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.



     25. Notice of Certain Events.



33









 





          (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 its any series of
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.



     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:


Ascent Media Corporation

12300 Liberty Boulevard

Englewood, CO 80112

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

Canton, MA 02021

Attention: Client Administration




34









 




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.




     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, provided that such supplement or amendment does not
adversely affect the rights, duties or obligations of the Rights Agent under this Agreement.



     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.



     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) 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).



     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 faith shall be final,



35









 







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



     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.



     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.



     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.



     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.



     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.



36









 





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



	 	 	 	 	 
	 	ASCENT MEDIA CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	COMPUTERSHARE TRUST COMPANY, N.A.

as Rights Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




37









 





Exhibit A




FORM OF CERTIFICATE OF DESIGNATION




of




SERIES A JUNIOR PARTICIPATING PREFERRED STOCK




of




ASCENT MEDIA CORPORATION

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware




     Ascent Media Corporation, 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 pursuant to the authority vested in the Board of Directors of the Corporation (the
“Board of Directors”) in accordance with the provisions of the Certificate of Incorporation
of the said Corporation, the said Board of Directors on [        ], 2008 adopted the following resolution
creating a series of [45,000] shares of Preferred Stock designated as “Series A Junior
Participating Preferred Stock”:




RESOLVED, that pursuant to the authority vested in the Board of Directors of this
Corporation in accordance with the provisions of 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 Preferred
Stock”), and the number of shares constituting such series shall be [45,000]. 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 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.



38









 





     2. Dividends and Distribution.



     (A) Subject to the prior and superior rights of the holders of any shares of any class or
series of stock of the Corporation ranking prior and superior to the shares of Series A Preferred
Stock with respect to dividends, the holders of shares of Series A Preferred Stock, 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 stock of
the Corporation ranking junior to the Series A 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 Preferred Stock”) and the Series C Junior Participating
Preferred Stock, par value $.01 per share, of the Corporation (the “Series C Preferred
Stock”, and collectively with the Series A and Series B Preferred Stock, the “Preferred
Stock”), shall be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in cash on the last day of
March, June, September and December, in each year (each such date being referred to herein as a
“Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 or (b) the
Adjustment Number (as defined below) times the aggregate per share amount of all cash dividends,
and the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of Series A Common Stock
or a subdivision of the outstanding shares of Series A Common Stock (by reclassification or
otherwise), 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, since the
first issuance of any share or fraction of a share of Series A Preferred Stock. The
“Adjustment Number” shall initially be 1000. In the event the Corporation shall at any
time after [ ], 2008 (i) declare and pay any dividend on Series A Common Stock payable in shares of
Series A Common Stock, (ii) subdivide the outstanding Series A Common Stock or (iii) 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 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 Corporation shall declare a dividend or distribution on the Series A Preferred Stock
as provided in paragraph (A) above immediately after it declares a dividend or distribution on the
Series A Common Stock (other than a dividend payable in shares of Series A Common Stock).



     (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series A Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on such



39









 







shares shall begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days prior to the date fixed for the
payment thereof.



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



     (A) Each share of Series A 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, in the Restated Certificate of Incorporation or in
any other Certificate of Designation creating a series of preferred stock or any similar stock, and
except as otherwise required by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Series A Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted to a vote of the
stockholders of the Corporation.



     (C) Except as required by law and by Section 10 hereof, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required (except to the extent
they are entitled to vote with holders of 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
Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:



          (i) declare or pay dividends 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 A Preferred Stock;



          (ii) declare or pay dividends on or make any other distributions on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred



40









 







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 Preferred Stock,
or any shares of stock ranking on a parity with the Series A 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 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 Preferred Stock or
Series C Preferred Stock) in exchange for shares of any stock of the Corporation ranking junior (as
to dividends and upon dissolution, liquidation or winding up) to the Series A Preferred Stock or
rights, warrants or options to acquire such junior stock.



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



     5. Reacquired Shares. Any shares of Series A 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 herein.



     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 stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received an
amount per share (the “Series A Liquidation Preference”) equal to the greater of (i) $10.00
plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, or (ii) the Adjustment Number times the per share amount of
all cash and other property to be distributed in respect of the 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 stock of the Corporation, if any, that rank on a parity with the Series A Preferred
Stock in respect thereof, then the assets available for such distribution shall be distributed
ratably to the holders of the Series A Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences.



41









 





     (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 stock or securities, cash and/or any other property, then
in any such case each share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share equal to the Adjustment Number times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind), as the case may be,
into which or for which each share of Series A Common Stock is changed or exchanged.



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



     9. Ranking. The Series A Preferred Stock shall rank with respect to the payment of dividends
and as to the distribution of assets upon liquidation, dissolution or winding up, pari passu with
the Series B Preferred Stock and Series C Preferred Stock, junior to all other series of preferred
stock unless the terms of any such series 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 Preferred Stock are outstanding, the
Certificate of Incorporation of the Corporation shall not be amended, by merger, consolidation or
otherwise, which would materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders
of two-thirds of the outstanding shares of Series A Preferred Stock, voting separately as a class.



     11. Fractional Shares. Series A 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 Preferred Stock.



42









 





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



	 	 	 	 	 
	 	ASCENT MEDIA CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




43









 





Exhibit B




FORM OF CERTIFICATE OF DESIGNATION




of




SERIES B JUNIOR PARTICIPATING PREFERRED STOCK




of




ASCENT MEDIA CORPORATION

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware




     Ascent Media Corporation, 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 pursuant to the authority vested in the Board of Directors of the Corporation (the
“Board of Directors”) in accordance with the provisions of the Certificate of Incorporation
of the said Corporation, the said Board of Directors on [             ], 2008 adopted the following resolution
creating a series of [5,000] shares of Preferred Stock designated as “Series B Junior Participating
Preferred Stock”:




RESOLVED, that pursuant to the authority vested in the Board of Directors of this
Corporation in accordance with the provisions of 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 Preferred
Stock”), and the number of shares constituting such series shall be [5,000]. 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 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.



     2. Dividends and Distribution.



     (A) Subject to the prior and superior rights of the holders of any shares of any class or
series of stock of the Corporation ranking prior and superior to the shares of Series B Preferred



44









 







Stock with respect to dividends, the holders of shares of Series B Preferred Stock, 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,” collectively with the Series A Common Stock and
Series B Common Stock, the “Common Stock”) and of any class or series of any other stock of
the Corporation ranking junior to the Series B 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 Preferred Stock”) and the Series C Junior Participating
Preferred Stock, par value $.01 per share, of the Corporation (the “Series C Preferred
Stock,” and collectively with the Series A and Series B Preferred Stock, the “Preferred
Stock”), shall be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in cash on the last day of
March, June, September and December, in each year (each such date being referred to herein as a
“Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series B Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 or (b) the
Adjustment Number (as defined below) times the aggregate per share amount of all cash dividends,
and the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of Series B Common Stock
or a subdivision of the outstanding shares of Series B Common Stock (by reclassification or
otherwise), 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, since the
first issuance of any share or fraction of a share of Series B Preferred Stock. The
“Adjustment Number” shall initially be 1000. In the event the Corporation shall at any
time after [             ], 2008 (i) declare and pay any dividend on Series B Common Stock payable
in shares of Series B Common Stock, (ii) subdivide the outstanding Series B Common Stock or (iii)
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 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 Corporation shall declare a dividend or distribution on the Series B Preferred Stock
as provided in paragraph (A) above immediately after it declares a dividend or distribution on the
Series B Common Stock (other than a dividend payable in shares of Series B Common Stock).



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



45









 







accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series B Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination of holders of
shares of Series B Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days prior to the date fixed for the
payment thereof.



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



     (A) Each share of Series B 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, in the Restated Certificate of Incorporation or in
any other Certificate of Designation creating a series of preferred stock or any similar stock, and
except as otherwise required by law, the holders of shares of Series B Preferred Stock and the
holders of shares of Series B Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted to a vote of the
stockholders of the Corporation.



     (C) Except as required by law and by Section 10 hereof, holders of Series B 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
Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series B 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 Preferred Stock;



          (ii) declare or pay dividends on or make any other distributions on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with
the Series B Preferred Stock, except dividends paid ratably on the Series B 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 Preferred Stock,
or any shares of stock ranking on a parity with the Series B Preferred Stock



46









 




(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 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 Preferred Stock or Series C Preferred Stock) in exchange for shares of any stock of the
Corporation ranking junior (as to dividends and upon dissolution, liquidation or winding up) to the
Series B 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 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 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 herein.



     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 stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock
unless, prior thereto, the holders of shares of Series B 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 accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, or (ii) the Adjustment Number times the per share amount of
all cash and other property to be distributed in respect of the 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 stock of the Corporation, if any, that rank on a parity with the Series B Preferred
Stock in respect thereof, then the assets available for such distribution shall be distributed
ratably to the holders of the Series B 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.



47









 





     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 stock or securities, cash and/or any other property, then
in any such case each share of Series B Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share equal to the Adjustment Number times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind), as the case may be,
into which or for which each share of Series B Common Stock is changed or exchanged.



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



     9. Ranking. The Series B Preferred Stock shall rank with respect to the payment of dividends
and as to the distribution of assets upon liquidation, dissolution or winding up, pari passu with
the Series A Preferred Stock and Series C Preferred Stock, junior to all other series of preferred
stock unless the terms of any such series 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 Preferred Stock are outstanding, the
Certificate of Incorporation of the Corporation shall not be amended, by merger, consolidation or
otherwise, which would materially alter or change the powers, preferences or special rights of the
Series B Preferred Stock so as to affect them adversely without the affirmative vote of the holders
of 75% of the outstanding shares of Series B Preferred Stock, voting separately as a class.



     11. Fractional Shares. Series B 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 Preferred Stock.



48









 





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



	 	 	 	 	 
	 	ASCENT MEDIA CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




49









 





Exhibit C




FORM OF CERTIFICATE OF DESIGNATION




of




SERIES C JUNIOR PARTICIPATING PREFERRED STOCK




of




ASCENT MEDIA CORPORATION





Pursuant to Section 151 of the General Corporation Law

of the State of Delaware




     Ascent Media Corporation, 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 pursuant to the authority vested in the Board of Directors of the Corporation (the
“Board of Directors”) in accordance with the provisions of the Certificate of Incorporation
of the said Corporation, the said Board of Directors on [             ], 2008 adopted the following resolution
creating a series of [45,000] shares of Preferred Stock designated as “Series C Junior
Participating Preferred Stock”:




RESOLVED, that pursuant to the authority vested in the Board of Directors of this
Corporation in accordance with the provisions of 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 Preferred
Stock”), and the number of shares constituting such series shall be [45,000]. 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 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.



50









 





     2. Dividends and Distribution.



     (A) Subject to the prior and superior rights of the holders of any shares of any class or
series of stock of the Corporation ranking prior and superior to the shares of Series C Preferred
Stock with respect to dividends, the holders of shares of Series C Preferred Stock, 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 stock of
the Corporation ranking junior to the Series C 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 Preferred Stock”) and the Series B Junior Participating
Preferred Stock, par value $.01 per share, of the Corporation (the “Series B Preferred
Stock,” and collectively with the Series A and Series C Preferred Stock, the “Preferred
Stock”), shall be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in cash on the last day of
March, June, September and December, in each year (each such date being referred to herein as a
“Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series C Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 or (b) the
Adjustment Number (as defined below) times the aggregate per share amount of all cash dividends,
and the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of Series C Common Stock
or a subdivision of the outstanding shares of Series C Common Stock (by reclassification or
otherwise), 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, since the
first issuance of any share or fraction of a share of Series C Preferred Stock. The
“Adjustment Number” shall initially be 1000. In the event the Corporation shall at any
time after [                               ], 2008 (i) declare and pay any dividend on Series C Common Stock
payable in shares of Series C Common Stock, (ii) subdivide the outstanding Series C Common Stock or
(iii) 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 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 Corporation shall declare a dividend or distribution on the Series C Preferred Stock
as provided in paragraph (A) above immediately after it declares a dividend or distribution on the
Series C Common Stock (other than a dividend payable in shares of Series C Common Stock).



     (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series C
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series C Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on such



51









 







shares shall begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series C Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series C Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination of holders of
shares of Series C Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days prior to the date fixed for the
payment thereof.



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



     (A) Each share of Series C 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 (it being understood that holders of Series C Common Stock should not be entitled
to any voting powers, except as (and then only to the extent) otherwise required by the laws of the
State of Delaware).



     (B) Except as otherwise provided herein, in the Restated Certificate of Incorporation or in
any other Certificate of Designation creating a series of preferred stock or any similar stock, and
except as otherwise required by law, the holders of shares of Series C Preferred Stock and the
holders of shares of Series C Common Stock shall vote together as one class on all matters which
the holders of Series C Common Stock are entitled to vote.



     (C) Except as required by law and by Section 10 hereof, holders of Series C 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
Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series C 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 C Preferred Stock;



          (ii) declare or pay dividends on or make any other distributions on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with
the Series C Preferred Stock, except dividends paid ratably on the Series C Preferred



52









 







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 Preferred Stock,
or any shares of stock ranking on a parity with the Series C 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 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 Preferred Stock or
Series B Preferred Stock) in exchange for shares of any stock of the Corporation ranking junior (as
to dividends and upon dissolution, liquidation or winding up) to the Series C 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 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 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 herein.



     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 stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series C Preferred Stock
unless, prior thereto, the holders of shares of Series C 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 accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, or (ii) the Adjustment Number times the per share amount of
all cash and other property to be distributed in respect of the 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 stock of the Corporation, if any, that rank on a parity with the Series C Preferred
Stock in respect thereof, then the assets available for such distribution shall be distributed
ratably to the holders of the Series C Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences.



53









 





     (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 stock or securities, cash and/or any other property, then
in any such case each share of Series C Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share equal to the Adjustment Number times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind), as the case may be,
into which or for which each share of Series C Common Stock is changed or exchanged.



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



     9. Ranking. The Series C Preferred Stock shall rank with respect to the payment of dividends
and as to the distribution of assets upon liquidation, dissolution or winding up, pari passu with
the Series A Preferred Stock and Series B Preferred Stock, junior to all other series of preferred
stock unless the terms of any such series 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 C Preferred Stock are outstanding, the
Certificate of Incorporation of the Corporation shall not be amended, by merger, consolidation or
otherwise, which would materially alter or change the powers, preferences or special rights of the
Series C Preferred Stock so as to affect them adversely without the affirmative vote of the holders
of two-thirds of the outstanding shares of Series C Preferred Stock, voting separately as a class.



     11. Fractional Shares. Series C 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 Preferred Stock.



54









 





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



	 	 	 	 	 
	 	ASCENT MEDIA CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




55









 





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

ASCENT MEDIA CORPORATION




     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 Ascent Media
Corporation, 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
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 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 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 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 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



56









 







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 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 Preferred Stock.



     No fractional shares of Series A 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 Preferred Stock which are integral multiples of one one-thousandth of a share
of Series A 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 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.



57









 





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



	 	 	 	 	 
	 	ASCENT MEDIA CORPORATION

 	 
	 	By:  	 	 
	 	 	[Title] 	 
	 	 	 	 
	 



ATTEST:




	 	 	 
	 
 

[Title]

	 	 





Countersigned:




	 	 	 	 	 
	By

	 	, as Rights Agent
 

	 	 
	 

	 	[Title]
	 	 






58









 





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
	 	 





59









 





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 ASCENT MEDIA CORPORATION:


     The undersigned hereby irrevocably elects to exercise _______
Series A Rights represented by this
Series A Right Certificate to purchase the shares of Series A 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 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.



Form of Reverse Side of Series A Right Certificate—continued




 





(To be completed)




60









 





     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.



61









 





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

ASCENT MEDIA CORPORATION




     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 Ascent Media
Corporation, 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
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 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
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 incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a



62









 







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 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 Preferred Stock.



     No fractional shares of Series B 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 Preferred Stock which are integral multiples of one one-thousandth of a share
of Series B 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 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.



63









 





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



	 	 	 	 	 
	 	ASCENT MEDIA CORPORATION

 	 
	 	By:  	 	 
	 	 	[Title] 	 
	 	 	 	 
	 



ATTEST:




	 	 	 
	 

[Title]

	 	 






Countersigned:




	 	 	 	 	 
	By

	 	               , as Rights Agent
 

	 	 
	 

	 	[Title]
	 	 






64









 





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
	 	 





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 ASCENT MEDIA CORPORATION:




65









 





     The undersigned hereby irrevocably elects to exercise                      Series B Rights
represented by this Series B Right Certificate to purchase the shares of Series B 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 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.



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
	 	 





66









 






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.



67









 





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

ASCENT MEDIA CORPORATION




     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 Ascent Media Corporation, 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 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 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 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 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, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Series C Right Certificates. Copies of



68









 







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 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 Preferred Stock.



     No fractional shares of Series C 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 Preferred Stock which are integral multiples of one one-thousandth of a share
of Series C 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 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.



69









 





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



	 	 	 	 	 
	 	ASCENT MEDIA CORPORATION

 	 
	 	By:  	 	 
	 	 	[Title] 	 
	 	 	 	 
	 



ATTEST:




	 	 	 
	 

          [Title]
	 	 





          Countersigned:



	 	 	 	 	 
	By

	 	                , as Rights Agent
 


	 	 
	

	 	                    [Title]
	 	 






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:




70









 





     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
	 	 





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 ASCENT MEDIA CORPORATION:




     The undersigned
hereby irrevocably elects to exercise         Series C Rights represented by this
Series C Right Certificate to purchase the shares of Series C 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 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
	 	 





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(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.



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.



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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

ASCENT MEDIA CORPORATION




     On [DATE], the Board of Directors of Ascent Media Corporation (the “Company”) declared
a dividend of preferred share purchase rights to holders of the Company’s Common Stock of record as
of the close of business on [RECORD DATE] (the “Record Date”). The dividend consisted of
one Series A Right for each share of Series A Common Stock outstanding on the Record Date, and one
Series B Right for each share of Series B Common 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 Preferred Stock”),
and 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
Preferred Stock”). In the event that shares of Series C Common Stock are issued, each share of
Series C Common Stock will be issued together with one Series C Right (collectively with the Series
A Rights and the Series B Rights, the “Rights”), which Series C Right will represent 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 Preferred Stock” and collectively with the
Series A Preferred Stock and the Series B 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 outstanding as of the Record Date, by such Common 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.



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     The Rights Agreement defines “group” to mean any group within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934. [In addition, the stockholders of Discovery
Communications, Inc. (“DCI”) (other than the Company or any of its subsidiaries), each
Affiliate or Associate of any such stockholder, any other Person that has any agreement,
arrangement or understanding with any such stockholder (or with any Affiliate or Associate of any
such stockholder) for the purpose of acquiring, holding, voting (subject to a limited exception) or
disposing of any equity securities of DCI, and each Affiliate or Associate of any such person,
shall together constitute a “group” for purposes of the Rights Agreement.]



     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. Until the
Distribution Date (or earlier expiration of the Rights), new Common Stock certificates issued after
the Record Date upon transfer or new issuances of Common 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 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. 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 and the Series C
Common 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 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.



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     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 Preferred Stock, and (b) an
amount per share of Preferred Stock equal to 1000 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 1000 times the payment made per share of the applicable series of Common Stock. Each
share of Preferred Stock will have 1000 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 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 1000 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 of two times the exercise price of the Right.



     At any time after any person or group becomes an Acquiring Person and prior to the 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,



75









 







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.



     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 10 (Registration No. 000-51205). 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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