PEREGRINE PHARMACEUTICALS, INC. and INTEGRITY STOCK TRANSFER, INC. as Rights Agent RIGHTS AGREEMENT Dated as of March 16, 2006
EXHIBIT
4.19
PEREGRINE
PHARMACEUTICALS, INC.
and
INTEGRITY
STOCK TRANSFER, INC. as Rights Agent
Dated
as
of March 16, 2006
TABLE
OF CONTENTS
| Page | ||
|
Section
1.
|
Certain
Definitions
|
3
|
|
Section
2.
|
Appointment
of Rights Agent
|
7
|
|
Section
3.
|
Issue
of Right Certificates
|
7
|
|
Section
4.
|
Form
of Right Certificates
|
9
|
|
Section
5.
|
Countersignature
and Registration
|
9
|
|
Section
6.
|
Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates
|
10
|
|
Section
7.
|
Exercise
of Rights, Purchase Price; Expiration Date of Rights
|
11
|
|
Section
8.
|
Cancellation
and Destruction of Right Certificates
|
12
|
|
Section
9.
|
Availability
of Shares of Preferred Stock
|
12
|
|
Section
10.
|
Preferred
Stock Record Date
|
14
|
|
Section
11.
|
Adjustment
of Purchase Price, Number and Kind of Shares and Number of
Rights
|
14
|
|
Section
12.
|
Certificate
of Adjusted Purchase Price or Number of Shares
|
21
|
|
Section
13.
|
Consolidation,
Merger or Sale or Transfer of Assets or Earning Power
|
22
|
|
Section
14.
|
Fractional
Rights and Fractional Shares
|
25
|
|
Section
15.
|
Rights
of Action
|
26
|
|
Section
16.
|
Agreement
of Right Holders
|
27
|
|
Section
17.
|
Right
Certificate Holder Not Deemed a Stockholder
|
27
|
|
Section
18.
|
Concerning
the Rights Agent
|
28
|
|
Section
19.
|
Merger
or Consolidation or Change of Name of Rights Agent
|
28
|
|
Section
20.
|
Duties
of Rights Agent
|
29
|
|
Section
21.
|
Change
of Rights Agent
|
31
|
|
Section
22.
|
Issuance
of New Right Certificates
|
31
|
|
Section
23.
|
Redemption
|
32
|
|
Section
24.
|
Exchange
|
32
|
|
Section
25.
|
Notice
of Certain Events
|
33
|
|
Section
26.
|
Notices
|
34
|
|
Section
27.
|
Supplements
and Amendments
|
35
|
|
Section
28.
|
Successors
|
35
|
|
Section
29.
|
Benefits
of this Agreement
|
35
|
|
Section
30.
|
Determinations
and Actions by the Board of Directors
|
36
|
|
Section
31.
|
Severability
|
36
|
|
Section
32.
|
Governing
Law
|
36
|
|
Section
33.
|
Counterparts
|
36
|
|
Section
34.
|
Descriptive
Headings
|
36
|
This
Rights Agreement, dated as of March 16, 2006 (“Agreement”),
between Peregrine Pharmaceuticals, Inc., a Delaware corporation (the
“Company”),
and
Integrity Stock Transfer, Inc., as Rights Agent (the “Rights
Agent”).
The
Board
of Directors of the Company has authorized and declared a dividend of one
preferred share purchase right (a “Right”)
for
each share of Common Stock (as hereinafter defined) of the Company outstanding
as of the Close of Business (as defined below) on March 27, 2006 (the
“Record
Date”),
each
Right representing the right to purchase one one-thousandth (subject to
adjustment) of a share of Preferred Stock (as hereinafter defined), upon
the
terms and subject to the conditions herein set forth, and has further authorized
and directed the issuance of one Right (subject to adjustment as provided
herein) with respect to each share of Common Stock that becomes outstanding
between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined); provided,
however, that Rights may be issued with respect to shares of Common Stock
that
shall become outstanding after the Distribution Date and prior to the Expiration
Date in accordance with Section 22.
Accordingly,
in consideration of the premises and the mutual agreements herein set forth,
the
parties hereby agree as follows:
Section
1. Certain
Definitions.
For
purposes of this Agreement, the following terms have the meaning
indicated:
(a) “Acquiring
Person”
means
any Person (as such term is hereinafter defined) who or which, together with
all
Affiliates and Associates (as such terms are hereinafter defined) of such
Persons, becomes the Beneficial Owner (as such term is hereinafter defined)
of
15% or more of the shares of Common Stock then outstanding, but does not
include
an Exempt Person (as such term is hereinafter defined); provided,
however,
that
(i) if the Board of Directors of the Company determines in good faith that
a
Person who would otherwise be an “Acquiring Person” became such inadvertently
(including, without limitation, because (A) such Person was unaware that
it
beneficially owned a percentage of Common Stock that would otherwise cause
such
Person to be an “Acquiring Person” or (B) such Person was aware of the extent of
its Beneficial Ownership of Common Stock but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without
any
intention of changing or influencing control of the Company, then such Person
shall not be deemed to be or to have become an “Acquiring Person” for any
purposes of this Agreement unless and until such Person shall have failed
to
divest itself, as soon as practicable (as determined, in good faith, by the
Board of Directors of the Company), of Beneficial Ownership of a sufficient
number of shares of Common Stock so that such Person would no longer otherwise
qualify as an “Acquiring Person”; (ii) if, as of the date hereof or prior to the
first public announcement of the adoption of this Agreement, any Person is
or
becomes the Beneficial Owner of 15% or more of the shares of Common Stock
outstanding, such Person shall not be deemed to be or to become an “Acquiring
Person” unless and until such time as such Person, after the first public
announcement of the adoption of this Agreement, becomes the Beneficial Owner
of
additional shares of Common Stock (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding Common Stock
or
pursuant to a split or subdivision of the outstanding Common Stock), unless,
upon becoming the Beneficial Owner of such additional shares of Common Stock,
such Person is not then the Beneficial Owner of 15% or more of the shares
of
Common Stock then outstanding; and (iii) no Person shall become an “Acquiring
Person” as the result of an acquisition of shares of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the proportionate
number of shares of Common Stock beneficially owned by such Person to 15%
or
more of the shares of Common Stock then outstanding, provided,
however,
that if
a Person shall become the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding by reason of such share acquisitions by the
Company and shall thereafter become the Beneficial Owner of any additional
shares of Common Stock (other than pursuant to a dividend or distribution
paid
or made by the Company on the outstanding Common Stock or pursuant to a split
or
subdivision of the outstanding Common Stock), then such Person shall be deemed
to be an “Acquiring Person” unless upon becoming the Beneficial Owner of such
additional shares of Common Stock such Person does not beneficially own 15%
or
more of the shares of Common Stock then outstanding. For all purposes of
this
Agreement, any calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock 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 Securities
Exchange Act of 1934, as amended (the “Exchange
Act”),
as in
effect on the date hereof.
3
(b) “Affiliate”
and
“Associate”
have
the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act, as in effect on the date
hereof.
(c) A
Person
will be deemed the “Beneficial
Owner”
of,
will be deemed to have “Beneficial
Ownership”
of,
and
will be deemed to “beneficially
own”
any
securities:
(i) which
such Person or any of such Person’s Affiliates or Associates is deemed to
beneficially own, directly or indirectly, within the meaning of Rule l3d-3
of
the General Rules and Regulations under the Exchange Act as in effect on
the
date hereof;
(ii) which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time, compliance with regulatory
requirements, fulfillment of a condition or otherwise) 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, warrants or options, or otherwise; provided,
however,
that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own,
(x)
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, (y) securities
which
such Person has a right to acquire upon the exercise of Rights at any time
prior
to the time that any Person becomes an
4
Acquiring
Person or (z) securities issuable upon the exercise of Rights from and after
the
time that any Person becomes an Acquiring Person if such Rights were acquired
by
such Person or any of such Person’s Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof
(“Original
Rights”)
or
pursuant to Section 11(i) or Section 11(n) with respect to an adjustment
to
Original Rights; 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 by reason of such agreement, arrangement or understanding if the
agreement, arrangement or understanding to vote such security (1) arises
solely
from a revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2)
is
not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which
are
beneficially owned, directly or indirectly, by any other Person and with
respect
to 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 such securities of the Company;
provided,
however,
that no
Person who is an officer, director or employee of an Exempt Person shall
be
deemed, solely by reason of such Person’s status or authority as such, to be the
“Beneficial Owner” of, or to have “Beneficial Ownership” of, or to “beneficially
own” any securities that are “beneficially owned” (as defined in this Section
l(c)), including, without limitation, in a fiduciary capacity, by an Exempt
Person or by any other such officer, director or employee of an Exempt
Person.
(d) “Business
Day”
means
any day other than a Saturday, a Sunday or a day on which banking institutions
in the State of California 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., California time, on such date; provided,
however,
that if
such date is not a Business Day it shall mean 5:00 P.M., California time,
on the
next succeeding Business Day.
(f) “Common
Stock”
when
used with reference to the Company shall mean the Common Stock, par value
$.001
per share, of the Company. “Common Stock” when used with reference to any Person
other than the Company shall mean the common stock (or, in the case of an
unincorporated entity, the equivalent equity interest) with the greatest
voting
power of such other Person or the equity securities or other equity interest
having power to control or direct management, of such other person, or, if
such
other Person is a Subsidiary (as such term is hereinafter defined) of another
Person, the Person or Persons that ultimately control such first-mentioned
Person, and which has issued and outstanding such capital stock, equity
securities or equity interests.
5
(g) “Common
Stock Equivalents”
has
the
meaning set forth in Section 11(a)(iii) hereof.
(h) “Current
Value”
has
the
meaning set forth in Section 11(a)(iii) hereof.
(i) “Distribution
Date”
has
the
meaning set forth in Section 3 hereof.
(j) “Equivalent
Preferred Shares”
has
the
meaning set forth in Section 11(b) hereof.
(k) “Exempt
Person”
means
the Company or any Subsidiary (as such term is hereinafter defined) of the
Company, in each case including, without limitation, in its fiduciary capacity,
or any employee benefit plan of the Company or of any Subsidiary of the Company,
or any entity or trustee holding Common Stock for or pursuant to the terms
of
any such plan or for the purpose of funding any such plan or funding other
employee benefits for employees of the Company or of any Subsidiary of the
Company.
(l) “Exchange
Ratio”
has
the
meaning set forth in Section 24 hereof.
(m) “Expiration
Date”
has
the
meaning set forth in Section 7 hereof.
(n) “Flip-In
Event”
has
the
meaning set forth in Section 11(a)(ii) hereof.
(o) “Final
Expiration Date”
has
the
meaning set forth in Section 7 hereof.
(p) “Nasdaq”
means
The Nasdaq Stock Market.
(q) “Person”
means
any individual, firm, corporation, joint venture partnership, limited liability
company, unincorporated association, trust or other entity, and includes
any
successor (by merger or otherwise) to such entity.
(r) “Preferred
Stock”
means
the Series D Participating Preferred Stock, par value $.001 per share, of
the
Company having the rights and preferences set forth in the Form of Certificate
of Designation attached to this Agreement as Exhibit A.
(s) “Principal
Party”
has
the
meaning set forth in Section 13(b) hereof.
(t) “Redemption
Date”
has
the
meaning set forth in Section 7 hereof.
(u) “Redemption
Price”
has
the
meaning set forth in Section 23 hereof.
(v) “Right
Certificate”
has
the
meaning set forth in Section 3 hereof.
(w) “Securities
Act”
means
the Securities Act of 1933, as amended.
6
(x) “Section
11(a)(ii) Trigger Date”
has
the
meaning set forth in Section 11(a)(iii) hereof.
(y) “Spread”
has
the
meaning set forth in Section 11(a)(iii) hereof.
(z) “Stock
Acquisition Date”
means
the first date of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to Section 13(d)
of
the Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person
has become such, or such earlier date as a majority of the Board of Directors
shall become aware of the existence of an Acquiring Person.
(aa) “Subsidiary”
of
any
Person means any corporation or other entity of which securities or other
ownership interests having ordinary voting power sufficient to elect a majority
of the board of directors or other persons performing similar functions are
beneficially owned, directly or indirectly, by such Person, and any corporation
or other entity that is otherwise controlled, directly or indirectly, by
such
Person.
(bb) “Substitution
Period”
has
the
meaning set forth in Section 11(a)(iii) hereof.
(cc) “Summary
of Rights”
has
the
meaning set forth in Section 3 hereof.
(dd) “Trading
Day”
has
the
meaning set forth in Section 11(d)(i) hereof.
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 be the holders of Common Stock) in accordance with
the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
as
it may deem necessary or desirable.
Section
3. Issue
of Right Certificates.
(a) Until
the
Close of Business on the earlier of (i) the tenth day after the Stock
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 an Exempt Person) of, or of the first public announcement of
the
intention of such Person (other than an Exempt Person) to commence, a tender
or
exchange offer the consummation of which would result in any Person (other
than
an Exempt Person) becoming the Beneficial Owner of shares of Common Stock
aggregating 15% or more of the Common Stock then outstanding (the earlier
of
such dates being herein referred to as the “Distribution
Date,”
provided,
however,
that if
either of such dates occurs after the date of this Agreement and on or prior
to
the Record Date, then the Distribution Date shall be the Record Date), (x)
the
Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by
the certificates for Common Stock registered in the names of the holders
thereof
(which certificates for Common Stock shall be deemed to be Rights Certificates)
and not by separate Right Certificates, and (y) the Rights (and the right
7
to
receive certificates therefor) will be transferable only in connection with
the
transfer of the underlying shares of Common Stock. As soon as practicable
after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the
Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid
mail,
to each record holder of Common Stock as of the Close of Business on the
Distribution Date (other than any Acquiring Person or any Associate or Affiliate
of an Acquiring Person), at the address of such holder shown on the records
of
the Company, a Right Certificate, in substantially the form of Exhibit
B
hereto
(a “Right
Certificate”),
evidencing one Right (subject to adjustment as provided herein) for each
share
of Common Stock so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On
the
Record Date, or as soon as practicable thereafter, the Company will send
a copy
of a Summary of Rights to Purchase Shares of Preferred Stock, in substantially
the form of Exhibit
C
hereto
(the “Summary
of Rights”),
by
first-class, postage-prepaid mail, to each record holder of Common Stock
as of
the Close of Business on the Record Date (other than any Acquiring Person
or any
Associate or Affiliate of any Acquiring Person), at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Stock outstanding as of the Record Date, until the Distribution Date, the
Rights
will be evidenced by such certificates registered in the names of the holders
thereof together with the Summary of Rights. Until the Distribution Date
(or, if
earlier, the Expiration Date), the surrender for transfer of any certificate
for
Common Stock outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the transfer of the Rights associated
with the Common Stock represented thereby.
(c) Rights
shall be issued in respect of all shares of Common Stock issued or disposed
of
(including, without limitation, upon disposition of Common Stock out of treasury
stock or issuance or reissuance of Common Stock out of authorized but unissued
shares) after the Record Date but prior to the earlier of the Distribution
Date
and the Expiration Date, or in certain circumstances provided in Section
22
hereof, after the Distribution Date. Certificates issued for Common Stock
(including, without limitation, upon transfer of outstanding Common Stock,
disposition of Common Stock out of treasury stock or issuance or reissuance
of
Common Stock out of authorized but unissued shares) after the Record Date
but
prior to the earlier of the Distribution Date and the Expiration Date, or
in
certain circumstances provided in Section 22 hereof, after the Distribution
Date
shall have impressed on, printed on, written on or otherwise affixed to them
the
following legend:
This
certificate also evidences and entitles the holder hereof to certain rights
as
set forth in a Rights Agreement between Peregrine Pharmaceuticals, Inc. (the
“Company”)
and
Integrity Stock Transfer, Inc., as Rights Agent, dated as of March 16, 2006
and
as amended from time to time (the “Rights
Agreement”),
the
terms of which are hereby incorporated herein by reference and a copy of
which
is on file at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a copy
of
the Rights Agreement without charge after receipt of a written request therefor.
Under
certain circumstances, as set forth in the Rights Agreement, Rights owned
by or
transferred to any Person who is or becomes an Acquiring Person (as defined
in
the Rights Agreement) and certain transferees thereof will become null and
void
and will no longer be transferable.
8
With
respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier Expiration Date) the Rights associated
with
the Common Stock represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate,
except as otherwise provided herein, shall also constitute the transfer of
the
Rights associated with the Common Stock represented thereby. If the Company
purchases or otherwise acquires any Common Stock after the Record Date but
prior
to the Distribution Date, any Rights associated with such Common Stock shall
be
deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Stock which are no longer
outstanding.
Notwithstanding
this paragraph (c), the omission of a legend shall not affect the enforceability
of any part of this Agreement or the rights of any holder of the
Rights.
Section
4. Form
of Right Certificates.
The
Right Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be substantially in
the
form set forth in Exhibit
B
hereto
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as
may be
required to comply with any applicable law or with any rule or regulation
made
pursuant thereto or with any rule or regulation of any stock exchange or
interdealer quotation system on which the Rights may from time to time be
listed
or quoted, or to conform to usage. Subject to the provisions of this Agreement,
the Right Certificates, whenever issued, shall be dated as of the Record
Date
and shall show the date of counter-signature by the Rights Agent on their
face
and shall entitle the holders thereof to purchase such number of one
one-thousandths (1/1000th)
of a
share of Preferred Stock as shall be set forth therein at the price per one
one-thousandth (1/1000th)
of a
share of Preferred Stock set forth therein (the “Purchase
Price”),
but
the number of such one one-thousandths (1/1000th)
of a
share of Preferred Stock and the Purchase Price shall be subject to adjustment
as provided herein.
Section
5. Countersignature
and Registration.
(a) The
Right
Certificates shall be executed on behalf of the Company by its Chairman of
the
Board, its Chief Executive Officer, its President, or its Chief Financial
Officer, either manually or by facsimile signature, shall have affixed thereto
the Company’s seal or a facsimile thereof and shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the
Rights
Agent and shall not be valid for any purpose unless
9
countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent
and issued and delivered by the Company with the same force and effect as
though
the Person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the
Company
by any Person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any
such
Person was not such an officer.
(b) Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at
an
office or agency designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show
the
names and addresses of the respective holders of the Right Certificates,
the
number of Rights evidenced on its face by each of the Right Certificates,
and
the date of each of the Right Certificates.
Section
6. Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.
(a) Subject
to the provisions of this Agreement, at any time after the Distribution Date
and
prior to the Close of Business on the Expiration Date, any Right Certificate
or
Right Certificates may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered
holder
to purchase a like number of one one-thousandths (1/1000th)
of a
share of Preferred Stock 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, together
with any required form of assignment and certificates duly completed, to
be
transferred, split up, combined or exchanged at the office or agency of the
Rights Agent designated for such purpose. 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.
(b) Subject
to the provisions of this Agreement, at any time after the Distribution Date
and
prior to the Close of Business on the Expiration Date, 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.
10
Section
7. Exercise
of Rights, Purchase Price; Expiration Date of Rights.
(a) Except
as
otherwise provided herein, the Rights shall become exercisable on the
Distribution Date, and thereafter the registered holder of any Right Certificate
may, subject to Section 11(a)(ii) hereof and except as otherwise provided
herein, exercise the Rights evidenced thereby in whole or in part upon surrender
of the Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the office or agency of
the
Rights Agent designated for such purpose, together with payment of the aggregate
Purchase Price with respect to the total number of one one-thousandths
(1/1000th)
of a
share of Preferred Stock (or other securities, cash or other assets, as the
case
may be) as to which the Rights are exercised, at any time which is both after
the Distribution Date and prior to the time (the “Expiration
Date”)
that
is the earliest of (i) the Close of Business on March 16, 2016 (the
“Final
Expiration Date”),
(ii)
the time at which the Rights are redeemed as provided in Section 23 hereof
(the
“Redemption
Date”),
(iii)
the time at which such Rights are exchanged as provided in Section 24 hereof,
or
(iv) the closing of any merger or other acquisition transaction involving
the
Company pursuant to an agreement of the type described in Section 13(f) at
which
time the Rights are terminated.
(b) The
Purchase Price shall be initially $11.00 for each one one-thousandth
(1/1000th)
of a
share of Preferred Stock purchasable upon the exercise of a Right. The Purchase
Price and the number of one one-thousandths (1/1000th)
of a
share of Preferred Stock or other securities or property to be acquired upon
exercise of a Right 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) of this Section
7.
(c) Except
as
otherwise provided herein, upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the aggregate Purchase Price for the shares of
Preferred Stock 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, in cash or by certified check, cashier’s check or money
order payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Stock
certificates for the number of shares of Preferred Stock to be purchased
and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such
requests, or (B) requisition from a depositary agent appointed by the Company
depositary receipts representing interests in such number of one one-thousandths
(1/1000th)
of a
share of Preferred Stock as are to be purchased (in which case certificates
for
the Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs
any
such depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) promptly
after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly deliver such cash
to
or upon the order of the registered holder of such Right
Certificate.
11
(d) Except
as
otherwise provided herein, in case the registered holder of any Right
Certificate shall exercise less than all of the Rights evidenced thereby,
a new
Right Certificate evidencing Rights equivalent to the exercisable 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 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 form of election to purchase set forth on the reverse side
of
the Rights 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.
Section
8. Cancellation
and Destruction of Right Certificates.
All
Right Certificates surrendered for the purpose of exercise, transfer, split
up,
combination or exchange shall, if surrendered to the Company or to any of
its
agents, be delivered to the Rights Agent for cancellation or in canceled
form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted
by
any of the provisions of this Agreement. The Company shall deliver to the
Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel
and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver
all
canceled Right Certificates to the Company, or shall, at the written request
of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section
9. Availability
of Shares of Preferred Stock.
(a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock or
any
shares of Preferred Stock (and, following the occurrence of a Flip-In Event,
out
of its authorized and unissued Common Stock or other securities, or out of
it
shares held in its treasury), the number of shares of Preferred Stock (and,
following the occurrence of a Flip-In Event, Common Stock and/or other
securities) that will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So
long
as the shares of Preferred Stock (and, following the occurrence of a Flip-In
Event, Common Stock and/or other Securities) issuable upon the exercise of
Rights may be listed or admitted to trading on any national securities exchange,
or quoted on Nasdaq, the Company shall use its best efforts to cause, from
and
after such time as the Rights become exercisable, all shares reserved for
such
issuance to be listed or admitted to trading on such exchange, or quoted
on
Nasdaq, upon official notice of issuance upon such exercise.
12
(c) From
and
after such time as the Rights become exercisable, the Company shall use its
best
efforts, if then necessary to permit the issuance of shares of Preferred
Stock
upon the exercise of Rights, to register and qualify such shares of Preferred
Stock under the Securities Act and any applicable state securities or “Blue Sky”
laws (to the extent exemptions therefrom are not available), cause such
registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights are no longer
exercisable for such securities and the Expiration Date. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon
any
such suspension, the Company shall issue a public announcement stating that
the
exercisability of the Rights has been temporarily suspended, as well as a
public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act (if required) shall have been declared
effective.
(d) The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all shares of Preferred Stock (and, following the
occurrence of a Flip-In Event, Common Stock and/or other securities) delivered
upon exercise of Rights shall, at the time of delivery of the certificates
therefor (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(e) 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 shares
of Preferred Stock (and, following the occurrence of a Flip-In Event, Common
Stock and/or other securities), as the case may be, 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 Stock (or Common Stock and/or other securities, as the
case
may be) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Stock (or Common Stock
and/or other securities, as the case may be) upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by that
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.
13
Section
10. Preferred
Stock Record Date.
Each
Person in whose name any certificate for Preferred Stock (or Common Stock
and/or
other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares of Preferred Stock (or Common Stock and/or other securities, as the
case
may be) 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 which the Preferred
Stock
(or Common Stock and/or other securities, as the case may be) transfer books
of
the Company are closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such certificate
shall
be dated, the next succeeding Business Day on which the Preferred Stock transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of Preferred Stock for which the Rights shall be exercisable,
including, without limitation, the right to vote or to receive dividends
or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section
11. Adjustment
of Purchase Price, Number and Kind of Shares and Number of
Rights.
The
Purchase Price, the number of shares of Preferred Stock or other securities
or
property purchasable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
(a) (i)
If
the Company shall at any time after the date of this Agreement (A) declare
and
pay a dividend on the Preferred Stock payable in shares of Preferred Stock,
(B)
subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares of Preferred Stock or (D) issue any
shares
of its capital stock in a reclassification of the Preferred Stock (including
any
such reclassification in connection with a consolidation or merger in which
the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time
of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive
the
aggregate number and kind of shares of capital stock which, if such Right
had
been exercised immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, the holder would have owned
upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided,
however,
that in
no event shall the consideration to be paid upon the exercise of one Right
be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii)
Subject to Section 24 of this Agreement, if any Person becomes an Acquiring
Person (the first occurrence of such event being referred to hereinafter
as the
“Flip-In
Event”),
then
(A) the Purchase Price shall be adjusted to be the Purchase Price in effect
immediately prior to the Flip-In Event multiplied by the number of one
one-thousandths (1/1000th)
of a
share of Preferred Stock for which a Right was exercisable immediately prior
to
such Flip-In Event, whether or not such Right was then exercisable, and (B)
each
holder of a Right, except as otherwise provided in this Section 11(a)(ii)
and
Section 11(a)(iii) hereof, shall thereafter have the right to receive, upon
exercise thereof at a price equal to the Purchase
14
Price
(as
so adjusted), in accordance with the terms of this Agreement and in lieu
of
shares of Preferred Stock, such number of shares of Common Stock as shall
equal
the result obtained by dividing the then current Purchase Price (as so adjusted)
by 50% of the then current per share market price of the Common Stock
(determined pursuant to Section 11(d) hereof) on the date of such Flip-In
Event;
provided,
however,
that
the Purchase Price (as so adjusted) and the number of shares of Common Stock
so
receivable upon exercise of a Right shall, following the Flip-In Event, be
subject to further adjustment as appropriate in accordance with Section 11(f)
hereof. Notwithstanding anything in this Agreement to the contrary, however,
from and after the Flip-In Event, any Rights that were acquired or beneficially
owned by (x) any Acquiring Person (or any Affiliate or Associate of any
Acquiring Person), (y) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the Flip-In Event
or (z)
a transferee of any Acquiring Person (or any such Affiliate or Associate)
who
became a transferee prior to or concurrently with the Flip-In Event pursuant
to
either (I) a transfer (whether or not for consideration) from the Acquiring
Person to holders of its equity securities or to any Person with whom it
has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer (whether or not for consideration) which the
Board of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions
of this
paragraph, and subsequent transferees of such Persons, shall be void without
any
further action and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this Agreement.
The Company shall use all reasonable efforts to ensure that the provisions
of
this Section 11(a)(ii) are complied with, but shall have no liability to
any
holder of Right Certificates or other Person as a result of its failure to
make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. From and after the Flip-In Event, no
Right
Certificate shall be issued pursuant to Section 3 or Section 6 hereof that
represents Rights that are or have become void pursuant to the provisions
of
this paragraph, and any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become void pursuant to the provisions
of
this paragraph shall be canceled. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have not been
exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable
only in accordance with Section 13 and not pursuant to this Section
11(a)(ii).
(iii)
The
Company may at its option substitute for a share of Common Stock issuable
upon
the exercise of Rights in accordance with the foregoing subparagraph (ii)
a
number of shares of Preferred Stock or fraction thereof such that the then
current per share market price of one share of Preferred Stock multiplied
by
such number or fraction is equal to the then current per share market price
of
one share of Common Stock. If there are not sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit the exercise
in
full of the Rights in accordance with the foregoing subparagraph (ii), the
Board
of Directors shall, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, (A) determine
the
excess (such excess, the “Spread”)
of (1)
the value of the shares of Common Stock issuable upon
15
the
exercise of a Right in accordance with the foregoing subparagraph (ii) (the
“Current
Value”)
over
(2) the Purchase Price (as adjusted in accordance with the foregoing
subparagraph (ii)), and (B) with respect to each Right (other than Rights
which
have become void pursuant to the foregoing subparagraph (ii)), make adequate
provision to substitute for the shares of Common Stock issuable in accordance
with the foregoing subparagraph (ii) upon exercise of the Right and payment
of
the Purchase Price (as adjusted in accordance therewith), (1) cash, (2) a
reduction in such Purchase Price, (3) shares of Preferred Stock or other
equity
securities of the Company (including, without limitation, shares or fractions
of
shares of preferred stock which, by virtue of having dividend, voting and
liquidation rights substantially comparable to those of the shares of Common
Stock, are deemed in good faith by the Board of Directors to have substantially
the same value as the shares of Common Stock (such shares of Preferred Stock
and
shares or fractions of shares of preferred stock are hereinafter referred
to as
“Common
Stock Equivalents”)),
(4)
debt securities of the Company, (5) other assets, or (6) any combination
of the
foregoing, having a value which, when added to the value of the shares of
Common
Stock issued upon exercise of such Right, shall have an aggregate value equal
to
the Current Value (less the amount of any reduction in such Purchase Price),
where such aggregate value has been determined by the Board of Directors
upon
the advice of a nationally recognized investment banking firm selected in
good
faith by the Board of Directors; provided,
however,
that if
the Company shall not make adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the Flip-In Event (the
“Section
11(a) (ii) Trigger Date”),
then
the Company shall be obligated to deliver, to the extent permitted by applicable
law and any material agreements then in effect to which the Company is a
party,
upon the surrender for exercise of a Right and without requiring payment
of such
Purchase Price, shares of Common Stock (to the extent available), and then,
if
necessary, such number or fractions of shares of Preferred Stock (to the
extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If, upon the occurrence of the Flip-In
Event, the Board of Directors shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, then, if the Board of Directors
so
elects, the thirty (30) day period set forth above may be extended to the
extent
necessary, but not more than ninety (90) days after the Section 11(a) (ii)
Trigger Date, in order that the Company may seek stockholder approval for
the
authorization of such additional shares (such thirty (30) day period, as
it may
be extended, is herein called the “Substitution
Period”).
To
the extent that the Company determines that some action need be taken pursuant
to the second and/or third sentence of this Section 11(a)(iii), the Company
(x)
shall provide, subject to Section 11(a)(ii) hereof and the last sentence
of this
Section 11(a)(iii), that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights until the expiration
of the Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made pursuant
to such second sentence and to determine the value thereof. In the event
of any
such suspension, the Company shall issue a public announcement stating that
the
exercisability of the Rights has been temporarily suspended, as well as a
public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the shares of Common Stock shall
be the
current per share market price (as determined pursuant to Section 11(d)(i))
on
the Section 11(a)(ii) Trigger Date and the per share or fractional value
of any
“Common Stock Equivalent” shall be deemed to equal the current per share market
price of the Common Stock. The Board of Directors of the Company may, but
shall
not be required to, establish procedures to allocate the right to receive
shares
of Common Stock upon the exercise of the Rights among holders of Rights pursuant
to this Section 11(a)(iii).
16
(b) If
the
Company shall fix a record date for the issuance of rights, options or warrants
to all holders of Preferred Stock entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or purchase Preferred
Stock (or shares having the same rights, privileges and preferences as the
Preferred Stock (“Equivalent
Preferred Shares”))
or
securities convertible into Preferred Stock or Equivalent Preferred Shares
at a
price per share of Preferred Stock or Equivalent Preferred Shares (or having
a
conversion price per share, if a security convertible into shares of Preferred
Stock or Equivalent Preferred Shares) less than the then current per share
market price of the Preferred Stock (determined pursuant to Section 11(d)
hereof) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock and Equivalent Preferred
Shares
outstanding on such record date plus the number of shares of Preferred Stock
and
Equivalent Preferred Shares which the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent Preferred Shares so
to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price,
and
the denominator of which shall be the number of shares of Preferred Stock
and
Equivalent Preferred Shares outstanding on such record date plus the number
of
additional shares of Preferred Stock and/or Equivalent Preferred Shares to
be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided,
however,
that in
no event shall the consideration to be paid upon the exercise of one Right
be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may
be paid
in a consideration part or all of which shall be in a form other than cash,
the
value of such consideration shall be as determined in good faith by the Board
of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock and Equivalent 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 Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness or assets (other than
a
regular quarterly cash dividend or a dividend payable in Preferred Stock)
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
17
price
of the Preferred Stock (determined pursuant to Section 11(d) hereof) 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 portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock, and the denominator of which
shall
be such current per share market price (determined pursuant to Section 11(d)
hereof) of the Preferred Stock; provided,
however,
that in
no event shall the consideration to be paid upon the exercise of one Right
be
less than the aggregate par value of the shares of 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) Except
as
otherwise provided herein, for the purpose of any computation hereunder,
the
“current
per share market price”
of
any
security (a “Security”
for
the
purpose of this Section 11(d)(i)) on any date shall be deemed to be the average
of the daily closing prices per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided,
however,
that if
the current per share market price of the Security is determined during a
period
following the announcement by the issuer of such Security of (A) a dividend
or
distribution on such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security, and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the
record
date for such subdivision, combination or reclassification, then, and in
each
such case, the current per share market price shall be appropriately adjusted
to
reflect the current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, or,
in
case no such sale takes place on such day, the average of the closing bid
and
asked prices, regular way, in either case as reported by the principal
consolidated transaction reporting system with respect to securities listed
or
admitted to trading on the Nasdaq National Market or, if the Security is
not
listed or admitted to trading on the Nasdaq National Market, as reported
in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security
is
listed or admitted to trading or, if the Security is not listed or admitted
to
trading on any national securities exchange, the last quoted price or, if
not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use, or, if on
any
such date the Security is 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 Security selected by the Board of Directors of the
Company. The term “Trading
Day”
shall
mean a day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
18
(ii)
For the
purpose of any computation hereunder, if the Preferred Stock is publicly
traded,
the “current per share market price” of the Preferred Stock shall be determined
in accordance with the method set forth in Section 11(d)(i). If the Preferred
Stock is not publicly traded but the Common Stock is publicly traded, the
“current per share market price” of the Preferred Stock shall be conclusively
deemed to be the current per share market price of the Common Stock as
determined pursuant to Section 11(d)(i) multiplied by the then applicable
Adjustment Number (as defined in and determined in accordance with the
Certificate of Designation for the Preferred Stock). If neither the Common
Stock
nor the Preferred Stock is publicly 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.
(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 hundred-thousandth of a share of Preferred Stock
or
one-hundredth of a share of Common Stock or other share or security as the
case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three
years from the date of the transaction which requires such adjustment or
(ii)
the Expiration Date.
(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 the Preferred Stock, thereafter the
Purchase Price and the number of such other shares so receivable upon exercise
of a 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 Stock contained in Sections 11(a), 11(b), 11(c), 11(e), 11(h),
11(i)
and 11(m) hereof, as applicable, and the provisions of Sections 7, 9, 10,
13 and
14 hereof with respect to the Preferred Stock shall apply on like terms to
any
such other shares.
(g) All
Rights originally issued by the Company subsequent to any adjustment made
to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-thousandths of a share of Preferred
Stock
purchasable from time to time hereunder upon exercise of the Rights, all
subject
to further adjustment as provided herein.
(h) Unless
the Company shall have exercised its election as provided in Section 11(i),
upon
each adjustment of the Purchase Price as a result of the calculations made
in
Sections 11(b) and 11(c), each Right outstanding immediately prior to the
making
of such adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-thousandths of a share of
Preferred Stock (calculated to the nearest one hundred-thousandth of a share
of
Preferred Stock) obtained by (i) multiplying (x) the number of one
one-thousandths of a share purchasable upon the exercise of a Right immediately
prior to such adjustment by (y) the Purchase Price in effect immediately
prior
to such adjustment and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment.
19
(i) The
Company may elect on or after the date of any adjustment of the Purchase
Price
pursuant to Sections 11(b) or 11(c) hereof to adjust the number of Rights,
in
substitution for any adjustment in the number of one one-thousandths of a
share
of Preferred Stock purchasable upon the exercise of a Right. Each of the
Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-thousandths of a share of Preferred Stock for which
a
Right was exercisable immediately prior to such adjustment. Each Right held
of
record prior to such adjustment of the number of Rights shall become that
number
of Rights (calculated to the nearest one-hundredth) 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. Such record date
may
be the date on which the Purchase Price is adjusted or any day thereafter,
but,
if the Right Certificates have been issued, shall be at least 10 days later
than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i),
the
Company may, as promptly as practicable, cause to be distributed to holders
of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders
shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the
date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on
the
record date specified in the public announcement.
(j) Irrespective
of any adjustment or change in the Purchase Price or the number of one
one-thousandths (1/1000th)
of a
share of Preferred Stock issuable upon the exercise of a Right, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of one one-thousandths (1/1000th)
of a
share of Preferred Stock 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 fraction of Preferred Stock or other
shares of capital stock issuable upon exercise of a Right, 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 shares of Preferred Stock or other such shares at such adjusted
Purchase Price.
20
(l) In
any
case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event issuing to the holder
of
any Right exercised after such record date the Preferred Stock and other
capital
stock or securities of the Company, if any, issuable upon such exercise over
and
above the Preferred Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in
effect
prior to such adjustment; provided,
however,
that
the Company shall deliver to such holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder’s right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such adjustments in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that
it
in its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Stock, issuance wholly for
cash of
any shares of Preferred Stock at less than the current market price, issuance
wholly for cash of Preferred Stock or securities which by their terms are
convertible into or exchangeable for Preferred Stock, dividends on Preferred
Stock payable in shares of Preferred Stock or issuance of rights, options
or
warrants referred to hereinabove in Section 11(b), hereafter made by the
Company
to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) Anything
in this Agreement to the contrary notwithstanding, if at any time after the
date
of this Rights Agreement and prior to the Distribution Date, the Company
shall
(i) declare and pay any dividend on the Common Stock payable in Common Stock
or
(ii) effect a subdivision, combination or consolidation of the Common Stock
(by
reclassification or otherwise than by payment of a dividend payable in Common
Stock) into a greater or lesser number of shares of Common Stock, then, in
each
such case, the number of Rights associated with each share of Common Stock
then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date or in accordance with Section 22, shall be proportionately adjusted
so that
the number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately prior
to
such event by a fraction the numerator of which shall be the total number
of
shares of Common Stock outstanding immediately prior to the occurrence of
the
event and the denominator of which shall be the total number of shares of
Common
Stock outstanding immediately following the occurrence of such event. The
adjustments provided for in this section shall be made successively whenever
such a dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
(o) The
Company agrees that, after the earlier of the Distribution Date or the Stock
Acquisition Date, it will not, except as permitted by Sections 23, 24 or
27
hereof, take (or permit any Subsidiary to take) any action if at the time
such
action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the
Rights.
Section
12. Certificate
of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 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 Stock and the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof
(if
so required under Section 25 hereof). The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained
and
shall not be deemed to have knowledge of any such adjustment unless and until
it
shall have received such certificate.
21
Section
13. Consolidation,
Merger or Sale or Transfer of Assets or Earning Power.
(a) In
the
event, directly or indirectly, at any time after the Flip-In Event (i) the
Company shall consolidate with or shall merge into any other Person and the
Company shall not be the surviving corporation, (ii) any Person shall
consolidate with or shall 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 Stock shall be changed into or
exchanged for stock or other securities of any other Person (or of the Company)
or cash or any other property, or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell, exchange, mortgage
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 wholly-owned Subsidiaries of the Company) in one or more
transactions each of which complies with Section 11(o), then upon the first
occurrence of such event, proper provision shall be made so that: (A) each
holder of a Right (other than Rights which have become void pursuant to Section
11(a)(ii) hereof) shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof), in accordance with the terms of
this
Agreement and in lieu of shares of Preferred Stock or Common Stock of the
Company, such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall equal
the result obtained by dividing the Purchase Price (as theretofore adjusted
in
accordance with Section 11(a)(ii) hereof) by 50% of the current per share
market
price of the Common Stock of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation,
merger,
sale or transfer; provided,
however,
that
the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof) and the number of shares of Common Stock of such Principal Party
so
receivable upon exercise of a Right shall be subject to further adjustment
as
appropriate in accordance with Section 11(f) hereof to reflect any events
occurring in respect of the Common Stock of such Principal Party after the
occurrence of such consolidation, merger, sale or transfer; (B) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of
the
Company pursuant to this Rights Agreement; (C) the term “Company” shall
thereafter be deemed to refer to such Principal Party; and (D) such Principal
Party shall take such steps (including, but not limited to, the reservation
of a
sufficient number of its shares of Common Stock in accordance with Section
9
hereof) in connection with such consummation of any such transaction as may
be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights; provided that, upon
the
subsequent occurrence of any consolidation, merger, sale or transfer of assets
or other extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise of
a
Right and payment of the Purchase Price as provided in this Section 13(a),
such
cash, shares, rights, warrants and other property which such holder would
have
been entitled to receive had such holder, at the time of such transaction,
owned
the Common Stock of the Principal Party receivable upon the exercise of a
Right
pursuant to this Section 13(a), and such Principal Party shall take such
steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with
the
terms hereof for such cash, shares, rights, warrants and other
property.
22
(b) “Principal
Party”
shall
mean:
(i)
in the
case of any transaction described in (i) or (ii) of the first sentence of
Section 13(a) hereof: (A) the Person that is the issuer of the securities
into
which the shares of Common Stock are converted in such merger or consolidation,
or, if there is more than one such issuer, the issuer the shares of Common
Stock
of which have the greatest aggregate market value of shares outstanding,
or (B)
if no securities are so issued, (x) the Person that is the other party to
the
merger, if such Person survives said merger, or, if there is more than one
such
Person, the Person the shares of Common Stock of which have the greatest
aggregate market value of shares outstanding or (y) if the Person that is
the
other party to the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives) or (z) the Person
resulting from the consolidation; and
(ii)
in
the case of any transaction described in (iii) of the first sentence of Section
13(a) hereof, the Person that is the party receiving the greatest portion
of the
assets or earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such transaction or
transactions receives the same portion of the assets or earning power so
transferred or if the Person receiving the greatest portion of the assets
or
earning power cannot be determined, whichever of such Persons is the issuer
of
Common Stock having the greatest aggregate market value of shares
outstanding;
provided,
however, that in any such case described in the foregoing clause (b)(i) or
(b)(ii), if the Common Stock of such Person is not at such time or has not
been
continuously over the preceding 12-month period registered under Section
12 of
the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary
of
another Person the Common Stock of which is and has been so registered, the
term
“Principal Party” shall refer to such other Person, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stock
of
all of which is and has been so registered, the term “Principal Party” shall
refer to whichever of such Persons is the issuer of Common Stock having the
greatest aggregate market value of shares outstanding, or (3) if such Person
is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules
set
forth in clauses (1) and (2) above shall apply to each of the owners having
an
interest in the venture as if the Person owned by the joint venture was a
Subsidiary of both or all of such joint venturers, and the Principal Party
in
each such case shall bear the obligations set forth in this Section 13 in
the
same ratio as its interest in such Person bears to the total of such
interests.
23
(c) The
Company shall not consummate any consolidation, merger, sale or transfer
referred to in Section 13(a) hereof unless prior thereto the Company and
the
Principal Party involved therein shall have executed and delivered to the
Rights
Agent an agreement confirming that the requirements of Sections 13(a) and
(b)
hereof shall promptly be performed in accordance with their terms and that
such
consolidation, merger, sale or transfer of assets shall not result in a default
by the Principal Party under this Agreement as the same shall have been assumed
by the Principal Party pursuant to Sections 13(a) and (b) hereof and providing
that, as soon as practicable after executing such agreement pursuant to this
Section 13, the Principal Party will:
(i)
prepare
and file a registration statement under the Securities Act, if necessary,
with
respect to the Rights and the securities purchasable upon exercise of the
Rights
on an appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing and
use
its best efforts to cause such registration statement to remain effective
(with
a prospectus at all times meeting the requirements of the Securities Act)
until
the Expiration Date and similarly comply with applicable state securities
laws;
(ii)
use
its best efforts, if the Common Stock of the Principal Party shall be listed
or
admitted to trading on the Nasdaq National Market or on another national
securities exchange, to list or admit to trading (or continue the listing
of)
the Rights and the securities purchasable upon exercise of the Rights on
the
Nasdaq National Market or such securities exchange, or, if the Common Stock
of
the Principal Party shall not be listed or admitted to trading on the Nasdaq
National Market or a national securities exchange, to cause the Rights and
the
securities receivable upon exercise of the Rights to be authorized for quotation
on Nasdaq or on such other system then in use;
(iii)
deliver to holders of the Rights historical financial statements for the
Principal Party which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the Exchange Act;
and
(iv)
obtain waivers of any rights of first refusal or preemptive rights in respect
of
the Common Stock of the Principal Party subject to purchase upon exercise
of
outstanding Rights.
(d) In
case
the Principal Party has a provision in any of its authorized securities or
in
its certificate of incorporation or by-laws or other instrument governing
its
affairs, which provision would have the effect of (i) causing such Principal
Party to issue (other than to holders of Rights pursuant to this Section
13), in
connection with, or as a consequence
24
of,
the
consummation of a transaction referred to in this Section 13, shares of Common
Stock or Common Stock Equivalents of such Principal Party at less than the
then
current market price per share thereof (determined pursuant to Section 11(d)
hereof) or securities exercisable for, or convertible into, Common Stock
or
Common Stock Equivalents of such Principal Party at less than such then current
market price, or (ii) providing for any special payment, tax or similar
provision in connection with the issuance of the Common Stock of such Principal
Party pursuant to the provisions of Section 13, then, in such event, the
Company
hereby agrees with each holder of Rights that it shall not consummate any
such
transaction unless prior thereto the Company and such Principal Party shall
have
executed and delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have been canceled,
waived or amended, or that the authorized securities shall be redeemed, so
that
the applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.
(e) The
Company covenants and agrees that it shall not, at any time after the Flip-In
Event, enter into any transaction of the type described in clauses (i) through
(iii) of Section 13(a) hereof if (i) at the time of or immediately after
such
consolidation, merger, sale, transfer or other transaction there are any
rights,
warrants or other instruments or securities outstanding or agreements in
effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights, (ii) prior to, simultaneously with or
immediately after such consolidation, merger, sale, transfer or other
transaction, the stockholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of Section 13(b) hereof shall
have
received a distribution of Rights previously owned by such Person or any
of its
Affiliates or Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the
Rights.
(f) Notwithstanding
anything contained herein to the contrary, upon the consummation of any merger
or other acquisition transaction of the type described in clauses (i), (ii)
or
(iii) of Section 13(a) involving the Company pursuant to a merger or other
acquisition agreement between the Company and any Person (or one or more
of such
Person’s Affiliates or Associates) which agreement has been approved by the
Board of Directors of the Company prior to any Person becoming an Acquiring
Person, this Agreement and the rights of holders of Rights hereunder shall
be
terminated in accordance with Section 7(a).
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 (except prior to the
Distribution Date in accordance with Section 11(n) hereof). 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.
25
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 Nasdaq National Market or, if the Rights are not listed or
admitted to trading on the Nasdaq National Market, 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.
(b) The
Company shall not be required to issue fractions of Preferred Stock (other
than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock) or to distribute certificates which evidence fractional
shares
of Preferred Stock (other than fractions which are integral multiples of
one
one-thousandth of a share of Preferred Stock) upon the exercise or exchange
of
Rights. Interests in fractions of Preferred Stock in integral multiples of
one
one-thousandth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided,
that
such agreement shall provide that the holders of such depositary receipts
shall
have all the rights, privileges and preferences to which they are entitled
as
beneficial owners of the Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Company
shall
pay to the registered holders of Right Certificates at the time such Rights
are
exercised or exchanged as herein provided an amount in cash equal to the
same
fraction of the current market value of a whole share of Preferred Stock
(as
determined in accordance with Section 14(a) hereof) for the Trading Day
immediately prior to the date of such exercise or exchange.
(c) The
Company shall not be required to issue fractions of shares of Common Stock
or to
distribute certificates which evidence fractional shares of Common Stock
upon
the exercise or exchange of Rights. In lieu of such fractional shares of
Common
Stock, the Company shall pay to the registered holders of the Right Certificates
with regard to which such fractional shares of Common Stock would otherwise
be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock (as determined in accordance with
Section
14(a) hereof) for the Trading Day immediately prior to the date of such exercise
or exchange.
(d) The
holder of a Right by the acceptance of the Right expressly waives his right
to
receive any fractional Rights or any fractional shares upon exercise or exchange
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 Stock); and any registered holder
of
any
26
Right
Certificate (or, prior to the Distribution Date, of the Common Stock), 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 Stock), on his own behalf
and
for his own benefit, may 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
(or,
prior to the Distribution Date, such Common Stock) in the manner provided
therein 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:
(a) prior
to
the Distribution Date, the Rights will be transferable only in connection
with
the transfer of the Common Stock;
(b) after
the
Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the office or agency of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer with all required certificates completed;
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 Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing
on the
Right Certificates or the Common Stock 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 Stock
or any
other securities of the Company which may at any time be issuable on the
exercise or exchange 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 this Agreement), or
to
receive dividends or subscription rights, or otherwise, until the Rights
evidenced by such Right Certificate shall have been exercised or exchanged
in
accordance with the provisions hereof.
27
Section
18. Concerning
the Rights Agent.
(a) 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 arising
therefrom, directly or indirectly.
(b) The
Rights Agent shall be protected and shall incur no liability for, or in respect
of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Stock or Common Stock or for other securities
of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to
be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section
19. Merger
or Consolidation or Change of Name of Rights Agent.
(a) 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 powers 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.
(b) 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.
28
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, the Chief Financial Officer, 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 provided for in Sections 3, 11, 13, 23 and 24, or the ascertaining
of the
existence of facts that would require any such change or adjustment (except
with
respect to the exercise of Rights evidenced by Right Certificates after receipt
of a certificate furnished pursuant to Section 12, describing such change
or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares
of Preferred Stock or other securities to be issued pursuant to this Agreement
or any Right Certificate or as to whether any shares of Preferred Stock or
other
securities will, when issued, be validly authorized and issued, fully paid
and
nonassessable.
29
(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 person reasonably
believed by the Rights Agent to be any one of the Chairman of the Board,
the
Chief Executive Officer, the President, the Chief Financial Officer, or the
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any
action taken or suffered by it in good faith in accordance with instructions
of
any such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions
from
the Company may, at the option of the Rights Agent, set forth in writing
any
action proposed to be taken or omitted by the Rights Agent under this Agreement
and the date on and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action taken
by, or omission of, the Rights Agent in accordance with a proposal included
in
any such application on or after the date specified in such application (which
date shall not be less than five Business Days after the date any officer
of the
Company actually receives such application unless any such officer shall
have
consented in writing to an earlier date) unless, prior to taking any such
action
(or the effective date in the case of an omission), the Rights Agent shall
have
received written instructions in response to such application specifying
the
action to be taken or omitted.
(h) The
Rights Agent and any stockholder, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the
Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The
Rights Agent may execute and exercise any of the rights or powers hereby
vested
in it or perform any duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or accountable for
any
act, default, neglect or misconduct of any such attorneys or agents or for
any
loss to the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment
thereof.
(j) If,
with
respect to any Rights Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate contained in the form of assignment or the form
of
election to purchase set forth on the reverse thereof, as the case may be,
has
not been completed to certify the holder is not an Acquiring Person (or an
Affiliate or Associate thereof), the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first
consulting with the Company.
30
(k) At
any
time, and from time to time after the Distribution Date, upon request of
the
Company, the Rights Agent shall promptly deliver to the Company a list, as
of
the most practicable date, of the holders of record of Rights.
Section
21. Change
of Rights Agent.
The
Rights Agent or any successor Rights Agent may resign and be discharged from
its
duties under this Agreement upon 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Stock or Preferred Stock
by
registered or certified mail, and, following the Distribution Date, to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be,
and to
each transfer agent of the Common Stock or Preferred Stock by registered
or
certified mail, and, following the Distribution Date, 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 the laws of any state of the United States or the District of
Columbia, in good standing, having an office in California, or New York,
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 Stock or Preferred Stock, and, following
the Distribution Date, mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for
in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section
22. Issuance
of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such forms as may be approved by its Board of Directors
to
reflect any adjustment or change in the Purchase Price and the
31
number
or kind or class of shares or other securities or property purchasable under
the
Right Certificates made in accordance with the provisions of this Agreement.
In
addition, in connection with the issuance or sale of Common Stock following
the
Distribution Date and prior to the Expiration Date, the Company may with
respect
to shares of Common Stock so issued or sold pursuant to (i) the exercise
of
stock options, (ii) under any employee plan or arrangement, (iii) upon the
exercise, conversion or exchange of securities, notes or debentures issued
by
the Company or (iv) a contractual obligation of the Company, in each case
existing prior to the Distribution Date, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, no such Right Certificate shall be issued if the Company
is
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or such holder.
Section
23. Redemption.
(a) The
Board
of Directors of the Company may, at any time prior to the Flip-In Event,
redeem
all but not less than all of the then outstanding Rights at a redemption
price
of $.001 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (the redemption
price being hereinafter referred to as the “Redemption
Price”).
The
redemption of the Rights may be made effective at such time, on such basis
and
with such conditions as the Board of Directors in its sole discretion may
establish. The Redemption Price shall be payable, at the option of the Company,
in cash, shares of Common Stock, or such other form of consideration as the
Board of Directors shall determine.
(b) Immediately
upon the action of the Board of Directors ordering the redemption of the
Rights
pursuant to paragraph (a) of this Section 23 (or at such later time as the
Board
of Directors may establish for the effectiveness of such redemption), and
without any further action and without any notice, the right to exercise
the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall promptly give
public
notice of any such redemption; provided,
however,
that
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board
of
Directors ordering the redemption of the Rights (or such later time as the
Board
of Directors may establish for the effectiveness of such redemption), the
Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice 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 shall state the method
by
which the payment of the Redemption Price will be made.
Section
24. Exchange.
(a) The
Board
of Directors of the Company may, at its option, at any time after the Flip-In
Event, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the provisions
of Section 11(a)(ii) hereof) for Common Stock at an exchange ratio of one
share
of Common Stock per
32
Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such amount per Right being
hereinafter referred to as the “Exchange
Ratio”).
Notwithstanding the foregoing, the Board of Directors shall not be empowered
to
effect such exchange at any time after an Acquiring Person shall have become
the
Beneficial Owner of shares of Common Stock aggregating 50% or more of the
shares
of Common Stock then outstanding. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have not been
exchanged pursuant to this Section 24(a) shall thereafter be exercisable
only in
accordance with Section 13 and may not be exchanged pursuant to this Section
24(a). The exchange 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.
(b) Immediately
upon the effectiveness of the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section
24
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of
such
Rights shall be to receive that number of shares of Common Stock equal to
the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The
Company shall promptly give public notice of any such exchange; provided,
however,
that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company shall promptly mail a notice of any such exchange
to all of the holders of the Rights so exchanged at their last addresses
as they
appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which
the exchange of the shares of Common Stock for Rights will be effected and,
in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.
(c) The
Company may at its option substitute, and, in the event that there shall
not be
sufficient shares of Common Stock issued but not outstanding or authorized
but
unissued to permit an exchange of Rights for Common Stock as contemplated
in
accordance with this Section 24, the Company shall substitute to the extent
of
such insufficiency, for each share of Common Stock that would otherwise be
issuable upon exchange of a Right, a number of shares of Preferred Stock
or
fraction thereof (or Equivalent Preferred Shares, as such term is defined
in
Section 11(b)) such that the current per share market price (determined pursuant
to Section 11(d) hereof) of one share of Preferred Stock (or equivalent
preferred share) multiplied by such number or fraction is equal to the current
per share market price of one share of Common Stock (determined pursuant
to
Section 11(d) hereof) as of the date of such exchange.
Section
25. Notice
of Certain Events.
(a) In
case
the Company shall at any time after the earlier of the Distribution Date
or the
Stock Acquisition Date propose (i) to pay any dividend payable in stock of
any
class to the holders of its Preferred Stock or to make any other distribution
to
the holders of its Preferred Stock (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options,
33
(iii)
to
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision or combination of outstanding
Preferred Stock), or to effect any consolidation or merger into or with,
or to
effect any sale or other transfer (or 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 (other than pursuant to a merger or other
acquisition agreement approved by the Board before there is any Acquiring
Person), (iv) to effect the liquidation, dissolution or winding up of the
Company, or (v) to declare or pay any dividend on the Common Stock payable
in
Common Stock or to effect a subdivision, combination or consolidation of
the
Common Stock (by reclassification or otherwise than by payment of dividends
in
Common Stock), then, in each such case, the Company shall give to each holder
of
a Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of
such
stock dividend, or distribution of rights or warrants, or the date on which
such
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the Common Stock and/or Preferred
Stock,
if any such date is to be fixed, and such notice shall be so given in the
case
of any action covered by clause (i) or (ii) above at least 10 days prior
to the
record date for determining holders of the Preferred Stock for purposes of
such
action, and in the case of any such other action, at least 10 days prior
to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Stock and/or Preferred Stock, whichever shall
be
the earlier.
(b) In
case
any event described in Section 11(a)(ii) or Section 13 shall occur then the
Company shall as soon as practicable thereafter give to each holder of a
Right
Certificate (or if occurring prior to the Distribution Date, the holders
of the
Common Stock) in accordance with Section 26 hereof, a notice of the occurrence
of such event, which notice shall describe such event and the consequences
of
such event to holders of Rights under Section 11(a)(ii) and Section 13
hereof.
(c) Notwithstanding
anything in this Agreement to the contrary, prior to the Distribution Date,
a
filing by the Company with the SEC shall constitute sufficient notice to
the
holders of securities of the Company, including the Rights, for purposes
of this
Agreement, and no other notice need be given.
Section
26. Notices.
Notices
or demands authorized by this Agreement to be given or made by the Rights
Agent
or by the holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent)
as
follows:
Peregrine
Pharmaceuticals, Inc.
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Chief Financial Officer
34
with
a
copy to:
▇▇▇▇▇
& ▇▇▇▇▇▇ L.L.P.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Subject
to the provisions of Section 21 hereof, any notice or demand authorized by
this
Agreement to be given or made by the Company or by the holder of any 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:
Integrity
Stock Transfer, Inc.
▇▇▇▇
▇.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Bldg.5
-
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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
27. Supplements
and Amendments.
Except
as provided in the penultimate sentence of this Section 27, for so long as
the
Rights are then redeemable, the Company may in its sole and absolute discretion,
and the Rights Agent shall if the Company so directs, supplement or amend
any
provision of this Agreement in any respect without the approval of any holders
of the Rights. At any time when the Rights are no longer redeemable, except
as
provided in the penultimate sentence of this Section 27, the Company may,
and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights, provided
that no
such supplement or amendment may (a) adversely affect the interests of the
holders of Rights as such (other than an Acquiring Person or an Affiliate
or
Associate of an Acquiring Person), (b) cause this Agreement again to become
amendable other than in accordance with this sentence or (c) cause the Rights
again to become redeemable. Notwithstanding anything contained in this Agreement
to the contrary, no supplement or amendment shall be made which changes the
Redemption Price. Upon the delivery of a certificate from an appropriate
officer
of the Company which states that the proposed supplement or amendment is
in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment.
Section
28. Successors.
All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section
29. Benefits
of this Agreement.
Nothing
in this Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be
for the
sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Stock).
35
Section
30. Determinations
and Actions by the Board of Directors.
The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or
as may be
necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including, without
limitation, a determination to redeem or not redeem the Rights or to amend
or
not amend this Agreement). All such actions, calculations, interpretations
and
determinations (including, for purposes of clause (y) below, all omissions
with
respect to the foregoing) that are done or made by the Board of Directors
of the
Company in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights, as such, and all
other
parties, and (y) not subject the Board of Directors to any liability to
the
holders of the Rights.
Section
31. Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section
32. Governing
Law.
This
Agreement and each Right Certificate issued hereunder shall be deemed to
be a
contract made under the laws of the State of Delaware and for all purposes
shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such
State.
Section
33. Counterparts.
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all
such
counterparts shall together constitute but one and the same
instrument.
Section
34. Descriptive
Headings.
Descriptive headings of the several Sections of this Agreement are inserted
for
convenience only and shall not control or affect the meaning or construction
of
any of the provisions hereof.
36
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
|
PEREGRINE
PHARMACEUTICALS, INC.
|
||
| |
|
|
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ | |
|
|
||
|
▇▇▇▇
▇.
▇▇▇▇▇
Chief Financial
Officer
|
||
|
INTEGRITY
STOCK TRANSFER, INC.
as
Rights
Agent
|
||
| |
|
|
| By: | /s/ ▇▇▇ ▇▇▇▇▇▇▇▇ | |
|
|
||
|
▇▇▇
▇▇▇▇▇▇▇▇
President
|
||
37
Exhibit
A
FORM
OF
CERTIFICATE
OF DESIGNATION
of
SERIES
D
PARTICIPATING PREFERRED STOCK
of
PEREGRINE
PHARMACEUTICALS, INC.
Pursuant
to Section 151 of the General Corporation Law
of
the
State of Delaware
Peregrine
Pharmaceuticals, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions
of
Section 151 thereof, DOES HEREBY CERTIFY:
That
pursuant to the authority vested in the Board of Directors in accordance
with
the provisions of the Certificate of Incorporation of the said Corporation,
the
said Board of Directors on March 16, 2006 adopted the following resolution
creating a series of 500,000 shares of Preferred Stock designated as
“Series
D Participating Preferred Stock”:
RESOLVED,
that pursuant to the authority vested in the Board of Directors of this
Corporation in accordance with the provisions of the Certificate of
Incorporation, a series of Preferred Stock, par value $.001 per share, of
the
Corporation be and hereby is created, and that the designation and number
of
shares thereof and the voting and other powers, preferences and relative,
participating, optional or other rights of the shares of such Series and
the
qualifications, limitations and restrictions thereof are as
follows:
Series
D Participating Preferred Stock
1.
Designation
and Amount.
There
shall be a series of Preferred Stock that shall be designated as “Series D
Participating Preferred Stock,” and the number of shares constituting such
series shall be 500,000. Such number of shares may be increased or decreased
by
resolution of the Board of Directors; provided, however, that no decrease
shall
reduce the number of shares of Series D Participating Preferred Stock to
less
than the number of shares then issued and outstanding plus the number of
shares
issuable upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Corporation.
1
2.
Dividends and Distribution.
(A) Subject
to the prior and superior rights of the holders of any shares of any class
or
series of stock of the Corporation ranking prior and superior to the shares
of
Series D Participating Preferred Stock with respect to dividends, the holders
of
shares of Series D Participating Preferred Stock, in preference to the holders
of shares of any class or series of stock of the Corporation ranking junior
to
the Series D Participating Preferred Stock in respect thereof, shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on
the
first day of May, August, November and February in each year (each such date
being referred to herein as a “Quarterly
Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series D Participating Preferred Stock,
in
an amount per share (rounded to the nearest cent) equal to the greater of
(a)
$1.00 or (b) the Adjustment Number (as defined below) times the aggregate
per
share amount of all cash dividends, and the Adjustment Number times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other
distributions other than a dividend payable in shares of Common Stock or
a
subdivision of the outstanding shares of Common Stock (by reclassification
or
otherwise), declared on the Common Stock, par value $.001 per share, of the
Corporation (the “Common
Stock”)
since
the immediately preceding Quarterly Dividend Payment Date, or, with respect
to
the first Quarterly Dividend Payment Date, since the first issuance of any
share
or fraction of a share of Series D Participating Preferred Stock. The
“Adjustment Number” shall initially be 1,000. In the event the Corporation shall
at any time after March 16, 2006, (i) declare and pay any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number
of
shares, then in each such case the Adjustment Number in effect immediately
prior
to such event shall be adjusted by multiplying such Adjustment Number by
a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the
number of shares of Common Stock that were outstanding immediately prior
to such
event.
(B) The
Corporation shall declare a dividend or distribution on the Series D
Participating Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than
a
dividend payable in shares of Common Stock).
(C) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series D
Participating Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series D Participating Preferred
Stock, unless the date of issue of such shares is prior to the record date
for
the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a date after
the
record date for the determination of holders of shares of Series D Participating
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends
shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series D Participating Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares
at
the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series D Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 60 days prior to the date fixed for
the
payment thereof.
2
3.
Voting Rights.
The
holders of shares of Series D Participating Preferred Stock shall have the
following voting rights:
(A) Each
share of Series D Participating Preferred Stock shall entitle the holder
thereof
to a number of votes equal to the Adjustment Number on all matters submitted
to
a vote of the stockholders of the Corporation.
(B) Except
as
required by law and by Section 10 hereof, holders of Series D Participating
Preferred Stock shall have no special voting rights and their consent shall
not
be required (except to the extent they are entitled to vote with holders
of
Common Stock as set forth herein) for taking any corporate action.
(C) If,
at
the time of any annual meeting of stockholders for the election of directors,
the equivalent of six quarterly dividends (whether or not consecutive) payable
on any share or shares of Series D Participating Preferred Stock are in default,
the number of directors constituting the Board of Directors of the Company
shall
be increased by two. In addition to voting together with the holders of Common
Stock for the election of other directors of the Company, the holders of
record
of the Series D Participating Preferred Stock, voting separately as a class
to
the exclusion of the holders of Common Stock, shall be entitled at said meeting
of stockholders (and at each subsequent annual meeting of stockholders),
unless
all dividends in arrears on the Series D Participating Preferred Stock have
been
paid or declared and set apart for payment prior thereto, to vote for the
election of two directors of the Company, the holders of any Series D
Participating Preferred Stock being entitled to cast a number of votes per
share
of Series D Participating Preferred Stock as is specified in paragraph (A)
of
this Section 3. Each such additional director shall serve until the next
annual
meeting of stockholders for the election of directors, or until his successor
shall be elected and shall qualify, or until his right to hold such office
terminates pursuant to the provisions of this Section 3(C). Until the default
in
payments of all dividends which permitted the election of said directors
shall
cease to exist, any director who shall have been so elected pursuant to the
next
preceding sentence may be removed at any time, without cause, only by the
affirmative vote of the holders of the shares of Series D Participating
Preferred Stock at the time entitled to cast a majority of the votes entitled
to
be cast for the election of any such director at a special meeting of such
holders called for that purpose, and any vacancy thereby created may be filled
by the vote of such holders. If and when such default shall cease to exist,
the
holders of the Series D Participating Preferred Stock shall be divested of
the
foregoing special voting rights, subject to revesting in the event of each
and
every subsequent like default in payments of dividends. Upon the termination
of
the foregoing special voting rights, the terms of office of all persons who
may
have been elected directors pursuant to said special voting rights shall
forthwith terminate, and the number of directors constituting the Board of
Directors shall be reduced by two. The voting rights granted by this Section
3(C) shall be in addition to any other voting rights granted to the holders
of
the Series D Participating Preferred Stock in this Section 3.
3
4. Certain
Restrictions.
(A) Whenever
quarterly dividends or other dividends or distributions payable on the Series
D
Participating Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether
or not declared, on shares of Series D Participating Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i)
declare
or pay dividends on, make any other distributions on, or redeem or purchase
or
otherwise acquire for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series
D
Participating Preferred Stock;
(ii)
declare or pay dividends on or make any other distributions on any shares
of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series D Participating Preferred Stock,
except dividends paid ratably on the Series D Participating Preferred Stock
and
all such parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled;
or
(iii)
redeem, purchase or otherwise acquire for consideration any shares of Series
D
Participating Preferred Stock, or any shares of stock ranking on a parity
with
the Series D Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of Series D Participating Preferred Stock, or to
such
holders and holders of any such shares ranking on a parity therewith, upon
such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
Series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The
Corporation shall not permit any subsidiary of the Corporation to purchase
or
otherwise acquire for consideration any shares of stock of the Corporation
unless the Corporation could, under paragraph (A) of this Section 4, purchase
or
otherwise acquire such shares at such time and in such manner.
5.
Reacquired Shares. Any
shares of Series D Participating Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired promptly after
the
acquisition thereof. All such shares shall upon their retirement become
authorized but unissued shares of Preferred Stock and may be reissued as
part of
a new series of Preferred Stock to be created by resolution or resolutions
of
the Board of Directors, subject to any conditions and restrictions on issuance
set forth herein.
4
6. Liquidation,
Dissolution or Winding Up. (A)
Upon
any liquidation, dissolution or winding up of the Corporation, voluntary
or
otherwise, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series D Participating Preferred Stock unless, prior thereto,
the holders of shares of Series D Participating Preferred Stock shall have
received an amount per share (the “Series
D Liquidation Preference”)
equal
to the greater of (i) $1,000 plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date
of
such payment, or (ii) the Adjustment Number times the per share amount of
all
cash and other property to be distributed in respect of the Common Stock
upon
such liquidation, dissolution or winding up of the Corporation.
(B) In
the
event, however, that there are not sufficient assets available to permit
payment
in full of the Series D Liquidation Preference and the liquidation preferences
of all other classes and series of stock of the Corporation, if any, that
rank
on a parity with the Series D Participating Preferred Stock in respect thereof,
then the assets available for such distribution shall be distributed ratably
to
the holders of the Series D Participating Preferred Stock and the holders
of
such parity shares in proportion to their respective liquidation
preferences.
(C) Neither
the merger nor consolidation of the Corporation into or with another corporation
nor the merger or consolidation of any other corporation into or with the
Corporation shall be deemed to be a liquidation, dissolution or winding up
of
the Corporation within the meaning of this Section 6.
7.
Consolidation, Merger, Etc. In
case
the Corporation shall enter into any consolidation, merger, combination or
other
transaction in which the outstanding shares of Common Stock are exchanged
for or
changed into other stock or securities, cash and/or any other property, then
in
any such case each share of Series D Participating Preferred Stock shall
at the
same time be similarly exchanged or changed in an amount per share equal
to the
Adjustment Number times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case
the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series D Participating Preferred Stock shall be adjusted
by
multiplying such amount by a fraction, the numerator of which is the number
of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. In the event the Corporation
shall
at any time declare or pay any dividend on the Series D Participating Preferred
Stock payable in shares of Series D Participating Preferred Stock, or effect
a
subdivision, combination or consolidation of the outstanding shares of Series
D
Participating Preferred Stock (by reclassification or otherwise than by payment
of a dividend in shares of Series D Participating Preferred Stock) into a
greater or lesser number of shares of Series D Participating Preferred Stock,
then in each such case the amount set forth in the first sentence of this
Section 7 with respect to the exchange or change of shares of Series D
Participating Preferred Stock shall be adjusted by multiplying such amount
by a
fraction, the numerator of which is the number of shares of Series D
Participating Preferred Stock that were outstanding immediately prior to
such
event and the denominator of which is the number of shares of Series D
Participating Preferred Stock outstanding immediately after such
event.
5
8.
No
Redemption. Shares
of
Series D Participating Preferred Stock shall not be subject to redemption
by the
Company.
9.
Ranking. The
Series D Participating Preferred Stock shall rank junior to all other series
of
the Preferred Stock as to the payment of dividends and as to the distribution
of
assets upon liquidation, dissolution or winding up, unless the terms of any
such
series shall provide otherwise, and shall rank senior to the Common Stock
as to
such matters.
10.
Amendment.
At
any
time that any shares of Series D Participating Preferred Stock are outstanding,
the Certificate of Incorporation of the Corporation shall not be amended
in any
manner which would materially alter or change the powers, preferences or
special
rights of the Series D Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of two-thirds of the
outstanding shares of Series D Participating Preferred Stock, voting separately
as a class.
11.
Fractional
Shares. Series
D
Participating Preferred Stock may be issued in fractions of a share that
shall
entitle the holder, in proportion to such holder’s fractional shares, to
exercise voting rights, receive dividends, participate in distributions and
to
have the benefit of all other rights of holders of Series D Participating
Preferred Stock.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate this 16th
day of
March, 2006.
| PEREGRINE PHARMACEUTICALS, INC. | ||
| |
|
|
| By: | ||
|
|
||
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
|
||
6
Exhibit
B
______
Rights
Form
of
Right Certificate
Certificate
No. R-______
NOT
EXERCISABLE AFTER MARCH 16, 2016 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON
THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS
SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON
WHO
IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER
BE
TRANSFERABLE.
CAPITALIZED
TERMS USED IN THIS RIGHT CERTIFICATE WITHOUT DEFINITION SHALL HAVE THE MEANING
ASCRIBED TO THEM IN THE RIGHTS AGREEMENT.
RIGHT
CERTIFICATE
PEREGRINE
PHARMACEUTICALS, INC.
This
certifies that ____________________________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Rights
Agreement, dated as of March 16, 2006, as the same may be amended from time
to
time (the “Rights
Agreement”),
between Peregrine Pharmaceuticals, Inc., a Delaware corporation (the
“Company”),
and
Integrity Stock Transfer, Inc., as Rights Agent (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., California time,
on
March 16, 2016 at the office or agency of the Rights Agent designated for
such
purpose, or of its successor as Rights Agent, one one-thousandth of a fully
paid
non-assessable share of Series D Participating Preferred Stock, par value
$.001
per share (the “Preferred
Stock”),
of
the Company at a purchase price of $11.00 per one one-thousandth
(1/1000th)
of a
share of Preferred Stock (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 Rights
Certificate (and the number of one one-thousandths of a share of Preferred
Stock
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 16,
2006,
based on the Preferred Stock as constituted at such date. As provided in
the
Rights Agreement, the Purchase Price, the number of one one-thousandths
(1/1000th)
of a
share of Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Rights and the number of Rights evidenced
by
this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
1
This
Rights Certificate is subject to all of the terms, provisions and conditions
of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies
of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor.
This
Right Certificate, with or without other Right Certificates, upon surrender
at
the office or agency of the Rights Agent designated for such purpose, may
be
exchanged for another Right Certificate or Right Certificates of like tenor
and
date evidencing Rights entitling the holder to purchase a like aggregate
number
of shares of Preferred Stock as the Rights evidenced by the Right Certificate
or
Right Certificates surrendered shall have entitled such holder to purchase.
If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price of $.001
per Right or (ii) may be exchanged in whole or in part for shares of the
Company’s Common Stock, par value $.001 per share, or shares of Preferred
Stock.
No
fractional shares of Preferred Stock or Common Stock will be issued upon
the
exercise or exchange of any Right or Rights evidenced hereby (other than
fractions of Preferred Stock which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the Company,
be
evidenced by depository receipts), but in lieu thereof a cash payment will
be
made, as provided in the Rights Agreement.
No
holder
of this Right Certificate, as such, shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Stock
or of
any other securities of the Company which may at any time be issuable on
the
exercise or exchange 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 or exchanged as provided in the Rights
Agreement.
2
If
any
term, provision, covenant or restriction of the 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 the
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
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 _________, 20___.
| PEREGRINE PHARMACEUTICALS, INC. | ||
| |
|
|
| By: | ||
|
|
||
|
Name:
Title:
|
||
ATTEST:
____________________________________
Countersigned:
Integrity
Stock Transfer, Inc., as Rights Agent
By__________________________________
Authorized
Signature
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)
_______
Rights represented by this Right Certificate, together with all right, title
and
interest therein, and does hereby irrevocably constitute and appoint
____________________ Attorney,
to transfer said Rights on the books of the within-named Company, with full
power of substitution.
Dated:
____________________________
____________________________________
Signature
Signature
Guaranteed:
Signatures
must be guaranteed by a bank, trust company, broker, dealer or other “eligible
guarantor institution,” as defined in Rule 17Ad -15 promulgated under the
Securities Exchange Act of 1934, as amended, participating in a recognized
signature guarantee medallion program.
..............................................................................................................
(To
be
completed)
The
undersigned hereby certifies that the Rights evidenced by this Right Certificate
are not beneficially owned by, and are not being assigned to an Acquiring
Person
or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
After
due
inquiry and to the best knowledge of the undersigned, the undersigned did
not
acquire the Rights evidenced by this Right Certificate from any person who
is,
was, or subsequently became an Acquiring Person, or an Affiliate or Associate
thereof.
____________________________________
Signature
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 Rights Certificate)
To
PEREGRINE PHARMACEUTICALS, INC.
The
undersigned hereby irrevocably elects to exercise ________ Rights represented
by
this Right Certificate to purchase the shares of Preferred Stock (or other
securities or property) issuable upon the exercise of such Rights and requests
that certificates for such shares of Preferred Stock (or such other securities)
be issued in the name of:
_________________________________________________________________________
(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:________________________
____________________________________
Signature
(Signature
must conform to holder specified on Right Certificate)
Signature
Guaranteed:
Signature
must be guaranteed by a bank, trust company, broker, dealer or other “eligible
guarantor institution,” as defined in Rule 17Ad -15 promulgated under the
Securities Exchange Act of 1934, as amended, participating in a recognized
signature guarantee medallion program.
Form
of
Reverse Side of Right Certificate - continued
_________________________________________________________________________
(To
be
completed)
The
undersigned 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).
After
due
inquiry and to the undersigned’s best knowledge, the undersigned did not acquire
the Rights from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
____________________________________
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, such Assignment
or
Election to Purchase will not be honored.
2
Exhibit
C
UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED
BY OR
TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED
IN
THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND
VOID
AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY
OF RIGHTS TO PURCHASE
SHARES
OF
PREFERRED STOCK OF
PEREGRINE
PHARMACEUTICALS, INC.
On
March
16, 2006, the Board of Directors of Peregrine Pharmaceuticals, Inc. (the
“Company”)
declared a dividend of one preferred share purchase right (a “Right”)
for
each outstanding share of common stock, par value $.001 per share, of the
Company (the “Common
Stock”).
The
dividend is payable on March 27, 2006 (the “Record
Date”)
to the
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-thousandth (1/1000th)
of a
share of Series D Participating Preferred Stock, par value $.001 per share,
of
the Company (the “Preferred
Stock”)
at a
price of $11.00 per one one-thousandth (1/1000th)
of a
share of Preferred Stock (the “Purchase
Price”),
subject to adjustment. The description and terms of the Rights are set forth
in
a Rights Agreement dated as of March 16, 2006, as the same may be amended
from
time to time (the “Rights
Agreement”),
between the Company and Integrity Stock Transfer, Inc., as Rights Agent (the
“Rights
Agent”).
Until
the
earlier to occur of (i) 10 days following a public announcement that a person
or
group of affiliated or associated persons (with certain exceptions, an
“Acquiring
Person”)
has
acquired beneficial ownership of 15% or more of the outstanding shares of
Common
Stock or (ii) 10 business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person or group
of
affiliated persons becomes an Acquiring Person) following the commencement
of,
or announcement of an intention to make, a tender offer or exchange offer
the
consummation of which would result in the beneficial ownership by a person
or
group of 15% or more of the outstanding shares of Common Stock (the earlier
of
such dates being called the “Distribution
Date”),
the
Rights will be evidenced, with respect to any of the Common Stock certificates
outstanding as of the Record Date, by such Common Stock certificate together
with a copy of this Summary of Rights.
The
Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with
and
only with the Common Stock. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Common Stock certificates issued after
the
Record Date upon transfer or new issuances of Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for shares of Common Stock outstanding as of
the
Record Date, even without such notation or a copy of this Summary of Rights,
will also constitute the transfer of the Rights associated with the shares
of
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights
(“Right
Certificates”)
will
be mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
1
The
Rights are not exercisable until the Distribution Date. The Rights will expire
at the close of business on March 16, 2016 (the “Final
Expiration Date”),
unless the Final Expiration Date is advanced or extended or unless the Rights
are earlier redeemed or exchanged by the Company, in each case as described
below.
The
Purchase Price payable, and the number of shares of Preferred Stock or other
securities or property issuable, upon exercise of the Rights is subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for or purchase Preferred Stock at a price, or
securities convertible into Preferred Stock with a conversion price, less
than
the then-current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness
or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The
number of outstanding Rights is subject to adjustment in the event of a stock
dividend on the Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such
case,
prior to the Distribution Date.
Shares
of
Preferred Stock purchasable upon exercise of the Rights will not be redeemable.
Each share of Preferred Stock will be entitled, when, as and if declared,
to a
minimum preferential quarterly dividend payment of $1.00 per share but will
be
entitled to an aggregate dividend of 1,000 times the dividend declared per
share
of Common Stock. In the event of liquidation, dissolution or winding up of
the
Company, the holders of the Preferred Stock will be entitled to a minimum
preferential payment of $1,000 per share (plus any accrued but unpaid dividends)
but will be entitled to an aggregate payment of 1,000 times the payment made
per
share of Common Stock. Each share of Preferred Stock will have 1,000 votes,
voting together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which outstanding shares of Common
Stock
are converted or exchanged, each share of Preferred Stock will be entitled
to
receive 1,000 times the amount received per share of Common Stock. These
rights
are protected by customary antidilution provisions.
Because
of the nature of the Preferred Stock’s dividend, liquidation and voting rights,
the value of the one one-thousandth interest in a share of Preferred Stock
purchasable upon exercise of each Right should approximate the value of one
share of Common Stock.
In
the
event that any person or group of affiliated or associated persons becomes
an
Acquiring Person, each holder of a Right, other than Rights beneficially
owned
by the Acquiring Person (which will thereupon become void), will thereafter
have
the right to receive upon exercise of a Right that number of shares of Common
Stock having a market value of two times the exercise price of the
Right.
2
In
the
event that, after a person or group has become an Acquiring Person, the Company
is acquired in a merger or other business combination transaction or 50%
or more
of its consolidated assets or earning power are sold, proper provisions will
be
made so that each holder of a Right (other than Rights beneficially owned
by an
Acquiring Person which will have become void) will thereafter have the right
to
receive upon the exercise of a Right that number of shares of common stock
of
the person with whom the Company has engaged in the foregoing transaction
(or
its parent) that at the time of such transaction have a market value of two
times the exercise price of the Right.
At
any
time after any person or group becomes an Acquiring Person and prior to the
earlier of one of the events described in the previous paragraph or the
acquisition by such Acquiring Person of 50% or more of the outstanding shares
of
Common Stock, the Board of Directors may cause the Company to exchange the
Rights (other than Rights owned by such Acquiring Person which will have
become
void), in whole or in part, for shares of Common Stock or Preferred Stock
(or a
series of the Company’s preferred stock having equivalent rights, preferences
and privileges), at an exchange ratio of one share of Common Stock, or a
fractional share of Preferred Stock (or other preferred stock) equivalent
in
value thereto, per Right.
With
certain exceptions, no adjustment in the Purchase Price will be required
until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional shares of Preferred Stock or Common Stock will be issued
(other than fractions of Preferred Stock which are integral multiples of
one
one-thousandth of a share of Preferred Stock, which may, at the election
of the
Company, be evidenced by depositary receipts), and in lieu thereof an adjustment
in cash will be made based on the current market price of the Preferred Stock
or
the Common Stock.
At
any
time prior to the time an Acquiring Person becomes such, the Board of Directors
of the Company may redeem the Rights in whole, but not in part, at a price
of
$.001 per Right (the “Redemption
Price”)
payable, at the option of the Company, in cash, shares of Common Stock or
such
other form of consideration as the Board of Directors of the Company shall
determine. The redemption of the Rights may be made effective at such time,
on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the Rights,
the
right to exercise the Rights will terminate and the only right of the holders
of
Rights will be to receive the Redemption Price.
For
so
long as the Rights are then redeemable, the Company may, except with respect
to
the Redemption Price, amend the Rights Agreement in any manner. After the
Rights
are no longer redeemable, the Company may, except with respect to the Redemption
Price, amend the Rights Agreement in any manner that does not adversely affect
the interests of holders of the Rights.
Until
a
Right is exercised or exchanged, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right
to vote or to receive dividends.
A
copy of
the Rights Agreement has been filed with the Securities and Exchange Commission
as an Exhibit to a Registration Statement on Form 8-K dated March 17, 2006.
A
copy of the Rights Agreement is available free of charge from the Company.
This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, as the same
may
be amended from time to time, which is hereby incorporated herein by
reference.
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