CRITICARE SYSTEMS, INC. and LASALLE BANK NATIONAL ASSOCIATION Rights Agent Amended and Restated Rights Agreement Dated as of March 27, 2007
EXHIBIT
4.1
CRITICARE
SYSTEMS, INC.
and
LASALLE
BANK NATIONAL ASSOCIATION
Rights
Agent
Amended
and Restated Rights Agreement
Dated
as
of March 27, 2007
TABLE
OF
CONTENTS
| Page | ||
|
Section
1.
|
Certain
Definitions
|
1
|
|
Section
2.
|
Appointment
of Rights Agent
|
4
|
|
Section
3.
|
Issue
of Right Certificates
|
5
|
|
Section
4.
|
Form
of Right Certificates
|
7
|
|
Section
5.
|
Countersignature
and Registration
|
7
|
|
Section
6.
|
Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated,
|
|
|
Destroyed,
Lost or Stolen Right Certificates
|
8
|
|
|
Section
7.
|
Exercise
of Rights; Purchase Price; Expiration Date of Rights
|
8
|
|
Section
8.
|
Cancellation
and Destruction of Right Certificates
|
10
|
|
Section
9.
|
Availability
of Preferred Shares
|
10
|
|
Section
10.
|
Preferred
Shares Record Date
|
10
|
|
Section
11.
|
Adjustment
of Purchase Price, Number of Shares or
|
|
|
Number
of Rights
|
11
|
|
|
Section
12.
|
Certificate
of Adjusted Purchase Price
|
|
|
or
Number of Shares
|
20
|
|
|
Section
13.
|
Consolidation,
Merger or Sale or Transfer of Assets
|
|
|
or
Earning Power
|
20
|
|
|
Section
14.
|
Fractional
Rights and Fractional Shares
|
21
|
|
Section
15.
|
Rights
of Action
|
22
|
|
Section
16.
|
Agreement
of Right Holders
|
22
|
i
|
Section
17.
|
Right
Certificate Holder Not Deemed a Stockholder
|
23
|
|
Section
18.
|
Concerning
the Rights Agent
|
23
|
|
Section
19.
|
Merger
or Consolidation or Change of
|
|
|
Name
of Rights Agent
|
24
|
|
|
Section
20.
|
Duties
of Rights Agent
|
24
|
|
Section
21.
|
Change
of Rights Agent
|
26
|
|
Section
22.
|
Issuance
of New Right Certificates
|
27
|
|
Section
23.
|
Redemption
|
27
|
|
Section
24.
|
Notice
of Certain Events
|
29
|
|
Section
25.
|
Notices
|
29
|
|
Section
26.
|
Supplements
and Amendments
|
30
|
|
Section
27.
|
Successors
|
31
|
|
Section
28.
|
Benefits
of this Agreement
|
31
|
|
Section
29.
|
Severability
|
31
|
|
Section
30.
|
Determinations
and Actions by the Board of Directors
|
31
|
|
Section
31.
|
Governing
Law
|
31
|
|
Section
32.
|
Counterparts
|
32
|
|
Section
33.
|
Descriptive
Headings
|
32
|
|
Signatures
|
32
|
|
|
Exhibit
A
|
Form of Right Certificate |
ii
AMENDED
AND RESTATED RIGHTS AGREEMENT
THIS
AMENDED AND RESTATED RIGHTS AGREEMENT,
dated
as of March 27, 2007, is between CRITICARE SYSTEMS, INC., a Delaware
corporation (the "Company"), and LASALLE BANK NATIONAL ASSOCIATION (the "Rights
Agent").
RECITALS
A. The
Company is a party to a Rights Agreement with Firstar Trust Company, as rights
agent (the "Former Rights Agent"), dated March 27, 1997 (the "Original
Agreement"), pursuant to which the Board of Directors of the Company has
authorized and declared a dividend of one preferred stock share purchase right
(a "Right") for each Common Share (as hereinafter defined) of the Company
outstanding on April 24, 1997 (the "Record Date"), each Right representing
the right to purchase one-hundredth of one share of the Company's Preferred
Stock (the "Preferred Shares"), upon the terms and subject to the conditions
herein set forth, and further authorized and directed the issuance of one Right
with respect to each Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date
and
the Final Expiration Date (as such terms are hereinafter defined).
B. Pursuant
to Section 21 of the Rights Agreement, the Former Rights Agent has previously
resigned as rights agent. Pursuant to Section 21 of the Rights Agreement,
the Company desires to appoint the Rights Agent as the new rights agent to
act
on behalf of the Company and the holders of the Rights, and the Rights Agent
is
willing to so act, in accordance with the terms of this Agreement.
C. The
Company and the Rights Agent desire to amend and restate the Original Agreement
in accordance with the terms and conditions of this Agreement.
AGREEMENTS
Accordingly,
in consideration of the recitals 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) which,
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 20% or more of the Common Shares of the Company then
outstanding, but shall not include the Company, any Subsidiary (as such term
is
hereinafter defined) of the Company, any employee benefit plan of the Company
or
any Subsidiary of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as the result of an acquisition of Common
Shares by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 20% or more of the Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 20% or more
of
the Common Shares of the Company then outstanding by reason of share purchases
by the Company and shall, after such share purchases by the Company, become
the
Beneficial Owner of any additional Common Shares of the Company, then such
Person shall be deemed to be an "Acquiring Person."
(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.
(c) A
Person
shall be deemed the "Beneficial Owner" of and shall be deemed to "beneficially
own" any securities:
(i) which
such Person or any of such Person's Affiliates or Associates beneficially owns,
directly or indirectly;
(ii) which
such Person or any of such Person's Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), or upon
the
exercise of conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided, however,
that
a Person shall not be deemed the Beneficial Owner of, or to beneficially own,
any security if the
agreement, arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and 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
2
(iii) which
are
beneficially owned, directly or indirectly, by any other Person with which
such
Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding, voting (except
to
the extent contemplated by the proviso to Section 1(c)(ii)(B)) 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 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., Milwaukee, Wisconsin
time, on such date; provided, however, that if such date is not a Business
Day
it shall mean 5:00 P.M., Milwaukee, Wisconsin time, on the next succeeding
Business Day.
(f) "Common
Shares" when used with reference to the Company shall mean the shares of common
stock, par value $.04 per share, of the Company. "Common Shares" when used
with
reference to any Person other than the Company shall mean the capital stock
(or
equity interest) with the greatest voting power of such other Person or, if
such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
3
(g) "Disinterested
Director" shall mean any member of the Company's Board of Directors who is
not
an employee of the Company or any of its Subsidiaries or is unaffiliated with
the Acquiring Person or any of its Affiliates or Associates and was a member
of
the Company's Board of Directors prior to the time that the Acquiring Person
became an Acquiring Person and any successor of a Disinterested Director who
is
not an officer or employee of the Company or any of its Subsidiaries and is
unaffiliated with the Acquiring Person or any of its Affiliates or Associates
and is recommended to succeed a Disinterested Director by a majority of the
Disinterested Directors then on the Company's Board of Directors.
(h) "Distribution
Date" shall have the meaning set forth in Section 3 hereof.
(i) "Final
Expiration Date" shall have the meaning set forth in Section 7
hereof.
(j) "Person"
shall mean any individual, firm, corporation or other entity, and shall include
any successor (by merger or otherwise) of such entity.
(k) "Redemption
Date" shall have the meaning set forth in Section 7 hereof.
(l) "Section
11(a)(ii) Event" shall mean any event described in Section 11(a)(ii)[a],
[b] or [c] hereof.
(m) "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.
(n) "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.
Section
2. Appointment
of Rights Agent.
The
Company hereby appoints the Rights Agent to act as agent for the Company and
the
holders of the Rights (who, in accordance with Section 3 hereof, shall prior
to
the Distribution Date also be the holders of the Common Shares) 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.
4
Section
3. Issue
of Right Certificates.
(a) Until
the
earlier of (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 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 the consummation of
which
would result in any Person becoming the Beneficial Owner of Common Shares
aggregating 30% or more of the then outstanding Common Shares (including any
such date which is after the date of this Agreement and prior to the issuance
of
the Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also
be
deemed to be Right Certificates) and not by separate Right Certificates, and
(y)
the right to receive Right Certificates will be transferable only in connection
with the transfer of 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 A hereto (a "Right
Certificate"), evidencing one Right for each Common Share so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) 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 or 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.
5
(c) Certificates
for Common Shares which become outstanding (including, without limitation,
reacquired Common Shares referred to in the last sentence of this paragraph
(c))
after the Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall bear the following
legend:
This
certificate also evidences and entitles the holder hereof to certain rights
as
set forth in an Amended and Restated Rights Agreement between Criticare Systems,
Inc. and LaSalle Bank National Association (as successor rights agent to Firstar
Trust Company), dated as of March 27, 2007 (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 Criticare Systems, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. Criticare Systems, Inc. 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 (as defined in the Rights Agreement) shall become
null and void.
Certificates
for Common Shares containing the legend as provided in the Original Agreement
shall remain valid and effective and new certificates for Common Shares
containing the foregoing legend shall only be required to be issued upon
issuance of new or replacement certificates, whether upon surrender of the
old
certificates or otherwise. With respect to such certificates containing the
foregoing legend, until the Distribution 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 cancelled and retired
so that the Company shall not be entitled to exercise any Rights associated
with
the Common Shares which are no longer outstanding.
6
Section
4. Form
of Right Certificates.
The
Right Certificates (and the forms of election to purchase one one-hundredth
Preferred Shares and of assignment to be printed on the reverse thereof) shall
be substantially the same as Exhibit A 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 on which the Rights may from time
to
time be listed, or to conform to usage. Subject to the provisions of Section
22
hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of one one-hundredth Preferred Shares as shall be set forth therein
at the price per one one-hundredth Preferred Share set forth therein (the
"Purchase Price"), but the number of such one one-hundredth Preferred Shares
and
the Purchase Price shall be subject to adjustment as provided
herein.
Section
5. Countersignature
and Registration.
The
Right Certificates shall be executed on behalf of the Company by its Chairman
of
the Board, its Chief Executive Officer, its President, any of its Vice
Presidents, or its Treasurer, either manually or by facsimile signature, 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 Rights
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
principal office, 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.
7
Section
6. Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.
Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof) 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-hundredth Preferred Shares 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 principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient
to
cover any tax or governmental charge that may be imposed in connection with
any
transfer, split up, combination or exchange of Right Certificates.
Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto,
and
upon surrender to the Rights Agent and cancellation of the Right Certificate
if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered holder in lieu of
the
Right Certificate so lost, stolen, destroyed or mutilated.
Section
7. Exercise
of Rights; Purchase Price; Expiration
Date of Rights.
(a) The
registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase on the reverse side thereof duly executed, to
the
Rights Agent at the principal office of the Rights Agent, together with payment
of the Purchase Price for each one one-hundredth Preferred Share as to which
the
Rights are exercised, at or prior to the earliest of (i) the close of business
on March 27, 2017 (the "Final Expiration Date"), or (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date").
8
(b) The
Purchase Price for each one one-hundredth Preferred Share purchasable pursuant
to the exercise of a Right shall initially be $25.00, shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in accordance with
paragraph (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 number of one one-hundredth Preferred Shares to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder
of
such Right Certificate in accordance with Section 9 hereof by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) requisition from any transfer agent of the
Preferred Shares certificates for the number of one one-hundredth Preferred
Shares to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) after receipt
of such certificates, 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.
(d) In
case
the registered holder of any Right Certificate shall exercise less than all
the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the Rights Agent to
the
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding
anything in this Rights Agreement to the contrary, neither the Rights Agent
nor
the Company shall be obligated to undertake any action with respect to a
registered holder of Rights upon the occurrence of any purported transfer or
exercise of Rights pursuant to Section 6 hereof or this Section 7 unless
such registered holder shall have (i) completed and signed the certificate
contained in the form of assignment or election to purchase set forth on the
reverse side of the Right Certificate surrendered for such transfer or exercise
and (ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) thereof as the Company shall reasonably
request.
9
Section
8. Cancellation
and Destruction of Right Certificates.
All
Right Certificates surrendered for the purpose of exercise, transfer, split
up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted
by
any of the provisions of this Rights Agreement. The Company shall deliver to
the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the
Company.
Section
9. Availability
of Preferred Shares.
The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized
and
issued and fully paid and nonassessable shares.
The
Company further covenants and agrees that it will pay when due and payable
any
and all federal and state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right Certificates or of any
Preferred Shares upon the exercise of Rights. The Company shall not, however,
be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the Preferred Shares in
a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or to deliver any
certificates for Preferred Shares upon the exercise of any Rights until any
such
tax shall have been paid (any such tax being payable by the holder of such
Right
Certificate at the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
Section
10. Preferred
Shares Record Date.
Each
person in whose name any certificate for Preferred Shares is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of
record of the Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of such surrender
and payment is a date upon
10
which
the
Preferred Shares transfer books of the Company are closed, such person shall
be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Shares
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled
to
any rights of a holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section
11. Adjustment
of Purchase Price, Number of Shares or Number of Rights.
The
Purchase Price, the number of one one-hundredth 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 which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, he 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.
(ii) If:
[a] any
Acquiring Person or any Associate or Affiliate of any Acquiring Person at any
time after the date of this Agreement, directly or indirectly, without the
prior
approval of a majority of the Disinterested Directors, shall
11
[i] merge
into the Company or otherwise combine with the Company, the Company shall be
the
continuing or surviving corporation of such merger or combination, and the
Common Shares shall remain outstanding and shall not be changed or
exchanged,
[ii] in
one or
more transactions, transfer any assets to the Company in exchange (in whole
or
in part) for Common Shares or for securities exercisable for or convertible
into
Common Shares or otherwise obtain from the Company, with or without
consideration, any additional Common Shares or securities exercisable or
convertible into Common Shares (other than as part of a pro rata distribution
to
all holders of Common Shares),
[iii] sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose
(in
one transaction or a series of transactions) to, from or with the Company or
any
of the Company's Subsidiaries, assets on terms and conditions less favorable
to
the Company than the Company would be able to obtain through arm's-length
negotiation with an unaffiliated third party,
[iv] sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire
or
dispose of in one transaction or a series of transactions to, from or with
(as
the case may be) the Company or any of the Company's Subsidiaries other than
incidental to the lines of business, if any, engaged in as of the date hereof
between the Company and such Acquiring Person or Associate or Affiliate assets
having an aggregate fair market value of more than $1,000,000, other than
pursuant to a transaction described in Section 13 hereof,
[v] receive
any compensation from the Company or any of the Company's Subsidiaries other
than compensation for full-time employment as a regular employee at rates in
accordance with the Company's (or its Subsidiaries') past practices,
or
[vi] receive
the benefit, directly or indirectly (except proportionately as a stockholder),
of any loans, advances, guarantees, pledges or other financial assistance or
any
tax credits or other tax advantage provided by the Company or any of its
Subsidiaries, or
[b] any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant
to
the terms of any such plan), alone or together with its Affiliates and
Associates, shall, without the prior approval of a majority of the Disinterested
Directors, at any time after the Record Date, become the Beneficial Owner of
30%
or more of the Common Shares then outstanding, other than pursuant to any
transaction set forth in Section 13(a) hereof, or
12
[c] during
such time as there is an Acquiring Person, there shall be, without the prior
approval of a majority of the Disinterested Directors, any reclassification
of
securities (including any reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of transactions involving the
Company or any of its Subsidiaries, other than a transaction or transactions
to
which the provisions of Section 13(a) apply (whether or not into or
otherwise involving an Acquiring Person) which has the effect, directly or
indirectly, or increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity securities or securities exercisable
for or convertible into Common Shares which is directly or indirectly owned
by
any Acquiring Person or any Associate or Affiliate of any Acquiring Person,
then, within five days after the date of the occurrence of an event described
in
Section 11(a)(ii)[b] hereof and promptly following the occurrence of any
event described in Section 11(a)(ii)[a] or [c] hereof, proper provision
shall be made so that each holder of a Right (except as provided below and
in
Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the
terms
of this Agreement, in lieu of Preferred Shares, such number of Common Shares
as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-hundredths Preferred Shares for
which a Right was exercisable immediately prior to the first occurrence of
a
Section 11(a)(ii) Event and dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase Price" for
each Right and for all purposes of this Agreement) by (y) 50% of the
current market price (determined pursuant to Section 11(d) hereof) per
Common Share on the date of such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) If
the
number of Common Shares which are authorized by the Company's Certificate of
Incorporation, but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights, are not sufficient to permit the exercise
in
full of the Rights in accordance with the foregoing subparagraph (ii) of
this Section 11(a), the Company shall:
[a] determine
the excess of [i] the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over [ii] the Purchase Price
(such excess, the "Spread") and
13
[b] with
respect to each Right, make adequate provision to substitute for the Adjustment
Shares, upon payment of the applicable Purchase Price, [i] cash,
[ii] a reduction in the Purchase Price, [iii] equity securities of the
Company (including, without limitation, Preferred Shares, or units of Preferred
Shares, which the Board of Directors of the Company has deemed to have the
same
value as Common Shares (such Preferred Shares, "Common Stock Equivalents")),
[iv] debt securities of the Company, [v] other assets, or
[vi] any combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been determined by the Board
of Directors of the Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the Company;
provided, however, if the Company shall not have made adequate provision to
deliver value pursuant to clause [b] above within 30 days following the
first occurrence of a Section 11(a)(ii) Event, then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares (to the extent available)
and then, if necessary, cash, which securities and/or assets in the aggregate
are equal to the Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional Common
Shares could be authorized for issuance upon exercise in full of the Rights,
the
30-day period set forth above may be extended to the extent necessary, but
not
more than 90 days following the first occurrence of a Section 11(a)(i)
Event, to enable the Company to seek shareholder approval for the authorization
of such additional shares (such period, as it may be extended, the "Substitution
Period").
To
the
extent that the Company determines that some action needs to be taken pursuant
to the first and/or second sentences of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights and (y) may suspend
the exercisability of the Rights until the expiration of the Substitution Period
to seek any authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to determine
the value thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of each Common Share shall be the current market price (as determined
pursuant to Section 11(d) hereof) on the date of the first occurrence of a
Section 11(a)(ii) Event and the value of any Common Stock Equivalent shall
be deemed to have the same value as a Common Share on such date.
14
(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 securities convertible into Preferred Shares at
a
price per Preferred Share (or having a conversion price per share, if a security
convertible into Preferred Shares) less than the then current per share market
price of the Preferred Shares (as defined in Section 11(d)) on such record
date,
the Purchase Price to be in effect after such record date shall be determined
by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares to be so
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 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 of the Company, 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 which
would then be in effect if such record date had not been fixed.
(c) In
case
the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness or assets (other than
a
regular quarterly cash dividend or a dividend payable in Preferred Shares)
or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such
record date by a fraction, the numerator of which shall be the then current
per
share market price of the Preferred Shares on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the
15
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
the Common Shares on any date shall be deemed to be the average of the daily
closing prices per share of such Common Shares 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 Common Shares is determined during a period following the announcement
by
the issuer of such Common Shares of (A) a dividend or distribution on such
Common Shares payable in shares of such Common Shares or securities convertible
into such shares, or (B) any subdivision, combination or reclassification of
such Common Shares 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 Common Share. 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 New York Stock
Exchange or, if the Common Shares are not listed or admitted to trading on
the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Common Shares are listed or admitted to trading
or, if the Common Shares 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, as reported
by
the National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the Common
Shares 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 Common Shares selected by the Board of Directors of the Company.
16
The
term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Shares are listed or admitted to trading is open
for the transaction of business or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, a Business Day. If
the
Common Shares are not publicly held or so listed or traded, "current per share
market price" shall mean the fair value per share as determined in good faith
by
the Board of Directors of the Company, whose determination shall be described
in
a statement filed with the Rights Agent.
(ii) For
the
purpose of any computation hereunder, the "current market price" per Preferred
Share shall be determined in the same manner as set forth above for the Common
Shares in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the current market price per Preferred Share cannot be
determined in the manner provided above or if the Preferred Shares are not
publicly held or listed or traded in a manner described in clause (i) of
this Section 11(d), the "current market price" per Preferred Share shall be
conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Shares occurring after the date
of
this Agreement) multiplied by the Current Market Price per Common Share. If
neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current market price" per Preferred Share shall mean the
fair
value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all purposes of
this
Agreement, the "current market price" of one one-hundredth of a Preferred Share
shall be equal to the "current market price" of one Preferred Share divided
by
100.
(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 ten-thousandth of a share as the case
may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of
(i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
17
(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
Section 11(a) through (c), inclusive, and the provisions of Sections 7, 9,
10
and 13 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 Preferred Shares purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless
the Company shall have exercised its election as provided in Section 11(i),
upon
each adjustment of the Purchase Price as a result of the calculations made
in
Sections 11(b) and (c), 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 Preferred Shares (calculated to the
nearest one ten-thousandth of a share) obtained by (i) multiplying (x) the
number of shares 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 Preferred Shares 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 Preferred Shares 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
18
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 Preferred
Shares 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 Preferred Shares which were expressed in the initial Right
Certificates issued hereunder.
(k) Before
taking any action that would cause an adjustment reducing the Purchase Price
below the then par value, if any, of the Preferred Shares issuable upon exercise
of the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly
and
legally issue fully paid and nonassessable Preferred Shares at such adjusted
Purchase Price.
(1) In
any
case in which this Section 11 shall require that an adjustment in the
Purchase Price be made effective as of a record date for a specified event,
the
Company may elect to defer until the occurrence of such event the issuing to
the
holder of any Right exercised after such record date of the Preferred Shares
and
other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis
of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder's right to receive such additional shares
upon
the occurrence of the event requiring such adjustment.
19
(m) Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent
that it in its sole discretion shall determine to be advisable in order that
any
consolidation or subdivision of the Preferred Shares, issuance wholly for cash
of any Preferred Shares at less than the current market price, issuance wholly
for cash of Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, dividends on Preferred Shares payable
in Preferred Shares or issuance of rights, options or warrants referred to
in
Section 11(b), hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such stockholders.
Section
12. Certificate
of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file
with
the Rights Agent and with each transfer agent for the Common Shares a copy
of
such certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 24 hereof.
Section
13. Consolidation,
Merger or Sale or Transfer of Assets or Earning Power.
In the
event, directly or indirectly, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with
such
merger, all or part of the Common Shares shall be changed into or exchanged
for
stock or other securities of any other Person (or the Company) or cash or any
other property, or (c) the Company shall sell or otherwise transfer (or one
or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets
or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price
equal
to two times the then current Purchase Price multiplied by the number of one
one-hundredth Preferred Shares for which a Right is then exercisable, in
accordance with the terms of this Agreement, such number of Common Shares of
such other Person (including the Company as successor thereto or as the
surviving corporation) as shall equal the result obtained by (A) multiplying
two
times the then current Purchase Price by the number of one one-hundredth
Preferred Shares for which a Right is then exercisable and dividing that product
by (B) 50% of the then current per share market price of the
Common Shares of such
20
other
Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the issuer
of
such Common Shares shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such issuer shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation
to
the Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement so providing. The Company
shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by
the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section
14. Fractional
Rights and Fractional Shares.
(a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, 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 New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which
the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such
organization, the average of the closing bid and asked prices as furnished
by a
professional market maker making a market in the Rights selected by the Board
of
Directors of the Company. If on any such date no such market maker is making
a
market in the Rights, the fair value of the Rights on such date as determined
in
good faith by the Board of Directors of the Company shall be
used.
21
(b) The
Company shall not be required to issue fractions of Preferred Shares upon
exercise of the Rights or to distribute certificates which evidence fractional
Preferred Shares. In lieu of fractional Preferred Shares, the Company may,
at
its sole option, 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 closing price of a Preferred Share (as determined pursuant to
Section 11(d)) for the Trading Day immediately prior to the date of such
exercise.
(c) The
holder of a Right by the acceptance of the Right expressly waives the holder's
right to receive any fractional Rights or any fractional shares upon exercise
of
a Right (except as provided above).
Section
15. Rights
of Action.
All
rights of action in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the 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.
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:
22
(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 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 which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or
any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 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 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.
23
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 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.
Section
19. Merger
or Consolidation or Change of Name of Rights Agent.
Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer
or
corporate trust 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.
24
Section
20. Duties
of Rights Agent.
The
Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The
Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact
or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Treasurer or the Secretary
of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in
good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The
Rights Agent shall be liable hereunder to the Company and any other Person
only
for its own negligence, bad faith or willful misconduct.
(d) The
Rights Agent shall not be liable for or by reason of any of the statements
of
fact or recitals contained in this Agreement or in the Right Certificates
(except its countersignature thereof) or be required to verify the same, but
all
such statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The
Rights Agent shall not be under any responsibility in respect of the validity
of
this Agreement or the execution and delivery hereof (except the due 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
Section 3, 11, 13 or 23, or the ascertaining of the existence of facts that
would require any such change or adjustment (except
25
with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether
any
Preferred Shares or Common 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, 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.
(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 by 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.
26
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' prior notice in writing mailed to
the
Company and to each transfer agent of the Common 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' prior notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares
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
a
corporation organized and doing business under the laws of the United States
or
of the State of Wisconsin (or of any other state of the United States so long
as
such corporation is authorized to do business as a banking institution in the
State of Wisconsin), in good standing, having an office in the State of
Wisconsin, which is authorized under such laws to exercise corporate trust
or
stock transfer powers and is subject to supervision or examination by federal
or
state authority and which has at the time of its appointment as Rights Agent
a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder,
and
execute and deliver any further assurance, conveyance, act or deed necessary
for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common 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.
27
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.
Section
23. Redemption.
(a) The
Board of Directors of the Company may, at its option, at any time prior to
the
earlier of (i) the close of business on the twentieth day following such
time as any Person becomes an Acquiring Person or (ii) the Final Expiration
Date, redeem all but not less than all the then outstanding Rights at a
redemption price of $.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").
The redemption of the Rights by the Board of Directors may be made effective
at
such time, on such basis and with such conditions as the Board of Directors
in
its sole discretion may establish. Provided, however, that if, after a Person
has become an Acquiring Person and following the expiration of the right of
redemption hereunder but prior to any transaction of the kind described in
Section 13, (i) a Person who is an Acquiring Person shall have
transferred or otherwise disposed of a number of Common Shares in one
transaction or series of transactions, not directly or indirectly involving
the
Company or any of its Affiliates, Associates or Subsidiaries, which did not
result in the occurrence of a transaction of the type described in
Section 13 such that such Person is thereafter a Beneficial Owner of 10% or
less of the outstanding shares of Common Stock, and (ii) there are no other
Persons, immediately following the occurrence of the event described in
clause (i), who are Acquiring Persons, then the right of redemption shall
be reinstated and thereafter be subject to the provisions of this
Section 23. Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence of
a
transaction of the type described in Section 13 until such time as the
Company's right of redemption hereunder has expired.
(b) Immediately
upon the action of the Board of Directors of the Company ordering the redemption
of the Rights pursuant to paragraph (a) of this Section 23, 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
and
notice to the Rights Agent of any such redemption; provided, however, that
the
failure to give, or any defect in, any such notice shall not affect
28
the
validity of such redemption. Within 10 days after such action of the Board
of
Directors ordering the redemption of the Rights, the Company shall mail a notice
of redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall
be
deemed given, whether or not the holder receives the notice. Each such notice
of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner
other
than that specifically set forth in this Section 23, and other than in
connection with the purchase of Common Shares prior to the Distribution
Date.
Section
24. Notice
of Certain Events.
(a) In case the Company shall propose, at any time after the Distribution
Date, (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, then, in each such case,
the Company shall give to each holder of a Right Certificate, in accordance
with
Section 25 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, or distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the
date of participation therein by the holders of the 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 Preferred Shares whichever shall be the
earlier.
(b) In
case
any Section 11(a)(ii) Event shall occur, then (i) the Company shall as soon
as practicable thereafter give to each holder of a Right Certificate, in
accordance with Section 25 hereof, a notice of the occurrence of such event,
which notice shall describe such event and the consequences of such event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references
in the preceding paragraph to Preferred Shares shall be deemed thereafter to
refer to Common Shares and/or, if appropriate, other securities.
29
Section
25. 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:
Criticare
Systems, Inc.
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Corporate Secretary
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:
LaSalle
Bank National Association
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇. ▇▇▇▇ ▇▇▇▇▇▇
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
26. Supplements
and Amendments.
The
Company may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any ambiguity,
to
correct or supplement any provision contained herein which may be defective
or
inconsistent with any other provisions herein, or to make any other provisions
with respect to the Rights which the Company may deem necessary or desirable,
any such supplement or amendment to be evidenced by a writing signed by the
Company and the Rights Agent; provided, however, that from and after such time
as any Person becomes an Acquiring Person, this Agreement shall not be amended
in any manner which would adversely affect the interests of the holders of
Rights. Without limiting the foregoing, the Company may at any time prior to
such time as any Person becomes an Acquiring Person amend this Agreement to
lower the thresholds set forth in Sections l(a) and 3(a) hereof to not less
than
the greater of (i) the sum of .001% and the largest percentage of the
outstanding Common Shares then known by the Company to be beneficially owned
by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan) and (ii)
10%.
30
Section
27. 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
28. 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
29. 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
30. Determinations
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 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. The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, 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 (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are
done or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Right Certificates
and all other parties and (y) not subject the Board to any liability to the
holders of the Rights.
Section
31. 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.
31
Section
32. Counterparts.
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section
33. 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.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and attested, all as of the day and year first above
written.
CRITICARE
SYSTEMS, INC.
BY
▇▇▇▇
▇. Soika________________________
▇▇▇▇ ▇. ▇▇▇▇▇, President and
Chief Executive Officer
BY
▇▇▇▇
▇. Knudson_________________ _____
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
LASALLE
BANK NATIONAL ASSOCIATION
BY _/s/
▇▇▇▇ Rimkus______________________
Its_Vice
President______________________
BY _/s/
▇▇▇▇▇▇ Kaminski____________________
Its_Vice
President______________________
32
Exhibit
A
Form
of
Right Certificate
Certificate
No. R- ____
Rights
NOT
EXERCISABLE AFTER MARCH 27, 2017 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right
Certificate
CRITICARE
SYSTEMS, 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 Amended and
Restated Rights Agreement, dated as of March 27, 2007 (the "Rights
Agreement"), between Criticare Systems, Inc., a Delaware corporation (the
"Company"), and LaSalle Bank National Association (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such
term
is defined in the Rights Agreement) and prior to 5:00 P.M., Milwaukee, Wisconsin
time, on March 27, 2017 at the principal office of the Rights Agent, or at
the office of its successor as Rights Agent, one one-hundredth of one fully
paid
nonassessable share of Preferred Stock, par value $.04 per share (the "Preferred
Shares"), of the Company, at a purchase price of $25 per full one one-hundredth
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
Preferred Shares 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
March 27, 2007, based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of
Preferred Shares 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.
B-1
This
Right Certificate is subject to all of the terms, provisions and conditions
of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies
of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This
Right Certificate, with or without other Right Certificates, upon surrender
at
the principal office of the Rights Agent, 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 Common 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 $.01
per
Right or (ii) may be exchanged in whole or in part for Preferred
Shares.
The
Company is not required to issue any fractional Preferred Shares upon the
exercise of any Right or Rights evidenced hereby. In lieu thereof, the Company
may, at its sole option, make a cash payment 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.
B-2
This
Right Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.
WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal. Dated as of ___________.
CRITICARE
SYSTEMS, INC.
BY_____________________________
Attest:
________________________________
Countersigned:
LASALLE
BANK NATIONAL ASSOCIATION
BY______________________________
Authorized
Signature
B-3
Form
of
Reverse Side of Right Certificate
FORM
OF ASSIGNMENT
(To
be
executed by the registered holder if such
holder
desires to transfer the Right Certificate.)
FOR
VALUE
RECEIVED ____________________________________ hereby sells, assigns and
transfers unto
_____________________________________________________________________________________________
(Please print name and address of transferee)
_____________________________________________________________________________________________
this
Right Certificate, together with all right, title and interest therein, and
does
hereby irrevocably constitute and appoint
______________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company,
with
full
power of substitution.
Dated:
___________________, 20__
________________________________
Signature
Signature
Guaranteed:
Signatures
must be guaranteed by a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc.,
or a
commercial bank or trust company having an office or correspondent in the United
States.
------------------------------------------------------------------------------------------------
The
undersigned hereby certifies that the Rights evidenced by this Right Certificate
are not beneficially owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
________________________________
Signature
B-4
Form
of
Reverse Side of Right Certificate -- continued
FORM
OF ELECTION TO PURCHASE
.
(To
be
executed if holder desires to exercise Rights represented by the Right
Certificate.)
To
CRITICARE SYSTEMS, INC.:
The
undersigned hereby irrevocably elects to exercise Rights represented by this
Right Certificate to purchase the one one-hundredth Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please
insert social security
or
other
identifying number
________________________________________________________________________________________________________________
(Please
print name and address)
________________________________________________________________________________________________________________
If
such
number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please
insert social security
or
other
identifying number
________________________________________________________________________________________________________________
(Please
print name and address)
________________________________________________________________________________________________________________
Dated:________________,
20__
________________________________
Signature
Signature
Guaranteed:
Signatures
must be guaranteed by a member firm of a registered national securities
exchange, a member of the National Association of Securities
B-5
Form
of
Reverse Side of Right Certificate -- continued
Dealers,
Inc., or a commercial bank or trust company having an office or correspondent
in
the United States.
-------------------------------------------------------------------------------------------------------------------------------------
The
undersigned hereby certifies that the Rights evidenced by this Right Certificate
are not beneficially owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
_______________________________
Signature
-------------------------------------------------------------------------------------------------------------------------------------
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.
B-6