Exhibit 1
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RIGHTS AGREEMENT
This Rights Agreement (this "Agreement"), dated as of January 27,
1999, is by and between Hemagen Diagnostics, Inc. (the "Company"), a
Delaware corporation, and Continental Stock Transfer & Trust Company (the
"Rights Agent"), a New York Corporation.
The Company's Board of Directors has declared a dividend of one right
(a "Right") in respect of each share of the Company's Common Stock
outstanding of record as of the close of business, New York time, on
February 10, 1999 (the "Record Date"). Each Right has the terms and is
subject to the conditions set forth in this Agreement.
The parties hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement:
(a) "Acquiring Person" means any Person who, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of 15% or
more of the Common Shares of the Company then outstanding or who was such a
Beneficial Owner at any time after the date hereof, whether or not such
Person continues to be the Beneficial Owner of 15% or more of the Common
Shares then outstanding, but will not include the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any Subsidiary of
the Company, or any entity holding securities of the Company organized,
appointed, or established by the Company or any Subsidiary for or pursuant
to the terms of any such plan. Notwithstanding the foregoing, (i) none of
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an "Acquiring Person", and (ii) no Person will become an "Acquiring Person"
solely as the result of an acquisition of Common Shares by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or
more of the Common Shares of the Company then outstanding; provided,
however, that if a Person becomes the Beneficial Owner of 15% or more of the
Common Shares of the Company then outstanding by reason of share purchases
by the Company, and after such share purchases by the Company, becomes the
Beneficial Owner of any additional Common Shares of the Company, then such
Person will be deemed to be an "Acquiring Person." Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Rights Agreement.
(b) "Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date of this Agreement.
(c) A Person will be deemed the "Beneficial Owner" of and will be
deemed to "beneficially own" any securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement, or understanding
(whether or not in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise; provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," (A) securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for payment, purchase, or exchange, or (B) at any time prior to the
occurrence of a Triggering Event, securities issuable upon exercise of
Rights, or (C) from and after the occurrence of a Triggering Event,
securities issuable upon exercise of Rights, which 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 23 hereof (the "Original Rights") or pursuant to Section
11(i) hereof in connection with an adjustment made with respect to any
Original Rights;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement, arrangement,
or understanding, whether or not in writing; provided, however, that a
Person will not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a
result of an oral or written agreement, arrangement, or understanding
to vote such security if such agreement, arrangement, or
understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the General Rules
and Regulations under the Exchange Act, and (B) is not also then
reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of
this paragraph (d)) or disposing of any voting securities of the
Company.
provided, however, that nothing in this paragraph (d) will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
(d) "Business Day" means any day other than a Saturday, a Sunday,
or a day on which banking institutions in New York City are authorized or
obligated by law or executive order to close.
(e) "Close of business" on any given date means 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a
Business Day it means 5:00 P.M., New York City time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company means
the shares of common stock, par value $0.01 per share, of the Company.
"Common Shares" when used with reference to any Person other than the
Company means the capital stock with the greatest voting power, or the
equity securities or other equity interest having power to control or direct
the management, of such other Person, or if such other Person is a
Subsidiary of another Person, of the Person or Persons that ultimately
control such first-mentioned Person and which have issued and outstanding
such capital stock, equity securities, or equity interests.
(g) "Distribution Date" has the meaning set forth in Section 3
hereof.
(h) "Expiration Date" has the meaning set forth in Section 7
hereof.
(i) "Final Expiration Date" has the meaning set forth in Section 7
hereof.
(j) "Person" means any individual, firm, corporation, partnership,
limited liability company, trust, or other entity, and includes any
successor (by merger or otherwise) of such entity.
(k) "Redemption Date" has the meaning set forth in Section 7
hereof.
(l) "Section 7(e) Person" has the meaning set forth in Section 7
hereof.
(m) "Section 11(a)(ii) Event" means any event described in Section
11(a)(ii) hereof.
(n) "Section 13 Event" means any event described in clauses (x),
(y), or (z) of Section 13(a) hereof.
(o) "Shares Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, includes without
limitation a report filed pursuant to Section 13(d) under the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become
such.
(p) "Subsidiary" of any Person means any other Person of which a
majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such first-mentioned Person,
or which is otherwise controlled by such first-mentioned Person.
(q) "Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
(r) "Voting Stock" means (i) the Common Shares of the Company, and
(ii) any other shares of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with the
Common Shares in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution, or
winding-up. Whenever any provision of this Agreement requires a
determination of whether a number of shares of Voting Stock constituting a
specified percentage of such Voting Stock has been voted, tendered,
acquired, sold or otherwise disposed of, or a determination of whether a
Person has offered or proposed to acquire a number of shares of Voting Stock
constituting such specified percentage, the number of shares of Voting Stock
constituting such specified percentage of Voting Stock will in every such
case be deemed to be the number of shares of Voting Stock constituting the
specified percentage of the Company's entire voting power then entitled to
vote generally in the election of directors or then entitled to vote
together with the Common Shares in respect of any merger, consolidation,
sale of all or substantially all of the Company's assets, liquidation,
dissolution, or winding-up.
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 until the Distribution Date, will also be the holders of the
Common Shares in accordance with Section 3 hereof) in accordance with the
terms and conditions hereof; and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable, upon ten (10) days' prior
written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such co-Rights Agent. In the event the Company appoints one or more Co-
Rights Agents, the respective duties of the Rights Agents and any Co-Rights
Agents will be as the Company may determine.
Section 3. Issue of Rights Certificates.
(a) Until the earliest of:
(i) the close of business on the tenth Business Day after the
Shares Acquisition Date; or
(ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time as
any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer, the consummation of which would
result in any Person becoming the Beneficial Owner of Common Shares
aggregating 15% or more of the then outstanding Common Shares;
(including any such date which is after the date of this Agreement and prior
to the issuance of the Rights; the earliest of such dates being herein
referred to as the "Distribution Date"):
(x) no right may be exercised;
(y) the Rights will be evidenced (subject to the provisions
of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates
will also be deemed to be certificates for Rights) and not by separate
certificates; and
(z) the Rights (and the right to receive certificates
therefor) will be transferable only in connection with the transfer of
the underlying Common Shares.
As soon as practicable after the Distribution Date, the Company will prepare
and execute, the Rights Agent will countersign, and the Company will send or
cause to be sent (and if requested, the Rights Agent will send) by first-
class, postage-prepaid mail or other appropriate means, to each record
holder of Common Shares as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, a
certificate for Rights, in substantially the form of the attached Exhibit A
(collectively, "Rights Certificates"), evidencing one Right for each Common
Share so held. As of and after the Distribution Date, the Rights will be
evidenced solely by Rights 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 Common Shares,
in substantially the form of the attached Exhibit B (the "Summary of
Rights"), by first-class, postage-prepaid mail, or other appropriate means,
to each record holder of Common Shares as of the close of business on the
Record Date, at the address of such holder shown on the records of the
Company or its transfer agent.
With respect to certificates for Common Shares outstanding as of the
Record Date, until the Distribution Date (or earlier redemption, expiration
or termination of the Rights), the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with a
copy of the Summary of Rights attached thereto, and the registered holders
of the Common Shares will also be the registered holders of the associated
Rights. With respect to uncertificated Common Shares outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by
the registration of the Common Shares in the Company's share register in the
names of the holders thereof.
Until the Distribution Date (or earlier redemption, expiration or
termination of the Rights), the surrender for transfer of any certificate
for Common Shares outstanding on the Record Date, even without a copy of the
Summary of Rights attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate.
(c) Certificates issued for Common Shares (including without
limitation certificates issued upon transfer or exchange of Common Shares)
after the Record Date but prior to the earlier of the Distribution Date or
the Expiration Date will be deemed also to be certificates for Rights and
will have impressed, printed, or written thereon, or otherwise affixed
thereto, the following legend:
"This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Hemagen
Diagnostics, Inc. and Continental Stock Transfer and Trust Company,
dated as of January 27, 1999 (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 Hemagen Diagnostics,
Inc.. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may expire, or may be
evidenced by separate certificates and no longer be evidenced by this
certificate. Hemagen Diagnostics, Inc. will mail to the registered
holder of this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. As described in
the Rights Agreement, under certain circumstances, Rights held by
Acquiring Persons (as defined in the Rights Agreement), or certain
related Persons, and any subsequent holder of such Rights, may become
null and void."
and, in the case of the initial transaction or subsequent periodic
statements with respect to uncertificated Common Shares, the following
legend:
"The registration in the share register of Hemagen Diagnostics, Inc.
of the shares of common stock to which this initial transaction or
subsequent periodic statement relates also evidences and entitles the
registered holder of such shares to certain rights as set forth in a
Rights Agreement between Hemagen Diagnostics, Inc. and Continental
Stock Transfer and Trust Company, dated as of January 27, 1999 (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 Hemagen Diagnostics, Inc. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by such
registration. Hemagen Diagnostics, Inc. 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 issued to any Person who
becomes an Acquiring Person (as defined in the Rights Agreement) may
become null and void."
Until the Distribution Date, the Rights associated with Common Shares
will be evidenced only by the certificates representing such Common Shares,
and the surrender for transfer of any such certificate will also constitute
the transfer of the Rights associated with the Common Shares represented
thereby. However, with respect to such initial transaction or subsequent
periodic statements containing the foregoing legend, until the Distribution
Date, the Rights associated with the Common Shares with respect to which
such statements are issued shall be evidenced solely by the registration of
ownership of such Common Shares in the share register of the Company, and
the registration of transfer of ownership in such share register shall also
constitute the transfer of the Rights associated with the Common Shares
whose ownership is so transferred. In the event that the Company purchases
or acquires any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares will be
deemed cancelled and retired so that the Company will not be entitled to
exercise any Rights associated with the Common Shares that are no longer
outstanding.
Notwithstanding anything to the contrary stated herein, no Rights
Certificate shall be issued pursuant to this Section 3 that represents
Rights "beneficially owned" by an Acquiring Person whose Rights would be
void pursuant to Section 7(e) or any Associate or Affiliate of any such
Acquiring Person; no Rights Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to Section 7(e) or any Associate or Affiliate thereof or to any
nominee of such Acquiring Person, Associate or Affiliate; any Rights
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to Section 7(e) shall be
canceled.
Section 4. Form of Rights Certificates.
The Rights Certificates (and the forms of election to purchase shares
and of assignment to be printed on the reverse thereof) will be
substantially in the form of the attached Exhibit A, and may have such marks
of identification or designation and such legends, summaries, or
indorsements 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 securities quotation system on or by which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the provisions
of Section 11 and Section 23 hereof, the Rights Certificates initially will
entitle the holders thereof to purchase such number of Common Shares as may
be set forth therein at the price per Common Share set forth therein (the
"Purchase Price"), but the number of such Common Shares and the Purchase
Price will be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Rights
Certificates will be executed on behalf of the Company by such officer or
officers who would be entitled to sign certificates representing Common
Shares, either manually or by facsimile signature, may (but need not) have
affixed thereto the Company's seal or a facsimile thereof, and may (but need
not) be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates will be
countersigned by the Rights Agent and will not be valid for any purpose
unless so countersigned. If any officer of the Company who signed any of
Rights Certificate ceases to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificate, 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 Rights Certificate had not
ceased to be such officer of the Company; and any Rights Certificate may be
signed on behalf of the Company by any Person who, at the actual date of the
execution of such Rights Certificate, will be a proper officer of the
Company to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such Person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept books for registration and transfer of the Rights Certificates,
showing the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates, and the date of each Rights Certificate.
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
Subject to the provisions of Sections 3(c), 4, 7(e), and 15 hereof, at any
time after the close of business on the Distribution Date, and before the
close of business on the Expiration Date, any Rights Certificate(s) may be
transferred, split up, combined, or exchanged for one or more new Rights
Certificates entitling the registered holder to purchase the same number of
Common Shares as the Rights Certificate(s) surrendered then entitled such
holder to purchase.
Any registered holder desiring to transfer, split up, combine, or
exchange any Rights Certificate(s) will make such request in writing
delivered to the Rights Agent, and will surrender the Rights Certificate or
Rights Certificates to be transferred, split up, combined, or exchanged at
the office of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer, split up, combination or exchange
of any such surrendered Rights Certificate until the registered holder shall
have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent will
countersign and deliver to the Person entitled thereto one or more Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any transfer, split-up, combination,
or exchange of Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction, or
mutilation of a Rights Certificate, and in case of loss, theft, or
destruction, of indemnity and/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 Rights Certificate if mutilated,
the Company will execute and deliver a new Rights Certificate of like tenor
to the Rights Agent for delivery to the registered holder in lieu of the
Rights Certificate so lost, stolen, destroyed, or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for the Common Shares (or other
securities) as to which the Rights are being exercised, at or prior to the
earliest of:
(i) the close of business on the tenth anniversary of the
date hereof (the "Final Expiration Date");
(ii) the time at which the Rights are redeemed as provided in
Section 24 hereof (the "Redemption Date"); or
(iii) the time at which such Rights are exchanged as provided
in Section 25 hereof (such earliest time being herein referred to as
the "Expiration Date").
(b) The Purchase Price for each Common Share upon the exercise of a
Right will initially be $4.00, will be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof, and will be payable in lawful
money of the United States of America in accordance with Section 7(c)
hereof.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the appropriate form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be purchased
and an amount equal to any applicable transfer tax required to be paid by
the holder of such Rights Certificate in accordance with Section 9 hereof,
in cash or by certified check, cashier's check, money order, or bank draft
paid or payable to the order of the Company, the Rights Agent will thereupon
promptly:
(i) (A) requisition from any transfer agent of the Common
Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Common Shares to be purchased (and the
Company hereby irrevocably authorizes its transfer agent to comply
with all such requests), or (B) if the Company, in its sole
discretion, elects to deposit the Common Shares issuable upon
conversion of the Rights hereunder into a depository, requisition from
the depository agent depository receipts representing such number of
Common Shares as are to be purchased (in which case certificates for
the Common Shares represented by such receipts will be deposited by
the transfer agent with the depository agent) and the Company will
direct the depository agent to comply with such request;
(ii) when appropriate, requisition from the Company the
amount of cash, if any, to be paid in lieu of issuance of fractional
shares in accordance with Section 15 hereof;
(iii) promptly after receipt of such certificates or
depository receipts, cause the same to be delivered to or upon the
order of the registered holder of such Rights 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 Rights
Certificate. In the event that the Company is obligated to issue
other securities of the Company pursuant to Section 11(a), the Company
will make all arrangements necessary so that such other securities are
available for distribution by the Rights Agent, if, as, and when
appropriate.
(d) Subject to the provisions of Section 15 hereof, if the
registered holder of any Rights Certificate exercises less than all of the
Rights evidenced thereby, a new Rights Certificate evidencing Rights
equivalent to the Rights remaining unexercised will be issued by the Rights
Agent to the registered holder of such Rights Certificate.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by any:
(i) Acquiring Person or Associate or Affiliate of an
Acquiring Person;
(ii) transferee of an Acquiring Person (or of any Associate
or Affiliate of an Acquiring Person) who becomes such a transferee
after the Acquiring Person becomes such; or
(iii) transferee of an Acquiring Person (or of any Associate
or Affiliate of an Acquiring Person) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and who
receives such Rights pursuant to either (A) a transfer (regardless of
whether for consideration) from such Acquiring Person, Associate, or
Affiliate to holders of equity interests in such Acquiring Person,
Associate, or Affiliate, or to any Person with whom such Acquiring
Person, Associate, or Affiliate has any continuing oral or written
plan, agreement, arrangement, or understanding regarding the
transferred Rights, or (B) a transfer that the Board of Directors of
the Company has determined is part of an oral or written plan,
agreement, arrangement, or understanding that has as a primary purpose
or effect avoidance of this Section 7(e);
(each Person described in the preceding clauses (i) through (iii) of this
Section 7(e), a "Section 7(e) Person") will become null and void without any
further action, and no holder of such Rights will have any rights whatsoever
with respect to such Rights, whether under this Agreement or otherwise.
The Company will use reasonable efforts to insure that the provisions
of this Section 7(e) and Sections 3(c) and 4 hereof are complied with, but
will have no liability to any holder of Rights Certificates or any other
Person as a result of its failure to make or erroneous making of any
determination with respect to an Acquiring Person, Affiliate or Associate of
an Acquiring Person, or transferee of any such Person.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company will be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless the certificate
contained in the form of election to purchase set forth on the reverse side
of the Rights Certificate surrendered for such exercise will have been
properly completed and duly executed by the registered holder thereof and
the Company will have been provided with such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company will reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination, or exchange will, if surrendered to the Company or to
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or if surrendered to the Rights Agent, will be cancelled by
it; and no Rights Certificates will be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights Agreement. The
Company will deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent will so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent will deliver all cancelled Rights Certificates to
the Company, or at the written request of the Company, will destroy such
cancelled Rights Certificates and certify such destruction to the Company.
Section 9. Reservation and Availability of Common Shares.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Common Shares
or any Common Shares held in its treasury, a number of Common Shares (or
other securities) sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7 of this Agreement.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares or other
securities delivered upon due exercise of Rights and payment of the purchase
price therefor will be duly and validly authorized and issued, fully paid,
and nonassessable at the time of delivery of the certificates for such
Common Shares or other securities.
(c) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges
payable in respect of the issuance or delivery of the Rights Certificates or
of any Common Shares or other securities upon the exercise of Rights. The
Company will not, however, be required to pay any transfer tax payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of certificates or depository receipts for
the Common Shares or other securities in a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered
for exercise; or to issue or to deliver any certificates or depository
receipts for Common Shares or other securities upon the exercise of any
Rights until any such tax has been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax
is due.
(d) The Company may temporarily suspend the exercisability of the
Rights in order to prepare and file any registration statement as may be
required to be filed pursuant to applicable law with respect to securities
purchasable upon exercise of the Rights. Upon any such suspension, the
Company will issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended. The Company will thereafter
issue a public announcement at such time as the suspension is no longer in
effect.
Section 10. Common Shares Record Date. Each Person in whose name any
certificate for Common Shares (or other securities) is issued upon the
exercise of Rights will for all purposes be deemed to have become the holder
of record of the Common Shares represented thereby on, and such certificate
will be dated, the date upon which the Rights 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 Common Shares (or other
securities) transfer books of the Company are closed, such Person will be
deemed to have become the record holder of such shares on, and such
certificate will be dated, the next succeeding Business Day on which the
Common Shares (or other securities) transfer books of the Company are open.
Until a Rights Certificate has been duly exercised, the holder thereof
will not be entitled to any rights of a stockholder of the Company with
respect to shares for which the Rights may be exercisable ( including
without limitation the rights to vote and to receive dividends and other
distributions) and will not be entitled to receive any notice of any
proceedings of the Company, except as specifically provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right, and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) Except as otherwise provided in this Section 11(a)
and in Section 7(e), if the Company at any time after the date of this
Agreement (A) declares a dividend on the Common Shares payable in
Common Shares, (B) subdivides the outstanding Common Shares,
(C) combines the outstanding Common Shares into a smaller number of
shares, or (D) issues any shares of its capital stock in a
reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), then 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, as the case may be, and the number and kind of
shares of capital stock issuable on such date, each will be
proportionately adjusted so that the holder of any Right duly
exercised after such applicable time will be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and
kind of shares of capital stock that, if such Right had been exercised
immediately prior to such applicable time and at a time when the
Common Shares transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination, or
reclassification; provided, however, that in no event will the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs that would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) will
be in addition to, and will be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Section 25 of this Agreement, if any Person
becomes an Acquiring Person then, and in each such case, proper
provision will be made promptly so that, following the Distribution
Date, each holder of a Right, except as provided in Section 7(e)
hereof, will have a right to receive, upon exercise thereof at a price
equal to the then current Purchase Price in accordance with the terms
of this Agreement, such number of Common Shares of the Company as is
equal to the result obtained by (x) multiplying the then current
Purchase Price by the then number of Common Shares for which a Right
was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which following such
first occurrence will thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50%
of the then current per share market price of the Company's Common
Shares (determined pursuant to Section 11(d) hereof) on the date of
such first occurrence (such number of shares, the "Adjustment
Shares"); provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section
13 hereof will apply and no adjustment will be made pursuant to this
Section 11(a)(ii). In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish the
benefits intended to be afforded by the Rights.
(iii) In the event that the number of Common Shares that are
authorized by the Company's certificate of incorporation (as amended
and in effect as of the relevant time) but not outstanding or reserved
for issuance for purposes other than upon exercise of the Rights, are
not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a),
the Company will: (A) determine the excess of the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over the Purchase Price (such excess, the "Spread"), and (B)
with respect to each Right, make adequate provision to substitute for
the Adjustment Shares, upon payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) Common Shares of
the same or a different class or other equity securities of the
Company (including without limitation preferred shares or units of
preferred shares that the Company's Board of Directors in good ▇▇▇▇▇
▇▇▇▇▇ (based on, among other things, the dividend and liquidation
rights of such preferred shares) to have substantially the same
economic value as Common Shares (such preferred shares, hereinafter
referred to as "common share equivalents")), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where
such aggregate value has been determined by the Board of Directors
after considering the advice of a competent investment banking firm
selected by the Board of Directors of the Company; provided, however,
that if the Company has not made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y)
the date on which the Company's right of redemption pursuant to
Section 24(b) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company will
be obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, Common Shares (to
the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board
of Directors of the Company determines in good faith that it is likely
that sufficient additional Common Shares could be authorized for
issuance upon exercise in full of the Rights, the 30-day period set
forth above may be extended to the extent necessary, but not more than
90 days 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 period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines
that action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company will provide,
subject to Section 7(e) hereof, that such action will apply uniformly
to all outstanding Rights, and 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 first
sentence and to determine the value thereof. The Company will make a
public announcement when the exercisability of the Rights has been
temporarily suspended, and again when such suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the
Common Shares will be the current market price (as determined pursuant
to Section 11(d) hereof) per Common Share on the Section 11(a)(ii)
Trigger Date and the value of any "common share equivalent" will be
deemed to have the same value as the Common Shares on such date.
(b) If the Company fixes a record date for the issuance of rights,
options, or warrants to all holders of Common Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe
for or purchase Common Shares (or shares having the same or more favorable
rights, privileges, and preferences as the Common Shares ("equivalent common
shares")) or securities convertible into Common Shares or equivalent common
shares at a price per Common Share or equivalent common share (or having a
conversion price per share, if a security convertible into Common Shares or
equivalent common shares) less than the then current per share market price
of the Common Shares (as defined in Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date will be determined by
multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which will be the number of Common
Shares outstanding on such record date plus the number of Common Shares that
the aggregate offering price of the total number of Common Shares and/or
equivalent common 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 will be
the number of Common Shares outstanding on such record date plus the number
of additional Common Shares and/or equivalent common 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
will 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 will be in a form other than
cash, the value of such consideration will be as determined in good faith by
the Board of Directors of the Company, whose determination will be described
in a statement filed with the Rights Agent. Common Shares owned by or held
for the account of the Company will not be deemed outstanding for the
purpose of any such computation. Such adjustment will 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 will be adjusted
to be the Purchase Price which would then be in effect if such record date
had not been fixed.
(c) If the Company fixes a record date for the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of cash, evidences of
indebtedness, or other assets (other than a dividend payable in Common
Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record
date will be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
will be the then current per share market price of the Common Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination will be described in
a statement filed with the Rights Agent) of the portion of the cash,
evidences of indebtedness, or other assets so to be distributed or of such
subscription rights or warrants applicable to one Common Share and the
denominator of which will be such current per share market price of the
Common Shares; provided, however, that in no event will 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 will be made successively whenever such a
record date is fixed; and in the event that such distribution is not so
made, the Purchase Price will again be adjusted to be the Purchase Price
that would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder other
than computations made pursuant to Section 11(a)(iii) hereof, the
"current per share market price" of any Security (a "Security" for the
purpose of this Section 11(d)(i)) on any date will be deemed to be the
average of the daily closing prices per share of such Security for the
30 consecutive Trading Days (as hereinafter defined) immediately prior
to such date; provided, however, that in the event that the current
per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such
Security or securities convertible into such shares, or (B) any
subdivision, combination, or reclassification of such Security 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 will be appropriately
adjusted to reflect the current market price per share equivalent of
such Security. The closing price for each day will be the last sale
price, regular way, or in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange, or if the Security is not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the 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 National Association of Securities Dealers,
Inc. Automated Quotations System ("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" means a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed
or admitted to trading on any national securities exchange, a Business
Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares will be
determined in accordance with the method set forth in Section
11(d)(i). If the Common Shares are not publicly held or so listed or
traded, "current per share market price" means the fair value per
share as determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement filed
with the Rights Agent.
(e) Subject to the final sentence of this Section 11(e), no
adjustment in the Purchase Price will be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments that by reason of this Section 11(e)
are not required to be made will be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 11 will
be made to the nearest cent or to the nearest one ten-thousandth of any
Common Share or any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 will be made no later than the earlier of
(i) three years from the date of the transaction that 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 will become entitled to
receive any shares of capital stock of the Company other than Common Shares,
thereafter the number of such other shares so receivable upon exercise of
any Right will 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 Common Shares contained in Section 11(a) through (c), (e), (h) through
(k), and (m), and the provisions of Sections 7, 9, 10, 13, 14, and 15 with
respect to the Common Shares will 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 will evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company has exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment will thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of Common
Shares (calculated to the nearest one ten thousandth of a Common Share)
obtained by (i) multiplying (x) the number of Common Shares covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Common Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number
of Rights will be exercisable for the number of Common Shares for which a
Right was exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights will become that
number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company will make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but if the Rights Certificates have been
issued, will be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company as
promptly as practicable will cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 15 hereof, the additional Rights to which such holders
will be entitled as a result of such adjustment, or at the Company's option,
will cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Rights Certificates evidencing all the Rights to which such holders are
entitled after such adjustment. Rights Certificates so to be distributed
will be issued, executed, and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and will be registered in the names of the holders of record of
Rights 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 Common Share issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of Common Shares that were
expressed in the initial Rights 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 Common
Shares issuable upon exercise of the Rights, the Company will take any
corporate action that may be necessary, in the opinion of its counsel, in
order that the Company may validly and legally issue fully paid and
nonassessable Common Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 requires that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may defer until the occurrence of such event
the issuing to the holder of any Right exercised after such record date of
the Common Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Common Shares and other
capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company will deliver to such holder
an 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 will be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as
and to the extent that it in its sole discretion determines to be advisable
in order that any consolidation or subdivision of the Common Shares,
issuance wholly for cash of any Common Shares at less than the current
market price, issuance wholly for cash of Common Shares or securities that
by their terms are convertible into or exchangeable for Common Shares, stock
dividends, or issuance of rights, options, or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to holders of
its Common Shares will not be taxable to such stockholders.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made pursuant to Section 11 or 13 hereof,
the Company will promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or if prior to the
Distribution Date, to each holder of a certificate representing Common
Shares) in accordance with Section 27 hereof. The Rights Agent may rely on
such certificate without further inquiry and may assume that no such
adjustment has been made unless and until it will have received such
certificate.
Section 13. Consolidation, Merger, or Sale or Transfer of Assets or
Earning Power of the Company.
(a) In the event that, following the Shares Acquisition Date,
directly or indirectly:
(x) the Company consolidates with, or merges with and into,
any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 14(b) hereof), and the Company
is not the continuing or surviving corporation of such consolidation
or merger;
(y) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 14(b) hereof) consolidates with
the Company, or merges with and into the Company and the Company is
the continuing or surviving corporation of such merger, and in
connection with such merger, all or part of the Common Shares will be
changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property;
(z) the Company sells or otherwise transfers (or one or more
of its Subsidiaries sells or otherwise transfers), 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 Person (other than to the Company or one or more of
its Subsidiaries, in one or more transactions that complies with
Section 14(b) hereof);
then, and in each such case, proper provision will be made so that (i)
following the Distribution Date, and subject to Section 7(e) hereof, each
holder of a Right will have the right to receive, upon the exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, such number of freely tradable Common Shares of the Principal
Party (as hereinafter defined), free and clear of liens, rights of call or
first refusal, encumbrances, and other adverse claims, as is equal to the
result obtained by (1) multiplying the then current Purchase Price by the
number of Common Shares for which a Right is exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such shares for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, by
the Purchase Price in effect immediately prior to such first occurrence),
and (2) dividing that product (which following the first occurrence of a
Section 13 Event, will be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by 50% of the current per share
market price of the Common Shares of such Principal Party (determined
pursuant to Section 11(d) hereof) on the date of consummation of such
Section 13 Event; (ii) such Principal Party will thereafter be liable for,
and will assume, by virtue of such consolidation, merger, sale, or transfer,
all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" will thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof will apply to such Principal Party; and (iv) such
Principal Party will take such steps (including without limitation the
reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may be necessary
to assure that the provisions hereof will thereafter be applicable, as
nearly as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of subsection (a) of this Section 13, the
Person that is the issuer of any securities into which Common Shares
of the Company are converted in such merger of consolidation, and if
no securities are so issued, the Person that is the other party to the
merger or consolidation (including, if applicable, the Company, if it
is the surviving corporation); and
(ii) in the case of any transaction described in clause (z)
of the first sentence of paragraph (a) of this Section 13, the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case (1) if the Common Shares of such
Person are not at such time and have not been continuously over the
preceding 12-month period registered under Section 12 of the Securities
Exchange Act of l934, as amended (the "Exchange Act"), and such Person is a
direct or indirect subsidiary or Affiliate of another Person, then
"Principal Party" will refer to such other Person; (2) in case such Person
is a subsidiary, directly or indirectly, or Affiliate of more than one
Person, the Common Shares of two or more of which are and have been so
registered, "Principal Party" will refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate market value; and
(3) in case 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 the preceding clauses (1) and (2)
will apply to each of the chains of ownership having an interest in such
joint venture as if such party were a "Subsidiary" of both or all of such
joint ventures and the Principal Parties in each such chain will bear the
obligations set forth in this Section 13 in the same ratio as their direct
or indirect interests in such Person bear to the total of such interests.
(c) The Company will not consummate any such consolidation, merger,
sale or transfer unless the Principal Party has a sufficient number of
authorized Common Shares that have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section
13 and unless prior thereto the Company and each Principal Party and each
other Person who may become a Principal Party as a result of such
consolidation, merger, sale, or transfer first execute and deliver to the
Rights Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that, as
soon as practicable after the date of any Section 13 Event, the Principal
Party at its own expense will:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities
purchasable upon the exercise of the Rights, will use its best efforts
to cause such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to cause
such registration statement to remain effective (with a prospectus
meeting the requirements of the Securities Act) until the Expiration
Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary;
(iii) use its best efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the
Rights on a national securities exchange or to meet the eligibility
requirements for quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates, which
financial statements comply in all material respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 will similarly apply to successive mergers
or consolidations or sales or other transfers. If a Section 13 Event occurs
at any time after the occurrence of a Section 11(a)(ii) Event, the Rights
that have not theretofore been exercised will thereafter become exercisable
solely in the manner described in paragraph (a) of this Section 13.
Section 14. Additional Covenants.
(a) The Company covenants and agrees that it will not at any time
after the Distribution Date (i) consolidate with, (ii) merge with or into,
or (iii) sell or transfer, in one or more transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the
Company and its subsidiaries taken as a whole, to any other Person, if at
the time of or after such consolidation, merger, or sale there are any
charter or by-law provisions or any rights, warrants, or other instruments
outstanding or any other action taken or circumstances extant that would
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights. The Company will not consummate any such consolidation, merger, or
sale unless the Company and such other Person first execute and deliver to
the Rights Agent a supplemental agreement evidencing compliance with this
subsection.
(b) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 24 or Section 28 hereof,
take any action if at the time such action is taken it is reasonably
foreseeable that such action will substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
Section 15. Fractional Rights and Fractional Shares.
(a) The Company will not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(i), or to
distribute Rights Certificates that evidence fractional Rights. In lieu of
such fractional Rights, there will be paid to the registered holders of the
Rights 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
15(a), the current market value of a whole Right will be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing
price for any day will be the last sale price, regular way, or in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange, or if the Rights are
not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading, or if the Rights are
not listed or admitted to trading on any national securities exchange, the
last quoted price, or if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such
other system then in use, or if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company will be used.
(b) The Company will not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates that
evidence fractional Common Shares. In lieu of fractional Common Shares, the
Company will pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Common Share. For the
purposes of this Section 15(b), the current market value of a Common Share
will be the closing price of a Common Share (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right.
Section 16. Rights of Action. Excepting the rights of action given
to the Rights Agent under Section 19 hereof, all rights of action in respect
of this Agreement are vested in the respective registered holders of the
Rights Certificates (and prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Rights
Certificate (or prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action, or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights Certificate
and in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Holders of Rights will be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred by them in any action to
enforce the provisions of this Agreement.
Section 17. Agreement of Rights Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly indorsed or accompanied by
a proper instrument of transfer;
(c) subject to Section 6 and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the Person in whose name the Rights
Certificate (or prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent will be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent will have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other
order, decree, or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory, or administrative agency or commission, or any
statute, rule, regulation, or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon
as possible.
Section 18. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate will be entitled to vote, receive
dividends or be deemed for any purpose to be the holder of the Common Shares
or any other securities of the Company that may at any time be issuable on
the exercise of the Rights represented thereby, nor will anything contained
herein or in any Rights Certificate be construed to confer upon the holder
of any Rights Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 26
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Rights Certificate have been exercised
in accordance with the provisions hereof.
Section 19. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without gross negligence, bad faith, or willful
misconduct on the part of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending against any
claim of liability arising directly therefrom.
The Rights Agent will be protected and will 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 Rights
Certificate or certificate for Common Shares or 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 if necessary, verified or acknowledged, by the proper
Person or Persons.
Section 20. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent may be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, will 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 22 hereof. In case at the time such successor Rights Agent
succeeds to the agency created by this Agreement, any of the Rights
Certificates will have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates have been countersigned,
any successor Rights Agent may countersign such Rights 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 Rights Certificates will have the
full force provided in the Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or
in its changed name; and in all such cases such Rights Certificates will
have the full force provided in the Rights Certificates and in this
Agreement.
Section 21. 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 Rights
Certificates, by their acceptance thereof, will 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 will 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 deems it necessary or desirable that any fact or matter
(including without limitation the identity of any Acquiring Person) 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 is
specifically prescribed herein) may be deemed to be conclusively proved and
established by a certificate signed by the Chief Executive Officer,
President, any Vice President, the Treasurer, the Chief Financial Officer or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate will 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 will be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith, or willful
misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed
to have been made by the Company only.
(e) The Rights Agent will 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 Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or for the manner,
method, or amount of any adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after receipt of a
certificate furnished pursuant to Section 12 describing any such
adjustment); nor will it be responsible for any determination by the Board
of Directors of the Company of the current market value of the Rights or
Common Shares; nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Common Shares or other securities to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any Common Shares or other
securities will, when issued, be validly authorized and issued, fully paid,
and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge,
and deliver or cause to be performed, executed, acknowledged, and delivered
all such further and other acts, instruments, and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chief Executive Officer, President, any Vice President, the Treasurer,
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 will 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 Rights Agreement and the date on
and/or after which such action will be taken or such omission will be
effective. The Rights Agent will 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 will not be less than ten Business Days after the date the Chief
Executive Officer, President, any Vice President, the Treasurer, the Chief
Financial Officer or the Secretary of the Company actually receives such
application, unless any such officer of the Company consents 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 receives 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 will 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 will 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 the act, default, neglect, or misconduct of any such attorney or agent,
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement will require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there will be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certification attached to the
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause l
and/or 2 thereof, the Rights Agent will not take any further action with
respect to such requested exercise of transfer without first consulting with
the Company.
Section 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' prior notice in writing to the Company and to
each transfer agent of the Common Shares in accordance with Section 27
hereof, and to the holders of the Rights Certificates by first-class mail at
the expense of the Company.
The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' prior notice in writing sent to the Rights Agent or successor
Rights Agent, as the case may be, and each transfer agent of the Common
Shares in accordance with Section 27 hereof, and to the holders of the
Rights Certificates by first-class mail.
If the Rights Agent resigns or is removed or otherwise becomes
incapable of acting, the Company will appoint a successor to the Rights
Agent. If the Company fails 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 Rights Certificate (who will, with such
notice, submit his Rights Certificate for inspection by the Company), then
the registered holder of any Rights 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 a
court, will be an entity organized and doing business under the laws of the
United States or any state of the United States (so long as such entity is
in good standing), and 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 $100
million. After appointment, the successor Rights Agent will 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 will 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 will
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any
notice provided for in this Section 22, however, or any defect therein, will
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 23. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company at its option may issue new Rights Certificates in such form as may
be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement.
Section 24. Redemption.
(a) The Rights may be redeemed by action of the Board of Directors
pursuant to paragraph (b) of this Section 24, and will not be redeemed in
any other manner.
(b) The Board of Directors of the Company may, at its option, at
any time prior to the earliest of (x) the close of business on the tenth day
following a Shares Acquisition Date, or (y) 5:00 p.m., E.S.T., on the Final
Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof. The redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis, and with such
conditions as the Board of Directors in its sole discretion may establish.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (b) of
this Section 24, 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 will be to receive the Redemption Price. The Company
will promptly give public notice of any such redemption; provided, however,
that the failure to give, or any defect in, any such notice will not affect
the validity of such redemption. Within 10 days after such action ordering
the redemption of the Rights pursuant to paragraph (b) or (c), as the case
may be, the Company will mail a notice of redemption to all the holders of
the then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent, or prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares. Any notice
mailed in the manner herein provided will be deemed duly given, whether or
not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made.
The Company may, at its option, pay the Redemption Price in cash, Common
Shares (based on the current per share market price of the Common Shares as
of the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors. Notwithstanding anything contained
in this Agreement to the contrary, the Rights will not be exercisable after
the first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption under Section 24(b) has expired.
Section 25. Exchange.
(a) The Company's Board of Directors, at its option, at any time
after the occurrence of a Section 11(a)(ii) Event may exchange all or part
of the then outstanding and exercisable Rights (which will not include
Rights that have become void pursuant to the provisions of Section 7(e)
hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend, or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Company's Board of Directors may not effect such exchange at
any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary, or
any entity holding Common Shares for or pursuant to the terms of any such
plan), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Company's Board of Directors
ordering the exchange of any Rights pursuant to subsection (a) of this
Section 25, and without any further action and without any notice, the right
to exercise such Rights will terminate and the only right thereafter of a
holder of such Rights will be to receive that number of Common Shares equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company will promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
will not affect the validity of such exchange. The Company promptly will
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided will be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the Common
Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights that will be exchanged. Any partial exchange
will be effected pro rata based on the number of Rights (other than Rights
that have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In the event that there are not sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated
in accordance with this Section 25, the Company will take all such action as
may be necessary to authorize additional Common Shares for issuance upon
exchange of the Rights.
(d) The Company will not be required to issue fractions of Common
Shares or to distribute certificates that evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company will pay to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Common
Share. For the purposes of this paragraph (e), the current market value of
a whole Common Share will be the closing price of a Common Share (as
determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 25.
Section 26. Notice of Certain Events.
(a) In case the Company proposes, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of its Common Shares or to make any other distribution to the
holders of its Common Shares, (ii) to offer to the holders of its Common
Shares rights or warrants to subscribe for or to purchase any additional
Common Shares or shares of stock of any class or any other securities,
rights, or options, (iii) to effect any reclassification of its Common
Shares (other than a reclassification involving only the subdivision of
outstanding Common Shares), (iv) to effect any consolidation or merger into
or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect
the liquidation, dissolution, or winding-up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or
to effect a subdivision, combination or consolidation of the Common Shares
(by reclassification or otherwise than by payment of dividends in Common
Shares), then, in each such case, the Company will give to each holder of a
Rights Certificate, in accordance with Section 27 hereof, a notice of such
proposed action, which will specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding-up is to take place and the date of participation
therein by the holders of the Common Shares, if any such date is to be
fixed, and such notice will 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 Common Shares for purposes of such action, and in
the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares, whichever will be the earlier.
(b) In case any of Section 11(a)(ii) Event will occur, (i) the
Company will as soon as practicable thereafter give to each holder of a
Rights Certificate, in accordance with Section 27 hereof, a notice of the
occurrence of such event, which notice will describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Common Shares
will be deemed thereafter to refer to Common Shares or, if appropriate,
other securities.
Section 27. Notices. Any notice or demand authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company will be sufficiently given or made
if sent by reputable overnight courier or by registered, certified, or
first-class mail, postage or delivery charges prepaid and addressed (until
another address is filed in writing with the Rights Agent) as follows:
Hemagen Diagnostics, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Any notice or demand authorized by this Agreement to be given or made
by the Company or by the holder of any Rights Certificate to or on the
Rights Agent will be sufficiently given or made if sent by reputable
overnight courier or by registered, certified, or first-class mail, postage
or delivery charges prepaid and addressed (until another address is filed in
writing with the Company) as follows:
Continental Stock Transfer and Trust Company
▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Compliance Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate or
certificate representing Common Shares will 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 28. Supplements and Amendments. Prior to the Distribution
Date, if the Company so directs, the Company and the Rights Agent will
supplement or amend any provision of this Agreement without the approval of
any holders of certificates representing Common Shares. From and after the
Distribution Date, if the Company so directs, the Company and the Rights
Agent will supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein that may be defective
or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable and that will not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or any Affiliate or
Associate of an Acquiring Person).
Section 29. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent will bind
and inure to the benefit of their respective successors and assigns
hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement
will be construed to give to any Person or corporation other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and prior to the Distribution Date, of the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement will be for the sole and exclusive benefit of the Company, the
Rights Agent, and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, of the Common Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement will
remain in full force and effect and will in no way be affected, impaired or
invalidated.
Section 32. Governing Law. This Agreement and each Rights
Certificate issued hereunder will be deemed to be a contract made under the
laws of the State of Delaware and for all purposes will 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 will for all purposes
be deemed to be an original, and all such counterparts will together
constitute but one and the same agreement.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
will not control or affect the meaning or construction of any of the
provisions hereof.
[ Remainder of Page Intentionally Left Blank ]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, as an agreement under seal, as of the date
first above written.
HEMAGEN DIAGNOSTICS, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY,
as Rights Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
Exhibit A to Rights Agreement
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER JANUARY 27, 2009, OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT, AT THE OPTION
OF THE COMPANY, TO REDEMPTION AT $0.001 PER RIGHT AND TO EXCHANGE ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS
SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
RIGHTS CERTIFICATE
HEMAGEN DIAGNOSTICS, INC.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions,
and conditions of the Rights Agreement, dated as of January 27, 1999 (the
"Rights Agreement"), by and between Hemagen Diagnostics, Inc. (the
"Company"), a Delaware corporation, and Continental Stock Transfer and Trust
Company (the "Rights Agent"), to purchase from the Company at any time after
the Distribution Date (as defined in the Rights Agreement) and prior to 5:00
P.M., New York City time, on January 27, 2009, at the office of the Rights
Agent designated for such purpose, or at the office of its successor as
Rights Agent designated for such purpose, one share of Common Stock, par
value $0.01 per share (the "Common Shares"), of the Company, at a purchase
price of $4.00 per Common Share (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of Common Shares that may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above,
are the number of Rights and Purchase Price as of January 27, 1999, based on
the Common Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of Common Shares that may be
purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
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 of the Rights Agent, the Company and the holders of the Rights
Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned office of the
Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
may be surrendered at the principal office of the Rights Agent in exchange
for another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase the same aggregate number
of Common Shares as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered entitled such holder to purchase. If this Rights
Certificate is exercised in part, the holder will be entitled to receive
upon surrender hereof another Rights Certificate or Rights 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 its
option at a redemption price of $0.001 per Right, or (ii) may be exchanged
in whole or in part by the Company, at its option, for Common Shares.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, will be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Common Shares or of any other securities of the Company that may at any time
be issuable on the exercise hereof, nor will 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 Rights Certificate have been exercised as provided in the
Rights Agreement.
This Rights Certificate will not be valid or obligatory for any
purpose until it is countersigned by the Rights Agent.
Dated: ____________, ____.
HEMAGEN DIAGNOSTICS, INC.
By
----------------------------
Name:
Title:
Continental Stock Transfer & Trust Company
-----------------------------
Authorized Officer
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns, and transfers to ___
________________________
(Please print name and address of transferee)
________________________
this Rights Certificate, together with all right, title, and interest
therein, and does hereby irrevocably constitute and appoint ________________
as attorney, to transfer the within Rights Certificate on the books of
Hemagen Diagnostics, Inc., with full power of substitution.
Dated: _______________, _____ __
(Signature)
Medallion Signature Guaranty:
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Assignment Certification
------------------------
The undersigned hereby certifies by checking the appropriate boxes
that:
(l) The Rights evidenced by this Rights Certificate [ ] are [ ]
are not being sold, assigned, and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such term is defined pursuant to the Rate Agreement);
(2) After due inquiry and to the best knowledge of the undersigned,
he, she, or it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _______________, _____ __
(Signature)
Notice
------
The signatures to the foregoing Assignment and Certification must
correspond exactly to the name of the registered owner hereof, as written
upon the face of this Rights Certificate, without any change whatsoever.
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FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Rights Certificate.)
To HEMAGEN DIAGNOSTICS, INC.:
The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Rights Certificate to
purchase the Common Shares (or such other securities of the Company or of
any other person) issuable upon the exercise of such Rights and requests
that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number: ________________
___ _________________________
(Please print name and address)
____________________________
(If the above number of Rights is not all of the Rights evidenced by
this Rights Certificate, then a new Rights Certificate for the balance
remaining of such Rights will be registered and returned to the
undersigned.)
Dated: _______________, _____ __
(Signature)
Medallion Signature Guaranty:
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Election Certification
----------------------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) The Rights evidenced by this Rights Certificate [ ] are [ ]
are not being sold, assigned, and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of any
Acquiring Person (as such terms are defined pursuant to the Rate Agreement).
(2) After due inquiry and to the best knowledge of the undersigned,
he, she, or it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any person who is or was an Acquiring Person or an
Affiliate or Associate of any Acquiring Person.
Dated: _______________, _____ __
(Signature)
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NOTICE
------
The signatures in the foregoing Election to Purchase and Certification
must correspond exactly to the name of the registered owner hereof, as
written upon the face of this Rights Certificate, without any change
whatsoever.
In the event the certification set forth above in the Assignment or
the Election to Purchase, as the case may be, is not completed, the Company
and the Rights Agent will deem the beneficial owner of the Rights evidenced
by this Rights Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.
Exhibit B to Rights Agreement
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On January 27, 1999, the Board of Directors of Hemagen Diagnostics,
Inc. (the "Company") declared a dividend distribution of one common share
purchase right (a "Right") for each outstanding share of common stock, par
value $0.01 per share (the "Common Shares"), of the Company. The dividend
is payable on February 10, 1999 (the "Record Date") to the stockholders of
record on that date. Except as described below, each Right, when
exercisable, entitles the registered holder to purchase from the Company one
Common Share of the Company at a price of $4.00 per Common Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Company and Continental Stock Transfer and Trust Company ("Continental")
as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, and no separate Rights
certificates will be distributed. Until the earlier to occur of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") have acquired
beneficial ownership of 15% or more of the outstanding Common Shares (the
date of such an announcement being a "Shares Acquisition Date"), 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 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
such outstanding Common Shares, the Rights will be evidenced, with respect
to any of the Common Share certificates outstanding as of the Record Date,
by such Common Share certificates together with a copy of this Summary of
Rights.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any certificates
for Common Shares outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Shares as
of the close of business on the Distribution Date, and the separate Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on January 27, 2009 (the "Final Expiration Date"), unless
the Rights are earlier redeemed by the Company, as described below.
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights are 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
Common Shares, (ii) upon the grant to holders of the Common Shares of
certain rights or warrants to subscribe for or purchase Common Shares at a
price, or securities convertible into Common Shares with a conversion price,
less than the then current market price of the Common Shares or (iii) upon
the distribution to holders of the Common Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out
of earnings or retained earnings or dividends payable in Common Shares) or
of subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Common Shares
issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock dividend on the
Common Shares payable in Common Shares or subdivisions, consolidations or
combinations of the Common Shares occurring, in any such case, prior to the
Distribution Date.
Common Shares purchasable upon exercise of the Rights will not be
redeemable.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction in
which the Common Shares are exchanged or changed, or 50% or more of the
Company's consolidated assets or earning power are sold (in one transaction
or a series of transactions), proper provision will be made so that each
holder of a Right (other than an Acquiring Person) will thereafter have the
right to receive, upon the exercise thereof at the then current exercise
price of the Right, that number of shares of common stock of the acquiring
company (or, in the event there is more than one acquiring company, the
acquiring company receiving the greatest portion of the assets or earning
power transferred) which at the time of such transaction would have a market
value of two times the exercise price of the Right.
In the event that any person becomes an Acquiring Person, each holder
of a Right will thereafter have the right to receive upon exercise that
number of Common Shares having a market value of two times the exercise
price of the Right. Upon occurrence of any of the events described in the
immediately preceding sentence, any Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person shall immediately become null and void.
At any time after the occurrence of any such event and prior to the
acquisition by such person or group of 50% or more of the outstanding Common
Shares, the Board of Directors may exchange the Rights (other than Rights
owned by such person or group which have become void), in whole or in part,
at an exchange ratio of one Common Share per Right (subject to adjustment).
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 Common Shares will be issued and in
lieu thereof, an adjustment in cash will be made based on the market price
of the Common Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier of (i) the tenth day after a Shares
Acquisition Date, or (ii) the expiration of the Rights, the Board of
Directors may redeem the Rights in whole, but not in part, at a price of
$.001 per Right (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. 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.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, to make changes that do
not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time
period under the Rights Agreement; provided, however, that no amendment to
adjust the time period governing redemption shall be made at such time as
the Rights are not redeemable.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
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-A.
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, which is
hereby incorporated herein by reference.