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TIKCRO TECHNOLOGIES LTD.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
Rights Agent
Bonus Rights Agreement
Dated as of September 12, 2005
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TABLE OF CONTENTS
Section 1. Certain Definitions..........................................................................1
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Section 2. Appointment of Rights Agent..................................................................4
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Section 3. Issue of Right Certificates..................................................................4
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Section 4. Form of Right Certificates...................................................................6
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Section 5. Countersignature and Registration............................................................6
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Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
---------- Mutilated, Destroyed, Lost or Stolen Right Certificates......................................7
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights................................7
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Section 8. Cancellation and Destruction of Right Certificates...........................................9
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Section 9. Reservation and Availability of Ordinary Shares..............................................9
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Section 10. Ordinary Shares Record Date..................................................................9
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Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights...........................10
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Section 12. Certificate of Adjusted Purchase Price or Number of Shares...................................17
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Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.........................17
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Section 14. Fractional Rights and Fractional Shares......................................................19
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Section 15. Rights of Action.............................................................................20
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Section 16. Agreement of Right Holders...................................................................20
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Section 17. Right Certificate Holder Not Deemed a Shareholder............................................20
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Section 18. Concerning the Rights Agent..................................................................21
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Section 19. Merger or Consolidation or Change of Name of Rights Agent....................................21
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Section 20. Duties of Rights Agent.......................................................................22
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Section 21. Change of Rights Agent.......................................................................23
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Section 22. Issuance of New Right Certificates...........................................................24
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Section 23. Redemption...................................................................................24
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Section 24. Notice of Certain Events.....................................................................25
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Section 25. Notices......................................................................................26
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Section 26. Supplements and Amendments...................................................................26
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Section 27. Successors...................................................................................27
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Section 28. Benefits of this Agreement...................................................................27
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Section 29. Severability.................................................................................27
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Section 30. Governing Law................................................................................28
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Section 31. Counterparts.................................................................................28
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Section 32. Descriptive Headings.........................................................................28
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Section 33. Determination and Actions by the Board.......................................................28
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BONUS RIGHTS AGREEMENT
Bonus Rights Agreement, dated as of September 12, 2005, (the
"Rights Agreement") between Tikcro Technologies Ltd., an Israeli corporation
(the "Company"), and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agent").
The Board of Directors of the Company has authorized the
distribution of one bonus right (a "Right") for each Ordinary Share (as defined
in Section 1(g) hereof) of the Company outstanding on September 26, 2005 (the
"Record Date"), and has authorized the issuance of one Right (as such number may
be hereinafter adjusted pursuant to the terms hereof) with respect to each
Ordinary Share that shall be issued (whether originally issued or delivered from
the Company's treasury) between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are defined in Sections 3 and 7 hereof) and, in certain circumstances
provided in Section 22 hereof, after the Distribution Date, each Right initially
representing the right to purchase one-half of one Ordinary Share.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as
such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or more
of the Ordinary Shares of the Company then outstanding but shall not
include (i) the Company, (ii) any wholly-owned Subsidiary of the
Company, (iii) any employee benefit plan of the Company or of any
Subsidiary or Affiliate of the Company, (iv) any entity holding shares
of share capital of the Company for or pursuant to the terms of any
such plan, (v) any Person who, along with such Person's Affiliates and
Associates, is the Beneficial Owner of 15% or more of the Ordinary
Shares outstanding as of the date hereof, provided that such Person,
including such Person's Affiliates and Associates, does not acquire,
after the date hereof, additional Ordinary Shares in excess of 1.5% of
the Ordinary Shares of the Company then outstanding, exclusive of (x)
Ordinary Shares acquired by such Person and such Person's Affiliates
and Associates as a result of stock dividends, stock splits,
recapitalizations or similar transactions in which the Company did not
receive any consideration for issuing the Ordinary Shares; (y) Ordinary
Shares acquired by such Person and such Person's Affiliates and
Associates as a result of devises, bequests and intestate succession;
and (z) Ordinary Shares acquired by such Person and such Person's
Affiliates and Associates as a result of participation by such Person
and such Person's Affiliates and Associates in any dividend
reinvestment plan, stock option plan or other similar plan or
arrangement of the Company or its Subsidiaries or Affiliates, (vi) any
Person who, along with such Person's Affiliates and Associates, becomes
an Acquiring Person (as defined in the preceding clauses of this
Section 1(a)) as a result of a Qualified Offer (as defined in Section
11(a)(ii) hereof), (vii) any Person who becomes an Acquiring Xxxxx (as
defined in the preceding clauses of this Section 1(a)) by virtue of
acquiring Ordinary Shares as a result of participation by such Person
and such Person's Affiliates and Associates in any dividend
reinvestment plan, stock option plan or other similar plan or
arrangement of the Company or its Subsidiaries or Affiliates, provided
that such Person, including such Person's Affiliates and Associates,
does not acquire thereafter any additional Ordinary Shares, exclusive
of (x) Ordinary Shares acquired by such Person and such Person's
Affiliates and Associates as a result of stock dividends, stock splits,
recapitalizations or similar transactions in which the Company did not
receive any consideration for issuing the Ordinary Shares; (y) Ordinary
Shares acquired by such Person and such Person's Affiliates and
Associates as a result of devises, bequests and intestate succession;
and (z) Ordinary Shares acquired by such Person and such Person's
Affiliates and Associates as a result of participation by such Person
and such Person's Affiliates and Associates in any dividend
reinvestment plan, stock option plan or other similar plan or
arrangement of the Company or its Subsidiaries or Affiliates or (viii)
any Person who becomes an Acquiring Person (as defined in the preceding
clauses of this Section 1(a)) inadvertently or without knowledge of the
terms of the Rights and who or which, together with all Affiliates and
Associates, thereafter does not acquire additional Ordinary Shares
while the Beneficial Owner of 15% or more of the Ordinary Shares then
outstanding; provided that if so requested by the Company, (x) such
Person shall certify within 10 Business Days of being so requested,
that such Person had acquired the Ordinary Shares inadvertently or
without knowledge of the terms of the Rights and (y) such Person shall
promptly sell any shares acquired in excess of the applicable threshold
that would have otherwise caused such Person to be an Acquiring Person
. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Ordinary 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 Ordinary Shares of the Company then outstanding;
provided, however, that if a Person who becomes the Beneficial Owner of
15% or more of the Ordinary Shares of the Company then outstanding by
reason of share purchases by the Company shall, after such share
purchases by the Company, become the Beneficial Owner of any additional
Ordinary Shares of the Company constituting 1.5% or more of the
Ordinary Shares then outstanding, then such Person shall be deemed to
be an "Acquiring Person". Notwithstanding the foregoing, neither Xxxxx
Xxxxx nor Xxxx Xxxxxx, alone or together, including without limitation,
together with their respective Affiliates and Associates, shall be
deemed to be an "Acquiring Person".
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations, as in
effect on the date of this Agreement, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(c) "Audit Committee" shall mean the Audit Committee of the Board of
Directors of the Company or, if there is then no such Audit Committee,
all of the Company's outside directors (as such term is used in the
Israeli Companies Law, 5759-1999 and the regulations promulgated
thereunder) then serving on the Board or, if there are then no outside
directors serving on the Board, the Board of Directors.
(d) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 under
the Exchange Act), including pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report);
(ii) which such Person or any of such Person's Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly, by any other
Person (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 to the extent
contemplated by the proviso to Section 1(d)(ii)(B)) or disposing of any
securities of the Company;
provided, however, that nothing in this paragraph (c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition; and provided
further, however, that any shareholder of the Company, with Affiliates(s),
Associate(s) or other Person(s) who may be deemed representatives of it serving
as director(s) of the Company, shall not be deemed to "beneficially own"
securities held by other Persons as a result of (i) Affiliates or Associates of
such shareholder serving as directors or taking any action in connection
therewith, (ii) discussing the status of its Ordinary Shares with the Company or
other shareholders of the Company similarly situated or (iii) voting or acting
in a manner similar to other shareholders similarly situated, absent a finding
by the Board of Directors of an agreement among such shareholders to act in
concert with one another as shareholders so as to cause, in the good faith
judgment of the Board of Directors, each such shareholder to be the Beneficial
Owner of the Ordinary Shares held by the other shareholder(s).
(e) "Business Day" shall mean any day other than a Friday, Saturday, Sunday, or
a day on which banking institutions in the State of New York or the State of
Israel are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M., New York City
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(g) "Ordinary Shares" when used with reference to the Company shall mean the
Ordinary Shares, par value NIS 0.10 per share, of the Company. "Ordinary Shares"
when used with reference to any Person other than the Company shall mean the
share capital (or equity interest) with the greatest voting power of such other
Person or, if such Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(h) "Person" shall mean any individual, partnership, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(i) "Section 11 Event" shall mean any event described in Section 11(a)(ii)
hereof.
(j) "Shares Acquisition Date" shall mean the earlier of the date of (i) the
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such or (ii) the public disclosure of facts by the Company or an Acquiring
Person indicating that an Acquiring Person has become such.
(k) "Subsidiary" of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Ordinary Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the Close
of Business on the tenth Business Day after the Shares Acquisition Date or (ii)
the Close of Business on the tenth Business Day (or such later date as the Board
of Directors, with the concurrence of the Audit Committee, shall determine)
after the date of the commencement of (within the meaning of Rule 14d-2 under
the Exchange Act), a tender or exchange offer the consummation of which would
result in any Person's becoming an Acquiring Person (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights; the earlier of such dates referred to in clauses (i) and (ii) of this
Section 3(a) being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for Ordinary Shares registered in the names of
the holders thereof (which certificates for Ordinary Shares shall also be deemed
to be Right Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in connection with
the transfer of Ordinary Shares. The Board of Directors of the Company may defer
the date set forth in clause (ii) of the preceding sentence to a specified later
date or to an unspecified later date, each to be determined by action of the
Board of Directors of the Company, with the concurrence of the Audit Committee.
As soon as practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or cause
to be sent (and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Ordinary Shares as of
the Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Right Certificate, in substantially the
form of Exhibit A hereto, evidencing one Right for each Ordinary Share so held.
As of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) At the request of any holder of Ordinary Shares, the Company will send or
cause to be sent a copy of a Summary of Rights to Purchase Ordinary Shares, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
by first-class, postage-prepaid mail, to the address of such holder shown on the
records of the Company. With respect to certificates for Ordinary Shares
outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates for Ordinary Shares registered in the names of
the holders thereof. Until the Distribution Date (or the earlier Redemption Date
or Final Expiration Date), the surrender for transfer of any certificate for
Ordinary Shares outstanding on the Record Date shall also constitute the
transfer of the Rights associated with the Ordinary Shares represented thereby.
(c) Certificates issued for Ordinary Shares (including, without limitation,
certificates issued upon transfer or exchange of Ordinary Shares) after the
Record Date but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date shall have impressed on, printed on, or
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Bonus Rights Agreement between Tikcro
Technologies Ltd. and the Rights Agent thereunder dated as of September
12, 2005, as amended (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 Tikcro Technologies Ltd. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. Tikcro Technologies Ltd. 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, Rights issued to Acquiring Persons or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement)
may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Ordinary Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Ordinary Shares represented thereby.
Section 4. Form of Right Certificates. Each Right Certificate (and the forms of
election to purchase shares and of assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit A hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Each Right Certificate
shall entitle the holder thereof to purchase such number of Ordinary Shares as
shall be set forth therein at the price per share set forth therein (such price
per whole Ordinary Share, the "Purchase Price"), but the number and kind of such
shares and the Purchase Price shall be subject to adjustment as provided herein.
In addition, the Company shall have the right to attach a certificate to any
Right Certificate providing for the holder thereof to certify whether or not
such Person is or was an Acquiring Person or an Affiliate or Associate thereof
or whether such Person acquired the Rights evidenced by such Right Certificate
from any such Person. In the event the Company attaches such a certificate to
any Right Certificate, proper execution of such certificate shall be a
prerequisite to the exercise of the Rights associated therewith as set forth in
the applicable provisions of this Agreement.
Section 5. Countersignature and Registration. The Right Certificates shall be
executed on behalf of the Company by its Chief Executive Officer either manually
or by facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent, and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificates may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal offices, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject to the
provisions of Section 14 hereof, any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the earlier of
the Redemption Date or the Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of Ordinary Shares as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights Agent and shall
surrender the Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the principal office of the Rights Agent. Thereupon
the Rights Agent shall countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment from the holders of Right Certificates of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of such Right
Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's or the Rights
Agent's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a)
The registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase on the reverse side thereof duly executed, to the
Rights Agent at the principal office of the Rights Agent, together with payment
of the Purchase Price for each Ordinary Share as to which the Rights are
exercised, at or prior to the earlier of (i) the Close of Business on December
31, 2015 (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date").
(b) The Purchase Price for each Ordinary Share pursuant to the exercise of
Rights shall initially be $2.50, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights, with
the form of election to purchase duly executed, accompanied by payment of the
Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash, or by certified check
or bank draft payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Ordinary
Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Ordinary Shares to be purchased, and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, (ii) when appropriate, requisition from the Company the amount of
funds to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) promptly after receipt of such certificates, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt, promptly deliver such funds to
or upon the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall exercise less
than all the Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) The Company shall use its best efforts to (i) file, as soon as practicable
following the earliest date after the first occurrence of a Section 11 Event on
which the consideration to be delivered by the Company upon exercise of the
Rights has been determined pursuant to this Agreement (including in accordance
with Section 11(a)(iii) hereof), or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Ordinary Shares or other securities purchasable upon exercise of the Rights on
an appropriate form, (ii) cause such registration statement to become effective
as soon as practicable after such filing and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such Ordinary Shares or other
securities and (B) the Expiration Date. The Company will also take such action
as may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states and non-U.S. jurisdictions in connection
with the exercisability of the Rights. The Company may temporarily suspend, for
a period of time not to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 7(e), the exercisability of the
Rights in order to prepare and file such registration statement and permit it to
become effective or to comply with applicable securities law requirements of
other jurisdictions. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company shall determine that a
registration statement or foreign equivalent is required following the
Distribution Date, the Company may temporarily suspend the exercisability of the
Rights until such time as a registration statement has been declared effective
and any applicable foreign requirements have been satisfied. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained or the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared
effective.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all cancelled
Right Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Ordinary Shares. The Company
covenants and agrees that it will use its best efforts to cause to be reserved
and kept available out of its authorized and unissued Ordinary Shares, or any
authorized and issued Ordinary Shares held in its treasury, the number of
Ordinary Shares that will be sufficient to permit the exercise in full of all
outstanding Rights.
So long as the Ordinary Shares issuable upon the exercise of
Rights may be listed on any national securities exchange or quoted on the Nasdaq
Stock Market, the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange or the Nasdaq Stock Market upon official
notice of issuance upon such exercise.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Ordinary Shares delivered upon
exercise of Rights shall at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and non-assessable.
The Company further covenants and agrees that it will pay when
due and payable any and all transfer taxes and charges which may be payable by
the Company in respect of the issuance or delivery of the Right Certificates or
of any Ordinary Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates for the Ordinary Shares in a name other
than that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates for Ordinary
Shares upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
Section 10. Ordinary Shares Record Date. Each Person in whose name any
certificate for Ordinary Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Ordinary
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Ordinary Shares transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Ordinary Shares transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate, as such, shall
not be entitled to any rights of a shareholder of the Company with respect to
shares for which the Rights shall be exercisable, including, without limitation,
the right to vote or to receive dividends or other distributions, and shall not
be entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights.
The Purchase Price, the number 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) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Ordinary Shares payable in Ordinary
Shares, (B) subdivide the outstanding Ordinary Shares, (C) combine the
outstanding Ordinary Shares into a smaller number of shares or (D) issue any
shares of its share capital in a reclassification of the Ordinary Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of share capital issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of share capital which, if such
Right had been exercised immediately prior to such date and at a time when the
Ordinary Shares transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that if the
record date for any such dividend, subdivision, combination or reclassification
shall occur prior to the Distribution Date, the Company shall make an
appropriate adjustment to the Purchase Price (taking into account any additional
Rights which may be issued as a result of such dividend, subdivision,
combination or reclassification), in lieu of adjusting (as described above) the
number of Ordinary Shares (or other capital stock, as the case may be) issuable
upon exercise of the Rights. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event any Person, at any time after the date hereof, shall become
an Acquiring Person, unless the event causing such Person to become an Acquiring
Person is an acquisition of Ordinary Shares pursuant to a tender offer or
an exchange offer for all outstanding Ordinary Shares at a price and on terms
determined by the Board of Directors, with the concurrence of the Audit
Committee, to be (x) at a price that is fair to shareholders (taking into
account all factors which such members of the Board deem relevant including,
without limitation, prices which could reasonably be achieved if the Company or
its assets were sold on an orderly basis designed to realize maximum value) and
not inadequate and (y)otherwise in the best interests of the Company and its
shareholders (a "Qualified Offer"),
then, and in each such case, proper provision shall be made so that each holder
of a Right, except as provided below, shall thereafter have a right to receive,
upon exercise thereof in accordance with the terms of this Agreement, such
number of Ordinary Shares as shall equal the result obtained by (x) multiplying
the then-current Purchase Price by the number of half Ordinary Shares for which
a Right is then exercisable and (y) dividing that product by 50% of the current
per share market price of the Ordinary Shares (such number of Ordinary Shares is
herein called 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 shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii). (To illustrate the adjustment in the immediately preceding
sentence: If (i) the "then-current Purchase Price" is $2.50, (ii) the "number of
half Ordinary Shares for which a Right is then exercisable" is one and (iii) the
"current per share market price of the Ordinary Shares" is $1.00, then the
Adjustment Shares per Right equals five Ordinary Shares.) Notwithstanding the
foregoing, upon the occurrence of any of the events listed above in this
subparagraph (ii), any Rights that are or were on or after the earlier of the
Distribution Date or Shares Acquisition Date beneficially owned by the Acquiring
Person or any Associate or Affiliate of the Acquiring Person shall become null
and void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. Any Right Certificate issued pursuant to Section 3
hereof that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Right Certificate issued at any time upon
the transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and
any Right Certificate issued pursuant to Section 6, 7(d) or 22 hereof or this
Section 11 upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain the following legend
(provided, however, that the Rights Agent shall not be responsible for affixing
such legend unless a responsible officer of the Rights Agent has actual
knowledge as to the foregoing circumstances or the Company has notified the
Rights Agent in writing thereof):
The Rights represented by this Right Certificate were issued to a
Person who was an Acquiring Person or an Affiliate or any Associate of
an Acquiring Person or a nominee thereof. This Right Certificate and
the Rights represented hereby may become void in the circumstances
specified in Section 11(a)(ii) of the Rights Agreement.
The term "Responsible Officer," when used with respect to the Rights Agent
herein, shall mean the chairman of the board of directors, the vice Chairman of
the board, the president, each vice president, the secretary, the treasurer,
each assistant vice president, each corporate trust officer or any other officer
of the Rights Agent customarily performing functions similar to those performed
by the Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of his knowledge of and
familiarity with the particular subject.
(iii) In the event that the number of Ordinary Shares which is authorized by the
Company's articles of association but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not sufficient
to permit the exercise in full of the Rights in accordance with Section 11(a)
(ii), the Company shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value")
over (2) the Purchase Price (such excess is herein called the "Spread"), and (B)
with respect to each Right and to the extent permitted by applicable law, make
adequate provision to substitute for the Adjustment Shares, upon exercise of the
Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Ordinary Shares or
other equity securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock which the Board of Directors, with the
concurrence of the Audit Committee, has deemed to have the same value as
Ordinary Shares (such shares or units of shares of preferred stock are referred
to herein as "common stoc 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, with the concurrence of the Audit Committee;
provided, however, if the Company shall not have 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 Event and (y) the date on
which the Company's right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company, to the extent permitted by applicable law,
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, Ordinary Shares (to the extent
available) and then, if necessary, cash, which Ordinary Shares and/or cash have
an aggregate value (to the extent of the Company's cash resources then
available) equal to the Spread. If the Board shall determine in good faith that
it is likely that sufficient additional Ordinary Shares could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day period set
forth above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in order that the Company
may seek shareholder approval for the authorization of such additional Ordinary
Shares (such period, as it may be extended, the "Substitution Period"). To the
extent that the Company determines that some action should be taken pursuant to
the first and/or second sentences of this Section 11(a)(iii), the Company (x)
shall provide (except as otherwise provided herein), that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional securities and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Ordinary Shares shall be the Current Market Price per share of
the Ordinary Shares on the Section 11(a)(ii) Trigger Date and the value of any
"common stock equivalent" shall be deemed to have the same value as the Ordinary
Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights or
warrants to all holders of Ordinary Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase
Ordinary Shares (or securities convertible into Ordinary Shares) at a price per
Ordinary Share (or having a conversion price per Ordinary Share, if a security
convertible into Ordinary Shares) less than the current per share market price
of the Ordinary Shares (as defined in Section 11(d) hereof) on such record date,
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Ordinary Shares
outstanding on such record date plus the number of Ordinary Shares which the
aggregate offering price of the total number of Ordinary Shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price and the denominator
of which shall be the number of Ordinary Shares outstanding on such record date
plus the number of additional Ordinary Shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, with the concurrence of the Audit Committee, whose
determination shall be described in a statement delivered to the Rights Agent.
Ordinary Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making of a distribution
to all holders of the Ordinary Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness or assets (other than a
regular quarterly cash dividend out of the earnings or retained earnings of the
Company) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current per share market price of the Ordinary Shares (as defined in Section
11(d) hereof) on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, with the concurrence of the
Audit Committee, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable to
one Ordinary Share and the denominator of which shall be such current per share
market price of the Ordinary Shares. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than computations made
pursuant to Section 11(a)(iii) hereof, the "Current Market Price" of the
Ordinary Shares on any date shall be deemed to be the average of the daily
closing prices per share of such Ordinary Shares for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the Current Market Price per share of the Ordinary Shares on any date
shall be deemed to be the average of the daily closing prices per share of such
Ordinary Shares for the ten (10) consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market Price
per share of the Ordinary Shares is determined during a period following the
announcement by the issuer of the Ordinary Shares of (i) any dividend or
distribution on such Ordinary Shares, payable in shares of such Ordinary Shares
or securities convertible into shares of such Ordinary Shares (other than the
Rights), or (ii) any subdivision, combination or reclassification of such
Ordinary Shares, and the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification shall not
have occurred prior to the expiration of the requisite thirty (30) Trading Day
period or ten (10) Trading Day period, as set forth above, then, and in each
such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Ordinary Shares are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Ordinary Shares are listed or admitted to trading or, if
the Ordinary Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported on
the Nasdaq Stock Market or, if on any such date the Ordinary Shares are not
quoted on the Nasdaq Stock Market, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Ordinary Shares selected by the Board. If on any such date no market maker is
making a market in the Ordinary Shares, the fair value of such Ordinary Shares
on such date as determined in good faith by the Board shall be used. The term
"Trading Day" shall mean a day on which the principal stock market on which the
Ordinary Shares are listed or admitted to trading is open for the transaction of
business or, if the Ordinary Shares are not listed or admitted to trading on any
stock market, a Business Day. If the Ordinary Shares are not publicly held or
not so listed or traded, "Current Market Price" per share shall mean the fair
value per share as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) No adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in such price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a), the holder
of any Right thereafter exercised shall become entitled to receive any shares of
share capital of the Company other than Ordinary Shares, thereafter the number
of such other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Ordinary Shares contained in
Section 11(a) through (c), inclusive, and the provisions of Sections 7, 9, 10
and 13 hereof with respect to the Ordinary Shares shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company subsequent to any adjustment
made to the Purchase Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of Ordinary Shares purchasable from time
to time hereunder upon exercise of the Rights, all subject to further adjustment
as provided herein.
(h) Unless the Company shall have exercised its election as provided in Section
11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares (calculated to
the nearest ten-thousandth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the Purchase
Price to adjust the number of Rights, in substitution for any adjustment in the
number of Ordinary Shares issuable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of Ordinary Shares for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the number
of Ordinary Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Ordinary Shares issuable
upon exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Ordinary Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment in the
Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date the Ordinary Shares and
other share capital or securities of the Company, if any, issuable upon such
exercise over and above the Ordinary Shares and other share capital or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent
that it in its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Ordinary Shares, issuance wholly for cash of
any of the Ordinary Shares at less than the current market price, issuance
wholly for cash of Ordinary Shares or securities which by their terms are
convertible into or exchangeable for Ordinary 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 Ordinary Shares shall not be
taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related 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 or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date, it will
not, except as permitted by Section 23 or Section 26 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever
an adjustment is made as provided in Sections 11 and 13 hereof, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the Ordinary Shares a
copy of such certificate and (c) if after the Distribution Date, mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
25 hereof.
Section 13.Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
(a) In the event that, following the Shares Acquisition Date, directly or
indirectly, (i) the Company shall consolidate with, or merge with and
into, any other Person, (ii) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Ordinary Shares of the
Company shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other
property, or (iii) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one
or more transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person, then, and in each such case,
and except as contemplated by Section 13(d), proper provision shall be
made so that (A) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement, such number of
validly authorized and fully paid, non-assessable and freely tradable
Ordinary Shares of the Principal Party (as such term is hereinafter
defined) as shall be equal to the result obtained by (x) multiplying
the then-current Purchase Price by the number of half Ordinary Shares
for which a Right is then exercisable (without taking into account any
adjustment previously made pursuant to Section 11(a)(ii)) and (y)
dividing that product by 50% of the current per share market price of
the Ordinary Shares of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (B) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (C) the term "Company" shall
thereafter be deemed to refer to such Principal Party; and (D) such
Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Ordinary Shares in
accordance with Section 9 hereof) in connection with such consummation
as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation
to its Ordinary Shares thereafter deliverable upon the exercise of the
Rights.
(b) "Principal Party" shall mean (i) in the case of any transaction
described in Section 13(a)(i) or (ii), the Person that is the issuer of
any securities into which Ordinary Shares are converted in such merger
or consolidation, and if no securities are so issued, the Person that
is the other party to such merger or consolidation, and (ii) in the
case of any transaction described in Section 13(a)(iii) 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, (A) if the Ordinary Shares of
such Person are not at such time and have not been continuously over
the preceding 12-month period registered under Section 12 of the
Exchange Act and such Person is a direct or indirect Subsidiary of
another Person the Ordinary Shares of which are and have been so
registered, "Principal Party" shall refer to such other Person and (B)
in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Ordinary Shares of two or more of which are and
have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Ordinary Shares having the greatest
aggregate market value.
(c) (i) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient
number of authorized Ordinary Shares which 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 such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth
in Section 13(a) and (b) and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or
transfer of assets mentioned in Section 13(a), such Principal Party
will (A) prepare and file a registration statement under the Securities
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (1) become effective as
soon as practicable after such filing and (2) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the earlier of the Expiration Date or the Redemption Date, and
(B) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that
comply in all respects with the requirements for registration on Form
10 under the Exchange Act. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the time
of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a
result of the consummation of such transaction, would substantially
diminish or otherwise eliminate the benefits intended to be afforded by
the Rights.
(ii) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that an event described in Section 13(a) shall occur at any time after
the occurrence of an event described in Section 11(a)(ii), the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in Section 13(a)(i)
or (ii) if (i) such transaction is consummated with a Person or Persons
(or a Subsidiary of any such Person or Persons) who acquired Ordinary
Shares pursuant to a tender offer or exchange offer for all outstanding
Ordinary Shares which complies with the provisions of Section 11(a)(ii)
hereof, (ii) the price per Ordinary Share offered in such transaction
is not less than the price per Ordinary Share paid to all holders of
Ordinary Shares whose shares were purchased pursuant to such tender
offer or exchange offer, and (iii) the form of consideration being
offered to the remaining holders of Ordinary Shares pursuant to such
transaction is the same as the form of consideration paid pursuant to
such tender offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder
shall expire.
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not
be required to issue fractions of Rights or to distribute or cause the Rights
Agent to distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, to the extent permitted by applicable law, the
Company may, at its option, pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares upon exercise
or redemption of the Rights or to distribute certificates which evidence
fractional shares. In lieu of fractional shares, to the extent permitted by
applicable law, the Company may, at its option, pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
Ordinary Share. Prior to the Shares Acquisition Date, a number of Rights must be
exercised so that only whole Ordinary Shares will be issued. For purposes of
this Section 14(b), the current market value of an Ordinary Share shall be the
closing price of an Ordinary Share (as determined pursuant to the second
sentence of Section 11(d) hereof) for the Trading day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly waives his
right to receive any fractional Rights or any fractional shares upon exercise or
redemption of a Right.
Section 15. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 18
hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Ordinary Shares); and any registered holder of any Right Certificate (or, prior
to the Distribution Date, of any Ordinary Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of any Ordinary Shares), may, in his own behalf and for his
own benefit, enforce this Agreement, and may institute and maintain any suit,
action or proceeding against the Company to enforce this Agreement, or otherwise
enforce or act in respect of his right to exercise the Rights evidenced by such
Right Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person (including, without limitation, the Company) subject to this
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by accepting the
same consents and agrees with the Company and the Rights Agent and with every
other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Ordinary Shares;
(b) after the Distribution Date, the Right Certificates are transferable only on
the registry books of the Rights Agent if surrendered at the principal office of
the Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company may, and, upon appropriate instruction by the Company, the
Rights Agent shall, deem and treat the Person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Ordinary Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Ordinary Shares certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to the
contrary.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder, as
such, of any Right Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Ordinary Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder in
accordance with a fee schedule to be mutually agreed upon and, from time to
time, its reasonable expenses and reasonable counsel fees and other reasonable
and customary disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder, provided
that the incurrence of any such expenses shall be subject to the prior written
approval of the Company, which approval shall not be unreasonably withheld. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses (including reasonable
attorneys' fees) of defending against any claim of liability in the premises,
provided that the Company shall be entitled to control the defense of any such
claim and shall not be liable for any settlement entered into without its prior
written consent.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate for Ordinary Shares or other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal counsel
for the Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights
Agent shall deem it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) shall be deemed to be conclusively proved and
established by a certificate signed by the Chief Executive Officer of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it in conformity with such certificate under the provisions of this
Agreement.
(c) The Rights Agent shall be liable hereunder only for its own negligence, bad
faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution
of any Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible for
any adjustment required under the provisions of Sections 11 or 13 hereof or
responsible for the manner, method or amount of any such 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 Right Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Ordinary Shares to be issued pursuant to this Agreement or
any Right Certificate or as to whether any Ordinary Shares will, when so issued,
be validly authorized and issued, fully paid and non-assessable.
(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
Right 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 of the Company, and to apply to such officer for advice or instructions
in connection with its duties under this Rights Agreement, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of such officer.
(h) The Rights Agent and any shareholder, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of
the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys or agents, and the Rights Agent shall not be answerable or accountable
for any act, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.
(j) At any time and from time to time after the Distribution Date, upon the
request of the Company, the Rights Agent shall promptly deliver to the Company a
list, as of the most recent practicable date (or as of such earlier date as may
be specified by the Company), of the holders of record of Rights.
(k) Except as otherwise provided herein, the Rights Agent shall not be required
to expend or risk its own funds in the performance of its duties or in the
exercise of its rights hereunder.
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
days' notice in writing mailed to the Company and to each transfer agent of the
Ordinary Shares by registered or certified mail. The Company shall promptly
notify the holders of the Right Certificates by first-class mail of any such
resignation. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Ordinary Shares and
to the holders of the Right Certificates. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to such Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the Rights Agent or the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or of the State of New York (or of any other
state of the United States so long as such corporation is authorized to do
business in the State of New York), in good standing, having an office in the
State of New York which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal or state
authority. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Ordinary Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement. In addition, in connection with the issuance or sale of
Ordinary Shares following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to Ordinary Shares
of the Company so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement of the Company or a Subsidiary or
Affiliate thereof, granted or awarded as of the Distribution Date, or other
securities hereinafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Right Certificate would be issued, and
(ii) no such Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption. (a) The Board of Directors of the Company, with the
concurrence of the Audit Committee, may, at its option, at any time prior to the
Close of Business on the earlier of (x) the tenth Business Day following the
Shares Acquisition Date (or such later date as the Board of Directors, with the
concurrence of the Audit Committee, shall determine, which determination to be
made prior to the Close of Business on the tenth Business Day following the
Shares Acquisition Date) and (y) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $.001 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of an event described in Section 11(a)(ii) until such
time as the Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, Ordinary Shares of the
Company (based on the current share market price of such Ordinary Shares at the
time of redemption, provided, however, that, unless permitted by applicable law,
the effective consideration per Ordinary Share paid to the Company shall not be
less than the par value thereof) or any other form of consideration deemed
appropriate by the Board of Directors of the Company.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the
holders of Rights shall have not further rights other than the right to receive
the Redemption Price. Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders 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 Ordinary Shares. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.
Section 24. Notice of Certain Events. In case the Company shall propose at any
time after the Distribution Date (a) to pay any dividend payable in share
capital of any class to the holders of Ordinary Shares or to make any other
distribution to the holders of Ordinary Shares (other than a regularly quarterly
cash dividend out of the earnings or retained earnings of the Company), or (b)
to offer to the holders of Ordinary Shares rights or warrants to subscribe for
or to purchase any additional Ordinary Shares or shares of share capital of any
class or any other securities, rights or options, or (c) to effect any
reclassification of its Ordinary Shares other than a reclassification involving
only the subdivision of outstanding Ordinary Shares), or (d) to effect any
consolidation or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, or (e) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to the Rights Agent and
to each holder of a Right Certificate, in accordance with Section 25 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, 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 Ordinary Shares, if any such date is
to be fixed, and such notice shall be so given in the case of any action covered
by clause (a) or (b) above at least 10 days prior to the record date for
determining holders of the Ordinary 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 Ordinary Shares whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) of
this Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 25 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Right Certificate to or on
the Company shall be sufficiently given or made if sent by hand delivery,
courier, first-class mail, postage prepaid, or facsimile transmission (provided
a addressed (until another address is delivered in writing to the Rights Agent)
as follows:
Tikcro Technologies Ltd.
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx 00000, Israel
Attention: Chief Executive Officer
Fax no.: x000-0-000-0000
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by hand delivery, courier, facsimile transmission, first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
American Stock Transfer & Trust Company
0 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Fax no.: x0-000-000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, to holders of Ordinary Shares) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Company.
Section 26. Supplements and Amendments. (a) Prior to the Distribution Date
subject to the provisions of Section 26(b), the Company and the Rights Agent
shall, if the Company (upon approval of the Board and the Audit Committee) so
directs, supplement or amend any provision of this Agreement in any manner
without the approval of any holders of certificates representing Ordinary Shares
and the Rights; provided, however, that if the effect of such supplement or
amendment would be to alter, amend or enlarge the scope or extent of the Rights
Agent's duties, liabilities or obligations under Section 18, 19, 20, 21 or this
provision of this Section 26 hereof, such supplement or amendment shall only
become effective with the prior written consent of the Rights Agent. From and
after the Distribution Date and subject to the provisions of Section 26(b), the
Company and the Rights Agent shall, if the Company (upon approval of the Board
and the Audit Committee) so directs, 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 which
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 which the Company may deem desirable but
which does not adversely affect the interests of holders of Rights (other than
an Acquiring Person). Upon the delivery of a certificate from an officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Ordinary Shares.
(b) Notwithstanding anything herein to the contrary, no supplement or amendment
shall be made to this Agreement at a time when the Rights are not redeemable,
except as contemplated by clause (i) or (ii) of the second sentence of 26(a)
hereof.
Section 27. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 28. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Ordinary Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Ordinary Shares).
Section 29. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidate; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth Business Day following the date of such
determination by the Board.
Section 30. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Israel and for all purposes shall be governed by and construed exclusively in
accordance with the laws of such State. The courts of Tel Aviv, Israel shall
have exclusive jurisdiction for any disputes arising out of or in connection
with this Agreement.
Section 31. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the several Sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
Section 33. Determination and Actions by the Board. The Board (where
specifically provided herein, with the concurrence of the Audit Committee) shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (a) interpret
the provisions of this Agreement, and (b) make all calculations and
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (ii) below, all omissions with
respect to the foregoing) which are done, taken or made by the Board (where
specifically provided for herein, with the concurrence of the Audit Committee)
in good faith, shall (i) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (ii) not
subject the members of the Board or Audit Committee to any liability to the
holders of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
TIKCRO TECHNOLOGIES LTD.
By:/s/Xxxxx Xxxxx
----------------
Name: Xxxxx Xxxxx
Title:Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:/s/Xxxxxxx X. Xxxxxx
-------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
Exhibit A
[Form of Bonus Right Certificate]
Certificate No. R- __________ Bonus Rights
NOT EXERCISABLE AFTER DECEMBER 31, 2015 OR EARLIER IF NOTICE
OF REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT, ON THE TERMS
SET FORTH IN THE BONUS RIGHTS AGREEMENT. [THE RIGHTS
REPRESENTED BY THIS CERTIFICATE WERE ISSUED TO A PERSON WHO
WAS AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON OR A NOMINEE THEREOF. THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OF THE RIGHTS
AGREEMENT.]*
Bonus Right Certificate
TIKCRO TECHNOLOGIES LTD.
This certifies that , or registered assigns, is the
registered owner of the number of bonus rights (the "Rights") set forth above,
each of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Bonus Rights Agreement dated as of September 12, 2005 (the
"Rights Agreement") between Tikcro Technologies Ltd., an Israeli corporation
(the "Company"), and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M. (New York City time) on December 31, 2015, at the principal office of
the Rights Agent, or its successors as Rights Agent, one-half of one fully paid,
non-assessable Ordinary Share, par value NIS 0.10 per share (the "Ordinary
Shares"), of the Company, at a purchase price of $2.50 per share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of September 12, 2005, based on the Ordinary Shares as
constituted at such date.
As provided in the Rights Agreement, the Purchase Price and
the number of Ordinary Shares which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal offices of the
Company and of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Ordinary Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.001 per Right.
The Company shall not be required to issue fractional Ordinary
Shares upon the exercise of any Right or Rights evidenced hereby.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Ordinary Shares or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
* The portion of the legend in brackets shall be inserted only if applicable as
provided under the Rights Agreement.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ________________.
ATTEST: TIKCRO TECHNOLOGIES LTD.
___________________________ By___________________________
Name:
Title:
Countersigned:
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By____________________________
Authorized Signature
Date:____________________________
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
[To be executed by the registered holder if such holder desires to
transfer the Right Certificates.]
FOR VALUE RECEIVED ____________________________________
hereby sells, assigns and transfers unto _______________________
_______________________________________________________________________
_______________________________________________________________________
[Please print name and address of transferee]
this Right Certificate and the Rights evidenced thereby, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ______________________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power of
substitution.
Dated:___________________
---------------------------------
Signature
Signature Guaranteed:
-------------------------------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not beneficially owned by an Acquiring Person or an Affiliate or an
Associate thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Right Certificate from any person who is or was an Acquiring Person or an
Affiliate or Associate thereof.
Dated:___________________
------------------------------
Signature
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right Certificate.)
To: TIKCRO TECHNOLOGIES LTD.
The undersigned hereby irrevocably elects to exercise ____________________
Rights represented by this Right Certificate to purchase the Ordinary Shares
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 such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social
security or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
Dated:__________________
------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
-----------------------------------------------------------------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not beneficially owned by an Acquiring Person or an Affiliate or an
Associate thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Right Certificate from any person who is or was an Acquiring Person or an
Affiliate or Associate thereof.
Dated:_______________
------------------------------
Signature
---------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and
Election must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Forms of
Assignment and Election is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and, in the case of an Assignment, will affix a legend to that effect on any
Right Certificates issued in exchange for this Right Certificate.
Exhibit B
SUMMARY OF BONUS RIGHTS TO PURCHASE
ORDINARY SHARES OF
TIKCRO TECHNOLOGIES LTD.
On September 12, 2005, the Board of Directors of Tikcro
Technologies Ltd. (the "Company") declared a distribution of one bonus right (a
"Right") for each outstanding Ordinary Share, par value NIS 0.10 per share (the
"Ordinary Shares"), of the Company. The distribution is payable on September 26,
2005 (the "Record Date") to shareholders of record on that date. Each Right
initially entitles the registered holder to purchase from the Company one-half
of one Ordinary Share at a price of $2.50 per share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Bonus Rights Agreement (the "Rights Agreement") between the Company and
American Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten business days following
a public announcement that a person or group of affiliated or associated persons
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of the Ordinary Shares other than as a result of repurchases of Ordinary Shares
by the Company (an "Acquiring Person") or (ii) ten business days following the
commencement of a tender offer or exchange offer the consummation of which would
result in any person's becoming an Acquiring Person (the earlier of such dates
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Ordinary Share certificates outstanding as of the Record
Date by such Ordinary Share certificate. A person who beneficially owns as of
the Record Date 15% or more of the Ordinary Shares will not become an Acquiring
Person unless and until such person thereafter acquires additional Ordinary
Shares representing 1.5% or more of the Ordinary Shares of the Company then
outstanding.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Ordinary Shares.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
new Ordinary Share certificates issued after the Record Date upon transfer or
new issuance of the Ordinary 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 Ordinary Shares will also constitute the transfer of the Rights
associated with the Ordinary Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Ordinary Shares as of the Close of Business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on December 31, 2015, unless earlier redeemed by the
Company as described below.
The Purchase Price payable, and the number of Ordinary 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
Ordinary Shares, (ii) upon the grant to all holders of the Ordinary Shares of
certain rights or warrants to subscribe for Ordinary Shares or convertible
securities at less than the current market price of the Ordinary Shares or (iii)
upon the distribution to holders of the Ordinary Shares of evidences of
indebtedness or assets (excluding regular quarterly cash dividends net of
earnings or retained earnings or dividends payable in Ordinary Shares) or of
subscription rights or warrants (other than those referred to above).
In the event that a Person becomes an Acquiring Person, except
pursuant to an offer for all outstanding Ordinary Shares which the Board of
Directors, with the concurrence of the Audit Committee, determines to be fair
and not inadequate and to otherwise be in the best interests of the Company and
its shareholders, proper provision shall be made so that each holder of a Right,
other than Rights that were beneficially owned by the Acquiring Person on the
earlier of the Distribution Date or the date an Acquiring Person becomes an
Acquiring Person (which Rights will thereafter be void), shall thereafter have
the right to receive, upon the exercise thereof at the then current exercise
price of the Right, that number of Ordinary Shares having a market value of two
times the exercise price of the Right. In addition, in the event that, at any
time following a Person becoming an Acquiring Person, (i) the Company engages in
a merger or other business combination transaction in which the Company is not
the surviving corporation (other than with an entity which acquired the shares
pursuant to a Qualified Offer), (ii) the Company engages in a merger or other
business combination transaction in which the Company is the surviving
corporation and the Ordinary Shares are changed or exchanged, or (iii) 50% or
more of the Company's assets or earning power is sold or transferred, proper
provision shall be made so that each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of the acquiring company which at the time of such
transaction would have a market value of two times the exercise price of the
Right. For example, at an exercise price of $2.50 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in this paragraph would entitle its holder to purchase $5.00 worth of
shares. Assuming that the shares had a per share value of $1.00 at such time,
the holder of each valid Right would be entitled to purchase five shares for
$2.50.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that the
rights become exercisable for Ordinary Shares (or other consideration) of the
Company or for shares of the acquiring company or in the event of the redemption
of the Rights as set forth above.
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 correct or supplement any provision
which may be defective or inconsistent with any other provision therein, to
shorten or lengthen any time period thereunder, or to make changes which do not
adversely affect the interests of holders of Rights (other than an Acquiring
Person). The foregoing notwithstanding, no amendment may be made to the Rights
Agreement when the Rights are not redeemable, except to cure any ambiguity or
correct or supplement any provision contained in the Rights Agreement which may
be defective or inconsistent with any other provision therein.
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission. A copy of the Rights Agreement is available
free of charge from the Rights Agent. 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 incorporated herein by reference.
