Classmates.com 2006 Annual Report Download - page 139

Rights, or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall, in lieu of
issuing Units of Preferred Stock in accordance with Section 11(a)(ii) hereof: (A) determine the excess of (1) the value of the Units of
Preferred Stock issuable upon the exercise of a Right (the “Current Value”)
over (2) the Purchase Price (such excess being referred to as
the “Spread”)
and (B) with respect to each Right, make adequate provision to substitute for such Units of Preferred Stock, upon exercise
of the Rights, (1) cash, (2) a reduction in the Purchase Price, (3) other equity securities of the Company (including, without limitation,
Common Stock of the Company or shares or units of shares of any series of preferred stock which the board of directors of the
Company shall have conclusively deemed to have the same value as the Units of Preferred Stock (such shares or units of preferred stock
are herein called “Preferred Stock Equivalents”)), except to the extent that the Company has not obtained any necessary regulatory
approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary
regulatory approval for such issuance, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the
Current Value, as determined by the board of directors of the Company based upon the advice of a nationally recognized investment
banking firm selected by the board of directors of the Company (which determination shall be described in a statement filed with the
Rights Agent and shall be conclusive and binding on the Rights Agent, the holders of the Rights and all other persons); provided ,
however , if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty days
following the later of (x) occurrence of a Section 11(a)(ii) Event, and (y) the date on which the Company’
s right of redemption pursuant
to Section 23(a) expires (the later of (x) and (y) being referred to herein as the “Section 11(a)(iii) Trigger Date”), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, Units of
Preferred Stock (to the extent available), and then, if necessary, cash, having an aggregate value equal to the Spread.
(b) If the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them (for a
period expiring within forty five calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same
rights, privileges and preferences as the Preferred Stock (“Equivalent Preferred Stock”)) or securities convertible into Preferred Stock or
Equivalent Preferred Stock at a price per Unit of Preferred Stock or Equivalent Preferred Stock (or having a conversion price per Unit, if a
security convertible into Units of Preferred Stock or Equivalent Preferred Stock) less than the then Current Per Share Market Price (as
determined pursuant to Section 11(d)) of a Unit of Preferred Stock 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 sum of the number of Units of Preferred Stock outstanding on such record date plus the number of Units of Preferred Stock which the
aggregate offering price of the total number of Units of Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the
denominator of which shall be the sum of the number of Units of Preferred Stock outstanding on such record date plus the number of additional
Units of Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so
to be offered are initially convertible). If such subscription price may be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by the board of directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive and binding on the Rights Agent and the holders of the Rights.
Units of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record date is fixed; and if such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
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