Document:

exv4w1

 

Exhibit
4.1

 

AMENDED AND RESTATED RIGHTS AGREEMENT

by and between

MEDICIS PHARMACEUTICAL CORPORATION

and

WELLS FARGO BANK, N.A.,

as Rights Agent

Dated as of August 17, 2005

 

 

 

TABLE OF CONTENTS

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

i

 

LIST OF EXHIBITS

Exhibit A  —  Form of Certificate of Designations

Exhibit B  —  Form of Right Certificate

Exhibit C  —  Summary of Rights to Purchase Preferred Shares

ii

 

AMENDED AND RESTATED RIGHTS AGREEMENT

            AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of August 17, 2005 (this “Agreement”) between
Medicis Pharmaceutical Corporation, a Delaware corporation (the “Company”), and Wells Fargo Bank,
N.A., a national banking association, as successor-in-interest to American Stock Transfer & Trust
Company, a New York corporation, as rights agent (the “Rights Agent”).

RECITALS:

            On August 17, 1995, the Board of Directors of the Company (the “Board”) adopted a stockholder
rights plan (the “1995 Plan”) and executed a Rights Agreement, dated as of August 17, 1995 (the
“Original Agreement Date”), as amended, between the Company and the predecessor-in-interest to the
Rights Agent (the “1995 Agreement”).

            The 1995 Plan is scheduled to expire on August 17, 2005.

            On August 1, 2005, the Board determined it desirable and in the best interests of the Company
and its stockholders for the Company to renew the 1995 Plan and to implement such renewal by
executing this Agreement.

            On August 17, 1995, the Board of Directors of the Company authorized and declared a dividend
of one preferred share purchase right (a “Right”) for each Class A Common Share and Class B Common
Share (each as hereinafter defined) of the Company outstanding as of the close of business on
August 30, 1995 (the “Record Date”), each Right representing the right to purchase one
one-hundredth of a Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the issuance of one Right with
respect to each Class A Common Share and each Class B Common Share that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are hereinafter defined); provided, however, that Rights may
be issued with respect to Class A Common Shares that shall become outstanding after the
Distribution Date and prior to the Final Expiration Date in accordance with Section 22
hereof.

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

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

            (a) “Acquiring Person” shall mean any Person who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15% or more of the Class A Common
Shares of the Company then outstanding (or, if such Person is an Institutional Investor, 20% or
more), but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company or any Subsidiary of the Company or (iv) any entity holding
Class A Common Shares for or pursuant to the terms of any such plan under the foregoing clause
(iii). Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the
result of a purchase of Class A Common Shares by the Company

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which, by reducing the number of Class A Common Shares of the Company outstanding, increases the
proportionate number of Class A Common Shares of the Company beneficially owned by such Person to
15% or more of the Class A Common Shares of the Company then outstanding (or, if such Person is an
Institutional Investor, 20% or more); provided, however, that, if a Person shall become the
Beneficial Owner of 15% or more of the Class A Common Shares of the Company then outstanding (or,
if such Person is an Institutional Investor, 20% or more) by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the Beneficial Owner of any
additional Class A Common Shares of the Company, other than in connection with a stock split, stock
dividend or other similar transaction initiated by the Company occurring after the Original
Agreement Date, then such Person shall be deemed to be an “Acquiring Person.” Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith that a Person who
would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person as promptly as practicable (as
determined in good faith by the Board of Directors of the Company) divests a sufficient number of
Class A Common Shares so that such Person would no longer be an “Acquiring Person,” as defined
pursuant to the foregoing provisions of this paragraph (a), then such Person shall not, as a result
of such inadvertent acquisition, be deemed to be an “Acquiring Person” for any purposes of this
Agreement.

            (b) “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 under the Exchange
Act as in effect on the date of this Agreement.

            (c) “Associate” shall have the meaning ascribed to such term in Rule 12b-2 under the Exchange
Act as in effect on the date of this Agreement.

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

            (i) which such Person or any of such Person’s Affiliates or Associates beneficially
owns, directly or indirectly;

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

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regulations promulgated under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report); or

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

provided, however, that nothing in this Section 1(d) shall cause a Person engaged in
business as an underwriter of securities to be the “Beneficial Owner” of, or to “beneficially own,”
any securities acquired through such Person’s participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date of such acquisition, and then only
if such securities continue to be owned by such Person at such expiration of forty days.

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

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

            (f) “Class A Common Shares” when used with reference to the Company shall mean the shares of
Class A common stock, par value $0.014 per share, of the Company. “Class A Common Shares” when
used with reference to any Person other than the Company shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned
Person.

            (g) “Class B Common Shares” shall mean the shares of Class B Common Stock, par value $0.014
per share, of the Company.

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

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

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

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

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

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            (m) “Institutional Investor” shall mean a Person who has a Schedule 13G on file with the
Securities and Exchange Commission pursuant to the requirements of Rule 13d-1 under the Exchange
Act with respect to its holdings of the Company’s Class A Common Shares (“Schedule 13G”), so long
as (i) such Person is principally engaged in the business of managing investment funds for
unaffiliated securities investors and, as part of such Person’s duties as agent for fully managed
accounts, holds or exercises voting or dispositive power over Class A Common Shares, (ii) such
Person acquires Beneficial Ownership of Class A Common Shares pursuant to trading activities
undertaken in the ordinary course of such Person’s business and not with the purpose nor the
effect, either alone or in concert with any other Person or Persons, of exercising the power to
direct or cause the direction of the management and policies of the Company or of otherwise
changing or influencing the control of the Company, nor in connection with or as a participant in
any transaction having such purpose or effect, including any transaction subject to Rule 13d-3(b)
of the Exchange Act, and (iii) if such Person is a Person included in Rule 13d-1(b)(1)(ii) of the
Exchange Act, such Person is not obligated to, and does not, file a Schedule 13D with respect to
the securities of the Company.

            (n) “NASDAQ” shall mean the National Association of Securities Dealers, Inc. Automated
Quotation System.

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

            (p) “Preferred Shares” shall mean shares of Series A Junior Participating Preference Stock,
par value $0.01 per share, of the Company having the rights and preferences set forth in the
Certificate of Designations filed with the Secretary of State of the State of Delaware on August
18, 1995, a copy of which is attached to this Agreement as Exhibit A, as the same may be
amended from time to time in accordance with its terms.

            (q) “Purchase Price” shall have the meaning set forth in Section 4 hereof, as adjusted
in accordance with this Agreement and as in effect from time to time.

            (r) “Record Date” shall have the meaning set forth in the second paragraph hereof.

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

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

            (u) “Right” shall have the meaning set forth in the second paragraph hereof.

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

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

            (x) “Shares Acquisition Date” shall mean the first date of public announcement by the Company
or an Acquiring Person that an Acquiring Person has become such.

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            (y) “Subsidiary” of any Person shall mean any corporation, partnership or other entity of
which a majority of the voting power of the voting equity securities or equity interest is owned,
directly or indirectly, by such Person.

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

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

     Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent,
as of the Original Agreement Date, to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall, prior to the Distribution Date, also be
the holders of the Class A Common Shares and Class B Common Shares of the Company) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment as of
the Original Agreement Date. The Company may from time to time appoint such co-Rights Agents as it
may deem necessary or desirable.

     Section 3. Issue of Right Certificates.

            (a) Until the earlier of (i) the close of business on the tenth day after the Shares
Acquisition Date or (ii) the close of business on the tenth Business Day (or such later date as may
be determined by action of the Board of Directors of the Company prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Class A Common Shares of the Company for or
pursuant to the terms of any such plan) of, or of the first public announcement of the intention of
any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Class A Common Shares for or
pursuant to the terms of any such plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming an Acquiring Person (including any such date which is
after the Original Agreement Date and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the “Distribution Date”), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for Class A Common
Shares and Class B Common Shares of the Company registered in the names of the holders thereof
(which certificates shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be transferable only in
connection with the transfer of Class A Common Shares of the Company. As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record holder of Class A Common Shares and
Class B Common Shares of the Company as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate, in substantially
the form of Exhibit B hereto (a “Right Certificate”), evidencing one Right for each Class A
Common Share and Class B Common Share so held. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.

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            (b) On the Record Date, or as soon as practicable thereafter, the Company will send a copy of
a Summary of Rights to Purchase Preferred Shares, in substantially the form of Exhibit C
hereto (the “Summary of Rights”), by first-class, postage-prepaid mail, to each record holder of
Class A Common Shares and Class B Common Shares 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
Class A Common Shares and Class B Common Shares of the Company outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such certificates registered in the
names of the holders thereof together with a copy of the Summary of Rights attached thereto. Until
the Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any Class A Common Shares and Class B Common Shares of the Company
outstanding on the Record Date represented by certificates, with or without a copy of the Summary
of Rights attached thereto, shall also constitute the transfer of the Rights associated with the
Class A Common Shares and Class B Common Shares of the Company represented thereby.

            (c) Certificates for Class A Common Shares and Class B Common Shares which become outstanding
(including, without limitation, reacquired Class A Common Shares and Class B Common Shares referred
to in the last sentence of this paragraph (c)) after the Record Date but prior to the earliest of
the Distribution Date, the Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following legend:

This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement, dated as of August 17, 1995, between
Medicis Pharmaceutical Corporation and Norwest Bank Minnesota, N.A., as
successor-in-interest to American Stock Transfer & Trust Company, as Rights Agent
(as amended, the “Rights Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of Medicis Pharmaceutical Corporation. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. Medicis
Pharmaceutical Corporation will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person (as defined in the Rights Agreement) may
become null and void.

With respect to such certificates containing the foregoing legend, until the Distribution Date, the
Rights associated with the Class A Common Shares and Class B Common Shares of the Company
represented by such certificates shall 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 Class A Common Shares and Class B Common Shares of the Company represented thereby. In
the event that the Company purchases or otherwise acquires any Class A Common Shares or Class B
Common Shares of the Company after the Record Date but prior to the Distribution Date, any Rights
associated with such Class A Common Shares or Class B Common Shares of the Company shall be deemed
cancelled and retired so that the Company

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shall not be entitled to exercise any Rights associated with the Class A Common Shares or Class B
Common Shares of the Company which are no longer outstanding.

     Section 4. Form of Right Certificates. The Right Certificates (and the forms of
election to purchase Preferred Shares and of assignment to be printed on the reverse thereof) shall
be substantially in the form set forth in Exhibit B hereto, and may have such marks of
identification or designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or
as may be required to comply with any applicable law or with any applicable rule or regulation made
pursuant thereto or with any applicable rule or regulation of any stock exchange or the National
Association of Securities Dealers, Inc., or to conform to usage. Subject to the provisions of
Section 22 hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of one one-hundredths of a Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein (the “Purchase Price”), but the number
of such one one-hundredths of a Preferred Share and the Purchase Price shall be subject to
adjustment as provided herein.

     Section 5. Countersignature and Registration. The Right Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Executive Vice Presidents or its Treasurer, either manually or by facsimile
signature, shall have affixed thereto the Company’s seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by
the Company with the same force and effect as though the individual who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any individual who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Agreement any such individual was not such an
officer.

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

     Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 14
hereof, at any time after the close of business on the Distribution Date, and at or prior to the
close of business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void pursuant to Section 11(a)(ii)
hereof or that have been exchanged pursuant to Section 24 hereof) may be transferred, split
up, combined or exchanged for another Right

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Certificate or Right Certificates entitling the
registered holder to purchase a like number of one one-hundredths of a Preferred Share as the Right
Certificate or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office or agency of the Rights Agent designated for such purpose. Thereupon the
Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.

            Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company’s
request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights
Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.

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

            (a) The registered holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein), in whole or in part, at any time after the Distribution
Date, upon surrender of the Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the office or agency of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for each one one-hundredth
of a Preferred Share as to which the Rights are exercised, at or prior to the earliest of (i) the
close of business on August 17, 2015 (the “Final Expiration Date”), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the “Redemption Date”), or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.

            (b) The Purchase Price for each one one-hundredth of a Preferred Share purchasable pursuant to
the exercise of a Right shall initially be $200.00, and shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof, and shall be payable in lawful money
of the United States of America in accordance with paragraph (c) of this Section 7.

            (c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the Purchase Price for the shares to
be purchased and an amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 9 hereof by certified check, cashier’s
check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly
(i) (A) requisition from any transfer agent of the Preferred Shares certificates for the number
of Preferred Shares to be purchased and the Company hereby irrevocably
authorizes, as of the Original Agreement Date, any such transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number of Preferred Shares

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issuable upon exercise of the Rights with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent of the Preferred Shares with such depositary agent) and
the Company hereby directs, as of the Original Agreement Date, such depositary agent to comply with
all such requests; (ii) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14 hereof; (iii)
promptly after receipt of such certificates or depositary receipts, cause the same to be delivered
to or upon the order of the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder; and (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Right Certificate.

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

            (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported transfer or exercise of Rights pursuant to Section 6 hereof or
this Section 7 unless such registered holder shall have (i) completed and signed the
certificate and the form of assignment or election to purchase set forth on the reverse side of the
Right Certificate surrendered for such transfer or exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company or the Rights Agent shall reasonably request.

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

     Section 9. Availability of Preferred Shares.

            (a) The Company covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held in its treasury the
number of Preferred Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7 hereof. The Company covenants and agrees

9

 

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

            (b) If then required by law, the Company shall use its reasonable best efforts (i) as soon as
practicable following an event described in Section 11(a)(ii) as to which the consideration
to be delivered by the Company upon exercise of the Rights has been determined in accordance with
this Agreement, or as soon as is required by law following the Distribution Date, as the case may
be, to file a registration statement on an appropriate form under the Securities Act with respect
to the securities purchasable upon exercise of the Rights, (ii) to cause such registration
statement to become effective as soon as practicable after such filing, and (iii) to cause such
registration statement to remain effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the earlier of (A) the date as of which Rights are no longer
exercisable for such securities and (B) the Final Expiration Date. If then required by law, the
Company shall also use its reasonable best efforts to take such action as may be necessary or
appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various
states in connection with the exercise of the Rights. The Company may temporarily suspend, for a
period of time not to exceed one hundred and twenty (120) days after the first occurrence of an
event described in Section 11(a)(ii), 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 (and shall provide written notice to the Rights
Agent) stating that the exercisability of the Rights has been temporarily suspended, as well as a
public announcement, in each case with written notice to the Rights Agent, at such time as the
suspension is no longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained, the exercise of such Rights is not
permitted under applicable law, or if required by law a registration statement has not been
declared effective.

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

     Section 10. Preferred Shares Record Date. Each Person in whose name any certificate
for Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that, if the date of such surrender and payment is a date upon which

10

 

the Preferred Shares transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not
be entitled to any rights of a holder of Preferred Shares for which the Rights shall 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 of Shares or Number of Rights. The
Purchase Price, the number of Preferred Shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this Section 11.

            (a) (i) In the event the Company shall at any time after the Original Agreement Date (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation), except as otherwise provided in
this Section 11(a), the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Shares transfer books of the
Company were open, such 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. If an event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii) hereof.

            (ii) Subject to Section 24 hereof, in the event any Person becomes an Acquiring
Person, each holder of a Right (other than any Rights that are or were acquired or beneficially
owned by any Acquiring Person or by any Associate or Affiliate of any Acquiring Person) shall
thereafter have a right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Class A Common Shares of the Company as shall equal the result obtained by
(A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and (B) dividing that product by 50% of the then
current per share market price of the Class A Common Shares of the Company (determined pursuant to
Section 11(d) hereof) on the date of the occurrence of such event. In the event that any
Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall
not take any action, except as permitted by this Agreement,

11

 

which if at the time such action is or
would be taken it is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.

            From and after the occurrence of such event, any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
shall be void, and any holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no
Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be
void pursuant to the preceding sentence shall be cancelled.

            (iii) In the event that there shall not be sufficient Class A Common Shares issued but not
outstanding or authorized but unissued to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii), the Company shall take all such action as may be necessary to
authorize additional Class A Common Shares for issuance upon exercise of the Rights. In the event
the Company shall, after good faith effort, be unable to take all such action as may be necessary
to authorize such additional Class A Common Shares, the Company shall substitute, for each Class A
Common Share that would otherwise be issuable upon exercise of a Right, a number of Preferred
Shares or fraction thereof such that the current per share market price of one Preferred Share
(determined pursuant to Section 11(d) hereof) multiplied by such number or fraction is equal to the
current per share market price of one Class A Common Share (determined pursuant to Section 11(d)
hereof) as of the date of issuance of such Preferred Shares or fraction thereof.

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

12

 

securities so to be offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company issuable upon exercise of one Right. In case
such subscription price may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and holders of the Rights. Preferred Shares
and equivalent preferred shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and, in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

            (c) In case the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then-current per share market price of the Preferred
Shares (determined pursuant to Section 11(d) hereof) on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and holders of the Rights) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such then-current per share market price of the Preferred Shares
(determined pursuant to Section 11(d) hereof) on such record date; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less than the aggregate
par value of the shares of capital stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record date is fixed; and, in the event
that such distribution is not so made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record date had not been fixed.

            (d) (i) For the purpose of any computation hereunder, the “current per share market price” of
any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall be
deemed to be the average of the daily closing prices per share of such Security for the 30
consecutive Trading Days immediately prior to such date; provided, however, that, in the event that
the current per share market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or Securities convertible into such shares (other than the
Rights), or (B) any subdivision, combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, as the case may be, then, and in
each such case, the current per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing price for each day shall

13

 

be the last sale price, regular way, reported at or prior to 4:00 P.M. Eastern time or, in
case no such sale takes place on such day, the average of the bid and asked prices, regular way,
reported as of 4:00 P.M. Eastern time, in either case, as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading on any national
securities exchange, as reported by the National Association of Securities Dealers Automated
Quotations/National Market System (“NASDAQ/NMS”), or, if the Security is not listed or admitted to
trading on any national securities exchange or NASDAQ/NMS, the last quoted price reported at or
prior to 4:00 P.M. Eastern time or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported as of 4:00 P.M. Eastern time by NASDAQ or such
other system then in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a professional market
maker making a market in the Security selected by the Board of Directors of the Company. The term
“Trading Day” shall mean a day on which the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed or admitted to trading
on any national securities exchange, NASDAQ/NMS is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national securities exchange or NASDAQ/NMS, a
Business Day.

            (ii) For the purpose of any computation hereunder, the “current per share market price” of the
Preferred Shares shall be determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Shares are not publicly traded, the “current per share market
price” of the Preferred Shares shall be conclusively deemed to be the current per share market
price of the Class A Common Shares as determined pursuant to Section 11(d)(i) hereof
(appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring
after the Original Agreement Date), multiplied by one hundred. If neither the Class A Common
Shares nor the Preferred Shares are publicly held or so listed or traded, “current per share market
price” shall mean the fair value per share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with the Rights Agent.

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

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

14

 

receivable upon exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), (e), (i),
(m) and (n), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Shares shall apply on like terms to any such other shares.

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

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

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

15

 

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

            (k) Before taking any action that would cause an adjustment reducing the Purchase Price below
the then par value, if any, of the Preferred Shares or other shares of capital stock 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 duly authorize and validly issue fully paid
and nonassessable Preferred Shares or other such shares at such adjusted Purchase Price.

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

            (m) Anything in this Section 11 to the contrary notwithstanding, the 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 it, in its sole discretion, shall
determine to be advisable in order that any consolidation or subdivision of the Preferred Shares,
issuance wholly for cash of any Preferred Shares at less than the current market price, issuance
wholly for cash of Preferred Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, dividends on Preferred Shares payable in Preferred Shares or
issuance of rights, options or warrants referred to in Section 11(b) hereof, hereafter made
by the Company to holders of the Preferred Shares shall not be taxable to such stockholders.

            (n) In the event that, at any time after the Original Agreement Date and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the Class A Common Shares
payable in Class A Common Shares, or (ii) effect a subdivision, combination or consolidation of the
Class A Common Shares (by reclassification or otherwise than by payment of dividends in Class A
Common Shares) into a greater or lesser number of Class A Common Shares, then, in any such case,
(A) the number of one one-hundredths of a Preferred Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Class A Common Shares outstanding immediately before such event and the
denominator of which is the number of Class A Common Shares outstanding immediately after such
event, and (B) each Class A Common Share outstanding immediately after such event shall have issued
with respect to it that number of Rights which each Class A Common Share outstanding immediately
prior to such event had issued with respect to it. The adjustments provided for in this
Section 11(n) shall be

16

 

made successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 or 13 hereof, the Company shall
promptly (a) prepare a certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the
Class A Common Shares or the Preferred Shares a copy of such certificate and (c) if such adjustment
occurs at any time after the Distribution Date, mail a brief summary thereof to each holder of a
Right Certificate in accordance with Section 25 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein contained and shall not
be deemed to have knowledge of any such adjustment unless and until it shall have received such
certificate.

     Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. In
the event, directly or indirectly, at any time after a Person has become an Acquiring Person, (a)
the Company shall consolidate with, or merge with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such merger, all or part
of the Class A Common Shares shall be changed into or exchanged for stock or other securities of
any other Person (or the Company) or cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power aggregating 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company
or one or more of its wholly-owned Subsidiaries, then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of duly authorized, validly issued, fully paid and nonassessable
Class A Common Shares of such other Person (including the Company as successor thereto or as the
surviving corporation) as shall equal the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is then
exercisable and (B) dividing that product by 50% of the then current per share market price of the
Class A Common Shares of such other Person (determined pursuant to Section 11(d) hereof) on
the date of consummation of such consolidation, merger, sale or transfer; (ii) the issuer of such
Class A Common Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such issuer; and
(iv) such issuer shall take such steps (including, but not limited to, the reservation of a
sufficient number of its Class A Common Shares in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless, prior thereto, the Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing. The Company shall not enter into any

17

 

transaction of the kind referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. The provisions of this Section 13
shall similarly apply to successive mergers or consolidations or sales or other transfers.

     Section 14. Fractional Rights and Fractional Shares.

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

          (b) The Company shall not be required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of
the Rights or to distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided that such agreement shall provide
that the holders of such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Preferred Share. For the purposes of this Section 14(b), the current market value of a Preferred Share
shall be the

18

 

closing price of a Preferred Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.

          (c) The holder of a Right, by the acceptance of the Right, expressly waives such holder’s
right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as
provided above).

     Section 15. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 18 hereof, are
vested in the respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Class A Common Shares); and any registered holder
of any Right Certificate (or, prior to the Distribution Date, of the Class A Common Shares),
without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the Class A Common Shares), 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 Right Certificate in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement, and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the obligations of any
Person subject to, this Agreement.

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

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

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

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

          (d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of

19

 

competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided, however, the Company must use its
reasonable best efforts to have any such order, decree or ruling lifted or otherwise overturned as
soon as possible.

     Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of
any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the Preferred Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such,
any of the rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.

     Section 18. Concerning the Rights Agent. The Company agrees to pay to the Rights
Agent such reasonable compensation as shall be agreed to in writing by the Company and the Rights
Agent for all services rendered by it hereunder, and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.

          The Rights Agent shall be protected and shall incur no liability for, or in respect of any
action taken, suffered or omitted by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the Preferred Shares, Class A Common Shares
or Class B Common Shares or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper Person or Persons.

     Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust powers of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution
or filing of any instrument or paper or any further act on the part of any of the parties hereto;
provided that such corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights Agent

20

 

shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so countersigned; and, in case at
that time any of the Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or
in the name of the successor Rights Agent; and, in all such cases, such Right Certificates shall
have the full force provided in the Right Certificates and in this Agreement.

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

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

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

          (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Executive Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.

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

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

          (e) The Rights Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due authorization and execution hereof
by the Rights Agent) or in respect of the validity or execution of any Right Certificate

21

 

(except its countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3, 11,
13, 23 or 24 hereof, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Preferred Shares will, when issued, be duly authorized,
validly issued, fully paid and nonassessable.

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

          (g) The Rights Agent is hereby authorized and directed, as of the Original Agreement Date, to
accept instructions with respect to the performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Executive Vice President,
the Secretary or the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions.

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

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

          (j) If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of election to purchase, as
the case may be, has either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.

22

 

     Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing
mailed to the Company and to each transfer agent of the Class A Common Shares or Preferred Shares
by registered or certified mail, and to the holders of the Right Certificates by first-class mail.
The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Class A Common Shares or Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(which holder shall, with such notice, submit such holder’s Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or of the State of New York (or of any other state of the
United States so long as such corporation is authorized to do business as a banking institution in
the State of Arizona or the State of New York), in good standing, having an office in the State of
Arizona or the State of New York, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by federal or state authority
and which has at the time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Class A Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall not affect
the legality or validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.

     Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be
approved by the Board of Directors of the Company to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of Class A Common Shares following the
Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date,
the Company (i) shall with respect to Class A Common Shares so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, granted or awarded prior to
the Distribution Date, or upon the exercise, conversion or exchange of securities, notes or
debentures issued by the Company prior to the Distribution Date (unless an Acquiring Person or any
of its Affiliates or Associates is

23

 

the Beneficial Owner of such stock options, securities, notes or
debentures), and (ii) may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) the Company shall not be
obligated to issue any such Right Certificates if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Right Certificate would be issued, and (ii)
no Right Certificate shall be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.

     Section 23. Redemption.

          (a) The Board of Directors of the Company may, at its option, by the affirmative vote of a
majority of the whole Board of Directors of the Company, at any time prior to such time as any
Person becomes an Acquiring Person, redeem all but not less than all the then outstanding Rights at
a redemption price of $0.001 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the Original Agreement Date (such redemption price
being hereinafter referred to as the “Redemption Price”). The redemption of the Rights by the
Board of Directors of the Company may be made effective at such time, on such basis and with such
conditions as the Board of Directors of the Company, in its sole discretion, may establish. The
term “whole Board of Directors of the Company” means the number of directors the Company would have
if there were no vacancies in the Board of Directors of the Company.

          (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights pursuant to Section 23(a), and without any further action and
without any notice, the right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give
public notice of any such redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption. Within 10 days after such
action of the Board of Directors of the Company ordering the redemption of the Rights, the Company
shall mail a notice of redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Class A Common Shares and the Class B
Common Shares. Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time except (i) in the manner specifically set forth in this Section 23 or
in Section 24 hereof or (ii) in connection with the purchase of Class A Common Shares prior to the
Distribution Date.

     Section 24. Exchange.

          (a) The Board of Directors of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the

24

 

provisions of Section 11(a)(ii) hereof) for Class A Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring
after the Original Agreement Date (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors of the Company shall not
be empowered to effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any
entity holding Class A Common Shares for or pursuant to the terms of any such plan), together with
all Affiliates and Associates of such Person, becomes the Beneficial owner of Class A Common Shares
aggregating 50% or more of the Class A Common Shares then outstanding.

          (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to paragraph (a) of this Section 24 and without any further action
and without any notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of Class A Common Shares
equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry 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 Class A
Common Shares for Rights will be effected, and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.

          (c) In the event that there shall not be sufficient Class A Common Shares issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may be necessary
to authorize additional Class A Common Shares for issuance upon exchange of the Rights. In the
event the Company shall, after good faith effort, be unable to take all such action as may be
necessary to authorize such additional Class A Common Shares, the Company shall substitute, for
each Common Share that would otherwise be issuable upon exchange of a Right, a number of Preferred
Shares or fraction thereof such that the current per share market price of one Preferred Share
(determined pursuant to Section 11(d) hereof) multiplied by such number or fraction is
equal to the current per share market price of one Class A Common Share (determined pursuant
to Section 11(d) hereof) as of the date of issuance of such Preferred Shares or fraction thereof.

          (d) The Company shall not be required to issue fractions of Class A Common Shares or to
distribute certificates which evidence fractional Class A Common Shares. In lieu of such
fractional Class A Common Shares, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Class A Common Shares would otherwise be issuable
an amount in cash equal to the same fraction of the current market value of a whole Class A Common
Share. For the purposes of this paragraph (d), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant to

25

 

the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.

     Section 25. Notice of Certain Events.

          (a) In case the Company shall, at any time after the Distribution Date, propose (i) to pay any
dividend payable in stock of any class to the holders of the Preferred Shares or to make any other
distribution to the holders of the Preferred Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of the Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of the Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred Shares), (iv) to effect
any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of
50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person, (v) to effect the liquidation, dissolution or winding up of the Company, or
(vi) to declare or pay any dividend on the Class A Common Shares payable in Class A Common Shares
or to effect a subdivision, combination or consolidation of the Class A Common Shares (by
reclassification or otherwise than by payment of dividends in Class A Common Shares), then, in each
such case, the Company shall give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders of the Class A
Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Shares for purposes of such action, and, in
the case of any such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the Class A Common Shares
and/or Preferred Shares, whichever shall be the earlier.

          (b) In case the event set forth in Section 11(a)(ii) hereof shall occur, then the
Company shall, as soon as practicable thereafter, give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of Rights under Section
11(a)(ii) hereof.

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

          Medicis Pharmaceutical Corporation

          8125 North Hayden Road

          Scottsdale, AZ 85258-2463

          Attention: Corporate Secretary

26

 

     Subject to the provisions of Section 21 hereof, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as follows:

          Wells Fargo Bank, N.A.

          161 N. Concord Exchange

          South St. Paul, MN 55075

          Attention: Shareowner Services

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

     Section 27. Supplements and Amendments. The Company may from time to time, with
approval by the affirmative vote of a majority of the whole Board of Directors of the Company,
supplement or amend this Agreement without the approval of any holders of Right Certificates in
order to cure any ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or to make any other provisions with
respect to the Rights which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights Agent; provided,
however, that, from and after such time as any Person becomes an Acquiring Person, this Agreement
shall not be amended in any manner which would adversely affect the interests of the holders of
Rights.

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

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

     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.

     Section 31. Determinations and Actions by the Board of Directors, etc. (a) For all
purposes of this Agreement, any calculation of the number of Class A Common Shares or of any other
class of capital stock outstanding at any particular time, including for purposes of determining
the particular percentage of the outstanding voting power or such outstanding Class

27

 

A Common Shares of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) (as in effect on the date of this Agreement) under the Exchange Act. The Board
of Directors of the Company shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the Board of Directors of
the Company or to the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not redeem the Rights or
to amend the Agreement). 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 of Directors of the Company 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 of Directors of the Company, or any of the directors on the
Board of Directors of the Company, to any liability to the holders of the Rights.

            (b) It is understood that the Independent Directors Committee (as defined below) of the Board
of Directors of the Company shall review and evaluate this Agreement in order to consider whether
the maintenance of this Agreement continues to be in the interests of the Company, its stockholders
and any other relevant constituencies of the Company, within three (3) years of the date hereof and
at least every three (3) years thereafter. Following each such review, the Independent Directors
Committee will communicate its conclusions to the full Board of Directors of the Company, including
any recommendation in light thereof as to whether this Agreement should be modified or the Rights
should be redeemed. The “Independent Directors Committee” shall be comprised of the members of the
corporate governance and nominating committee of the Board of Directors of the Company who are
neither an Acquiring Person or a Person on whose behalf a tender offer or exchange offer for Common
Shares is being made nor a representative, nominee, Associate or Affiliate of an Acquiring Person or of a Person on whose
behalf a tender offer or exchange for Common Shares is being made.

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

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

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

[signature page follows]

28

 

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

	 	 	 	 	 	 	 
	Attest:	 	MEDICIS PHARMACEUTICAL
 CORPORATION
	 
	 	 	 	 	 	 
	By:

	 	/s/ Marilyn A. Luby	 	By:	 	/s/ Mark A. Prygocki, Sr.
	 

	 	 
	 	 	 	 
	Name:

	 	Marilyn A. Luby	 	Name:	 	Mark A. Prygocki, Sr.
	Title:

	 	Executive Assistant to  Mark Prygocki	 	Title:	 	Executive Vice President, Chief
Financial Officer,
Corporate Secretary and Treasurer
	 
	 	 	 	 	 	 
	Attest:	 	WELLS FARGO BANK, N.A.
	 
	 	 	 	 	 	 
	By:	 	/s/ Cheryl Kelly	 	By:	 	/s/ Cindy L. Gesme
	 

	 	 	 	 	 	 
	Name:	 	Cheryl Kelly	 	Name:	 	Cindy L. Gesme
	Title:	 	Account Manager/Officer	 	Title:	 	Account Manager/Officer

 

 

Exhibit A

CERTIFICATE OF DESIGNATIONS

of

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

[See Attached]

 

 

CERTIFICATE OF DESIGNATIONS

OF

SERIES A JUNIOR PARTICIPATING PREFERENCE STOCK

OF

MEDICIS PHARMACEUTICAL CORPORATION

(Pursuant to Section 151 of the

General Corporation Law of the State of Delaware)

          Medicis Pharmaceutical Corporation, a corporation organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the “Corporation”), hereby certifies
that the following resolution was adopted by the Board of Directors of the Corporation as required
by Section 151 of the General Corporation Law at a meeting duly called and held on August 17, 1995:

          RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of
the Corporation (hereinafter called the “Board of Directors” or the “Board”) in accordance with the
provisions of the Certificate of Incorporation, as amended to date (hereinafter called the
“Certificate of Incorporation”), of the Corporation, the Board of Directors hereby creates a series
of Preferred Stock, par value $.01 per share (the “Preferred Stock”), of the Corporation and hereby
states the designation and number of shares, and fixes the relative rights, preferences, and
limitations thereof as follows:

          Series A Junior Participating Preference Stock:

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

          Section 2. Dividends and Distributions.

     (A) Subject to the rights of the holders of any shares of any other series of Preferred
Stock of the Corporation or of any other stock of the Corporation ranking prior and superior
to the Series A Preference Stock with respect to dividends, the holders of
shares of Series A Preference Stock, in preference to the holders of Class A Common
Stock, par value $.001 per share (the “Class A Common Stock”), and Class B Common

A-1

 

Stock,
$.001 par value (the “Class B Common Stock” and, together with the Class A Common Stock, the
“Common Stock”), of the Corporation, and of any other stock ranking junior to the Series A
Preference Stock as to dividends, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December in each year (each
such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of
a share of Series A Preference Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series A Preference Stock. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preference Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such event.

     (B) The Corporation shall declare a dividend or distribution on the Series A Preference
Stock as provided in paragraph (A) of this Section immediately after it declares a dividend
or distribution on the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A
Preference Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.

     (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preference Stock from the Quarterly Dividend Payment Date next preceding the date of issue
of such shares, unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination of holders of
shares of Series A Preference Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.

A-2

 

Dividends
paid on the shares of Series A Preference Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated pro rata on
a share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of Series A
Preference Stock entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be not more than 60 days prior to the date fixed for the payment
thereof.

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

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

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

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

          Section 4. Certain Restrictions.

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

A-3

 

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

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

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

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

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

          Section 5. Reacquired Shares. Any shares of Series A Preference Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued and undesignated 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 Certificate of Incorporation, or in any other Certificate of Designations creating a
series of Preferred Stock or any similar stock or as otherwise required by law.

          Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or
winding up of the Corporation, no distribution shall be made (A) to the holders of shares of stock
ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preference Stock unless, prior thereto, the
holders of shares of Series A

A-4

 

Preference Stock shall have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, provided that the holders of shares of the Series A Preference Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to
holders of shares of Class A Common Stock, or (B) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A
Preference Stock, except distributions made ratably on the Series A Preference Stock and all such
parity stock in proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Class A Common Stock payable in shares of Class A
Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of
Class A Common Stock (by reclassification or otherwise than by payment of a dividend in shares of
Class A Common Stock) into a greater or lesser number of shares of Class A Common Stock, then in
each such case the aggregate amount to which holders of shares of Series A Preference Stock were
entitled immediately prior to such event shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Class A Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of Class A Common Stock that
were outstanding immediately prior to such event.

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

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

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

          Section 10. Amendment. If any proposed amendment to the Certificate of Incorporation would
materially alter or change the preferences, special rights or powers of the

A-5

 

Series A Preference
Stock so as to affect the Series A Preference Stock adversely, or would authorize the creation of a
class of stock having preferences or rights with respect to dividends or dissolution or the
distribution of assets that would be superior to the preferences or rights of the Series A
Preference Stock, then the holders of the Series A Preference Stock shall be entitled to vote as a
separate class upon such amendment, and the affirmative vote of the holders of at least two-thirds
of the outstanding shares of Series A Preference Stock shall be necessary to the adoption thereof,
in addition to such other vote as may be required by the General Corporation Law of the State of
Delaware.

IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation
by its Chairman and Chief Executive Officer and attested by its Assistant Secretary this 
16 day of August, 1995.

	 	 	 
	 

	 	/s/ Jonah Shacknai
	 

	 	 
	 

	 	Chairman and Chief Executive
Officer
	 
	 	 
	Attest:
	 	 
	 
	 	 
	/s/ Iris Finkelstein
	 	 
	 	 	 
	Assistant Secretary
	 	 

A-6

 

Exhibit B

Form of Right Certificate

			
	 	 	 
	Certificate No. R-
	 	                     Rights

NOT EXERCISABLE AFTER AUGUST 17, 2015 OR EARLIER IF REDEMPTION OR

EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER

RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT.

Right Certificate

MEDICIS PHARMACEUTICAL 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 Amended and Restated Rights Agreement, dated as of August
17, 2005 (the “Agreement”), between Medicis Pharmaceutical Corporation, a Delaware corporation (the
“Company”), and Wells Fargo Bank, N.A., a national banking association (the “Rights Agent”), to
purchase from the Company at any time after the Distribution Date (as such term is defined in the
Agreement) and prior to 5:00 P.M., New York time, on August 17, 2015 at the office or agency of the
Rights Agent designated for such purpose, or at the office of its successor as Rights Agent, one
one-hundredth of a fully paid non-assessable share of Series A Junior Participating Preference
Stock, par value $0.01 per share, of the Company (the “Preferred Shares”), at a purchase price of
$200.00 per one one-hundredth of a Preferred Share (the “Purchase Price”), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a
Preferred Share which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of August 17, 2005, based on the
Preferred Shares as constituted at such date. As provided in the Agreement, the Purchase Price and
the number of one one-hundredths of a Preferred Share which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.

     This Right Certificate is subject to all of the terms, provisions and conditions of the
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent,
the Company and the holders of the Right Certificates. Copies of the Agreement are on file at the
principal executive offices of the Company and the offices of the Rights Agent.

     This Right Certificate, with or without other Right Certificates, upon surrender at the office
or agency of the Rights Agent designated for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If

B-1

 

this Right Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates for the number of whole
Rights not exercised.

     Subject to the provisions of the Agreement, the Rights evidenced by this Right Certificate (i)
may be redeemed by the Company at a redemption price of $0.001 per Right or (ii) may be exchanged
in whole or in part for Preferred Shares or shares of the Company’s Class A Common Stock, par value
$0.014 per share. No fractional Preferred Shares will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredth of
a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts),
but, in lieu thereof, a cash payment will be made, as provided in the Agreement.

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

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

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

	 	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	MEDICIS PHARMACEUTICAL
 CORPORATION
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Countersigned:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WELLS FARGO BANK, N.A.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

B-2

 

[Form of Reverse Side of Right Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)

     FOR VALUE RECEIVED                                                                                  hereby sells, assigns and transfers unto                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                                                

(Please print name and address of transferee)

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

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature
	 
	 	 	 	 
	Signature Medallion Guaranteed:	 	 

B-3

 

CERTIFICATE

          The undersigned hereby certifies by checking the appropriate boxes that:

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

          (2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] 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.

	 	 	 	 	 
	Dated:                                        ,                     

	 	                                                                                                                        	 	 
	 

	 	Signature	 	 
	 
	 	 	 	 
	Signature Medallion Guaranteed:

B-4

 

[Form of Reverse Side of Right Certificate – continued]

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise

Rights represented by the Right Certificate.)

	 	 	 
	To:

	Medicis Pharmaceutical Corporation

      The undersigned hereby irrevocably elects to exercise _________Rights represented by this
Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights and
requests that certificates for such Preferred Shares be issued in the name of:

Please insert social security

or other identifying number

 

(Please print name and address)

 

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

Please insert social security

or other identifying number

 

(Please print name and address)

 

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature
	 
	 	 	 	 
	Signature Medallion Guaranteed:	 	 

B-5

 

[Form of Reverse Side of Right Certificate – continued]

CERTIFICATE

          The undersigned hereby certifies by checking the appropriate boxes that:

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

          (2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] 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.

	 	 	 	 	 
	Dated:                                        ,                     

	 	                                                                                                                        	 	 
	 

	 	Signature	 	 
	 
	 	 	 	 
	Signature Medallion Guaranteed:

B-6

 

NOTICE

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

     All Guarantees must be made by a financial institution (such as a bank or broker) which is a
participant in the Securities Transfer Agents Medallion Program (“STAMP”), the New York Stock
Exchange, Inc. Medallion Signature Program (“MSP”), or the Stock Exchanges Medallion Program
(“SEMP”) and must not be dated. Guarantees by a notary public are not acceptable.

     In the event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent may
deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Agreement) and not honor such
Assignment or Election to Purchase.

B-7

 

Exhibit C

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED SHARES

Introduction

     On August 17, 1995, the Board of Directors of our Company, Medicis Pharmaceutical Corporation,
a Delaware corporation, declared a dividend of one preferred share purchase right (a “Right”) for
each outstanding share of Class A common stock, par value $0.014 per share, and Class B common
stock, par value $0.014 per share. The dividend was payable to the stockholders of record on
August 30, 2005.

     The Rights were issued pursuant to the Rights Agreement as made between our Company and the
predecessor-in-interest to Wells Fargo Bank, N.A., as the Rights Agent (the “Rights Agent”), on
August 17, 1995, as amended (the “Original Rights Agreement”). Our Board renewed the Original
Rights Agreement, which was scheduled to expire on August 17, 2005, pursuant to the Amended and
Restated Rights Agreement, dated as of August 17, 2005 between our Company and the Rights Agent (as
so amended and restated, the “Rights Agreement”). Our Board has adopted the Rights Agreement to
protect stockholders from coercive or otherwise unfair takeover tactics. In general terms, it
works by imposing a significant penalty upon any person or group which acquires 15% or more of our
outstanding common stock without the approval of our Board or more than 20% for certain
institutional investors. The Rights Agreement should not interfere with any merger or other
business combination approved by our Board.

     For those interested in the specific terms of the Rights Agreement, we provide the following
summary description. Please note, however, that this description is only a summary is not
complete, and should be read together with the entire Rights Agreement, which has been filed with
the Securities and Exchange Commission as an Exhibit to a Form 8-A/A dated [                                ], 2005.
A copy of the Rights Agreement is available free of charge from our Company.

The Rights. Our Board authorized the issuance of a Right with respect to each outstanding
share of common stock on August 30, 1995. The Rights will initially trade with, and will be
inseparable from, the common stock. The Rights are evidenced only by certificates that represent
shares of common stock. New Rights will accompany any new shares of common stock we issue after
August 30, 1995 until the Distribution Date described below.

Exercise Price. Each Right will allow its holder to purchase from our Company one
one-hundredth of a share of Series A Junior Participating Preference Stock (“Preferred Share”) for
$200.00, once the Rights become exercisable.

Exercisability. The Rights will not be exercisable until

	q	 	10 days after the public announcement that a person or group has become an
“Acquiring Person” by obtaining beneficial ownership of 15% or more of our outstanding common
stock or 20% or more for certain institutional investors, or, if earlier,

C-1

 

	q	 	10 business days (or a later date determined by our Board before any person or
group becomes an Acquiring Person) after a person or group begins a tender or exchange offer
which, if completed, would result in that person or group becoming an Acquiring Person.

     We refer to the date when the Rights become exercisable as the “Distribution Date.” Until that
date, the common stock certificates will also evidence the Rights, and any transfer of shares of
common stock will constitute a transfer of Rights. After that date, the Rights will separate from
the common stock and be evidenced by Right certificates that we will mail to all eligible holders
of common stock. Any Rights held by an Acquiring Person are void and may not be exercised.

Consequences of a Person or Group Becoming an Acquiring Person.

	q	 	Flip In. If a person or group becomes an Acquiring Person, all holders of Rights except
the Acquiring Person may, for $200.00, purchase shares of our Class A common stock with a
market value of $400.00, based on the market price of the Class A common stock prior to such
acquisition.
	 
	q	 	Flip Over. If our Company is acquired in a merger or similar transaction after an
Acquiring Person becomes such, all holders of Rights except the Acquiring Person may, for
$200.00, purchase shares of the acquiring corporation with a market value of $400.00 based on
the market price of the acquiring corporation’s stock, prior to such merger.

Preferred Share Provisions.

Each one one-hundredth of a Preferred Share, if issued:

	q	 	will not be redeemable.
	 
	q	 	will entitle holders to quarterly dividend payments of $0.01 per one one-hundredth of a
Preferred Share, or an amount equal to the dividend paid on one share of common stock,
whichever is greater.
	 
	q	 	will entitle holders upon liquidation either to receive $1.00 per one one-hundredth of a
Preferred Share or an amount equal to the payment made on one share of common stock, whichever
is greater.
	 
	q	 	will have the same voting power as one share of Class A common stock.
	 
	q	 	if shares of our Class A common stock are exchanged via merger, consolidation or a
similar transaction, will entitle holders to a per share payment equal to the payment made on
one share of Class A common stock.

The value of one one-hundredth interest in a Preferred Share should approximate the value of one
share of Class A common stock.

C-2

 

Expiration. The Rights will expire at 5:00 P.M., New York time, on August 17, 2015, unless
such date is advanced or extended or unless the Rights are earlier redeemed or exchanged by our
Board as described below.

Redemption. Our Board may redeem the Rights for $0.001 per Right at any time before any
person or group becomes an Acquiring Person. If our Board redeems any Rights, it must redeem all
of the Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to
receive the redemption price of $0.001 per Right. The redemption price will be adjusted if we have
a stock split or stock dividends of our common stock.

A committee of our Board composed of independent directors will review the Rights Agreement
periodically (at least every three years) in order to consider whether the maintenance of the
Rights Agreement continues to be in the best interests of the Company, its stockholders and any
other relevant constituencies. This committee will communicate its conclusions to the full Board
after each review, including any recommendation as to whether the Rights Agreement should be
modified or the Rights should be redeemed.

Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring
Person owns 50% or more of our outstanding Class A common stock, our Board may extinguish the
Rights by exchanging one share of Class A common stock or an equivalent security for each Right,
other than Rights held by the Acquiring Person.

Anti-Dilution Provisions. Our Board may adjust the purchase price of the Preferred Shares,
the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution
that may occur from a stock dividend, a stock split, or a reclassification of the Preferred Shares
or common stock. No adjustments to the purchase price of less than 1% will be made.

Amendments. The terms of the Rights Agreement may be amended by our Board without the
consent of the holders of the Rights except that after a person or group becomes an Acquiring
Person, our Board may not amend the agreement in a way that adversely affects holders of the
Rights.

C-3Exhibit 4.1

    

      CERTIFICATE
        OF DESIGNATIONS

      OF

      SERIES
        A CUMULATIVE CONVERTIBLE PREFERRED STOCK

      

      It
        is
        hereby certified that:

      

      I. The
        name
        of the corporation is Oblio Telecom, Inc. (the “Corporation”), a Delaware
        corporation and wholly owned subsidiary of Ventures-National Incorporated,
        a
        Utah corporation (the “Parent”). Capitalized terms used herein but not otherwise
        defined shall have the meanings assigned such term in that certain Asset
        Purchase Agreement, dated as of July 28, 2005, by and between the Parent,
        the
        Corporation, Oblio Telecom L.L.P., a Texas limited liability partnership
        (the
“Holder”), Sammy Jibrin and Radu Achiriloaie. (the “Purchase
        Agreement”)

      

      II. The
        certificate of incorporation of the Corporation, authorizes the issuance
        of
        10,000 shares of Preferred Stock, $.01 par value per share, and expressly
        vests
        in the Board of Directors of the Corporation the authority provided therein
        to
        issue all of said shares in one or more Series by resolution or resolutions
        to
        establish the designation and number and to fix the relative rights and
        preferences of each series to be issued.

      

      III. The
        Board
        of Directors of the Corporation, pursuant to the authority expressly vested
        in
        it, has adopted the following resolution creating a class of Series A Cumulative
        Convertible Preferred Stock:

      

      RESOLVED,
        that a portion of the authorized shares of Preferred Stock of the Corporation
        shall be designated as a separate series possessing the rights and preferences
        set forth below:

      

      1. Designation:
        Number of Shares; Stated Value.
        The
        designation of said series of Preferred Stock shall be Series A Cumulative
        Convertible Preferred Stock (the “Series A Preferred Stock”). The number of
        shares of Series A Preferred Stock shall be 9,000. Such shares shall be
        constituted in four (4) tranches , which shall be referred to as Tranche
        A,
        Tranche B, Tranche C and Tranche D. Each of Tranches B, C and D shall correspond
        to a year as set forth below. Tranche A consists of 3,000 shares. Each of
        the
        remaining Tranches consists of 2,000 shares. Each share of Series A Preferred
        Stock shall have an initial stated value equal to $1,000 (as adjusted for
        any
        stock dividends, combinations or splits with respect to such shares, the
“Stated
        Value”), and $.01 par value. Not later than July 15 of each of the three years
        commencing with the year 2006, the Corporation’s Chief Financial Officer shall
        prepare and deliver to the Holders a certificate setting forth a calculation
        of
        the Corporation’s net earnings, before interest, taxes, depreciation and
        amortization for the twelve full months ending on May 31 of such year (“Annual
        EBITDA”).

      

      (a) In
        the
        event the Annual EBITDA for any year shall be below the minimum amount set
        forth
        in Section 1(c) below (“Minimum EBITDA”), the Stated Value for each share with
        respect to the Tranche for such year shall be reduced by an amount equal
        to:

      

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      (Minimum
        EBITDA less actual Annual EBITDA) x 0.668,
        

      2,000.

      In
        no
        event shall the Stated Value for the shares in Tranche A be subject to reduction
        hereunder.

      

      (b) In
        the
        event that the Stated Value for any Tranche is reduced pursuant to Section
        1(a)
        above, if the Annual EBITDA for any subsequent year shall exceed the Target
        EBITDA for that subsequent year, the Stated Value for each share with respect
        to
        the Tranche for such year shall be increased by an amount equal to:

      

      (actual
        Annual EBITDA less Target EBITDA) x 0.668

            2,000

      up
        to the
        aggregate amount of reduction pursuant to Section 1(a). In no event shall
        an
        increase in Stated Value for any Tranche cause the total Stated Value of
        all
        four Tranches to exceed $9,000,000.

      

      (c)  

      
        
          	 	 	 Minimum	 Target	 
	 	 Year	 EBITDA	 EBITDA	 
	 	 One	 $10,000,000	 $11,000,000	 
	 	 Two	 $12,250,000	 $13,250,000	 
	 	 Three 	 $15,000,000	 $16,000,000	 

        

      2. Ranking.
        The
        Series A Preferred Stock shall rank (i) senior to the Corporation’s common
        stock, par value $.01 per share (“Common Stock”); (ii) senior to any class or
        series of capital stock of the Corporation hereafter created (unless where
        such
        class or series of capital stock specifically, by its terms, ranks senior
        to or
        Pari Passu with the Series A Preferred Stock); (iii) on parity with any class
        or
        series of capital stock of the Corporation hereafter created specifically
        ranking, by its terms, on parity with the Series A Preferred Stock (“Pari Passu
        Securities”); and (iv) junior to any class or series of capital stock of the
        Corporation hereafter created specifically ranking, by its terms, senior
        to the
        Series A Preferred Stock (“Senior Securities”), in each case as to distribution
        of assets upon liquidation, dissolution or winding up of the Corporation,
        whether voluntary or involuntary.

      2. Ranking.
        The
        Series A Preferred Stock shall rank (i) senior to the Corporation’s common
        stock, par value $.01 per share (“Common Stock”); (ii) senior to any class or
        series of capital stock of the Corporation hereafter created (unless where
        such
        class or series of capital stock specifically, by its terms, ranks senior
        to or
        Pari Passu with the Series A Preferred Stock); (iii) on parity with any class
        or
        series of capital stock of the Corporation hereafter created specifically
        ranking, by its terms, on parity with the Series A Preferred Stock (“Pari Passu
        Securities”); and (iv) junior to any class or series of capital stock of the
        Corporation hereafter created specifically ranking, by its terms, senior
        to the
        Series A Preferred Stock (“Senior Securities”), in each case as to distribution
        of assets upon liquidation, dissolution or winding up of the Corporation,
        whether voluntary or involuntary.

      

      3. Dividends.

      

      (a) Subject
        to that certain Preferred Stock Subordination Agreement (the “Subordination
        Agreement”), dated August 12, 2005, between the holders of the Series A
        Preferred Stock and CapitalSource Finance LLC (“CapitalSource”), the holders of
        outstanding shares of Series A Preferred Stock shall be entitled to receive
        preferential dividends, in cash, out of legally available funds of the
        Corporation , before any dividend or other distribution will be paid or declared
        and set apart for payment on any shares of any Common Stock, or other class
        of
        stock presently authorized or to be authorized (the Common Stock, and such
        other
        stock being hereinafter collectively the “Junior Stock”) at a rate per annum
        equal to three percent (3%) (the “Dividend Rate”), of the then current Stated
        Value per share of each share of Series A Preferred Stock then outstanding
        (as
        adjusted pursuant to Section 4 below) (the “Quarterly Dividend Amount”). The
        Quarterly Dividend Amount shall be (i) calculated on the basis of a 365 day
        year
        and (ii) accrue commencing on the Closing Date and shall be payable commencing
        October 1, 2005, and on the first day of each consecutive three month period
        thereafter (each such date, a “Quarterly Dividend Payment Date”). 

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (b) The
        dividends on the Series A Preferred Stock provided above shall be cumulative,
        whether or not earned, so that if: (i) at any time, full cumulative dividends
        on
        the Series A Preferred Stock then outstanding, from the date at which dividends
        thereon are cumulative to the end of the next quarterly dividend period,
        shall
        not have been paid or declared and set apart for payment; or (ii) the full
        dividend on Series A Preferred Stock then outstanding for the then current
        quarterly dividend period shall not have been paid or declared and set apart
        for
        payment, then the amount of the deficiency shall be paid or declared and
        set
        apart for payment (but without interest thereon) before any sum shall be
        set
        apart for or applied by the Parent, the Corporation or any Subsidiary of
        the
        Parent of the Corporation, as the case may be, to: (x) the purchase, redemption
        or other acquisition of the Series A Preferred Stock or Parri Passu Securities;
        (y) before any dividend or other distribution shall be paid or declared and
        set
        apart for payment on any Junior Stock; and (z) before any sum shall be set
        aside
        for or applied to the purchase, redemption or other acquisition of Junior
        Stock.

      

      4. Liquidation
        Rights.

      

      (a) Upon
        the
        dissolution, liquidation or winding-up of the Corporation, whether voluntary
        or
        involuntary, the Holders of the Series A Preferred Stock shall be entitled
        to
        receive, before any payment or distribution shall be made on the Junior Stock,
        out of the assets of the Corporation available for distribution to stockholders,
        the Stated Value per share of Series A Preferred Stock then outstanding and
        all
        accrued and unpaid dividends to and including the date of payment thereof.
        Upon
        the payment in full of all amounts due to Holders of the Series A Preferred
        Stock, the holders of the Common Stock of the Corporation and any other class
        of
        Junior Stock shall receive all remaining assets of the Corporation legally
        available for distribution. If the assets of the Corporation available for
        distribution to the holders of the Series A Preferred Stock shall be
        insufficient to permit payment in full of the amounts payable as aforesaid
        to
        the holders of Series A Preferred Stock upon such liquidation, dissolution
        or
        winding-up, whether voluntary or involuntary, then all such assets of the
        Corporation shall be distributed ratably among the holders of the Series
        A
        Preferred Stock.

      

      (b) Neither
        the purchase nor the redemption by the Corporation of shares of any class
        of
        stock, nor the merger or consolidation of the Corporation with or into any
        other
        corporation or corporations, nor the sale or transfer by the Corporation
        of all
        or any part of its assets shall be deemed to be a liquidation, dissolution
        or
        winding-up of the Corporation for the purposes of this Section 4.

      

      5. Redemption;
        Conversion into Parent’s Common Stock.

      

      (a) Subject
        to the Subordination Agreement and the further provisions of this Section
        5, the
        Corporation shall have the right at any time commencing after the issuance
        of
        the Series A Preferred Stock to redeem any outstanding Series A Preferred
        Stock,
        in cash, by paying the holder of such shares according to the following
        schedule:

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (i) From
        the
        original issuance date until the one year anniversary of the original issuance
        date: 105% of the then current Stated Value of the Series A Preferred Stock
        to
        be redeemed plus any accrued and unpaid dividends that have accumulated on
        such
        Series A Preferred Stock;

      

      (ii) From
        the
        one year anniversary of the original issuance date until the two year
        anniversary of the original issuance date: 110% of the then current Stated
        Value
        of the Series A Preferred Stock to be redeemed plus any accrued and unpaid
        dividends that have accumulated on such Series A Preferred Stock;

      

      (iii) From
        the
        two year anniversary of the original issuance date until the three year
        anniversary of the original issuance date: 115% of the then current Stated
        Value
        of the Series A Preferred Stock to be redeemed plus any accrued and unpaid
        dividends that have accumulated on such Series A Preferred Stock.

      

      (iv) Notwithstanding
        anything else contained herein, the Corporation shall redeem all outstanding
        shares of Series A Preferred Stock by paying the holder of such shares the
        then
        current Stated Value of the Series A Preferred Stock plus any accrued and
        unpaid
        dividends that have accumulated on such Series A Preferred Stock, on the
        third
        anniversary of the original issuance date of the shares of Series A Preferred
        Stock (the “Final Redemption Date”). The Stated Value of Tranche D shall be
        adjusted as per Section 1 above prior to the redemption of that
        Tranche.

      

      (v) Notwithstanding
        the foregoing, after the first year after the original issue date of the
        Series
        A Preferred Stock, the Corporation may not redeem any Tranche of Series A
        Preferred Stock prior to the Stated Value of that Tranche being determined
        in
        accordance with Section 1 above without the prior consent of the Holder of
        the
        Series A Preferred Stock to be redeemed.

      

      (b) Subject
        to the further provisions of this Section 5, each holder of shares of Series
        A
        Preferred Stock shall have the right at any time during the period from the
        original issuance date of the Series A Preferred Stock to such holder until
        the
        Final Redemption Date to convert such shares into fully paid and non-assessable
        shares of the Parent’s Common Stock at the Conversion Price. The number of
        shares of the Parent’s Common Stock issuable upon conversion of each share of
        Series A Preferred Stock shall equal (i) the sum of (A) the then current
        Stated
        Value per share and (B), accrued and unpaid dividends on such share, divided
        by
        (ii) $1.50 (the “Conversion Price”). Notwithstanding the foregoing, the Holders
        of Series A Preferred Stock shall only be permitted to convert Tranche B
        during
        the second year after the original issuance date of the Series A Preferred
        Stock, Tranche C during the third year after the original issuance date of
        the
        Series A Preferred Stock and Tranche D upon the Final Redemption Date. In
        the
        event the Holders do not convert the full Tranche in any year, such unconverted
        shares may be converted in any of the following years.

      

      (c) A
        Holder
        of Series A Preferred Stock desiring to convert any of such shares shall
        give
        notice of its decision to convert the shares into the Parent’s Common Stock by
        delivering, along with their certificate(s) representing the shares of Series
        A
        Preferred Stock to be converted, an executed and completed notice of conversion
        in the form of Exhibit A hereto (“Notice of Conversion”) to the Parent, the
        Corporation or the Parent’s transfer agent. Each date on which any Notice of
        Conversion is delivered or telecopied to the Parent in accordance with the
        provisions hereof shall be deemed a Conversion Date (the “Conversion Date”). The
        Parent or the Corporation will cause the transfer agent to deliver certificates
        representing the shares of the Parent’s Common Stock issuable upon conversion of
        the Series A Preferred Stock (and a certificate representing the balance
        of the
        Series A Preferred Stock not so converted, if requested by the Holders) to
        the
        Holders at their registered address. The Parent shall be obligated to deliver
        to
        the respective Holder, simultaneously with the aforedescribed Parent’s Common
        Stock, at the election of the Holders, additional shares of the Parent’s Common
        Stock representing the conversion, at the Conversion Price, of dividends
        accrued
        on the Series A Preferred Stock being converted.

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (d) If
        the
        Parent shall have filed a registration statement with the Securities and
        Exchange Commission covering shares of the Parent’s Common Stock issuable to the
        Holders upon the conversion of Series A Preferred Stock, and such registration
        statement shall have been declared effective and remains effective, then
        the
        Corporation shall have the following conversion rights and
        obligations:

      

      (i) if
        the
        average closing price of the Parent’s Common Stock on the principal market where
        it is traded is at least $4.50 for a period of at least twenty (20) consecutive
        trading days, and the average daily volume during such period is at least
        50,000
        shares per day, then the Corporation may, in its sole discretion (after 4:00pm
        on the 20th trading day), provide the Holder with written notice (a “Mandatory
        Conversion Notice”) requiring the conversion of any or all of the then
        outstanding shares of Series A Preferred Stock, on the fifth (5th) trading
        day
        following the date of the Mandatory Conversion Notice (the “Mandatory Conversion
        Date”). On the Mandatory Conversion Date, the Corporation shall convert such
        shares of Series A Preferred Stock according to the formula in Section 5(b)
        and
        shall deliver to each Holder certificates evidencing the shares of Parent’s
        Common Stock issued in satisfaction of the Series A Preferred Stock being
        converted. Other than pursuant to this Section 5(d), the Corporation and
        the
        Parent shall have no right to force conversion of the Series A Preferred
        Stock.

      

      (e) The
        Parent shall not be required, in connection with any conversion of Series
        A
        Preferred Stock to issue a fraction of a share of its Common Stock and shall
        instead deliver a stock certificate representing the next whole
        number.

      

      (f) The
        Conversion Price and number and kind of shares or other securities to be
        issued
        upon conversion is subject to adjustment from time to time upon the occurrence
        of certain events, as follows:

      

      (i) Stock
        Splits, Combinations and Dividends.
        If the
        shares of the Parent’s Common Stock are subdivided or combined into a greater or
        smaller number of shares of the Parent’s Common Stock, or if a dividend is paid
        on the Parent’s Common Stock in shares of the Parent’s Common Stock, the
        Conversion Price, as the case may be, shall be proportionately reduced in
        case
        of subdivision of shares or stock dividend or proportionately increased in
        the
        case of combination of shares, in each such case by the ratio which the total
        number of shares of the Parent’s Common Stock outstanding immediately after such
        event bears to the total number of shares of the Parent’s Common Stock
        outstanding immediately prior to such event.

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (ii) Reclassification,
        etc.
        If the
        Parent, at any time, shall, by reclassification or otherwise, change, or
        permit
        to be changed, the Parent’s Common Stock into the same or a different number of
        securities of any class or classes, the Series A Preferred Stock shall
        thereafter be convertible into the number of such securities and kind of
        securities as would have been issuable as the result of such reclassification
        or
        other change with respect to the Parent’s Common Stock as if conversion of the
        Series A Preferred Stock into Parent Common Stock had occurred immediately
        prior
        to such reclassification or other change. 

      

      (g) In
        the
        case of any consolidation or merger of the Corporation with or into any other
        corporation (other than a merger in which the Corporation is the surviving
        or
        continuing corporation which does not result in any reclassification,
        conversion, or change of the outstanding shares of Common Stock and which
        does
        not result in a change in voting power of greater than 50%) then, as part
        of
        such consolidation or merger, lawful provision shall be made so that holders
        of
        Series A Preferred Stock shall thereafter have the right to receive the kind
        and
        amount of consideration receivable upon such consolidation or merger by a
        holder
        of the number of shares of the Parent’s Common Stock into which such shares of
        Series A Preferred Stock would have been convertible by the Holder immediately
        prior to such consolidation or merger. 

      

      (h) In
        case
        of any sale or conveyance to any third party person or entity of all or
        substantially all of the assets the Corporation in connection with which
        consideration shall be issuable, distributable, payable, or deliverable for
        outstanding shares of Parent Common Stock, then lawful provision shall be
        made
        so that the holders of Series A Preferred Stock shall thereafter have the
        right
        to receive the kind and amount of consideration that shall be issuable,
        distributable, payable, or deliverable upon such sale or conveyance by a
        holder
        of the number of shares of the Parent’s Common Stock into which such shares of
        Series A Preferred Stock would have been convertible by the Holder immediately
        prior to such sale or conveyance.

      

      (i) So
        long
        as any shares of Series A Preferred Stock shall remain outstanding and the
        Holders thereof shall have the right to convert the same in accordance with
        provisions of this Section 5, the Parent shall at all times reserve from
        the
        authorized but unissued shares of its Parent Common Stock a sufficient number
        of
        shares to provide for such conversions.

      

      (j) The
        Parent or the Corporation, as the case may be, shall pay the amount of any
        and
        all issue taxes (but not income taxes) which may be imposed in respect of
        any
        issue or delivery of stock upon the conversion of any shares of Series A
        Preferred Stock, but all transfer taxes and income taxes that may be payable
        in
        respect of any change of ownership of Series A Preferred Stock or any rights
        represented thereby or of stock receivable upon conversion thereof shall
        be paid
        by the person or persons surrendering such stock for conversion.

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      6. Sale
        of Shares Below Conversion Price.

      

      (a) If
        at any
        time or from time to time after the original issuance date, the Parent or
        the
        Corporation issues or sells Additional Shares of Parent Common Stock (as
        defined
        below) for an Effective Price (as defined below) less than the then current
        Conversion Price, then and in each such case, the then current Conversion
        Price
        shall be reduced, as of the opening of business on the date of such issue
        or
        sale, to a Conversion Price determined by multiplying the then current
        Conversion Price by a fraction:

      

      (i) the
        numerator of which shall be (A) the number of shares of Parent Common Stock
        deemed outstanding (as defined below) immediately prior to such issue or
        sale
        plus (B) the number of shares of Parent Common Stock which the Aggregate
        Consideration received (as defined below) by the Parent or the Corporation
        for
        the total number of Additional Shares of Parent Common Stock so issued would
        purchase at the then current Conversion Price; and 

      

      (ii) the
        denominator of which shall be (A) the number of shares of Parent Common Stock
        deemed outstanding (as defined below) immediately prior to such issue or
        sale
        plus (B) the total number of Additional Shares of Parent Common Stock so
        issued.

      

      For
        the
        purposes of the preceding sentence, the number of shares of Parent Common
        Stock
        deemed to be outstanding as of a given date shall be the sum of (A) the number
        of shares of Parent Common Stock actually outstanding, (B) the number of
        shares
        of Parent Common Stock into which the then outstanding shares of Convertible
        Securities could be converted if fully converted on the day immediately
        preceding the given date, and (C) the number of shares of Parent Common Stock
        which could be obtained through the exercise or conversion of all other rights,
        options and convertible securities outstanding on the day immediately preceding
        the given date. 

      

      (b) No
        adjustment shall be made to the Conversion Price in an amount less than one
        cent
        per share. Any adjustment otherwise required by this Section 6 that is not
        required to be made due to the preceding sentence shall be included in any
        subsequent adjustment to the Conversion Price.

      

      (c) For
        the
        purpose of making any adjustment required under this Section 6, the aggregate
        consideration received by the Parent or the Corporation for any issue or
        sale of
        securities (the “Aggregate Consideration”) shall: (A) to the extent it consists
        of cash, be computed at the net amount of cash received by the Parent or
        the
        Corporation after deduction of any underwriting or similar commissions,
        compensation or concessions paid or allowed by the Parent or Corporation
        in
        connection with such issue or sale but without deduction of any other expenses
        payable by the Parent or Corporation, (B) to the extent it consists of property
        other than cash, be computed at the fair value of that property as determined
        in
        good faith by the Parent’s Board of Directors and (C) if Additional Shares of
        Parent Common Stock, Convertible Securities (as defined below) or rights
        or
        options to purchase either Additional Shares of Parent Common Stock or
        Convertible Securities are issued or sold together with other stock or
        securities or other assets of the Parent or the Corporation for a consideration
        which covers both, be computed as the portion of the consideration so received
        that may be reasonably determined in good faith by the Parent Board of Directors
        to be allocable to such Additional Shares of Parent Common Stock, Convertible
        Securities or rights or options.

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (d) For
        the
        purpose of the adjustment required under this Section 6, if the Parent or
        Corporation issues or sells (x) stock or other securities convertible into,
        Additional Shares of Parent Common Stock (such convertible stock or securities
        being herein referred to as “Convertible Securities”) or (y) rights or options
        for the purchase of Additional Shares of Parent Common Stock or Convertible
        Securities and if the price of such Additional Shares of Parent Common Stock
        is
        less than the applicable Conversion Price, in each case the Parent shall
        be
        deemed to have issued at the time of the issuance of such rights or options
        or
        Convertible Securities the maximum number of Additional Shares of Parent
        Common
        Stock issuable upon exercise or conversion thereof and to have received as
        consideration for the issuance of such shares an amount equal to the total
        amount of the consideration, if any, received by the Parent or Corporation
        for
        the issuance of such rights or options or Convertible Securities
        plus:

      

      (i) in
        the
        case of such rights or options, the minimum amounts of consideration, if
        any,
        payable to the Parent or Corporation upon the exercise of such rights or
        options; and

      

      (ii) in
        the
        case of Convertible Securities, the minimum amounts of consideration, if
        any,
        payable to the Parent or Corporation upon the conversion thereof (other than
        by
        cancellation of liabilities or obligations evidenced by such Convertible
        Securities); provided that if the minimum amounts of such consideration cannot
        be ascertained, but are a function of antidilution or similar protective
        clauses, the Parent or Corporation shall be deemed to have received the minimum
        amounts of consideration without reference to such clauses.

      

      (iii) if
        the
        minimum amount of consideration payable to the Parent or Corporation upon
        the
        exercise or conversion of rights, options or Convertible Securities is reduced
        over time or on the occurrence or non-occurrence of specified events other
        than
        by reason of antidilution adjustments, the Effective Price shall be recalculated
        using the figure to which such minimum amount of consideration is reduced;
        provided further, that if the minimum amount of consideration payable to
        the
        Parent or Corporation upon the exercise or conversion of such rights, options
        or
        Convertible Securities is subsequently increased, the Effective Price shall
        be
        again recalculated using the increased minimum amount of consideration payable
        to the Parent or Corporation upon the exercise or conversion of such rights,
        options or Convertible Securities. 

      

      (iv) If
        any
        such rights or options or the conversion privilege represented by any such
        Convertible Securities shall expire without having been exercised, the
        applicable Conversion Price as adjusted upon the issuance of such rights,
        options or Convertible Securities shall be readjusted to the Conversion Price
        which would have been in effect had an adjustment been made on the basis
        that
        the only Additional Shares of Parent Common Stock so issued were the Additional
        Shares of Parent Common Stock, if any, actually issued or sold on the exercise
        of such rights or options or rights of conversion of such Convertible
        Securities, and such Additional Shares of Parent Common Stock, if any, were
        issued or sold for the consideration actually received by the Parent or
        Corporation upon such exercise, plus the consideration, if any, actually
        received by the Parent or Corporation for the granting of all such rights
        or
        options, whether or not exercised, plus the consideration received for issuing
        or selling the Convertible Securities actually converted, plus the
        consideration, if any, actually received by the Parent or Corporation (other
        than by cancellation of liabilities or obligations evidenced by such Convertible
        Securities) on the conversion of such Convertible Securities.

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (e) For
        the
        purpose of making any adjustment to the Conversion Price of the Preferred
        Stock
        required under this Section 6, “Additional Shares of Parent Common Stock” shall
        mean all shares of Parent Common Stock issued by the Parent and all shares
        of
        Parent Common Stock issuable upon conversion of Convertible Securities issued
        by
        the Parent or the Corporation or deemed to be issued pursuant to this Section
        6
        (including shares of Parent Common Stock subsequently reacquired or retired
        by
        the Parent or the Corporation), other than:

      

      (i) shares
        of
        Parent Common Stock issued upon conversion of the Series A Preferred Stock;
        

      

      (ii) shares
        of
        Parent Common Stock and/or options, warrants or other Parent Common Stock
        purchase rights and the Parent Common Stock issued pursuant to such options,
        warrants or other rights (as adjusted for any stock dividends, combinations,
        splits, recapitalizations and the like after the filing date hereof) after
        the
        original issuance date to employees, officers or directors of, or consultants
        or
        advisors to the Parent or Corporation or any subsidiary pursuant to stock
        purchase or stock option plans or other arrangements that are approved by
        the
        Parent Board of Directors;

      

      (iii) shares
        of
        Parent Common Stock issued pursuant to the exercise of options, warrants
        or
        convertible securities outstanding as of the original issuance
        date;

      

      (iv) shares
        of
        Parent Common Stock and/or options, warrants or other Parent Common Stock
        purchase rights, and the Parent Common Stock issued pursuant to such options,
        warrants or other rights issued for consideration other than cash pursuant
        to a
        merger, consolidation, acquisition, strategic alliance or similar business
        combination approved by the Parent Board of Directors; 

      

      (v) shares
        of
        Parent Common Stock or Preferred Stock issued pursuant to any equipment loan
        or
        leasing arrangement, real property leasing arrangement or debt financing
        from a
        bank or similar financial institution approved by the Parent Board of Directors;
        

      

      (vi) shares
        of
        Parent Common Stock or Preferred Stock issued to third-party service providers
        in exchange for or as partial consideration for services rendered to the
        Parent
        or the Corporation;

      

      (vii) shares
        of
        Parent Common Stock issued to any charitable organization described in Section
        170(c) of the Internal Revenue Code, provided that such donation has been
        approved by the Parent Board of Directors; 

      

      (viii) any
        equity securities issued in connection with strategic transactions involving
        the
        Parent or Corporation and other entities, including (i) joint ventures,
        manufacturing, marketing or distribution arrangements or (ii) technology
        transfer or development arrangements; provided that the issuance of shares
        therein has been approved by the Parent Board of Directors; and

      

      (ix) any
        equity securities issued or issuable to Cornell Capital or an entity or entities
        designated by it pursuant to a financing arranged in connection with the
        performance of the Corporation’s and Parent’s obligations under the Purchase
        Agreement.

      

      References
        to Parent Common Stock in the subsections of this Section 6(e) above shall
        mean
        all shares of Parent Common Stock issued by the Company or deemed to be issued
        pursuant to this Section 6. The “Effective Price” of Additional Shares of Parent
        Common Stock shall mean the quotient determined by dividing the total number
        of
        Additional Shares of Parent Common Stock issued or sold, or deemed to have
        been
        issued or sold by the Parent or Corporation under this Section 6, into the
        Aggregate Consideration received, or deemed to have been received by the
        Parent
        or Corporation for such issue under this Section 6, for such Additional Shares
        of Parent Common Stock.

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      7. Voting
        Rights.
        The
        shares of Series A Preferred Stock shall not have voting rights, except as
        required by law.

      

      8. Events
        of Default.
        Upon
        the occurrence and continuance of an Event of Default (as defined below),
        but
        subject to the Subordination Agreement, the Holder shall, ten (10) days after
        giving written notice to the Corporation (the “Default Notice Period”), have the
        option to require the Corporation to redeem the Series A Preferred Stock
        held by
        the Holder by the immediate payment to the Holder by the Corporation of a
        sum of
        money equal to the then current Stated Value, plus accrued and unpaid dividends
        (the “Default Payment”). If, with respect to any Event of Default, the
        Corporation cures the Event of Default within the Default Notice Period,
        the
        Event of Default will be deemed to no longer exist and any rights and remedies
        of the Holder pertaining to such Event of Default will be of no further force
        or
        effect. 

      

      The
        occurrence of any of the following events set forth in Sections 8(a) through
        8(d) is an “Event of Default”:

      

      (a) Failure
        to Make Payment.
        The
        Corporation fails to make any payment required to be paid pursuant to the
        terms
        hereofand such failure continues for a period of ten (10) business days
        following the date upon which each payment was due. 

      

      (b) Breach
        of Covenant.
        The
        Parent or the Corporation breaches any covenant or other term or condition
        of
        this Certificate of Designations or the Purchase Agreement in any material
        respect and which could have a Material Adverse Effect, and such breach,
        if
        subject to cure, continues for a period of twenty (20) days after the occurrence
        thereof.

      

      (c) Receiver
        or Trustee.
        The
        Parent or the Corporation shall make an assignment for the benefit of creditors,
        or apply for or consent to the appointment of a receiver or trustee for it
        or
        for a substantial part of its property or business; or such a receiver or
        trustee shall otherwise be appointed.

      

      (d) Bankruptcy.
        Bankruptcy, insolvency, reorganization or liquidation proceedings or other
        proceedings or relief under any bankruptcy law or any law for the relief
        of
        debtors shall be instituted by or against the Parent or the
        Corporation.

      

      9. Status
        of Redeemed Stock.
        In case
        any shares of Series A Preferred Stock shall be redeemed or otherwise
        repurchased or reacquired, the shares so redeemed or reacquired shall resume
        the
        status of authorized but unissued shares of Preferred Stock and shall no
        longer
        be designated as Series A Preferred Stock.

      

      In
        witness whereof, the Corporation has caused this Certificate of Designations
        to
        be executed on this 12th
        day of
        August, 2005.

    

     

    
      
        
          	 	 	 
	 	OBLIO
                  TELECOM, INC.
	 
 	 
 	 
 
	Date: 	By:  	/s/ Daniel
                  Guimond
	 	
                  
Daniel
                  Guimond
	 	Chief Financial
                  Officer and Secretary

        

      

      
        
          
             

          

          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

      NOTICE
        OF CONVERSION

      

      (TO
        BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT THE SERIES A
        CONVERTIBLE PREFERRED STOCK OF OBLIO TELECOM, INC.

      

      The
        undersigned hereby irrevocably elects to convert ______________ shares of
        Series
        A Convertible Preferred Stock of Oblio Telecom, Inc. and $_____________ of
        the
        dividend due, into shares of Parent’s Common Stock according to the conditions
        hereof, as of the date written below.

      

      Date
        of
        Conversion: ___________________________________________________________________________________________________________________________

      

      Applicable
        Conversion Price Per
        Share:_____________________________________________________________________________________________________________

      

      Number
        of
        Parent’s Common Shares Issuable Upon This
        Conversion:______________________________________________________________________________________

      

      Signature:___________________________________________________________________________________________________________________________________

      

      Print
        Name:__________________________________________________________________________________________________________________________________

       

      Address:____________________________________________________________________________________________________________________________________

      

      

      Deliveries
        Pursuant to this Notice of Conversion Should Be Made
        to:______________________________________________________________________________________

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