Document:

exv10w54

Exhibit 10.54

September 24, 2009

CONFIDENTIAL

Mr. Brian M. Culley

Chief Business Officer

Adventrx Pharmaceuticals Inc.

6725 Mesa Ridge Road

Suite 100

San Diego, CA 92121

Dear Mr. Culley:

     This letter (the “Agreement”) constitutes the agreement between Rodman & Renshaw, LLC
(“Rodman” or the “Placement Agent”) and Adventrx Pharmaceuticals Inc. (the
“Company”), that Rodman shall serve as the exclusive placement agent for the Company, on a
“reasonable best efforts” basis, in connection with the proposed placement (the
“Placement”) of registered securities (the “Securities”) consisting of the
Company’s Series D Convertible Preferred Stock and warrants to purchase shares of Common Stock, in
both cases including shares of the Company’s common stock, par value $0.001 per share (the
“Shares” or “Common Stock”) underlying the preferred stock and warrants. The terms
of such Placement and the Securities shall be mutually agreed upon by the Company and the
purchasers (each, a “Purchaser” and collectively, the “Purchasers”) and nothing
herein constitutes that Rodman would have the power or authority to bind the Company or any
Purchaser or an obligation for the Company to issue any Securities or complete the Placement. This
Agreement and the documents executed and delivered by the Company and the Purchasers in connection
with the Placement shall be collectively referred to herein as the “Transaction
Documents.” The date of the closing of the Placement shall be referred to herein as the
“Closing Date.” The Company expressly acknowledges and agrees that Rodman’s obligations
hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does
not constitute a commitment by Rodman to purchase the Securities and does not ensure the successful
placement of the Securities or any portion thereof or the success of Rodman with respect to
securing any other financing on behalf of the Company.

SECTION 1. COMPENSATION AND OTHER FEES.

     As compensation for the services provided by Rodman hereunder, the Company agrees to pay to
Rodman:

(A) The fees set forth below with respect to the Placement:

1. A cash fee payable immediately upon the closing of the Placement and equal to
7% of the aggregate gross proceeds raised in the Placement.

2. Such number of warrants (the “Rodman Warrants”) to Rodman or its designees at
the Closing to purchase shares of Common Stock equal to 5% of the aggregate number of Shares
sold in the Placement. The Rodman Warrants shall have the same terms as the warrants (if
any) issued to the Purchasers in the Placement except that the exercise price shall be 125%
of the public offering price of the Securities and the expiration date shall be five years
from the effective date of the registration statement referred to in Section 2(A) below.
The Rodman Warrants shall not have

Rodman
& Renshaw, LLC o 1251
Avenue of the Americas, 20th Floor, New York, NY 10020

Tel: 212 356 0500 o Fax: 212 581 5690 o www.rodm.com o Member: FINRA, SIPC

 

 

antidilution protections or be transferable for six
months from the public offering date, except as permitted by Financial Industry Regulatory
Authority (“FINRA”) Rule 5110, and
further, the number of Shares underlying the Rodman Warrants shall be reduced if necessary
to comply with FINRA rules or regulations.

          (B) The Company also agrees to reimburse Rodman’s expenses incurred in connection with its
services under the Agreement (with supporting invoices/receipts) up to a maximum of 2% of the
aggregate gross proceeds raised in the placement, but in no event more than $100,000. Such
reimbursement shall be payable immediately upon (but only in the event of) the closing of the
Placement.

SECTION 2. REGISTRATION STATEMENT.

The Company represents and warrants to, and agrees with, the Placement Agent that:

          (A) The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-1 (Registration File No. 333-160778) under
the Securities Act of 1933, as amended (the “Securities Act”).. At the time of such filing,
the Company met the requirements of Form S-1 under the Securities Act. The Company will file with
the Commission pursuant to Rules 430A and 424(b) under the Securities Act, and the rules and
regulations (the “Rules and Regulations”) of the Commission promulgated thereunder, a final
prospectus included in such registration statement relating to the placement of the Shares and the
plan of distribution thereof and has advised the Placement Agent of all further information
(financial and other) with respect to the Company required to be set forth therein. Such
registration statement, including the exhibits thereto, as amended at the date of this Agreement,
is hereinafter called the “Registration Statement”; such prospectus in the form in which it
appears in the Registration Statement is hereinafter called the “Base Prospectus”; and the
amended or supplemented form of prospectus, in the form in which it will be filed with the
Commission pursuant to Rules 430A and 424(b) (including the Base Prospectus as so amended or
supplemented) is hereinafter called the “Prospectus Supplement.” Any reference in this
Agreement to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be
deemed to refer to and include the documents incorporated by reference therein (the
“Incorporated Documents”) pursuant to Item 12 of Form S-1 which were filed under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or before the date of this
Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may
be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement” with
respect to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be
deemed to refer to and include the filing of any document under the Exchange Act after the date of
this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case
may be, deemed to be incorporated therein by reference. All references in this Agreement to
financial statements and schedules and other information that is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration Statement, the Base
Prospectus or the Prospectus Supplement (and all other references of like import) shall be deemed
to mean and include all such financial statements and schedules and other information that is or is
deemed to be incorporated by reference in the Registration Statement, the Base Prospectus or the
Prospectus Supplement, as the case may be. Following FINRA approval of the compensation
arrangements set forth in Section 1, the Company has no reason to believe that the Registration
Statement will not be declared effective by the Commission.

          (B) The Registration Statement (and any further documents to be filed with the Commission)
contains all exhibits and schedules as required by the Securities Act. Each of the Registration
Statement and any post-effective amendment thereto, at the time it became effective, complied in
all material respects with the Securities Act and the Exchange Act and the applicable Rules and
Regulations and did not and, as amended or supplemented, if applicable, will not, contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The Base Prospectus, and the Prospectus
Supplement, each as of its respective

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date, comply in all material respects with the Securities Act and the Exchange Act and the
applicable Rules and Regulations. Each of the Base Prospectus and the Prospectus Supplement, as
amended or supplemented, did not and will not contain as of the date thereof any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. The Incorporated
Documents, if any, when they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the applicable Rules and Regulations, and none of such
documents, when they were filed with the Commission, contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements therein (with respect to
Incorporated Documents incorporated by reference in the Base Prospectus or Prospectus Supplement),
in light of the circumstances under which they were made not misleading; and any further documents
so filed and incorporated by reference in the Base Prospectus or Prospectus Supplement, when such
documents are filed with the Commission, will conform in all material respects to the requirements
of the Exchange Act and the applicable Rules and Regulations, as applicable, and will not contain
any untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. No
post-effective amendment to the Registration Statement reflecting any facts or events arising after
the date thereof which represent, individually or in the aggregate, a fundamental change in the
information set forth therein is required to be filed with the Commission. There are no documents
required to be filed with the Commission in connection with the transaction contemplated hereby
that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed
within the requisite time period. There are no contracts or other documents required to be
described in the Base Prospectus, or Prospectus Supplement, or to be filed as exhibits or schedules
to the Registration Statement, that have not been described or filed as required.

          (C) The Company is eligible to use free writing prospectuses in connection with the Placement
pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus that the
Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be,
filed with the Commission in accordance with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or
that was prepared by or behalf of or used by the Company complies or will comply in all material
respects with the requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. The Company will not, without the prior consent of the Placement Agent,
prepare, use or refer to, any free writing prospectus.

          (D) The Company has delivered, or will as promptly as practicable deliver, to the Placement
Agent complete conformed copies of the Registration Statement and of each consent and certificate
of experts, as applicable, filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits), the Base Prospectus, and the Prospectus Supplement, as amended or
supplemented, in such quantities and at such places as the Placement Agent reasonably requests.
Neither the Company nor any of its directors and officers has distributed and none of them will
distribute, prior to the Closing Date, any offering material in connection with the offering and
sale of the Shares other than the Base Prospectus, the Prospectus Supplement, the Registration
Statement, copies of the documents incorporated by reference therein and any other materials
permitted by the Securities Act.

SECTION 3. REPRESENTATIONS AND WARRANTIES. Except as disclosed in the SEC Reports
(as defined below) or the Registration Statement, which disclosures shall be deemed a part hereof,
the Company hereby makes the representations and warranties set forth below to the Placement Agent.

          (A) Organization and Qualification. All of the direct and indirect subsidiaries
(individually, a “Subsidiary”) of the Company are set forth on Schedule 3(A). The Company
owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any
“Liens” (which for

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purposes of this Agreement shall mean a lien, charge, security interest,
encumbrance, right of first refusal, preemptive right or other restriction), and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and use its properties
and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation or default of any of the provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except where the failure to
be so qualified or in good standing, as the case may be, could not have or reasonably be expected
to result in (i) a material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of operations, assets,
business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii)
or (iii), a “Material Adverse Effect”) and no “Proceeding” (which for purposes of
this Agreement shall mean any action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or
threatened) has been instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or qualification.

          (B) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary action on the part of
the Company and no further action is required by the Company, its board of directors or its
stockholders in connection therewith other than in connection with the “Required Approvals”
(as defined in subsection 3(D) below). Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with the terms hereof and
thereof, will constitute the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.

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          (C) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Securities and the consummation by the
Company of the other transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both would become a default)
under, result in the creation of any Lien upon any of the properties or assets of the Company or
any Subsidiary, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility,
debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and regulations), or by which
any property or asset of the Company or a Subsidiary is bound
or affected; except in the case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse Effect.

          (D) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other governmental authority or other
“Person” (defined as an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind, including, without
limitation, any Trading Market (as defined below)) in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other than such filings as are required to
be made under applicable Federal and state securities laws, under the applicable rules of the NYSE
Amex (the “Trading Market”) or that certain Rights Agreement, dated July 27, 2005, as
amended (the “Rights Agreement”) (collectively, the “Required Approvals”).

          (E) Issuance of the Securities; Registration. The Securities are duly authorized and,
when issued and paid for in accordance with the applicable Transaction Documents, will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction Documents. The Company has
reserved from its duly authorized capital stock the maximum number of shares of Common Stock
issuable pursuant to the Transaction Documents. The issuance by the Company of the Securities has
been registered under the Securities Act and all of the Securities are freely transferable and
tradable by the Purchasers without restriction (other than any restrictions arising solely from an
act or omission of a Purchaser). The Securities are being issued pursuant to the Registration
Statement and the issuance of the Securities has been registered by the Company under the
Securities Act. Prior to the Closing, the Registration Statement will be effective and available
for the issuance of the Securities thereunder and the Company has not received any notice that the
Commission does not intend to declare the registration statement effective. The “Plan of
Distribution” section under the Registration Statement permits the issuance and sale of the
Securities hereunder. Upon receipt of the Securities, the Purchasers will have good and marketable
title to such Securities and, following conversion of the Securities in accordance with the
applicable Transaction Documents, the Shares underlying the Securities will be freely tradable on
the Trading Market.

          (F) Capitalization. The capitalization of the Company is as set forth in the
Registration Statement. The Company has not issued any capital stock since its most recently filed
periodic report under the Exchange Act, other than pursuant to the exercise of employee stock
options under the Company’s stock option plans, the issuance of shares of Common Stock to employees
pursuant to the Company’s employee stock purchase plan and pursuant to the conversion or exercise
of securities exercisable, exchangeable or convertible into Common Stock (“Common Stock
Equivalents”). No Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions contemplated by

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the
Transaction Documents. Except as a result of the purchase and sale of the Securities, there are no
outstanding options, warrants, script rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock
Equivalents. The issuance and sale of the Securities will not obligate the Company to issue shares
of Common Stock or other securities to any Person (other than the Purchasers) and will not result
in a right of any holder of Company securities to adjust the exercise, conversion, exchange or
reset price under such securities. All of the outstanding shares of capital stock of the Company
are validly issued, fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors of the Company or others is required
for the issuance and sale of the Securities. Other than the Rights Agreement, there are no
stockholders agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.

          (G) SEC Reports; Financial Statements. The Company has complied in all material
respects with requirements to file all reports, schedules, forms, statements and other documents
required to be filed by it under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period
as the Company was required by law to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports”) on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any such extension.
As of their respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.

          (H) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date
of the latest audited financial statements included within the SEC Reports, except as specifically
disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has
not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or
required to be disclosed in filings made with the Commission, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity
securities to any officer, director or “Affiliate” (defined as any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 144 under the Securities
Act), except pursuant to existing Company stock option

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plans. The Company does not have pending
before the Commission any request for confidential treatment of information. Except for the
issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3(H), no
event, liability or development has occurred or exists with respect to the Company or its
Subsidiaries or their respective business, properties, operations or financial condition, that
would be required to be disclosed by the Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed 1 Trading Day prior to the date that
this representation is made.

          (I) Litigation. There is no action, suit, inquiry, notice of violation, Proceeding or
investigation pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were
an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the
subject of any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge
of the Company, there is not pending or contemplated, any investigation by the Commission involving
the Company or any current or former director or officer of the Company. The Commission has not
issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. None of the
Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s
relationship with the Company, and neither the Company or any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good. No executive officer, to the knowledge of the
Company, is, or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or non-competition
agreement, or any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries
to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries
are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and wages and hours, except
where the failure to be in compliance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

          (J) Labor Relations. No material labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company which could reasonably be
expected to result in a Material Adverse Effect.

          (K) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such default or violation
has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body,
or (iii) is or has been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws applicable to
its business and all such laws that affect the environment, except in each case as could not have a
Material Adverse Effect.

          (L) Regulatory Permits. The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not have or reasonably be expected to result
in a Material Adverse Effect (“Material Permits”), and neither the Company nor any
Subsidiary has received any notice of proceedings

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relating to the revocation or modification of any
Material Permit. For clarity, the Company has not received the approval of any regulatory agency to
market any of its product candidates.

          (M) Title to Assets. The Company and the Subsidiaries have good and marketable title
in fee simple to all real property owned by them that is material to the business of the Company
and the Subsidiaries and good and marketable title in all personal property owned by them that is
material to the business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property and do not
materially interfere with the use made and
proposed to be made of such property by the Company and the Subsidiaries and Liens for the
payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases of which the Company and the
Subsidiaries are in compliance.

          (N) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to
use, all patents, patent applications, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and other similar intellectual property
rights necessary or material for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse Effect
(collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary
has received a notice (written or otherwise) that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any Person. To the knowledge of
the Company, all such Intellectual Property Rights are enforceable (other than patent and trademark
applications) and there is no existing infringement by another Person of any of the Intellectual
Property Rights of others. The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

          (O) Insurance. The Company and the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as are prudent and
customary in the businesses in which the Company and the Subsidiaries are engaged, including, but
not limited to, directors and officers insurance coverage at least equal to the aggregate
subscription amount under the Transaction Documents. To the best knowledge of the Company, such
insurance contracts and policies are accurate and complete. Neither the Company nor any Subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.

          (P) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction with the Company or
any Subsidiary (other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise requiring payments to or
from any officer, director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or is an officer,
director, trustee or partner, other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other
employee benefits, including stock option agreements under any stock option plan of the Company.

          (Q) Sarbanes-Oxley. The Company is in material compliance with all provisions of the
Sarbanes-Oxley Act of 2002 which are applicable to it as of the date hereof and of the closing date
of the Placement.

          (R) Certain Fees. Except as otherwise provided in this Agreement, no brokerage or
finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor
or consultant, finder,

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placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section that may be due in connection with the transactions
contemplated by the Transaction Documents.

          (S) Trading Market Rules. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market.

          (T) Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not become subject to the Investment
Company Act.

          (U) Registration Rights. No Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company.

          (V) Listing and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. The Company has
not, in the 12 months preceding the date hereof, received notice from any Trading Market on which
the Common Stock is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements.

          (W) Application of Takeover Protections. The Company and its Board of Directors have
taken all necessary action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to
the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without limitation as a result
of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

          (X) Solvency. Based on the financial condition of the Company as of the Closing Date
after giving effect to the receipt by the Company of the proceeds from the sale of the Securities
hereunder, (i) the Company’s fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) the Company’s assets do not
constitute unreasonably small capital to carry on its business for the current fiscal year as now
conducted and as proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or
in respect of its debt when such amounts are required to be paid. The Company does not intend to
incur debts beyond its ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any
facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing
Date. The SEC Reports set forth as of the dates thereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has
commitments. For the purposes of this Agreement, “Indebtedness” shall mean (a) any
liabilities for borrowed

9

 

money or amounts owed in excess of $50,000 (other than trade accounts
payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other
contingent obligations in respect of Indebtedness of others, whether or not the same are or should
be reflected in the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business; and (c) the present value of any
lease payments in excess of $50,000 due under leases required to be capitalized in accordance with
GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

          (Y) Tax Status. Except for matters that would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, the Company and each
Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and
has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax
deficiency which has been asserted or threatened against the Company or any Subsidiary.

          (Z) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly,
used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by
any person acting on its behalf of which the Company is aware) which is in violation of law, or
(iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

          (AA) Accountants. The Company’s accountants are named in the Prospectus Supplement.
To the knowledge of the Company, such accountants, who the Company expects will express their
opinion with respect to the financial statements to be included in the Company’s next Annual Report
on Form 10-K, are a registered public accounting firm as required by the Securities Act.

          (BB) Regulation M Compliance. The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in
the stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Securities (other than for the placement agent’s placement
of the Securities), or (iii) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.

          (CC) Approvals. The issuance and listing on the Trading Market of the Shares requires
no further approvals, including but not limited to, the approval of shareholders.

          (DD) FINRA Affiliations. There are no affiliations with any FINRA member firm among
the Company’s officers, directors or, to the knowledge of the Company, any five percent (5%) or
greater stockholder of the Company, except as set forth in the Base Prospectus.

SECTION 4. ENGAGEMENT TERM. Rodman’s engagement hereunder will be for the period
of 30 days. The engagement may be terminated by either the Company or Rodman at any time upon 10
days’ written notice. Notwithstanding anything to the contrary contained herein, the provisions in
this Agreement concerning confidentiality, indemnification and contribution will survive any
expiration or termination of this Agreement. Upon any termination of this Agreement, the Company’s
obligation to pay Rodman any fees actually earned on closing of the Offering and otherwise payable
under Section 1(A), shall survive any expiration or termination of this Agreement, as permitted by
FINRA Rule 5110(f)(2)(d). Upon any termination of this Agreement, the Company’s obligation to
reimburse Rodman for out of pocket accountable expenses actually incurred by Rodman and
reimbursable upon closing of the Offering

10

 

pursuant to Section 1(B), if any are otherwise due under
Section 1(B) hereof, will survive any expiration or termination of this Agreement, as permitted by
FINRA Rule 5110(f)(2)(d).

SECTION 5. RODMAN INFORMATION. The Company agrees that any information or advice
rendered by Rodman in connection with this engagement is for the confidential use of the Company
only in their evaluation of the Placement and, except as otherwise required by law, the Company
will not disclose or otherwise refer to the advice or information in any manner without Rodman’s
prior written consent.

SECTION 6. NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall
not be construed as creating rights enforceable by any person or entity not a party hereto, except
those entitled hereto by virtue of the indemnification provisions hereof. The Company acknowledges
and agrees that Rodman is not and shall not be construed as a fiduciary of the Company and shall
have no duties or liabilities to the equity holders or the creditors of the Company or any other
person by virtue of this Agreement or the retention of Rodman hereunder, all of which are hereby
expressly waived.

SECTION 7. CLOSING. The obligations of the Placement Agent and the Purchasers,
and the closing of the sale of the Securities hereunder are subject to the accuracy, when made and
on the Closing Date, of the representations and warranties on the part of the Company and its
Subsidiaries contained herein, to the accuracy of the statements of the Company and its
Subsidiaries made in any certificates pursuant to the provisions hereof, to the performance by the
Company and its Subsidiaries of their obligations hereunder, and to each of the following
additional terms and conditions:

          (A) No stop order suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or threatened by the
Commission, and any request for additional information on the part of the Commission (to be
included in the Registration Statement, the Base Prospectus or the Prospectus Supplement or
otherwise) shall have been complied with to the reasonable satisfaction of the Placement Agent.

          (B) The Placement Agent shall not have discovered and disclosed to the Company on or prior to
the Closing Date that the Registration Statement, the Base Prospectus or the Prospectus Supplement
or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion
of counsel for the Placement Agent, is material or omits to state any fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary to make the
statements therein not misleading.

          (C) All corporate proceedings and other legal matters incident to the authorization, form,
execution, delivery and validity of each of this Agreement, the Securities, the Registration
Statement, the Base Prospectus and the Prospectus Supplement and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable them to pass upon
such matters.

          (D) The Placement Agent shall have received from outside counsel to the Company such counsel’s
written opinion, addressed to the Placement Agent and the Purchasers dated as of the Closing Date,
in form and substance reasonably satisfactory to the Placement Agent, which opinion shall include a
“10b-5” representation from such counsel.

          (E) Neither the Company nor any of its Subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by reference in the Base Prospectus,
any loss or interference with its business from fire, explosion, flood, terrorist act or other
calamity, whether or not

11

 

covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth in or contemplated by the Base Prospectus and
(ii) since such date there shall
not have been any change in the capital stock or long-term debt of the Company or any of its
Subsidiaries or any change, or any development involving a prospective change, in or affecting the
business, general affairs, management, financial position, stockholders’ equity, results of
operations or prospects of the Company and its Subsidiaries, otherwise than as set forth in or
contemplated by the Base Prospectus, the effect of which, in any such case described in clause (i)
or (ii), is, in the judgment of the Placement Agent, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms
and in the manner contemplated by the Base Prospectus and the Prospectus Supplement.

          (F) The Common Stock is registered under the Exchange Act and, as of the Closing Date, the
Shares shall be listed and admitted and authorized for trading on the Trading Market, and
satisfactory evidence of such actions shall have been provided to the Placement Agent. The Company
shall have taken no action designed to, or likely to have the effect of terminating the
registration of the Common Stock under the Exchange Act or delisting or suspending from trading the
Common Stock from the Trading Market, nor has the Company received any information suggesting that
the Commission or the Trading Market is contemplating terminating such registration or listing.

          (G) Subsequent to the execution and delivery of this Agreement, there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock Exchange, the
Nasdaq National Market or the NYSE Alternext US or in the over-the-counter market, or trading in
any securities of the Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum or maximum prices or maximum ranges for prices shall have been established on
any such exchange or such market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, (iii) the United
States shall have become engaged in hostilities in which it is not currently engaged, the subject
of an act of terrorism, there shall have been an escalation in hostilities involving the United
States, or there shall have been a declaration of a national emergency or war by the United States,
or (iv) there shall have occurred any other calamity or crisis or any change in general economic,
political or financial conditions in the United States or elsewhere, if the effect of any such
event in clause (iii) or (iv) makes it, in the sole judgment of the Placement Agent, impracticable
or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the
manner contemplated by the Base Prospectus and the Prospectus Supplement.

          (H) No action shall have been taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities or materially and adversely affect or potentially
and adversely affect the business or operations of the Company; and no injunction, restraining
order or order of any other nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance or sale of the Securities
or materially and adversely affect or potentially and adversely affect the business or operations
of the Company.

          (I) The Company shall have entered into subscription agreements with each of the Purchasers
and such agreements shall be in full force and effect and shall contain representations and
warranties of the Company as agreed between the Company and the Purchasers.

          (J) FINRA shall have raised no objection to the fairness and reasonableness of the terms and
arrangements of this Agreement. In addition, the Company shall, if requested by the Placement
Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, an Issuer
Filing with

12

 

FINRA pursuant to FINRA Rule 5110 with respect to the Registration Statement and pay
all filing fees required in connection therewith.

          (K) Prior to the Closing Date, the Company shall have furnished to the Placement Agent such
further information, certificates and documents as the Placement Agent may reasonably request.

          All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Placement Agent.

SECTION 8. INDEMNIFICATION. (A) To the extent permitted by law, the Company will
indemnify Rodman and its affiliates, stockholders, directors, officers, employees and controlling
persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
against all losses, claims, damages, expenses and liabilities, as the same are incurred (including
the reasonable fees and expenses of counsel), relating to or arising out of its activities
hereunder or pursuant to this engagement letter, except to the extent that any losses, claims,
damages, expenses or liabilities (or actions in respect thereof) are found in a final judgment (not
subject to appeal) by a court of law to have resulted primarily and directly from Rodman’s willful
misconduct or gross negligence in performing the services described herein.

          (B) Promptly after receipt by Rodman of notice of any claim or the commencement of any action
or proceeding with respect to which Rodman is entitled to indemnity hereunder, Rodman will notify
the Company in writing of such claim or of the commencement of such action or proceeding, and the
Company will assume the defense of such action or proceeding and will employ counsel reasonably
satisfactory to Rodman and will pay the fees and expenses of such counsel. Notwithstanding the
preceding sentence, Rodman will be entitled to employ counsel separate from counsel for the Company
and from any other party in such action if counsel for Rodman reasonably determines that it would
be inappropriate under the applicable rules of professional responsibility for the same counsel to
represent both the Company and Rodman. In such event, the reasonable fees and disbursements of no
more than one such separate counsel will be paid by the Company. The Company will have the
exclusive right to settle the claim or proceeding provided that the Company will not settle any
such claim, action or proceeding without the prior written consent of Rodman, which will not be
unreasonably withheld.

          (C) The Company agrees to notify Rodman promptly of the assertion against it or any other
person of any claim or the commencement of any action or proceeding relating to a transaction
contemplated by this engagement letter.

          (D) If for any reason the foregoing indemnity is unavailable to Rodman or insufficient to hold
Rodman harmless, then the Company shall contribute to the amount paid or payable by Rodman as a
result of such losses, claims, damages or liabilities in such proportion as is appropriate to
reflect not only the relative benefits received by the Company on the one hand and Rodman on the
other, but also the relative fault of the Company on the one hand and Rodman on the other that
resulted in such losses, claims, damages or liabilities, as well as any relevant equitable
considerations. The amounts paid or payable by a party in respect of losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other fees and expenses
incurred in defending any litigation, proceeding or other action or claim. Notwithstanding the
provisions hereof, Rodman’s share of the liability hereunder shall not be in excess of the amount
of fees actually received, or to be received, by Rodman under this engagement letter (excluding any
amounts received as reimbursement of expenses incurred by Rodman).

          (E) These indemnification provisions shall remain in full force and effect whether or not the
transaction contemplated by this engagement letter is completed and shall survive the termination
of this

13

 

engagement letter, and shall be in addition to any liability that the Company might
otherwise have to any indemnified party under this engagement letter or otherwise.

SECTION 9. GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made and to be
performed entirely in such State. This Agreement may not be assigned by either party without the
prior written consent of the other party. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and permitted assigns. Any right to
trial by jury with respect to any dispute arising under this Agreement or any transaction or
conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought
into the courts of the State of New York or into the Federal Court located in New York, New York
and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each
party hereto hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If either party shall commence an action or proceeding to
enforce any provisions of a Transaction Document, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

SECTION 10. ENTIRE AGREEMENT/MISC. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to this Placement, and supersedes all
prior agreements and understandings, relating to the subject matter hereof. If any provision of
this Agreement is determined to be invalid or unenforceable in any respect, such determination will
not affect such provision in any other respect or any other provision of this Agreement, which will
remain in full force and effect. This Agreement may not be amended or otherwise modified or waived
except by an instrument in writing signed by both Rodman and the Company. The representations,
warranties, agreements and covenants contained herein shall survive the closing of the Placement
and delivery and/or conversion of the Securities, as applicable. This Agreement may be executed in
two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party, it being understood that both parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission or a .pdf format file, such
signature shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such facsimile or .pdf signature
page were an original thereof.

SECTION 11. NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified on the signature pages attached hereto
prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date
of transmission, if such notice or communication is delivered via facsimile at the facsimile number
on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m.
(New York City time) on any business day, (c) the business day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the
party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages hereto.

          Please confirm that the foregoing correctly sets forth our agreement by signing and returning
to Rodman a copy of this Agreement.

14

 

	 	 	 	 	 
	 	Very truly yours,

RODMAN & RENSHAW, LLC

 	 
	 	By:  	/s/ John Borer
 	 
	 	 	Name:  	John Borer 	 
	 	 	Title:  	Sr. Managing Director 	 

	 	 	 	 	 
	 

	 	 	 	Address for notice:
	 

	 	 	 	1251 Avenue of the Americas, 20th Floor
	 

	 	 	 	New York, NY, 10020
	 

	 	 	 	Fax (646) 841-1640
	 

	 	 	 	Attention: General Counsel

Accepted and Agreed to as of

the date first written above:

	 	 	 	 	 
	ADVENTRX PHARMACEUTICALS INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Patrick Keran
 

Name: Patrick Keran
	 	 
	 

	 	Title: Vice President, Legal	 	 

Address for notice:

6725 Mesa Ridge Road

Suite 100

San Diego, CA 92121

Fax (858) 552-0876

Attention: Chief Business Officer

15

 

Schedule 3(A)

	 	 	 
	Name of Subsidiary	 	Jurisdiction of Organization
	 
	 	 
	SD Pharmaceuticals, Inc.

	 	Delaware
	 
	 	 
	ADVENRTRX (Europe) Ltd.

	 	United Kingdom

16exv4w1

Exhibit 4.1

RIGHTS AGREEMENT

dated as of

September 21, 2009

between

BFC FINANCIAL CORPORATION

and

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

Rights Agent

 

 

TABLE OF CONTENTS

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

i

 

	 	 	 	 	 
	Section 30.   Severability
	 	 	34	 
	 
	Section 31.   Governing Law
	 	 	34	 
	 
	Section 32.   Counterparts
	 	 	34	 
	 
	Section 33.   Descriptive Headings; Interpretation
	 	 	34	 

EXHIBITS

	 
	Exhibit A:    Form of Articles of Amendment

	 
	Exhibit B:    Form of Rights Certificate

	 
	Exhibit C:    Summary of Rights

ii

 

RIGHTS AGREEMENT

     RIGHTS AGREEMENT, dated as of September 21, 2009 (the “Agreement”), between BFC
Financial Corporation, a Florida corporation (the “Company”), and American Stock Transfer &
Trust Company, LLC (the “Rights Agent”).

W I T N E S S E T H

     WHEREAS, under the Internal Revenue Code of 1986, as amended (the “Code”), and rules
promulgated by the Internal Revenue Service, the Company may use available net operating loss
carryforwards (“NOLs”) in certain circumstances to offset future earnings, and thus reduce the
Company’s federal income tax liability (subject to certain requirements and restrictions);

     WHEREAS, if the Company experiences an “Ownership Change,” as defined in Section 382 of the
Code, its ability to use the NOLs could be substantially jeopardized or limited;

     WHEREAS, the Company believes that the NOLs are a substantial asset and that it is in the best
interests of the Company and its shareholders that the Company provide for the protection of the
NOLs and other Tax Benefits (as hereinafter defined) on the terms and conditions set forth herein;
and

     WHEREAS, on September 21, 2009, the Board of Directors of the Company (the “Board”)
authorized and declared a dividend distribution of one preferred share purchase right (a
“Right”) for each share of the Company’s Class A Common Stock, par value $0.01 per share
(the “Class A Common Stock”), and Class B Common Stock, par value $0.01 per share (the
“Class B Common Stock” and, together with the Class A Common Stock, the “Common
Stock”) outstanding at the Close of Business (as hereinafter defined) on September 21, 2009
(the “Record Date”), each Right initially representing the right to purchase one
one-hundredth of a share of Series A Preferred Stock (as hereinafter defined) of the Company, upon
the terms and subject to the conditions hereinafter set forth, and further authorized and directed
the issuance of one Right with respect to each share of Common Stock that shall become outstanding
after the Record Date but prior to the earlier of the Distribution Date (as hereinafter defined)
and the Expiration Date (as hereinafter defined).

     NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the parties hereby
agree as follows:

     Section 1. Certain Definitions

     For purposes of this Agreement, the following terms shall have the meanings indicated:

          (a) “Acquiring Person” shall mean any Person (other than any Related Person or any
Exempt Person) that has become, in itself or, together with all Affiliates and Associates of such
Person, the Beneficial Owner of 5.0% or more of the shares of Common Stock then-outstanding;
provided, however, that any Person who would otherwise qualify as an Acquiring Person as of the
Close of Business on the Record Date will not be deemed to be an Acquiring Person for any purpose
of this Agreement on and after such date unless and until such time as such Person or Affiliates or
Associates of such Person acquires the beneficial ownership of one additional share of Class A
Common Stock or

3

 

Class B Common Stock; and provided, further, that a Person will not be deemed
to have become an Acquiring Person solely as a result of (i) a reduction in the number of shares of
Common Stock outstanding, (ii) the grant by the Company of any options, warrants, rights or similar
interests (including restricted stock) to the Company’s (or any of its subsidiaries’) directors,
officers and employees and/or the exercise by any such director, officer or employee of any such
option, warrant, right or similar interest, (iii) any other unilateral grant of any security by the
Company or (iv) an Exempt Transaction, unless and until such time as such Person or Affiliates or
Associates of such Person acquires the Beneficial Ownership of one additional share of Class A
Common Stock or Class B Common Stock. The Board shall not make any determination with respect to a
potential Acquiring Person until five (5) Business Days after the date on which all Board members
first received notice of the change of beneficial ownership at issue. Notwithstanding the
foregoing, if the Board determines in good faith that a Person who would otherwise be an Acquiring
Person has become such inadvertently and such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would no longer be an Acquiring
Person, then such Person shall not be deemed to be an Acquiring Person for any purposes of this
Agreement. In addition, notwithstanding the provisions of this Section 1(a) or anything in this
Agreement to the contrary, the Board may, in its sole discretion, determine that any Person shall
not be deemed to be an Acquiring Person for any purposes of this Agreement.

          (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act as in effect on the date of this
Agreement, and to the extent not included within the foregoing clause of this Section 1(b), shall
also include, with respect to any Person, any other Person (whether or not a Related Person or an
Exempt Person) whose shares of Common Stock would be deemed constructively owned by such first
Person, owned by a single “entity” as defined in Section 1.382-3(a)(1) of the Treasury Regulations
or otherwise aggregated with shares owned by such first Person pursuant to the provisions of the
Code, or any successor provision or replacement provision, and the Treasury Regulations thereunder;
provided, however, that a Person shall not be deemed to be the Affiliate or
Associate of another Person solely because either or both Persons are or were directors of the
Company.

          (c) “Agreement” shall have the meaning set forth in the preamble of this Agreement.

          (d) “Authorized Officer” shall mean the Chief Executive Officer, President, any Vice
President, the Treasurer or the Secretary of the Company.

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

               (i) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights, warrants, options or other
rights (in each case, other than upon exercise or exchange of the Rights); provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own,
securities (including rights, options or warrants) which are convertible or exchangeable into Class
A Common Stock or Class B Common Stock until such time as the convertible or exchangeable
securities are exercised and converted or exchanged into Class A Common Stock or Class B Common
Stock, as the case may be, except to the

4

 

extent the acquisition or transfer of such rights, options or warrants would be treated as
exercised on the date of its acquisition or transfer under Section 1.382-4(d) of the Treasury
Regulations; and, provided, further, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or exchange;

               (ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has or shares the right to vote or dispose of, or has “beneficial ownership” of (as
defined under Rule 13d-3 promulgated under the Exchange Act), including pursuant to any agreement,
arrangement or understanding (whether or not in writing) if the effect of such agreement,
arrangement or understanding is to treat such Persons as an “entity” under Section 1.382-3(a)(1) of
the Treasury Regulations; or

               (iii) of which any other Person is the Beneficial Owner, if such Person or any of such
Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not
in writing) with such other Person (or any of such other Person’s Affiliates or Associates) with
respect to acquiring, holding, voting or disposing of any securities of the Company if the effect
of such agreement, arrangement or understanding is to treat such Persons as an “entity” under
Section 1.382-3(a)(1) of the Treasury Regulations; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any security (A) if such Person has
the right to vote such security pursuant to an agreement, arrangement or understanding (whether or
not in writing) which (1) arises solely from a revocable proxy given to such Person in response to
a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then reportable on Schedule 13D under
the Exchange Act (or any comparable or successor report or schedule) or (B) if such beneficial
ownership arises solely as a result of such Person’s status as a “clearing agency” (as defined in
Section 3(a)(23) of the Exchange Act); provided, further, however, that
nothing in this Section 1(e) shall cause a Person engaged in business as an underwriter of
securities or member of a selling to group to be the Beneficial Owner of, or to beneficially own,
any securities acquired through such Person’s participation in good faith in an underwriting
syndicate until the expiration of forty (40) calendar days after the date of such acquisition, or
such later date as the Board may determine in any specific case. Notwithstanding anything contained
herein to the contrary, to the extent not within the foregoing provisions of this Section 1(e), a
Person shall be deemed the Beneficial Owner of, and shall be deemed to beneficially own, securities
which such Person would be deemed to constructively own or which otherwise would be aggregated with
shares owned by such pursuant to Section 382 of the Code, or any successor provision or replacement
provision, and the Treasury Regulations thereunder.

          (f) “Board” shall have the meaning set forth in the preamble of this Agreement.

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

          (h) “Class A Common Stock” shall have the meaning set forth in the preamble of this
Agreement.

5

 

          (i) “Class B Common Stock” shall have the meaning set forth in the preamble of this
Agreement.

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

          (k) “Code” shall have the meaning set forth in the preamble of this Agreement.

          (l) “Common Stock” shall have the meaning set forth in the preamble of this Agreement.

          (m) “Company” shall have the meaning set forth in the preamble of this Agreement.

          (n) “Company’s Articles of Incorporation” shall mean the Amended and Restated Articles
of Incorporation of the Company, as amended.

          (o) “Current Per Share Market Price” shall have the meaning set forth in Section
11(d)(i) or Section 11(d)(ii) hereof, as applicable.

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

          (q) “Distribution Date” shall mean the earliest of (i) the Close of Business on the
tenth Business Day after the Stock Acquisition Date or (ii) the Close of Business on the tenth
Business Day (or, unless the Distribution Date shall have previously occurred, such later date as
may be specified by the Board) after the commencement of a tender or exchange offer by any Person
(other than any Related Person or any Exempt Person), if upon the consummation thereof, such Person
would be the Beneficial Owner of 5.0% or more of the then-outstanding Common Stock.

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

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

          (t) “Exchange Ratio” shall have the meaning set forth in Section 23(a) hereof.

          (u) “Exempt Person” shall mean (i) a Person whose Beneficial Ownership (together with
all Affiliates and Associates of such Person) of 5.0% or more of the then-outstanding Common Stock
would not, as determined by the Board, in its sole discretion, jeopardize or limit the availability
to the Company of its Tax Benefits and (ii) any Person that beneficially owns, as of the Record
Date, 5.0% or more of the outstanding Common Stock; provided, however, that, with
respect to clause (ii) of this Section 1(u), any such Person shall only be deemed to be an Exempt
Person for so long as it beneficially owns no more than the amount of Common Stock it owned on the
Record Date; and provided, further, that, with respect to clauses (i) and (ii) of
this paragraph, any Person shall cease to be an Exempt Person as of the date that such Person
ceases to beneficially own 5.0% or more of the then-outstanding Common Stock. Additionally, a
Person shall cease to be an Exempt Person if the Board, in its sole

6

 

discretion, makes a contrary determination with respect to the effect of such Person’s
Beneficial Ownership (together with all Affiliates and Associates of such Person) with respect to
the availability to the Company of its Tax Benefits.

          (v) “Exempt Transaction” shall mean the merger of Woodbridge Holdings Corporation with
and into WDG Merger, Sub, LLC, a wholly owned subsidiary of the Company, and the related issuance
of shares of the Company’s Class A Common Stock (the “Woodbridge Merger”), as well as any
other transaction that the Board determines, in its sole discretion, is exempt, which determination
shall be irrevocable.

          (w) “Expiration Date” shall mean the earliest of (i) September 21, 2019, (ii) the time
at which the Rights are redeemed as provided in Section 22 hereof, (iii) the time at which the
Rights are exchanged as provided in Section 23 hereof, (iv) the repeal of Section 382 of the Code
or any successor statute or the occurrence of any other event if the Board determines that this
Agreement is no longer necessary for the preservation of Tax Benefits and (v) the beginning of a
taxable year of the Company to which the Board determines that no Tax Benefits may be carried
forward.

          (x) “Nasdaq” means The Nasdaq Stock Market.

          (y) “NOLs” shall have the meaning set forth in the preamble of this Agreement.

          (z) “Person” shall mean any individual, firm, corporation, partnership, limited
liability company, limited liability partnership, trust or other legal entity or any group of
persons making a “coordinated acquisition” of shares or otherwise treated as an entity within the
meaning of Section 1.382-3(a)(1) of the Treasury Regulations or otherwise, and includes any
successor (by merger or otherwise) of any such individual or entity.

          (aa) “Series A Preferred Stock” shall mean shares of Series A Junior Participating
Preferred Stock, par value $0.01 per share, of the Company having the rights and preferences set
forth in the form of Articles of Amendment attached hereto as Exhibit A.

          (bb) “Purchase Price” shall mean initially $8.00 per one one-hundredth of a share of
Series A Preferred Stock, subject to adjustment as provided in this Agreement.

          (cc) “Record Date” shall have the meaning set forth in the preamble of this Agreement.

          (dd) “Redemption Price” shall mean $0.0001 per Right, subject to adjustment by the
Company to reflect any stock split, stock dividend or similar transaction occurring after the date
hereof.

          (ee) “Related Person” shall mean (i) the Company, (ii) any Subsidiary of the Company
or (iii) any employee benefit or stock ownership plan of the Company or of any Subsidiary of the
Company or any entity holding shares of Common Stock for or pursuant to the terms of any such plan.

          (ff) “Rights” shall have the meaning set forth in the preamble of this Agreement.

7

 

          (gg) “Rights Agent” shall have the meaning set forth in the preamble of this
Agreement.

          (hh) “Rights Certificates” shall mean certificates evidencing the Rights, in
substantially the form attached hereto as Exhibit B.

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

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

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

          (ll) “Stock Acquisition Date” shall mean the first date of public announcement (which
for purposes of this definition shall include, without limitation, a 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 shall become aware of the existence
of an Acquiring Person.

          (mm) “Subsidiary” shall mean, with reference to any Person, any corporation or other
legal entity of which a majority of the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person, or otherwise controlled by such Person.

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

          (oo) “Summary of Rights” shall mean a copy of a summary of the terms of the Rights, in
substantially the form attached hereto as Exhibit C.

          (pp) “Tax Benefits” shall mean the NOLs, capital loss carry-overs, general business
credit carry-overs, alternative minimum tax credit carry-overs and foreign tax credit carry-overs,
as well as any “net unrealized built-in loss” within the meaning of Section 382 of the Code, of the
Company or any direct or indirect subsidiary thereof.

          (qq) “Trading Day” shall mean a day on which the principal national securities
exchange or automated quotation system on which the shares of Class A Common Stock and Class B
Common Stock are listed or admitted to trading is open for the transaction of business.

          (rr) “Treasury Regulations” shall mean final, temporary and proposed income tax
regulations promulgated under the Code, including any amendments thereto.

     Section 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 and
hereby certifies that it complies with all applicable requirements governing transfer agents and
registrars. The Company may from time to time appoint such co-rights agents as it may deem
necessary or desirable.

8

 

The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the
acts or omissions of any such co-rights agent. Prior to the appointment of a co-rights agent, the
specific duties and obligations of each such co-rights agents shall be set forth in writing and
delivered to the Rights Agent and the proposed co-rights agent. Any actions which may be taken by
the Rights Agent pursuant to the terms of this Agreement may be taken by any such co-rights agent.
To the extent that any co-rights agent takes any action pursuant to this Agreement, such co-rights
agent shall be entitled to all of the rights and protections of, and subject to all of the
applicable duties and obligations imposed upon, the Rights Agent pursuant to the terms of this
Agreement.

     Section 3. Issuance of Rights Certificates

          (a) Until the Distribution Date, (i) the Rights will be evidenced (subject to the provisions
of Section 3(b) hereof) by the certificates representing shares of Common Stock of the Company (or,
in the case of uncertificated shares of Common Stock, by the book-entry account that evidences
record ownership of such shares) registered in the names of the holders thereof (which
certificates, if any, shall also be deemed to be Rights Certificates) and not by separate Rights
Certificates, and (ii) the right to receive Rights Certificates will be transferable only in
connection with the transfer of shares 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 and provided with
all necessary information, send) by first-class, insured, postage-prepaid mail, to each record
holder of shares of Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Rights Certificate evidencing one
Right for each share of Common Stock so held. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(i) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 13 hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates. The Company shall promptly notify the Rights Agent in writing upon the occurrence of
the Distribution Date and, if such notification is given orally, the Company shall confirm the same
in writing on or prior to the next succeeding Business Day. Until such notice is received by the
Rights Agent, the Rights Agent may presume conclusively for all purposes that the Distribution Date
has not occurred.

          (b) On the Record Date, or as soon as practicable thereafter, the Company will send a copy of
a Summary of Rights by first-class, postage-prepaid mail, to each record holder of shares of Common
Stock as of the Close of Business on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for shares of Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with a copy of the Summary of Rights
attached thereto. With respect to uncertificated shares of Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by the book-entry account
that evidences record ownership of such shares in the names of the holders thereof together with a
copy of the Summary of Rights maintained by the Company. Until the Distribution Date (or the
Expiration Date, if earlier), the surrender for transfer of any certificate (or, in the case of
uncertificated shares of Common Stock, a transfer recorded in the book-entry accounts that evidence
record ownership of such shares) for shares of

9

 

Common Stock outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated with the shares of
Common Stock represented thereby.

          (c) Certificates for shares of Common Stock which become outstanding (including, without
limitation, reacquired shares of Common Stock referred to in the last sentence of this paragraph
(c)) 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 a legend in
substantially the following form:

This certificate also evidences and entitles the holder hereof to certain rights as
set forth in a Rights Agreement between BFC Financial Corporation and American Stock
Transfer & Trust Company, LLC, dated as of September 21, 2009, as it may be amended
or supplemented from time to time (the “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 BFC Financial Corporation. Under certain circumstances, as set
forth in the Agreement, such Rights (as defined in the Agreement) will be evidenced
by separate certificates and will no longer be evidenced by this certificate. BFC
Financial Corporation will mail to the holder of this certificate a copy of the
Agreement without charge after receipt of a written request therefor. As set forth
in the Agreement, Rights beneficially owned by any Person (as defined in the
Agreement) who becomes an Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Agreement) become null and void.

With respect to such certificates containing the foregoing legend, the Rights associated with the
shares of Common Stock represented by such certificates shall, until the Distribution Date, be
evidenced by such certificates alone, and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with the shares of Common Stock represented
thereby. In the event that the Company purchases or acquires any shares of Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such shares of Common
Stock shall be deemed canceled and retired so that the Company shall not be entitled to exercise
any Rights associated with the shares of Common Stock which are no longer outstanding.

     Section 4. Form of Rights Certificates

     The Rights Certificates (and the form of election to purchase and the form of assignment to be
printed on the reverse thereof) shall each be substantially in the form attached hereto as
Exhibit B, with such changes and marks of identification or designation, and such legends,
summaries or endorsements printed thereon, as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or automated quotation system on which the Rights may from time to time be
listed or quoted, or to conform to usage. Subject to the provisions of Sections 11 and 21 hereof,
the Rights Certificates, whenever distributed shall entitle the holders thereof to purchase such
number of one one-hundredths of a share of Series A Preferred Stock as is set forth therein at the
Purchase Price; provided, however, that the Purchase Price,

10

 

the number and kind of securities issuable upon exercise of each Right and the number of
Rights outstanding shall be subject to adjustment as provided in this Agreement.

     Section 5. Countersignature and Registration

          (a) The Rights Certificates shall be executed on behalf of the Company by, and shall be
attested by, any Authorized Officer, in each case either manually or by facsimile signature, and
may have affixed thereto the Company’s seal or a facsimile thereof. The Rights Certificates shall
be countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be
valid for any purpose unless so countersigned. In case any Authorized Officer who shall have signed
any of the Rights Certificates shall cease to be an Authorized Officer before countersignature by
the Rights Agent and issuance and delivery by the Company, such Rights 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 Rights Certificates had not ceased to be an
Authorized Officer; and any Rights Certificates may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Rights Certificate, shall be an Authorized
Officer, although at the date of the execution of this Agreement any such person was not an
Authorized Officer.

          (b) Following the Distribution Date, upon receipt by the Rights Agent of notice of the
occurrence of the Distribution Date pursuant to Section 3 hereof, a shareholder list and all other
relevant information reasonably requested by the Rights Agent, the Rights Agent shall keep or cause
to be kept at its office or offices designated for such purposes (and at such other offices as may
be required to comply with any applicable law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any stock exchange or any automated quotation system on which the
Rights may from time to time be listed or quoted) books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face by each Rights
Certificate and the date of each Rights Certificate.

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

          (a) Subject to the provisions of Section 7(d) and Section 13 hereof, at any time after the
Close of Business on the Distribution Date, and prior to the Expiration Date, any Rights
Certificate(s) (other than Rights Certificates representing Rights that may have been exchanged
pursuant to Section 23 hereof) representing exercisable Rights may be transferred, split up,
combined or exchanged for another Rights Certificate(s), entitling the registered holder to
purchase a like number of one one-hundredths of a share of Series A Preferred Stock (or other
securities, as the case may be) as the Rights Certificate(s) surrendered then entitled such holder
(or former holder in the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any such Rights Certificate(s) must make such request in
writing delivered to the Rights Agent, and must surrender the Rights Certificate(s) to be
transferred, split up, combined or exchanged, with the forms of assignment and certificate
contained therein duly executed, at the office or offices of the Rights Agent designated for such
purpose. The Rights Certificates are transferable only on the registry books of the Rights Agent.
Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until the registered holder
shall have (i)

11

 

completed and signed the certificate contained in the form of assignment on the reverse side
of such Rights Certificate, (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) and the Affiliates and Associates of such Beneficial
Owner (or former Beneficial Owner) as the Company or the Rights Agent shall reasonably request and
(iii) paid a sum sufficient to cover any tax or charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates. Thereupon, the Rights Agent
shall countersign and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested registered in such name or names as may be
designated by the surrendering registered holder. The Rights Agent shall promptly forward any such
sum collected by it to the Company or to such Person or Persons as the Company shall specify by
written notice. The Rights Agent shall have no duty or obligation unless and until it is satisfied
that all such taxes and/or charges have been paid.

          (b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and 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 Rights Certificate, if mutilated, the Company
shall execute and deliver a new Rights Certificate of like tenor to the Rights Agent and the Rights
Agent will countersign and deliver such new Rights Certificate to the registered holder in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.

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

          (a) Except as otherwise provided herein, the Rights shall become exercisable on the
Distribution Date and prior to the Expiration Date, and thereafter the registered holder of any
Rights Certificate may, subject to Section 11(a)(ii) and Section 23 hereof, exercise the Rights
evidenced thereby in whole or in part upon surrender of the Rights 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 Purchase
Price (including any applicable tax or charge required to be paid by the holder of such Rights
Certificate) for each one one-hundredth of a share of Series A Preferred Stock (or other
securities, cash or assets, as the case may be) as to which the Rights are exercised.

          (b) Upon receipt of a Rights Certificate representing exercisable Rights with the form of
election to purchase and the certificate properly completed and duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased (and an amount equal to any applicable
tax or charge required to be paid) by certified check, cashier’s check, bank draft 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 shares of Series A Preferred Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates representing the total number of one
one-hundredths of a share of Series A Preferred Stock to be purchased (and the Company hereby
irrevocably authorizes and directs its transfer agent to comply with all such requests) or (B) if
the Company shall have elected to deposit any shares of Series A Preferred Stock issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a share of Series A Preferred
Stock as are to be purchased (and the Company hereby irrevocably authorizes and directs such
depositary agent to comply with all such requests), (ii)

12

 

after receipt of such certificates (or depositary receipts, as the case may be) cause the same
to be delivered to or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder, (iii) when appropriate,
requisition from the Company or any transfer agent therefor certificates representing the number of
equivalent shares to be issued in lieu of the issuance of shares of Class A Common Stock in
accordance with the provisions of Section 11(a)(iii) hereof, (iv) when appropriate, after receipt
of such certificates, cause the same to be delivered to or upon the order of the registered holder
of such Rights Certificate, registered in such name or names as may be designated by such holder,
(v) when appropriate, requisition from the Company the amount of cash to be paid in lieu of the
issuance of fractional shares in accordance with the provisions of Section 13 hereof and (vi) when
appropriate, after receipt, deliver such cash to the registered holder of such Rights Certificate.

          (c) In case the registered holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, the Rights Agent shall prepare, execute and deliver a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised to the registered
holder of such Rights Certificate or to his duly authorized assigns, subject to the provisions of
Section 13 hereof.

          (d) 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 any purported transfer,
split up, combination or exchange of any Rights Certificate pursuant to Section 6 or exercise or
assignment of a Rights Certificate as set forth in this Section 7 unless the registered holder of
such Rights Certificate shall have (i) duly and properly completed and signed the certificate
following the form of assignment or the form of election to purchase, as applicable, set forth on
the reverse side of the Rights Certificate surrendered for such transfer, split up, combination,
exchange, exercise or assignment and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) thereof and of the Rights evidenced thereby and
Affiliates and Associates thereof as the Company or the Rights Agent may reasonably request.

     Section 8. Cancellation and Destruction of Rights Certificates

     All Rights Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its agents, be delivered to
the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Rights 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 Rights Certificate purchased or acquired by the Company other than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

     Section 9. Company Covenants Concerning Securities and Rights

     The Company covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued shares of Series A Preferred Stock (and, following the occurrence of an
event which would establish the Distribution Date, out of its authorized and unissued shares of its
Class A Common Stock and/or other securities) the number of shares of Series A Preferred Stock
(and, following

13

 

the occurrence of an event which would establish the Distribution Date, Class A Common Stock
and/or other securities) that will be sufficient to permit the exercise in full of all outstanding
Rights in accordance with Section 7 hereof. The Company covenants and agrees that it will take all
actions as may be necessary to ensure that all shares of Series A Preferred Stock delivered upon
the exercise of Rights shall, at the time of delivery of the certificates for such shares (subject
to payment of the Purchase Price and all applicable taxes and charges), be duly and validly
authorized and issued and fully paid and nonassessable shares.

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

     If the Company determines that registration under the Securities Act is required, then the
Company shall use its reasonable best efforts to (i) file, as soon as practicable following the
first occurrence of an event which would establish the Distribution Date and the consideration to
be delivered by the Company upon exercise of the Rights has been determined in accordance with
Section 11(a) hereof, or as soon as is required by law following the Distribution Date, as the case
may be, a registration statement under the Securities Act with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing and (iii) cause such
registration statement to remain effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company may temporarily suspend,
for a period not to exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this paragraph, the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such suspension, the Company
shall issue a public announcement stating, and notify the Rights Agent, that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement and notification to the
Rights Agent at such time as the suspension is no longer in effect. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the securities or “blue sky” laws
of the various states in connection with the exercisability of the Rights. 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, or
an exemption therefrom shall be available, and until a registration statement has been declared
effective. The Company will notify the Rights Agent in writing of the jurisdictions in which Rights
shall not be exercisable pursuant to the preceding sentence.

14

 

     Section 10. Record Date

     Each Person in whose name any certificate for a number of one one-hundredths of a share of
Series A Preferred Stock (or Class A Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of
record of such shares of Series A Preferred Stock (or Class A Common Stock and/or other securities,
as the case may be) represented thereby on, and such certificate shall be dated as of, the date
upon which the Rights Certificate representing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable taxes and charges) was made;
provided, however, that if the date
of such surrender and payment is a date upon which the transfer books of the Company for shares of
Series A Preferred Stock (or Class A Common Stock and/or other securities, as the case may be) are
closed, such Person shall be deemed to have become the record holder of such securities on, and
such certificate shall be dated as of, the next succeeding Business Day on which the transfer books
of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a holder of any security of the Company
with respect to shares for which the Rights are or may be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.

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

     The Purchase Price, the number of shares of Series A 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 Record Date (A) declare a
dividend on the shares of Series A Preferred Stock payable in shares of Series A Preferred Stock,
(B) subdivide the outstanding shares of Series A Preferred Stock, (C) combine the outstanding
shares of Series A Preferred Stock into a smaller number of shares of Series A Preferred Stock or
(D) issue any shares of its capital stock in a reclassification of the shares of Series A 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 Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, as the case may be, and
the number and kind of shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the transfer books of the Company for the shares
of Series A Preferred Stock 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.

               (ii) Subject to Section 23 of this Agreement and except as otherwise provided in this Section
11(a)(ii) and Section 11(a)(iii) below, in the event that any Person becomes an Acquiring

15

 

Person, each holder of a Right shall, after the later of the occurrence of such event and the
effective date of an appropriate registration statement pursuant to Section 9 hereof, have the
right to receive, upon exercise thereof at a price equal to the then-current Purchase Price, in
accordance with the terms of this Agreement and in lieu of shares of Series A Preferred Stock, such
number of shares of Class A Common Stock (or at the option of the Company, such number of one
one-hundredths of a share of Series A Preferred Stock) as shall equal the result obtained by (x)
multiplying the then-current Purchase Price by the number of one one-hundredths of a share of
Series A Preferred Stock for which a Right is then exercisable and dividing that product by (y) 50%
of the Current Per Share Market Price of the Class A Common Stock (determined pursuant to Section
11(d) hereof), on the date of the occurrence of such event; provided, however, that the Purchase
Price (as so adjusted) and the number of shares of Class A Common Stock so receivable upon exercise
of a Right shall thereafter be subject to further adjustment as appropriate in accordance with
Section 11(f) hereof.

               Notwithstanding anything in this Agreement to the contrary, however, from and after the time
(the “invalidation time”) when any Person first becomes an Acquiring Person, any Rights
that are beneficially owned by (A) any Acquiring Person (or any Affiliate or Associate of any
Acquiring Person), (B) a transferee of any Acquiring Person (or any such Affiliate or Associate)
who becomes a transferee after the invalidation time or (C) a transferee of any Acquiring Person
(or any such Affiliate or Associate) who became a transferee prior to or concurrently with the
invalidation time pursuant to either (1) 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, written or otherwise, regarding the transferred Rights or (2) a transfer that the
Board has determined is part of a plan, arrangement or understanding, written or otherwise, which
has the purpose or effect of avoiding the provisions of this paragraph, and subsequent transferees
of such Persons, shall be void without any further action, and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such Rights under any provision of this
Agreement. The Company will use commercially 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 Rights
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
invalidation time, no Right Certificates 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 Certificates delivered to the Rights Agent that represent Rights that are or have
become void pursuant to the provisions of this paragraph shall be canceled.

               (iii) The Company may at its option substitute for a share of Class A Common Stock issuable
upon the exercise of Rights in accordance with Section 11(a)(ii) above such number or fractions of
shares of Series A Preferred Stock having an aggregate current market value equal to the Current
Per Share Market Price of a share of Class A Common Stock. In the event that there shall be an
insufficient number of shares of Class A Common Stock authorized but unissued (and unreserved) to
permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board 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 of (x) the
value of the shares of Common Stock issuable upon the exercise of a Right in accordance with
Section 11(a)(ii) (the “Current Value”) over (y) the then-current Purchase Price multiplied
by the number of one one-hundredths of shares of Series A Preferred Stock for which a Right was
exercisable immediately prior to the time that the Acquiring Person became such (such excess, the
“Spread”), and (B) with respect to each Right (other

16

 

than Rights which have become void pursuant to Section 11(a)(ii)), make adequate provision to
substitute for the shares of Class A Common Stock issuable in accordance with Section 11(a)(ii)
upon exercise of the Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction
in such Purchase Price, (3) shares of Series A 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 Class A Common Stock, are deemed in good faith by the Board to have substantially the
same value as the shares of Class A Common Stock (such 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 Class A Common Stock actually 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 (upon the
advice of a nationally recognized investment banking firm selected by the Board in good faith);
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 date that the Acquiring Person became
such (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 the Purchase Price, shares of Class A Common Stock (to the extent available), and then,
if necessary, such number or fractions of shares of Series A 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 within the thirty (30) day period referred to above, the Board shall determine in
good faith that it is likely that sufficient additional shares of Class A Common Stock could be
authorized for issuance upon exercise in full of the Rights, then, if the Board so elects, such
thirty (30) day period 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 shareholder approval
for the authorization of such additional shares (such thirty (30) day period, as it may be
extended, is hereinafter 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 Rights and (y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such 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 Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.

          (b) If the Company fixes a record date for the issuance of rights, options or warrants to all
holders of shares of Series A Preferred Stock entitling them (for a period expiring within
forty-five (45) calendar days after such record date) to subscribe for or purchase shares of Series
A Preferred Stock (or securities having equivalent rights, privileges and preferences as the shares
of Series A Preferred Stock (for purposes of this Section 11(b), “Equivalent Preferred
Stock”)) or securities convertible into shares of Series A Preferred Stock or Equivalent
Preferred Stock at a price per share of Series A Preferred Stock or Equivalent Preferred Stock (or
having a conversion price per share, if a security convertible into shares of Series A Preferred
Stock or Equivalent Preferred Stock) less than the Current Per Share Market Price of the shares of
Series A Preferred Stock (determined pursuant to Section 11(d))

17

 

on such record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which is the number of shares of Series A Preferred Stock outstanding on
such record date plus the number of shares of Series A Preferred Stock which the aggregate offering
price of the total number of shares of Series A Preferred Stock and/or Equivalent Preferred Stock
so to be offered (and/or the aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such Current Per Share Market Price and the denominator of which is
the number of shares of Series A Preferred Stock outstanding on such record date plus the number of
additional shares of Series A Preferred Stock and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of capital stock issuable
upon exercise of one Right. In the event such subscription price is paid in a consideration part or
all of which is in a form other than cash, the value of such consideration shall be as determined
in good faith by the Board, whose determination shall be described in a written statement filed
with the Rights Agent. Shares of Series A Preferred Stock 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) If the Company fixes a record date for the making of a distribution to all holders of
shares of Series A 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, cash (other than a regular periodic cash dividend), assets, stock (other
than a dividend payable in shares of Series A Preferred Stock) or subscription rights, options or
warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which is the Current Per Share Market Price of
the shares of Series A Preferred Stock (as determined pursuant to Section 11(d)) on such record
date or, if earlier, the date on which shares of Series A Preferred Stock begin to trade on an
ex-dividend or when issued basis for such distribution, less the fair market value (as determined
in good faith by the Board, whose determination shall be described in a written statement filed
with the Rights Agent) of the portion of the evidences of indebtedness, cash, assets or stock so to
be distributed or of such subscription rights, options or warrants applicable to one share of
Series A Preferred Stock, and the denominator of which is such Current Per Share Market Price of
the shares of Series A 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 issuable upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.

          (d) (i) For the purpose of any computation hereunder, the “Current Per Share Market
Price” of any security (a “Security” for purposes of this Section 11(d)(i) only) on any
date shall be deemed to be the average of the daily closing prices per share of a share of such
Security for the 30 consecutive Trading Days immediately prior to, but not including, such date;
provided, however, that in the event that the Current Per Share Market Price of the Security is
determined during a period

18

 

following the announcement by the issuer of such Security of (A) a dividend or distribution on
such Security payable in shares of such Security or securities convertible into such shares (other
than the Rights) or (B) any subdivision, combination or reclassification of such Security, and
prior to the expiration of thirty (30) Trading Days after, but not including, the ex-dividend date
for such dividend or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Per Share Market Price shall be
appropriately adjusted to take into account ex-dividend trading or to reflect the current per share
market price per share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or, if the Security is not listed
or admitted to trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such date the Security is not
quoted by any such organization, the average of the closing bid and asked prices as furnished by a
professional market maker selected by the Board making a market in the Security. If the Security is
not publicly held or not so listed or traded, or is not the subject of available bid and asked
quotes, the Current Per Share Market Price of such Security shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described in a written
statement filed with the Rights Agent.

               (ii) For the purpose of any computation hereunder, the “Current Per Share Market
Price” of shares of the Series A Preferred Stock shall be determined in accordance with the
method set forth above in Section 11(d)(i) other than the last sentence thereof. If the Current Per
Share Market Price of Series A Preferred Stock cannot be determined in the manner provided above,
it shall be conclusively deemed to be an amount equal to the current per share market price of the
shares of Class A Common Stock multiplied by one hundred (as such number may be appropriately
adjusted to reflect events such as stock splits, stock dividends, recapitalizations or similar
transactions relating to the shares of Class A Common Stock occurring after the date of this
Agreement). If neither the Class A Common Stock nor the Series A Preferred Stock are publicly held
or listed or traded, or the subject of available bid and asked quotes, “Current Per Share Market
Price” of the Series A Preferred Stock shall mean the fair value per share as determined in good
faith by the Board, whose determination shall be described in a written statement filed with the
Rights Agent. For all purposes of this Agreement, the Current Per Share Market Price of one
one-hundredth of a share of Series A Preferred Stock will be equal to the Current Per Share Market
Price of one share of Series A Preferred Stock divided by one hundred.

          (e) Except as set forth below, no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1%
in such price; provided,
however, that any adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest one one-millionth of a
share of Series A Preferred Stock or one one-hundredth of a share of Class A Common Stock or other
security. 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 (3) years from the date of the
transaction which requires such adjustment and (ii) the Expiration Date.

19

 

           (f) If as a result of an adjustment made pursuant to Section 11(a), the holder of any Right
thereafter exercised becomes entitled to receive any securities of the Company other than shares of
Series A Preferred Stock, thereafter the number and/or kind of such other securities so receivable
upon exercise of any Right (and/or the Purchase Price in respect thereof) 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 shares of Series A Preferred Stock (and the Purchase Price in
respect thereof) contained in this Section 11, and the provisions of Sections 7, 9, 10 and 13 with
respect to the shares of Series A Preferred Stock (and the Purchase Price in respect thereof) shall
apply on like terms to any such other securities (and the Purchase Price in respect thereof).

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

          (h) Unless the Company has exercised its election as provided in Section 11(i) below, upon
each adjustment of the Purchase Price pursuant to Section 11(b) or (c), each Right outstanding
immediately prior to the making of such adjustment shall evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of a share of Series A Preferred Stock
(calculated to the nearest one one-millionth of a share of Series A Preferred Stock) obtained by
(i) multiplying (x) the number of one one-hundredths of a share of Series A Preferred Stock
issuable upon exercise of a Right immediately prior to such adjustment of the Purchase Price by (y)
the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.

          (i) The Company may elect, on or after the date of any adjustment of the Purchase Price, to
adjust the number of Rights in substitution for any adjustment in the number of one one-hundredths
of a share of Series A Preferred Stock issuable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a share of Series A 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
hundred-thousandth) obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. The Company shall also, as promptly as practicable, notify the
Rights Agent in writing of same and give the Rights Agent a copy of such announcement. Such record
date may be the date on which the Purchase Price is adjusted or any day thereafter, but if the
Rights Certificates have been issued, such record date shall be at least ten (10) calendar days
later than the date of the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly
as practicable, cause to be distributed to holders of record of Rights Certificates on such record
date Rights Certificates evidencing, subject to the provisions of Section 13, the additional Rights
to which such holders are 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 Rights Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof if required

20

 

by the Company, new Rights Certificates evidencing all the Rights to which such holders are
entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price), and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.

          (j) Without respect to any adjustment or change in the Purchase Price and/or the number and/or
kind of securities issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price and the number and kind of
securities which were expressed in the initial Rights Certificate issued hereunder.

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

          (l) In any case in which this Section 11 otherwise requires that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of any Right exercised after such
record date the number of one one-hundredths of a share of Series A Preferred Stock or other
securities of the Company, if any, issuable upon such exercise over and above the number of one
one-hundredths of a share of Series A Preferred Stock or other securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company delivers to such holder a due bill or other appropriate
instrument evidencing such holder’s right to receive such additional shares of Series A Preferred
Stock or other securities upon the occurrence of the event requiring such adjustment.

          (m) Notwithstanding anything in this Agreement to the contrary, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that in its good faith judgment the Board determines to be
necessary or advisable in order that any (i) consolidation or subdivision of the shares of Series A
Preferred Stock, (ii) issuance wholly for cash of shares of Series A Preferred Stock at less than
the Current Per Share Market Price therefor, (iii) issuance wholly for cash of shares of Series A
Preferred Stock or securities which by their terms are convertible into or exchangeable for shares
of Series A Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of its shares of Series A
Preferred Stock is not taxable to such shareholders.

          (n) Notwithstanding anything in this Agreement to the contrary, in the event that the Company
at any time after the Record Date and prior to the Distribution Date (i) pays a dividend on the
outstanding shares of Class A Common Stock or Class B Common Stock payable in shares of Class A
Common Stock or Class B Common Stock, as the case may be, (ii) subdivides the outstanding shares of
Class A Common Stock or Class B Common Stock, (iii) combines the outstanding shares of Class A
Common Stock or Class B Common Stock into a smaller number of shares of such stock or (iv) issues

21

 

any shares of its capital stock in a reclassification of the outstanding shares of Class A
Common Stock or Class B Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation), the
number of Rights associated with each share of Class A Common Stock and/or each share of Class B
Common Stock then outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter associated with
each share of Class A Common Stock and/or each share of Class B Common Stock following any such
event equals the result obtained by multiplying the number of Rights associated with each share of
Class A Common Stock or Class B Common Stock, as the case may be, immediately prior to such event
by a fraction, the numerator of which is the total number of shares of Class A Common Stock or
Class B Common Stock, as the case may be, outstanding immediately prior to the occurrence of the
event and the denominator of which is the total number of shares of Class A Common Stock or Class B
Common Stock, as the case may be, outstanding immediately following the occurrence of such event.
The adjustments provided for in this Section 11(n) shall be made successively whenever such a
dividend is paid or such a subdivision, combination or reclassification is effected.

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares

     Whenever an adjustment is made or any event affecting the Rights or their exercisability
(including, without limitation, an event which causes Rights to become null and void) occurs as
provided in Section 11, the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts and calculations accounting for such adjustment or
describing such event, (b) file with the Rights Agent, and with each transfer agent for the shares
of Series A Preferred Stock, Class A Common Stock and Class B Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a Rights Certificate. 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; provided,
however, that the Rights Agent will not be
entitled to such protection in the event of actions or omissions performed by or on behalf of the
Rights Agents in bad faith or with willful misconduct.

     Section 13. Fractional Rights and Fractional Shares

          (a) The Company shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional Rights, the Company shall
pay to the registered holders of the Rights 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 one Right. For purposes of this Section 13(a), the current market value of one
Right is the closing price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing price for any Trading 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 on the
principal national securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq or such other system then in use or, if on any

22

 

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 selected by the Board making a market
in the Rights. If the Rights are not publicly held or are not so listed or traded, or are not the
subject of available bid and asked quotes, the current market value of one Right shall mean the
fair value thereof as determined in good faith by the Board, whose determination shall be described
in a written statement filed with the Rights Agent.

          (b) The Company shall not be required to issue fractions of shares of Series A Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a share of Series A
Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Series A Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Series A Preferred Stock). Fractions of Series A Preferred Stock in
integral multiples of one one-hundredth of a share of Series A Preferred Stock may, in the sole
discretion of the Company, be evidenced by depositary receipts pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided that such agreement provides that the
holders of such depositary receipts have all the rights, privileges and preferences to which they
are entitled as beneficial owners of the Series A Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Series A Preferred Stock that are not integral multiples
of one one-hundredth of a share of Series A Preferred Stock, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one one-hundredth of a share of
Series A Preferred Stock. For purposes of this Section 13(b), the current market value of one
one-hundredth of a share of Series A Preferred Stock shall be one one-hundredth of the closing
price of a share of Series A Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof)
for the Trading Day immediately prior to the date of such exercise;
provided, however, that if the
closing price of the shares of the Series A Preferred Stock cannot be so determined, the closing
price of the shares of the Series A Preferred Stock for such Trading Day shall be conclusively
deemed to be an amount equal to the closing price of the Class A Common Stock for such Trading Day
multiplied by one hundred (as such number may be appropriately adjusted to reflect events such as
stock splits, stock dividends, recapitalizations or similar transactions occurring after the date
of this Agreement).

          (c) Following the occurrence of any Person becoming an Acquiring Person, the Company shall not
be required to issue fractions of shares of Class A Common Stock upon exercise or exchange of the
Rights or to distribute certificates which evidence fractional shares of Class A Common Stock. In
lieu of issuing any such fractional securities, the Company may pay to any Person to whom or which
such fractional securities would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of one such security. For purposes of this Section 13(c), the current
market value of one share of Class A Common Stock or other security issuable upon the exercise or
exchange of Rights shall be the closing price thereof (as determined pursuant to Section 11(d)(i)
hereof) on the Trading Day immediately prior to the date of such exercise or exchange.

          (d) The holder of a Right, by the acceptance of the Rights, expressly waives such holder’s
right to receive any fractional Rights or any fractional shares upon exercise of a Right, except as
permitted by this Section 13.

23

 

     Section 14. Rights of Action

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

          (b) Notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, judgment, decree or ruling (whether interlocutory or final)
issued by a court of competent jurisdiction or by a governmental regulatory, self-regulatory or
administrative agency or commission, or any statute, rule, regulation, or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however that the Company shall use commercially
reasonable efforts to have any such injunction, order, judgment, decree or ruling lifted or
otherwise overturned as soon as possible.

     Section 15. Agreement of Rights Holders

     Every holder of a Right 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 shall be transferable only in connection with
the transfer of shares of Common Stock;

          (b) after the Distribution Date, the Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed and accompanied by a properly executed instrument of
transfer with the appropriate forms and certificates fully executed;

          (c) the Company and the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Class A Common Stock or Class B
Common Stock share certificate, if any) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Class A Common Stock or Class B Common Stock share certificate, if
any, made by

24

 

anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the contrary; and

          (d) such holder expressly waives any right to receive any fractional Rights and any fractional
securities upon exercise or exchange of a Right, except as otherwise provided in Section 13.

     Section 16. Rights Certificate Holder Not Deemed a Shareholder

     No holder of any Rights Certificate, by means of such possession, shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of one one-hundredths of a
share of Series A Preferred Stock or any other security of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, by
means of such possession, any of the rights of a shareholder of the Company, including any right to
vote on any matter submitted to shareholders at any meeting thereof, including the election of
directors, or to give or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in Section 24 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate have been exercised in accordance with the provisions of this Agreement.

     Section 17. 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 preparation, 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, damage, judgment, fine, penalty, claim, demand, cost or expense incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent (which gross
negligence, bad faith or willful misconduct must be determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction), for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of this Agreement and the
performance of its duties and responsibilities and the exercise of its rights hereunder, including
the costs and expenses of defending against any claim of liability arising therefrom, directly or
indirectly (except upon such a final, non-appealable order, judgment, decree or ruling of gross
negligence, bad faith or willful misconduct). The costs and expenses of enforcing this right of
indemnification will also be paid by the Company (subject to reimbursement in connection with a
determination by a final, non-appealable order, judgment, decree or ruling of gross negligence, bad
faith or willful misconduct). The provisions of this Section 17 shall survive the exercise,
exchange, redemption or expiration of the Rights, the resignation, replacement or removal of the
Rights Agent and the termination of this Agreement.

          (b) The Rights Agent may conclusively rely on, and will be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in connection with its
acceptance or administration of this Agreement and the exercise and performance of its duties and
responsibilities and the exercise of its rights hereunder in reliance upon, any Rights Certificate
or certificate evidencing shares of Series A Preferred Stock, Class A Common Stock, Class B Common

25

 

Stock or other securities of the Company, or any 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 19.

          (c) Notwithstanding anything in this Agreement to the contrary, in no event will the Rights
Agent be liable for special, indirect or consequential losses or damages of any kind whatsoever
(including, but not limited, to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.

     Section 18. Merger, Consolidation or Change of Name of Rights Agent

          (a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent is a party, will be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 20 hereof. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the Rights Certificates
shall have been countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and if at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent; and in all such cases such
Rights Certificates shall have the full force provided in the Rights Certificates and in this
Agreement.

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

     Section 19. Duties of Rights Agent

     The Rights Agent undertakes to perform the duties and obligations expressly imposed by this
Agreement (and no implied duties) upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound:

          (a) The Rights Agent may consult with competent legal counsel (who may be legal counsel for
the Company), and the advice or opinion of such counsel shall be full and complete authorization
and protection to the Rights Agent, and the Rights Agent shall incur no liability for or in respect
of any action taken, suffered or omitted by it in accordance with the content of such advice or
opinion.

26

 

          (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 (including, without limitation, the identity
of any Acquiring Person and the determination of the Current Per Share Market Price) be proved or
established by the Company prior to taking, suffering or omitting to take any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed by any Authorized
Officer and delivered to the Rights Agent; and such certificate, pursuant to its terms, shall be
full and complete authorization and protection to the Rights Agent for any action taken or suffered
by it under the provisions of this Agreement in reliance upon such certificate.

          (c) The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or
willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a
final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction).

          (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 Rights 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 will have no liability in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant contained in this Agreement or in any Rights Certificate; nor shall it be responsible for
any adjustment required under the provisions of Sections 11, 12, 22 or 23 hereof or responsible for
the manner, method or amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such 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 Class A Common Stock or Series A Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Class A Common Stock or Series A
Preferred Stock shall, when so issued, be validly authorized and issued, fully paid and
nonassessable.

          (f) The Company agrees that it shall 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 and the exercise of the rights hereunder from any Authorized Officer
and to apply to all Authorized 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 Authorized 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

27

 

omission shall be effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such application on or
after the date specified in such application (which date shall not be less than five (5) Business
Days after the date any Authorized Officer actually receives such application, unless any such
Authorized 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 Person.

          (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself (through its directors, officers or employees) or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for
any act, omission, default, neglect or misconduct of any such attorney or agent or for any loss to
the Company or any other Person resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment thereof (each as
determined by a final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).

          (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.

          (k) No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not reasonably assured
to it.

          (l) The Rights Agent shall not be deemed to have knowledge of any event of which it was
supposed to receive notice thereof hereunder, and the Rights Agent shall be fully protected and
shall incur no liability for failing to take any action in connection therewith, unless and until
it has received such notice in writing.

          (m) The provisions of this Section 19 shall survive the exercise, exchange, redemption or
expiration of the Rights, the resignation, replacement or removal of the Rights Agent and the
termination of this Agreement.

28

 

     Section 20. Change of Rights Agent

     The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days’ written notice mailed to the Company, and to each
transfer agent of the shares of Class A Common Stock, Class B Common Stock and Series A Preferred
Stock known to the Rights Agent, by registered or certified mail, and to the registered holders of
the Rights Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days’ written notice mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the shares of Class A
Common Stock, Class B Common Stock and Series A Preferred Stock, by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall, in its sole
discretion, appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (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 Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered holder of any Rights Certificate
may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a legal
business entity organized and doing business under the laws of the United States or any state of
the United States, in good standing, which is authorized under such laws to exercise corporate
trust, stock transfer or shareholder services powers and which has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a
legal business entity described in clause (a) of this sentence. 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 shares of Class
A Common Stock, Class B Common Stock and Series A Preferred Stock and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give any notice provided
for in this Section 20, however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.

     Section 21. Issuance of New Rights Certificates

     Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be
approved by the Board to reflect any adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property purchasable under the Rights Certificates
made in accordance with the provisions of this Agreement;
provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, in its good faith judgment, the
Board determines that the issuance of such Rights Certificate could have a material adverse tax
consequence to the Company or to the Person to whom or which such Rights Certificate otherwise
would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.

29

 

     Section 22. Redemption

          (a) The Board may, at any time prior to the Distribution Date, redeem all but not less than
all of the then-outstanding Rights at 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, in its sole
discretion, may establish. The Company may, at its option, pay the Redemption Price in cash,
securities or any other form of consideration deemed appropriate by the Board.

          (b) Immediately upon the effectiveness of the redemption of the Rights, and without any
further action and without any notice, the right to exercise the Rights shall terminate and the
only right thereafter of the holders of Rights shall be to receive the Redemption Price for each
Right so held without interest thereon. Promptly after the effectiveness of the redemption of the
Rights, the Company shall give public notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such holders at each holder’s last
address as it appears upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the shares of Class A Common Stock and Class
B Common Stock; provided, however, that the failure to give, or any defect in, any such
notice will not affect the validity of the redemption of the Rights. Any notice 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
shall be made.

     Section 23. Exchange

          (a) The Board may, at its option, at any time after any Person first becomes an Acquiring
Person, exchange all or part of the then-outstanding and exercisable Rights (which shall not
include Rights that have not become effective or that have become void pursuant to the provisions
of Section 11(a)(ii) hereof) for shares of Class A Common Stock at an exchange ratio of one share
of Class A Common Stock (or one one-hundredth of a share of Series A Preferred Stock) per Right,
appropriately adjusted to reflect any adjustment made pursuant to the terms of this Agreement (such
amount per Right being hereinafter referred to as the “Exchange Ratio”). The exchange of
the Rights by the Board may be made effective at such time, on such basis and with such conditions
as the Board, in its sole discretion, may establish.

          (b) Immediately upon the effectiveness of the action of the Board ordering the exchange of any
Rights pursuant to Section 23(a) 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 Class A 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 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 Class A Common
Stock for Rights shall be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange

30

 

shall be effected pro rata based on the number of Rights (other than Rights which have become
void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

          (c) The Company may at its option substitute and, in the event that there shall not be
sufficient shares of Class A Common Stock issued but not outstanding or authorized but unissued
(and unreserved) to permit an exchange of Rights as contemplated in accordance with this Section
23, the Company shall substitute to the extent of such insufficiency, for each share of Class A
Common Stock that would otherwise be issuable upon exchange of a Right, a number of shares of
Series A Preferred Stock (or Equivalent Preferred Stock) or fraction thereof, such that the Current
Per Share Market Price of one share of Series A Preferred Stock (or Equivalent Preferred Stock)
multiplied by such number or fraction is equal to the Current Per Share Market Price of Class A
Common Stock as of the date of such exchange.

     Section 24. Notice of Certain Events

          (a) If the Company proposes to (i) pay any dividend payable in stock of any class to the
holders of shares of Series A Preferred Stock or to make any other distribution to the holders of
shares of Series A Preferred Stock (other than a regular periodic cash dividend), (ii) offer to the
holders of shares of Series A Preferred Stock rights, options, warrants or any similar instrument
to subscribe for or to purchase any additional shares of Series A Preferred Stock or shares of
stock of any class or any other securities, rights or options, (iii) effect any reclassification of
the Series A Preferred Stock (other than a reclassification involving only the subdivision of
outstanding shares of Series A Preferred Stock), (iv) effect any consolidation or merger into or
with any other Person (other than the Woodbridge Merger), (v) effect the liquidation, dissolution
or winding up of the Company or (vi) on or after the Distribution Date, (A) declare or pay any
dividend on the shares of Class A Common Stock or Class B Common Stock payable in shares of Class A
Common Stock or Class B Common Stock, respectively, or (B) effect a subdivision, combination or
reclassification of the Class A Common Stock or Class B Common Stock, as the case may be, then, in
each such case, the Company shall give to the Rights Agent and, to the extent possible, to each
holder of a Rights Certificate, in accordance with Section 25 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock dividend, distribution
or offering of rights, warrants, options or any similar instrument or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is
to take place and the date of participation therein by the holders of the shares of Series A
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 ten (10) days prior to the record date for
determining holders of the shares of Class A Common Stock, Class B Common Stock, and/or Series A
Preferred Stock for purposes of such action, and in the case of any such other action covered by
clause (i) or (ii) above at least ten (10) days prior to the date of such proposed action or the
date of participation therein by the holders of the shares of Series A Preferred Stock, whichever
is the earlier.

          (b) As soon as practicable after a Stock Acquisition Date, if any, the Company shall give to
the Rights Agent and each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 25 hereof, a notice of the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights.

31

 

     Section 25. Notices

          (a) Notices or demands authorized by this Agreement to be given or made by the Rights Agent or
by the holder of any Rights Certificate to or on the Company shall be sufficiently given or made
(a) immediately, if made by personal delivery to the party to be notified, (b) on the fifth day
after it is sent by first-class mail, postage prepaid or (c) on the next Business Day after it is
sent by nationally recognized overnight courier, all addressed (until another address is filed in
writing by the Company with the Rights) as follows:

BFC Financial Corporation

2100 West Cypress Creek Road

Fort Lauderdale, FL 33309

Attention; Alan B. Levan, Chairman, President and Chief Executive Officer

With a copy to:

Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.

150 West Flagler Street, Suite 2200

Miami, FL 33130

Attention: Alison W. Miller, Esq.

          (b) Subject to the provisions of Section 20, any notice or demand authorized by this Agreement
to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made (a) immediately, if made by personal delivery to the
party to be notified, (b) on the fifth day after it is sent by first-class mail, postage prepaid or
(c) on the next Business Day after it is sent by nationally recognized overnight courier, all
addressed (until another address is filed in writing by the Rights Agent with the Company) as
follows:

American Stock Transfer & Trust Company, LLC

59 Maiden Lane

New York, New York 10038

Attention: Corporate Trust Department

          (c) Notices or demands authorized by this Agreement to be given or made by the Company or the
Rights Agent to the holder of any Rights Certificate (or, prior to the Distribution Date,
registered holders of shares of Class A Common Stock or Class B Common Stock) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the Company.

     Section 26. Supplements and Amendments

     Prior to the Distribution Date, 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 Rights, any such supplement or amendment to
be evidenced by a writing signed by the Company and the Rights Agent. From and after the time at
which the Rights cease to be redeemable pursuant to Section 22, the Company may and the Rights
Agent shall,

32

 

if the Company so directs, supplement or amend this Agreement without the approval of any
holders of Rights in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other provision herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to amend or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable; provided, however, that no such supplement or amendment shall adversely affect the interests of the
holders of Rights (other than an Acquiring Person or any Affiliate or Associate of an Acquiring
Person), and no such amendment may cause the Rights again to become redeemable or cause this Rights
Agreement again to become amendable other than in accordance with this sentence. Upon the delivery
of a certificate from an Authorized Officer which states that the proposed supplement or amendment
is in compliance with the terms of this Section 26, the Rights Agent shall execute such supplement
or amendment. Notwithstanding anything herein to the contrary, the Rights Agent shall not be
obligated to enter into any supplement or amendment that affects the Rights Agent’s own rights,
duties, obligations or immunities under this Agreement.

     Section 27. Successors

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

     Section 28. Determinations and Actions by the Board

          (a) For all purposes of this Agreement, any calculation of the number of shares of any class
of the Company’s capital stock outstanding at any particular time, including for purposes of
determining the particular percentage of the 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)
under the Exchange Act or the provisions of Section 382 of the Code or any successor or replacement
provision.

          (b) The Board shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations
and calculations deemed necessary or advisable for the administration of this Agreement (including,
without limitation, a determination to redeem or not to redeem the Rights or amend this Agreement).

          (c) All such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made
by the Board in good faith shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties and (y) not subject the Board, or any of the
directors on the Board, to any liability to any person, including, without limitation, the Rights
Agent and the holders of the Rights. Unless otherwise notified, the Rights Agent shall always be
entitled to assume that the Board acted in good faith, and the Rights Agent shall be fully
protected and shall incur no liability in reliance thereon.

33

 

     Section 29. Benefits of this Agreement

     Nothing in this Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of shares of Class A Common Stock and Class B 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 Rights
Certificates (and, prior to the Distribution Date, registered holders of shares of Class A Common
Stock and Class B Common Stock).

     Section 30. Severability

     If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that
nothing contained in this Section 30 will affect the ability of the Company under the provisions of
Section 26 to supplement or amend this Agreement to replace such invalid, void or unenforceable
term, provision, covenant or restriction with a legal, valid and enforceable term, provision,
covenant or restriction.

     Section 31. Governing Law

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

     Section 32. Counterparts

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

     Section 33. Descriptive Headings; Interpretation

     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.

[SIGNATURE PAGE FOLLOWS]

34

 

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

	 	 	 	 	 
	 	BFC FINANCIAL CORPORATION

 	 
	 	/s/ Alan B. Levan
 	 
	 	Name:  	Alan B. Levan 	 
	 	Title:  	Chairman, President and Chief Executive Officer 	 
	 
	 	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

 	 
	 	/s/ Herbert Lemmer
 	 
	 	Name:  	Herbert Lemmer 	 
	 	Title:  	Vice President 	 
	 

35

 

EXHIBIT A

FORM OF

ARTICLES OF AMENDMENT

TO THE

AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF

BFC FINANCIAL CORPORATION

     The Amended and Restated Articles of Incorporation, as amended, of BFC FINANCIAL CORPORATION,
a Florida corporation (the “Corporation”), are hereby amended pursuant to the provisions of Section
607.0602 of the Florida Business Corporation Act, and such amendment is set forth as follows:

     FIRST: Article IV of the Amended and Restated Articles of Incorporation, as amended, of the
Corporation is hereby amended to add the following language at the end of such article:

AA. Series A Junior Participating Preferred Stock. The Board of Directors hereby authorizes and
creates a new series of Preferred Stock, par value $0.01 per share, of the Corporation. The
designation and number of shares and the relative rights, preferences and limitations of the shares
of such new series of Preferred Stock of the Corporation are as follows:

     1. Designation and Amount. The shares of such series will be designated as Series A Junior
Participating Preferred Stock (the “Series A Preferred”) and the number of shares constituting the
Series A Preferred is Two Million (2,000,000). Such number of shares may be increased or decreased
by resolution of the Board; provided, however, that no decrease will reduce the number of shares of
Series A Preferred to a number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation and convertible into Series
A Preferred.

     2. Dividends and Distributions.

          (a) Subject to the rights of the holders of any shares of any series of Preferred Stock
ranking prior to the Series A Preferred with respect to dividends, including the Corporation’s 5%
Preferred Stock, the holders of shares of Series A Preferred, in preference to the holders of the
Corporation’s Class A Common Stock, par value $0.01 per share, and Class B Common Stock, par value
$0.01 per share (collectively, the “Common Stock”), and of any other stock ranking junior to the
Series A Preferred (collectively, the “Junior Stock”), will be entitled to receive, when, as and if
declared by the Board out of funds legally available for the purpose, dividends payable in cash
(except as otherwise provided below) on such dates as are from time to time established for the
payment of dividends on the Common Stock (each such date being referred to herein as a “Dividend
Payment Date”), commencing on the first Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A

 

 

Preferred (the “First Dividend Payment Date”), in an amount per share (rounded to the nearest
cent) equal to, subject to the provision for adjustment hereinafter set forth, the greater of (i)
$1 and (ii) one hundred (100) times the aggregate per share amount of all cash dividends, and one
hundred (100) times the aggregate per share amount (payable in kind) of all non-cash dividends,
other than a dividend payable in shares of Class A Common Stock or Class B Common Stock, as the
case may be, or a subdivision of the outstanding shares of Class A Common Stock or Class B Common
Stock, as the case may be (by reclassification or otherwise), declared on the Class A Common Stock
and/or Class B Common Stock since the immediately preceding Dividend Payment Date or, with respect
to the First Dividend Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred. In the event that the Corporation at any time (i) declares a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivides the
outstanding shares of Common Stock, (iii) combines the outstanding shares of Common Stock into a
smaller number of shares or (iv) issues any shares of its capital stock in a reclassification of
the outstanding shares of Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Corporation is the continuing or surviving corporation), then,
in each such case, the amount to which holders of shares of Series A Preferred would otherwise be
entitled immediately prior to such event will be correspondingly adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock
outstanding immediately prior to such event.

          (b) The Corporation will declare a dividend on the Series A Preferred as provided in paragraph
(a) of this Section 2 immediately after it declares a dividend on the Class A Common Stock and/or
Class B Common Stock (other than a dividend payable in shares of Common Stock). Each such dividend
on the Series A Preferred will be payable immediately prior to the time at which the related
dividend on the Class A Common Stock and/or Class B Common Stock is payable.

          (c) Dividends will accrue, and be cumulative, on outstanding shares of Series A Preferred from
the Dividend Payment Date immediately preceding the date of issue of such shares, unless (i) the
date of issue of such shares is prior to the record date for the First Dividend Payment Date, in
which case dividends on such shares will accrue from the date of the first issuance of a share of
Series A Preferred or (ii) the date of issue is a Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A Preferred entitled to receive a
dividend and before such Dividend Payment Date, in either of which events such dividends will
accrue, and be cumulative, from such Dividend Payment Date. Accrued but unpaid dividends will
cumulate from the applicable Dividend Payment Date but will not bear interest. Dividends paid on
the shares of Series A Preferred in an amount less than the total amount of such dividends at the
time accrued and payable on such shares will be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board may fix a record date for the determination of
holders of shares of Series A Preferred entitled to receive payment of a dividend or distribution
declared thereon, which record date will be not more than sixty (60) calendar days prior to the
date fixed

 

 

for the payment thereof.

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

          (a) Subject to the provision for adjustment hereinafter set forth and except as otherwise
provided herein, in the Articles of Incorporation or in any amendment to the Articles of
Incorporation, or as otherwise required by law, each share of Series A Preferred shall entitle the
holder thereof to one hundred (100) votes on all matters upon which the holders of the Common Stock
are entitled to vote. In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which holders of shares of
Series A Preferred were entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the number of shares of
Common Stock outstanding immediately prior to such event. For purposes of Section 3, Voting
Rights, of Article IV, including, without limitation, paragraphs 3(a) and 3(b) thereof, the Class A
Common Stock and Series A Preferred shall collectively have the total voting power of the
Corporation equaling the Class A Percentage, and the number of outstanding shares of Series A
Preferred multiplied by a factor of 100 shall be added to the number of outstanding shares of Class
A Common Stock for purposes of determining the number of votes that holders of Class B Common Stock
shall be entitled to with respect to each share of Class B Common Stock that they hold (and in no
event shall anything contained in this paragraph or any other provision or paragraph of this
Section AA of Article IV be deemed to increase the Class A Percentage above the applicable amount
set forth in Section 3, Voting Rights, of Article IV).

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

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

 

 

     4. Restrictions.

          (a) Whenever dividends or distributions payable on the Series A Preferred are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether or not declared,
on shares of Series A Preferred outstanding have been paid in full, the Corporation will not:

     (i) Declare or pay dividends, or make any other distributions, on any shares
of Junior Stock;

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

     (iii) Redeem, purchase or otherwise acquire for consideration shares of any
Junior Stock; provided, however, that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such Junior Stock in exchange for
shares of any other Junior Stock; or

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

          (b) The Corporation will not permit any majority-owned 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 purchased or otherwise acquired by the
Corporation in any manner whatsoever will be retired and canceled promptly after the acquisition
thereof. All such shares will upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the Articles of Incorporation or in
any Amendment to the Articles of Incorporation creating a series of Preferred Stock or any similar
stock or as otherwise required by law.

 

 

     6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of
the Corporation, no distribution will be made (a) to the holders of shares of Junior Stock unless,
prior thereto, the holders of shares of Series A Preferred have received an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to the date of such
payment; provided, however, that the holders of shares of Series A Preferred will be entitled to
receive an aggregate amount per share, subject to the provision for adjustment hereinafter set
forth, equal to a minimum per share liquidation payment of $100 but will be entitled to an
aggregate per share liquidation payment of one hundred (100) times the payment made per share of
Common Stock or (b) to the holders of shares of Parity Stock, except distributions made ratably on
the shares of Series A Preferred and all such Parity Stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation, dissolution or winding up.
In the event the Corporation at any time (i) declares a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivides the outstanding shares of Common
Stock, (iii) combines the outstanding shares of Common Stock into a smaller number of shares or
(iv) issues any shares of its capital stock in a reclassification of the outstanding shares of
Common Stock (including any such reclassification in connection with a consolidation or merger in
which the Corporation is the continuing or surviving corporation), then, in each such case and
regardless of whether any shares of Series A Preferred are then issued or outstanding, the
aggregate amount to which each holder of shares of Series A Preferred would otherwise be entitled
immediately prior to such event will be correspondingly adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of Common Stock outstanding
immediately prior to such event.

     7. Consolidation, Merger, Etc. In the event that the Corporation enters into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then, in
each such case, each outstanding share of Series A Preferred will at the same time be similarly
exchanged for or changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to one hundred (100) times the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation at any time (a)
declares a dividend on the outstanding shares of Common Stock payable in shares of Common Stock,
(b) subdivides the outstanding shares of Common Stock, (c) combines the outstanding shares of
Common Stock into a smaller number of shares or (d) issues any shares of its capital stock in a
reclassification of the outstanding shares of Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Corporation is the continuing or surviving
corporation), then, in each such case and regardless of whether any shares of Series A Preferred
are then issued or outstanding, the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred will be correspondingly adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the number of shares of
Common Stock outstanding immediately prior to such event.

 

 

     8. No Redemption. The shares of Series A Preferred are not redeemable.

     9. Rank. The Series A Preferred ranks, with respect to the payment of dividends and the
distribution of assets, junior to all other series of the Corporation’s Preferred Stock, including
the Corporation’s 5% Preferred Stock, unless the terms of such series shall so provide.

     10. Fractional Shares. Series A Preferred 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.

     11. Amendment. The Articles of Incorporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the Series A Preferred so
as to affect such stock adversely without the affirmative vote of the holders of at least a
majority of the outstanding shares of Series A Preferred, voting together as a single class.

 

 

EXHIBIT B

FORM OF RIGHTS CERTIFICATE

			
	Certificate No. R-                     
	 	                     Rights

NOT EXERCISABLE AFTER SEPTEMBER 21, 2019 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS OR IF THE
RIGHTS ARE EARLIER TERMINATED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE RIGHTS AGREEMENT
(AS HEREINAFTER DEFINED). THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND TERMINATION ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.

RIGHTS CERTIFICATE

BFC FINANCIAL CORPORATION

     This certifies that                     , or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof, subject to the terms,
provisions, and conditions of the Rights Agreement, (the “Rights Agreement”), by and between BFC
Financial Corporation, a Florida corporation (the “Company”), and American Stock Transfer & Trust
Company, LLC (the “Rights Agent”), dated as of September 21, 2009, to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 p.m. (New York time) on the Expiration Date (as such term is defined in the Rights Agreement)
at the office or offices of the Rights Agent designated for such purpose, one one-hundredth of a
fully paid nonassessable share of Series A Junior Participating Preferred Stock, par value $0.01
per share, of the Company (the “Series A Preferred Stock”), at a purchase price of $8.00 per one
one-hundredth of a share of Series A Preferred Stock (the “Purchase Price”), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate
duly executed. If this Rights Certificate is exercised in part, the holder will be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised. The number of Rights evidenced by this Rights Certificate (and the
number of one one-hundredths of a share of Series A Preferred Stock which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of the date of the Rights Agreement, based on the shares of Series A Preferred
Stock as constituted at such date. As provided in the Rights Agreement, the Purchase Price and/or
the number and/or kind of securities of the Company which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to adjustment upon the occurrence of
certain events. Capitalized terms used but not defined herein shall have the meanings ascribed to
such terms in the Rights Agreement.

     This Rights Certificate is subject to all of the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and conditions are incorporated by reference herein and
made a part hereof and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities of the Rights Agent, the
Company and the holders of the Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of the Rights under the circumstances specified in the
Rights Agreement. Copies of the

 

 

Rights Agreement are on file at the principal executive offices of the Company and can be
obtained from the Company without charge upon written request therefor.

     Pursuant to the Rights Agreement, from and after the occurrence of any Person becoming an
Acquiring Person, any Rights that are Beneficially Owned by (i) any Acquiring Person (or any
Affiliate or Associate of any Acquiring Person), (ii) a transferee of any Acquiring Person (or any
such Affiliate or Associate) who becomes a transferee after the occurrence of any Person becoming
an Acquiring Person or (iii) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who became a transferee prior to or concurrently with any Person becoming an Acquiring
Person pursuant to either (a) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (b) a transfer which the Board has determined is part of a
plan, arrangement or understanding which has the purpose or effect of avoiding certain provisions
of the Rights Agreement, and subsequent transferees of any of such Persons, will be void without
any further action, and any holder of such Rights will thereafter have no rights whatsoever with
respect to such Rights under any provision of the Rights Agreement. From and after the occurrence
of any Person becoming an Acquiring Person, no Rights Certificate will be issued that represents
Rights that are or have become void pursuant to the provisions of the Rights Agreement, and any
Rights Certificate delivered to the Rights Agent that represents Rights that are or have become
void pursuant to the provisions of the Rights Agreement will be canceled.

     This Rights Certificate, with or without other Rights Certificates, may be exchanged for
another Rights Certificate or Rights Certificates entitling the holder to purchase a like number of
one one-hundredths of a share of Series A Preferred Stock (or other securities, as the case may be)
as the Rights Certificate or Rights Certificates surrendered entitled such holder (or former holder
in the case of a transfer) to purchase, upon presentation and surrender hereof at the office or
offices of the Rights Agent designated for such purpose, with the Form of Assignment (if
appropriate) and the related Certificate duly executed.

     Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at its option at a redemption price of $0.0001 per Right or may be
exchanged in whole or in part. Further, subject to the provisions of the Rights Agreement, the
Rights may be terminated prior to September 21, 2019 or the earlier redemption or exchange of the
Rights. The Rights Agreement may be supplemented and amended by the Company, as provided therein.

     The Company is not required to issue fractions of shares of Series A Preferred Stock (other
than fractions which are integral multiples of one one-hundredths of a share of Series A Preferred
Stock, which may, at the option of the Company, be evidenced by depositary receipts) or other
securities issuable upon the exercise of any Right or Rights evidenced hereby. In lieu of issuing
such fractional shares, the Company may make a cash payment, as provided in the Rights Agreement.

     No holder of this Rights Certificate, as such, will be entitled to vote or receive dividends
or be deemed for any purpose the holder of shares of Series A Preferred Stock or of any other
securities of the Company which may at any time be issuable upon the exercise of the Right or
Rights represented hereby, nor shall anything contained herein or in the Rights Agreement be
construed to confer upon the holder hereof, as such, any of the rights of a shareholder of the
Company or any right to vote on any matter submitted to the shareholders of the Company, including,
without limitation, the election of

 

 

directors, or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by
this Rights Certificate have been exercised in accordance with the provisions of the Rights
Agreement.

     This Rights Certificate will not be valid or obligatory for any purpose until it has been
countersigned by the Rights Agent.

     WITNESS the facsimile signatures of the proper officers of the Company. Dated as of
                    , 20      .

	 	 	 	 	 
	 	

BFC FINANCIAL CORPORATION

 	 
	 	 
 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 
	 	Attested:

 	 
	 	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 
	 	Countersigned:

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

 	 
	 	
 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

Form of Reverse Side of Rights Certificate

FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the Rights Certificate)

FOR VALUE RECEIVED,                                          hereby sells, assigns and transfers this Rights
Certificate, together with all right, title and interest herein, to

 

(Please print name and address of transferee)

and does hereby irrevocably constitute and appoint                             attorney, with full power of
substitution, to transfer this Rights Certificate on the books of the
within-named Company.

Dated :                     ,           

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 

Signature(s) Guaranteed:

SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

                                        

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

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 

 

 

	 	 	 	 	 

CERTIFICATE

The undersigned hereby certifies that:

     (1) the Rights evidenced by this Rights Certificate are not being sold, assigned, transferred,
split up, combined or exchanged by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Person (as such terms are defined in the Rights Agreement); and

     (2) after due inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement).

Dated:                     ,                     

	 	 	 	 	 
	 	 	 
	 	                                                    	 
	 	Signature 	 
	 	 	 

 

 

	 	 	 	 	 

Form of
Reverse Side of Rights Certificate – continued

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise the Rights Certificate)

To BFC Financial Corporation:

The undersigned hereby irrevocably elects to exercise                                  Rights represented by this
Rights Certificate to purchase, with respect to each such Right so exercised, one one-hundredth of
a share of Series A Preferred Stock or other securities issuable upon the exercise of such Rights
and requests that certificates for such securities be issued in the name of and delivered to:

Please insert social security or other identifying number:                                         

 

(Please print name and address)

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

Please insert social security or other identifying number:                                         

 

(Please print name and address)

Dated:
                    ,           

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 
	 

Signature(s) Guaranteed:

SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

                                        

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

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 

 

 

	 	 	 	 	 

CERTIFICATE

The undersigned hereby certifies that:

     (1) the Rights evidenced by this Rights Certificate are not being exercised by or on behalf of
a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Person (as such
terms are defined in the Rights Agreement); and

     (2) after due inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement).

Dated:                     ,              

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	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 Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.

     In the event the Certification accompanying 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.

 

 

EXHIBIT C

SUMMARY OF RIGHTS

     On September 21, 2009, our Board of Directors declared a dividend of one preferred share
purchase right (each, a “Right”) for each outstanding share of Class A Common Stock and Class B
Common Stock (collectively, our “Common Stock”). The terms of the Rights are set forth in a Rights
Agreement, by and between us and American Stock Transfer & Trust Company, LLC, as Rights Agent,
dated as of September 21, 2009 (the “Rights Agreement”).

     This Summary of Rights provides only a general description of the Rights Agreement and, thus,
should be read together with the entire Rights Agreement, which is incorporated into this summary
by reference. The Rights Agreement is attached as Exhibit 4.1 to our Current Report on Form 8-K
filed with the Securities and Exchange Commission (the “SEC”) on September 25, 2009 and can be
accessed via the SEC’s internet web site at www.sec.gov. Additionally, upon written
request, we will provide a copy of the Rights Agreement free of charge to any of our shareholders.
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the
Rights Agreement.

     Our Board adopted the Rights Agreement in an effort to protect shareholder value as the Rights
Agreement is aimed at protecting against a possible limitation on our ability to use net operating
loss carryforwards (“NOLs”) to reduce potential future federal income tax obligations and to
provide other Tax Benefits to us. Under the Internal Revenue Code and rules promulgated by the
Internal Revenue Service, we may “carry forward” NOLs in certain circumstances to offset any
current and future earnings and, thus, reduce our federal income tax liability, subject to certain
requirements and restrictions. However, if we experience an “Ownership Change,” as defined in
Section 382 of the Internal Revenue Code, in the future, our ability to use available NOLs as well
as NOLs, if any, that we experience in the future will be substantially limited, and the timing of
the usage of the NOLs could be substantially delayed, which could therefore significantly impair
the value of that asset.

     The Rights Agreement is intended to act as a deterrent to any person or group from acquiring
5% or more of our outstanding Common Stock (an “Acquiring Person”) after September 21, 2009 (the
“Record Date”) without the approval of our Board. Existing shareholders as of the close of business
on the Record Date will not be required to divest any shares of our Common Stock as the Rights
Agreement provides that shareholders who own 5% or more of our outstanding Common Stock as of the
close of business on the Record Date will not trigger exercisability of the Rights so long as they
do not (i) acquire any additional shares of our Common Stock or (ii) fall under 5% ownership of our
outstanding Common Stock and then purchase shares of our Common Stock which, together with the
other shares of our Common Stock then owned by the shareholder, represent 5% or more of our
outstanding Common Stock. Additionally, a shareholder who our Board determines has inadvertently
exceeded the 5% threshold can avoid the dilutive effect of the Rights by promptly divesting shares
of our Common Stock so as to reduce its interest below the threshold level. Further, our Board
may, in its sole discretion, exempt any shareholder from being deemed an Acquiring Person for
purposes of the Rights Agreement if our Board determines that such shareholder’s

 

 

ownership of our Common Stock would not adversely affect the Tax Benefits which the Rights
Agreement is aimed at preserving, including, without limitation, our ability to use NOLs to reduce
potential future federal income tax obligations. Any Rights held by an Acquiring Person and the
Acquiring Person’s Affiliates and Associates will become void and may not be exercised.

     The Rights Agreement was not adopted in response to any effort to acquire control of us.
However, by providing a deterrent to any person or group from acquiring 5% or more of our
outstanding Common Stock, the Rights Agreement may also have an anti-takeover effect. The Rights
Agreement should not interfere with any merger or other business combination approved by our Board.
Specifically, by its terms, the Rights Agreement is inapplicable to, and will not have any impact
on, our merger with Woodbridge Holdings Corporation and the related issuance of shares of our Class
A Common Stock.

     The Rights. Our Board authorized the issuance of one Right per each share of our Common Stock
outstanding as of September 21, 2009. Subject to the terms, provisions and conditions of the Rights
Agreement, if the Rights become exercisable, each Right would initially represent the right to
purchase from us one one-hundredth of a share of our Series A Junior Participating Preferred Stock
for a purchase price of $8.00 (the “Purchase Price”). If issued, each one one-hundredth of a share
of Series A Junior Participating Preferred Stock would give the shareholder approximately the same
dividend, voting and liquidation rights as does one share of our Class A Common Stock (with all
outstanding shares of our Class A Common Stock and Series A Junior Participating Preferred Stock
representing, in the aggregate, 22% of our general voting power, subject to adjustment in
accordance with our Articles of Incorporation). However, prior to exercise, a Right does not give
its holder any rights as a shareholder, including, without limitation, any dividend, voting or
liquidation rights.

     Exercisability. The Rights will not be exercisable until the earlier of (i) 10 business days
after a public announcement that a person or group has become an Acquiring Person and (ii) 10
business days after the commencement of a tender or exchange offer by a person or group for 5% or
more of our outstanding Common Stock.

     We refer to the date that the Rights become exercisable as the “Distribution Date.” Until the
Distribution Date, our Class A Common Stock and Class B Common Stock certificates will evidence the
Rights. Any transfer of shares of our Common Stock prior to the Distribution Date will constitute a
transfer of the associated Rights. After the Distribution Date, the Rights may be transferred
other than in connection with the transfer of the underlying shares of our Common Stock unless and
until our Board has determined not to effect an exchange pursuant to the Rights Plan (as described
below).

     After the date, if any, on which any person or group becomes an Acquiring Person, each holder
of a Right, other than Rights beneficially owned by the Acquiring Person and any Affiliate or
Associate of the Acquiring Person (which will have become void), will thereafter have the right to
receive upon exercise of a Right and payment of the Purchase Price, that

 

 

number of shares of our Class A Common Stock which have a market value equal to two times the
Purchase Price.

     Exchange. After the Distribution Date, the Board may exchange the Rights (other than Rights
owned by the Acquiring Person and any Affiliate or Associate of the Acquiring Person, which will
have become void), in whole or in part, at an exchange ratio of one share of Class A Common Stock,
or a fractional share of Series A Junior Participating Preferred Stock (or of a share of a similar
class or series of our preferred stock having similar rights, preferences and privileges) of
equivalent value, per Right (subject to adjustment).

     Expiration. The Rights will expire on the earliest of (i) September 21, 2019, (ii) the time
at which the Rights are redeemed pursuant to the Rights Agreement, (iii) the time at which the
Rights are exchanged pursuant to the Rights Agreement, (iv) the repeal of Section 382 of the Code
or any successor statute or the occurrence of any other event if our Board determines that the
Rights Agreement is no longer necessary for the preservation of Tax Benefits and (v) the beginning
of a taxable year to which our Board determines that no Tax Benefits may be carried forward.

     Redemption. At any time prior to the Distribution Date, our Board may redeem the Rights in
whole, but not in part, at a price of $0.0001 per Right (the “Redemption Price”). The redemption of
the Rights may be made effective at such time, on such basis and with such conditions as our Board,
in its sole discretion, may establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate, and the holders of Rights will thereafter only have the right
to receive the Redemption Price.

     Anti-Dilution Provisions. Our Board may adjust the Purchase Price, the number of shares
issuable upon exercise of the Rights and the number of outstanding Rights to prevent dilution that
may occur as a result of certain events, including, among others, a stock dividend, a stock split
or a reclassification of our capital stock. No adjustments to the Purchase Price of less than 1%
will be made.

     Amendments. Before the Distribution Date, our Board may amend or supplement the Rights
Agreement without the consent of the Rights holders. After the Distribution Date, our Board may
amend or supplement the Rights Agreement only to cure an ambiguity, to alter time period
provisions, to correct inconsistent provisions or to make any additional changes to the Rights
Agreement, but only to the extent that those changes do not impair or adversely affect any Rights
holder and do not result in the Rights again becoming redeemable or the Rights Agreement again
becoming amendable other than in connection with amendments described in this sentence.

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