Exhibit 10.1

STANDBY PURCHASE AGREEMENT

by and among

Idearc Inc.

and

▇▇▇▇▇▇▇ & Co. Inc.

Dated as of November 18, 2009

TABLE OF CONTENTS

i

TABLE OF CONTENTS

(continued)

ii

EXHIBITS

SCHEDULES

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STANDBY PURCHASE AGREEMENT

STANDBY PURCHASE AGREEMENT, dated as of November 18, 2009 (this “Agreement”), among Idearc Inc., Debtor and Debtor-in-Possession, a Delaware corporation (the “Company”), and the investment funds and accounts managed by ▇▇▇▇▇▇▇ & Co. Inc. (“▇▇▇▇▇▇▇”) set forth on Schedule 1 (the “Standby Purchasers”).  All capitalized terms used herein have the meanings ascribed to such terms in Section 1 or ascribed to them in the Chapter 11 plan of reorganization of the Company and its U.S. subsidiaries, dated as of September 9, 2009 and supplemented as of October 29, 2009, a copy of which is attached hereto as Exhibit A (the “Existing Plan”).

RECITALS

A.            The Company and its wholly-owned, direct and indirect U.S. subsidiaries (collectively with the Company, the “Debtors”) have filed chapter 11 petitions under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§101-1532 (as amended, the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”) (such chapter 11 cases, the “Chapter 11 Cases”) and have proposed to effectuate a financial and corporate restructuring of the Debtors through the Existing Plan.

B.            The Existing Plan provides that (i) each holder of an Allowed Secured Credit Facility Claim (the “Class 3 Holders”) will receive, on the Effective Date and in full satisfaction, settlement, release, discharge of, in exchange for, and on account of such Allowed Secured Credit Facility Claim, its Pro Rata share of (x) Distributable Cash; (y) $2.75 billion in principal amount of the New Term Loans, and (z) shares of New Common Stock representing in the aggregate 95% of the New Common Stock to be issued and outstanding as of the Effective Date, and (ii) each holder of an Allowed Unsecured Note Claim, an Allowed Unsecured Credit Facility Claim and an Allowed General Unsecured Claim (the “Class 4 Holders” and together with the Class 3 Holders, but excluding the Standby Purchasers and their Affiliates, the “Eligible Subscribers”) will receive, on the Effective Date and in full satisfaction, settlement, release, discharge of, in exchange for, and on account of such Allowed Claim, its Pro Rata share of (x) shares of New Common Stock representing 5% of the New Common Stock to be issued pursuant to the Existing Plan and outstanding as of the Effective Date, and (y) all distributions, if any, to be made from the Litigation Trust to be established on the Effective Date for the sole benefit of Class 4 Claims to hold the Litigation Trust Rights.

C.            Certain Standby Purchasers are Class 3 Holders and Class 4 Holders, and in such capacities will receive shares of New Common Stock to be issued pursuant to the Existing Plan.

D.            The Standby Purchasers desire to purchase additional shares of New Common Stock so that the Standby Purchasers will own up to an aggregate of 45% of the New Common Stock to be issued and outstanding as of the Effective Date, immediately after the effectiveness of the Plan.

E.             The Existing Plan will be amended pursuant to (i) a Plan Modification in the form attached hereto as Exhibit B to provide, among other things, that the Eligible Subscribers may elect to receive cash in lieu of shares of New Common Stock (such election, the “Plan

Election”), and (ii) subject to Bankruptcy Court approval, a settlement term sheet (a copy of which has been provided to ▇▇▇▇▇▇▇) that will provide, among other things, the amount of shares of New Common Stock to be distributed will be 85% to Class 3 Holders and 15% to Class 4 Holders, the Class 4 Holders will receive a cash distribution, and the senior secured lenders will waive distributions of cash and New Common Stock for their deficiency claims included in the Class 4 Claims (collectively Exhibit B and the global settlement, the “Plan Modification,” and the Existing Plan as amended in accordance with the Plan Modification, the “Plan”).

F.             Upon the terms and subject to the conditions set forth herein, the Standby Purchasers have agreed, severally, but not jointly, to subscribe for and purchase from the Company, and the Company has agreed to issue and sell to the Standby Purchasers, the number of shares of New Common Stock for which the Eligible Subscribers have elected under the Plan Election to receive cash.  The cash proceeds from the sale to the Standby Purchasers of such shares of New Common Stock will be used by the Company to fund the cash payments to the Eligible Subscribers under the Plan Election.

G.            The Company and the Standby Purchasers have agreed that the maximum number of shares of New Common Stock to be issued by the Company to the Standby Purchasers hereunder, together with the shares of New Common Stock to be received by the Standby Purchasers in their capacity as Class 3 Holders and Class 4 Holders and any shares of New Common Stock otherwise beneficially owned by ▇▇▇▇▇▇▇ and the Standby Purchasers, shall not result in the Beneficial Ownership by the Standby Purchasers in the aggregate of more than 45% of the New Common Stock to be issued and outstanding as of the Effective Date (such 45% limitation is referred to herein as the “Ownership Limitation”).  Accordingly, in the event the Eligible Subscribers elect under the Plan Election to receive cash in lieu of shares of New Common Stock that would otherwise result in the corresponding issuance and sale to the Standby Purchasers of shares of New Common Stock that would exceed the Ownership Limitation, the amount of cash to be received by the Eligible Subscribers in lieu of shares of New Common Stock that they would otherwise have received under the Plan Election will be reduced pro rata so that the number of shares of New Common Stock to be issued by the Company to the Standby Purchasers will not result in ▇▇▇▇▇▇▇ and the Standby Purchasers beneficially owning in excess of the Ownership Limitation.

H.            As a material inducement to the Company to enter into this Agreement, the Standby Purchasers have agreed to enter into a standstill agreement, in the form of Exhibit C (the “Standstill Agreement”).

I.              Upon the effectiveness of the Plan, the Company may adopt a Rights Agreement substantially identical to Exhibit D (the “Rights Agreement”).

K.            On or prior to the date hereof, the Bankruptcy Court entered an order in the Chapter 11 Cases approving the Company’s entering into this Agreement, the Standstill Agreement and the Registration Rights Agreement and consummating the transactions contemplated hereby and thereby on the terms and subject to the conditions set forth in such order, a copy of which is attached hereto as Exhibit E (the “Approval Order”).

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Accordingly, in consideration of the foregoing and the mutual covenants and agreements contained herein, the parties hereby agree as follows:

SECTION 1.
DEFINITIONS

The following capitalized terms as used in this Agreement have the respective meanings ascribed to such terms as specified below:

“Action” means any action, cause of action, claim, prosecution, investigation, suit, litigation, grievance, arbitration or other proceeding, whether civil, criminal or administrative, at Law or in equity, by or before any Governmental Entity.

“Affiliate” of any Person means any Person that directly or indirectly controls, or is under common control with, or is controlled by, such Person.  As used in this definition, “control” (including with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).

“Agreement” means this Standby Purchase Agreement, as the same may be hereafter amended, modified or supplemented.

“Alternative Transaction” means any of the following: (i) the acquisition of any shares of capital stock or any other voting securities or debt securities of any Debtor or any interests therein, (ii) the acquisition of all or a material portion of the assets and properties of any Debtor or interests therein, (iii) the merger, consolidation or combination of any Debtor, (iv) the financing or refinancing of any Debtor, including, without limitation, any debtor-in-possession financing, (v) the liquidation, dissolution or reorganization of any Debtor, including, without limitation, any plan or reorganization other than the Existing Plan (as amended by the Plan Modification), or (vi) the acquisition, directly or indirectly, by any Debtor, or its subsidiaries, of capital stock or assets and properties of any other Person.

“Amended and Restated By-laws” means the Amended and Restated By-laws of the Company in the form attached hereto as Exhibit F.

“Amended and Restated Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company in the form attached hereto as Exhibit G.

“Ancillary Agreements” means the Registration Rights Agreement and the Standstill Agreement.

“Approval Order” has the meaning set forth in the Recitals.

“Approvals” means any consents, orders, authorizations, approvals, clearances or declarations from any Governmental Entity or other Person.

“Bankruptcy Code” has the meaning set forth in the Recitals.

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“Bankruptcy Court” has the meaning set forth in the Recitals.

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure and any local bankruptcy rules in effect in the Bankruptcy Court.

“Beneficially Own” and its correlatives each has the meaning ascribed to such terms under Rule 13d-3 of the Exchange Act.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

“Cash-Out Shares” means the shares of New Common Stock available for distribution to Eligible Subscribers under the Existing Plan (as amended by the Plan Modification) prior to giving effect to the Plan Election.

“Chapter 11 Cases” has the meaning set forth in the Recitals.

“Class 3 Holders” has the meaning set forth in the Recitals.

“Class 4 Holders” has the meaning set forth in the Recitals.

“Closing” has the meaning set forth in Section 2.2(a).

“Closing Date” has the meaning set forth in Section 2.2(a).

“Company” has the meaning set forth in the Preamble and includes the Company prior to and after the effectiveness of the Plan.

“Confidentiality Agreement” has the meaning set forth in Section 5.1.

“Confirmation Order” means the order of the Bankruptcy Court confirming the Plan, in a form that is reasonably satisfactory to the Standby Purchasers.

“Contract” means any contract, agreement, commitment, lease, purchase order, license, mortgage, indenture, supplemental indenture, line of credit, note, bond, loan, credit agreement, capital lease, sale/leaseback arrangement, concession agreement, franchise agreement or other instrument, including all amendments, supplements, exhibits and attachments thereto.

“Debtors” has the meaning set forth in the Recitals and includes the Debtors prior to and after the effectiveness of the Plan.

“Default” means in violation or breach of, or in default under (or, with or without the giving of notice or lapse of time, or both, would be in default) according to the terms of the relevant document or agreement.

“Disclosure Statement” means the Disclosure Statement with respect to the Plan, Solicitation Version, Docket No. 940 in the Chapter 11 Cases.

“Eligible Subscribers” has the meaning set forth in the Recitals.

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“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Existing Plan” has the meaning set forth in the Preamble.

“Final Order” means an order of the Bankruptcy Court as to which the time to appeal, petition for certiorari, or move for reargument or rehearing has expired and as to which no appeal, petition for certiorari, or other proceedings for reargument or rehearing shall then be pending or as to which any right to appeal, petition for certiorari, reargument, or rehearing shall have been waived in writing in form and substance reasonably satisfactory to the Standby Purchasers, or, in the event that an appeal, writ of certiorari or reargument, or rehearing thereof has been sought, such order of the Bankruptcy Court shall have been determined by the highest court to which such order was appealed, or certiorari, reargument or rehearing shall have been denied and the time to take any further appeal, petition for certiorari, or move for reargument or rehearing shall have expired; provided, however, that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be filed with respect to such order shall not preclude such order from being a Final Order.

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time.

“Governmental Entity” means any supranational, foreign, domestic, federal, territorial, provincial, state, municipal or local governmental authority, quasi-governmental authority, instrumentality, court, government or self-regulatory organization, commission, tribunal, arbitral body or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.

“HSR Act” means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended.

“Indebtedness” means, with respect to any person, without duplication:  (i) (A) indebtedness for borrowed money, (B) all obligations of such person evidenced by bonds, debentures, notes or similar instruments, (C) all obligations of such person under interest rate or currency hedging transactions (valued at the termination value thereof), (D) all letters of credit issued for the account of such person and (E) obligations of such person to pay rent or other amounts under any lease of real property or personal property, which obligations are required to be classified as capital leases in accordance with GAAP; (ii) indebtedness for borrowed money of any other person guaranteed, directly or indirectly, in any manner by such person; and (iii) indebtedness of the type described in clause (i) above secured by any Lien upon property owned by such person, even though such person has not in any manner become liable for the payment of such indebtedness; provided, however, that Indebtedness shall not be deemed to include (i) any accounts payable or trade payables incurred in the ordinary course of business of such person, or (ii) any intercompany indebtedness between any person and any wholly owned subsidiary of such person or between any wholly owned subsidiaries of such person.

“KCC” has the meaning set forth in Section 5.3(c).

“Knowledge” shall mean, as to any party, the actual knowledge of such party’s principal executive officers.

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“Law” means any domestic, foreign, federal, state, local or other law, statute, ordinance, writ, rule, regulation or governmental requirement of any kind, and the rules, regulations and orders promulgated thereunder and any final orders, decrees, judgments or injunction of any regulatory agency, court or other Governmental Entity.

“Liens” means any mortgage, pledge, security interest, encumbrance, lien (statutory or other), claim, liability, charge, lease, covenant, easement, option, right of others, hypothecation, conditional sale agreement or restriction (whether on voting, sale, transfer, defenses, set-off or recoupment rights, disposition, or otherwise), whether imposed by agreement, understanding, law, equity, or otherwise.

“Material Adverse Effect” means a change, effect, event, occurrence, development, circumstance or state of facts that, either alone or in combination with other changes, effects, events, occurrences, developments, circumstances or state of facts, has had a material adverse effect on the business, financial condition or results of operations of the Company and its subsidiaries (including foreign subsidiaries and their respective businesses) taken as a whole; provided, however, that none of the following shall be deemed (either alone or in combination) to constitute, and none of the following shall be taken into account in determining whether there has been or would be, such a material adverse effect: any adverse effect (including any litigation, loss of employees, cancellation of or delay in customer orders, reduction in revenue or net income or disruption of business relationships) arising from or attributable or relating to (i) the announcement or pendency of the issuance of the New Common Stock to the Standby Purchasers or any of the other transactions contemplated by this Agreement, (ii) any act of terrorism or war, or any armed hostilities, anywhere in the world, (iii) legal, accounting, investment banking or other fees or expenses incurred in connection with the Plan or any of the other transactions contemplated by this Agreement, (iv) the payment of any amounts due to, or the provision of any other benefits to, any officers or other employees under employment contracts, non-competition agreements, employee benefit plans, severance arrangements or other arrangements in existence as of the date of this Agreement and disclosed in the Existing Plan or the Disclosure Statement, (v) compliance with the terms of, or the taking of any action required by, the Existing Plan (as amended by the Plan Modification) or this Agreement, (vi) the taking of any action by any Standby Purchaser or any action or omission to act that has been approved or consented to in writing by any Standby Purchaser, (vii) any breach (or event or circumstance with notice or lapse of time would constitute a breach) of this Agreement by any Standby Purchaser, or (viii) any change in accounting requirements or principles required by GAAP or any change in applicable Laws, except, in the case of the foregoing clauses (ii), and (viii), to the extent such changes, effects, events, occurrences, developments, circumstances or state of facts have a disproportionate effect on the business, financial condition or results of operations of the Company and its subsidiaries (including foreign subsidiaries and their respective businesses) taken as a whole.

“Material Contract” means any “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) filed by the Company under the Securities Act or the Exchange Act, and any material amendments, supplements or modifications to any such material contract.

“Ownership Limitation” has the meaning set forth in the Recitals.

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“▇▇▇▇▇▇▇” has the meaning set forth in the Preamble.

“Person” includes all natural persons, corporations, business trusts, limited liability companies, associations, companies, partnerships, joint ventures and other entities, as well as governments and their respective agencies and political subdivisions.

“Plan” has the meaning set forth in the Recitals, and includes any permitted amendments, modifications or supplements thereto, subject to Section 6(h) hereof.

“Plan Modification” has the meaning set forth in the Recitals.

“Plan Election” has the meaning set forth in the Recitals.

“Plan Election Deadline” shall mean 4:00 p.m., Central Time, on the date that is 20 days after the date on which the Company transmits to the Eligible Subscribers the election forms for making the Plan Election in accordance with Section 5.3(b), subject to extension in accordance with Section 5.3(c).

“Purchase Price” has the meaning set forth in Section 2.2(b).

“Registration Rights Agreement” means the Registration Rights Agreement by and among the Company, each of the Standby Purchasers and the other Persons that become a party thereto, in the form attached hereto as Exhibit H.

“Representatives” of any Person shall mean the attorneys, accountants or other agents or employees of such Person.

“Retained Shares” means the number of Cash-Out Shares that will be issued under the Plan to the Eligible Subscribers as of the Effective Date, after giving effect to the Plan Election and the application of the Ownership Limitation.

“Rights Agreement” has the meaning set forth in the Recitals.

“SEC” means the United States Securities and Exchange Commission.

“SEC Reports” has the meaning set forth in Section 3.6(a).

“Securities Act” means the Securities Act of 1933, as amended.

“Standby Percentage” means the percentage of the total Purchase Price to be paid by each Standby Purchaser and the percentage of the total Standby Purchase Shares to be received by each Standby Purchaser, as set forth on Schedule 1.

“Standby Purchase” has the meaning set forth in Section 2.1(c).

“Standby Purchase Shares” means the number of Cash-Out Shares for which the Eligible Subscribers have elected to receive cash pursuant to the Plan Election, as such number of shares may be reduced to the extent necessary to prevent the Ownership Limitation from being exceeded.

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“Standby Purchasers” has the meaning assigned to it in the Preamble.

“Standstill Agreement” has the meaning set forth in the Recitals.

“Subscription Price” means, subject to increase pursuant to Section 5.3(c), the per share subscription price for the New Common Stock, in the Plan Election and the Standby Purchase (which shall be the same in both cases), which amount will be equal to $260,000,000 divided by the aggregate number of shares of New Common Stock to be issued and outstanding on the Effective Date, immediately after the effectiveness of the Plan.  For example, if on the Effective Date, immediately after the effectiveness of the Plan (after giving effect to the Plan Election and the Standby Purchase) there are 100,000,000 shares of New Common Stock then issued and outstanding, the Subscription Price shall be $2.60.

“Third Party” means any Person other than the Company, ▇▇▇▇▇▇▇, the Standby Purchasers or any of their respective Affiliates.

“Voting Debt” means any bonds, debentures, notes or other debt securities having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) generally in the election of directors of the Company or other matters on which holders of the New Common Stock may vote.

SECTION 2.
STANDBY COMMITMENT AND PURCHASE

2.1           Standby Commitment and Purchase.

(a)           On or before the second Business Day after the Plan Election Deadline, ▇▇▇▇▇▇▇ shall notify the Company in writing as to (i) the amount of Claims owned of record and beneficially by ▇▇▇▇▇▇▇, each Standby Purchaser and their respective Affiliates and (ii) the Claims for which ▇▇▇▇▇▇▇, each Standby Purchaser and their respective Affiliates have signed a confirmation to purchase such Claims, each as of the Plan Election Deadline.

(b)           On or before the fifth Business Day after the Plan Election Deadline, the Company shall notify each Standby Purchaser in writing as to (i) the aggregate number of Cash-Out Shares, (ii) the aggregate number of shares of New Common Stock to be issued to the Standby Purchasers in their capacity as Claim 3 Holders and Claim 4 Holders, (iii) the aggregate number of Retained Shares, (iv) the Subscription Price, (v) the aggregate number of Standby Purchase Shares, (vi) the number of Standby Purchase Shares to be purchased by each Standby Purchaser and its respective Standby Percentage and (vii) the aggregate Subscription Price payable by each Standby Purchaser to the Company for its Standby Purchase Shares.

(c)           Upon the terms and subject to the conditions contained in this Agreement, at the Closing the Company shall issue and sell to each Standby Purchaser, and each Standby Purchaser shall subscribe for and purchase from the Company (independent of the obligation of any other Standby Purchaser) its Standby Percentage of the Standby Purchase Shares (the “Standby Purchase”).

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2.2           Closing; Payments.

(a)           The completion of the Standby Purchase (the “Closing”) shall take place at the offices of Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP in New York, New York, on the date on which all of the conditions to the occurrence of the Effective Date (other than the condition of receipt of payment from the Standby Purchasers of the Purchase Price in respect of their Standby Purchase) have been satisfied or waived and all of the conditions set forth under Sections 6 and 7 have been satisfied or waived by the Company or the Standby Purchasers (as applicable), or at such other location or on such other date as may be mutually agreed by the Company and the Standby Purchasers (the day on which the Closing takes place being the “Closing Date”).  The Closing shall be deemed to be effective as of 12:01 a.m. on the Closing Date and all documents and instruments will be deemed to have been delivered simultaneously at such time.

(b)           At the Closing, each Standby Purchaser hereby agrees, severally, but not jointly, to pay the Company the aggregate Subscription Price for its Standby Percentage of the Standby Purchase Shares to be purchased by such Standby Purchaser hereunder (the aggregate of such payments by all of the Standby Purchasers, the “Purchase Price”) by wire transfer of immediately available funds to an account designated by the Company at least three Business Days prior to the scheduled Closing Date.

(c)           At the Closing, upon receipt in full of the aggregate Subscription Price for each Standby Purchaser’s Standby Percentage of the Standby Purchase Shares to be purchased by each Standby Purchaser hereunder, the Company shall deliver to such Standby Purchaser (or its designees) stock certificates or evidence of book-entry record ownership representing the Standby Purchase Shares to be issued by the Company to such Standby Purchaser pursuant to this Agreement, free and clear of any Liens, except Liens created by or otherwise resulting from actions by such Standby Purchaser.

SECTION 3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the SEC Reports, the Existing Plan, the Plan Modification or the Disclosure Statement (excluding any forward-looking disclosures contained in such reports under the headings “Risk Factors” or “Cautionary Note” or any similar sections and any other forward looking statement, disclaimer or disclosure that is similarly nonspecific and predictive or forward-looking in nature), the Company represents and warrants to the Standby Purchasers as follows:

3.1           Corporate Status.  Each of the Debtors is duly incorporated or otherwise organized, validly existing and in good standing under the Laws of its governing jurisdiction and each (a) has all requisite corporate, limited partnership or limited liability company power and authority to carry on its business as it is now being conducted and (b) is duly qualified to do business in each of the jurisdictions in which the ownership, operation or leasing of its assets or the conduct of its business requires it to be so qualified, except where the failure to have such corporate or other power or authority or to be so qualified, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.

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3.2           Authorization; Noncontravention.

(a)           The Company has all necessary corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The Board of Directors of the Company has adopted resolutions at a meeting duly called and held, subject to all necessary Approvals in the Chapter 11 Cases, (i) authorizing and approving this Agreement, the Ancillary Agreements, the Amended and Restated Certificate of Incorporation, the Amended and Restated Bylaws, the Rights Agreement, the issuance of the New Common Stock to the Standby Purchasers at the Closing and the other transactions contemplated hereby and by the Ancillary Agreements on the terms and subject to the conditions set forth herein and therein, and (ii) directing that the Plan, including the Amended and Restated Certificate of Incorporation, the Amended and Restated By-Laws, the Ancillary Agreements and the Rights Agreement, be submitted for all necessary Approvals in the Chapter 11 Cases.

(b)           The execution, delivery and performance of this Agreement and the Ancillary Agreements have been duly and validly authorized by all necessary corporate action and, subject to the entry of the Confirmation Order, the consummation by the Company of the transactions contemplated hereby and thereby, including the issuance, sale and delivery of the New Common Stock, have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Company or vote of holders of any class or series of capital stock of the Company is necessary to authorize this Agreement or the Ancillary Agreements or to consummate the transactions contemplated hereby and thereby, including the issuance, sale and delivery of the Standby Purchase Shares pursuant to this Agreement, including any approval under the rules and regulations of any securities exchange on which the Company’s equity securities are or, after the Closing will be, traded.  This Agreement has been duly executed and delivered by the Company and (assuming due authorization by ▇▇▇▇▇▇▇ and each Standby Purchaser and due execution and delivery by ▇▇▇▇▇▇▇) constitutes, and each Ancillary Agreement, when executed and delivered by the Company (assuming due authorization, execution and delivery by each Standby Purchaser), will constitute, a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at Law).  The sale and issuance of the Standby Shares at Closing are not subject to any preemptive rights or rights of first offer.

3.3           No Conflict.  Subject to the entry of the Confirmation Order, the execution, delivery and performance by the Company of this Agreement and the Ancillary Agreements do not, and the consummation of the transactions contemplated hereby and thereby and compliance with the provisions of this Agreement and the Ancillary Agreements will not, conflict with, or result in any Default under, or give rise to an increase in, or right of termination, cancellation or acceleration of, any obligation or to the loss of a benefit under, or result in the suspension, revocation, impairment, forfeiture or amendment of any term or provision of or the creation of any Lien upon any of the properties or assets of any of the Debtors under, or require any consent or waiver under, any provision of (i) the certificate of incorporation or by-laws (or comparable organizational documents) of any of the Debtors (in the case of the Company, including after the effectiveness of the Amended and Restated Certificate of Incorporation and the Amended and Restated By-Laws), (ii) any material Contract to which any of the Debtors or any of their

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respective subsidiaries is a party or by which any of its assets are bound, or (iii) any Law, judgment, order or decree of any Governmental Entity, other than with respect to clauses (ii) and (iii), to the extent it would not have and would not reasonably be expected to have a Material Adverse Effect.  Subject to the entry of the Confirmation Order and as may be required by the HSR Act, no permit, no Approval of, or registration, qualification, or filing with, or notice to, any Governmental Entity is required to be obtained or made by or with respect to any of the Debtors in connection with the execution, delivery and performance of this Agreement or any of the Ancillary Agreements by the Company or the consummation by the Company of the transactions contemplated by this Agreement or the Ancillary Agreements, including the issuance of the New Common Stock.

3.4           Capital Structure.

(a)           As of the Closing Date, the authorized capital stock of the Company will be as set forth in the Amended and Restated Certificate of Incorporation.  As of the Closing Date, shares of New Common Stock equal to 10% of the aggregate number of shares of New Common Stock to be issued and outstanding on the Effective Date, immediately after the effectiveness of the Plan, will be reserved for issuance pursuant to an equity incentive plan as described in the Disclosure Statement.  No shares of preferred stock of the Company will be issued and outstanding on the Closing Date.  The shares of New Common Stock issuable hereunder and under the Plan will, when issued, (i) be duly authorized, validly issued, fully paid and nonassessable, (ii) not have been issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Delaware General Corporation Law, the Amended and Restated Certificate of Incorporation or the Amended and Restated By-Laws or any Contract to which the Company or any of its subsidiaries is a party or by which any of its or their respective assets are bound, and (iii) be delivered by the Company free and clear of all Liens, except for Liens created by, or otherwise resulting from actions by, the recipient of such shares.  As of the Closing Date, the Company will have no Voting Debt.  As of the Closing Date there will be no (A) outstanding obligations, options, warrants, convertible securities, exchangeable securities, securities or rights that are linked to the value of the New Common Stock or other rights, agreements or commitments relating to the capital stock of the Company (but only to the Company’s Knowledge with respect to any such obligations, options, rights, agreements or commitments to which the Company is not a party) or obligating the Company to issue or sell or otherwise transfer shares of capital stock of the Company or any securities convertible into or exchangeable for any shares of capital stock of the Company or any Voting Debt, (B) outstanding obligations of the Company to repurchase, redeem or otherwise acquire shares of its capital stock, (C) voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of shares of capital stock of the Company (but only to the Company’s Knowledge with respect to any such agreements or understandings to which the Company is not a party), except for the Standstill Agreement, or (D) rights of first refusal, preemptive rights, subscription rights or any similar rights under any provision of the Delaware General Corporation Law, the Amended and Restated Certificate of Incorporation or the Amended and Restated By-Laws or any Contract to which the Company or any of its subsidiaries is a party or by which any of its or their respective assets are bound, except for the preemptive rights provided for in the Amended and Restated Certificate of Incorporation, and except, in the case of the foregoing clauses (C) and (D), as would not reasonably be expected to materially and adversely affect the value of the

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New Common Stock to be acquired by the Standby Purchasers pursuant to this Agreement.  As of the Closing Date, the Company will not have an outstanding “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events, except for the Rights Agreement.

(b)           Schedule 3.4(b) sets forth, as of the date hereof and as of the Closing Date, a list of all subsidiaries of the Company, including each such subsidiary’s name, its jurisdiction of incorporation or organization and the percentage of its outstanding capital stock or equity interests owned by the Company or a subsidiary of the Company.  The shares of outstanding capital stock or equity interests of the subsidiaries of the Company are duly authorized, validly issued, fully paid and nonassessable, and owned of record and beneficially by the Company or a subsidiary of the Company, free and clear of any Liens, except those in favor of the Debtors’ senior lenders.

(c)           As of the Closing Date, no subsidiary of the Company has any Voting Debt.  As of the Closing Date, there will be no (i) outstanding obligations, options, warrants, convertible securities, exchangeable securities, securities or other rights, agreements or commitments, in each case, relating to the capital stock of the subsidiaries of the Company (but only to the Company’s Knowledge with respect to any such obligations, options, rights, agreements or commitments to which the Company or any of its subsidiaries is not a party) or obligating the Company or its subsidiaries to issue or sell or otherwise transfer shares of the capital stock of the subsidiaries of the Company or any securities convertible into or exchangeable for any shares of capital stock of the subsidiaries of the Company or any Voting Debt of any subsidiary of the Company, (ii) outstanding obligations of the subsidiaries of the Company to repurchase, redeem or otherwise acquire shares of their respective capital stock, (iii) voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of shares of capital stock of the subsidiaries of the Company or (iv) rights of first refusal, preemptive rights, subscription rights or any similar rights under any provision of the Delaware General Corporation Law (or the corresponding corporation law of such subsidiary’s jurisdiction of organization), the governing or organizational documents of any subsidiary of the Company or any Contract to which any subsidiary of the Company is a party or by which any of their respective assets are bound.

3.5           SEC Reports and Company Financial Statements.

(a)           The Company has timely filed all forms, reports, schedules, statements and other documents (including all exhibits) required to be filed by it with the SEC under the Exchange Act or the Securities Act since January 1, 2008 (the “SEC Reports”).  The SEC Reports at the time filed or, (i) in the case of any SEC Reports amended or superseded by a filing, then on the date of such amending or superseding filing, and (ii) in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of mailing respectively, (x) complied in all material respects with the requirements of the Exchange Act or the Securities Act, as the case may be, and the rules and regulations of the SEC thereunder, and (y) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.  No subsidiary of the Company is a registrant with the SEC.

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(b)           Each of the consolidated financial statements (including, in each case, any notes thereto) included or incorporated by reference in the SEC Reports complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, was prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto) and fairly presented in all material respects the consolidated financial position, results of operations and cash flows of the Company and its consolidated subsidiaries as at the respective dates thereof and for the respective periods indicated therein, except as otherwise noted therein and subject, in the case of unaudited statements, to normal, non-material audit adjustments.

(c)           Except as set forth on or reserved against in the consolidated balance sheet of the Company and its consolidated subsidiaries as of June 30, 2009 included in the Company’s Form 10-Q for the quarter ended June 30, 2009 including the notes thereto, none of the Company or any of its consolidated subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise), except for liabilities or obligations (i) incurred since June 30, 2009 in the ordinary course of business and consistent with past practice, (ii) that are less than $20,000,000 in the aggregate or (iii) future lease obligations as disclosed in the Company’s Form 10-K for the fiscal year ending December 31, 2008.  Except as disclosed in the Company’s Form 10-Q for the quarter ended June 30, 2009, neither the Company nor any of its subsidiaries has any outstanding Indebtedness, other than intercompany loans (among wholly owned subsidiaries) and other than Indebtedness incurred in the ordinary course of business and consistent with past practice since June 30, 2009 in an aggregate principal amount which does not exceed $5,000,000.

(d)           Neither the Company nor any of its subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar Contract or arrangement (including any Contract relating to any transaction or relationship between or among the Company and any of its subsidiaries, on the one hand, and any unconsolidated affiliate of the Company or any of its subsidiaries, including any structured finance, special purpose or limited purpose entity or person, on the other hand, or any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K of the SEC)), where the result, purpose or effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company or any of its subsidiaries in the Company’s or such subsidiary’s audited financial statements or other SEC Reports.

3.6           Private Placement.  The offer, sale, and issuance of the shares of New Common Stock in conformity with the terms of this Agreement and the Plan qualify for exemption from the registration requirements of Section 5 of the Securities Act and applicable state securities laws.

3.7           Registration Rights.  Except as set forth in the Registration Rights Agreement or as provided for in the Existing Plan (as amended by the Plan Modification), the Company has not granted or agreed to grant, and is not under any obligation to provide, any rights (including “piggy-back” registration rights) to register under the Securities Act any of its securities to be issued under the Plan or that may be issued subsequently, including the New Common Stock.

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SECTION 4.
REPRESENTATIONS AND WARRANTIES OF EACH STANDBY PURCHASER

For purposes of this Section 4, ▇▇▇▇▇▇▇ hereby makes the following representations and warranties to the Company on behalf of the Standby Purchasers:

4.1           Corporate Status.  Such Standby Purchaser is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and has all requisite power and authority to carry on its business as it is now being conducted.

4.2           Authorization; Noncontravention.

(a)           Authorization.  Such Standby Purchaser has all necessary power and authority to execute and deliver this Agreement and the Ancillary Agreements, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance of this Agreement and the Ancillary Agreements and the consummation by such Standby Purchaser of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate or other action.  This Agreement has been duly executed and delivered by such Standby Purchaser and (assuming due authorization, execution and delivery by the Company) constitutes, and the Ancillary Agreements, when executed and delivered by the Company and each of the Standby Purchasers (assuming due authorization, execution and delivery by the Company and, in the case of the Registration Rights Agreement, any party other than the Company and the Standby Purchasers), will constitute, a valid and binding obligation of such Standby Purchaser, enforceable against such Standby Purchaser in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at Law).

(b)           No Conflict.  The execution, delivery and performance by such Standby Purchaser of this Agreement and the Ancillary Agreements do not, and the consummation of the transactions contemplated hereby and thereby and compliance with the provisions of this Agreement and the Ancillary Agreements will not, conflict with, or result in any Default under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the amendment of any term or provision of or the creation of any Lien upon any of the assets of such Standby Purchaser under any provision of (i) the certificate of incorporation or by-laws or any other relevant organizational documents of such Standby Purchaser, (ii) any material Contract to which such Standby Purchaser is a party or by which any of its assets are bound or (iii) any Law, judgment, order or decree of any Governmental Entity, in each case applicable to such Standby Purchaser or its assets, other than, in the case of clauses (ii) or (iii), any such conflicts, Defaults, rights, losses, amendments or Liens that would not reasonably be expected to materially impair or delay the ability of such Standby Purchaser to perform its obligations under this Agreement or the Ancillary Agreements or carry out the transactions contemplated hereby or thereby in accordance with the terms herein or therein.  No material permit, Approval of or registration or filing with, or notice to, any Governmental Entity, including under the HSR Act, is required to be obtained or made by or with respect to such Standby Purchaser in connection with the execution, delivery and performance of this

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Agreement or the Ancillary Agreements by such Standby Purchaser or the consummation by such Standby Purchaser of the transactions contemplated by this Agreement or the Ancillary Agreements, except for compliance with and filings under the Exchange Act, the Securities Act, state securities Laws or “blue-sky” laws and the rules and regulations of The NASDAQ Stock Market as described on Schedule 4.2(b).

4.3           Investment Representations.  Each Standby Purchaser (a) is acquiring the shares of New Common Stock hereunder solely for investment with no present intention to distribute them to any person in violation of the Securities Act or any applicable U.S. state securities laws, (b) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of the purchasing the shares of New Common Stock hereunder and of making an informed investment decision, has conducted a review of the business and affairs of the Debtors that it considers sufficient and reasonable for purposes of purchasing the shares of New Common Stock hereunder and has been provided an opportunity to ask questions of and receive answers from Representatives of the Company concerning the terms and conditions of this Agreement, the Ancillary Agreements and the purchase of such New Common Stock, (c) is able to bear the economic risk of the owning the shares of New Common Stock to be acquired hereunder and at the present time is able to afford a complete loss of such investment and (d) is an institutional “accredited investor” (as that term is defined by Rule 501 under the Securities Act).

4.4           Claims Ownership.  Such Standby Purchaser and its Affiliates owns of record and beneficially the Claims of the Debtors, and has trade date confirmations as to the Claims of the Debtors, as separately disclosed in writing by the Standby Purchasers to the Company.  Except as to any Claims of the Debtors subject to such trade date confirmations, such Standby Purchaser or such Affiliates has the right to vote such Claims in the Chapter 11 Cases and does not own of record or beneficially or have the right to vote any other Claims or other securities of the Debtors in the Chapter 11 Cases or otherwise.

4.5           Available Funds.  Such Standby Purchaser has, and will have at the Closing, sufficient funds in its possession to permit it to acquire and pay for the shares of New Common Stock to be purchased by it and to otherwise perform and pay for its obligations under this Agreement.

SECTION 5.
COVENANTS AND ADDITIONAL AGREEMENTS

5.1           Confidentiality.  ▇▇▇▇▇▇▇ and each Standby Purchaser acknowledges and agrees that (a) the information being provided to it in connection with the consummation of the transactions contemplated hereby is subject to the terms of a confidentiality agreement between ▇▇▇▇▇▇▇ and the Company dated as of August 2009 (the “Confidentiality Agreement”), the terms of which are incorporated herein by reference, and (b) it is bound by the terms and conditions of the Confidentiality Agreement and the Confidentiality Agreement is in full force and effect.

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5.2           Further Actions.

(a)           Upon the terms and subject to the conditions and limitations of this Agreement, including the provisions immediately below, each party shall use its commercially reasonable efforts to cause the Closing to occur as promptly as practicable.

(b)           Without limiting the generality of Section 5.2(a), the Company shall use its commercially reasonable efforts to promptly take, or cause to be taken, all actions and promptly do, or cause to be done, all things necessary, proper or advisable in order to (i) obtain the Confirmation Order with respect to the Plan, (ii) include in the Confirmation Order the approval of the Amended and Restated Certificate of Incorporation and the Amended and Restated By-laws and (iii) consummate the transactions contemplated by the Plan on terms consistent with the terms set forth in the Plan, including without limitation the filing of the Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware and the adoption of the Amended and Restated By-laws by the Company.

(c)           If any objections are asserted with respect to the Standby Purchase or the other transactions contemplated hereby under any Law or if any suit is instituted (or threatened to be instituted) by any applicable Governmental Entity or any private party challenging any of the transactions contemplated hereby as violative of any Law or that would otherwise prevent, materially impede or materially delay the consummation of the transactions contemplated hereby, upon notice thereof each party shall promptly notify each of the other parties hereto and shall use its reasonable best efforts to resolve any such objections or suits which, in any case if not resolved, would reasonably be expected to prevent, materially impede or materially delay the consummation of the Standby Purchase or the other transactions contemplated hereby.

(d)           Nothing in this Section 5.2 shall require the Standby Purchasers to agree to any change to the terms of this Agreement, any Ancillary Agreement, the Amended and Restated Certificate of Incorporation, the Amended and Restated By-Laws or the Plan, other than to fill in blanks for names and dates and other, similar items of a ministerial nature.  In the event the obligations set forth in this Section 5.2 require any Standby Purchaser to (i) make any payments of any money or incur any liability for fees, expenses or otherwise to any Third Party (other than ordinary course fees to advisors that would be incurred in connection with this Agreement absent the obligations in this Section 5.2) or (ii) resolve objections or suits, litigate or dispute any matter with a Third Party, the Company shall reimburse such Standby Purchaser for all reasonable out-of-pocket costs and expenses (including legal fees) associated therewith within 10 Business Days of receiving a reasonably detailed invoice from such Standby Purchaser.

5.3           Bankruptcy Matters.

(a)           Promptly after the date hereof, the Debtors shall file the Plan Modification with the Bankruptcy Court.

(b)           No later than two Business Days after the date hereof, the Debtors shall commence the solicitation for the Plan Election by distributing to the Eligible Subscribers election forms approved by the Bankruptcy Court and continue such solicitation until the Plan Election Deadline, at which time such election forms shall be due.

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(c)           ▇▇▇▇▇▇▇ shall have the right at any time prior to the Plan Election Deadline to elect to either (x) extend the original Plan Election Deadline or (y) increase the Subscription Price and extend the original Plan Election Deadline, by delivering written notice to the Company.  The Company shall (i) within one Business Day of receipt of such written notice issue a press release concerning ▇▇▇▇▇▇▇’▇ election and post a copy of such press release, a copy of the written notice of such election by ▇▇▇▇▇▇▇ and a revised election form for the Plan Election, each in a form acceptable to the Company and ▇▇▇▇▇▇▇, on ▇▇▇.▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇ and (ii) within two Business Days of such election by ▇▇▇▇▇▇▇, to have ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Consultants LLC (“KCC”) mail to all Eligible Subscribers a copy of the written notice of such election by ▇▇▇▇▇▇▇ and a revised election form for the Plan Election by first class mail (except that such materials will be sent to the banks, brokers, nominees or other holders of the Class 4 Unsecured Note Claims by overnight delivery), with all costs and expenses incurred by KCC in printing and mailing the written notices and revised election forms to be paid for by ▇▇▇▇▇▇▇, and in each case the Plan Election Deadline shall then be extended until the date that is ten Business Days following the date on which the materials are mailed (or sent by overnight delivery, as applicable) to all Eligible Subscribers in accordance with the foregoing clause (ii).  If ▇▇▇▇▇▇▇ elects to increase the Subscription Price in accordance with this Section 5.3(c), assuming the Closing occurs, all Eligible Subscribers that elected to receive cash pursuant to the Plan Election would be entitled to receive the increased Subscription Price.

(d)           The Company shall consult with ▇▇▇▇▇▇▇ concerning the Confirmation Order and any other orders of the Bankruptcy Court and bankruptcy proceedings in connection therewith and provide the Standby Purchasers with copies of requested applications, pleadings, notices, proposed orders and other documents relating to such proceedings as soon as reasonably practicable prior to any submission thereof to the Bankruptcy Court; excluding however any documents subject to applicable privileges.

5.4           Fees and Expenses. The Company shall reimburse ▇▇▇▇▇▇▇ and the Standby Purchasers for the reasonable out-of-pocket fees, costs and expenses incurred by ▇▇▇▇▇▇▇, the Standby Purchasers or on ▇▇▇▇▇▇▇’▇ or the Standby Purchasers’ behalf in connection with this Agreement, the Ancillary Agreements and the consummation of the Plan, including, without limitation, the fees and expenses of accountants and counsel to ▇▇▇▇▇▇▇ and to the Standby Purchasers, irrespective of whether the Closing occurs and the parties consummate the transactions contemplated by this Agreement.  If the Plan is not consummated, the Company shall pay the foregoing fees, costs and expenses to ▇▇▇▇▇▇▇ and each Standby Purchaser in cash as an administrative expense under Section 503 of the Bankruptcy Code.

5.5           Listing.  Promptly following the date hereof, the Company shall apply to cause the shares of New Common Stock to be approved for listing on the NASDAQ Global Market and shall use its commercially reasonable efforts to ensure such shares are listed for quotation on the NASDAQ Global Market as of the Closing Date.

5.6           Use of Proceeds.  The net proceeds from the sale of the Standby Purchase Shares shall be used by the Company to fund the cash payments to be made by the Company to the Eligible Subscribers pursuant to the Plan Election.

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5.7           Publicity.  The parties to this Agreement agree that no public release or announcement concerning the transactions contemplated hereby or by the Ancillary Agreements shall be issued by, or as a result of, the actions of any of them without the prior consent of ▇▇▇▇▇▇▇, with respect to the Company, and the Company, with respect to ▇▇▇▇▇▇▇ or any Standby Purchaser; provided, however, the Company may issue any such release or announcement as may be required by Bankruptcy Rules or any other Law or the rules and regulations of the NASDAQ Global Market or the SEC.  In such case, the Company shall notify ▇▇▇▇▇▇▇ and allow ▇▇▇▇▇▇▇ reasonable time (taking into account the circumstances) to comment on, such release or announcement in advance of such issuance.

5.8           Further Assurances.  After the Closing, each party shall, at the request of any other party hereto and without further conditions or consideration, take such other actions as such other party may reasonably request in order to more effectively consummate the transactions contemplated hereby in accordance with and subject to the terms and conditions of this Agreement, the Ancillary Agreements and the Confirmation Order.

5.9           Access to Books and Records.  From the date hereof until the Closing, the Company shall provide ▇▇▇▇▇▇▇ and its Representatives access upon reasonable prior notice, during normal business hours, to the facilities, officers, advisors and Representatives of the Debtors and to the Debtors’ books, records, and Contracts, except to the extent disclosure of such documents would result in the loss of attorney client privilege (in which case the parties will, to the extent possible, make appropriate substitute arrangements so that the foregoing restriction would not apply).

5.10         Notices.  Between the date hereof and the Closing, each party shall give prompt written notice to the other parties hereto of (i) the occurrence, or failure to occur, of any event of which such party is aware which occurrence or failure would be likely to cause any representation or warranty of such party contained in this Agreement to be untrue or inaccurate in any material respect or would be likely to cause any covenant of such party contained in this Agreement not to be satisfied, (ii) receipt of any notice or other communication from any Third Party alleging that the consent of such party is or may be required in connection with the transactions contemplated by this Agreement or the Ancillary Agreements, (iii) any notice or other communication from any Governmental Entity in connection with the transactions contemplated by this Agreement or the Ancillary Agreements, (iv) any Action commenced, or, to the Knowledge of such party, threatened, relating to or involving or otherwise affecting such party or the transactions contemplated by this Agreement or the Ancillary Agreements, and (v) any failure of such party to comply, in any material respect, with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder.

5.11         Notice of Alternative Transaction.  In the event that any Debtor or its Representatives receives an unsolicited inquiry, proposal or offer with respect to an Alternative Transaction, whether written or oral, the Company shall provide ▇▇▇▇▇▇▇ written notice thereof within two Business Days of such receipt, and shall promptly notify ▇▇▇▇▇▇▇ in writing of any subsequent material developments with respect to such inquiries, proposals or offers, which notices will include a summary of the material terms of such inquiry, proposal or offer, including, without limitation, economic terms, conditions to entering into a definitive agreement, and conditions to consummating the transaction, as may be applicable.  The Company represents and

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warrants to the Standby Purchasers that, except as contemplated by the Existing Plan (as amended by the Plan Modification) and this Agreement, as of the date of this Agreement, the Company is not a party to any pending agreements, understandings, negotiations or discussions with respect to any Alternative Transaction.

5.12         Acquisitions of Interests.  From the date of this Agreement to and including the Closing Date, neither ▇▇▇▇▇▇▇ nor any Standby Purchaser nor any of their respective Affiliates shall, directly or indirectly, purchase, acquire, or enter into any agreement, arrangement or understanding with respect to the purchase or acquisition by ▇▇▇▇▇▇▇, any Standby Purchaser or any of their respective Affiliates of, any Claims of any Debtor or any New Common Stock, except pursuant to this Agreement and except for any Claims for which ▇▇▇▇▇▇▇ has signed a confirmation to purchase such Claims as of the date of this Agreement  which confirmations have been separately disclosed in writing by ▇▇▇▇▇▇▇ to the Company.   Nothing in this Agreement shall restrict or prohibit ▇▇▇▇▇▇▇ or any Standby Purchaser or any of their respective Affiliates from (a) financing, pledging in connection with any financing transaction, selling, or contracting to sell any Claims of the Debtors or (b) entering into any swap or other arrangement that transfers to another Person, in whole or in part, any of the voting or economic consequences of ownership of any Claims of the Debtors.

5.13         Survival of Representations and Warranties.  Except as set forth in the immediately succeeding sentence, the representations and warranties of the Company and each Standby Purchaser, including ▇▇▇▇▇▇▇ on behalf of the Standby Purchasers, contained in this Agreement or in any certificate delivered hereunder shall not survive the Closing and shall be of no force and effect after the Closing.  Notwithstanding anything to the contrary set forth herein, nothing contained in this Agreement shall affect a party’s rights at law or in equity in connection with actual (and not constructive) fraud or any knowing or willful breach or violation of any representation, warranty or covenant under this Agreement and nothing in this Agreement will be construed as limiting any right, defense, or affirmative defense of any party in any proceeding involving such a claim.

SECTION 6.
CONDITIONS TO OBLIGATIONS OF STANDBY PURCHASERS

The obligation of the Standby Purchasers to consummate the Standby Purchase shall be subject, in each case, to the satisfaction (or waiver by ▇▇▇▇▇▇▇) of each of the following conditions:

(a)           Representations and Warranties.  (i) The representations and warranties of the Company contained in this Agreement (other than in Section 3.4(a) and (c)) shall be true and correct, without giving effect to any “materiality” or “Material Adverse Effect” qualifications therein, on and as of the date hereof and as of the Closing Date, with the same force and effect as though made on and as of such dates (except to the extent that any such representation or warranty is made as of a specified date, in which case, such representation or warranty shall be true and correct as of such specified date), except to the extent that any failures of such representations and warranties to be so true and correct, individually or in the aggregate, have not had or would not reasonably be expected to have a Material Adverse Effect, and (ii) the representations and warranties of the Company set forth in Section 3.4(a) and (c) shall be true

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and correct in all respects on and as of the date hereof and as of the Closing Date, with the same force and effect as though made on and as of such dates, except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty shall be true and correct in all respects as of such specified date.

(b)           Compliance with Covenants.  The Company shall have performed or complied with, in all material respects, its agreements and covenants required to be performed or complied with under this Agreement on or prior to the Closing.

(c)           Material Adverse Effect.  There shall have occurred following the date of this Agreement no change, effect, event, occurrence, development, circumstance or state of facts, that has had or would reasonably be expected to have or result in a Material Adverse Effect.

(d)           Officer’s Certificate.  The Company shall have delivered to the Standby Purchasers a certificate of its Chief Executive Officer or Chief Financial Officer to the effect that each of the conditions specified in this Section 6(a), (b) and (c) are satisfied in all respects.

(e)           Secretary’s Certificate.  The Company shall have delivered to the Standby Purchasers a secretary’s certificate, duly executed by the Secretary of the Company, certifying as to (A) the resolutions of the board of directors of the Company approving the transactions contemplated hereby, (B) the Company’s certificate of incorporation and bylaws and (C) the incumbency and specimen signature of each officer of the Company executing this Agreement and any document contemplated to be delivered pursuant hereto on behalf of the Company.  The Company shall also have delivered to the Standby Purchasers a certificate of good standing of the Company in its state of organization.

(f)            Required Consents.  All of the Approvals set forth on Schedule 6(f) shall have been obtained.

(g)           Bankruptcy Court Orders.  The Confirmation Order and the Approval Order shall have been entered by the Bankruptcy Court, each such order shall have remained in full force and effect, and no order staying, reversing, modifying or amending either the Confirmation Order or the Approval Order shall be in effect, and since the date hereof, none of the Debtors shall have made a public announcement, entered into an agreement or filed any pleading, evidencing its intention to support or otherwise supports any transaction with respect to the reorganization or sale of any of the Debtors or otherwise shall have taken any action that is materially inconsistent with the transactions contemplated by the Existing Plan (as amended by the Plan Modification), the Disclosure Statement or this Agreement.

(h)           Plan Amendments.  (i) Any material amendment to the Existing Plan, the Plan or the Disclosure Statement, and (ii) any change to the pro forma capitalization of the Company contemplated by the Existing Plan (as amended by the Plan Modification) or the Disclosure Statement that adversely affects the equity valuation of the Company or any modification to the capital structure of the Company contemplated by the Existing Plan (as amended by the Plan Modification) or the Disclosure Statement, in each case shall be acceptable to ▇▇▇▇▇▇▇.

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(i)            Plan Effectiveness.  All conditions to the occurrence of the Effective Date shall have occurred (other than the consummation of the Standby Purchase) or shall have been satisfied or waived in accordance with the Plan.

(j)            Plan Documents.  The final documentation relating to the Plan and the transactions contemplated by the Plan shall be in form and substance consistent with the Plan and the exhibits attached thereto.

(k)           Amended and Restated Certificate of Incorporation.  The Amended and Restated Certificate of Incorporation shall have been filed with the Secretary of State of the State of Delaware, shall be in full force and effect and no action shall have been taken to further amend, modify or repeal such Amended and Restated Certificate of Incorporation.

(l)            Amended and Restated By-laws.  The Amended and Restated By-laws shall have been adopted by the Board of Directors of the Company and no action has been taken to further amend, modify or repeal such Amended and Restated By-laws.

(m)          Listing.  The shares of New Common Stock to be issued to the Standby Purchasers pursuant to this Agreement and the Plan shall have been listed and authorized for trading on the NASDAQ Global Market.

(n)           Ancillary Agreements.  Each of the Registration Rights Agreement and the Standstill Agreement shall have been duly authorized, executed and delivered by the Company.

(o)           Judgments, Decrees and Litigation.  There shall not be in effect or exist any Law, judgment, order, injunction or decree issued by a Governmental Entity restraining or prohibiting the consummation of or imposing material modifications on the transactions contemplated by this Agreement or the Plan.

SECTION 7.

CONDITIONS TO OBLIGATIONS OF THE COMPANY

The obligation of the Company to consummate the Standby Purchase shall be subject, in each case, to the satisfaction (or waiver by the Company) of each of the following conditions:

(a)           Representations and Warranties.  The representations and warranties of the Standby Purchasers and ▇▇▇▇▇▇▇ contained in this Agreement shall be true and correct in all material respects, without giving effect to any “materiality” qualifications therein, on and as of the date hereof and as of the Closing Date, with the same force and effect as though made on and as of such dates, except to the extent that any such representation or warranty is made as of a specified date, in which case, such representation or warranty shall be true and correct in all material respects, without giving effect to any “materiality” qualifications therein,  as of such specified date.

(b)           Compliance with Covenants.  ▇▇▇▇▇▇▇ and all of the Standby Purchasers shall have performed or complied with, in all material respects, all of their respective several

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agreements and covenants required to be performed or complied with under this Agreement on or prior to the Closing.

(c)           Officer’s Certificates.  ▇▇▇▇▇▇▇ shall have delivered to the Company a certificate of its Chief Executive Officer or Chief Financial Officer to the effect that each of the conditions specified in this Section 7(a) and (b) is satisfied in all respects.

(d)           Required Consents.  All of the Approvals set forth in Schedule 7(d) shall have been obtained.

(e)           Bankruptcy Court Orders; Plan Effectiveness.  The Confirmation Order and the Approval Order shall have been entered by the Bankruptcy Court and all conditions to the occurrence of the Effective Date shall have occurred (other than the consummation of the Standby Purchase) or shall have been satisfied or waived in accordance with the Plan.

(f)            Ancillary Agreements.  Each of the Registration Rights Agreement and the Standstill Agreement shall have been duly authorized, executed and delivered by each of the Standby Purchasers.

(g)           Judgments, Decrees and Litigation.  There shall not be in effect or exist any Law, judgment, order, injunction or decree issued by a Governmental Entity restraining or prohibiting the consummation of or imposing material modifications on the transactions contemplated by this Agreement or the Plan.

SECTION 8.

TERMINATION

8.1           Termination.  Notwithstanding anything in this Agreement to the contrary, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing:

(a)           by mutual written consent of the Company and ▇▇▇▇▇▇▇;

(b)           by either the Company or ▇▇▇▇▇▇▇ if any Law or any judgment, injunction, order or decree of any Governmental Entity of competent jurisdiction shall restrain or prohibit the consummation of the Closing or the Plan, and such judgment, injunction, order or decree shall become final and nonappealable and was not entered at the request of the terminating party or any of its Affiliates;

(c)           by ▇▇▇▇▇▇▇, in the event of a breach of any representation, warranty, covenant or agreement of the Company set forth in this Agreement such that any condition set forth in Section 6 would be incapable of being satisfied; provided, however that, except for breaches of the covenants and agreements contained in Section 5.3(a), (b) and (c), the right to terminate this Agreement pursuant to this Section 8.1(c) for breaches of covenants or agreements that are capable of being cured shall only be available to ▇▇▇▇▇▇▇ after the Company has received written notice of such breach and has failed to cure such breach within five Business Days following such notice;

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(d)           by the Company, in the event of a breach of any representation, warranty, covenant or agreement of ▇▇▇▇▇▇▇ or any Standby Purchaser set forth in this Agreement such that any condition set forth in Section 7 would be incapable of being satisfied; provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(d) for breaches of covenants or agreements shall only be available to the Company after ▇▇▇▇▇▇▇ has received written notice of such breach and has failed to cure such breach within five Business Days following such notice;

(e)           by ▇▇▇▇▇▇▇, in the event that after the date hereof any of the Debtors shall have made a public announcement, entered into an agreement or filed any pleading evidencing its intention to support or otherwise supports any transaction with respect to the reorganization or sale of any of the Debtors or takes any other action that is otherwise materially inconsistent with the transactions contemplated by this Agreement, the Disclosure Statement or the Existing Plan (as modified by the Plan Modification);

(f)            by ▇▇▇▇▇▇▇, if without the prior written consent of ▇▇▇▇▇▇▇ the Company shall have (i) materially amended the Existing Plan, the Plan or the Disclosure Statement, or (ii) changed the pro forma capitalization of the Company contemplated by the Existing Plan (as amended by the Plan Modification) or the Disclosure Statement in a manner that adversely affects the equity valuation of the Company or modified the capital structure of the Company contemplated by the Existing Plan (as amended by the Plan Modification) or the Disclosure Statement;

(g)           by ▇▇▇▇▇▇▇, if there shall have occurred following the date of this Agreement a change, effect, event, occurrence, development, circumstance or state of facts, that has had or would reasonably be expected to have or result in a Material Adverse Effect;

(h)           by ▇▇▇▇▇▇▇, if the solicitation for the Plan Election has not been commenced by the date that is five Business Days following the entry of the Approval Order by the Bankruptcy Court or if such solicitation shall not have concluded by the Plan Election Deadline;

(i)            by ▇▇▇▇▇▇▇, if the Confirmation Order shall not have been entered by the Bankruptcy Court and become a Final Order by February 15, 2010;

(j)            by ▇▇▇▇▇▇▇, if the Confirmation Order is modified in any material respect that is adverse to the Standby Purchasers without its consent;

(k)           by ▇▇▇▇▇▇▇, if the Chapter 11 Cases are converted to cases under chapter 7 of the Bankruptcy Code, a trustee or examiner with expanded powers is appointed pursuant to the Bankruptcy Code or the Bankruptcy Court enters an order pursuant to section 362 of the Bankruptcy Code lifting the automatic stay with respect to any material portion of the properties and assets of the Debtors; or

(l)            by the Company or ▇▇▇▇▇▇▇, if the Closing has not occurred on or prior to February 28, 2010;

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provided, however, that the right to terminate this Agreement under the foregoing subsections (b) through (d) shall not be available to any party whose failure to fulfill any of its obligations, or whose breach of any representation or warranty, under this Agreement has been the cause of or resulted in the event or failure otherwise giving rise to the termination right.

8.2           Effect of Termination.  In the event of this Agreement is duly terminated in accordance with Section 8.1, this Agreement shall become void and of no further force and effect, and the transactions contemplated hereby shall be abandoned, without further action by any of the parties, except that the provisions of Sections 5.1, 5.4 and 5.7 shall survive any termination of this Agreement.  Regardless of the termination of this Agreement, nothing contained in this Agreement shall relieve any party hereto from liability for any breach or inaccuracy of its representations, warranties, covenants or agreements contained in this Agreement prior to such termination.

SECTION 9.

MISCELLANEOUS

9.1           No Fiduciary Representation.  Notwithstanding anything herein to the contrary, the Company acknowledges and agrees that (a) the transactions contemplated hereby are arm’s length commercial transactions between the Company, on the one hand, and ▇▇▇▇▇▇▇ and the Standby Purchasers, on the other, (b) in connection therewith and with the processes leading to such transactions, ▇▇▇▇▇▇▇ and each Standby Purchaser is acting solely as a principal and not the agent or fiduciary of the Debtors or their debtor estates, (c) neither ▇▇▇▇▇▇▇ nor any Standby Purchaser has assumed an advisory or fiduciary responsibility in favor of the Debtors or their debtor estates with respect to any legal, tax, investment, accounting, regulatory or other matters involving the transactions contemplated herein or the processes leading thereto (irrespective of whether ▇▇▇▇▇▇▇ or such Standby Purchaser has advised or is currently advising the Debtors on other matters), and (d) the Debtors have consulted their own legal and financial advisors to the extent it deemed appropriate.  The Company agrees that it will not claim that any Standby Purchaser has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Debtors or its shareholders or debtor estates, in connection with the transactions contemplated herein or the processes leading thereto.

9.2           Non-Reliance.  ▇▇▇▇▇▇▇ and each Standby Purchaser acknowledges and agrees that: (a) the Company has not made and is not making, and it has not relied and is not relying upon, any representations or warranties whatsoever, express or implied, regarding Debtors’ business or capitalization, regarding the Debtors’ past or future performance or otherwise relating in any way to the subject matter of this Agreement, except as expressly provided in Section 3, the Plan or the Disclosure Statement; and (b) no Representative of the Debtors has made, or is making, any representations or warranties whatsoever, express or implied, regarding the Debtors’ business or capitalization, past or future performance or otherwise relating in any way to the subject matter of this Agreement.  Without limiting the generality of the foregoing, ▇▇▇▇▇▇▇ and each Standby Purchaser acknowledges and agrees that, except as set forth in the Plan or the Disclosure Statement, the Debtors have not made and are not making, and it has not relied and is not relying upon, any representations or warranties whatsoever, express or implied, regarding the future revenues, future results of operations or future financial condition of the

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Debtors or regarding any projections, forecasts, estimates or budgets discussed with, delivered to or made available to such Standby Purchaser or any of its Representatives.

9.3           Notices.  Any notice or other communication required or which may be given pursuant to this Agreement will be in writing and either delivered personally to the addressee, telecopied to the addressee, sent via electronic mail or mailed, certified or registered mail, postage prepaid, and will be deemed given when so delivered personally, telecopied, or sent via electronic mail, or, if mailed, five days after the date of mailing, as follows:

(a)           if to ▇▇▇▇▇▇▇ or any Standby Purchaser, to:

▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇  ▇▇▇▇▇
Attn:       ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile:  (▇▇▇) ▇▇▇-▇▇▇▇

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

Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

(b)           if to the Company, to:

Idearc Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇  ▇▇▇▇▇-▇▇▇▇
Attn:       ▇▇▇▇ ▇▇▇▇▇▇▇▇, Executive Vice President, General Counsel and Secretary
Facsimile:  ▇▇▇-▇▇▇-▇▇▇▇

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

Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn:       ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile:  (▇▇▇) ▇▇▇-▇▇▇▇

9.4           Assignment.  Except as described in this Section 9.4, this Agreement will be binding upon and inure to the benefit of each and all of the parties to this Agreement, and neither this Agreement nor any of the rights or interests hereunder will be assigned nor any duties or obligations delegated by any of the parties to this Agreement without the prior written consent of the other parties.  Notwithstanding the foregoing, any Standby Purchaser (but not ▇▇▇▇▇▇▇) may assign its rights and delegate its obligations hereunder to any Affiliate thereof; provided that any

25

such delegation shall not release such Standby Purchaser from any of its obligations under this Agreement.

9.5           Entire Agreement.  This Agreement, including the terms of the agreements contemplated hereby and referred to herein contain the entire agreement by and between the Company, ▇▇▇▇▇▇▇ and the Standby Purchasers with respect to the transactions contemplated by this Agreement and supersedes all prior written and prior or contemporaneous oral, agreements and representations with respect thereto.

9.6           Waivers and Amendments.  This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions of this Agreement may be waived, only by a written instrument signed by the Company and ▇▇▇▇▇▇▇ or, in the case of a waiver, by (i) ▇▇▇▇▇▇▇, in the case of a waiver by any Standby Purchaser or (ii) the Company, in the case of a waiver by the Company.  No delay on the part of any party in exercising any right, power or privilege pursuant to this Agreement will operate as a waiver thereof, nor will any waiver on the part of any party of any right, power or privilege pursuant to this Agreement, nor will any single or partial exercise of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise thereof or the exercise of any other right, power or privilege pursuant to this Agreement.  The rights and remedies provided pursuant to this Agreement are cumulative and are not exclusive of any rights or remedies which any party otherwise may have at law or in equity.  Notwithstanding anything to the contrary in this Agreement, no amendment that increases a Standby Purchaser’s Standby Percentage of the Purchase Price shall be effective against any Standby Purchaser without such Standby Purchaser’s consent.

9.7           Governing Law; Jurisdiction; Venue; No Jury Trial.  This Agreement and any claim related directly or indirectly to this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the principles of conflicts of law thereof that would defer to the substantive laws of any other jurisdiction.  The parties agree that, during the period from the date hereof until the date on which the Debtors’ Chapter 11 Cases are closed or dismissed (the “Bankruptcy Period”), the Bankruptcy Court shall have exclusive jurisdiction to resolve any controversy, claim or dispute arising out of or relating to this Agreement or any other agreement entered into in connection herewith.  The parties further agree that, following the Bankruptcy Period, any action or proceeding with respect to such controversy, claim or dispute shall be brought against any of the parties exclusively in either the United States District Court for the Southern District of New York or any state court of the State of New York located in such district, and each of the parties hereby consents to the personal jurisdiction of such court and the Bankruptcy Court (and to the appropriate appellate courts) in any such action or proceeding and waives any objection, including, without limitation, any objection to the laying of venue or on the grounds of forum non conveniens, which any of them may now or hereafter have to the bringing of such action or proceeding in such respective jurisdictions.  Each party hereby irrevocably consents to the service of process of any of the aforesaid courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the other parties to such action or proceeding.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND

26

THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY.

9.8           Third Party Beneficiaries.  This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any Person, other than the parties hereto and such permitted assigns, any legal or equitable rights hereunder.

9.9           Counterparts.  This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.  All such counterparts will be deemed an original, will be construed together and will constitute one and the same instrument.

9.10         Interpretation; Exhibits and Schedules.  The headings contained in this Agreement, in any Exhibit or Schedule hereto and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  The term “or” is not exclusive.  All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall have the meaning as defined in this Agreement.  When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated.

9.11         Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein will not be in any way impaired thereby, it being intended that all of the rights and privileges of the parties hereto will be enforceable to the fullest extent permitted by law.

9.12         No Presumption.  The Debtors and the Standby Purchasers each participated in the negotiation and drafting of this Agreement and has each been represented throughout to its satisfaction by legal counsel of its choosing.  In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

9.13         No Personal Liability.  No director, officer, employee, incorporator, stockholder, managing member, member, general partner, limited partner, principal or other agent of any of ▇▇▇▇▇▇▇ or the Standby Purchasers shall have any liability for any obligations of the Standby Purchasers under this Agreement or for any claim based on, in respect of, or by reason of, the obligations of ▇▇▇▇▇▇▇ or the Standby Purchasers hereunder.  The Company waives and releases all such liability.  This waiver and release is a material inducement to ▇▇▇▇▇▇▇’▇ and the Standby Purchasers’ entry into this Agreement.

9.14         Several, Not Joint, Obligations.  The agreements, representations, and obligations of the Standby Purchasers under this Agreement are, in all respects, several and not joint.

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9.15         Specific Performance.  The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions without the necessity of posting bond to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at Law or in equity.  Unless otherwise expressly stated in this Agreement, no right or remedy described or provided in this Agreement is intended to be exclusive or to preclude a party from pursuing other rights and remedies to the extent available under this Agreement, at Law or in equity.

[signature pages follow]

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

[Signature page to Standby Purchase Agreement]

EXHIBIT C

STANDSTILL AGREEMENT

This Standstill Agreement (this “Agreement”) is made as of [·], 2009 by and between (a) Idearc Inc., a Delaware corporation (the “Company”), and (b) ▇▇▇▇▇▇▇ & Co. Inc., a Delaware corporation (“▇▇▇▇▇▇▇ & Co.”), for its own account for the limited purposes set forth herein, and on behalf of the investment funds and accounts managed by ▇▇▇▇▇▇▇ & Co. listed on Schedule A to this Agreement (the “Standby Purchasers” and together with ▇▇▇▇▇▇▇ & Co., “▇▇▇▇▇▇▇”).

R E C I T A L S

WHEREAS, the Company and ▇▇▇▇▇▇▇ & Co. (on behalf of the Standby Purchasers) are parties to that certain Standby Purchase Agreement dated as of [·], 2009 (the “Purchase Agreement”);

WHEREAS, pursuant to the Purchase Agreement, the Company agreed to offer pursuant to its Chapter 11 plan of reorganization of the Company and its subsidiaries, dated as of September 9, 2009, as supplemented as of October [·], 2009 (the “Plan”), to each holder of Class 3 and Class 4 claims under the Plan other than ▇▇▇▇▇▇▇ (“Eligible Subscribers”) the right to receive, in lieu of any and all shares of common stock, par value $[·], of the Company (“New Common Stock”) to be issued pursuant to the Plan, cash in an amount determined as set forth in the Plan (the “Plan Election”), subject to the Ownership Limitation (as defined in the Purchase Agreement);

WHEREAS, pursuant to the Purchase Agreement, the Standby Purchasers agreed to subscribe for and purchase from the Company, and the Company agreed to issue and sell to the Standby Purchasers, the number of shares of New Common Stock for which the Eligible Subscribers have elected under the Plan Election to receive cash, subject to the Ownership Limitation;

WHEREAS, the cash proceeds of the sale of such shares of New Common Stock to the Standby Purchasers pursuant to the Purchase Agreement will be used by the Company to fund the cash payments to the Eligible Subscribers under the Plan Election; and

WHEREAS, ▇▇▇▇▇▇▇ and the Company are entering into this Agreement to define certain agreements between ▇▇▇▇▇▇▇ and the Company.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.                                      Board Representation.

(a)                                  The Company agrees that if ▇▇▇▇▇▇▇ beneficially owns 20% or more of the then issued and outstanding shares of New Common Stock at any time during the period commencing on the Effective Date and ending on the 180th day after the Effective Date, ▇▇▇▇▇▇▇ shall be entitled during such period to nominate one (1) individual (such

1

individual, and any successor to such individual as contemplated in Section 1(a)(iii), the “▇▇▇▇▇▇▇ Nominee”) for election as a member of the Board of Directors of the Company (the “Board”); and specifically the Company agrees to:

(i)                                     as promptly as practicable and in no event later than 10 days following the nomination of the ▇▇▇▇▇▇▇ Nominee as contemplated in this Section 1, (i) increase the size of the Board by one seat and (ii) appoint the ▇▇▇▇▇▇▇ Nominee as a director of the Company whose term shall expire on the earlier of (A) such time, if any, as ▇▇▇▇▇▇▇ ceases to beneficially own 20% or more of the issued and outstanding shares of New Common Stock for a period of 30 consecutive days and (B) at the annual meeting of stockholders to be held in 2011, subject to re-election or re-appointment of the ▇▇▇▇▇▇▇ Nominee as provided in Sections 1(a)(ii) and 1(a)(iii) below, respectively;

(ii)                                  unless ▇▇▇▇▇▇▇ has at any time prior to the Termination Date ceased to beneficially own 20% or more of the issued and outstanding shares of New Common Stock for a period of 30 consecutive days, at each annual meeting of stockholders of the Company to be held prior to the Termination Date, the Company (1) will cause the slate of nominees standing for election, and recommended by the Board, at each such meeting to include the ▇▇▇▇▇▇▇ Nominee, (2) will nominate and reflect in the proxy statement on Schedule 14A for each such meeting the nomination of the ▇▇▇▇▇▇▇ Nominee for election as a director of the Company at each such meeting, and (3) cause all proxies received by the Company to be voted in the manner specified by such proxies and, to the extent permitted under applicable law and stock exchange rules, cause all proxies for which a vote is not specified to be voted for the ▇▇▇▇▇▇▇ Nominee; and

(iii)                               if the ▇▇▇▇▇▇▇ Nominee ceases to be a director of the Company other than due to ▇▇▇▇▇▇▇ ceasing to beneficially own 20% or more of the issued and outstanding shares of New Common Stock for a period of 30 consecutive days at any time prior to the Termination Date, ▇▇▇▇▇▇▇ may propose to the Company a replacement nominee for election as a director of the Company, in which event such individual shall be appointed to fill the vacancy created as a result of the prior ▇▇▇▇▇▇▇ Nominee ceasing to be a director of the Company.

(b)                                 The Company agrees that promptly following the appointment or election of the ▇▇▇▇▇▇▇ Nominee, the Company will, upon written request by ▇▇▇▇▇▇▇, cause the ▇▇▇▇▇▇▇ Nominee to be included as a member of any committee of the Board on which the ▇▇▇▇▇▇▇ Nominee is eligible to serve under applicable law or stock exchange or market policy; provided, that ▇▇▇▇▇▇▇ and the Company agree that the following actions will require approval of a majority of directors of the Company who are independent of ▇▇▇▇▇▇▇ and management of the Company, which independent directors may comprise a committee of the Board: (i) the amendment or waiver of any provision of this Agreement, (ii) consent to the assignment of ▇▇▇▇▇▇▇’▇ rights under this Agreement or consent to the relief of ▇▇▇▇▇▇▇’▇ obligations under this Agreement, (iii) the amendment or waiver of any provision of the Rights Agreement (defined in Section 4(a)) or the Registration Rights Agreement between the Company, ▇▇▇▇▇▇▇ and the holders of New Common Stock named therein and dated as of the date of this Agreement, in each case to the extent

2

any such amendment or waiver affects ▇▇▇▇▇▇▇, and (iv) redemption of the rights issued under the Rights Agreement.

(c)                                  ▇▇▇▇▇▇▇ will provide, as promptly as reasonably practicable, all information relating to the ▇▇▇▇▇▇▇ Nominee (and other information, if any) to the extent required under applicable law to be included in any proxy statement of the Company and in any other solicitation materials to be delivered to stockholders of the Company in connection with a stockholders meeting as contemplated by Section 1(a)(ii).

2.                                      Voting.  ▇▇▇▇▇▇▇ agrees that effective as of the Commencement Date and continuing until the Termination Date:

(a)                                  it will cause to be present, in person or represented by proxy, all Voting Securities that ▇▇▇▇▇▇▇ beneficially owns at all stockholder meetings of the Company so that all Voting Securities that ▇▇▇▇▇▇▇ beneficially owns may be counted for the purposes of determining the presence of a quorum at such meetings;

(b)                                 if and for so long as ▇▇▇▇▇▇▇ beneficially owns in excess of 25% of the then issued and outstanding shares of New Common Stock, on any and all matters submitted to a vote of the holders of New Common Stock ▇▇▇▇▇▇▇ (1) may vote up to 25% of the shares of New Common Stock then issued and outstanding in its discretion, and (2) shall vote, or cause to be voted, any shares of New Common Stock that ▇▇▇▇▇▇▇ beneficially owns in excess of such 25% in the same proportion as the other holders of New Common Stock vote their shares of New Common Stock with respect to such matters; provided, that notwithstanding the foregoing:

(i)                                     with respect to the election of nominees to the Board, ▇▇▇▇▇▇▇ (1) may vote up to 15% of the then issued and outstanding shares of New Common Stock in its discretion at the annual meeting of the stockholders of the Company to be held in 2011, (2) may vote up to 20% of the then issued and outstanding shares of New Common Stock in its discretion at each annual meeting of the stockholders of the Company to be held prior to the Termination Date (other than the annual meeting to be held in 2011), and (3) shall vote, or cause to be voted, any shares of New Common Stock that ▇▇▇▇▇▇▇ beneficially owns in excess of such 15% and 20%, as applicable, in the same proportion as other holders of shares of New Common Stock vote their shares of New Common Stock with respect to the election of nominees to the Board at each annual meeting of the stockholders of the Company held prior to the Termination Date; provided, that in all cases, ▇▇▇▇▇▇▇ may vote all of its shares of New Common Stock in favor of the election of the ▇▇▇▇▇▇▇ Nominee;

(ii)                                  with respect to a proposed Change of Control Transaction that ▇▇▇▇▇▇▇ desires to vote in favor of, ▇▇▇▇▇▇▇ may vote all shares of New Common Stock that ▇▇▇▇▇▇▇ beneficially owns in favor of such Change of Control Transaction if such Change of Control Transaction treats ▇▇▇▇▇▇▇ and its Affiliates the same as all other holders of New Common Stock and if pursuant to such Change of Control Transaction ▇▇▇▇▇▇▇ will dispose of its shares of New Common Stock;

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(iii)                               with respect to a proposed Change of Control Transaction that ▇▇▇▇▇▇▇ does not desire to vote in favor of, but which Change of Control Transaction has been recommended by the Board for approval by the Company’s stockholders, ▇▇▇▇▇▇▇ (1) may vote up to 30% of the then issued and outstanding shares of New Common Stock in respect of such Change of Control Transaction in its sole discretion, and (2) shall vote, or cause to be voted, any shares of New Common Stock that ▇▇▇▇▇▇▇ beneficially owns in excess of such 30% in the same proportion as the other holders of New Common Stock vote their shares of New Common Stock with respect to such Change of Control Transaction; and

(iv)                              notwithstanding Sections 2(b)(ii) and (iii), except as provided in the immediately succeeding sentence, if ▇▇▇▇▇▇▇ or an Affiliate of ▇▇▇▇▇▇▇ has any interest in the Person or Persons (other than the Company) that is a party in a Change of Control Transaction (other than a Debt Interest) or if such Change of Control Transaction treats ▇▇▇▇▇▇▇ or its Affiliates differently than all other holders of New Common Stock, then ▇▇▇▇▇▇▇ shall vote, or cause to be voted, all shares of New Common Stock that ▇▇▇▇▇▇▇ beneficially owns in the same proportion as the holders of New Common Stock who do not have an interest in any Person or Persons (other than the Company) that is a party in such Change of Control Transaction vote their shares of New Common Stock with respect to such Change of Control Transaction.  Notwithstanding the foregoing, ▇▇▇▇▇▇▇ shall not be subject to the restrictions set forth in this Section 2(b)(iv) prior to the Termination Date at such time, if any, as ▇▇▇▇▇▇▇ shall beneficially own less than 20% of the then issued and outstanding shares of New Common Stock for a period of 30 consecutive days.

(c)                                  ▇▇▇▇▇▇▇ agrees that with respect to the voting of shares of its New Common Stock over which ▇▇▇▇▇▇▇ has discretion as contemplated in Section 2(b), ▇▇▇▇▇▇▇ shall vote contemporaneously with the voting by other stockholders of the Company.  ▇▇▇▇▇▇▇ agrees that with respect to the voting of shares of its New Common Stock over which ▇▇▇▇▇▇▇ does not have discretion as contemplated in Section 2(b), ▇▇▇▇▇▇▇ shall take such action as may be necessary to cause such shares of New Common Stock to be automatically voted in accordance with the terms of Section 2(b).

(d)                                 ▇▇▇▇▇▇▇ hereby revokes any and all other proxies and voting agreements given by ▇▇▇▇▇▇▇ with respect to the Voting Securities and will cause its Affiliates to revoke any and all proxies and voting agreements given by any such Affiliate with respect to the Voting Securities.

3.                                      Standstill.

(a)                                  ▇▇▇▇▇▇▇ hereby agrees that effective as of the Commencement Date and continuing until the earlier of (x) such time, if any, as ▇▇▇▇▇▇▇ beneficially owns less than 20% of the then issued and outstanding shares of New Common Stock for a period of 30 consecutive days and (y) the Termination Date, neither ▇▇▇▇▇▇▇ nor any of its Affiliates will, acting alone, as part of a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) or otherwise in concert with any other Person, unless specifically requested in writing by the Board on an unsolicited basis:

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(i)                                     after the Purchase Period (as defined below), acquire, or agree to acquire, offer to acquire, or seek or propose to acquire beneficial ownership of any New Common Stock or any rights or options to acquire any New Common Stock (including from a third Person); or

(ii)                                  initiate, propose, finance, negotiate, seek to effect, guarantee the financing of, assist any other Person  in obtaining financing for, or knowingly cause (1) any proxy contest or other proposal to obtain board representation, (2) any stockholder proposal, whether made pursuant to Rule 14a-8 or Rule 14a-4 under the Exchange Act or otherwise or (3) any Change of Control Transaction, except that ▇▇▇▇▇▇▇ may do any of the foregoing with respect to a proposed Change of Control Transaction if such proposed Change of Control Transaction is subject to the voting requirements set forth in Section 2(b); or

(iii)                               except with respect to a proposed Change of Control Transaction expressly subject to the voting requirements set forth in Section 2(b), “solicit” (within the meaning of Rule 14a-1(l) under the Exchange Act) any proxies to vote, or seek to influence any other Person with respect to the voting of any Voting Securities on any of the matters set forth in Section 3(a)(ii); or

(iv)                              except with respect to a proposed Change of Control Transaction expressly subject to the voting requirements set forth in Section 2(b), take any action that would require the Company under applicable law, rule or stock exchange policy to make a public announcement regarding any of the matters set forth in Section 3(a)(ii); or

(v)                                 except with respect to a proposed Change of Control Transaction expressly subject to the voting requirements set forth in Section 2(b), form, join or participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any Voting Securities; or

(vi)                              nominate an individual or individuals for election to the Board at any meeting (or by written consent in lieu of a meeting) of stockholders of the Company, other than as expressly provided in this Agreement with respect to the ▇▇▇▇▇▇▇ Nominee, or effect or attempt to effect the removal of any members of the Board (other than the ▇▇▇▇▇▇▇ Nominee); provided, that compliance by ▇▇▇▇▇▇▇ with the provisions of Sections 1 or 2(b) shall not constitute a violation of this provision; or

(vii)                           other than as expressly provided in this Agreement with respect to the ▇▇▇▇▇▇▇ Nominee, directly or indirectly seek to elect, appoint or otherwise place (or seek to have elected, appointed or otherwise placed) a representative of ▇▇▇▇▇▇▇ on the Board, it being the express agreement of ▇▇▇▇▇▇▇ and the Company that ▇▇▇▇▇▇▇ shall be entitled to only one seat on the Board, subject to the conditions set forth in this Agreement, prior to the Termination Date; or

(viii)                        seek to call, or to request the call of, a special meeting of the stockholders of the Company; or

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(ix)                                deposit any securities of the Company into a voting trust, or subject any securities of the Company to any agreement or arrangement with respect to the voting of such securities (other than pursuant to Section 2 of this Agreement), or other agreement or arrangement having similar effect to which, in each case, a Person who is not an Affiliate of ▇▇▇▇▇▇▇ is a party; or

(x)                                   execute any written stockholder consent with respect to the Company, except in accordance with Section 2 of this Agreement; or

(xi)                                except with respect to a proposed Change of Control Transaction expressly subject to the voting requirements set forth in Section 2(b), seek or request permission to do any of the foregoing, make, initiate, take or participate in any demand, request, action (legal or otherwise) or proposal to amend, waive or terminate any provision of this Agreement; or

(xii)                             disclose any intention, plan or arrangement inconsistent with the foregoing.

(b)                                 Notwithstanding the foregoing provisions of this Section 3, the parties to this Agreement acknowledge and agree that:

(i)                                     on the Effective Date or at any time during the period from the Effective Date to the date that is 270 days after the Effective Date (the “Purchase Period”), ▇▇▇▇▇▇▇ may acquire beneficial ownership of additional shares of New Common Stock; provided, that in no event, before, during or after the Purchase Period, may ▇▇▇▇▇▇▇ acquire or beneficially own in excess of 45% of the shares of New Common Stock then issued and outstanding (inclusive of the shares of New Common Stock issued to ▇▇▇▇▇▇▇ by the Company on the Effective Date in exchange for all of the Class 3 and Class 4 claims of ▇▇▇▇▇▇▇ pursuant to the Plan); provided further, that ▇▇▇▇▇▇▇ may acquire beneficial ownership of additional shares of New Common Stock (including after the Purchase Period) pursuant to ▇▇▇▇▇▇▇’▇ exercise of its preemptive rights set forth in Section 11, subject to the 45% beneficial ownership limitation set forth above in this Section 3(b)(i);

(ii)                                  the provisions of Section 3(a) shall not restrict the actions of ▇▇▇▇▇▇▇ taken in respect of a Change of Control Transaction the terms of which require as a condition to consummation of such Change of Control Transaction compliance with the applicable voting restrictions set forth in Sections 2(b)(ii), (iii) and (iv) (and which condition is not waived); and

(iii)                               the provisions of Section 3(a) will not limit in any respect ▇▇▇▇▇▇▇’▇ ability to privately make proposals to the Board with respect to any of the actions, activities, or matters otherwise restricted by Section 3(a).

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4.                                      Non-Interference.

(a)                                  The Company will not, by amendment of its Amended and Restated Certificate of Incorporation (the “Charter”), its Amended and Restated Bylaws (the “Bylaws”), or its Rights Agreement (together, the “Rights Agreement”), or through any other means, circumvent or seek to circumvent the observance or performance by the Company of any of its obligations under the terms of this Agreement, including, without limitation, by challenging in any manner the terms of the Charter, the Bylaws, or the Rights Agreement or the validity or enforceability of this Agreement on any grounds (including as being against public policy, as having been improperly induced or otherwise), whether by the initiation of any legal proceeding for such purpose, or by the intervention, participation or attempted intervention or participation in any manner in any other legal proceeding initiated by another Person or otherwise.

(b)                                 ▇▇▇▇▇▇▇ will not by any means, circumvent or seek to circumvent the observance or performance by ▇▇▇▇▇▇▇ of any of its obligations under the terms of this Agreement, including, without limitation, by challenging in any manner the terms of the  Charter, the Bylaws, or the Rights Agreement or the validity or enforceability of this Agreement on any grounds (including as being against public policy, as having been improperly induced or otherwise), whether by the initiation of any legal proceeding for such purpose, or by the intervention, participation or attempted intervention or participation in any manner in any other legal proceeding initiated by another Person or otherwise.

(c)                                  Notwithstanding the foregoing, the Company and ▇▇▇▇▇▇▇ each acknowledges and agrees that the invalidity or unenforceability of any provision of the Charter or the Bylaws will not constitute or give rise to a breach of Section 1(a)(i) of this Agreement or a right of either the Company or ▇▇▇▇▇▇▇ to terminate this Agreement based on such breach.

(d)                                 The Company agrees that until the earlier of (x) such time, if any, as ▇▇▇▇▇▇▇ beneficially owns less than 20% of the then issued and outstanding shares of New Common Stock for a period of 30 consecutive days and (y) the Termination Date, without the prior written consent of ▇▇▇▇▇▇▇ & Co., if ▇▇▇▇▇▇▇ (as defined in the Rights Agreement) has not become an Acquiring Person (as defined in the Rights Agreement), neither the Company nor the Rights Agent (as defined in the Rights Agreement) shall modify, supplement or amend Section 1(t) of the Rights Agreement or otherwise modify, supplement or amend the Rights Agreement in any manner that would adversely affect the rights, interests, duties or obligations of ▇▇▇▇▇▇▇ (as defined in the Rights Agreement) under the Rights Agreement in a manner that relates to the determination as to whether ▇▇▇▇▇▇▇ (as defined in the Rights Agreement) is a “Grandfathered Person” (as defined in the Rights Agreement) or “Acquiring Person” (as defined in the Rights Agreement) under the Rights Agreement.

5.                                      Publicity.

(a)                                  Neither the Company nor ▇▇▇▇▇▇▇ will, directly or indirectly, make or issue or cause to be made or issued any disclosure, announcement or statement (including without limitation the filing of any document or report with the SEC or any other governmental agency or any disclosure to any journalist, member of the media or

7

securities analyst) concerning the other party or any of its respective past, present or future general partners, managers, directors, officers or employees, which disparages any of such party’s respective past, present or future general partners, managers, directors, officers or employees as individuals (recognizing that each party will be free to (i) comment in good faith regarding the business of the other party, provided any such comment shall not otherwise violate the terms of this Agreement, and (ii) after consultation with counsel, make any disclosure that it determines in good faith is required to be made under applicable law).

6.                                      ▇▇▇▇▇▇▇’▇ Representations and Warranties.  ▇▇▇▇▇▇▇ represents and warrants to the Company that:

(a)                                  the execution, delivery and performance of this Agreement by ▇▇▇▇▇▇▇ have been duly and validly authorized by all necessary corporate action on the part of ▇▇▇▇▇▇▇; this Agreement has been duly executed by ▇▇▇▇▇▇▇, is a valid and binding agreement of ▇▇▇▇▇▇▇, and is enforceable against ▇▇▇▇▇▇▇ in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law); and

(b)                                 the execution, delivery and performance by ▇▇▇▇▇▇▇ of this Agreement does not violate or conflict with or result in a breach of or constitute (or with notice or lapse of time or both constitute) a default or result in the creation or imposition of, or give rise to, any lien, charge, restriction, claim, encumbrance or adverse penalty of any nature whatsoever under ▇▇▇▇▇▇▇’▇ organizational documents or under any agreement or instrument to which ▇▇▇▇▇▇▇ is a party or by which any of its properties or assets is bound or under any law or any order of any court or other agency of government.

7.                                      Company’s Representations and Warranties.  The Company represents and warrants to ▇▇▇▇▇▇▇ that:

(a)                                  the execution, delivery and performance of this Agreement by the Company have been duly and validly authorized by all necessary corporate action on the part of the Company; this Agreement has been duly executed by the Company, is a valid and binding agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law);

(b)                                 the execution, delivery and performance by the Company of this Agreement does not violate or conflict with or result in a breach of or constitute (or with notice or lapse of time or both constitute) a default or result in the creation or imposition of, or give rise to, any lien, charge, restriction, claim, encumbrance or adverse penalty of any nature whatsoever under the Charter, the Bylaws or under any agreement or instrument to which the Company is a party or by which any of its properties or assets is bound or under any law or any order of any court or other agency of government; and

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(c)                                  upon confirmation of the Plan, the New Common Stock will be the only authorized and outstanding class of capital stock of the Company.

8.                                      Certain Definitions.  As used in this Agreement, the following terms have the meanings indicated:

(a)                                  The term “Accredited Investor” means an “Accredited Investor,” as such term is defined in Regulation D promulgated under the Securities Act of 1933, as amended.

(b)                                 The term “Affiliate” means, with respect to any Person, any other Person, directly or indirectly, controlling, controlled by, or under common control with, such Person.  For purposes of this definition, the term “control” (including the correlative terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

(c)                                  Whether a Person “beneficially owns” or “beneficially owned,” is the “beneficial owner” of or has “beneficial ownership” of securities for the purposes of this Agreement shall be determined in the same manner as that set forth for determining a beneficial owner of a security under Rule 13d-3 of the Exchange Act, except that a Person will also be deemed to be the beneficial owner of all securities which such Person has the right to acquire pursuant to the exercise of any rights in connection with any securities or any agreement, regardless of when such rights may be exercised and whether they are conditional.

(d)                                 The term “Change of Control Transaction” means any transaction or series of related transactions that results in any of the following: (i) any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) is or becomes the beneficial owner, directly or indirectly, of Voting Securities of the Company representing at least a majority of the combined voting power of the Company’s then outstanding securities; (ii) during any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board (together with any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least a majority of the members of the Board; and (iii) a sale or disposition by the Company of all or substantially all of the assets of the Company and its subsidiaries taken as a whole (including the stock of any subsidiaries of the Company).

(e)                                  The terms “Commencement Date” means the date during the Purchase Period when ▇▇▇▇▇▇▇’▇ beneficial ownership of New Common Stock first reaches at least 20% of the then issued and outstanding shares of New Common Stock.

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(f)                                    The term “Debt Interest” means an interest as a holder of indebtedness, which indebtedness (1) is not convertible or exchangeable for equity, (2) has no voting rights on matters submitted to the stockholders of the issuer of such indebtedness (including the election of directors), and (3) does not result in ▇▇▇▇▇▇▇ or its Affiliates being deemed to be an Affiliate of the issuer of such indebtedness.

(g)                                 The term “Effective Date” means the effective date of the Plan pursuant to the terms thereof.

(h)                                 The term “Equity Securities” means New Common Stock or equity securities convertible into or exercisable or exchangeable for New Common Stock, but excluding Exempted Securities.

(i)                                     The term “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(j)                                     The term “Exempted Securities” means New Common Stock or equity securities convertible into or exercisable or exchangeable for New Common Stock issued (i) as consideration for any asset, right, entity or business acquired by the Company or any of its subsidiaries, including in connection with a merger, exchange offer, joint venture, license transaction or exchange of shares, (ii) in accordance with any stock option or other equity-based compensation plan of the Company or its subsidiaries or upon exercise, conversion or exchange of any stock option or other equity interest issued thereunder, (iii) as a dividend or other distribution to equityholders of the Company generally, (iv) in connection with a stock split or (v) in connection with the exchange, exercise or conversion of any equity interest that is outstanding (1) immediately upon the date of this Agreement, (2) thereafter, so long as ▇▇▇▇▇▇▇ had an opportunity to exercise the preemptive rights granted to ▇▇▇▇▇▇▇ with respect to the underlying equity interest or (3) thereafter, to the extent that such equity interest was issued pursuant to any of clauses (i), (ii), (iii) or (iv).

(k)                                  The term “Person” will be interpreted broadly to include, without limitation, any corporation, company, “group” (within the meaning of Section 13(d)(3) of the Exchange Act), partnership, limited liability company, other entity or individual.

(l)                                     The term “Termination Date” means the fourth anniversary of the Effective Date.

(m)                               The term “Voting Securities” means securities of the Company with the power to vote with respect to the election of directors generally, including, without limitation, the New Common Stock.

9.                                      Notices.  All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient or sent to the recipient by facsimile (if sent by facsimile prior to 5:00 p.m. local time of the recipient on a business day or, if not, on the next business day), or one (1) business day after deposit with a reputable overnight courier service (charges prepaid), or three (3) business days after being mailed to the recipient by

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certified or registered mail, return receipt requested and postage prepaid.  Such notices, demands and other communications shall be sent to the Company and ▇▇▇▇▇▇▇ at the following addresses:

If to the Company:

Idearc Inc.

▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

P. O. Box 619810

▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Attention:

Facsimile:

with copies to (which shall not constitute notice):

Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.

▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇

Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

If to ▇▇▇▇▇▇▇:

▇▇▇▇▇▇▇ & Co. Inc.

1251 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇

▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇  ▇▇▇▇▇

Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇

Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

with copies to (which shall not constitute notice):

Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇

▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

10.                               Expiration.  This Agreement shall expire on the Termination Date, subject to Section 12(a).

11.                               Preemptive Rights.

(a)                                  So long as ▇▇▇▇▇▇▇ and its controlled Affiliates beneficially own in excess of 20% of the shares of New Common Stock then outstanding, and subject to the terms and conditions of Section 11(b), the Company shall not issue additional Equity Securities (an “Issuance”) unless, prior to such Issuance, the Company notifies ▇▇▇▇▇▇▇ in writing of the proposed Issuance and grants to ▇▇▇▇▇▇▇, or at ▇▇▇▇▇▇▇’▇ election, one or more of its Affiliates, the right (the “Right”) to subscribe for and purchase in whole or in part, at

11

the same price and upon the same terms and conditions as set forth in the notice of such Issuance, a portion of such additional Equity Securities proposed to be issued in the Issuance such that immediately after giving effect to the Issuance and the exercise of the Right (including, for purposes of this calculation, the issuance of shares of New Common Stock upon conversion, exchange or exercise of any Equity Security issued in the Issuance and subject to the Right), the shares of New Common Stock that ▇▇▇▇▇▇▇ and its Affiliates beneficially own (rounded to the nearest whole share) shall represent the same percentage of the aggregate number of shares of New Common Stock outstanding as was beneficially owned by ▇▇▇▇▇▇▇ and its Affiliates immediately prior to the Issuance.  In the event Equity Securities are issued as part of a unit with other securities, the Right will apply to such unit and not separately to any component of such unit.

(b)                                 The Right may be exercised by ▇▇▇▇▇▇▇, or, at ▇▇▇▇▇▇▇’▇ election, one or more of its Affiliates, as the case may be, provided that the Person exercising the Right must (i) be an Accredited Investor and (ii) deliver written notice to the Company of such exercise of the Right which is received by the Company within twenty (20) business days after the date on which ▇▇▇▇▇▇▇ receives notice from the Company of the proposed Issuance.  The closing of the purchase and sale pursuant to the exercise of the Right shall occur on the date scheduled by the Company for the Issuance, which may not be earlier than ten (10) business days and no later than sixty (60) business days after the Company receives notice of the exercise of the Right.

(c)                                  Nothing in this Section 11 shall be deemed to prevent any Person from purchasing for cash or the Company from issuing any additional Equity Securities without first complying with the provisions of this Section 11; provided that, (i) the Board has determined in good faith that (a) the Company needs a prompt cash investment, (b) no alternative financing on terms no less favorable to the Company in the aggregate than such purchase is available on a no less timely basis, and (c) the delay caused by compliance with the provisions of this Section 11 in connection with such investment would be reasonably likely to materially adversely affect the Company; (ii) the Company gives prompt notice to ▇▇▇▇▇▇▇ of such investment as soon as practicable, and in any event at least five (5) business days prior to the consummation of such investment; and (iii) the purchasing holder or the Company enables ▇▇▇▇▇▇▇ to exercise its rights to purchase its pro rata share as promptly as practicable following the initial prompt cash investment.  For purposes of this Section 11(c), the term “pro rata share” shall be based on ▇▇▇▇▇▇▇’▇ and its Affiliates’ beneficial ownership of outstanding Equity Securities relative to the total number of outstanding Equity Securities, in each case prior to the issuance by the Company of Equity Securities in the transaction contemplated by this Section 11(c).

12.                               Miscellaneous.

(a)                                  Survival.  The representations and warranties, covenants and agreements contained in this Agreement shall survive the execution of this Agreement and any investigation at any time by or on behalf of ▇▇▇▇▇▇▇ or the Company.  The provisions of Section 11 and, to the extent necessary for the interpretation or enforcement of Section 11, Sections 8, 9 and 12, of this Agreement shall survive the expiration of this Agreement.

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(b)                                 Entire Agreement.  This Agreement contains the entire agreement between the parties hereto concerning the subject matter hereof and supersedes all prior written and prior or contemporaneous oral agreements between the parties with respect to such matters.

(c)                                  Amendment.  The agreements set forth in this Agreement may be modified or waived only by a separate writing by the Company and ▇▇▇▇▇▇▇ expressly so modifying or waiving such agreements.

(d)                                 No Waiver.  No failure or delay by the Company in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder.

(e)                                  Assignment.  Any assignment or attempted assignment of this Agreement by ▇▇▇▇▇▇▇ without the prior written consent of the Company shall be void.

(f)                                    Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

(g)                                 Specific Performance.  The parties hereto agree that money damages would not be a sufficient remedy for any breach of this Agreement and that each of the parties hereto shall be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach, and each party further agrees to waive any requirement for the security or posting of any bond in connection with such remedy.  Such remedy shall not be deemed to be the exclusive remedy for breach of this Agreement but shall be in addition to all other remedies available at law or equity.

(h)                                 THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND ENFORCED BY THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. THE PARTIES HERETO (I) IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE FOR ANY SUITS, ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATED TO THIS AGREEMENT AND IRREVOCABLY WAIVE ALL OBJECTIONS TO SUCH JURISDICTION, INCLUDING, WITHOUT LIMITATION, ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (II) AGREE THAT THIS AGREEMENT HAS BEEN ENTERED INTO IN EXPRESS RELIANCE UPON 6 DEL. C. SS. 2708, AND (III) IRREVOCABLY AND UNCONDITIONALLY CONSENT TO SERVICE OF PROCESS IN, SUBMIT TO THE EXCLUSIVE JURISDICTION OF, AND AGREE TO APPEAR IN, THE COURT OF CHANCERY IN THE STATE OF DELAWARE IN WILMINGTON, DELAWARE, WITH RESPECT

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TO ALL ACTIONS AND PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

*   *   *   *

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

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SCHEDULE A

16

EXHIBIT D

IDEARC INC.

AND

COMPUTERSHARE TRUST COMPANY, N.A., as Rights Agent

RIGHTS AGREEMENT

dated as of

                      , 2009

TABLE OF CONTENTS

Exhibit A

Form of Certificate of Designations of Series A Junior Participating Preferred Stock of Idearc Inc.

Exhibit B

Form of Right Certificate

Form of Assignment

Form of Election to Purchase

Exhibit C

Summary of Rights to Purchase Preferred Stock

RIGHTS AGREEMENT

This Rights Agreement, dated as of                        , 2009 (this “Agreement”), is between IDEARC INC., a Delaware corporation (the “Company”), and COMPUTERSHARE TRUST COMPANY, N.A., a national banking association (the “Rights Agent”).

W I T N E S S E T H:

WHEREAS, the Board of Directors of the Company (the “Board”) has authorized and declared a dividend distribution of one preferred share purchase right (a “Right”) for each outstanding share of Common Stock (as defined below) outstanding as of 5:00 p.m., Eastern time, on                        , 2009 (the “Record Date”) and has authorized the issuance of one Right (subject to adjustment) in respect of each share of Common Stock issued between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Expiration Date (as such terms are hereinafter defined) and under certain other circumstances, each Right representing the right to purchase one one-thousandth of one share of Series A Junior Participating Preferred Stock of the Company having the rights and preferences set forth in the form of Certificate of Designations of Series A Junior Participating Preferred Stock of Idearc Inc., attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth;

NOW, THEREFORE, 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 (other than a Company Entity or a Grandfathered Person) who or that shall be or become the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding.  Notwithstanding the foregoing:

(i)            no Person shall become an “Acquiring Person” as the result of an acquisition of Common Stock by a Company Entity that, by reducing the number of shares outstanding, increases the proportionate number of shares Beneficially Owned by a Person to 20% or more of the shares of Common Stock then outstanding; provided, however, that if such Person becomes the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding by reason of share acquisitions by Company Entities and shall, after such share acquisitions by Company Entities, become the Beneficial Owner of any additional shares of Common Stock (other than by reason of a stock dividend, stock split or other corporate action effected by the Company), then such Person shall be deemed to be an “Acquiring Person,” except as otherwise provided in Section 1(a)(ii), unless upon consummation of the acquisition of such additional shares of Common Stock such Person does not beneficially own 20% or more of the shares of Common Stock then outstanding;

(ii)           if (A) the Board determines in good faith that a Person who or that has satisfied the conditions for becoming an “Acquiring Person” pursuant to the foregoing provisions of this Section 1(a) did so inadvertently (including, without limitation, because (1) such Person was unaware that such Person had become the Beneficial Owner of 20% or more of the shares of

Common Stock then outstanding or (2) such Person was aware of the extent of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and without any intention of changing or influencing control of the Company, (B) such Person (and/or its Affiliates and Associates) divests a sufficient number of shares of Common Stock (including, in the case solely of Derivative Common Shares (as such term is hereinafter defined), by terminating one or more subject derivative transactions or disposing of a sufficient number of subject derivative securities) so that such Person would no longer satisfy the conditions for being an “Acquiring Person” pursuant to the foregoing provisions of this Section 1(a), and (C) such determination by the Board is made and such divestment by such Person (and/or its Affiliates and Associates) is completed prior to the time when the first Right is distributed by the Rights Agent pursuant to Section 3(a), then such Person shall not be an “Acquiring Person” and shall be deemed to have never been an “Acquiring Person” for all purposes of this Agreement (such that, for the avoidance of doubt, no Distribution Date shall occur, or be deemed to have occurred, as a result thereof and no adjustment pursuant to Section 11(a)(ii) or Section 13 shall be made in respect thereof); provided, however, that if such Person, after such determination and divestment, becomes the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding by reason of becoming the Beneficial Owner of any additional shares of Common Stock, then such Person shall be deemed to be an “Acquiring Person” unless a subsequent determination and divestment is made pursuant to this Section 1(a)(ii); and

(iii)          if a Person would be deemed to be an Acquiring Person upon the adoption of this Agreement because such Person is the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding on the date of this Agreement, such Person will not be deemed an Acquiring Person for any purposes of this Agreement unless and until such Person acquires Beneficial Ownership of one or more additional shares of Common Stock after the date of this Agreement (other than pursuant to a dividend or distribution paid in shares of Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), unless upon becoming the Beneficial Owner of such additional shares of Common Stock, such Person is not then the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding.

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

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

(d)           “Associate,” when used to indicate a relationship with any Person, shall mean each, any and all of the following:

(i)            any firm, corporation, limited liability company, partnership, joint venture, bank, trust or other entity of which such Person is an officer or partner;

(ii)           any firm, corporation, limited liability company, partnership, joint venture, bank, trust or other entity of which such Person is, directly or indirectly, the Beneficial Owner of 10% or more of any class of equity securities; provided, however, that any such firm, corporation, limited liability company, partnership, joint venture, bank, trust or other entity shall

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not be an “Associate” of a Person if, and only for so long as, such Person (A) satisfies the criteria set forth in both Rule 13d-1(b)(1)(i) and Rule 13d-1(b)(1)(ii) of the General Rules and Regulations under the Exchange Act, (B) has reported Beneficial Ownership of the equity securities of such firm, corporation, limited liability company, partnership, joint venture, bank, trust or other entity on Schedule 13G under the Exchange Act and is not required to report its ownership of such equity securities on Schedule 13D under the Exchange Act, (C) is the Beneficial Owner of less than 20% of the shares of Common Stock then outstanding (including any such shares that are beneficially owned by such Person’s Affiliates and Associates after giving effect to this proviso) and (D) has not reported and is not required to report its ownership of Common Stock on Schedule 13D under the Exchange Act;

(iii)          any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and

(iv)          any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person.

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

(i)            that such Person, or any of such Person’s Affiliates or Associates, beneficially owns, directly or indirectly, within the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement;

(ii)           that such Person, or any of such Person’s Affiliates or Associates, has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time or the satisfaction of other conditions) 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), written or otherwise, or upon the exercise of conversion rights, exchange rights, warrants, options or other rights (other than the Rights); provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” (1) securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange or (2) securities that such Person has a right to acquire on the exercise of Rights at any time prior to the time that such Person becomes an Acquiring Person; or (B) the right to vote pursuant to any agreement, arrangement or understanding, written or otherwise; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any security under this clause (B) if the agreement, arrangement or understanding to vote such security (x) 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 of the Exchange Act and (y) is not then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report);

(iii)          that are beneficially owned, directly or indirectly, by any other Person (or any of such other Person’s Affiliates or Associates) with which such Person (or any of such Person’s Affiliates or Associates) has (A) any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting (except pursuant to a

3

revocable proxy as described in the proviso to Section 1(e)(ii)(B)) or disposing of any securities of the Company or (B) any agreement, arrangement or understanding (whether or not in writing) to cooperate in obtaining, changing or influencing the control of the Company; provided, however, that (1) nothing in this Section 1(e) shall cause a Person engaged in business as an underwriter of securities to be the “Beneficial Owner” of, or to “beneficially own,” any securities acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty (40) days after the date of such acquisition, and then only if such securities continue to be owned by such Person at the expiration of such forty (40) day period, (2) no Person who is an officer, director or employee of a Company Entity shall be deemed, solely by reason of such Person’s status or authority as such, to be the “Beneficial Owner” of, or to “beneficially own,” any securities (including, without limitation, in a fiduciary capacity) beneficially owned by such Company Entity or by any other officer, director or employee of such Company Entity and (3) a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any securities held by such Person in trust accounts, managed accounts and the like, or otherwise held in a fiduciary capacity, that are beneficially owned by third Persons who are not Affiliates or Associates of such Person; or

(iv)          that are the subject of a derivative transaction entered into by such Person (or any of such Person’s Affiliates or Associates), or a derivative security acquired by such Person (or any of such Person’s Affiliates or Associates), that gives such Person (or any of such Person’s Affiliates or Associates) 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, or that provides such Person (or any of such Person’s Affiliates or Associates) an opportunity, directly or indirectly, to profit, or to share in any profit, derived from any change in the value of such securities, in any case without regard to whether (a) such derivative conveys any voting rights in such securities to such Person (or any of such Person’s Affiliates or Associates), (b) the derivative is required to be, or capable of being, settled through delivery of such securities or (c) such Person (or any of such Person’s Affiliates or Associates) may have entered into other transactions that hedge the economic effect of such derivative.  In determining the number of shares of Common Stock beneficially owned by virtue of the operation of this Section 1(e)(iv), the subject Person shall be deemed to beneficially own (without duplication) the notional or other number of shares of Common Stock specified in the documentation evidencing the derivative position as being subject to be acquired upon the exercise or settlement of the applicable right or as the basis upon which the value or settlement amount of such right, or the opportunity of the holder of such right to profit or share in any profit, is to be calculated in whole or in part, and in any case (or if no such number of shares of Common Stock is specified in such documentation or otherwise), as determined by the Board in good faith to be the number of shares of Common Stock to which the derivative position relates.  Such shares of Common Stock that are deemed so beneficially owned pursuant to the operation of this Section 1(e)(iv) shall be referred to herein as “Derivative Common Shares.”

Notwithstanding anything in this Section 1(e) 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 that such Person would be deemed to own beneficially hereunder.

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(f)            “Business Day” shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of Massachusetts 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., Eastern time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 p.m., Eastern time, on the next succeeding Business Day.

(h)           “Common Stock” shall mean the common stock, $0.01 par value (or as such par value may be changed from time to time), of the Company.

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

(j)            “Company” shall have the meaning set forth in the preamble hereto.

(k)           “Company Entity” shall mean (i) the Company, (ii) any subsidiary of the Company or (iii) any employee benefit plan of the Company or of any subsidiary of the Company, or any entity organized, appointed or established pursuant to the terms of any such plan.

(l)            “current market price per share” shall have the meaning set forth in Section 11(d).

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

(n)           “Definitive Acquisition Agreement” shall mean any agreement entered into by the Company that is conditioned on the approval by the holders of not less than a majority of the outstanding shares of Common Shock at a meeting of stockholders with respect to (i) a merger, consolidation, recapitalization, reorganization, share exchange, business combination or similar transaction involving the Company or (ii) the acquisition in any manner, directly or indirectly, of more than 50% of the consolidated total assets (including, without limitation, equity securities of its subsidiaries) of the Company.

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

(p)           “equivalent preferred stock” shall have the meaning set forth in Section 11(b).

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

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

(s)           “Expiration Date” shall mean the close of business on the earlier of (i)                        , 2012 and (ii)                        , 2010 if and only if Stockholder Approval has not been obtained on or prior to such date.

(t)            “Grandfathered Person” shall mean (i) ▇▇▇▇▇▇▇ & Co., Inc. (including any successor thereto, by operation of law or otherwise, but excluding any assignee, distributee or transferee thereof, in each case by operation of law or otherwise) (the “Institutional Investor”),

5

(ii) any controlled Affiliates of the Institutional Investor (including any successor to any such Affiliate or any assignee, distributee or transferee of any such Affiliate, in each case by operation of law or otherwise, for so long as such successor, assignee, distributee or transferee remains a controlled Affiliate of the Institutional Investor, but excluding any other successor to any such Affiliate or other assignee, distributee or transferee of any such Affiliate, in each case by operation of law or otherwise) (collectively, the “▇▇▇▇▇▇▇ Controlled Affiliates”) and (iii) the several investment funds and accounts managed by the Institutional Investor and/or any ▇▇▇▇▇▇▇ Controlled Affiliates (such funds and accounts, together with the Institutional Investor and any ▇▇▇▇▇▇▇ Controlled Affiliates, collectively, “▇▇▇▇▇▇▇”) for so long as ▇▇▇▇▇▇▇ is not the Beneficial Owner of more than the Permitted Percentage (as defined below) of the shares of Common Stock then outstanding; provided, however, that ▇▇▇▇▇▇▇ shall not become an “Acquiring Person” as the result of an acquisition of Common Stock by a Company Entity that, by reducing the number of shares outstanding, increases the proportionate number of shares Beneficially Owned by ▇▇▇▇▇▇▇ to more than the Permitted Percentage of the shares of Common Stock then outstanding; provided, further, that if ▇▇▇▇▇▇▇ becomes the Beneficial Owner of more than the Permitted Percentage of the shares of Common Stock then outstanding by reason of share acquisitions by Company Entities and shall, after such share acquisitions by Company Entities have been publicly disclosed or have been disclosed to (or otherwise actually known by) ▇▇▇▇▇▇▇, become the Beneficial Owner of any additional shares of Common Stock (other than by reason of a stock dividend, stock split or other corporate action effected by the Company), then ▇▇▇▇▇▇▇ shall be deemed to be an “Acquiring Person,” except as otherwise provided in Section 1(a)(ii) (substituting “more than the Permitted Percentage” for “20% or more” in each case in that subsection), unless upon consummation of the acquisition of such additional shares of Common Stock ▇▇▇▇▇▇▇ does not beneficially own more than the Permitted Percentage of the shares of Common Stock then outstanding.

For purposes of this Section 1(t), the “Permitted Percentage” shall mean the lower of (1) forty-five percent (45%) and (2) the percentage of the outstanding shares of Common Stock that are Beneficially Owned by ▇▇▇▇▇▇▇ at the close of business on the day that is 270 days immediately following the effective date of the consummation of the transactions contemplated by that certain Standby Purchase Agreement, dated as of                          , 2009, by and between ▇▇▇▇▇▇▇ and the Company.

(u)           “Independent Directors” shall mean members of the Board who are not officers, employees or Affiliates (or designees of Affiliates) of the Company.

(v)           “invalidation time” shall have the meaning set forth in Section 11(a)(ii).

(w)          “NASDAQ” shall mean the NASDAQ National Market System.

(x)            “Outside Meeting Date” shall have the meaning set forth in Section 23(b).

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

(z)            “Preferred Stock” shall mean the Series A Junior Participating Preferred Stock of the Company having the rights and preferences set forth in the form of Certificate of

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Designations of Series A Junior Participating Preferred Stock of Idearc Inc., attached hereto as Exhibit A and, to the extent that there are not a sufficient number of shares of Series A Junior Participating Preferred Stock of the Company authorized to permit the full exercise of the Rights, any other series of preferred stock of the Company designated for such purpose containing terms substantially similar to the terms of the Series A Junior Participating Preferred Stock of the Company.

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

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

(cc)         “Qualified Offer” shall mean an offer determined by a majority of the Independent Directors to have each of the following characteristics:

(i)            a fully financed, all-cash tender offer, or an exchange offer offering shares of common stock of the offeror, or a combination thereof, in each such case for all of the outstanding shares of Common Stock at the same per-share consideration;

(ii)           an offer that has commenced within the meaning of Rule 14d-2(a) under the Exchange Act;

(iii)          an offer whose per-share offer price exceeds the greatest of (A) the highest reported market price per share of the Common Stock during the 24 months immediately preceding the commencement of the offer (within the meaning of Rule 14d-2(a) under the Exchange Act), (B) the highest price per share of the Common Stock paid by the Person making the offer (or any of such Person’s Affiliates) during the 24 months immediately preceding the commencement of the offer (within the meaning of Rule 14d-2(a) under the Exchange Act) or prior to the expiration of the offer, (C) an amount that is 25% higher than the 12-month moving average per share price of the Common Stock (determined as of the Trading Day immediately preceding the date of commencement of the offer (within the meaning of Rule 14d-2(a) under the Exchange Act)), (D) an amount that is 25% higher than the closing price (as “closing price” is determined pursuant to Section 11(d)(i)) per share of the Common Stock on the Trading Day immediately preceding the commencement of the offer (within the meaning of Rule 14d-2(a) under the Exchange Act) and (E) if, at the time that the offer is commenced (within the meaning of Rule 14d-2(a) under the Exchange Act), any other offer that is a Qualified Offer has been commenced and remains open, the price per share of the Common Stock offered in such earlier Qualified Offer; provided, however, that, to the extent that an offer that includes common stock of the offeror, such per-share offer price of the offer will be determined by valuing such common stock of the offeror at the lowest reported market price for such common stock of the offeror during the five (5) trading days immediately preceding and the five (5) trading days immediately following the commencement of the offer (within the meaning of Rule 14d-2(a) under the Exchange Act);

(iv)          an offer that, within twenty (20) Business Days after the commencement date of the offer (or within ten (10) Business Days after any increase in the offer consideration), does not result in a nationally recognized investment banking firm retained by the Board

7

rendering an opinion to the Board that the consideration being offered to the stockholders of the Company is either unfair or inadequate;

(v)           if the offer includes shares of common stock of the offeror, an offer pursuant to which (A) the offeror shall permit representatives of the Company (including a nationally-recognized investment banking firm retained by the Board and legal counsel and an accounting firm designated by the Company) to have access to such offeror’s books, records, management, accountants, financial advisors, counsel and other appropriate outside advisors for the purposes of permitting such representatives to conduct a due diligence review of the offeror in order to permit the Board to evaluate the offer and make an informed decision and, if requested by the Board, to permit such investment banking firm (relying as appropriate on the advice of such legal counsel) to be able to render an opinion to the Board with respect to whether the consideration being offered to the stockholders of the Company is fair from a financial point of view and (B) within ten (10) Business Days after such representatives of the Company (including a nationally-recognized investment banking firm retained by the Board and legal counsel and an accounting firm designated by the Company) shall have notified the Company and the offeror that it had completed such due diligence review to its satisfaction (or, following completion of such due diligence review, within ten (10) Business Days after any increase in the consideration being offered), such investment banking firm does not render an opinion to the Board that the consideration being offered to the stockholders of the Company is either unfair or inadequate and such investment banking firm does not, after the expiration of such ten (10) Business Day period, render an opinion to the Board that the consideration being offered to the stockholders of the Company has become either unfair or inadequate based on a subsequent disclosure or discovery of a development or developments that have had or are reasonably likely to have a material adverse effect on the value of the common stock of the offeror;

(vi)          an offer that is subject to only the minimum tender condition described below in Section 1(cc)(ix) and other customary terms and conditions, which conditions shall not include any financing, funding or similar conditions or any requirements with respect to the offeror or its agents being permitted any due diligence with respect to the books, records, management, accountants or other outside advisors of the Company;

(vii)         an offer pursuant to which the Company has received an irrevocable, legally binding written commitment of the offeror that the offer will remain open for at least one hundred twenty (120) days and, if a Special Meeting is duly requested in accordance with Section 23(b), for at least ten (10) Business Days after the date of the Special Meeting or, if no Special Meeting is held within ninety (90) days following receipt of the Special Meeting Notice in accordance with Section 23(b), for at least ten (10) Business Days following such ninety (90) day period;

(viii)        an offer pursuant to which the Company has received an irrevocable, legally binding written commitment of the offeror that, in addition to the minimum time periods specified above in Section 1(cc)(vii), the offer, if it is otherwise to expire prior thereto, will be extended for at least twenty (20) Business Days after any increase in the consideration being offered or after any bona fide alternative offer is commenced within the meaning of Rule 14d-2(a) under the Exchange Act; provided, however, that such offer need not remain open, as a result of Section 1(cc)(vii) and this Section 1(cc)(viii), beyond (A) the time that any other offer

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satisfying the criteria for a Qualified Offer is then required to be kept open under such Section 1(cc)(vii) and this Section 1(cc)(viii) or (B) the expiration date, as such date may be extended by public announcement (with prompt written notice to the Rights Agent) in compliance with Rule 14e—1 under the Exchange Act, of any other tender offer for the Common Stock with respect to which the Board has agreed to redeem the Rights immediately prior to acceptance for payment of Common Stock thereunder (unless such other offer is terminated prior to its expiration without any Common Stock having been purchased thereunder) or (C) one (1) Business Day after the stockholder vote with respect to approval of any Definitive Acquisition Agreement has been officially determined and certified by the inspectors of elections;

(ix)           an offer that is conditioned on a minimum of at least two-thirds of the outstanding shares of the Common Stock not held by the Person making such offer (and such Person’s Affiliates and Associates) being tendered and not withdrawn as of the offer’s expiration date, which condition shall not be waivable;

(x)            an offer pursuant to which the Company has received an irrevocable, legally binding written commitment of the offeror to consummate, as promptly as practicable upon successful completion of the offer, a second step transaction whereby all shares of the Common Stock not tendered into the offer will be acquired at the same consideration per share actually paid pursuant to the offer, subject to stockholders’ statutory appraisal rights, if any;

(xi)           an offer pursuant to which the Company and its stockholders have received an irrevocable, legally binding written commitment of the offeror that no amendments will be made to the offer to reduce the consideration being offered or to otherwise change the terms of the offer in a way that is adverse to a tendering stockholder;

(xii)          an offer (other than an offer consisting solely of cash consideration) pursuant to which the Company has received the written representation and certification of the offeror and the written representations and certifications of the offeror’s Chief Executive Officer and Chief Financial Officer, acting in such capacities, that (A) all facts about the offeror that would be material to making an investor’s decision to accept the offer have been fully and accurately disclosed as of the date of the commencement of the offer within the meaning of Rule 14d-2(a) under the Exchange Act, (B) all such new facts will be fully and accurately disclosed on a prompt basis during the entire period during which the offer remains open, and (C) all required Exchange Act reports will be filed by the offeror in a timely manner during such period; and

(xiii)         if the offer includes non-cash consideration, (A) the non-cash portion of the consideration offered must consist solely of common stock of a Person that is a publicly-owned United States corporation, (B) such common stock must be freely tradable and listed or admitted to trading on either the New York Stock Exchange or NASDAQ, (C) no stockholder approval of the issuer of such common stock is required to issue such common stock, or, if such approval is required, such approval has already been obtained, (D) no Person (including such Person’s Affiliates and Associates) beneficially owns 20% or more of the voting stock of the issuer of such common stock at the time of commencement of the offer or at any time during the term of the offer, (E) no other class of voting stock or other voting securities of the issuer of such common stock is outstanding and (F) the issuer of such common stock meets the registrant eligibility requirements for use of Form S-3 for registering securities under the Securities Act,

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including the filing of all required Exchange Act reports in a timely manner during the twelve calendar months prior to the date of commencement of such offer.

For the purposes of Section 1(cc)(i), “fully financed” shall mean that the offeror has sufficient funds for the offer and related expenses which shall be evidenced by (1) firm, unqualified, legally binding written commitments from responsible financial institutions having the necessary financial capacity, accepted by the offeror, to provide funds for such offer subject only to customary terms and conditions (for the avoidance of doubt it being understood that a provision relating to the sharing with a financing source of any break-up or termination fee shall be considered customary), (2) cash or cash equivalents then available to the offeror, set apart and maintained solely for the purpose of funding the offer with an irrevocable, legally binding written commitment being provided by the offeror to the Board to maintain such availability until the offer is consummated or withdrawn or (3) a combination of the foregoing; which evidence has been provided to the Company prior to, or upon, commencement of the offer.  If an offer becomes a Qualified Offer in accordance with this Section 1(cc), but subsequently ceases to be a Qualified Offer as a result of the failure at a later date of such offer to continue to satisfy any of the requirements of this Section 1(cc), such offer shall cease to be a Qualified Offer and the provisions of Section 23(b) shall no longer be applicable to such offer, provided that the actual redemption of the Rights pursuant to Section 23(b) shall not have already occurred.

(dd)         “Record Date” shall have the meaning set forth in the recitals hereof.

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

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

(gg)         “Redemption Resolution” shall have the meaning set forth in Section 23(b).

(hh)         “Right” shall have the meaning set forth in the recitals hereof.

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

(jj)           “Rights Agent” shall have the meaning set forth in the preamble hereto.

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

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

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

(nn)         “Senior Voting Stock” shall have the meaning set forth in Section 13(b).

(oo)         “Shares Acquisition Date” shall mean the first date of public announcement (which for purposes of this definition shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become an “Acquiring Person” for purposes of this Agreement.

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(pp)         “Special Independent Committee” means a special committee of the Board comprised of each Independent Director who is not a director, officer, employee, Affiliate or designee of a Grandfathered Person.

(qq)         “Special Meeting” shall have the meaning set forth in Section 23(b).

(rr)           “Special Meeting Notice” shall have the meaning set forth in Section 23(b).

(ss)         “Special Meeting Period” shall have the meaning set forth in Section 23(b).

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

(uu)         “Stockholder Approval” shall mean the approval of this Agreement by the affirmative vote of a majority of all the votes cast at a meeting of stockholders of the Company, duly held in accordance with the Company’s Amended and Restated Certificate of Incorporation and Amended and Restated By-laws (as each may be amended from time to time) and applicable law, at which a quorum is present.

(vv)         “subsidiary” of a Person shall mean any corporation or other entity of which securities or other ownership interests having ordinary voting power sufficient to elect a majority of the board of directors or other persons performing similar functions are beneficially owned, directly or indirectly, by such Person or any other subsidiary of such Person.

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

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

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

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

Section 3.               Issue of Right Certificates.

(a)           Until the close of business on the earlier of (i) the tenth (10th) day after the Shares Acquisition Date or (ii) the tenth (10th) Business Day (or such later date as may be determined by action of the Board prior to the Shares Acquisition Date) after the date of the commencement of, or first public announcement of the intent to commence, by any Person (other than a Company Entity), a tender or exchange offer the consummation of which would result in any Person (other than a Company Entity) becoming an Acquiring Person (including any such date that is after the date of this Agreement and prior to the issuance of the Rights) (the earlier of the dates in subsections (i) and (ii) hereof being herein referred to as the “Distribution Date”), (A) the Rights will be evidenced (subject to the provisions of Section 3(b)) by the certificates for the Common Stock registered in the names of the holders thereof (which certificates shall be deemed also to

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be Right Certificates) and not by separate Right Certificates, and the record holders of Common Stock represented by such certificates shall be the record holders of the Rights represented thereby, and (B) the Rights will be transferable only in connection with the transfer of the Common Stock.  Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of Common Stock.  As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if so requested by written notice and provided with a stockholder list and all other relevant information that the Rights Agent may reasonably request, send), by first class, postage-prepaid mail, to each record holder of Common Stock as of the close of business on the Distribution Date (other than an Acquiring Person or any Affiliate or Associate of an Acquiring Person), at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a “Right Certificate”), evidencing one Right (subject to adjustment as provided herein) for each share of Common Stock so held.  As of and after the Distribution Date, the Rights will be evidenced solely by such Right Certificates.  The Company shall promptly notify the Rights Agent in writing upon the occurrence of the Distribution Date.  Until such notice is received by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the Distribution Date has not occurred.

(b)           On the Record Date or as soon as practicable thereafter, the Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in substantially the form attached hereto as Exhibit C (the “Summary of Rights”), by first class, postage-prepaid mail or other means used by the Company to deliver proxy statements to its stockholders, to each record holder of Common Stock as of the close of business on the Record Date at the address of such holder shown on the records of the Company.  With respect to shares of Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with a copy of the Summary of Rights.  Until the Distribution Date (or if earlier, the Redemption Date or the Expiration Date), the surrender for transfer of any certificate for Common Stock outstanding on the Record Date, with or without a copy of the Summary of Rights, shall also constitute the transfer of the Rights associated with the Common Stock represented thereby.

(c)           Rights shall be issued in respect of all shares of Common Stock issued or disposed of (including, without limitation, upon disposition of Common Stock out of treasury stock or issuance or reissuance of Common Stock out of authorized but unissued shares) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date and the Expiration Date, or in certain circumstances provided in Section 22, after the Distribution Date.  Certificates issued for Common Stock (including, without limitation, upon transfer of outstanding Common Stock, disposition of Common Stock out of treasury stock or issuance or reissuance of Common Stock out of authorized but unissued shares) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date and the Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend:

This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between Idearc Inc. and Computershare Trust Company, N.A., as Rights Agent, dated as of                        , 2009, as the same may be supplemented or amended from time to time (the “Rights Agreement”),

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the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of Idearc Inc.  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.  Computershare Trust Company, N.A. will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor.  Under certain circumstances, as set forth in the Rights Agreement, Rights acquired or beneficially owned by any Person who becomes an Acquiring Person or any Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement) and their transferees will become null and void and will not longer be transferable.

With respect to such certificates containing the foregoing legend, until the earliest of the Distribution Date, the Redemption Date and the Expiration Date, the Rights associated with the Common Stock represented by such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any of such certificates, except as otherwise provided herein, shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates.

In the event that the Company purchases or acquires any shares of Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such shares of Common Stock shall be deemed cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with the shares of Common Stock that are no longer outstanding.

Notwithstanding this Section 3(c), the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights.

Section 4.               Form of Right Certificates.  The Right Certificates (and the forms of election to purchase shares 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 that do not affect the rights, duties or obligations of the Rights Agent as set forth in this Agreement) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or automated quotation system on which the Rights may from time to time be listed, or to conform to usage.  Subject to the provisions of Section 22, the Right Certificates, in each case, on their face shall entitle the holders thereof to purchase such number of shares of the Preferred Stock as shall be set forth therein at the price per share set forth therein (the “Purchase Price”), but the number of such shares (and the type of securities or other property issuance upon exercise of the Rights) and the Purchase Price shall be subject to adjustment as provided herein.

Section 5.               Countersignature and Registration.  The Right Certificates shall be executed on behalf of the Company in the manner provided in the Amended and Restated By-Laws of the Company (as it may be amended from time to time) for Common Stock certificates. 

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The Right Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be valid for any purpose unless so countersigned.

In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered with the same force and effect as though the person who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement any such person was not such an officer.

Following the Distribution Date, and receipt by the Rights Agent of (i) written notice of the Distribution Date pursuant to Section 3(a), and (ii) a stockholder list and all relevant information reasonably requested by the Rights Agent pursuant to Section 3(a), the Rights Agent will keep or cause to be kept, at its office designated for such purposes, books for registration and transfer of the Right Certificates issued hereunder.  Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates.

Section 6.               Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.  Subject to the provisions of Section 7(e) and Section 14, at any time after the close of business on the Distribution Date, and prior to the close of business on the earlier of the Redemption Date and the Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become null and void pursuant to Section 11(a)(ii) or that have been exchanged pursuant to Section 24) may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-thousandths of a share of Preferred Stock (or, following such time, other securities, cash or assets as the case may be) as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase.  Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the office of the Rights Agent designated for such purposes.  Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested.  As a condition to such transfer, division, combination or exchange, the Company may require payment by the surrendering holder of a sum sufficient to cover any tax or charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates.  The Rights Agent shall have no duty or obligation to take any action under any section of this Agreement that requires the payment by a Rights holder of applicable taxes and/or charges unless and until it is satisfied that all such taxes and/or charges have been paid.

Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or  mutilation of a Right Certificate, and, in the case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the

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Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

Notwithstanding any other provision of this Agreement to the contrary, the Company and the Rights Agent may amend this Agreement to provide for uncertificated Rights in addition to or in place of Rights evidenced by Right Certificates.

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

(a)           The registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein) in whole or in part at any time after the Distribution Date upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof properly completed and duly executed, to the Rights Agent at the office of the Rights Agent designated for such purposes together with payment of the Purchase Price for each one one-thousandth of one share of the Preferred Stock (or Common Stock, other securities, cash or assets, as the case may be) as to which the Rights are exercised, at or prior to the earliest of (i) the Expiration Date, (ii) the time at which the Rights are redeemed as provided in Section 23 (“Redemption Date”), or (iii) the time at which such Rights are exchanged as provided for in Section 24.

(b)           The Purchase Price for each one one-thousandth of one share of the Preferred Stock pursuant to the exercise of a Right shall initially be $        .00, shall be subject to adjustment from time to time as provided in Section 11 and Section 13, and shall be payable in lawful money of the United States of America in accordance with Section 7(c).

(c)           Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase properly completed and duly executed, accompanied by payment of the aggregate Purchase Price for shares to be purchased and an amount equal to any applicable tax or charge required to be paid by the holder of such Right Certificate in accordance with Section 6 in cash, or by certified check or cashier’s check payable to the order of the Company, the Rights Agent shall thereupon (i) (A) promptly requisition from any transfer agent of the Preferred Stock of the Company, or make available if the Rights Agent is the transfer agent of the Preferred Stock, certificates for the number of one one-thousandths of a share of the Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) promptly requisition from the depositary agent depositary receipts representing such number of one one-thousandths of a share of Preferred Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs the depositary agent to comply with such request, (ii) when appropriate, promptly requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14, (iii) after receipt of such certificates or depositary receipts, promptly cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder, and

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(iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate.

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

(e)           Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the purported transfer or exercise of Rights pursuant to Section 6 or this Section 7 unless the registered holder shall have properly completed and duly executed the form of assignment or election to purchase on the reverse side of the Right Certificate surrendered for such transfer or exercise and shall have provided such additional evidence of the identity of the Beneficial Owner (or such former or proposed Beneficial Owner) thereof or such Beneficial Owner’s Affiliates or Associates as the Company or the Rights Agent shall reasonably request.

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

Section 9.               Reservation and Availability of Shares of Preferred Stock.  The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Preferred Stock, or its authorized and issued Preferred Stock held in its treasury, the number of shares of the Preferred Stock that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with this Agreement.

So long as the Preferred Stock (and, following the time that a Person becomes an Acquiring Person, shares of Common Stock or other securities) issuable upon the exercise of Rights may be listed or admitted to trading on any national securities exchange or automated quotation system, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted for trading on such exchange or automated quotation system upon official notice of issuance upon such exercise.

The Company covenants and agrees that it will take all such action as may be necessary to ensure that all shares of the Preferred Stock (and, following the time that a Person becomes an Acquiring Person, shares of Common Stock or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such (subject to payment of the

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Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares.

The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges that may be payable in respect of the issuance or delivery of the Right Certificates or of any shares of the Preferred Stock (or shares of Common Stock or other securities) upon the exercise of Rights.  The Company shall not, however, be required (a) to pay any tax or charge that may be payable in respect of any transfer involved in the transfer or delivery of Right Certificates or the issuance or delivery of certificates for the Preferred Stock in a name other than that of the registered holder of the Right Certificate evidencing Rights surrendered for exercise or (b) to issue or deliver any certificates for shares of the Preferred Stock 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 Right Certificate at the time of surrender) or until it has been established to the Company’s satisfaction that no such tax or charge is due.

The Company shall, if legally required, (i) prepare and file, as soon as reasonably possible following the Distribution Date, a registration statement under the Securities Act with respect to the securities purchasable upon exercise of or exchangeable for the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as reasonably possible after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of (x) the date as of which the Rights are no longer exercisable for such securities and (y) the Expiration Date.  The Company also shall take all such action as may be required or as is appropriate under the securities or blue sky laws of such jurisdictions as may be necessary or appropriate with respect to the securities purchasable upon the exercise of or exchangeable for the Rights.  The Company may temporarily suspend, for a period not to exceed one hundred twenty (120) days following the Distribution Date, the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective.  Upon any such suspension of exercisability of Rights referred to in this paragraph, 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 and give the Rights Agent a copy of such announcement.  Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite qualification or exemption in such jurisdiction shall have been obtained and until a registration statement under the Securities Act (if required) shall have been declared effective.

Section 10.             Preferred Stock Record Date.  Each Person in whose name any certificate for shares of the Preferred Stock is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Stock represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights, together with the form of election to purchase properly completed and duly executed, was duly surrendered and payment of the Purchase Price (and any applicable taxes or charges) was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred Stock transfer books of the Company are closed, such Person shall be deemed to have

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become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock transfer books of the Company are open.  Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a stockholder of the Company with respect to shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

Section 11.             Adjustment of Purchase Price, Number of Shares or Number of Rights.  The Purchase Price, the number and kind or class of shares of stock of the Company purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

(a)           (i)            In the event the Company shall at any time after the Record Date (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of Preferred Stock issuable upon exercise of one Right.  If an event occurs that would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), 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).

(ii)           Subject to Section 24, in the event any Person becomes an Acquiring Person, each holder of a Right shall thereafter have a right to receive, upon exercise thereof at a price equal to the Purchase Price in effect immediately prior to such Person becoming an Acquiring Person multiplied by the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of Common Stock as shall equal the result obtained by (A) multiplying such Purchase Price by the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable and dividing that product by (B) 50% of the current market price per share of the Common Stock on the date of the occurrence of such event; provided, however, that if the transaction that would otherwise give rise to the adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii); provided further, however, that the Purchase Price (as so adjusted) and the number of shares of Common Stock so receivable upon exercise of a Right (or, at the option of the Company, such number of one one-

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thousandths of a share of Preferred Stock) shall thereafter be subject to further adjustment as appropriate in accordance with Section 11(f).  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.  Notwithstanding anything in this Agreement to the contrary, however, from and after the time (the “invalidation time”) when any Person first becomes an Acquiring Person, any Rights that are or were acquired or beneficially owned by any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), including, without limitation, any such Rights when held by (1) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the invalidation time, (2) a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or concurrently with the invalidation time pursuant to either (x) a transfer from the Acquiring Person to holders of its equity securities or to any Person with whom it has any continuing agreement, arrangement or understanding, written or otherwise, regarding the transferred Rights or (y) a transfer that the Board determines is part of a plan, arrangement or understanding, written or otherwise, that has the purpose or effect of avoiding the provisions of this Section 11(a)(ii), or (3) a subsequent transferee of any Person described in the foregoing clauses (1) or (2), shall be null and void without any further action and any holder of such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement.  The Company shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of Rights or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder.  From and after the invalidation time, no Right Certificate shall be issued pursuant to Section 3, Section 6 or Section 7(d) that represents Rights beneficially owned by an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate whose Rights would be null and void pursuant to the provisions of this paragraph shall be cancelled.

(iii)          The Company may, at its option, substitute for a share of Common Stock issuable upon the exercise of Rights in accordance with Section 11(a)(ii) a number of shares of Preferred Stock or fraction thereof such that the current market price per share of one share of Preferred Stock multiplied by such number or fraction is equal to the current market price per share of one share of Common Stock.  In the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), the Board shall, with respect to such deficiency, to the extent permitted by applicable law and any material agreements then in effect to which the Company is a party, (A) determine the excess (such excess, the “Spread”) of (1) the value of the shares of Common Stock issuable upon the exercise of a Right in accordance with Section 11(a)(ii) (the “Current Value”) over (2) the Purchase Price in effect immediately prior to such Person becoming an Acquiring Person multiplied by the number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to such Person becoming an Acquiring Person and (B) with respect to each Right (other than Rights that have become null and void pursuant to Section 11(a)(ii)), make adequate provision to substitute for

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the shares of Common Stock issuable in accordance with Section 11(a)(ii) upon exercise of the Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in such Purchase Price, (3) shares of Preferred Stock or other equity securities of the Company (including, without limitation, shares or fractions of shares of preferred stock that, by virtue of having dividend, voting and liquidation rights substantially comparable to those of the shares of Common Stock, are deemed in good faith by the Board to have substantially the same value as the shares of Common Stock (such shares of Preferred Stock and shares or fractions of shares of preferred stock are hereinafter referred to as “Common Stock Equivalents”)), (4) debt securities of the Company, (5) other assets or (6) any combination of the foregoing, having a value that, when added to the value of the shares of Common Stock issued upon exercise of such Right, shall have an aggregate value equal to the Current Value (less the amount of any reduction in such Purchase Price), where such aggregate value has been determined by the Board upon the advice of a nationally recognized investment banking firm selected in good faith by the Board; provided, however, that if the Company shall not make adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the date on which any Person becomes an Acquiring Person (the date on which any Person becomes an Acquiring Person being the “Section 11(a)(ii) Trigger Date”), then the Company shall be obligated to deliver, to the extent permitted by applicable law and any material agreements then in effect to which the Company is a party, upon the surrender for exercise of a Right and without requiring payment of such Purchase Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread.  If, upon any Person becoming an Acquiring Person, the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, then, if the Board so elects, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the “Substitution Period”).  To the extent that the Company determines that some action need be taken pursuant to the second and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) and the last sentence of this Section 11(a)(iii), that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such second sentence and to determine the value thereof.  In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect.  For purposes of this Section 11(a)(iii), the value of the shares of Common Stock shall be the current market price per share on the Section 11(a)(ii) Trigger Date and the per share or fractional value of any Common Stock Equivalent shall be deemed to equal the current market price per share of the Common Stock.  The Board may, but shall not be required to, establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).

(b)           In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them (for a period expiring within forty-five (45) calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares

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having economically equivalent 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 share of Preferred Stock or equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the current market price per share of the 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 number of shares of Preferred Stock and equivalent preferred stock outstanding on such record date plus the number of shares of Preferred Stock that the aggregate offering price of the total number of shares 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 market price and the denominator of which shall be the number of shares of Preferred Stock and equivalent preferred stock outstanding on such record date plus the number of additional shares 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); 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 securities issuable upon exercise of one Right.  In case such subscription price may be paid in 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, whose determination shall be described in a written statement filed with the Rights Agent.  Shares 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 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 Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than (i) a regular periodic cash dividend, the record date for which occurs at a time when there is no Acquiring Person, or (ii) a regular periodic cash dividend, the record date for which occurs at a time when there is an Acquiring Person, at a rate not in excess of 125% of the rate of the last cash dividend theretofore paid or (iii) a dividend payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price per share of the Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a written statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one share of Preferred Stock and the denominator of which shall be such current market price per share of the Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of Preferred Stock issuable upon exercise of one Right.  Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such

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distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed.

(d)           (i)  For the purpose of any computation hereunder, the “current market price per share” of any security (a “Security”) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current market price per share of the Security is determined during the 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 shares of such Security, or (B) any subdivision, combination or reclassification of such Security, and prior to the expiration of thirty (30) Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current market price per share shall be appropriately adjusted to reflect the current market price per share equivalent of such security.  The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and ask prices, regular way, in either case (1) as reported by the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, or (2) if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported by the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading, or (3) if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low ask prices in the over-the-counter market, as reported by NASDAQ or such other system then in use, or (4) if on any such date the Security is not quoted by any such organization, the average of the closing bid and ask prices as furnished by a professional market maker making a market in the Security selected by the Board or (5) if on any such date, no such market maker is making a market in such Security, the fair market value of the Security on such date as determined in good faith by the Board.  The term “Trading Day” shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day.

(ii)  For the purpose of any computation hereunder, if the Preferred Stock is publicly traded, the “current market price per share” of Preferred Stock shall be determined in the same manner as set forth above for Common Stock in Section 11(d)(i).  If the Preferred Stock is not publicly traded or if the current market price per share of Preferred Stock cannot be determined in the manner provided above but the Common Stock is publicly traded, the “current market price per share” of Preferred Stock shall be conclusively deemed to be the current market price per share of Common Stock (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the Record Date), multiplied by one thousand.  If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, the “current market price per share” of Preferred Stock shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a written statement filed with the Rights Agent.

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(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 ten-thousandth of a share of Common Stock or other share (other than Preferred Stock) or ten-millionth of a share of Preferred Stock, 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 (A) three years from the date of the transaction that mandates such adjustment or (B) the Expiration Date.

(f)            If as a result of an adjustment made pursuant to Section 11(a), the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company or of any Principal Party other than shares of the Preferred Stock, thereafter the Purchase Price and 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 shares of the Preferred Stock contained in Section 11(a), Section 11(b), Section 11(c), Section 11(e), Section 11(h), Section 11(i) and Section 11(m), and the provisions of Section 7, Section 9, Section 10, Section 13 and Section 14 with respect to the shares of the Preferred Stock shall apply on like terms to any such other shares.

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

(h)           Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Section 11(b) and Section 11(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price per one one-thousandth of a share of Preferred Stock, that number of one one-thousandths of a share of Preferred Stock (calculated to the nearest ten-millionth) obtained by (i) multiplying (x) the number of one one-thousandths of a share of Preferred Stock purchasable upon exercise of 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 one-thousandths of a share of the Preferred Stock purchasable upon the exercise of a Right.  Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment.  Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest ten-millionth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after the adjustment of the Purchase Price.  The

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Company shall make a public announcement of its election to adjust the number of Rights (with prompt written notice thereof to the Rights Agent), indicating the record date for the adjustment to be made and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement.  If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment.  Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.

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

(k)           Before taking any action that would cause an adjustment reducing the Purchase Price below one one-thousandth of the then par value, if any, of the shares of the Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action that may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable shares of such Preferred Stock 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 (with prompt written notice of such election to the Rights Agent) to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date the shares of Preferred Stock, Common Stock and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the shares of the Preferred Stock, Common Stock 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 ▇▇▇▇ or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment.

(m)          Notwithstanding anything in this Section 11 to the contrary, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it, in its sole discretion, shall determine to be advisable in order that any consolidation or subdivision of the Preferred Stock, issuance wholly for cash of any shares of the Preferred Stock at less than the current market price, issuance wholly for cash of any shares of the Preferred Stock or securities that by their terms are

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convertible into or exchangeable for Preferred Stock, dividends on the Preferred Stock payable in Preferred Stock or issuance of rights, options or warrants referred to hereinabove in this Section 11, hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders.

(n)           In the event that at any time after the Record Date and prior to the Distribution Date, the Company shall (i) declare or pay any dividend on the Common Stock payable in Common Stock or (ii) effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of dividends in Common Stock) into a greater or lesser number of shares of Common Stock, then in any such case (A) the number of one one-thousandths of a share of Preferred Stock purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of one one-thousandths of a share of Preferred Stock so purchasable immediately prior to such event by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately before such event and the denominator of which is the number of shares of Common Stock outstanding immediately after such event, and (B) each share of Common Stock outstanding immediately after such event shall have issued with respect to it that number of Rights that each share of Common Stock 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.  If an event occurs that would require an adjustment under Section 11(a)(ii) and this Section 11(n), the adjustments provided for in this Section 11(n) shall be in addition and prior to any adjustment required pursuant to Section 11(a)(ii).

(o)           The Company agrees that, after the Shares Acquisition Date, it will not, except as permitted by Section 23, Section 24 or Section 27, take (or permit any subsidiary to take) any action if, at the time such action is taken, it is reasonably foreseeable that such action will diminish substantially or eliminate the benefits intended to be afforded by the Rights.

Section 12.             Certificate of Adjusted Purchase Price or Number of Shares.  Whenever an adjustment is made as provided in Section 11 and Section 13, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief written statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent and with each transfer agent for the Common Stock and the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 26.  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 such adjustment or event unless and until it shall have received such certificate.

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

(a)           In the event that, following the time at which any Person becomes an Acquiring Person, (i) the Company shall consolidate with, or merge with and into, any other Person (other than one or more of its wholly-owned subsidiaries), (ii) any Person (other than one or more of its wholly-owned subsidiaries) shall consolidate with or merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection

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with such merger, all or part of the Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property, or (iii) the Company shall sell or otherwise transfer (or one or more of its subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its subsidiaries (taken as a whole) to any other Person (other than the Company or one or more of its wholly-owned subsidiaries), then, and in each such case, proper provision shall be made so that (A) each holder of a Right (other than Rights that have been null and void pursuant to Section 11(a)(ii)) shall thereafter have the right to receive, upon the exercise thereof at the Purchase Price in effect immediately prior to such Person becoming an Acquiring Person multiplied by the number of one one-thousandths of a share of Preferred Stock for which a Right would then be exercisable (whether or not such Right was then exercisable) (each as adjusted thereafter pursuant to Section 11(a)(i), Section 11(b), Section 11(c), Section 11(f), Section 11(h), Section 11(i) and Section 11(m)), in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of validly issued, fully paid, non-assessable and freely tradable Senior Voting Stock (as hereinafter defined) of the Principal Party (as hereinafter defined) (including the Company as successor thereto or as the surviving corporation), not subject to any liens, encumbrances, rights of call or first refusal or other adverse claims, as shall be equal to the result obtained by (1) multiplying such Purchase Price by the then number of one one-thousandths of share of Preferred Stock for which a Right would then be exercisable (whether or not such Right was then exercisable) (each as adjusted thereafter pursuant to Section 11(a)(i), Section 11(b), Section 11(c), Section 11(f), Section 11(h), Section 11(i) and Section 11(m)) and dividing that product by (2) 50% of the current market price per share of the Senior Voting Stock of such Principal Party (determined in the manner described in Section 11(d)) on the date of consummation of such consolidation, merger, sale or transfer; provided that the Purchase Price and the number of shares of Senior Voting Stock of such Principal Party issuable upon exercise of each Right shall be further adjusted as provided in Section 11(f) to reflect any events occurring in respect of such Principal Party after the date of such consolidation, merger, sale or transfer; (B) the Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (C) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 shall apply to such Principal Party following the occurrence of such consolidation, merger, sale or transfer; and (D) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Senior Voting Stock in accordance with Section 9, with each reference to Preferred Stock in Section 9 being deemed to be a reference to the shares of its Senior Voting Stock) 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 shares of its Senior Voting Stock thereafter deliverable upon the exercise of the Rights; provided that, upon the subsequent occurrence of any consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect of such Principal Party, each holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided in this Section 13(a), such cash, shares, rights, warrants and other property that such holder would have been entitled to receive had such holder, at the time of such transaction, owned the Senior Voting Stock of the Principal Party receivable upon the exercise of a Right pursuant to this Section 13(a), and such Principal Party shall take such steps (including, but not limited to, reservation of

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shares of stock) as may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other property.

(b)           “Principal Party” shall mean (i) in the case of any transaction described in Section 13(a)(i) or Section 13(a)(ii), (A) the Person that is the issuer of any securities into which shares of Common Stock are converted in such merger or consolidation (or, if there is more than one such issuer, the issuer of such securities that has the greatest aggregate market value of securities outstanding), or (B) if no securities are so issued, (1) the Person that is the other party to the merger if such Person survives said merger (or, if there is more than one such Person, such Person who has the greatest aggregate market value of securities outstanding) or (2) if the Person that is the other party to the merger does not survive the merger, the Person that does survive the merger (including the Company if it survives) or (3) the Person resulting from the consolidation and (ii) in the case of any transaction described in Section 13(a)(iii), the Person that is the other party to such transaction or, if more than one, the Person that is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction; provided, however, that in any such case, if the Senior Voting Stock of such Person is not at such time and has not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, then (w) if such Person is a direct or indirect subsidiary of another Person the Senior Voting Stock of which is and has been so registered, the term “Principal Party” shall refer to such other Person; or (x) if such Person is a subsidiary, directly or indirectly, of more than one Person and the Senior Voting Stock of any two or more of such Persons is and has been so registered, the term “Principal Party” shall refer to whichever of such Persons is the issuer of the Senior Voting Stock having the greatest aggregate market value of shares outstanding; or (y) if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in clauses (w) and (x) above shall apply to each of the owners having an interest in such joint venture as if such joint venture were a subsidiary of both or all of such joint venturers and the Principal Party 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 joint venture bear to the total of such interests.  “Senior Voting Stock” shall mean the capital stock (or equity interest) of the Principal Party with the greatest voting power.

(c)           The Company shall not consummate any such consolidation, merger, sale or transfer unless prior thereto the Company and such Principal Party or Parties shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in Section 13(a) and Section 13(b) and further providing that, as soon as practicable after the date of any consolidation, merger or sale or transfer of assets mentioned in Section 13(a), the Principal Party or Parties will (i) prepare and file a registration statement under the Securities Act with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, will use its best efforts (A) to cause such registration statement to become effective as soon as practicable after such filing, (B) to cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of  the Securities Act) until the Expiration Date, and (C) to similarly comply with applicable state securities laws, and use its best efforts to list (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights on a national securities exchange; (ii) will deliver to holders of the Rights historical financial statements for the Principal Party or Parties and each of its Affiliates that comply in all respects with the requirements for registration on Form 10 (or any successor

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form) under the Exchange Act and (iii) obtain waivers of any rights of first refusal or preemptive rights in respect of the Common Stock of the Principal Party subject to purchase upon exercise of outstanding Rights.

(d)                                 If the Principal Party has a provision in any of its authorized securities or in its certificate of incorporation or by-laws or other instrument governing its affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders of Rights pursuant to this Section 13), in connection with, or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of Senior Voting Stock or Senior Voting Stock equivalents of such Principal Party at less than the then-current market price per share thereof or securities exercisable for, or convertible into, Senior Voting Stock or Senior Voting Stock equivalents of such Principal Party at less than such then-current market price or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the Senior Voting Stock of such Principal Party pursuant to the provisions of this Section 13, then, in such event, the Company hereby covenants and agrees with each holder of Rights that it shall not consummate any such transaction unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of such Principal Party shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection with, or as a consequence of, the consummation of the proposed transaction.

(e)                                  The Company covenants and agrees that it shall not, at any time after a Person first becomes an Acquiring Person, enter into any transaction of the kind referred to in this Section 13 if (x) at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements that, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights, (y) prior to, simultaneously with or immediately after such transaction, the stockholders of the Person who constitutes, or would constitute, the Principal Party for purposes of Section 13(b) shall have received a distribution of Rights previously owned by such Person or any of its Affiliates or Associates or (z) the form or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights.  The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers.

Section 14.                                      Fractional Rights and Fractional Shares.

(a)                                  The Company shall not be required to issue fractions of Rights or to distribute Right Certificates that evidence fractional Rights.  In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates, with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable.  The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and ask prices, regular way, in either case (i) as reported by the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, or (ii) if the Rights are not listed or

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admitted to trading on the New York Stock Exchange, as reported by the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading, or (iii) if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low ask prices in the over-the-counter market, as reported by NASDAQ or such other system then in use, or (iv) if on any such date the Rights are not quoted by any such organization, the average of the closing bid and ask prices as furnished by a professional market maker making a market in the Rights selected by the Board or (v) if on any such date, no such market maker is making a market in the Rights, the fair market value of the Rights on such date as determined in good faith by the Board.

(b)                                 The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions that are integral multiples of one one-thousandth of a share of Preferred Stock) upon exercise or exchange of the Rights or to distribute certificates that evidence fractional shares of Preferred Stock (other than fractions that are integral multiples of one one-thousandth of a share of Preferred Stock).  Fractions of shares of Preferred Stock in integral multiples of one one-thousandth of a share of Preferred Stock may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it, provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of shares of Preferred Stock.  In lieu of fractional shares that are not integral multiples of one one-thousandth of a share of Preferred Stock, the Company shall pay to the registered holders of Right Certificates with regard to which such fractional shares would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole share of Preferred Stock.  For purposes of this Section 14(b), the current market value of a whole share of Preferred Stock shall be the closing price of a share of Preferred Stock (as determined pursuant to the second sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date of such exercise or exchange).

(c)                                  The Company shall not be required to issue fractions of shares of Common Stock upon exercise or exchange of the Rights or to distribute certificates that evidence fractional shares of Common Stock.  In lieu of such fractional shares, the Company shall pay to the registered holders of Right Certificates with regard to which such fractional shares would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole share of Common Stock.  For purposes of this Section 14(c), the current market value of a whole share of Common Stock shall be the closing price of a share of Common Stock (as determined pursuant to the second sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date of such exercise or exchange).

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

(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

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and/or formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments.

Section 15.                                      Rights of Action.  All rights of action in respect of this Agreement are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of any certificate evidencing shares of the Common Stock), without the consent of the Rights Agent or of the registered holder of any other Right Certificate (or, prior to the Distribution Date, of any certificate evidencing shares of the Common Stock), may, in such holder’s own behalf and for such holder’s own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce this Agreement, or otherwise act in respect of such holder’s right to exercise the Rights evidenced by such Right Certificate (or, prior to the Distribution Date, by such certificate evidencing the Common Stock) in the manner provided in such Right Certificate and in this Agreement.  Without limiting the foregoing or any remedies available to the registered holders of Rights, it is specifically acknowledged that the registered holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.

Notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any registered holder of a Right or other Person as a result of the Company’s or the Rights Agent’s inability to perform any of their respective obligations under this Agreement by reason of any preliminary or permanent injunction or other order, judgment, decree or ruling (whether interlocutory or final) issued by a court 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 16.                                      Agreement of Right Holders.  Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:

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

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

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

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Section 17.                                      Right Certificate Holder Not Deemed a Stockholder.  No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Stock or any other securities of the Company that may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 23, Section 24 or Section 25), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof.

Section 18.                                      Concerning the Rights Agent.  The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder.  The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense (including, without limitation, the reasonable fees and expenses of legal counsel), incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent for any action taken, suffered or omitted by the Rights Agent in connection with the acceptance, administration and performance of its duties under this Agreement, including the costs and expenses of defending against any claim of liability in the premises and the enforcement of this indemnification.  This indemnification shall survive the termination of this Agreement, the exercise of or expiration of the Rights and the resignation, replacement or removal of the Rights Agent.

The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Right Certificate or certificate for the Preferred Stock or 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.

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

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in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

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

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

(a)                                  The Rights Agent may consult with the legal counsel (who may be legal counsel for the Company), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to 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 be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the President, any Vice President, the Treasurer or the 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 for 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 for only its own gross negligence, bad faith or willful misconduct.  Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect, 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 aggregate amount of 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 Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

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

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

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

(g)                                 The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary or the Treasurer of the Company, 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 by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken, 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 (5) 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.

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

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(i)                                     The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, absent gross negligence, bad faith or willful misconduct in the selection and continued employment thereof.

(j)                                     If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates that the Rights are beneficially owned by an Acquiring Person or an Affiliate or Associate thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company.

(k)                                  The Rights Agent shall have no responsibility to the Company, any holders of Rights or any holders of shares of Preferred Stock or other securities for interest or earnings on any monies held by the Rights Agent pursuant to this Agreement, except as otherwise specifically agreed in a separate writing by the Company and the Rights Agent.

(l)                                     The Rights Agent shall not be required to take notice or be deemed to have notice of any event or condition hereunder, including, but not limited to, a Distribution Date, a Redemption Date, any adjustment of the Purchase Price, the existence of an Acquiring Person or any other event or condition that may require action by the Rights Agent, unless the Rights Agent shall be specifically notified in writing of such event or condition by the Company, and all notices or other instruments required by this Agreement to be delivered to the Rights Agent must, in order to be effective, be received by the Rights Agent as specified in Section 26, and in the absence of such notice so delivered, the Rights Agent may conclusively assume no such event or condition exists.

Section 21.                                      Change of Rights Agent.  The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon thirty (30) days’ notice in writing mailed to the Company and to each transfer agent of the Common Stock and the Preferred Stock by registered or certified mail.  In the event the transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its duties under this Agreement as of the effective date of such termination.  The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and the Preferred Stock by registered or certified mail.  The Company will provide notice of any resignation (including any automatic resignation) or removal of any Rights Agent to the holders of the Right Certificates by first class mail as soon as practicable after such event.  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 thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit such holder’s Right Certificate for inspection by the Company), then the registered holder of any Right

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Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent.  Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a Person (or an Affiliate of such a Person) organized and doing business under the laws of the United States or of the State of Texas or the State of Massachusetts (or of any other state of the United States so long as such Person is authorized to do business as a banking institution in the State of Texas or the State of Massachusetts), in good standing, that is authorized under such laws to exercise corporate trust powers or stock transfer powers and is subject to supervision or examination by federal or state authority and that has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million.  After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose.  Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock or Preferred Stock, and mail a notice thereof in writing to the registered holders of the Right Certificates.  Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

Section 22.                                      Issuance of New Right Certificates.  Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company, at its option, may issue new Right Certificates evidencing Rights in such form as may be approved by the Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement.  In addition, in connection with the issuance or sale of Common Stock following the Distribution Date and prior to the Expiration Date, the Company may, with respect to shares of Common Stock so issued or sold pursuant to (a) the exercise of stock options, (b) under any employee plan or arrangement, (c) the exercise, conversion or exchange of securities, notes or debentures issued by the Company or (d) a contractual obligation of the Company, in each case existing prior to the Distribution Date, issue Right Certificates representing the appropriate number of Rights in connection with such issuance or sale.

Section 23.                                      Redemption.

(a)                                  The Board (with the concurrent approval by a majority of the members of the Special Independent Committee) may, at its option, at any time prior to the Shares Acquisition Date, redeem all but not less than all of the then outstanding Rights at a redemption price of $0.001 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the Record Date (such redemption price being hereinafter referred to as the “Redemption Price”).  The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish.  The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the current market price of the Common Stock at the time of redemption as determined pursuant to Section 11(d)(i)) or any other form of consideration deemed appropriate by the Board, or any combination thereof.

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(b)                                 If the Company receives a Qualified Offer and the Board has not redeemed the outstanding Rights or exempted such Qualified Offer from the terms of this Agreement or called a special meeting of stockholders for the purpose of voting on whether or not to exempt such Qualified Offer from the terms of this Agreement, in each case by the end of ninety (90) days following the commencement of such Qualified Offer, and if the Company receives, not earlier than ninety (90) days nor later than one hundred twenty (120) days following the commencement of such Qualified Offer, a written notice complying with the terms of this Section 23(b) (the “Special Meeting Notice”), properly executed by the holders of record (or their duly authorized proxy) of 10% or more of the shares of Common Stock then outstanding (excluding shares of Common Stock beneficially owned by the Person making the Qualified Offer and such Person’s Affiliates and Associates), directing the Board to submit to a vote of stockholders at a special meeting of the stockholders of the Company (a “Special Meeting”) a resolution authorizing the redemption of all, but not less than all, of the then outstanding Rights at the Redemption Price (the “Redemption Resolution”), then the Board shall take such actions as are necessary or desirable to cause the Redemption Resolution to be submitted to a vote of stockholders within ninety (90) Business Days following receipt by the Company of the Special Meeting Notice (the “Special Meeting Period”), including by including a proposal relating to adoption of the Redemption Resolution in the proxy materials of the Company for the Special Meeting; provided, however, that if the Company, at any time during the Special Meeting Period and prior to a vote on the Redemption Resolution, enters into a Definitive Acquisition Agreement, the Special Meeting Period may be extended (and any Special Meeting called in connection therewith may be cancelled) if the Redemption Resolution will be separately submitted to a vote at the same meeting as the Definitive Acquisition Agreement.  For purposes of a Special Meeting Notice, the record date for determining eligible holders of record of the Common Stock shall be the ninetieth (90th) day following the commencement of a Qualified Offer.  Any Special Meeting Notice must be delivered to the Secretary of the Company at the principal executive offices of the Company and must set forth, as to the stockholders of record executing such Special Meeting Notice, (i) the name and address of such stockholders, as they appear on the Company’s books and records, (ii) the number of shares of Common Stock that are owned of record by each of such stockholders and (iii) in the case of Common Stock that is owned beneficially by another Person, an executed certification by the holder of record that such holder has executed such Special Meeting Notice only after obtaining instructions to do so from such beneficial owner.  Subject to the requirements of applicable law, the Board may take a position in favor of or opposed to the adoption of the Redemption Resolution, or no position with respect to the Redemption Resolution, as it determines to be appropriate in the exercise of its fiduciary duties.  In the event that (A) no Person has become an Acquiring Person prior to the effective date of redemption referred to below in this sentence, (B) the Qualified Offer continues to be a Qualified Offer prior to the last day of the Special Meeting Period (the “Outside Meeting Date”) and (C) either (1) the Special Meeting is not held on or prior to the Outside Meeting Date or (2) at the Special Meeting at which a quorum is present, the holders of a majority of the shares of Common Stock outstanding as of the record date for the Special Meeting selected by the Board (excluding shares of Common Stock beneficially owned by the Person making the Qualified Offer and such Person’s Affiliates and Associates) vote in favor of the Redemption Resolution, then all of the Rights shall be deemed redeemed at the Redemption Price by such failure to hold the Special Meeting or as a result of the adoption of the Redemption Resolution by the stockholders of the Company (or the Board shall take such other action as may be necessary to prevent the existence

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of the Rights from interfering with the consummation of the Qualified Offer), such redemption to be effective, as the case may be, (x) as of the close of business on the Outside Meeting Date if a Special Meeting is not held on or prior to such date or (y) if a Special Meeting is held on or prior to the Outside Meeting Date, as of the date on which the results of the vote adopting the Redemption Resolution at the Special Meeting are certified as official by the appointed inspectors of election for the Special Meeting.

(c)                                  Immediately upon the action of the Board ordering the redemption of the Rights pursuant to Section 23(a) or the effectiveness of a redemption of the Rights pursuant to Section 23(b), in either case, without any further action and without any notice, the right to exercise the Rights will terminate and each Right will thereafter represent only the right to receive the Redemption Price.  The Company shall promptly give public notice of any such redemption and, within ten (10) days after such action causing a redemption of the Rights pursuant to Section 23(a) or 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 Stock.  Any notice that 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.  Notwithstanding the foregoing, the failure to give, or any defect in, any notice required to be made or given pursuant to this Section 23(c) shall not affect the validity of the redemption of the Rights.

(d)                                 Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 or in Section 24, and other than in connection with the repurchase of Common Stock prior to the Distribution Date.

Section 24.                                      Exchange.

(a)                                  The Board 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)) for shares of Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the Record Date (such exchange ratio being hereinafter referred to as the “Exchange Ratio”).  Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after any Acquiring Person, together with all Affiliates and Associates of such Acquiring Person, becomes the Beneficial Owner of 50% or more of the voting power of the shares of Common Stock then outstanding.  From and after the occurrence of an event specified in Section 13(a), any Rights that theretofore have not been exchanged pursuant to this Section 24(a) shall thereafter be only exercisable in accordance with Section 13 and may not be exchanged pursuant to this Section 24(a).  The exchange of the Rights by the Board may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish.

(b)                                 Immediately upon the effectiveness of the action of the Board ordering the exchange of any Rights pursuant to Section 24(a) and without any further action and without any

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notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio.  The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange.  The Company promptly shall mail a notice of any such exchange by first class mail 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 that 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 Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights that will be exchanged.  Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights that have become null and void pursuant to the provisions of Section 11(a)(ii)) held by each holder of Rights.

(c)                                  The Company may, at its option, substitute for a share of Common Stock issuable upon the exchange of Rights in accordance with Section 24(a) a number of shares of Preferred Stock (or equivalent preferred stock) or fraction thereof such that the current market price per share of one share of Preferred Stock (or equivalent preferred stock) multiplied by such number or fraction is equal to the current market price per share of Common Stock as of the date of such exchange.  In the event that there shall be insufficient shares of Common Stock issued but not outstanding or authorized but unissued (and unreserved) to permit an exchange of Rights in accordance with Section 24(a), the Company shall substitute, to the extent of such insufficiency, for each share of Common Stock that would otherwise be issuable upon the exchange of Rights in accordance with Section 24(a) a number of shares of Preferred Stock (or equivalent preferred stock) or fraction thereof such that the current market price per share of one share of Preferred Stock (or equivalent preferred stock) multiplied by such number or fraction is equal to the current market price per share of Common Stock as of the date of such exchange.

Section 25.                                      Notice of Certain Events.  In case the Company shall propose at any time following the Distribution Date (a) to pay any dividend payable in stock of any class to the holders of its Preferred Stock or to make any other distribution to the holders of its Preferred Stock (other than a regular periodic cash dividend at a rate not in excess of 125% of the rate of the last cash dividend theretofore paid), (b) to offer to the holders of its Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of the Preferred Stock or shares of stock of any class or any other securities, rights or options, (c) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision or combination of outstanding Preferred Stock), (d) 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 more than 50% of the assets or earning power of the Company and its subsidiaries (taken as a whole) to, any other Person, (e) to effect the liquidation, dissolution or winding up of the Company or (f) to declare or pay any dividend on the shares of Common Stock payable in shares of Common Stock or to effect a subdivision, combination or consolidation of the shares of Common Stock (by reclassification or otherwise than by payment of dividends in shares of Common Stock), then, in each such case, the Company shall give to each holder of a Right Certificate, in accordance with Section 26, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification,

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consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Common Stock and/or the Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (a) or (b) above at least ten (10) days prior to the record date for determining holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least ten (10) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Stock and/or the Preferred Stock, whichever shall be the earlier.  In case the event set forth in Section 11(a)(ii) or Section 13 shall occur, then the Company shall as soon as practicable thereafter give to each holder of a Right, in accordance with Section 26, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under Section 11(a)(ii) or Section 13, as applicable.

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

Idearc Inc.

▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

▇/▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Attention:  Corporate Secretary

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

Computershare Trust Company, N.A.

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Attention:  Client Services

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

Section 27.                                      Supplements and Amendments.  Except as otherwise provided in this Section 27, for so long as the Rights are then redeemable, the Company may from time to time in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or amend any provision of this Agreement in any respect without the approval of any holders of the Rights.  At any time when the Rights are no longer redeemable, except as otherwise provided in this Section 27, the Company (by action of the Board) may, and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights in order to (a) cure any ambiguity, (b) correct or supplement

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any provision contained herein that may be defective or inconsistent with any other provisions herein, (c) shorten or lengthen any time period hereunder or (d) change or supplement the provisions hereunder in any manner that the Company may deem necessary or desirable; provided, however, that at any time when the Rights are no longer redeemable, this Agreement shall not be supplemented or amended in any manner that would adversely affect the interests of the holders of Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 11(a)(ii)) as such, cause this Agreement to become amendable other than in accordance with this Section 27 or cause the Rights to again become redeemable.  Upon the delivery of a certificate from an appropriate officer of the Company that 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 that such supplement or amendment does not adversely affect the rights, duties or obligations of the Rights Agent under this Agreement.

Notwithstanding anything contained in this Agreement to the contrary, the Rights Agent may, but shall not be obligated to, enter into any supplement or amendment that affects the Rights Agent’s own rights, duties, obligations or immunities under this Agreement.

Notwithstanding anything contained in this Agreement to the contrary, no amendment to Section 1(t), and no other supplement or amendment to this Agreement that specifically relates to one or more Grandfathered Persons, may be effected without the approval of a majority of the members of the Special Independent Committee.

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

Section 29.                                      Benefits of this Agreement.  Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock).  Notwithstanding anything to the contrary set forth in this Agreement, ▇▇▇▇▇▇▇ shall be an intended third party beneficiary with respect to Section 1(t).

Section 30.                                      Determinations and Actions by the Board.  The Board shall have the exclusive power and authority to administer this Agreement and to exercise the rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (a) interpret the provisions of this Agreement and (b) make all determinations deemed necessary or advisable for the administration of this Agreement (including, without limitation, a determination to redeem or not redeem the Rights, to exchange or not exchange the Rights, or to amend this Agreement).  All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) that are done or made by the Board in good faith, shall (x) be final, conclusive and binding on the Company, the Rights

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Agent, the holders of the Rights, as such, and all other Persons and (y) not subject the Board to any liability to the holders of the Rights or any other Person.

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, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable and the Board determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 shall be reinstated (with prompt notice to the Rights Agent) and shall not expire until the close of business on the tenth (10th) Business Day following the date of such determination by the Board.  Without limiting the foregoing, if any provision requiring a specific group of directors of the Company to act is held by any court of competent jurisdiction or other governmental or judicial authority to be invalid, void or unenforceable, such determination shall then be made by the full Board in accordance with applicable law and the Company’s Amended and Restated Certificate of Incorporation and Amended and Restated By-laws (as each may be amended from time to time).

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

Section 33.                                      Descriptive Headings; References.  Descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.  Except as otherwise specifically provided, any reference to any section or exhibit will be deemed to refer to such section of or exhibit to this Agreement.

Section 34.                                      Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

Section 35.                                      Force Majeure.  Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.

{Remainder of Page Left Intentionally Blank}

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

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Exhibit A

Form of Certificate of Designations of Series A Junior Participating Preferred Stock of Idearc Inc.

{See Attached}

Exhibit B

Form of Right Certificate

NOT EXERCISABLE AFTER                        , 2012 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.  THE RIGHTS ARE SUBJECT, AT THE OPTION OF THE COMPANY, TO REDEMPTION AT $0.001 PER RIGHT OR TO EXCHANGE, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS AND THEIR AFFILIATES AND ASSOCIATES (AS SUCH TERMS ARE DEFINED IN SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.

Right Certificate

IDEARC INC.

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                        , 2009 (the “Rights Agreement”) between IDEARC INC., a Delaware corporation (the “Company”), and Computershare Trust Company, N.A., a national banking association (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to the close of business (as such term is defined in the Rights Agreement) on                        , 2012 at the office of the Rights Agent, or its successors as Rights Agent, designated for such purposes, one one-thousandth of one fully paid and non-assessable share of the Series A Junior Participating Preferred Stock (the “Preferred Stock”) of the Company, at a purchase price of $        .00 per one one-thousandth of one share (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed.  The number of Rights evidenced by this Right Certificate (and the number of one one-thousandths of a share of Preferred Stock that may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of                        , 2009, based on the shares of the Preferred Stock of the Company as constituted at such date.

As provided in the Rights Agreement, the Purchase Price, the number and kind or class of shares of stock of the Company that may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.

1

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

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

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

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may, but are not required to, be (i) redeemed by the Company at its option at a redemption price of $0.001 per Right or (ii) exchanged by the Company in whole or in part for shares of Preferred Stock or Common Stock, par value $0.01 per share, of the Company.

No fractional shares of the Preferred Stock or Common Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions that are integral multiples of one one-thousandth of one share of Preferred Stock, 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 Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Stock or of any other securities of the Company that 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 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 Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Rights Agreement.

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

2

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

Dated as of                               , 20        .