CARDIOTECH INTERNATIONAL, INC. and AMERICAN STOCK TRANSFER & TRUST COMPANY as Rights Agent RIGHTS AGREEMENT Dated as of January 28, 2008
EXHIBIT
4.1
EXECUTION
COPY
CARDIOTECH
INTERNATIONAL, INC.
and
AMERICAN
STOCK TRANSFER & TRUST
COMPANY
as
Rights Agent
Dated
as of January 28, 2008
THIS
RIGHTS
AGREEMENT(“Agreement”),
dated as of January 28, 2008, between CARDIOTECH INTERNATIONAL, INC., a Delaware
corporation (the “Company”), and AMERICAN STOCK TRANSFER & TRUST COMPANY
(“Rights Agent”).
The
Company’s board of directors (the
“Board of Directors”) has authorized and declared a dividend of one preferred
share purchase right (a “Right”) for each Common Share (as such term is
hereinafter defined) issued and outstanding at the close of business on February
8, 2008 (the “Record Date”), each Right representing the right to purchase one
one-hundredth of a Preferred Share (as such term is hereinafter defined), upon
the terms and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to each Common
Share that shall become issued and outstanding between the Record Date and
the
earliest to occur of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are hereinafter defined); provided,
however, that
Rights may be issued with respect to Common Shares that shall become issued
and
outstanding after the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date in accordance with the provisions
of Section 22 hereof.
Accordingly,
in consideration of the
premises and the mutual agreements herein set forth, the parties hereby agree
as
follows:
SECTION
1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) “Acquiring
Person” shall mean any
Person (as such term is hereinafter defined) who or that, together with all
Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of
15% or more of the Common Shares then outstanding. Notwithstanding the
foregoing, (A) the term Acquiring Person shall not include (i) the Company,
(ii)
any Subsidiary (as such term is hereinafter defined) of the Company, (iii)
any
employee benefit or compensation plan of the Company or any Subsidiary of the
Company or (iv) any entity holding Common Shares for or pursuant to the terms
of
any such employee benefit or compensation plan of the Company or any Subsidiary
of the Company and (B) no Person shall become an “Acquiring Person” (i) as the
result of an acquisition of Common Shares by the Company which, by reducing
the
number of Common Shares issued and outstanding, increases the proportionate
number of Common Shares beneficially owned by such Person to 15% or more of
the
Common Shares then outstanding;provided,
however, that
if a Person shall become the Beneficial Owner of 15% or more of the Common
Shares then outstanding by reason of share purchases by the Company and shall,
following written notice from, or public disclosure by the Company of such
share
purchases by the Company, become the Beneficial Owner of any additional Common
Shares without the prior consent of the Company and shall then Beneficially
Own
more than 15% of the Common Shares then outstanding, then such Person shall
be
deemed to be an “Acquiring Person,” (ii) as the result of the acquisition of
Common Shares directly from the Company; provided, however,
that if a Person shall become
the Beneficial Owner of 15% or more of the Common Shares then outstanding by
reason of share purchases or issuances directly from the Company and shall,
after that date, become Beneficial Owner of any additional Common Shares without
the prior written consent of the Company and shall then Beneficially Own more
than 15% of the Common Shares then outstanding, then such Person shall be deemed
to be an “Acquiring Person” or (iii) if the Board of Directors determines in
good faith that a Person who would otherwise be an “Acquiring Person,” as
defined pursuant to the foregoing provisions of this Section 1(a), has
become such inadvertently, and such Person divests, as promptly as practicable
(as determined in good faith by the Board of Directors), following receipt
of
written notice from the Company of such event, of Beneficial Ownership of a
sufficient number of Common Shares so that such Person would no longer be an
Acquiring Person, as defined pursuant to the foregoing provisions of this
Section 1(a), then such Person shall not be deemed to be an “Acquiring Person”
for any purposes of this Agreement; provided,
however, that
if such Person shall again become the Beneficial Owner of 15% or more of the
Common Shares then outstanding, such Person shall be deemed an “Acquiring
Person,” subject to the exceptions set forth in this Section 1(a).
(b) “Affiliate”
and“Associate”shall
have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in
effect on the date of this Agreement; provided,
however, that
the limited partners of a limited partnership shall not be deemed to be
Associates of such limited partnership solely by virtue of their limited
partnership interests.
(c) 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 is deemed to beneficially own, within the
meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange
Act as in effect on the date of this Agreement;
(ii) 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) pursuant
to
any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options, or
otherwise; provided,
however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or exchange; or (B) the right
to
vote pursuant to any agreement, arrangement or understanding; provided,
however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own,
any
security if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) that
are beneficially owned,
directly or indirectly, by any other Person with which such Person or any of
such Person’s Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between underwriters
and
selling group members with respect to a bona fide public offering of securities)
for the purpose of acquiring, holding, voting (except to the extent contemplated
by the proviso to Section 1(c)(ii)(B) hereof) or disposing of any
securities of the Company.
Notwithstanding
anything in this
definition of Beneficial Ownership to the contrary, the phrase, “then
outstanding,” when used with reference to a Person’s Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued
and outstanding together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to own beneficially
hereunder.
(d) “Business
Day” shall mean any day
other than a Saturday, a Sunday, or a day on which banking institutions in
the
State of New York are authorized or obligated by law or executive order to
close.
(e) “Close
of Business” on any given
date shall mean 5:00 p.m., New York Time, on such date;provided,
however, that
if such date is not a Business Day it shall mean 5:00 p.m., New York Time,
on
the next succeeding Business Day.
(f) “Common
Shares” shall mean the
shares of common stock, par value $0.001 per share, of the Company; provided,
however, that,
“Common Shares,” when used in this Agreement
in connection with a specific
reference to any Person other than the Company, shall mean the capital stock
(or
equity interest) with the greatest voting power of such other Person or, if
such
other Person is a Subsidiary of another Person, the Person or Persons that
ultimately control such first-mentioned Person.
(g) “Distribution
Date” shall have the
meaning set forth in Section 3(a) hereof.
(h) “Final
Expiration Date” shall have
the meaning set forth in Section 7(a) hereof.
(i) “Interested
Stockholder” shall
mean any Acquiring Person or any Affiliate or Associate of an Acquiring Person
or any other Person in which any such Acquiring Person, Affiliate or Associate
has an interest, or any other Person acting directly or indirectly on behalf
of
or in concert with any such Acquiring Person, Affiliate or Associate.
(j) “Person”
shall
mean any
individual, firm, corporation or other entity, and shall include any successor
(by merger or otherwise) of such entity.
(k) “Preferred
Shares” shall mean
shares of Series A Junior Participating Preferred Stock, par value $0.001 per
share, of the Company having the designations and the powers, preferences and
rights, and the qualifications, limitations and restrictions set forth in the
Form of Certificate of Designation attached to this Agreement as Exhibit
A.
(l) “Purchase
Price” shall have the
meaning set forth in Section 7(b) hereof.
(m) “Redemption
Date” shall have the
meaning set forth in Section 7(a) hereof.
(n) “Shares
Acquisition Date” shall
mean the first date of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such; provided,
however that,
if such Person is determined not to have become an Acquiring Person pursuant
to
Section l(a)(B)(iii) hereof, then no Shares Acquisition Date shall be
deemed to have occurred.
(o) “Subsidiary”
of
any Person shall
mean any corporation or other entity of which a majority of the voting power
of
the voting equity securities or equity interest is owned, directly or
indirectly, by such Person.
(p) “Transaction”
shall
mean any
merger, consolidation or sale of assets described in Section 13(a) hereof
or any acquisition of Common Shares which would result in a Person becoming
an
Acquiring Person or a Principal Party (as such term is hereinafter
defined).
(q) “Transaction
Person” with respect
to a Transaction shall mean (i) any Person who (x) is or will become an
Acquiring Person or a Principal Party (as such term is hereinafter defined)
if
the Transaction were to be consummated and (y) directly or indirectly proposed
or nominated a director of the Company which director is in office at the time
of consideration of the Transaction, or (ii) an Affiliate or Associate of such
a
Person.
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.
SECTION
3. Issue Of Right
Certificates.
(a) Until
the earlier of the Close of
Business on (i) the tenth day after the Shares Acquisition Date or (ii) the
tenth Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement (determined in accordance with Rule 14d-2
under the Exchange Act) by any Person (other than the Company, any Subsidiary
of
the Company, any employee benefit plan of the Company or of any Subsidiary
of
the Company or any entity holding Common Shares for or pursuant to the terms
of
any such plan) of, or of the first public announcement of the intention of
any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer (which intention to commence remains in
effect for five Business Days after such announcement), the consummation of
which would result in any Person 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 such dates being herein referred to as the
“Distribution Date”), (x) the Rights will be evidenced by the certificates for
Common Shares registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the Rights (and the right to receive Right Certificates
therefor) will be transferable only in connection with the transfer of Common
Shares. As soon as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if requested, send)
by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address
of
such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a “Right Certificate”), evidencing
one Right for each Common Share so held, subject to the adjustment provisions
of
Section 11 of this Agreement. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) On
the Record Date, or as soon as
practicable thereafter, the Company will send (directly or through the Rights
Agent or its transfer agent) a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the “Summary of Rights”),
by first-class, postage-prepaid mail, to each record holder of Common Shares
as
of the Close of Business on the Record Date, at the address of such holder
shown
on the records of the Company. With respect to certificates for Common
Shares 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. Until the Distribution Date (or the earlier of the
Redemption Date and the Final Expiration Date), the surrender for transfer
of
any certificate for Common Shares outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(c) Certificates
for Common Shares
that become outstanding after the Record Date but prior to the earliest of
the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
“This
certificate also evidences and
entitles the holder hereof to certain rights as set forth in a Rights Agreement
between CardioTech International, Inc. (the “Company”) and American Stock
Transfer & Trust Company, as Rights Agent (the “Rights Agent”), dated as of
January 28, 2008, as amended from time to time (the “Rights Agreement”), the
terms of which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such Rights will
be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of a written request
therefor. As described in the Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person or an Affiliate or Associate thereof
(as
defined in the Rights Agreement) and certain related persons, whether currently
held by or on behalf of such Person or by any subsequent holder, shall become
null and void.”
With
respect to such certificates
containing the foregoing legend, until the Distribution Date (or, if earlier,
the earlier of the Redemption Date or the Final Expiration Date), the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any
such
certificate shall also constitute the transfer of the Rights associated with
the
Common Shares represented thereby. In the event that the Company purchases
or acquires any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares shall be deemed
canceled and retired so that the Company shall not be entitled to exercise
any
Rights associated with the Common Shares 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.
(a) The
Right Certificates (and the
form of election to purchase Preferred Shares, the form of assignment and the
form of certification 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 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 quotation system on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 7, 11 and 22 hereof, the Right Certificates shall entitle
the holders thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the Purchase Price (as defined in
Section 7(b)), but the number of such one one-hundredths of a Preferred
Share and the Purchase Price shall be subject to adjustment as provided
herein.
(b) Any
Right Certificate issued
pursuant to Section 3(a) or Section 22 hereof that represents Rights
that are null and void pursuant to the second paragraph of
Section 11(a)(ii) hereof and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
“The
Rights represented by this Right
Certificate are or were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement). Accordingly, this Right
Certificate and the Rights represented hereby are null and void.”
The
provisions of Section 11(a)(ii)
hereof shall be operative whether or not the foregoing legend is contained
on
any such Right Certificate.
SECTION
5. Countersignature And
Registration. The
Right Certificates shall be executed on behalf of the Company by its Chief
Executive Officer, its President, its Chief Financial Officer, or any of its
Vice Presidents, either manually or by facsimile signature, may have affixed
thereto the Company’s seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed
any of the Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the 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, the
Rights Agent will keep or cause to be kept, at its office designated for such
purpose, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face
by
each of the Right Certificates and the date of each of the Right
Certificates.
SECTION
6. Transfer, Split Up,
Combination And Exchange Of Right Certificates; Mutilated, Destroyed, Lost
Or
Stolen Right Certificates. Subject to the provisions
of
Section 11(a)(ii), Section 14 and Section 24 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates 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-hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer
of
any such surrendered Right Certificate until the registered holder shal1 have
completed and signed the certificate contained in the form of assignment on
the
reverse side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 11(a)(ii),
Section 14 and Section 24 hereof, countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
Upon
receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of loss, theft
or
destruction, of indemnity or security reasonably satisfactory to them, and,
at
the Company’s request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will issue,
execute and deliver a new Right Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Notwithstanding
any other provisions
hereof, 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 Rights
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 duly executed, to the Rights Agent at the office
of
the Rights Agent designated for such purpose, together with payment of the
Purchase Price for each one one- hundredth of a Preferred Share (or such other
number of shares or other securities) as to which the Rights are exercised,
at
or prior to the earliest of (i) the Close of Business on February 8, 2018 (the
“Final Expiration Date”), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the “Redemption Date”), or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.
(b) The
purchase price for each one
one-hundredth of a Preferred Share pursuant to the exercise of a Right shall
initially be $100.00 (the “Purchase Price”) and shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof and shall be payable
in lawful money of the United States of America in accordance with Section
7(c)
below.
(c) Upon
receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance with
Section 9 hereof by certified check, cashier’s check, bank draft or money
order payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent for the Preferred Shares
certificates for the number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company, in its sole discretion, shall have elected
to
deposit the Preferred Shares issuable upon exercise of the Rights hereunder
into
a depository, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are
to be
purchased (in which case certificates for the Preferred Shares represented
by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of
cash
to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt, deliver
such
cash to or upon the order of the registered holder of such Right
Certificate. In the event that the Company is obligated to issue
securities of the Company other than Preferred Shares (including Common Shares)
of the Company pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities are available for
distribution by the Rights Agent, if and when appropriate.
In
addition, in the case of an exercise
of the Rights by a holder pursuant to Section 11(a)(ii) hereof, the Rights
Agent shall return such Right Certificate to the registered holder thereof
after
imprinting, stamping or otherwise indicating thereon that the rights represented
by such Right Certificate no longer include the rights provided by
Section 11(a)(ii) hereof, and, if fewer than all the Rights represented by
such Right Certificate were so exercised, the Rights Agent shall indicate on
the
Right Certificate the number of Rights represented thereby that continue to
include the rights provided by Section 11(a)(ii) hereof.
(d) In
case the registered holder of
any Right Certificate shall exercise fewer than all the Rights evidenced thereby
(other than a partial exercise of rights pursuant to Section 11 (a)(ii) as
described in Section 7(c) hereof), 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 his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) The
Company covenants and agrees
that it will cause to be reserved and kept available out of its authorized
and
unissued Preferred Shares or any Preferred Shares held in its treasury, the
number of Preferred Shares that will be sufficient to permit the exercise in
full of all outstanding Rights in accordance with this Section 7.
(f) Notwithstanding
anything in this
Agreement to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered holder upon
the
occurrence of any purported exercise as set forth in this Section 7 unless
such registered holder shall have (i) completed and signed the certification
following the form of election to purchase set forth on the reverse side of
the
Rights Certificate surrendered for such exercise, (ii) tendered the Purchase
Price (and an amount equal to any applicable transfer tax required to be paid
by
the holder of such Right Certificate in accordance with Section 9) to the
Company in the manner set forth in Section 7(c), and (iii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
SECTION
8. Cancellation And Destruction
Of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled form, or, if
delivered or surrendered to the Rights Agent, shall be canceled 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 canceled Right Certificates to the Company approximately one and
one-half years after the cancellation date, or shall, at the written request
of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION
9. Availability Of Preferred
Shares. The Company
covenants and agrees that so long as the Preferred Shares (and, after the time
a
person becomes an Acquiring Person, Common Shares or any other securities)
issuable upon the exercise of the Rights may be listed on any national
securities exchange or 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 on such exchange or 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 Preferred
Shares (or Common Shares and other securities, as the case may be) delivered
upon exercise of Rights shall, at the time of delivery of the certificates
for
such Preferred Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares or other
securities.
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 Preferred Shares upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer
tax that may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or the issuance or delivery of certificates
or depositary receipts for the Preferred Shares in a name other than that of,
the registered holder of the Right Certificate evidencing Rights surrendered
for
exercise or to issue or to deliver any certificates or depositary receipts
for
Preferred Shares upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right Certificate
at
the time of surrender) or until it has been established to the Company’s
reasonable satisfaction that no such tax is due.
As
soon as practicable after the
Distribution Date, the Company shall use its best efforts to:
(i) prepare
and file a registration
statement under the Securities Act of 1933, as amended (the “Act”), with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form, will use reasonable efforts to cause such registration statement to become
effective as soon as practicable after such filing and will use reasonable
efforts to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the Final
Expiration Date; and
(ii) use
reasonable efforts to qualify
or register the Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as may be necessary or
appropriate.
SECTION
10. Preferred Shares Record Date. Each person in whose
name
any certificate for Preferred Shares or other securities is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of
record of the Preferred Shares or other securities represented thereby on,
and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered with the forms of election and
certification duly executed and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided,
however, that
if the date of such surrender and payment is a date upon which the Preferred
Shares or other securities transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares or other securities transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of
a Right Certificate, as such, shall not be entitled to any rights of a holder
of
Preferred Shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions
or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
SECTION
11.
Adjustment Of Purchase Price, Number Of Shares Or Number Of Rights. The Purchase Price, the
number of
Preferred Shares covered by each Right and the number of Rights outstanding
are
subject to adjustment from time to time as provided in this
Section 11.
(a)
(i) In
the event the Company shall at
any time after the date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller
number of Preferred Shares or (D) issue any shares of its capital stock in
a
reclassification of the Preferred Shares (including any such reclassification
in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision, combination
or
reclassification, and the number and kind of shares of capital stock issuable
on
such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate number
and
kind of shares of capital stock that, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Shares transfer
books of the Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided,
however, that
in no event shall the consideration to be paid upon the exercise of one Right
be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs that would require
an adjustment under both Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject
to Section 24 hereof
and the provisions of the next paragraph of this Section 11(a)(ii), in the
event any Person shall become an Acquiring Person, each holder of a Right shall,
for a period of 60 days after the later of such time any Person becomes an
Acquiring Person or the effective date of an appropriate registration statement
filed under the Act pursuant to Section 9 hereof (provided, however that,
if at any time prior to the expiration or termination of the Rights there shall
be a temporary restraining order, a preliminary injunction, an injunction,
or
temporary suspension by the Board of Directors, or similar obstacle to exercise
of the Rights (the “Injunction”) that prevents exercise of the Rights, a new
60-day period shall commence on the date the Injunction is removed), have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common Shares
as
shall equal the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share for which a
Right
is then exercisable and dividing that product by (B) 50% of the then current
per
share market price of the Common Shares (determined pursuant to
Section 11(d) hereof) on the date such Person became an Acquiring
Person; provided,
however, that if the
transaction that would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant to
this Section 11(a)(ii). 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, from and after the time any Person becomes an
Acquiring Person, any Rights beneficially owned by (i) such Acquiring Person
or
an Associate or Affiliate of such Acquiring Person, (ii) a transferee of such
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person became such, or (iii) a transferee of
such
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person’s becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not
for
consideration) from the Acquiring Person to holders of equity interests in
such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Directors has determined is part
of a
plan, arrangement or understanding that has as a primary purpose or effect
the
avoidance of this Section 11(a)(ii), shall become null and void without any
further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement
or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 11(a)(ii) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. No Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof or
to
any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence shall be
canceled.
(iii) In
lieu of issuing Common Shares
in accordance with Section 11(a)(ii) hereof, the Company may, if a majority
of the Board of Directors then in office determines that such action is
necessary or appropriate and not contrary to the interests of holders of Rights,
elect to (and, in the event that the Board of Directors has not exercised the
exchange right contained in Section 24(c) hereof and there are not
sufficient treasury shares and authorized but unissued Common Shares to permit
the exercise in full of the Rights in accordance with Section 11(a)(ii), the
Company shall) take all such action as may be necessary to authorize, issue
or
pay, upon the exercise of the Rights, cash (including by way of a reduction
of
the Purchase Price), property, Common Shares, other securities or any
combination thereof having an aggregate value equal to the value of the Common
Shares that otherwise would have been issuable pursuant to
Section 11(a)(ii) hereof, that aggregate value shall be determined by a
nationally recognized investment banking firm selected by a majority of the
Board of Directors then in office. For purposes of the preceding sentence,
the value of the Common Shares shall be determined pursuant to
Section 11(d) hereof. Any such election by the Board of Directors
must be made within 60 days following the date on which the event described
in
Section 11(a)(ii) hereof shall have occurred. Following the
occurrence of the event described in Section 11(a)(ii) hereof, a majority
of the Board of Directors then in office may suspend the exercisability of
the
Rights for a period of up to 60 days following the date on which the event
described in Section 11(a)(ii) hereof shall have occurred to the extent
that such directors have not determined whether to exercise their rights of
election under 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 Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Shares (or shares
having the same designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions as the Preferred Shares
(“equivalent preferred shares”)) or securities convertible into Preferred Shares
or equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than
the
then current per share market price of the Preferred Shares (as such term is
hereinafter defined) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price
in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares that the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and
the
denominator of which shall be the number of Preferred Shares outstanding on
such
record date plus the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into which
the
convertible securities so to be offered are initially convertible); provided,
however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in
a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of
Directors, whose determination shall be described in a statement filed with
the
Rights Agent. Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants
are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
that would then be in effect if such record date had not been fixed.
(c) In
case the Company shall fix a
record date for the making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation)
of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or subscription rights
or
warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares (as such term is hereinafter defined) on such
record date, less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable
to
one Preferred Share and the denominator of which shall be such current per
share
market price of the Preferred Shares; provided,
however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company to be
issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to
be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d)
(i) For
the purpose of any computation
hereunder, the “current per share market price” of any security (a “Security”
for the purpose of this Section 11(d)(i)) on any date shall be deemed to be
the average of the daily closing prices per share of such Security for the
30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior
to such date; provided,
however, that
in the event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in shares
of
such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security or securities
convertible into such shares, or (C) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading
Days
after the ex dividend date for such dividend or distribution, or the record
date
for such subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security.
The closing price for each day shall be the last sale price, regular way, or,
in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or
admitted to trading on the American Stock Exchange or, if the Security is not
listed or admitted to trading on the American Stock Exchange, as reported in
the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security
is
listed or admitted to trading or, if the Security is not listed or admitted
to
trading on any national securities exchange, the last quoted price or, if not
so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, or, if on any such date the Security is not quoted in any such market,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of Directors
or, if on any such date no professional market maker is making a market in
the
Security, the price as determined in good faith by the Board of Directors.
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, the “current per share market price” of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i)
hereof. If the Preferred Shares are not publicly traded, the “current per
share market price” of the Preferred Shares shall be conclusively deemed to be
the current per share market price of the Common Shares as determined pursuant
to Section 11 (d)(i) hereof (appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof)
multiplied by one hundred. If neither the Common Shares nor the Preferred
Shares are publicly held or so listed or traded, “current per share market
price” shall mean the fair value per share as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent.
(e) No
adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided,
however, that
any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-hundredth of a Preferred Share or
one
ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction that requires such adjustment
or
(ii) the date of the expiration of the right to exercise any Rights.
(f) If
as a result of an adjustment
made pursuant to Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than Preferred Shares, thereafter the number of such other shares
so receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the
provisions with respect to the Preferred Shares contained in Sections 11(a)
through 11(c) hereof, inclusive, and the provisions of Sections 7, 9, 10, 13
and
14 hereof with respect to the Preferred Shares shall apply on like terms to
any
such other shares.
(g) All
Rights originally issued by
the Company subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase Price, the number
of one one-hundredths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless
the Company shall have
exercised its election as provided in Section 11(i) hereof, upon each
adjustment of the Purchase Price as a result of the calculations made in
Section 11(b) and Section 11(c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the
right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a Preferred Share (calculated to the nearest one one-
millionth of a Preferred Share) obtained by (i) multiplying (x) the number
of
one one-hundredths of a Preferred Share covered by a Right immediately prior
to
this adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained
by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The
Company may elect on or after
the date of any adjustment of the Purchase Price to adjust the number of Rights,
in substitution for any adjustment in the number of one one- hundredths of
a
Preferred Share purchasable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a Preferred Share for which
a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one ten-thousandth) obtained
by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment
of
the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been issued,
shall be at least 10 days later than the date of the public announcement.
If Right Certificates have been issued, upon each adjustment of the number
of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to
be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective
of any adjustment or
change in the Purchase Price or the number of one one-hundredths of a Preferred
Share issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price
and
the number of one one-hundredths of a Preferred Share that was 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-hundredth
of
the then par value, if any, of the Preferred Shares 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 non-assessable Preferred Shares at such adjusted Purchase
Price.
(l) In
any case in which this
Section 11 shall require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the Company may elect
to
defer until the occurrence of such event the issuing to the holder of any Right
exercised after such record date of the Preferred Shares and other capital
stock
or securities of the Company, if any, issuable upon such exercise 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) The
Company covenants and agrees
that, after the Distribution Date, it will not, except as permitted by
Section 23 or Section 27 hereof, take (or permit any Subsidiary to
take) any action the purpose of which is to, or if at the time such action
is
taken it is reasonably foreseeable that the effect of such action is to,
materially diminish or eliminate the benefits intended to be afforded by the
Rights. Any such action taken by the Company during any period after any
Person becomes an Acquiring Person but prior to the Distribution Date shall
be
null and void unless such action could be taken under this Section 11(m)
from and after the Distribution Date.
(n) Anything
in this Section 11
to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any consolidation
or
subdivision of the Preferred Shares, issuance wholly for cash of any Preferred
Shares at less than the current market price, issuance wholly for cash of
Preferred Shares or securities that by their terms are convertible into or
exchangeable for Preferred Shares, dividends on Preferred Shares payable in
Preferred Shares or issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company to holders of
its Preferred Shares shall not be taxable to such stockholders.
(o) In
the event that at any time
after the date of this Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision, combination or consolidation of the Common
Shares (by reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such
case
(A) the number of one one-hundredths of a Preferred Share purchasable after
such
event upon proper exercise of each Right shall be determined by multiplying
the
number of one one-hundredths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator
of
which is the number of Common Shares outstanding immediately after such event,
and (B) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights that each Common Share
outstanding immediately prior to such event had issued with respect to it.
The adjustments provided for in this Section 11(o) shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
(p) The
exercise of Rights under
Section 11(a)(ii) hereof shall only result in the loss of rights under
Section 11(a)(ii) hereof to the extent so exercised and shall not otherwise
affect the rights represented by the Rights under this Agreement, including
the
rights represented by Section 13 hereof.
SECTION
12.
Certificate Of Adjusted Purchase Price Or Number Of Shares. Whenever an adjustment
is made as
provided in Sections 11 and 13 hereof, the Company shall promptly (a) prepare
a
certificate setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) file with the Rights Agent and with each
transfer agent for the Common Shares or the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
adjustment 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
Shares Acquisition Date or, if a Transaction is proposed, the Distribution
Date,
directly or indirectly (x) the Company shall consolidate with, or merge with
and
into, any Interested Stockholder, or if in such merger or consolidation all
holders of Common Stock are not treated alike, any other Person, (y) any
Interested Stockholder, or if in such merger or consolidation all holders of
Common Stock are not treated alike, any other Person shall consolidate with
the
Company, or merge with and into the Company, and the Company shall be the
continuing or surviving corporation of such merger (other than, in the case
of
either transaction described in (x) or (y), a merger or consolidation that
would
result in all of the voting power represented by the securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of the surviving
entity) all of the voting power represented by the securities of the Company
or
such surviving entity outstanding immediately after such merger or consolidation
and the holders of such securities not having changed as a result of such merger
or consolidation), or (z) the Company shall sell, mortgage or otherwise transfer
(or one or more of its subsidiaries shall sell, mortgage or otherwise transfer),
in one or more transactions, assets or earning power aggregating more than
50%
of the assets or earning power of the Company and its subsidiaries (taken as
a
whole) to any Interested Stockholder or Stockholders, or if in such transaction
all holders of Common Stock are not treated alike, any other Person, (other
than
the Company or any Subsidiary of the Company in one or more transactions each
of
which individually and the aggregate does not violate Section 13(d) hereof)
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right, subject to Section 11(a)(ii) hereof, shall have the
right to receive, upon the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable in accordance with the terms of
this
Agreement and in lieu of Preferred Shares, such number of freely tradable Common
Shares of the Principal Party (as such term is hereinafter defined), free and
clear of liens, rights of call or first refusal, encumbrances or other adverse
claims, as shall be equal to the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable (without taking into account any
adjustment previously made pursuant to Section 11(a)(ii) hereof) and
dividing that product by (B) 50% of the then current per share market price
of
the Common Shares of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party; and (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Shares in accordance
with Section 9 hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) “Principal
Party” shall
mean:
(i) in
the case of any transaction
described in clause (x) or (y) of Section 13(a) hereof, the Person that is
the issuer of any securities into which Common Shares are converted in such
merger or consolidation, and if no securities are so issued, the Person that
is
the other party to the merger or consolidation (or, if applicable, the Company,
if it is the surviving corporation); and
(ii) in
the case of any transaction
described in clause (z) of Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions; provided,
however,that in any case,
(1) if the Common Shares of such Person are not at such time and have not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary or
Affiliate of another Person the Common Shares of which are and have been so
registered, “Principal Party” shall refer to such other Person; (2) if such
Person is a Subsidiary, directly or indirectly, or Affiliate of more than one
Person, the Common Shares of two or more of which are and have been so
registered, “Principal Party” shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate market value; and
(3)
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 (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a “Subsidiary” of both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(c) The
Company shall not consummate
any such consolidation, merger, sale or transfer unless the Principal Party
shall have a sufficient number of authorized Common Shares that have not been
issued or reserved for issuance to permit the exercise in full of the Rights
in
accordance with this Section 13 and unless prior thereto the Company and
each Principal Party and each other Person who may become a Principal Party
as a
result of such consolidation, merger, sale or transfer shall have (i) executed
and delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in Sections 13(a) and (b) and (ii) prepared, filed and had
declared and remain effective a registration statement under the Act on the
appropriate form with respect to the Rights and the securities exercisable
upon
exercise of the Rights and further providing that, as soon as practicable after
the date of any consolidation, merger, sale or transfer of assets mentioned
in
Section 13(a), the Principal Party at its own expense will:
(i) cause
the registration statement
under the Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the Final
Expiration Date;
(ii) use
its best efforts to qualify or
register the Rights and the securities purchasable upon exercise of the Rights
under the blue sky laws of such jurisdictions as may be necessary or
appropriate;
(iii) list
the Rights and the securities
purchasable upon exercise of the Rights on each national securities exchange
on
which the Common Shares were listed prior to the consummation of such
consolidation, merger, sale or transfer of assets or, if the Common Shares
were
not listed on a national securities exchange prior to the consummation of such
consolidation, merger, sale or transfer of assets, on a national securities
exchange; and
(iv) deliver
to holders of the Rights
historical financial statements for the Principal Party and each of its
Affiliates that comply in all material respects with the requirements for
registration on Form 10 under the Exchange Act.
The
provisions of this Section 13
shall similarly apply to successive mergers or consolidations or sales or other
transfers.
(d) After
the Distribution Date, the
Company covenants and agrees that it shall not (i) consolidate with, (ii) merge
with or into, or (iii) sell or transfer to, in one or more transactions, assets
or earning power aggregating more than 50% of the assets or earning power of
the
Company and its subsidiaries taken as a whole, any other Person (other than
a
Subsidiary of the Company in a transaction that does not violate
Section 11(m) hereof), if (x) at the time of or after such consolidation,
merger or sale there are any charter or bylaw provisions or any rights, warrants
or other instruments or securities outstanding, agreements in effect or any
other action taken that would diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with
or
immediately after such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the “Principal Party” for purposes
of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
The Company shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this Section 13(d).
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 asked prices, regular way, in either case as reported in
the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the American Stock Exchange or, if the Rights
are not listed or admitted to trading on the American Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which
the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, or, if on any such date the Rights are not quoted
by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors shall be used.
(b) The
Company shall not be required
to issue fractions of Preferred Shares (other than fractions that are integral
multiples of one one-hundredth of a Preferred Share) upon exercise of the Rights
or to distribute certificates that evidence fractional Preferred Shares (other
than fractions that are integral multiples of one one-hundredth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts; provided,
however, that
holders of such depositary receipts shall have all of the designations and the
powers, preferences and rights, and the qualifications, limitations and
restrictions to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional
Preferred Shares that are not integral multiples of one one-hundredth of a
Preferred Share, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Preferred
Share. For the purposes of this Section 14(b), the current market
value of a Preferred Share shall be the current per share market price of the
Preferred Shares (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date
of such exercise (or, if not publicly traded, in accordance with Section 11
(d)(ii) hereof).
(c) Following
the occurrence of one of
the transactions or events specified in Section 11 hereof giving rise to
the right to receive Common Shares, capital stock equivalents (other than
Preferred Shares) or other securities upon the exercise of a Right, the Company
shall not be required to issue fractions of Common Shares or units of such
Common Shares, capital stock equivalents or other securities upon exercise
of
the Rights or to distribute certificates which evidence fractional Common
Shares, capital stock equivalents or other securities. In lieu of
fractional Common Shares, capital stock equivalents or other securities, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same
fraction of the current market value of one Common Share or unit of such Common
Shares, capital stock equivalents or other securities. For purposes of
this Section 14(c), the current market value shall be the current per share
market price (as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise and, if such capital
stock equivalent is not traded, each such capital stock equivalent shall have
the value of one one-hundredth of a Preferred Share.
(d) The
holder of a Right by the
acceptance of the Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right (except as provided
above).
SECTION
15.
Rights Of Action.
All rights of action
in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Sections 18 and 20 hereof, are vested
in
the respective registered holders of the Right Certificates (and, prior to
the
Distribution Date, the registered holders of the Common Shares) and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in his own behalf and for his own benefit, enforce, and
may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement. Holders of
Rights shall be entitled to recover the reasonable costs and expenses, including
attorneys fees, incurred by them in any action to enforce the provisions of
this
Agreement.
SECTION
16.
Agreement Of Right Holders. Every holder of a Right,
by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior
to the Distribution Date,
the Rights will be transferable only in connection with the transfer of the
Common Shares;
(b) after
the Distribution Date, the
Right Certificates are transferable (subject to the provisions of this
Agreement) only on the registry books of the Rights Agent if surrendered at
the
principal office of the Rights Agent, 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 Shares certificate) is registered
as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificates
or the associated Common Shares certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the
contrary.
SECTION
17.
Right Certificate Holder Not Deemed A Stockholder. No holder, as such, of
any Right
Certificate shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of the Preferred Shares or any other securities of the
Company 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 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions
hereof.
SECTION
18.
Concerning The Rights Agent. The Company agrees to
pay to the
Rights Agent 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, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises. The
indemnity provided herein shall survive the expiration of the Rights and the
termination of this Agreement.
The
Rights Agent shall be protected and
shall incur no liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the Preferred Shares
or
Common Shares or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified
or
acknowledged, by the proper person or persons, or otherwise upon the advice
of
counsel as set forth in Section 20 hereof. In no case will the Rights
Agent be liable for special, indirect, incidental or consequential or
consequential loss or damage at any kind whatsoever (including but not limited
to lost profits), even if the Rights Agent has been advised of such loss or
damage.
SECTION
19.
Merger Or Consolidation Or Change Of Name Of Rights Agent. Any corporation into
which the
Rights Agent or any successor Rights Agent may be merged or with which it may
be
consolidated, or any corporation resulting from any merger or consolidation
to
which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the shareholder services or corporate trust 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
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement
any
of the Right Certificates shall have been countersigned but not delivered,
any
such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in
the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
In
case at any time the name of the
Rights Agent shall be changed and at such time any of the Right Certificates
shall have been countersigned but not delivered, the Rights Agent may adopt
the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
SECTION
20.
Duties Of Rights Agent. The Rights Agent undertakes
the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The
Rights Agent may consult with
legal counsel of its choice (who may be legal counsel for the Company), and
the
opinion of such counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in good faith and
in
accordance with such opinion.
(b) Whenever
in the performance of its
duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed
to
be conclusively proved and established by a certificate signed by any one of
the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Financial Officer, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith
by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The
Rights Agent shall be liable
hereunder to the Company and any other Person only for its own gross negligence,
bad faith or willful misconduct.
(d) The
Rights Agent shall not be
liable for or by reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The
Rights Agent shall not be
under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the 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 the Rights (including the Rights becoming void pursuant to
Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Sections 3,
11,
13, 23 or 24 hereof, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise
of
Rights evidenced by Right Certificates after receipt of a certificate pursuant
to Section 12 hereof describing such change or adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant
to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be 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 any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the Rights Agent with
respect to its duties or obligations under this Agreement and the date on and/or
after which such action shall be taken or omitted and the Rights Agent shall
not
be liable for any action taken or omitted in accordance with a proposal included
in any such application on or after the date specified therein (which date
shall
not be less than three Business Days after the date indicated in such
application unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking or omitting any such action, the Rights
Agent has received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The
Rights Agent and any
stockholder, director, officer or employee of the Rights Agent may buy, sell
or
deal in any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act
as
fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(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, provided reasonable
care was exercised in the selection and continued employment thereof.
(j) No
provision of this Agreement
shall require the Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification against
such
risk or liability is not reasonably assured to it.
(k) 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 not been executed, the Rights Agent shall not take
any
further action with respect to such requested exercise of transfer without
first
consulting with the Company.
SECTION
21.
Change Of Rights Agent. The Rights Agent or any
successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days’ notice in writing mailed to the Company and to each transfer agent
for the Common Shares or Preferred Shares by registered or certified mail,
and
to the holders of the Right Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent for the Common Shares or Preferred Shares
by
registered or certified mail, and to the holders of the Right Certificates
by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor
to
the Rights Agent. If the Company shall fail to make such appointment
within a period of 30 days after giving notice of such removal or after it
has
been notified in writing of such resignation or incapacity by the resigning
or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court
of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be either (a) a corporation, business trust or limited liability company
organized and doing business under the laws of the United States or of any
other
state of the United States that is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and that has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million or (b) a direct or indirect wholly owned Subsidiary of such an entity
or
its wholly-owning parent. 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 for the Common Shares or Preferred Shares, and mail a notice thereof
in
writing to the registered holders of the Right Certificates. Failure to
give any notice provided for in this Section 21, however, or
any defect therein,
shall not affect the legality or validity of the resignation or removal of
the
Rights Agent or the appointment of the successor Rights Agent, as the case
may
be.
SECTION
22.
Issuance Of New Right Certificates. Notwithstanding any of
the
provisions of this Agreement or of the Rights to the contrary, the Company
may,
at its option, issue new Right Certificates evidencing Rights in such form
as
may be approved by its Board of Directors to reflect any adjustment or change
in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with
the
provisions of this Agreement. In addition, in connection with the issuance
or sale of Common Shares following the Distribution Date and prior to the
earlier of the Redemption Date and the Final Expiration Date, the Company (a)
shall with respect to Common Shares so issued or sold pursuant to the exercise
of stock options or under any employee plan or arrangement in existence prior
to
the Distribution Date, or upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Company and in existence prior
to
the Distribution Date, and (b) may, in any other case, if deemed necessary
or
appropriate by the Board of Directors, issue Right Certificates representing
the
appropriate number of Rights in connection with such issuance or sale;provided,
however, that
(i) the Company shall not be obligated to issue any such Right Certificates
if,
and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to
the Company or the Person to whom such Right Certificate would be issued, and
(ii) no Right Certificate shall be issued if, and to the extent that the
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
SECTION
23.
Redemption.
(a) The
Rights may be redeemed by
action of the Board of Directors pursuant to Section 23(b) hereof and shall
not be redeemed in any other manner.
(b)
(i) The
Board of Directors may, at its
option, at any time prior to the earlier of (A) such time as any Person becomes
an Acquiring Person, or (B) the Final Expiration Date, redeem all but not less
than all of the then outstanding Rights at a redemption price of $0.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price
being
hereinafter referred to as the “Redemption Price”), and the Company may, at its
option, pay the Redemption Price in Common Shares (based on the “current
per-share market price,” as such term is defined in Section 11(d) hereof,
of the Common Shares at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors. The redemption
of the Rights by the Board of Directors may be made effective at such time,
on
such basis and subject to such conditions as the Board of Directors in its
sole
discretion may establish. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable pursuant to
Section 11(a)(ii) hereof prior to the expiration or termination of the
Company’ s right of redemption under this Section 23(b)(i).
(ii) In
addition, the Board of
Directors may, at its option, at any time after the time a Person becomes an
Acquiring Person and after the expiration of any period during which the holder
of Rights may exercise the rights under Section 11(a)(ii) hereof but prior
to any event described in clause (x), (y) or (z) of the first sentence of
Section 13 hereof, redeem all but not less than all of the then outstanding
Rights at the Redemption Price (x) in connection with any merger, consolidation
or sale or other transfer (in one transaction or in a series of related
transactions) of assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its subsidiaries (taken as a whole) in
which
all holders of Common Shares are treated alike and not involving (other than
as
a holder of Common Shares being treated like all other such holders) an
Interested Stockholder or a Transaction Person or (y)(A) if and for so long
as
the Acquiring Person is not thereafter the Beneficial Owner of 20% or more
of
the then outstanding Common Shares, and (B) at the time of redemption no other
Persons are Acquiring Persons.
(c) Immediately
upon the action of the
Board of Directors ordering the redemption of the Rights pursuant to
Section 23(b) hereof, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price. The Company shall promptly give public notice of any such
redemption; provided,
however, that
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board
of Directors ordering the redemption of the Rights pursuant to
Section 23(b) hereof, the Company shall mail a notice of redemption to all
the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Shares, provided,
however, that
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. 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. 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 hereof, and other than in connection with
the purchase of Common Shares prior to the Distribution Date.
(d) The
Company may, at its option,
discharge all of its obligations with respect to any redemption of the Rights
by
(i) issuing a press release announcing the manner of redemption of the Rights
and (ii) mailing payment of the Redemption Price to the registered holders
of
the Rights at their last addresses as they appear on the registry books of
the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares, and upon such action, all outstanding
Right Certificates shall be null and void without any further action by the
Company.
SECTION
24.
Exchange.
(a) The
Board of Directors may, at its
option, at any time after any Person becomes an Acquiring Person, exchange
all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any stock split,
stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the “Exchange Ratio”).
Notwithstanding the foregoing, the Board of Directors shall not be empowered
to
effect such exchange at any time after any Person (other than the Company,
any
Subsidiary of the Company, any employee benefit plan of the Company or any
such
Subsidiary, or any entity holding Common Shares for or pursuant to the terms
of
any such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately
upon the action of the
Board of Directors ordering the exchange of any Rights pursuant to
Section 24(a) hereof and without any further action and without any notice,
the right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided,
however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent; provided,
however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. 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 the
Common Shares 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 void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In
lieu of issuing Common Shares
in accordance with Section 24(a) hereof, the Company may, if a majority of
the Board of Directors then in office determines that such action is necessary
or appropriate and not contrary to the interests of the holders of Rights,
elect
to (and, in the event that there are not sufficient treasury shares and
authorized but unissued Common Shares to permit any exchange of the Rights
in
accordance with Section 24(a) hereof, the Company shall) take all such
action as may be necessary to authorize, issue or pay, upon the exchange of
the
Rights, cash, property, Common Shares, other securities or any combination
thereof having an aggregate value equal to the value of the Common Shares that
otherwise would have been issuable pursuant to Section 24(a) hereof, which
aggregate value shall be determined by a nationally recognized investment
banking firm selected by a majority of the Board of Directors then in
office. For purposes of the preceding sentence, the value of the Common
Shares shall be determined pursuant to Section 11(d) hereof. Any
election pursuant to this Section 24(c) by the Board of Directors must be
made by resolution within 60 days following the date on which the event
described in Section 11(a)(ii) hereof shall have occurred. Following
the occurrence of the event described in Section 11(a)(ii) hereof, a
majority of the Board of Directors then in office may suspend the exercisability
of the Rights for a period of up to 60 days following the date on which the
event described in Section 11(a)(ii) hereof shall have occurred to the
extent that such directors have not determined whether to exercise their rights
of exchange under this Section 24(c). 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.
(d) The
Company shall not be required
to issue fractions of Common Shares or to distribute certificates that evidence
fractional Common Shares. In lieu of such fractional Common Shares, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a
whole
Common Share. For the purposes of this Section 24(d), the current
market value of a whole Common Share shall be the closing price of a Common
Share (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately after the date of the first public
announcement by the Company that an exchange is to be effected pursuant to
this
Section 24.
SECTION
25.
Notice Of Certain Events.
(a) In
case the Company shall propose
(i) to pay any dividend payable in stock of any class to the holders of its
Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for
or to
purchase any additional Preferred Shares or shares of stock of any class or
any
other securities, rights or options, (iii) to effect any reclassification of
its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or
more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company
and
its Subsidiaries (taken as a whole), to any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or
pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purpose of such
stock dividend, or distribution of rights or warrants, or the date on which
such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or the Preferred Shares, if
any
such date is to be fixed, and such notice shall be so given in the case of
any
action covered by clause (i) or (ii) above at least 10 days prior to the record
date for determining holders of the Preferred Shares for purposes of such
action, and in the case of any such other action, at least 10 days prior to
the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Shares and/or the Preferred Shares, whichever
shall
be the earlier.
(b) In
case the event set forth in
Section 11(a)(ii) hereof shall occur, then the Company shall as soon as
practicable thereafter give to each holder of a Right Certificate, in accordance
with Section 26 hereof, a notice of the occurrence of such event, which
notice shall describe the event and the consequences of the event to holders
of
Rights under Section 11(a)(ii) hereof.
SECTION
26.
Notices. Notices or
demands authorized by this Agreement to be given or made by the Rights Agent
or
by the holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent)
as
follows:
CardioTech
International, Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief
Executive Officer and President
with
a copy (which shall not constitute
notice) to:
Seyfarth
▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. Dryer
Subject
to the provisions of
Section 21 hereof, any notice or demand authorized by this Agreement to be
given or made by the Company or by the holder of any Right Certificate to or
on
the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with
the Company) as follows:
American
Stock Transfer & Trust
Company
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Executive Vice
President
Notices
or demands authorized by this
Agreement to be given or made by the Company or the Rights Agent to the holder
of any Right Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address
of
such holder as shown on the registry books of the Company.
SECTION
27.
Supplements And Amendments. Prior to the Distribution
Date,
the Company and the Rights Agent shall, if the Company so directs, supplement
or
amend any provision of this Agreement without the approval of any holders of
the
Rights. From and after the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, from time to time supplement or amend
any provision of this Agreement without the approval of any holders of Right
Certificates in order to (i) cure any ambiguity, (ii) correct or supplement
any
provision contained herein that may be defective or inconsistent with any other
provisions herein, or (iii) change any other provisions with respect to the
Rights that the Company may deem necessary or desirable; provided,
however, that
no such supplement or amendment shall be made that would adversely affect the
interests of the holders of Rights (other than the interests of an Acquiring
Person or its Affiliates or Associates). Any supplement or amendment
adopted during any period after any Person has become an Acquiring Person but
prior to the Distribution Date shall become null and void unless such supplement
or amendment could have been adopted by the Company from and after the
Distribution Date. Any such supplement or amendment shall be evidenced by
a writing signed by the Company and the Rights Agent. Upon 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
unless the Rights Agent shall have determined in good faith that such supplement
or amendment would adversely affect its interest under this Agreement.
Prior to the Distribution Date, the interests of the holders of Rights shall
be
deemed coincident with the interests of the holders of Common Shares.
SECTION
28.
Determination And Actions By The Board Of Directors, Etc. For all purposes of this
Agreement, any calculation of the number of Common Shares outstanding at any
particular time, including for purposes of determining the particular percentage
of such outstanding Common Shares or any other securities of which any Person
is
the Beneficial Owner, shall be made in accordance with the last sentence of
Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act
as in
effect on the date of this Agreement. The Board of Directors shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board, or the Company, or
as
may be necessary or advisable in the administration of this Agreement, including
without limitation, the right and power to (i) interpret the provisions of
this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or
not
redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations that are done or made by the
Board in good faith, shall (x) be final, conclusive and binding on the Rights
Agent and the holders of the Rights, and (y) not subject the Board to any
liability to the holders of the Rights.
SECTION
29.
Successors. All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION
30.
Benefits Of This Agreement. Nothing in this Agreement
shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of
the Right Certificates (and, prior to the Distribution Date, the Common
Shares).
SECTION
31.
Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION
32.
Governing Law. This
Agreement and each Right Certificate issued hereunder shall be deemed to be
a
contract made under the laws of the State of Delaware and for all purposes
shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such
State.
SECTION
33.
Counterparts. This
Agreement may be executed in any number of original or facsimile counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
SECTION
34.
Descriptive Headings. Descriptive headings
of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
[Signature
Page
Follows]
IN
WITNESS
WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the day and year
first above written.
CARDIOTECH
INTERNATIONAL, INC.
By:
/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Chief Executive Officer and President
AMERICAN
STOCK TRANSFER & TRUST COMPANY
By:
/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Vice President
FORM
OF
CERTIFICATE
OF DESIGNATION
OF
SERIES
A JUNIOR PARTICIPATING PREFERRED
STOCK
(Exhibit
A to Rights Agreement)
(Pursuant
to Section 151 of the
Delaware
General Corporation
Law)
CARDIOTECH
INTERNATIONAL, INC.,a
corporation organized and existing under the General Corporation Law of the
State of Delaware (hereinafter called the “Company”), hereby certifies that the
following resolutions were adopted by the Board of Directors of the Corporation
as required by Section 151 of the General Corporation Law pursuant to an
action by unanimous written consent of the Board of Directors:
RESOLVED,that
pursuant to the authority
granted to and vested in the Company’s Board of Directors in accordance with the
provisions of the Company’s Certificate of Incorporation (the “Charter”), the
Board of Directors hereby creates a series of Junior Preferred Stock and hereby
states the designation and number of shares, and fixes the designations and
the
powers, preferences and rights, and the qualifications, limitations and
restrictions thereof (in addition to the provisions set forth in the Charter,
which are applicable to all classes and series of the Company’s preferred
stock), as follows:
Series A
Junior Participating
Preferred Stock:
Section
1.
Designation and Amount. Five Hundred Thousand
(500,000) shares
of Preferred Stock, par value $0.001 per share, are designated “Series A Junior
Participating Preferred Stock” with the designations and the powers, preferences
and rights, and the qualifications, limitations and restrictions specified
herein (the “Junior Preferred Stock”). Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall
reduce the number of shares of Junior Preferred Stock to a number less than
the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Company convertible
into Junior Preferred Stock.
Section
2.
Dividends and Distributions.
(A) Subject
to the rights of the
holders of any shares of any series of the Company’s preferred stock, par value
$0.001 per share (“Preferred Stock”), or any similar stock, ranking prior and
superior to the Junior Preferred Stock with respect to dividends, the holders
of
shares of Junior Preferred Stock, in preference to the holders of the Company’s
common stock, par value $0.001 per share (“Common Stock”), and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of April, July, October and January
in each year (each such date being referred to herein as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Junior Preferred Stock,
in an amount per share (rounded to the nearest cent) equal to the greater of
(a)
$1.00 or (b) subject to the provision for adjustment hereinafter set forth,
100
times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification
or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share
of
Junior Preferred Stock. In the event the Company shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock,
or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case, the amount to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event under clause
(b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such
event.
(B) The
Company shall declare a
dividend or distribution on the Junior Preferred Stock as provided in paragraph
(A) of this Section immediately after it declares a dividend or distribution
on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided,
that in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Junior Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends
shall begin to accrue
and be cumulative on outstanding shares of Junior Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date
of issue is a Quarterly Dividend Payment Date or is a date after the record
date
for the determination of holders of shares of Junior Preferred Stock entitled
to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Junior Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders of
shares of Junior Preferred Stock entitled to receive payment of a dividend
or
distribution declared thereon, which record date shall be not more than 60
days
prior to the date fixed for the payment thereof.
Section
3.
Voting Rights. The
holders of shares of Junior Preferred Stock shall have the following voting
rights:
(A) Subject
to the provision for
adjustment hereinafter set forth, each share of Junior Preferred Stock shall
entitle the holder thereof to 100 votes on all matters submitted to a vote
of
the Company’s stockholders (the “Stockholders”). In the event the Company
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise
than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the number of votes
per
share to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number
by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such
event.
(B) Except
as otherwise provided
herein, in any other Certificate of Designation creating a series of Preferred
Stock or any similar stock, or by law, the holders of shares of Junior Preferred
Stock and the holders of shares of Common Stock and any other capital stock
having general voting rights shall vote together as one class on all matters
submitted to a vote of the Stockholders.
(C) Except
as set forth herein, or as
otherwise provided by law, holders of Junior Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section
4.
Certain Restrictions.
(A) Whenever
quarterly dividends or
other dividends or distributions payable on the Junior Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Junior
Preferred Stock outstanding shall have been paid in full, the Company shall
not:
(i) declare
or pay dividends, or make
any other distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock;
(ii) declare
or pay dividends, or make
any other distributions, on any shares of stock ranking on a parity (either
as
to dividends or upon liquidation, dissolution or winding up) with the Junior
Preferred Stock, except dividends paid ratably on the Junior Preferred Stock
and
all such parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem
or purchase or otherwise
acquire for consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock, provided that the Company may at any time redeem, purchase
or
otherwise acquire shares of any such junior stock in exchange for shares of
any
stock ranking junior (either as to dividends or upon dissolution, liquidation
or
winding up) to the Junior Preferred Stock; or
(iv) redeem
or purchase or otherwise
acquire for consideration any shares of Junior Preferred Stock, or any shares
of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Junior Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The
Company shall not permit any
of its subsidiaries to purchase or otherwise acquire for consideration any
shares of the Company’s capital stock unless the Company could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section
5.
Reacquired Shares. Any shares of Junior
Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall
be
retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares
of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in
the
Amended and Restated Certificate of Incorporation, or in any other Certificate
of Designation creating a series of Preferred Stock or any similar stock or
as
otherwise required by law.
Section
6.
Liquidation, Dissolution or Winding Up. Upon the Company’s liquidation,
dissolution or winding up, no distribution shall be made (1) to the holders
of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock unless, prior thereto,
the holders of shares of Junior Preferred Stock shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, provided that
the
holders of shares of Junior Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be distributed per share
to holders of shares of Common Stock, or (2) to the holders of shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution
or
winding up) with the Junior Preferred Stock, except distributions made ratably
on the Junior Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Company shall at
any time declare or pay any dividend on the Common Stock payable in shares
of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Junior Preferred Stock were entitled immediately prior
to
such event under the proviso in clause (1) of the preceding sentence shall
be
adjusted by multiplying such amount by a fraction the numerator of which is
the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section
7.
Consolidation, Merger, Etc. In case the Company shall
enter into any
consolidation, merger, combination or other transaction in which the shares
of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Junior Preferred
Stock shall at the same time be similarly exchanged or changed into an amount
per share, subject to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Company
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise
than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth
in
the preceding sentence with respect to the exchange or change of shares of
Junior Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such
event.
Section
8.
No Redemption. The
shares of Junior Preferred Stock shall not be redeemable.
Section
9.
Rank. The Junior
Preferred Stock shall rank, with respect to the payment of dividends and the
distribution of assets, junior to all series of any other class of Preferred
Stock.
Section
10.
Amendment. The
Company’s Certificate of Incorporation, shall not be amended in any manner which
would materially alter or change the powers, preferences or special rights
of
the Junior Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of Junior Preferred Stock, voting together as a single class.
IN
WITNESS
WHEREOF,the undersigned
have executed this certificate as of January 28, 2008.
CARDIOTECH
INTERNATIONAL, INC.
By:
___________________________
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Chief Executive Officer and President
FORM
OF RIGHT CERTIFICATE
(Exhibit
B to Rights Agreement)
|
Certificate
No. R-
|
Rights
|
NOT
EXERCISABLE AFTER FEBRUARY 8, 2018,
OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $0.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT.
RIGHT
CERTIFICATE
CARDIOTECH
INTERNATIONAL,
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 January 28,
2008
(the “Rights Agreement”), between CardioTech International, Inc., a Delaware
corporation (the “Company”), and American Stock Transfer & Trust Company
(the “Rights Agent”), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to
5:00 pm, New York City time, on February 8, 2018, at the office of the Rights
Agent designated for such purpose, or at the office of its successor as Rights
Agent, one one-hundredth of a fully paid non-assessable share of the Company’s
Series A Junior Participating Preferred Stock, par value $0.001 per share
(the “Preferred Shares”), at a purchase price of $100.00 per one one-hundredth
of a Preferred Share (the “Purchase Price”), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate (and
the number of one one-hundredths of a Preferred Share which may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of February 8, 2008 based on the Preferred
Shares as constituted at such date.
From
and after the time any Person
becomes an Acquiring Person (as such terms are defined in the Rights Agreement),
if the Rights evidenced by this Right Certificate are beneficially owned by
(i) an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate who becomes
a
transferee after the Acquiring Person becomes such, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of any such
Acquiring Person, Associate or Affiliate who becomes a transferee prior to
or
concurrently with the Acquiring Person becoming such, such Rights shall become
null and void without any further action and no holder hereof shall have any
right with respect to such Rights from and after the time any Person becomes
an
Acquiring Person.
As
provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
This
Right Certificate is subject to all
of the terms, provisions and conditions of the Rights Agreement, as amended
from
time to time, 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 Company’s principal executive offices and at the
Rights Agent’s offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Executive Vice President.
This
Right Certificate, with or without
other Right Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, may be exchanged for another Right Certificate
or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of Preferred Shares as the Rights evidenced
by the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If 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 (i) may be redeemed by
the
Company at a redemption price of $0.01 per Right or (ii) may be exchanged in
whole or in part for shares of the Company’s Common Stock, par value $0.001 per
share, or, upon circumstances set forth in the Rights Agreement, cash, property
or other securities of the Company, including fractions of a share of Preferred
Stock.
No
fractional Preferred Shares will be
issued upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the Company’s election, 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 Shares or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right to
vote
for the election of directors or upon any matter submitted to stockholders
at
any meeting thereof, or to give or withhold consent to any corporate action,
or
to receive notice of meetings or other actions affecting stockholders (except
as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the 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.
WITNESSthe
signature of the proper officers of
the Company dated
,
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ATTEST:
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CardioTech
International,
Inc.
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Name:
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Name:
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Title:
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Title:
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COUNTERSIGNED:
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AMERICAN
STOCK TRANSFER &
TRUST
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COMPANY,as
Rights Agent
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By:
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Authorized
Officer
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Name:
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Title:
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FORM
OF REVERSE SIDE OF RIGHT
CERTIFICATE
FORM
OF ASSIGNMENT
(To
be executed by the registered holder
if such
holder
desires to transfer the
Right Certificate.)
FOR
VALUE
RECEIVED________________________________________
hereby sells, assigns and transfers unto
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(Please
print name and address of
transferee)
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_________________________________________________
this Right Certificate, together with all right, title and interest therein,
and
does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
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Dated:
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Signature
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Signature
Guaranteed:
SIGNATURES
must be guaranteed by an
“Eligible Guarantor Institution” as defined in Rule 17Ad-15 promulgated under
the Securities Exchange Act of 1934, as amended.
The
undersigned hereby certifies that
(1) the Rights evidenced by this Right Certificate are not being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person, an Interested Stockholder or an Affiliate or Associate thereof (as
such
terms are defined in the Rights Agreement); and (2) after due inquiry and
to the best of the knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Right Certificate from any Person who
is or
was an Acquiring Person, an Interested Stockholder, or an Affiliate or Associate
thereof.
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Signature
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FORM
OF ELECTION TO PURCHASE
(To
be executed if holder desires to
exercise
Rights
represented by the Right
Certificate.)
To
American Stock
Transfer & Trust Company:
The
undersigned hereby irrevocably
elects to exercise
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please
insert social security
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or
other identifying
number:
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(Please
print name and
address)
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If
such number of Rights shall not be
all the Rights evidenced by this Right Certificate, a new Right Certificate
for
the balance remaining of such Rights shall be registered in the name of and
delivered to:
Please
insert social security
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or
other identifying
number:
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(Please
print name and
address)
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Dated:
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Signature
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Signature
Guaranteed:
Signatures
must be guaranteed by an
“Eligible Guarantor Institution” as defined in Rule 17Ad-15 promulgated under
the Securities Exchange Act of 1934, as amended.
The
undersigned hereby certifies that
(1) the Rights evidenced by this Right Certificate are not beneficially owned
by
nor are they being exercised on behalf of an Acquiring Person, an Interested
Stockholder or an Affiliate or Associate thereof (as such terms are defined
in
the Rights Agreement); and (2) after due inquiry and to the best of the
knowledge of the undersigned, the undersigned did not acquire the Rights
evidenced by this Right Certificate from any Person who is or was an Acquiring
Person, an Interested Stockholder, or an Affiliate or Associate thereof.
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Signature
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NOTICE
The
signature in the Form of Assignment
or Form of Election to Purchase, as the case may be, must conform to the name
as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In
the event the certification set forth
above in the Form of Assignment or the Form of Election to Purchase, as the
case
may be, is not completed, the Company and the Rights Agent will deem the
beneficial owner of the Rights evidenced by this Right Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be
honored.
CARDIOTECH
INTERNATIONAL, INC.
SUMMARY
OF RIGHTS TO PURCHASE
PREFERRED
SHARES
(EXHIBIT
C TO RIGHTS AGREEMENT)
On
January 25, 2008, the Board of
Directors (the “Board”) ofCARDIOTECH
INTERNATIONAL, INC.(the
“Company”) declared a dividend
of one preferred share purchase right (a “Right”)
for each outstanding share of common stock, par value $0.001 per share (the
“Common Shares”), of the Company. The dividend is effective as of February
8, 2008 (the “Record Date”) with respect to the stockholders of record on that
date. The Rights will also attach to new Common Shares issued after the
Record Date. Each Right entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $0.001 per share (the “Preferred Shares”), of the
Company at a price of $100.00 per one one-hundredth of a Preferred Share (the
“Purchase Price”), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated as of January 28, 2008 (the
“Rights Agreement”), between the Company and American Stock Transfer & Trust
Company (the “Rights Agent”).
DETACHMENT
AND TRANSFER OF RIGHTS
Initially,
the Rights will be evidenced
by the stock certificates representing Common Shares then outstanding, and
no
separate Right Certificates will be distributed. Until the earlier to
occur of (i) 10 days following a public announcement that a person or group
of
affiliated or associated persons, has become an “Acquiring Person” (as such term
is defined in the Rights Agreement) or (ii) 10 business days (or such later
date
as the Board may determine) following the commencement of, or announcement
of an
intention to make, a tender offer or exchange offer which would result in the
beneficial ownership by an Acquiring Person of 15% or more of the outstanding
Common Shares (the earlier of such dates being called the “Distribution Date”),
the Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share
certificate. In general, an “Acquiring Person” is a person, the affiliates
or associates of such person, or a group, which has acquired beneficial
ownership of 15% or more of the outstanding Common Shares.
The
Rights Agreement provides that,
until the Distribution Date (or earlier redemption or expiration of the Rights),
the Rights will be transferable with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
new Common Share certificates issued after the Record Date upon transfer or
new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights) the surrender or transfer of any certificates
for
Common Shares outstanding as of the Record Date, even without such notation
or a
copy of this Summary of Rights being attached thereto, will also constitute
the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights (“Right Certificates”) will be
mailed to holders of record of the Common Shares as of the close of business
on
the Distribution Date and such separate Right Certificates alone will evidence
the Rights.
EXERCISABILITY
OF RIGHTS
The
Rights are not exercisable until the
Distribution Date. The Rights will expire on February 8, 2018 (the “Final
Expiration Date”), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, in each case as
described below. Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
The
Purchase Price payable, and the
number of Preferred Shares or other securities or property issuable or payable,
upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution. The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Shares
or
a stock dividend on the Common Shares payable in Common Shares, or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case,
prior to the Distribution Date. With certain exceptions, no adjustment in
the Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional Preferred
Shares will be issued (other than fractions which are integral multiples of
one
one-hundredth of a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts) and in lieu thereof, an adjustment in
cash
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
TERMS
OF PREFERRED SHARES
Preferred
Shares purchasable upon
exercise of the Rights will not be redeemable. Each Preferred Share will
be entitled to a minimum preferential quarterly dividend payment of $1.00 per
share, when, as and if declared by the Board of Directors, but will be entitled
to an aggregate dividend of 100 times any dividend declared per Common
Share. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $100.00 per
share but will be entitled to an aggregate payment of 100 times the payment
made
per Common Share. Each Preferred Share will have 100 votes, voting
together with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the amount received per
Common Share. These rights are protected by customary anti-dilution
provisions. Because of the nature of the Preferred Shares’ dividend,
liquidation and voting rights, the value of the one one-hundredth interest
in a
Preferred Share purchasable upon exercise of each Right should approximate
the
value of one Common Share. The Preferred Shares would rank junior to any
other series of the Company’s preferred stock.
TRIGGER
OF FLIP-IN AND FLIP-OVER
RIGHTS
In
the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, each holder of
a
Right, other than Rights beneficially owned by the Acquiring Person or any
affiliate or associate thereof (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common Shares having
a
market value of two times the exercise price of the Right.
In
the event that the Company is
acquired in a merger or other business combination transaction or 50% or more
of
its consolidated assets or earning power are sold to an Acquiring Person, its
affiliates or associates or certain other persons in which such persons have
an
interest, proper provision will be made so that each such holder of a Right
will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock
of
the acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right.
REDEMPTION
AND EXCHANGE OF RIGHTS
At
any time prior to the earlier of
(i) such time that a person has become an Acquiring Person, or
(ii) the Final Expiration Date, the Board may redeem all, but not less than
all, of the Rights at a price of $0.01 per Right (the “Redemption Price”).
In general, the redemption of the Rights may be made effective at such time
on
such basis with such conditions as the Board of Directors in its sole discretion
may establish Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
At
any time after any Person becomes an
Acquiring Person and prior to the acquisition by such person or group of 50%
or
more of the outstanding Common Shares, the Board may exchange the Rights (other
than Rights owned by such person or group which will have become void), in
whole
or in part, at an exchange ratio of one Common Share, or, under circumstances
set forth in the Rights Agreement, cash, property or other securities of the
Company, including fractions of a Preferred Share (or of a share of a class
or
series of the Company’s preferred stock having equivalent designations and the
powers, preferences and rights, and the qualifications, limitations and
restrictions), per Right (with value equal to such Common Shares).
AMENDMENT
OF RIGHTS
The
terms of the Rights generally may be
amended by the Board without the consent of the holders of the Rights, except
that from and after such time as the Rights become detached no such amendment
may adversely affect the interests of the holders of the Rights (excluding
the
interest of any Acquiring Person or its affiliates or associates).
ADDITIONAL
INFORMATION
A
copy of the Rights Agreement has been
filed with the Securities and Exchange Commission as an Exhibit to a
Current Report on Form 8-K filed on January 28, 2008. A copy of the Rights
Agreement is available from the Company by writing to CardioTech International,
Inc., Investor Relations, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. This summary description
of the
Rights is not intended to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.