Document:

anthracite_ex10-1.htm

    

    Exhibit
10.1

     

    Execution
Copy

    
 

    THIRD
OMNIBUS AMENDMENT AND AGREEMENT

     

    THIRD
OMNIBUS AMENDMENT AND AGREEMENT, dated as of January 28, 2009 (this “Agreement”), in
respect of (a) that certain Master Repurchase Agreement, dated as of July 20,
2007 (together with Annex I thereto (“Annex I”), as both
are amended, restated, supplemented or otherwise modified and in effect prior to
the date hereof, the “Existing Repurchase
Agreement”, and as both are amended hereby and as further amended,
restated, supplemented or otherwise modified and in effect from time to time,
the “Repurchase
Agreement”), by and among ANTHRACITE CAPITAL BOFA FUNDING LLC, as seller
(the “Seller”),
BANK OF AMERICA, N.A. (“BANA”) as a buyer,
BANC OF AMERICA MORTGAGE CAPITAL CORPORATION (“BAMCC”; BANA and
BAMCC, individually and/or collectively, as the context may require, each a
“Buyer” and
collectively, the “Buyers”) as a buyer,
and BANA as agent for the Buyers (in such capacity, the “Buyer Agent”); (b)
that certain Credit Agreement, dated as of March 17, 2006 (as amended, restated,
supplemented or otherwise modified prior to the date hereof, the “Existing Credit
Agreement”, and as amended hereby and as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”),
by and among ANTHRACITE CAPITAL, INC. (“Anthracite”) as
borrower agent (in such capacity, the “Borrower Agent”), AHR
CAPITAL BOFA LIMITED (“AHR”) as a borrower,
each of the borrowers from time to time party thereto (together with AHR,
collectively, the “Borrowers”; the
Borrowers and the Borrower Agent, collectively, the “Anthracite CA
Parties”) and BANA as lender (in such capacity, the “Lender”; the Buyers,
the Buyer Agent and the Lender, collectively, the “BOA Parties”); (c)
that certain Amended and Restated Fee Letter, dated as of August 7, 2008 (as
amended, restated, supplemented or otherwise modified prior to the date hereof,
the “Existing Fee
Letter” and together with the Existing Repurchase Agreement and the
Existing Credit Agreement, collectively, the “Existing Agreements”;
and as amended hereby and as amended, restated, supplemented or otherwise
modified from time to time, the “Fee Letter”; and
together with the Repurchase Agreement and the Credit Agreement, collectively,
the “Amended
Agreements”) between the Lender and the Borrower Agent, (d) that certain
Amended and Restated Guaranty, dated as of August 7, 2008, made by Anthracite,
as guarantor (in such capacity, the “Repo Guarantor”), in
favor of the Buyer Agent for the benefit of the Buyers; and (e) that certain
Amended and Restated Parent Guaranty, dated as of August 7, 2008, made by
Anthracite, as guarantor (in such capacity, the “CA Guarantor”, and
together with the “Repo Guarantor”,
collectively, the “Guarantor”), in favor
of the Lender.  Capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Amended Agreements, as
applicable.

     

    RECITALS

     

    WHEREAS,
the Seller, the Buyers and the Buyer Agent are parties to the Repurchase
Agreement;

     

    WHEREAS,
the Anthracite CA Parties and the Lender are parties to the Credit Agreement;
and

     

    WHEREAS,
the Seller and the Anthracite CA Parties have requested, and the BOA Parties
have agreed, that the Existing Agreements be amended subject to the terms
hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    NOW
THEREFORE, the Seller, the Anthracite CA Parties, the Guarantor and the BOA
Parties hereby agree, in consideration of the mutual premises and mutual
obligations set forth herein, the receipt and sufficiency of which is hereby
acknowledged, as follows:

     

    SECTION
1.   Amendments.

     

    (a)        Section
2 of Annex I to the Existing Repurchase Agreement is hereby amended by deleting
the defined term “Facility Amount” in its entirety and inserting in lieu thereof
the following:

     

    “Facility Amount”
shall mean, initially, $127,889,494, and such “Facility Amount” shall be reduced
by any payment to Buyer on account of the Repurchase Price (excluding payments
of Price Differential) of any Purchased Asset.”

     

    (b)        Section
3.6 of Annex I to the Existing Repurchase Agreement is hereby amended by
deleting it in its entirety and inserting in lieu thereof the
following:

     

    3.6        Reserved.

     

    (c)        Section
1.01 of the Existing Credit Agreement is hereby amended by deleting the defined
term “Maximum Credit” in its entirety and inserting in lieu thereof the
following:

     

    “Maximum Credit” shall
mean, initially, $38,796,256, and such “Maximum Credit” shall be reduced by any
payment or prepayment to Lender on account of the principal balance of any Loan;
provided further, that on each
Dollar Equivalent Overadvance Date, the “Maximum Credit” shall be increased by
an amount not to exceed the Dollar Equivalent Overadvance Maximum
Credit.

     

    (d)        Section
1.01 of the Existing Credit Agreement is hereby amended by deleting the defined
term “Dollar Equivalent Overadvance Maximum Credit” in its entirety and
inserting in lieu thereof the following:

     

    “Dollar Equivalent
Overadvance Maximum Credit” shall mean, in respect of any Dollar
Equivalent Overadvance Loan, initially, $5,819,438 and such “Dollar Equivalent
Overadvance Maximum Credit” shall be reduced, pro rata based on the ratio
between the Dollar Equivalent Overadvance Maximum Credit and the Maximum Credit,
by any payment or prepayment to Lender on account of the principal balance of
any Loan.

     

    (e)        Paragraph
(b) of the Existing Fee Letter is hereby amended by deleting it in its entirety
and inserting in lieu thereof the following:

     

    (b)         Reserved;

     

    SECTION
2.    Agreements.  Each
of the Seller and the Anthracite CA Parties hereby agrees as
follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (a)        No
additional Transactions shall be permitted under the Master Repurchase
Agreement.

     

    (b)        No
additional Loans, borrowings or other extensions of credit shall be made by
Lender to any Borrower under the Credit Agreement.

     

    (c)        Beginning
on and including January 28, 2009, no additional Unused Fee (as defined in each
of the Existing Repurchase Agreement and the Existing Fee Letter) shall be
due.  For the avoidance of doubt, any accrued but unpaid Unused Fee as
of January 28, 2009 shall be due and payable pursuant to the terms of the
Repurchase Agreement, the Credit Agreement and Fee Letter, as
applicable.

     

    SECTION
3.   Guarantor
Affirmation.  For the avoidance of doubt, the Guarantor hereby
agrees to and acknowledges the amendments in Section 1 and the Agreements in
Section
2 hereof.

     

    SECTION
4.   Conditions
Precedent.  This Agreement shall become effective on the date
(the “Agreement
Effective Date”) on which the Buyer Agent shall have
received

     

    (a)        this
Agreement, executed and delivered by a duly authorized officer of each of the
Seller, the Anthracite CA Parties, and the Guarantor; and

     

    (b)        for
the account of the applicable BOA Party, payment and reimbursement for all of
the BOA Parties’ corresponding costs and expenses incurred in connection with
this Agreement, all prior amendments and modifications to the Repurchase
Agreement and the Credit Agreement, any other documents prepared in connection
herewith and therewith and the transactions contemplated hereby and thereby,
other than the fees and disbursements of Cadwalader, Wickersham & Taft LLP,
counsel to the BOA Parties, which counsel fees and disbursements shall be paid
in accordance with Section 10 hereof.

     

    SECTION
5.   Representations and
Warranties.  On and as of the date first above written, each of
the Seller and Anthracite CA Parties hereby represents and warrants to the BOA
Parties that (a) it is in compliance with all the terms and provisions set forth
in the Transaction Documents or the Loan Documents, as applicable, as amended
hereby on its part to be observed or performed, (b) after giving effect to this
Agreement, no Default or Event of Default under the Repurchase Agreement and the
Credit Agreement has occurred and is continuing, and (c) after giving effect to
this Agreement, the representations and warranties contained in Section 10 of
the Repurchase Agreement and Section 5 of the Credit Agreement are true and
correct in all material respects as though made on such date (except for any
such representation or warranty that by its terms refers to a specific date
other than the date first above written, in which case it shall be true and
correct in all material respects as of such other date).

     

    SECTION
6.   Limited
Effect.  Except as expressly amended and modified by this
Agreement, the Existing Agreements shall continue to be, and shall remain, in
full force and effect in accordance with their respective terms; provided, however, that upon
the Agreement Effective Date, all references in the Repurchase Agreement and
herein to the “Transaction Documents” and all references in the Credit Agreement
and herein to the “Loan Documents” shall be deemed to include, in any event,
this Agreement.  Each reference to an Amended Agreement in any of the
Transaction Documents or the Loan Documents shall be deemed to be a reference to
the applicable Amended Agreement as amended hereby.

     

    SECTION
7.   Override
Provision.  Notwithstanding any provision in the Amended
Agreements to the contrary, which are hereby pro tanto superseded and
modified or replaced mutatis
mutandis to the extent of any inconsistency, the provisions in this
Agreement shall apply from and after the date hereof.

     

    SECTION
8.   Counterparts.  This
Agreement may be executed by each of the parties hereto on any number of
separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument.  Delivery of an
executed counterpart of a signature page to this Agreement in Portable Document
Format (PDF) or by facsimile transmission shall be effective as delivery of a
manually executed original counterpart thereof.

     

    SECTION
9.   GOVERNING
LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     

    SECTION 10.  Covenant.  Each
of the Seller and the Anthracite CA Parties hereby covenants and agrees, on a
joint and several basis, to pay promptly, following receipt of an invoice
therefor, the fees and disbursements of Cadwalader, Wickersham & Taft LLP,
counsel to the BOA Parties, incurred by such parties in connection with this
Agreement, all prior amendments and modifications to the Repurchase Agreement
and the Credit Agreement, any other documents prepared in connection herewith
and therewith and the transactions contemplated hereby and thereby; provided that if such
invoiced amounts are not paid in full within five (5) Business Days of the date
of receipt of the applicable invoice by the Seller or any Anthracite CA Party,
as the case may be, each of the Seller and the Anthracite CA Parties, as
applicable, hereby acknowledges and agrees that (a) with respect to the
Cash Management Account established in connection with the Repurchase Agreement,
the Account Bank shall apply (at the direction of the Buyer Agent) all Income
received by the Account Bank in respect of the Purchased Assets and the
associated Hedging Agreements on the Business Day next following the Business
Day on which such Income is deposited in the Cash Management Account to the
payment of such invoiced but unpaid amounts until such amounts are paid in full,
and (b) with respect to the Concentration Accounts established in
connection with the Credit Agreement, the Lender shall be entitled to direct the
Bank to pay such invoiced but unpaid amounts directly to the applicable counsel
to the BOA Parties from the funds on deposit in the Concentration Accounts until
all such invoiced but unpaid amounts are paid in full.

     

    [SIGNATURES
FOLLOW]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    
       

      
        
          	 
      	
                  ANTHRACITE CAPITAL,
      INC., as Borrower

                
	 
      	 
      	
                  Agent
      and Guarantor

                
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                  By:

                	
                  /s/
      Paul Horowitz

                
	 
      	 
      	 
      	
                  Name:

                	
                  Paul
      Horowitz

                
	 
      	 
      	 
      	
                  Title:

                	
                  Vice
      President

                
	 
      	 
      	 
      	 
      	 
      

        

      

       

       

      
        
          	 
      	
                  ANTHRACITE
      CAPITAL BOFA FUNDING

                
	 
      	 
      	
                  LLC, as
      Seller

                
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                  By:

                	
                  /s/
      Paul Horowitz

                
	 
      	 
      	 
      	
                  Name:

                	
                  Paul
      Horowitz

                
	 
      	 
      	 
      	
                  Title:

                	
                  Director

                
	 
      	 
      	 
      	 
      	 
      

        

      

       

       

      
        
          	 
      	
                  AHR CAPITAL BOFA
      LIMITED, as Borrower

                
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                  By:

                	
                  /s/
      Richard Shea

                
	 
      	 
      	 
      	
                  Name:

                	
                  Richard
      Shea

                
	 
      	 
      	 
      	
                  Title:

                	
                  Director

                
	 
      	 
      	 
      	 
      	 
      

        

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          	 
      	
                  BANK OF AMERICA N.A., as
      Lender, Buyer and

                
	 
      	 
      	
                  Buyer
      Agent

                
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                  By:

                	
                  /s/
      Jeffrey B. Hoyle

                
	 
      	 
      	 
      	
                  Name:

                	
                  Jeffrey
      B. Hoyle

                
	 
      	 
      	 
      	
                  Title:

                	
                  Managing
      Director

                
	 
      	 
      	 
      	 
      	 
      

        

      

       

       

      
        
          	 
      	
                  BANC
      OF AMERICA MORTGAGE CAPITAL

                
	 
      	 
      	
                  CORPORATION, as
      Buyer

                
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                  By:

                	
                  /s/
      Peter Cookson

                
	 
      	 
      	 
      	
                  Name:

                	
                  Peter
      Cookson

                
	 
      	 
      	 
      	
                  Title:

                	
                  Managing
      DirectorFiled by Bowne Pure Compliance

Exhibit 4.1

 

DOLAN MEDIA COMPANY

and

MELLON INVESTOR SERVICES LLC,

as

Rights Agent

RIGHTS AGREEMENT

dated as of January 29, 2009

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	Section 1. Certain Definitions
	 	 	2	 
	Section 2. Appointment of Rights Agent
	 	 	7	 
	Section 3. Issuance of Rights Certificates
	 	 	8	 
	Section 4. Form of Rights Certificates
	 	 	10	 
	Section 5. Countersignature and Registration
	 	 	11	 
	Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates
	 	 	12	 
	Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	13	 
	Section 8. Cancellation and Destruction of Rights Certificates
	 	 	15	 
	Section 9. Availability of Capital Stock
	 	 	15	 
	Section 10. Preferred Shares Record Date
	 	 	17	 
	Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
	 	 	17	 
	Section 12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	25	 
	Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power
	 	 	26	 
	Section 14. Fractional Rights and Fractional Shares
	 	 	28	 
	Section 15. Rights of Action
	 	 	30	 
	Section 16. Agreement of Rights Holders
	 	 	30	 
	Section 17. Rights Certificate Holder Not Deemed a Stockholder
	 	 	31	 
	Section 18. Concerning the Rights Agent
	 	 	31	 
	Section 19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	32	 
	Section 20. Rights and Duties of Rights Agent
	 	 	33	 
	Section 21. Change of Rights Agent
	 	 	35	 
	Section 22. Issuance of New Rights Certificates
	 	 	36	 
	Section 23. Redemption
	 	 	36	 
	Section 24. Exchange
	 	 	37	 
	Section 25. Notice of Certain Events
	 	 	39	 
	Section 26. Notices
	 	 	40	 
	Section 27. Supplements and Amendments
	 	 	41	 
	Section 28. Determination and Actions by the Board of Directors
	 	 	41	 
	Section 29. Successors
	 	 	42	 
	Section 30. Benefits of this Agreement
	 	 	42	 
	Section 31. Severability
	 	 	42	 
	Section 32. Governing Law
	 	 	42	 
	Section 33. Counterparts
	 	 	43	 
	Section 34. Descriptive Headings
	 	 	43	 

 

 

 

RIGHTS AGREEMENT

THIS RIGHTS AGREEMENT (as it may from time to time be supplemented or amended, this
“Agreement”), dated as of January 29, 2009, is between Dolan Media Company, a Delaware corporation,
and Mellon Investor Services LLC, a New Jersey limited liability company, as Rights Agent.

The Board of Directors of the Company (the “Board of Directors”) has authorized and declared a
dividend of one preferred share purchase right (a “Right”) for each Common Share (as hereinafter
defined) of the Company outstanding as of the Close of Business (as hereinafter defined) on
February 9, 2009 (the “Record Date”), each Right representing the right to purchase one
ten-thousandth 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 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).

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

Section 1. Certain Definitions. For purposes of this Agreement, the following terms
have the 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 Common Shares equal to or in
excess of 15% of the Common Shares then outstanding, 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, (iv) any entity organized, appointed or established by the
Company for, or pursuant to the terms of, any such plan, or (v) any Person who, prior to the
Company’s public announcement of the Board’s approval of this Agreement, is the Beneficial
Owner of Common Shares equal to or in excess of 15% of the Common Shares then outstanding (a
“Current 15% Owner”); provided, however, that if following such public announcement of the
Board’s approval of this Agreement, such Current 15% Owner becomes the Beneficial Owner of
any additional Common Shares of the Company and is the Beneficial Owner of Common Shares
equal to or in excess of 15% of the Common Shares then outstanding, then such Current 15%
Owner shall be deemed an “Acquiring Person”. Notwithstanding the

 

2

 

foregoing, no Person shall become an “Acquiring Person” as the result of (a) an acquisition of Common Shares by the
Company which, by reducing the number of
Common Shares outstanding, increases the proportionate number of Common Shares
beneficially owned by such Person to 15% or more of the Common Shares then outstanding or
(b) the acquisition by such Person of newly-issued Common Shares directly from the Company
(it being understood that a purchase from an underwriter or other intermediary is not
directly from the Company); provided, however, that if a Person becomes the Beneficial Owner
of Common Shares equal to or in excess of 15% of the Common Shares then outstanding by
reason of share purchases by the Company or the receipt of newly-issued Common Shares
directly from the Company and, after such share purchases or direct issuance by the Company,
becomes the Beneficial Owner of any additional Common Shares of the Company and is the
Beneficial Owner of Common Shares equal to or in excess of 15% of the Common Shares then
outstanding, then such Person shall be deemed to be an “Acquiring Person”. In addition, if
the Board of Directors determines in good faith that a Person who would otherwise be an
“Acquiring Person”, as defined pursuant to the foregoing provisions of this Section 1(a),
has become such inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an “Acquiring
Person”, as defined pursuant to the foregoing provisions of this Section 1(a), then such
Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.

(b) “Act” shall have the meaning set forth in Section 9(e) hereof.

(c) “Affiliate” and “Associate” shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act (as
hereinafter defined) 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 is
deemed to beneficially own, within the meaning of Rule 13d-3 of the General Rules
and Regulations under the Exchange Act as in effect on the date of this Agreement;

(ii) which such Person or any 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 and other than customary
agreements with and between initial purchasers and selling group members with
respect to a bona fide offering of securities under Rule 144A under the Act), or
upon the exercise of conversion rights (other than conversion rights applicable to
securities held by initial
purchasers or selling group members in connection with a bona fide offering of
securities under Rule 144A under the Act pursuant to customary agreements with and
between them and the Company, so long as such securities are so held), exchange
rights, rights (other than these Rights), warrants or options, or otherwise; provided, however, that

 

3

 

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

(iii) which are beneficially owned, directly or indirectly, by any other Person
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 and other than customary agreements with and between initial
purchasers and selling group members with respect to a bona fide offering of
securities under Rule 144A under the Act) 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 for
purposes of determining the Beneficial Ownership of securities under this Agreement,
officers and directors of the Company solely by reason of their status as such shall
not constitute a group (notwithstanding that they may be Associates of one another
or may be deemed to constitute a group for purposes of Section 13(d) the Exchange
Act) and shall not be deemed to own shares owned by another officer or director of
the Company; or

(iv) which are the subject of a derivative transaction entered into by such
Person, or a derivative security acquired by such Person, which gives such Person
the economic equivalent of ownership of an amount of such securities due to the fact
that the value of the derivative is explicitly determined by reference to the price
or value of such securities, without regard to whether (A) such derivative conveys
any voting rights in such securities to such Person, (B) the derivative is required
to be, or capable of being, settled through delivery of such securities, or (C) such
Person may have entered into other transactions that hedge the economic effect of
such derivative. In determining the number of Common Shares deemed Beneficially
Owned by virtue of the operation of this Section 1(d)(iv), the subject
Person shall be deemed to Beneficially Own (without duplication) the number of
Common Shares that are synthetically owned pursuant to such derivative transactions
or such derivative securities.

 

4

 

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 own beneficially hereunder.

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

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

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

(h) “Common Shares” shall mean the shares of Common Stock, par value $.001 per share,
of the Company, except that when the context refers to “Common Shares” of any Person other
than the Company such term shall mean the capital stock (or equity interest) of such other
Person with the greatest voting power, or the equity securities or other equity interest
having power to control or direct the management of such Person.

(i) “Company” shall mean Dolan Media Company, a Delaware corporation, until a successor
Person shall become such or until a Principal Party shall assume, and thereafter be liable
for, all obligations and duties of the Company hereunder, pursuant to the applicable
provisions of this Agreement, and thereafter “Company” shall mean such successor Person or
Principal Party.

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

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

 

5

 

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

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

(n) “Preferred Shares” shall mean shares of the Series A Junior Participating Preferred
Stock, par value $.001 per share, of the Company having the rights and preferences set forth
in the Form of Certificate of Designations attached to this Agreement as Exhibit A.

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

(p) “Purchase Price” shall have the meaning set forth in Section 4(a) hereof.

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

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

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

(t) “Rights Agent” shall mean Mellon Investor Services LLC, a New Jersey limited
liability company, until a successor Rights Agent shall have become such pursuant to the
applicable provisions hereof, and thereafter “Rights Agent” shall mean such successor Rights
Agent. If at any time there is more than one Person appointed by the Company as Rights
Agent pursuant to the applicable provisions of this Agreement, “Rights Agent” shall mean and
include each such Person.

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

(v) “Section 11(a)(ii) Event” shall mean an event described in Section 11(a)(ii)
hereof.

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

 

6

 

(x) “Shares Acquisition Date” shall mean the first date of public announcement (which
for purposes of this definition, shall include, but not be limited to, a report filed
pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.

(y) “Subsidiary” of any Person shall mean any Person 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)(i) hereof.

(bb) “Triggering Event” shall mean a Section 11(a)(ii) Event (as hereinafter defined)
or an event described in Section 13(a) hereof.

Any determination required to be made by the Board of Directors for purposes of applying the
definitions contained in this Agreement shall be made by the Board of Directors in its good faith
judgment, which determination shall be binding on the Rights Agent and the holders of the Rights.

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

 

7

 

Section 3. Issuance of Rights Certificates.

(a) Until the earlier of (i) the Close of Business on the tenth Business 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 prior to such time as
any Person becomes an Acquiring Person) after the date of the commencement by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person
organized, appointed or established by the Company for, or pursuant to the terms of,
any such plan) of, or of the first public announcement of the intention of any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company or any Person organized, appointed or established by the
Company 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 the Beneficial Owner of
Common Shares aggregating 15% or more of the then-outstanding Common Shares, including any
such date which is after the date of this Agreement 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 Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be certificates for Rights) or, for Common Shares held
in book-entry accounts through the direct registration service of the Company’s transfer
agent, by such book-entry accounts (together with a direct registration transaction advice
with respect to such shares), and not by separate certificates, (y) the Rights will be
transferable only in connection with the transfer of Common Shares and (z) each transfer of
Common Shares (including a transfer to the Company) shall constitute a transfer of the
Rights associated with such Common Shares. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign, and the
Company will (i) send or cause to be sent (and the Rights Agent will, if requested and
provided with all necessary information by the Company, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on
the Distribution Date, at the address of such holder shown on the records of the Company or
the transfer agent or registrar for the Common Shares, a Rights Certificate, in
substantially the form of Exhibit B hereto (a “Rights Certificate”), evidencing one
Right for each Common Share so held, or (ii) credit the book-entry account of such holder
with such Rights and send a direct registration transaction advice with respect to such
Rights to such holder. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates or such book-entry credits and related direct
registration transaction advices. In the event the Company elect to distribute any Rights
by crediting book-entry accounts, the provisions in this Agreement that reference Rights
Certificates shall be interpreted to reflect that the Rights are credits to the book-entry
accounts, that separate Rights Certificates are not issued with respect to some or all of
the Rights, and that any legend required on a Rights Certificate may be placed on the direct
registration transaction advice with respect to such Rights. The Company shall promptly
notify the Rights Agent in writing upon the occurrence of the Distribution Date and, if such
notification is given orally, the Company shall confirm same in writing on or prior to the
Business Day next following. Until such notice is received by the Rights Agent, the Rights
Agent may presume conclusively for all purposes that the Distribution Date has not occurred.

 

8

 

(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 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 or the transfer
agent or registrar for the Common Shares. With respect to Common Shares outstanding as of
the Record Date, until the Distribution Date or the earlier surrender for transfer thereof,
the Redemption Date or the Final Expiration Date, the Rights associated with (i) the Common
Shares represented by certificates shall be evidenced by such certificates for Common Shares
together with the Summary of Rights and (ii) the Common Shares held in book-entry accounts
shall be held in book-entry accounts and evidenced by the related transaction advice
together with the Summary of rights, and in either case the registered holders of the Common
Share shall also be the registered holders of the associated Rights. Until the Distribution
Date (or the earlier of the Redemption Date or the Final Expiration Date), the transfer of
any of the Common Shares outstanding on the Record Date, with or without a copy of the
Summary of Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.

(c) Certificates for Common Shares that become outstanding (including, but not limited
to, reacquired Common Shares referred to in the last sentence of this Section 3(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 a legend in substantially the following form:

This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Dolan
Media Company and Mellon Investor Services LLC, as Rights Agent,
dated as of January 29, 2009, as it may from time to time be
supplemented or 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 Dolan Media Company.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. Dolan Media Company will
mail to the holder of this certificate a copy of the Rights
Agreement, without charge, after receipt of a written request
therefore. As described in the Rights Agreement, Rights issued to
any Person who becomes an Acquiring Person or any Associate or
Affiliate thereof (as such terms are defined in the Rights
Agreement) shall become null and void.

Each book-entry account for such Common Shares that shall so become outstanding or shall be
transferred or exchanged after the Record Date but prior to the earlier of the Distribution
Date, the Redemption Date or the Expiration Date shall also be deemed to include the
associated Rights, and the direct registration transaction advice with respect to such shall
bear a legend in substantially the following form:

 

9

 

Each security covered by this Advice entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Dolan
Media Company and Mellon Investor Services LLC, as Rights Agent,
dated as of January 29, 2009, as it may be from time to time be
supplemented or 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 Dolan Media Company.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates or be covered
by separate book-entry credits and will no longer be covered by this
Advice. Dolan Media Company will mail to the holder of this
certificate a copy of the Rights Agreement, without charge, after
receipt of a written request therefore. As described in the Rights
Agreement, Rights issued to any Person who becomes an Acquiring
Person or any Associate or Affiliate thereof (as such terms are
defined in the Rights Agreement) shall become null and void.

With respect to such Common Shares described in this Section 3(c), until the Distribution
Date, the Rights associated with the Common Shares represented by such certificates or held
in such book-entry accounts shall be evidenced by such certificates or such book-entry
accounts (together with the direct registration transaction advice with respect to such
 shares) alone, and registered holders of Common Shares shall also be the registered holders
of the associated Rights, and the transfer of any Common Shares, whether by transfer of
physical certificates or book-entry transfer, shall also constitute the transfer of the
Rights associated with the Common Shares.

Section 4. Form of Rights Certificates.

(a) The Rights Certificates and the forms of election to purchase and of assignment to
be printed on the reverse thereof, shall be substantially the same as 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 (but which do not affect
the rights, duties or responsibilities of the Rights Agent) and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to conform to usage.
Subject to the terms, provisions and restrictions elsewhere herein, the Rights Certificates
shall entitle the holders thereof to purchase such number of one ten-thousandths of a
Preferred Share as shall be set forth therein at the price per one ten-thousandth of a
Preferred Share set forth therein (the
“Purchase Price”), but the amount and type of securities purchasable upon the exercise
of each Right and the Purchase Price shall be subject to adjustment as provided herein.

 

10

 

(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a direct or indirect transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person became an Acquiring Person, or (iii) a direct or indirect transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming an Acquiring Person and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or understanding, whether
written or oral, regarding the transferred Rights or (B) a transfer that the Board of
Directors has determined in good faith is part of a plan, arrangement or understanding,
whether written or oral, which has as a primary purpose or effect avoidance of the second
paragraph of Section 11(a)(ii) hereof, and any Rights Certificate issued pursuant to Section
6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall contain (to the extent feasible) a
legend in substantially the following form:

The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and
void in the circumstances specified in the second paragraph of
Section 11(a)(ii) of the Rights Agreement.

The provisions of the second paragraph of Section 11(a)(ii) shall apply whether or not any
Rights Certificate actually contains the foregoing legend.

Section 5. Countersignature and Registration. The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its
President, its Chief Financial Officer, any of its 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 Rights Certificates shall be either manually or by
facsimile signature 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 Rights
Certificates shall cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by
the Company with the same force and effect as though the Person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights Certificate may be
signed on behalf of the Company by any Person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such Rights Certificate (as
described in the first sentence of this Section 5), although at the date of the execution of this
Rights Agreement any such Person was not such an officer.

 

11

 

Following the Distribution Date, receipt by the Rights Agent of notice to that effect and all
other relevant information referred to in Section 3(a), the Rights Agent will keep or cause to be
kept, at its office designated for such purpose, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates and the date of each of the Rights Certificates.

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

(a) Subject to the provisions of Sections 4(b), 14 and 24 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 Rights Certificate or
Rights Certificates (other than Rights Certificates representing Rights that have become
null and 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 Rights
Certificate or Rights Certificates, entitling the registered holder to purchase a like
number of one ten-thousandths of a Preferred Share (or Common Shares, other securities or
property, as the case may be), as the Rights Certificate or Rights Certificates surrendered
then entitle such holder to purchase. Any registered holder desiring to transfer, split-up,
combine or exchange any Rights Certificate or Rights Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split-up, combined or exchanged at the office of the Rights
Agent designated for such purpose. The Rights Certificates are transferable only on the
registry books of the Rights Agent. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate(s) until the registered holder shall have (i) properly completed and
signed the certificate contained in the form of assignment on the reverse side of such
Rights Certificate(s), (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) thereof and the Rights evidenced thereby and
the Affiliates and Associates thereof as the Company or the Rights Agent shall reasonably
request and (iii) paid a sum sufficient to cover any tax or charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights Certificates as
required by Section 9(c) hereof. Thereupon, the Rights Agent shall, subject to Sections 4
and 11(a)(ii) hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested, registered in such
name or names as may be designated by the surrendering registered holder. The Rights Agent
shall promptly forward any such sum collected by it to the Company or to such Persons as the
Company shall specify by written notice. The Rights Agent shall have no duty or obligation
under any Section of this Agreement which requires the payment of taxes or other charges
unless and until it is satisfied that all such taxes and/or charges have been paid.

 

12

 

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

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

(a) Subject to Section 11(a)(ii) hereof, the registered holder of any valid Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein
including, but not limited to, the restrictions on exercisability set forth in Section 9(c)
hereof) in whole or in part at any time after the Distribution Date upon surrender of the
Rights Certificate, with the form of election to purchase and the certificate on the reverse
side thereof properly completed and duly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment of the Purchase Price for
each one ten-thousandth of a Preferred Share (or Common Shares, other securities, cash or
property, as the case may be) as to which the Rights are exercised, and an amount equal to
any tax or charge required to be paid under Section 9(c) hereof, by wire transfer, certified
check, cashier’s check or money order payable to the order of the Company, at or prior to
the earliest of (i) the Close of Business on January 29, 2019 (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. Except for those provisions herein which expressly survive the
termination of this Agreement, this Agreement shall terminate at such time as the Rights are
no longer exercisable hereunder.

(b) The Purchase Price for each one ten-thousandth of a Preferred Share to be issued
upon exercise of a Right shall initially be $40.00, 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 Section 7(c) below.

 

13

 

(c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form
of election to purchase and the certificate on the reverse side of the Rights Certificate
properly completed and duly executed, accompanied by payment of the aggregate Purchase Price
for the Preferred Shares (or other securities or property, as the case may be) to be
purchased and an amount equal to any applicable tax or charge required to be paid by the
holder of such Rights Certificate in accordance with Section 9(c) hereof by wire transfer,
certified check, cashier’s check or money order payable to the order of the Company, or such
other payment method reasonably required by the Company, subject to Section 20(h) hereof,
the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares (or make available if the Rights Agent is the transfer agent of the
Preferred Shares) certificates for the number of one ten-thousandths of a Preferred Share as
are to be purchased and the Company hereby irrevocably authorizes each such transfer agent
to comply with all such requests or (B) requisition from the depositary agent depositary
receipts as provided in Section 14(b) hereof, representing such number of one
ten-thousandths 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
with the depositary agent and the Company hereby directs each such depositary agent to
comply with such request), (ii) when necessary to comply with this Rights Agreement,
requisition from the Company or such other entity the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14 hereof, (iii) 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 Rights Certificate, registered in such name or names
as may be designated by such holder, and (iv) when necessary to comply with this Rights
Agreement, after receipt, deliver such cash to, or upon the order of, the registered holder
of such Rights Certificate. In the event that the Company elects or is obligated to issue
other securities (including Common Shares) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a)(iii) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or property are available for distribution
by the Rights Agent, if and when necessary to comply with this Rights Agreement.

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

(e) Notwithstanding anything in this Agreement to the contrary, neither the Rights
Agent nor the Company shall be obligated to undertake any action with respect to a
registered holder of Rights or other securities upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have (i)
properly
completed and duly executed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof, and of the Beneficial
Owner’s (or former Beneficial Owner’s) or Affiliates’ or Associates’ interest in, or rights
to, the Rights evidenced by such Rights Certificates, as the Company or the Rights Agent
shall reasonably request.

(f) Notwithstanding any statement to the contrary contained in this Agreement or in any
Rights Certificate, if the Distribution Date or the Shares Acquisition Date shall occur
prior to the Record Date, the provisions of this Agreement, including, but not limited to,
Sections 3 and 11(a)(ii), shall be applicable to the Rights upon their issuance to the same
extent such provisions would have been applicable if the Record Date were the date of this
Agreement.

 

14

 

Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split-up, combination or exchange
shall, if surrendered to the Company or 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 Rights Certificates shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

Section 9. Availability of Capital Stock.

(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares (and, following the occurrence
of a Distribution Date, out of its authorized and unissued Common Shares and/or other
securities or out of its authorized and issued shares held in its treasury), the number of
Preferred Shares (or Common Shares and/or other securities, as the case may be) that will be
sufficient to permit the exercise in full of all outstanding Rights as provided in this
Agreement.

(b) The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares (or Common Shares and/or other
securities, as the case may be) delivered upon exercise of Rights shall be, at the time
of delivery of the certificates for such Preferred Shares (or Common Shares and/or other
securities, as the case may be) (subject to any necessary payment of the Purchase Price),
duly and validly authorized and issued and fully paid and nonassessable shares.

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

 

15

 

(d) So long as the Preferred Shares (and, following the occurrence of a Distribution
Date, Common Shares and/or other securities, as the case may be) issuable and deliverable
upon the exercise of the Rights may be listed or traded on any inter-dealer quotation system
or national securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such issuance to
be listed on one such system or exchange upon official notice of issuance upon such
exercise.

(e) The Company shall use its best efforts to (i) file on the appropriate form, as soon
as practicable following the earliest date after the first occurrence of a Section 11(a)(ii)
Event on which the consideration to be delivered by the Company upon exercise of the Rights
has been determined hereunder, a registration statement under the Securities Act of 1933, as
amended (the “Act”), with respect to the securities purchasable upon exercise of the Rights,
(ii) cause such registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B) the Final Expiration
Date. The Company may temporarily suspend, for a period of time not to exceed ninety (90)
days after the date set forth in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no longer in effect. The
Company shall notify the Rights Agent whenever it makes a public announcement pursuant to this Section 9(e) and give the
Rights Agent a copy of such announcement.
In addition, if the Company shall determine that
a registration statement is required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such time as a registration
statement has been declared effective. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the
various states in connection with the exercisability of the Rights. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite registration or qualification in such jurisdiction shall not
have been obtained, the exercise thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.

 

16

 

Section 10. Preferred Shares Record Date. Each Person in whose name any certificate
for Preferred Shares (or Common Shares and/or other securities, as the case may be) is issued (or
in whose name a book-entry account for such securities is held) upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and such certificate
(or, in the case of securities held in book-entry form, the related direct transaction registration
advice) shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly
surrendered (or the transfer of the book-entry account effected) and payment of the applicable
Purchase Price (and any applicable taxes or charges) was duly made (or Rights were duly surrendered
in exchange for Common Shares pursuant to Section 24 hereof); provided, however, that if the date
of such surrender (or transfer in book-entry form) and payment is a date upon which the transfer
books of the Company are closed, such Person shall be deemed to have become the record holder of
the Preferred Shares (or Common Shares and/or other securities, as the case may be), on, and such
certificate (or, in the case of securities held in book-entry form, the related direct registration
transaction advice) shall be dated, the next succeeding Business Day on which the transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate (or book-entry account) shall not be entitled to any rights of a holder of
Preferred Shares (or Common Shares and/or other securities, as the case may be) for which the
Rights shall be exercisable, including, but not limited to, the right to vote, to receive dividends
or other distributions or to exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.

Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights. The Purchase Price, the number and kind of shares covered by and obtainable upon
exercise of each Right, and the number of Rights outstanding, are subject to adjustment from time
to time as provided in this Section 11 and Section 13 hereof.

(a) (i) In the event the Company shall at any time after the date of this Agreement
(A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine or consolidate 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, but not limited to, 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, consolidation 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
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, consolidation 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 that would require 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.

 

17

 

(i) Subject to Section 24 hereof and to the immediately succeeding paragraph,
in the event any Person shall become an Acquiring Person, each holder of a valid
Right shall thereafter have a right to receive, upon exercise thereof at a price per
share equal to the then-current Purchase Price multiplied by the number of one
ten-thousandths 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 Common Shares of the Company, as shall equal the result obtained by (x)
multiplying the then-current Purchase Price by the number of one ten-thousandths of
a Preferred Share for which a Right is then exercisable, and dividing that product
by (y) 50% of the then-current per share market price of the Company’s Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of the
event described above. 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 that would eliminate or diminish the benefits intended to be afforded by the
Rights.

From and after the time when a Person becomes an Acquiring Person (a
“Section 11(a)(ii) Event”) any Rights that are or were acquired or beneficially
owned by (i) any Acquiring Person or any Associate or Affiliate of such
Acquiring Person, (ii) a direct or indirect transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person became an Acquiring Person, or (iii) a direct or indirect transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person becoming an Acquiring Person and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any continuing
agreement, arrangement or understanding, whether written or oral, regarding the
transferred Rights or (B) a transfer which the Board of Directors has determined in
good faith is part of a plan, arrangement or understanding, whether written or oral,
which has as a primary purpose or effect the avoidance of this second paragraph of
this Section 11(a)(ii), shall each be null and void and any holder of such Rights
shall thereafter have no exercise or any other rights whatsoever with respect to
such Rights under any provision of this Agreement or otherwise. No Rights
Certificate shall be issued pursuant to Section 3, this Section 11(a)(ii) or Section
24 that represents Rights beneficially owned by an Acquiring Person or any Associate
or Affiliate thereof whose Rights would be null and void pursuant to the preceding
sentence; no Rights Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person or any Associate or Affiliate thereof whose Rights
would be null and void pursuant to the preceding sentence or to any nominee of such
Acquiring Person, Associate or Affiliate; and any Rights Certificate delivered to
the Rights Agent for transfer to an Acquiring Person, Associate or Affiliate thereof
whose Rights would be null and void pursuant to the preceding sentence shall be
cancelled. The Rights Agent shall not be deemed to have any knowledge of the
identity of any such Acquiring Person, Associate or Affiliate, or the nominee of any
of the foregoing, unless and until it shall have received written notice of the
identity of such Person from the Company and the Rights Agent may rely on such
notice in carrying out its duties under this Agreement.

 

18

 

(ii) In lieu of issuing Common Shares of the Company in accordance with Section
11(a)(ii) hereof, the Company may, in the sole discretion of the Board of Directors,
elect to (and, in the event that the Board of Directors has not exercised the
exchange right contained in Section 24 hereof and there are not sufficient issued
but not outstanding and authorized but unissued Common Shares to permit the exercise
in full of the Rights in accordance with Section 11(a)(ii) hereof, the Company
shall) take all such action as may be necessary to authorize, issue or pay, upon the
exercise of the Rights, cash (including by way of a reduction of the Purchase
Price), property, other securities or any combination thereof having an aggregate
value equal to the value of the Common Shares of the Company that otherwise would
have been issuable pursuant to Section 11(a)(ii), which aggregate value shall be
determined by the Board of Directors. For purposes of the preceding sentence, the
value of the Common Shares shall be
determined by multiplying the number of Common Shares issuable by the current
per share market price of such Common Shares pursuant to Section 11(d) hereof and
the value of any equity securities which the Board of Directors determines to be a
“common stock equivalent” (including the Preferred Shares, in such ratio as the
Board of Directors shall determine) shall be deemed to have the same value as the
Common Shares. Any such election by the Board of Directors must be made and
publicly announced within 60 days following the date on which the event described in
Section 11(a)(ii) shall have occurred (with prompt written notice thereof to the
Rights Agent). Following the occurrence of the event described in Section
11(a)(ii), the Board of Directors may suspend the exercisability of the Rights for a
period of up to 60 days following the date on which the event described in Section
11(a)(ii) shall have occurred to the extent that the Board of Directors has not
determined whether to exercise the Company’s right of election under this
Section 11(a)(iii). In the event of any such suspension, the Company shall issue a
public announcement (with prompt written notice thereof to the Rights Agent) stating
that the exercisability of the Rights has been temporarily suspended.

 

19

 

(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 outstanding on such record date plus the number of Preferred
Shares which could be purchased at the current per share market price for 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) and the denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock 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, whose determination shall be described
in a statement filed with the Rights Agent. 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 that 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, but not limited to, 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 on such record date, less
the fair market value (as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent) of the portion
of the assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and the denominator of which shall be
such current per share market price of the Preferred Shares; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock 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.

 

20

 

(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 (determined
as provided in the next sentence) per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to, but not
including, such date, and for the purpose of any computation under Section
11(a)(iii) hereof, the “current per share market price” of a Security 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 following (but not
including) such date; provided, however, that in the event that the current per
share market price of the Security is determined during a period 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 (but not including) the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then, and in
each such case, the current per share market price shall be appropriately adjusted
to reflect the current market price per share equivalent of such Security as if such
dividend, distribution, combination or reclassification has not been declared. The
closing price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal transaction reporting
system with respect to a Security listed or admitted for trading on the New York
Stock Exchange, or if such Security is not listed or admitted for trading on the New
York Stock Exchange, on the principal national securities exchange on which such
security is listed or admitted for trading, or, if such Security is not listed or
admitted for trading on any national securities exchange but sales price information
is reported for the Security, as reported by such self-regulatory organization or
registered securities information processor (as such terms are used under the
Exchange Act) that then reports information concerning such Security, or if sales
price information is not so reported, the average of the high bid and low asked
prices in the over-the-counter market on such day, as reported by such entity, or,
if on such day such Security is not quoted by any such entity, the average of the
closing bid and asked prices as furnished by a professional market maker making a
market in such Security selected by the Board of Directors of the Company. If on
such day no market maker is making a market in such Security, the fair value of such
Security on such date shall be as determined in good faith by the Board of Directors
of the Company. The term “Trading Day” shall mean, with respect to a Security, a
day on which the principal national securities exchange on which such Security is
listed or admitted for trading is open for the transaction of business, or, if such
Security is not listed or admitted for trading on any national securities exchange
but is quoted by a self-regulatory organization or registered securities information
processor (as such terms are used under the Exchange Act), a day on which such
entity reports trades, or, if such Security is not so quoted, a Business Day.

 

21

 

(i) 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) hereof. 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 Common Shares as determined
pursuant to Section 11(d)(i) (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof), multiplied
by ten thousand. If neither the 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, 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 that 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 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 Sections 11(a), 11(b) and 11(c), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply on like terms
to any such other shares.

 

22

 

(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 ten-thousandths 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
Sections 11(b) and 11(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 ten-thousandths of a Preferred Share (calculated to the nearest
one one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number of one
ten-thousandths 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
(ii) dividing the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.

(i) The Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in substitution for any adjustment in the number of one
ten-thousandths 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 ten-thousandths 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 (with prompt written notice thereof to the Rights Agent) 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 Rights Certificates
have been issued, shall be at least 10 days later than the date of the public announcement.
If Rights Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to 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 Rights Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment. Rights Certificates
so to be distributed shall be issued and executed by the Company, and countersigned and
delivered by the Rights Agent, in the manner provided for herein and shall be registered in
the names of the holders of record of Rights Certificates on the record date specified in
the public announcement.

 

23

 

(j) Irrespective of any adjustment or change in the Purchase Price or the number of one
ten-thousandths of a Preferred Share or other security issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the number of one ten-thousandths of a Preferred Share which were
expressed in the initial Rights Certificates issued hereunder, without prejudice to the
validity of such Rights Certificate(s) or the application of the provisions hereof.

(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 issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preferred 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 (with prompt written notice thereof to the Rights Agent) 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), hereafter made by the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.

 

24

 

(n) In the event that at any time after the date of this Agreement and prior to the
Shares Acquisition Date, the Company shall (i) declare or pay any dividend on the Common
Shares payable in Common Shares or (ii) effect a subdivision, combination or consolidation
of the Common Shares (by reclassification or means other than by payment of dividends) into
a greater or lesser number of Common Shares, then in any such case (x) the number of one
ten-thousandths of a Preferred Share purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of one ten-thousandths of a
Preferred Share so purchasable immediately prior to such event by a fraction, the numerator
of which is the number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately after such
event, and (y) each Common Share outstanding immediately after such event shall have issued
with respect to it that number of Rights which each 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 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 or any event affecting the Rights or their exercisability (including, but not
limited to, an event which causes Rights to become null and void) occurs as provided in Section 11
and 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment
or describing such event, and a brief, reasonably detailed statement of the facts, computations and
methodology accounting for such adjustment, (b) file with the Rights Agent and with each transfer
agent for the Common Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate in accordance with Section 25 and Section 26
hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any
adjustment or statement contained therein
and shall have no duty or liability with respect to, and shall not be deemed to have knowledge
of, any adjustment or any such event unless and until it shall have received such a certificate.

 

25

 

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

(a) If, after the Shares Acquisition Date, directly or indirectly, (w) the Company
shall consolidate with, or merge with and into, any other Person, (x) 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
or consolidation all or part of the outstanding Common Shares are changed into or exchanged
for stock or other securities of any other Person (or the Company) or cash or any other
property, (y) the Company shall sell, mortgage or otherwise transfer (or one or more of its
Subsidiaries shall sell, mortgage or otherwise transfer), in one or more transactions,
assets, cash flow 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 Person other than the Company or
one or more of its wholly-owned Subsidiaries, or (z) any Acquiring Person or any Associate
or Affiliate of any such Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, (A) shall, in one transaction or a series of transactions, transfer
any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part)
for Common Shares, for shares of other equity securities of the Company or for securities
exercisable for or convertible into shares of equity securities of the Company (Common
Shares or otherwise) or otherwise obtain from the Company, with or without consideration,
any additional shares of such equity securities or securities exercisable for or convertible
into shares of such equity securities (other than pursuant to a pro rata distribution to all
holders of Common Shares), (B) shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of assets, in one transaction or a series of
transactions, to, from or with the Company or any of its Subsidiaries without obtaining a
written opinion from a nationally recognized investment banking firm that the terms of such
transaction or arrangement are no less favorable to the Company than the Company would be
able to obtain in arm’s-length negotiation with an unaffiliated third party, (C) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of in
one transaction or a series of transactions, to, from or with the Company or any of the
Company’s Subsidiaries (other than incidental to the lines of business, if any, engaged in
as of the date hereof between the Company and such Acquiring Person or Associate or
Affiliate) assets having an aggregate fair market value of more than $5,000,000, (D) shall
receive any compensation from the Company or any of the Company’s Subsidiaries other than
compensation for full-time employment as a regular employee at rates in accordance with the
Company’s (or its Subsidiaries’) past practices, or (E) shall receive the benefit, directly
or indirectly (except proportionately as a stockholder and except if resulting from a
requirement of law or governmental regulation), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax advantage
provided by the Company or any of its Subsidiaries, then, and in each such case, (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 per share equal to the then-current Purchase
Price multiplied by the number of one ten-thousandths 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 validly authorized and issued, fully paid, non-assessable and freely
tradeable Common Shares of the Principal Party not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall equal the result obtained by (A)
multiplying the then-current Purchase Price by the number of one ten-thousandths of a
Preferred Share for which a Right is then exercisable and dividing that product by (B) 50%
of the then-current per share market price of the Common Shares of the Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement; (iii) the term
“Company” shall thereafter be deemed to refer to such Principal Party; and (iv) such
Principal Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of its 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 the Common Shares
thereafter deliverable upon the exercise of the Rights.

 

26

 

(b) “Principal Party” shall mean:

(i) In the case of any transaction described in (w) or (x) of the first
sentence of Section 13(a) hereof, the Person that is the issuer of any securities
into which Common Shares of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that is the surviving
entity of such merger or consolidation (including the Company if applicable); and

(ii) in the case of any transaction described in (y) or (z) of the first
sentence in Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets, securities, earning power or other benefit
transferred pursuant to such transaction or transactions;

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

(c) The Company shall not consummate any such consolidation, merger, sale or transfer
unless the Principal Party shall have sufficient Common Shares authorized to permit the full
exercise of the Rights and prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in Sections 13(a) and 13(b) hereof and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or transfer mentioned in
Section 13(a) hereof, the Principal Party will:

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

 

27

 

(ii) deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act; and

(iii) take such actions as may be necessary or appropriate under the blue sky
laws of the various states.

The Company shall not enter into any 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, consolidations, sales, dispositions 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
Rights Certificates which evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of 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 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 transaction reporting
system if the Rights are listed or admitted for trading on the New York Stock Exchange, or
if such Rights are not listed or admitted for trading on the New York Stock Exchange, on the
principal national securities exchange on which such Rights are listed or admitted for
trading, or, if such Rights are not listed or admitted for trading on any national
securities exchange but sales price information is reported for such Rights, as reported by
such self-regulatory organization or registered securities information processor (as such
terms are used under the Exchange Act) that then reports information concerning such Rights,
or if sales price information is not so reported, the average of the high bid and low asked
prices in the over-the-counter market on such day, as reported by such entity, or, if on
such day such Rights are not quoted by any such entity, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in such Rights
selected by the Board of Directors of the Company. If on such day no market maker is making
a market in such Rights, the fair value of such Rights on such date shall be as determined
in good faith by the Board of Directors of the Company.

 

28

 

(b) The Company shall not be required to issue fractions of Preferred Shares (other
than fractions which are integral multiples of one ten-thousandth 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 ten-thousandth of a
Preferred Share). Fractions of Preferred Shares in integral multiples of one ten-thousandth
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 ten-thousandth of a
Preferred Share, the Company shall pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For the purposes of this
Section 14(b), the current market value of a Preferred Share shall be the 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) Following the occurrence of a Distribution Date, the Company shall not be required
to issue fractions of Common Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares. In lieu of fractional Common Shares,
the Company may pay to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction of the current
market value of one Common Share. For purposes of this Section 14(c), the current market
value of one Common Share shall be the closing price of one Common 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.

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

(e) Whenever a payment for fractional Rights or fractional shares is to be made by the
Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a
certificate setting forth in reasonable detail the facts related to such payments and the
prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient
moneys to the Rights Agent in the form of fully collected funds to make such payments. The
Rights Agent shall be fully protected in relying upon such a certificate and shall have no
duty with respect to, and shall not be deemed to have knowledge of any payment for
fractional Rights or fractional shares under any Section of this Agreement relating to the
payment of fractional Rights or fractional shares unless and until the Rights Agent shall
have received such a certificate and sufficient moneys.

 

29

 

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 and Section 20 hereof,
are vested in the respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the 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 Rights Certificate in the manner provided in such Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and will be entitled to specific performance of the obligations under,
and injunctive relief against (in either case, without the posting of bond or other security),
actual or threatened violations of the obligations of any Person subject to, this Agreement.

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

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

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

(c) the Company and the Rights Agent may deem and treat the Person in whose name the
Rights Certificate (or, prior to the Distribution Date, the associated certificate for
Common Shares) is registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the Rights Certificates or
the associated certificate for Common Shares 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

 

30

 

(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 any
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 (whether interlocutory or final) issued by a court or by a governmental, regulatory,
self-regulatory or administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority prohibiting or
otherwise restraining performance of such obligation.

Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such,
of any Rights 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 Rights Certificate be construed to confer upon the holder of any Rights 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 Rights 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 reasonable compensation for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, delivery, amendment, administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent and its Affiliates and each of their directors, officers, employees and agents
(collectively, the “Indemnified Parties”) for, and to hold them harmless against, any damage, loss,
liability, judgment, fine, penalty, claim, demand, settlement, cost or expense (including, but not
limited to, the reasonable fees and expenses of legal counsel), incurred without gross negligence,
bad faith or willful misconduct on the part of the Indemnified Parties (which gross negligence, bad
faith or willful misconduct must be determined by a final, non-appealable order, judgment, decree
or ruling of a court of competent jurisdiction), for any action taken, suffered or omitted by the
Indemnified Parties in connection with the acceptance, administration, exercise and performance of
its duties under this Agreement, including the costs and expenses of defending against any claim or
demand of liability arising, directly or indirectly, therefrom. To the extent that the Rights
Agent is successful in an action to enforce its rights of indemnification, the costs and expenses
incurred in enforcing this right of indemnification shall be paid by the Company. The provisions
of this Section 18 and Section 20 below shall survive the termination of this Agreement, the
exercise or expiration of the Rights and the resignation, replacement, removal or substitution of
the Rights Agent. In no case shall the Indemnified Parties be liable for special, punitive,
indirect, incidental or consequential loss or damage of any kind whatsoever (including, but not
limited to, lost profits), even if the Indemnified Parties have been advised of the likelihood of
such loss or damage.

 

31

 

The Rights Agent shall be authorized and protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with its acceptance and
administration of this Agreement and the exercise and performance of its duties hereunder, in
reliance upon any Rights Certificate or certificate for the Preferred Shares or 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, or otherwise upon the advice of counsel as set
forth in Section 20 hereof. The Rights Agent shall not be deemed to have knowledge of any event of
which it was supposed to receive notice thereof hereunder, and the Rights Agent shall be fully
protected and shall incur no liability for failing to take any action in connection therewith
unless and until it has received such notice.

Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any Person
into which the Rights Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any Person succeeding to the shareholder services
business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement any of the Rights
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 Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the Rights Certificates and in
this Agreement.

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

 

32

 

Section 20. Rights and Duties of Rights Agent. The Rights Agent undertakes to perform
only the duties and obligations expressly imposed by this Agreement (and no implied duties) upon
the following terms and conditions by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:

(a) The Rights Agent may consult with legal counsel of its own choice (who may be legal
counsel for the Company or in-house counsel of the Rights Agent), and the advice or opinion
of such counsel shall be full and complete authorization and protection to the Rights Agent
and the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it in accordance with such advice or 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 (including, but not limited to,
the identity of an Acquiring Person and the determination of the current per share market
price of any security) be proved or established by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Financial Officer, any Vice President, the
Treasurer, the Secretary or the Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full and complete authorization and protection
to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any
action taken, suffered or omitted by it under the provisions of this Agreement in reliance
upon such certificate.

(c) The Rights Agent shall be liable hereunder to the Company and any other Person only
for its own gross negligence, bad faith or willful misconduct (which gross negligence, bad
faith or willful misconduct must be determined by a final, non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction.). Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special, indirect,
punitive, consequential or incidental loss or damage of any kind whatsoever (including, but
not limited to, lost profits), even if the Rights Agent has been advised of the likelihood
of such loss or damage. Any liability of the Rights Agent under this Agreement will be
limited to the amount of annual fees paid by the Company to the Rights Agent.

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

 

33

 

(e) The Rights Agent shall not have any liability for or be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or execution of any
Rights Certificate (except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any change in the exercisability of the
Rights (including the Rights becoming null and void pursuant to
Section 11(a)(ii) hereof) or any change or 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 Rights Certificates
after receipt of the certificate described in Section 12 hereof, upon which the Rights Agent
may rely); 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 (or Common Shares
and/or other securities, as the case may be) to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any Preferred Shares (or Common Shares and/or other
securities, as the case may be) will, when issued, be validly authorized and issued, fully
paid and nonassessable.

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

(g) The Rights Agent is hereby authorized and directed to accept, prior to the Shares
Acquisition Date, 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, the Chief
Financial Officer, any Vice President, the Treasurer, the Secretary or the Assistant
Secretary of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and such instructions shall be full authorization and protection
to the Rights Agent and the Rights Agent shall not be liable for or in respect of any action
taken, suffered or omitted by it in accordance with instructions of any such officer or for
any delay in acting while waiting for those instructions. The Rights Agent shall be fully
authorized and protected in relying upon the most recent instructions received by any such
officer. Any application of the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to be taken,
suffered or omitted by the Rights Agent under this Agreement and the date on and/or after
which such action shall be taken or suffered or such omission shall be effective. The
Rights Agent shall not be liable for any action taken or suffered by, or omission of, the
Rights Agent in accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than five Business Days
after the date any officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying the action to be
taken, suffered or omitted.

 

34

 

(h) If, with respect to any Right Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate contained in the form of assignment or the form of
election to purchase set forth on the reverse thereof, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 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.

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

(j) The Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself (through its directors, officers, and
employees) or by or through its attorneys or agents, and the Rights Agent 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 or any other Person resulting from any such act,
default, neglect or misconduct, absent gross negligence, bad faith or willful misconduct in
the selection and continued employment thereof (which gross negligence, bad faith or willful
misconduct must be determined by a final, non-appealable order, judgment, decree or ruling
of a court of competent jurisdiction.)

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

Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and thereafter be discharged from its duties under this Agreement upon 30 days’ prior
notice in writing mailed to the Company and to each transfer agent of the Common Shares or
Preferred Shares known to the Rights Agent by registered or certified mail, and, following the
Distribution Date, to the holders of Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days’ prior notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of
the Common Shares or Preferred Shares by registered or certified mail, and following the
Distribution Date, to the holders of Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the Company shall 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
Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by the Company), then the registered holder

 

35

 

of  any Rights
Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be
either (A) a Person organized and doing business under the laws of the United States or of any
state of the United States, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers, and subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million or (B) an affiliate of a Person described in clause (A). After
appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Shares or Preferred Shares, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice provided for in
this Section 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 Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form as may be approved by the Board of
Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class
of shares or other securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement.

Section 23. Redemption.

(a) The Rights may be redeemed by action of the Board of Directors pursuant to Section
23 (b) hereof and shall not be redeemed in any other manner.

(b) The Board of Directors may, at its option, at any time prior to such time as any
Person becomes an Acquiring Person, redeem all, but not less than all, of the
then-outstanding Rights at a redemption price of $.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the “Redemption Price”). The
redemption of the Rights by the Board of Directors may be made effective at such time on
such basis and with such conditions as the Board of Directors in its sole discretion may
establish. If redemption of the Rights is to be effective as of a future date, the Rights
shall continue to be exercisable, subject to Section 11(a)(ii) hereof, until the effective
date of the redemption, provided that nothing contained herein shall preclude
the Board of Directors from subsequently causing the Rights to be redeemed at a date
earlier than the previously scheduled effective date of the redemption. The Company may, at
its option, pay the Redemption Price in cash, Common Shares (based on the current market
value of a whole Common Share at the closing price of a Common Share (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to,
but not including, the date of such payment) or any other form of consideration deemed
appropriate by the Board of Directors.

 

36

 

(c) Immediately upon the action of the Board of Directors ordering the redemption of
the Rights pursuant to Section 23(b) hereof (or at the effective time of such redemption
established by the Board of Directors pursuant to Section 23(b) hereof), 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 (with prompt written
notice thereof to the Rights Agent); provided, however, that the failure to give, or any
defect in, any such notice shall not affect the legality or validity of such redemption.
Within 10 days after such action of the Board of Directors ordering the redemption of the
Rights pursuant to Section 23(b) hereof or if later, the effectiveness of the redemption of
the rights pursuant to the second to last sentence of Section 23(b), the Company shall mail
a notice of redemption to all the holders of the then-outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common 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. The Company may, at its option,
discharge all of its obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights (with prompt written notice thereof to the
Rights Agent), (ii) depositing with a bank or trust company having a capital and surplus of
at least $100 million, funds necessary for such redemption, in trust, to be applied to the
redemption of the Rights so called for redemption and (iii) arranging for the mailing of the
Redemption Price to the registered holders of the Rights; then, and upon such action, all
outstanding Rights Certificates shall be null and void without further action by the
Company.

Section 24. Exchange.

(a) The Board of Directors 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 null and void pursuant to the provisions of
Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof. Notwithstanding the foregoing, the Board of
Directors 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 Person holding
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 50% or more of the Common
Shares then outstanding.

 

37

 

(b) Immediately upon the action of the Board of Directors ordering the exchange of any
Rights pursuant to Section 24(a) hereof 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 Common Shares equal to the number
of valid Rights held by such holder. The Company shall promptly give public notice of any
such exchange (with prompt written notice thereof to the Rights Agent); provided, however,
that the failure to give, or any defect in, such notice shall not affect the legality or
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 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 null and void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.

(c) In any exchange pursuant to this Section 24, the Company, at its option, may
substitute Preferred Shares (or equivalent preferred shares, as such term is defined in
Section 11(b) hereof) for Common Shares exchangeable for Rights, at the initial rate of one
ten-thousandth of a Preferred Share (or equivalent preferred share) for each Common Share,
as appropriately adjusted to reflect adjustments in the voting rights of the Preferred
Shares pursuant to the terms thereof, so that the fraction of a Preferred Share delivered in
lieu of each Common Share shall have the same voting rights as the Common Share for which
the fraction of Preferred Share is being substituted.

(d) In the event that there shall not be sufficient Common Shares or Preferred 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 Common Shares or Preferred Shares for issuance upon
exchange of the Rights.

(e) The Company shall not be required to issue fractions of Common Shares or to
distribute certificates that evidence fractional Common Shares. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders of the Rights Certificates
with regard to which such fractional Common Shares would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole Common Share. For
the purposes of this Section 24(e), the current market value
of a whole Common Share shall be the closing price of a Common Share (as determined
pursuant to 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.

 

38

 

Section 25. Notice of Certain Events.

(a) In case the Company shall propose (i) to pay any dividend payable in stock of any
class to the holders of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer to the
holders of 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 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
Common Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares), then, in each such case, the Company shall give to the Rights
Agent and each holder of a Rights Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for such event, and the
date of participation therein by the holders of the Common Shares and/or Preferred Shares,
if any such date is to be fixed, and such notice 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 Common Shares and/or
Preferred Shares, whichever shall be the earlier.

(b) In case a Section 11(a)(ii) Event shall occur, then the Company shall as soon as
practicable thereafter give to the Rights Agent and each holder of a Rights 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.

 

39

 

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 Rights Certificate to or on the Company shall be
sufficiently given or made if (i) personally delivered, (ii) delivered by a reputable overnight
courier service or (iii) sent, by first-class mail, postage prepaid, and delivered or addressed
(until another address is filed in writing with the Rights Agent) as follows:

Dolan Media Company

222 South Ninth Street

Suite 2300

Minneapolis, MN 55402

Attention: Corporate Secretary

with copies (which shall not constitute notice) to:

Dolan Media Company

222 South Ninth Street

Suite 2300

Minneapolis, MN 55402

Attention:   Katie Gettman

                   In-House Counsel

and

Katten Muchin Rosenman LLP

525 West Monroe Street

Chicago, Illinois 60661

Attention: Walter S. Weinberg, Esq.

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 Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if (i) personally delivered, (ii) delivered by a
reputable overnight courier service or (iii) sent, by first-class mail, postage prepaid, and
delivered or addressed (until another address is filed in writing with the Company) as follows:

Mellon Investor Services LLC

200 W. Monroe Street

Suite 1590

Chicago, IL 60606

Attn: Susan R. Hogan – Vice President

with a copy (which shall not constitute notice) to:

Mellon Investor Services LLC

480 Washington Boulevard

Jersey City, NJ 07310
Attn: General Counsel

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Rights Certificate 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.

 

40

 

Section 27. Supplements and Amendments. At any time when the Rights are then
redeemable, the Company may in its sole and absolute discretion and the Rights Agent shall, subject
to the provisions of this Section 27 and provided that such supplement or amendment does not affect
the rights, duties, obligations or immunities of the Rights Agent, if the Company so directs,
supplement or amend any provision of this Agreement in any respect without the approval of any
holders of Rights or holders of Common Shares. At any time when the Rights are not redeemable, the
Company may, in its sole and absolute discretion, and the Rights Agent shall, subject to the
provisions of this Section 27 and provided that such supplement or amendment does not affect the
rights, duties, obligations or immunities of the Rights Agent, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights or holders of
Common Shares in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein that may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to change or supplement the provisions
hereunder in any manner that the Company may deem necessary or desirable; provided that no such
amendment or supplement shall materially adversely affect the interests of the holders of Rights
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person); and further
provided that this Agreement may not be supplemented or amended pursuant to this sentence to
lengthen (A) a time period relating to when the Rights may be redeemed or (B) any other time period
unless the lengthening of such other time period is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights (other than any Acquiring
Person and its Affiliates and Associates ). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is in compliance with
the terms of this Section 27, the Rights Agent shall execute such supplement or amendment;
provided, however, that the Rights Agent may, but shall not be obligated to, enter into any such
supplement or amendment that affects the Rights Agent’s own rights, duties, obligations or
immunities under this Agreement.

Section 28. Determination and Actions by the Board of Directors. The Board of
Directors 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, or the Company, or as may be
necessary or advisable in the administration of this Agreement, including, but not limited to, 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, but not limited
to, a determination to redeem or not redeem the Rights or to amend the Agreement and whether any
proposed amendment adversely affects the interests of the holders of Rights Certificates). For all
purposes of this Agreement, any calculation of the number of Common Shares or other securities
outstanding at any particular time, including for purposes of determining the particular percentage
of such outstanding Common Shares or any other securities of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act as in effect on the date of this 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 in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the
Rights Certificates and all other Persons unless the Board of Directors specifically states that
such action, calculations, interpretation or determination is not final, conclusive and binding,
and (y) not subject the Board of Directors to any liability to the holders of the Rights
Certificates. The Rights Agent is entitled always to assume the Board of Directors acted in good
faith and shall be fully protected and incur no liability in reliance thereon.

 

41

 

Section 29. 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 30. 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 valid
Rights Certificates (and, prior to the Distribution Date, the 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 valid Rights Certificates
(and, prior to the Distribution Date, the Common Shares).

Section 31. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, null and
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; and provided further, that if any such excluded term, provision, covenant or
restriction shall adversely affect the rights, immunities, duties or obligations of the Rights
Agent, the Rights Agent shall be entitled to resign immediately.

Section 32. Governing Law. This Agreement and each Rights 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; provided, however, that all
provisions regarding the rights, duties, obligations and liabilities of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

 

42

 

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. This Agreement,
to the extent signed and delivered by means of a facsimile machine or other electronic transmission
(including transmission in portable document format by electronic mail), shall be treated in all
manner and respects and for all purposes as an original agreement and shall be considered to have
the same binding legal effect as if it were the original signed version thereof
delivered in person. At the request of either party hereto, the other party hereto shall
re-execute original forms thereof and deliver them to the other party, except that the failure of
one party to comply with such a request shall not render this Agreement invalid or unenforceable.
Neither party hereto shall raise the use of a facsimile machine or other electronic transmission to
deliver a signature, or the fact that any signature was transmitted or communicated through the use
of a facsimile machine or other electronic transmission, as a defense to the formation or
enforceability of a contract and each such party forever waives any such defense.

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

[Remainder of page intentionally left blank.

Signature page follows.]

 

43

 

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

	 	 	 	 	 
	 	
DOLAN MEDIA COMPANY

 	 
	 	By:  	/s/ James P. Dolan
 	 
	 	 	James P. Dolan 	 
	 	 	Its:  Chairman, Chief Executive Officer and  President 	 
	 
	 	MELLON INVESTOR SERVICES, LLC

 	 
	 	By:  	
/s/ Susan Hogan
 	 
	 	 	Susan Hogan 	 
	 	 	Its: Vice President 	 

 

 

 

Exhibit A

FORM

OF

CERTIFICATE OF DESIGNATIONS

OF

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

OF

DOLAN MEDIA COMPANY

(Pursuant to Section 151 of the

General Corporation Law of the State of Delaware)

 

DOLAN MEDIA COMPANY, a corporation organized and existing under the General Corporation Law of
the State of Delaware (hereinafter called the “Company”), hereby certifies that the following
resolution was adopted by the Board of Directors of the Company as required by Section 151 of the
General Corporation Law of the State of Delaware at a meeting duly called and held on January 29,
2009:

RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of
this Company (hereinafter called the “Board of Directors” or the “Board”) in accordance with the
provisions of the Company’s Amended and Restated Certificate of Incorporation, the Board of
Directors hereby creates a series of Preferred Stock, par value $0.001 per share (the “Preferred
Stock”), of the Company and hereby states the designation and number of shares, and fixes the
relative rights, preferences, and limitations thereof as follows:

Series A Junior Participating Preferred Stock

Section 1. Designation and Amount. The shares of such series shall be designated as
“Series A Junior Participating Preferred Stock” (the “Junior Preferred Stock”) and the number of
shares constituting the Junior Preferred Stock shall initially be 5,000. 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 Junior Preferred 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 or rights issued
by the Company convertible into shares of Junior Preferred Stock and further provided that the
Board of Directors shall increase the number of shares constituting the
Junior Preferred Stock to the extent necessary for the Company to have available sufficient
shares of such Junior Preferred Stock available to fulfill all of the Company’s obligations to
holders of securities (including option, rights and warrants) of the Company.

 

A-1

 

Section 2. Dividends and Distributions.

(A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or
any similar stock) ranking prior and superior to the Junior Preferred Stock with respect to
dividends, the holders of shares of Junior Preferred Stock, in preference to the holders of Common
Stock, par value $0.001 per share (the “Common Stock”) of the Company, and of any other junior
stock shall be entitled to receive, when, as and if declared by the Board of Directors out of the
funds legally available for the purpose, dividends payable when and as dividends are declared on
the Common Stock in an amount, subject to the provision for adjustment hereinafter set forth, equal
to 10,000 times the aggregate per share amount of all cash dividends, and 10,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other distributions,
declared on the Common Stock (except as provided in the next sentence). In the event the Company
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 other means other 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 Junior Preferred Stock were entitled immediately prior to such event
under 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 Company shall declare a dividend or distribution on the Junior Preferred Stock as
provided in paragraph (A) of this Section 2 immediately after it declares a dividend or
distribution on the Common Stock.

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

(A) Each share of Junior Preferred Stock shall entitle the holder thereof to 10,000 votes on
all matters submitted to a vote of the stockholders of the Company.

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

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

 

A-2

 

Section 4. Reacquired Shares. Any shares of Junior Preferred Stock purchased or
otherwise acquired by the Company 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 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 Company’s Amended
and Restated 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 5. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution
or winding up of the Company, no distribution shall be made (i) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock unless, prior thereto, the holders of shares of Junior Preferred Stock shall
have received an aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 10,000 times the aggregate amount to be distributed per share to holders of
shares of Common Stock and (ii) to the holders of stock ranking on a parity upon liquidation,
dissolution or winding up with the Junior Preferred Stock, unless simultaneously therewith
distributions are made ratably on the Junior Preferred Stock and all other shares of such parity
stock in proportion to the total amounts to which the holders of shares of Junior Preferred Stock
are entitled under clause (i) of this sentence and to which the holders of such parity shares are
entitled, in each case upon such liquidation, dissolution or winding up. In the event the Company
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 aggregate
amount to which holders of shares of Junior Preferred Stock were entitled immediately prior to such
event under clause (i) 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.

Section 6. Consolidation, Merger, etc. In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for, or changed into, other stock or securities, cash and/or any other property, then in
any such case each share of Junior Preferred 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 10,000 times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Company 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 set forth in the preceding sentence with respect to
the exchange or change of shares of Junior Preferred Stock 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.

 

A-3

 

Section 7. No Redemption. The shares of Junior Preferred Stock shall not be
redeemable.

Section 8. Rank. The Junior Preferred Stock shall rank, with respect to the payment
of dividends and the distribution of assets, junior to all series of any other class of the
Company’s Preferred Stock (other than any series of any class which is expressly made junior to the
Junior Preferred Stock).

Section 9. Amendment. The Amended and Restated Certificate of Incorporation of the
Company shall not be amended in any manner that would materially alter or change the powers,
preferences or special rights of the Junior Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of at least two-thirds of the outstanding shares of Junior
Preferred Stock, voting together as a single class.

IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Company by
its
[                    ]
as of January 29, 2009.

	 	 	 	 	 
	 	Dolan Media Company

 	 
	 	By:  	 	 
	 	 	Title: 	 

 

A-4

 

Exhibit B

Form of Rights Certificate

			
	 	 	 
	Certificate No.                     
	 	                     Rights

NOT EXERCISABLE AFTER JANUARY 29, 2019 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE
RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND ARE VOIDABLE AND SUBJECT TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN THE SECOND PARAGRAPH OF SECTION
11(a)(ii) OF THE RIGHTS AGREEMENT.]*

Rights Certificate

Dolan Media Company

This certifies that                     , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of January 29, 2009 (as it may
from time to time be supplemented or amended, the “Rights Agreement”) between Dolan Media Company,
a Delaware corporation (the “Company”), and Mellon Investor Services LLC (the “Rights Agent”), to
purchase from the Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 p.m., Central time on January 29, 2019 at the office of the
Rights Agent designated for such purpose, or at the office of its successor as Rights Agent, one
ten-thousandth of a fully paid nonassessable share of Series A Junior Participating Preferred
Stock, par value $.001 per share (the “Preferred Shares”), of the Company, at a purchase price of
$40.00 per one ten-thousandth of a Preferred Share (the “Purchase Price”), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and the Certificate set
forth on the reverse side hereof duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of one ten-thousandths 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 January 29, 2009, based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of one ten-thousandths of a Preferred Share that may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.

 

	 	 	 
	*	 	The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.

 

B-1

 

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

This Rights Certificate, with or without other Rights Certificates, upon surrender at the
office of the Rights Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights 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 Rights
Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
(i) may be redeemed by the Company at a redemption price of $.001 per Right or (ii) may be
exchanged in whole or in part for Preferred Shares or shares of the Company’s Common Stock, par
value $.001 per share, on the terms set forth in the Rights Agreement.

No fractional Preferred Shares will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions that are integral multiples of one ten-thousandths 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 Rights Agreement.

No holder of this Rights 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
Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting stockholders (except
as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised as provided in the
Rights Agreement.

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

 

B-2

 

WITNESS the facsimile signature of the proper officer of the Company. Dated as of
                    .

	 	 	 	 	 
	[Seal]	 DOLAN MEDIA COMPANY

 	 
	 	By:  	 	 

Countersigned:

MELLON INVESTOR SERVICES LLC,

as Rights Agent

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Authorized Signature
	 	 

 

B-3

 

[Form of Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate.)

FOR VALUE RECEIVED,                                         
 hereby sells, assigns and transfers unto                                         
                    
                    
                    
                    
                    
                    
                    
                    
                    

(Please print name and address of transferee)

(Please print social security or other identifying number of transferee)

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

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 
	 	 
	 

	 	 	 	 	 	 

Signature
	 	 

	 	 	 	 	 
	Signature Guaranteed:
	 	 	 	 
	 

	 	 

	 	 

Signature must be guaranteed by an Eligible Guarantor Institution as defined by SEC Rule
17Ad-15 (17 C.F.R. 240.17-Ad-15).

 

B-4

 

CERTIFICATE

The undersigned hereby certifies by checking the appropriate boxes that:

(1) this Rights Certificate o is o is not being sold, 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 Person (as such terms are defined in the Rights Agreement); and

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

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 
	 	 
	 

	 	 	 	 	 	 

Signature
	 	 

	 	 	 	 	 
	Signature Guaranteed:
	 	 	 	 
	 

	 	 

	 	 

NOTICE

The signatures to the foregoing Assignment and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.

The signature must be guaranteed by an Eligible Guarantor Institution as defined by SEC Rule
17Ad-15 (17 C.F.R. 240.17-Ad-15).

 

B-5

 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to

exercise the Rights Certificate.)

To:    Dolan Media Company

The undersigned hereby irrevocably elects to exercise                      Rights represented by this
Rights Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights (or
such other securities of the Company or of any other person which may be issuable upon the exercise
of the Rights) and requests that certificates for such Preferred Shares (or other securities) be
issued in the name of:

 

 

(Please print name and address)

(Please insert social security or other identifying number)

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

 

 

(Please print name and address)

(Please insert social security or other identifying number)

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 
	 	 
	 

	 	 	 	 	 	 

Signature
	 	 

	 	 	 	 	 
	Signature Guaranteed:
	 	 	 	 
	 

	 	 

	 	 

Signatures must be guaranteed by an Eligible Guarantor Institution as defined by SEC Rule
17Ad-15 (17 C.F.R. 240.17-Ad-15).

 

B-6

 

CERTIFICATE

The undersigned hereby certifies by checking the appropriate boxes that:

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

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

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 
	 	 
	 

	 	 	 	 	 	 

Signature
	 	 

	 	 	 	 	 
	Signature Guaranteed:
	 	 	 	 
	 

	 	 

	 	 

NOTICE

The signatures to the foregoing Election to Purchase and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.

The signature must be guaranteed by an Eligible Guarantor Institution as defined by SEC Rule
17Ad-15 (17 C.F.R. 240.17-Ad-15).

 

B-7

 

NOTICE

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 will
deem the beneficial owner of the Rights evidenced by this Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.

 

B-8

 

Exhibit C

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED SHARES UNDER PLAN ADOPTED BY

DOLAN MEDIA COMPANY

Under certain circumstances set forth in the Rights Agreement, Rights beneficially owned by or
transferred to any Person who is, was or becomes an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), and certain transferees thereof, will
become null and void and will no longer be transferable.

On January 29, 2009, the Board of Directors of Dolan Media Company (the “Company”) announced
the declaration of a dividend of one Right for each outstanding share of Common Stock (a “Right”),
par value $0.001 per share (the “Common Shares”), of the Company. The dividend is payable to the
stockholders of record on February 9, 2009 (the “Record Date”). Each Right entitles the registered
holder to purchase from the Company one ten-thousandth of a share of Series A Junior Participating
Preferred Stock, par value $0.001 per share (the “Preferred Shares”), of the Company at a price of
$40.00 per one ten-thousandth of a Preferred Share (the “Purchase Price”), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement (the “Rights
Agreement”) between the Company and Mellon Investor Rights LLC, as Rights Agent (the “Rights
Agent”).

Until the earlier of (i) the close of business on the tenth day after the first public
announcement that a person or group of affiliated or associated persons have acquired beneficial
ownership of Common Shares equal to or in excess of 15% or more of the then-outstanding Common
Shares (an “Acquiring Person”), or (ii) the close of business on the tenth day (or such later date
as may be determined by action of the Company’s Board of Directors prior to such time as any person
becomes an Acquiring Person) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would result in the beneficial
ownership of such person or group of 15% or more of such outstanding Common Shares (the earlier of
such dates being called the “Distribution Date”), the Rights will be evidenced by the Common Share
certificates (or, for Common Shares held in book-entry accounts through the direct registration
services of the Company’s transfer agent, by such book-entry accounts (together with a direct
registration transaction advice with respect to such shares), will be transferable only by the
transfer of the Common Shares associated with such Rights and any transfer of the Common Shares
(including a transfer to the Company) will constitute a transfer of the Rights. As described
below, after a person or group becomes an Acquiring Person, the Rights may not be redeemed or
amended.

 

C-1

 

Until the Distribution Date (or earlier redemption or expiration of the Rights), new Common
Share certificates issued after the Record Date, upon transfer or new issuance of Common Shares,
will contain a legend incorporating the Rights Agreement by reference (or, for Common Shares held
in book-entry accounts through the direct registration services of the Company’s transfer agent, a
legend on the direct registration transaction advice with respect to such shares.) Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of the Record
Date, even without such notation, or a copy of this Summary of Rights being attached, will also
constitute the transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights (“Rights Certificates”) will be mailed to holders of record of the Common
Shares as of the close of business on the Distribution Date and such separate Rights Certificates
alone will evidence the Rights. In the event the Company elects to distribute any Rights by
crediting book-entry accounts, the provisions in this summary that reference Rights Certificates
shall be interpreted to reflect that the Rights are credits to the book-entry accounts, that
separate Rights Certificates are not issued with respect to some or all of the Rights, and that any
legend required on a Rights Certificate may be placed on the direct registration transaction advice
with respect to such Rights. Each Right is exercisable for one ten-thousandth of a Preferred Share
at any time after the Distribution Date.

The Rights are not exercisable for Common Shares until the Distribution Date. The Rights will
expire on January 29, 2019 (the “Final Expiration Date”), unless the Final Expiration Date is
extended or unless the Rights are redeemed earlier by the Company, in each case, as described
below.

If a person or group of affiliated or associated persons becomes an Acquiring Person, each
holder of a Right (other than those described in the next sentence) will thereafter have the right
to receive, upon exercise, Common Shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Purchase Price of the Right
instead of Preferred Shares. All Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person (and certain related persons or
transferees) will be null and void.

At any time after a person or group becomes an Acquiring Person and prior to the acquisition
by such person or group of 50% or more of the outstanding Common Shares, the Board of Directors of
the Company may exchange the Rights (other than Rights owned by such person or group that have
become null and void), in whole or in part, without any additional payment, for Common Shares, at
an exchange ratio of one Common Share (or of a share of a class or series of the Company’s
preferred shares having equivalent rights, preferences and privileges) per Right (subject to
adjustment).

At any time after the first date of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such, if (i) the Company is the surviving corporation in a
merger with any other company or entity, (ii) the Company is acquired in a merger or other business
combination transaction, (iii) 50% or more of the Company’s consolidated assets or earning power
are sold, or (iv) an Acquiring Person engages in certain “self-dealing” transactions with the
Company, each holder of a Right (other than those whose Rights have become null and void) will
thereafter have the right to receive, upon the exercise thereof at the then-current Purchase Price
of the Right, that number of shares of common stock of the surviving or acquiring company which at
the time of such transaction will have a market value of two times the Purchase Price of such
Right.

 

C-2

 

With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional Preferred
Shares will be issued (other than fractions which are integral multiples of one ten-thousandth of a
Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts)
and in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of exercise.

At any time prior to a person or group becoming an Acquiring Person, the Board of Directors of
the Company may redeem all, but not less than all, of the Rights at a price of $.001 per Right (the
"Redemption Price”). The redemption of the Rights may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.

Any of the provisions of the Rights may be amended by the Board of Directors in its sole
discretion. However, after a person or group becomes an Acquiring Person, any such amendment must
not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring
Person and certain related persons and transferees).

A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Current Report on Form 8-K dated February 3, 2009. A copy of the Rights Agreement
is available free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which
is hereby incorporated herein by reference.

 

C-3

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