NORTHWEST BIOTHERAPEUTICS, INC.
STOCKHOLDER RIGHTS AGREEMENT
THIS STOCKHOLDER RIGHTS AGREEMENT is dated as of February 26, 2002 (this
"Rights Agreement"), and is between Northwest Biotherapeutics, Inc., a Delaware
corporation ("NWBio") and Mellon Investor Services LLC, a New Jersey limited
liability company, as Rights Agent ("Rights Agent").
NWBio's Board of Directors has authorized and declared a dividend of one
Right (as hereinafter defined) for each share of Common Stock, $0.001 par
value, of NWBio (the "Common Stock") outstanding at the Close of Business (as
hereinafter defined) on March 4, 2002 (the "Record Date") and has authorized the
issuance of one Right (as such number may hereafter be adjusted pursuant to the
provisions of this Rights Agreement) with respect to each share of Common Stock
that shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Expiration Date (as such terms are
hereinafter defined); provided, however, that Rights may be issued with respect
to shares of Common Stock that shall become outstanding after the Distribution
Date and prior to the earlier of the Redemption Date or the Expiration Date in
accordance with the provisions of Section 23. Each Right shall initially
represent the right to purchase one (1) Common Share.
Accordingly, in consideration of the premises and the mutual agreements set
forth in this Rights Agreement, NWBio and Rights Agent hereby agree as follows:
1. DEFINITIONS. The following terms, as used herein, have the following
meanings:
"Acquiring Person" shall mean any Person which, alone or together with all
Affiliates and Associates of such Person, shall become, after the date hereof,
the Beneficial Owner of 15% or more of the Common Shares then outstanding, but
shall not include (a) NWBio, any Subsidiary of NWBio, any employee benefit plan
of NWBio or any of its Subsidiaries, or any Person holding Common Shares for or
pursuant to the terms of any such employee benefit plan or (b) any such Person
who has become such a Beneficial Owner solely because (i) of a change in the
aggregate number of Common Shares outstanding since the last date on which such
Person acquired Beneficial Ownership of any Common Shares or (ii) it acquired
Beneficial Ownership in the good-faith belief that such acquisition would not
(y) cause such Beneficial Ownership to exceed 15% of the Common Shares then
outstanding and such Person relied in good faith in computing the percentage of
its Beneficial Ownership on publicly filed reports or documents of NWBio that
are inaccurate or out-of-date or (z) otherwise cause a Distribution Date or the
adjustment provided for in Section 11(a) to occur. Notwithstanding clause (b) of
the prior sentence, if any Person that is not an Acquiring Person due to such
clause (b) does not reduce its percentage of Beneficial Ownership of Common
Shares to below 15% by the Close of Business on the tenth Business day after
notice from NWBio (the date of notice being the first day) that such Person's
Beneficial Ownership of Common Stock so exceeds 15%, such Person shall, at the
end of such ten Business Day period, become an Acquiring Person (and such clause
(b) shall no
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longer apply to such Person). For purposes of this definition, the determination
of whether any Person acted in "good faith" shall be conclusively determined by
NWBio's Board of Directors.
"Affiliate" and "Associate" when used with reference to any Person, shall
have the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act, as in effect on the date of this
Rights Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed to
"beneficially own" and shall be deemed to have "Beneficial Ownership" of, any
securities:
(a) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire within 60 days
of such time pursuant to any agreement, arrangement or understanding
(whether or not in writing), or upon the exercise of conversion rights,
exchange 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
payment or exchange;
(b) 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 of the
General Rules and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security under this subparagraph (b) as a
result of an agreement, arrangement or understanding to vote such security
(1) arising solely from a revocable proxy or consent given in response to a
public proxy or consent solicitation made pursuant to, and in accordance
with, the Exchange Act and the applicable rules and regulations thereunder,
or (2) made in connection with, or pursuant to, and in accordance with, the
Exchange Act and the applicable rules and regulations thereunder, or (3)
made in connection with, or to otherwise participate in, a proxy or consent
solicitation made, or to be made, pursuant to, and in accordance with, the
applicable provisions of the Exchange Act and the applicable rules and
regulations thereunder, whether or not such agreement, arrangement or
understanding described in clause (1) or (2) above is also then reportable
by such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(c) which are beneficially owned, directly or indirectly, by any other
Person (or any Affiliates or Associates thereof) with which such Person or
any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (1) to subparagraph (b) of this definition) or
disposing of any voting securities of NWBio; provided, however, that
nothing in this definition 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
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in good faith in a firm commitment underwriting until the expiration of 40
days after the date of such acquisition.
"Book Value," when used with reference to Common Shares issued by any
Person, shall mean the amount of such Person's equity applicable to each Common
Share, determined (a) in accordance with generally accepted accounting
principles in effect on the date as of which such Book Value is to be
determined, (b) using all the consolidated assets and all the consolidated
liabilities of such Person on the date as of which Book Value is to be
determined, except that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and (c) after giving effect
to (i) the exercise of all rights, options and warrants to purchase such Common
Shares (other than the Rights), and the conversion of all securities convertible
into such Common Shares, at an exercise or conversion price, per Common Share,
that is less than such Book Value before giving effect to such exercise or
conversion (whether or not exercisability or convertibility is conditioned upon
the occurrence of a future event), (ii) all dividends and other distributions on
the capital stock of such Person declared prior to the date as of which such
Book Value is to be determined and to be paid or made after such date, and (iii)
any other agreement, arrangement or understanding (written or oral), or
transaction or any other action prior to the date as of which such Book Value is
to be determined that would have the effect of thereafter reducing such Book
Value.
"Business Combination" shall have the meaning set forth in Section
11(c)(i).
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in Seattle, Washington,
are authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 p.m., Seattle,
Washington time, on such date; provided, however, that if such date is not a
Business Day, "Close of Business" shall mean 5:00 p.m., Seattle, Washington
time, on the next succeeding Business Day.
"Common Shares," when used with reference to NWBio prior to a Business
Combination, shall mean the shares of Common Stock of NWBio, $0.001 par value,
or any other shares of capital stock of NWBio into which the Common Stock shall
be reclassified or changed. "Common Shares," when used with reference to any
Person (other than NWBio prior to a Business Combination), shall mean shares of
capital stock of such Person (if such Person is a corporation) of any class or
series, or units of equity interests in such Person (if such Person is not a
corporation) of any class or series, the terms of which do not limit (as a
maximum and not merely in proportional terms) the amount of dividends or income
as payable or distributable on such class or series or the amount of assets
distributable on such class or series upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person and do not provide that
such class or series is subject to redemption at the option of such Person, or
any shares of capital stock or units of equity interests into which the
foregoing shall be reclassified or changed; provided, however, that, if at any
time there shall be more than one such class or series of capital stock or
equity interests of such Person, "Common Shares" of such Person shall include
all such classes and series substantially in the proportion of the total number
of shares or other units of each such class or series outstanding at such time.
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"Common Stock" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
The term "control" with respect to any person shall mean the power to
direct the management or policies of such Person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other Persons by or through stock ownership, agency or otherwise; and the
terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.
"Director" shall mean a member of the Board of Directors of NWBio, who is
not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or
a nominee or representative of an Acquiring Person or of any such Affiliate or
Associate, while such Person is a member of the Board.
"Distribution Date" shall have the meaning set forth in Section 3(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as in effect
on the date in question, unless otherwise specifically provided in this Rights
Agreement.
"Exchange Consideration" shall have the meaning set forth in Section
11(b)(i).
"Expiration Date" shall have the meaning set forth in Section 7(a).
"Fully Diluted Basis" shall mean that, for purpose of calculating any
Person's percentage ownership of the Common Stock, except as described below,
all outstanding options or warrants to acquire Common Stock, or securities
convertible or exchangeable into Common Stock, shall be assumed to be exercised,
converted and exchanged into the shares of Common Stock into which they,
pursuant to their terms, may then or thereafter upon the passage of time be
exercised, converted or exchanged. For purposes of determining the aggregate
shares of outstanding Common Stock, unexercised stock options issued to
employees or directors for compensatory purposes pursuant to an employee stock
option or other stock incentive plan approved by a majority of the Directors of
NWBio shall not be deemed to have been exercised except that for purposes of
determining the aggregate shares of Common Stock held by such Person, all such
stock options held by such Person shall be deemed to be exercised.
"Group" shall mean any Group, as defined by Sections 13(d)(3) and 14(d)(2)
of the Exchange Act.
"Involuntary Acquisition" shall mean, with respect to any Person, the
purchase or acquisition of beneficial ownership of Common Stock by such Person
as a result of any stock split, dividend, distribution, rights offering by NWBio
or any Subsidiary of NWBio, recapitalization of NWBio, reclassification or other
change in the terms of the Securities held by such Person, adjustment in the
conversion or exchange ratio of any convertible or exchangeable
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security or exercise, conversion or exchange of any option, right, warrant or
convertible or exchangeable security held by such Person.
"Major Part," when used with reference to the assets of NWBio and its
Subsidiaries as of any date, shall mean assets (a) having a fair market value
aggregating 50% or more of the total fair market value of all the assets of
NWBio and its subsidiaries (taken as a whole) as of the date in question, (b)
accounting for 50% or more of the total value (net of depreciation and
amortization) of all the assets of NWBio and its Subsidiaries (taken as a whole)
as would be shown on a consolidated or combined balance sheet of NWBio and its
Subsidiaries as of the date in question, prepared in accordance with generally
accepted accounting principles then in effect, or (c) accounting for 50% or more
of the total amount of net income or revenues of NWBio and its Subsidiaries
(taken as a whole) as would be shown on a consolidated or combined statement of
income of NWBio and its Subsidiaries for the period of 12 months ending on the
last day of NWBio's monthly accounting period next preceding the date in
question, prepared in accordance with generally accepted accounting principles
then in effect.
"Market Value," when used with reference to Common Shares on any date,
shall mean the average of the daily closing prices, per share, of such Common
Shares for the period that is the shorter of (a) 30 consecutive Trading Days
immediately prior to the date in question and (b) the number of consecutive
Trading Days beginning on the Trading Day immediately after the date of the
first public announcement of the event requiring a determination of the Market
Value and ending on the Trading Day immediately prior to the record date of such
event; provided, however, that, in the event that the Market Value of such
Common Shares is to be determined in whole or in part during a period following
the announcement by the issuer of such Common Shares of any action of the type
described in Section 12(a) that would require an adjustment thereunder, then,
and in each such case, the Market Value of such Common Shares shall be
appropriately adjusted to reflect the effect of such action on the market price
of such Common Shares. The closing price for each Trading Day shall be the
closing price quoted on the New York Stock Exchange, or, if such securities are
not listed on such exchange, on the principal United States securities exchange
registered under the Exchange Act (or any recognized foreign stock exchange) on
which such securities are listed or, if such securities are not listed on any
exchange, the average of the closing bid and ask quotations with respect to a
share of such securities on the Nasdaq Stock Market or such other system then in
use or, if no such quotations are available, the average of the closing bid and
ask price as furnished by a professional market maker making a market in such
securities selected by NWBio's Board of Directors. If, on any such Trading Day,
no market maker is making a market in such securities, the closing price of such
securities on such Trading Day shall be deemed to be the fair value of such
securities as determined in good faith by NWBio's Board of Directors (whose
determination shall be described in a statement filed with Rights Agent and
shall be binding on Rights Agent, the holders of Rights and all other Persons).
"NWBio" shall have the meaning set forth in the introductory paragraph of
this Rights Agreement; provided, however, that if there is a Business
Combination, "NWBio" shall have the meaning set forth in Section 11(c)(iii).
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"Permitted Offer: shall mean (i) a tender offer or an exchange offer for
all outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the Directors who are not officers or employees of NWBio,
after receiving advice from one or more investment banking firms, to be (a) at a
price and on terms that are fair to and in the best interests of NWBio's
stockholders (taking into account all factors that such members of the Board
deem relevant including, without limitation, prices that could reasonably be
achieved if NWBio or its assets were sold in an orderly basis designed to
realize maximum value) and (b) otherwise in the best interests of NWBio and its
stockholders, or (ii) a tender offer or exchange offer resulting in acceptance
by stockholders holding, in the aggregate, 90% or more of the outstanding Common
Stock (other than shares beneficially owned by the Acquiring Person, by its
Affiliate and by officers and directors of NWBio).
"Person" shall mean an individual, corporation, limited liability company,
partnership, joint venture, association, trust, unincorporated organization or
other entity.
"Principal Party" shall mean the Surviving Person in a Business
Combination; provided, however, that, if such Surviving Person is a direct or
indirect Subsidiary of any other Person, "Principal Party" shall mean the Person
which is the ultimate parent of such Surviving Person and which is not itself a
Subsidiary of another Person. In the event ultimate control of such Surviving
Person is shared by two or more Persons, "Principal Party" shall mean that
Person which is immediately controlled by such two or more Persons.
"Purchase Price" with respect to each Right shall mean $19.25, subject to
adjustment as provided herein, and shall be payable in lawful money of the
United States of America. All references herein to the Purchase Price shall mean
the Purchase Price as in effect at the time in question.
"Record Date" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"Redemption Date" shall have the meaning set forth in Section 24(a).
"Redemption Price" with respect to each Right shall mean $0.0001, as such
amount may from time to time be adjusted in accordance with Section 12. All
references in this Rights Agreement to the Redemption Price shall mean the
Redemption Price as in effect at the time in question.
"Registered Common Shares" shall mean Common Shares that are, as of the
date of consummation of a Business Combination, and have continuously been for
the 12 months immediately preceding such date, registered under Section 12 of
the Exchange Act.
"Right Certificate" shall mean a certificate evidencing a Right in
substantially the form attached to this Rights Agreement as Exhibit A.
"Right" shall mean the right to purchase Common Shares (or other
securities) as provided in this Rights Agreement.
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"Securities Act" shall mean the Securities Act of 1933, as in effect on the
date in question, unless otherwise specifically provided in this Rights
Agreement.
"Subsidiary" shall mean a Person, at least a majority of the total
outstanding voting power being the power under ordinary circumstances (and not
merely upon the happening of a contingency) to vote in the election of directors
of such Person (if such Person is a corporation) of which is owned, directly or
indirectly, by another Person or by one or more other subsidiaries of such other
Person or by one or more other Subsidiaries of such other Person.
"Surviving Person" shall mean (a) the Person which is the continuing or
surviving Person in a consolidation or merger specified in Section 11(c)(i)(A)
or 11(c)(i)(B) or (b) the Person to which the Major Part of the assets of NWBio
and its Subsidiaries is sold, leased, exchanged or otherwise transferred or
disposed of in a transaction specified in Section 11(c)(i)(C); provided,
however, that if the Major Part of the assets of the Person and its subsidiaries
is sold, leased, exchanged or otherwise transferred or disposed of in one or
more related transactions specified in Section 11(c)(i)(C) to more than one
Person, the "Surviving Person" in such case shall mean the Person that acquired
assets of NWBio and/or its Subsidiaries with the greatest fair market value in
such transaction or transactions.
"Trading Day" shall mean a day on which the principal national securities
exchange (or principal recognized foreign stock exchange, as the case may be) on
which any securities or Rights, as the case may be, are listed or admitted to
trading is open for the transaction of business or, if the securities or Rights
in question are not listed or admitted to trading on any national securities
exchange (or recognized foreign stock exchange, as the case may be), a Business
Day.
2. APPOINTMENT OF RIGHTS AGENT. NWBio hereby appoints Rights Agent to act as
agent for NWBio in accordance with the terms and conditions of this Rights
Agreement, and Rights Agent hereby accepts such appointment. NWBio may from time
to time appoint one or more co-Rights Agents as it may deem necessary or
desirable. In the event NWBio appoints one or more co-Rights Agents, the
respective duties of Rights Agent and any co-Rights Agents shall be as NWBio
shall determine. The Rights Agent shall have no duty to supervise, and in no
event shall be liable for, the acts or omissions of any such co-Rights Agent.
3. ISSUE OF RIGHTS AND RIGHT CERTIFICATES.
(a) One Right shall be associated with each Common Share outstanding on the
Record Date, each additional Common Share that shall become outstanding between
the Record Date and the earliest Distribution Date, the Redemption Date and the
Expiration Date, and each additional Common Share with which Rights are issued
after the Distribution Date but prior to the earlier of the Redemption Date and
the Expiration Date as provided in Section 23; provided, however, that if the
number of outstanding Rights are combined into a smaller number of outstanding
Rights pursuant to Section 12(a), the appropriate fractional right determined
pursuant to such Section shall thereafter be associated with each Common Share.
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(b) Until the earlier of (i) the Close of Business on the tenth Business
Day after the date that NWBio learns that a Person has become an Acquiring
Person and (ii) the Close of Business on such date, if any, as may be designated
by NWBio's Board of Directors following the commencement of, or first public
disclosure of an intent to commence, a tender or exchange offer by any Person
(other than NWBio, any Subsidiary of NWBio, any employee benefit plan of NWBio
or any of its Subsidiaries, or any Person holding Common Shares for or pursuant
to the terms of any such employee benefit plan) for outstanding Common Shares,
if upon consummation of such tender or exchange offer such Person could be the
Beneficial Owner of 15% or more of the outstanding Common Shares (the Close of
Business on the earlier of the dates set forth in (i) and (ii) being the
"Distribution Date"), (y) the Rights will be evidenced by the certificates for
Common Shares registered in the names of the holders thereof and not be separate
Right Certificates and (z) the Rights, including the right to receive Right
Certificates, will be transferable only in connection with the transfer of the
Common Shares. As soon as practicable after the Distribution Date and receipt by
Rights Agent of a list of stockholders of Common Shares, Rights Agent will send,
by first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Distribution Date, at the address of such holder shown on the records of
NWBio, a Right Certificate evidencing one whole Right for each Common Share (or
for the number of Common Shares with which one whole Right is then associated if
the number of Rights per Common Share held by such record holder has been
adjusted in accordance with the provisions of Section 3(a)). If the number of
Rights associated with each Common Share has been adjusted in accordance with
the provisions of Section 3(a), at the time of distributing the Right
Certificates, NWBio may make any necessary and appropriate rounding adjustments
so that Right Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Right in accordance with
Section 15(a). As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(c) With respect to any certificate for Common Shares, until the earliest
of the Distribution Date, the Redemption Date and the Expiration Date, the
Rights associated with the Common Shares represented by any such certificate
shall be evidenced by the certificate alone, the registered holders of the
associated Rights and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(d) Certificates issued for Common Shares after the Record Date (including,
without limitation, upon transfer or exchange of outstanding Common Shares), but
prior to the earliest of the Distribution Date, the Redemption Date and the
Expiration Date, shall have printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Northwest Biotherapeutics, Inc.
Stockholder Rights Agreement dated as of February 26, 2002, as it may be
amended from time to time (the "Rights Agreement"), between Northwest
Biotherapeutics, Inc. ("Northwest Biotherapeutics") and Mellon Investor
Services LLC, as Rights Agent (or between Northwest Biotherapeutics and any
successor Rights Agent under 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
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Northwest Biotherapeutics. 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. Northwest
Biotherapeutics will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request
therefor. Rights beneficially owned by Acquiring Persons or their
Affiliates or Associates (as such terms are defined in the Rights
Agreement) and by any subsequent holder of such Rights are null and void
and nontransferable.
Notwithstanding the requirements of this paragraph (d), the omission of a legend
shall not affect the enforceability of any part of this Rights Agreement or the
rights of any holder of Rights.
4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the form of
election to purchase and form of assignment to be printed on the reverse side
thereof) shall be in substantially the form set forth as Exhibit A and may have
such marks or identification or designation and such legends, summaries or
endorsements printed thereon as NWBio may deem appropriate, which do not affect
the rights, duties or responsibilities of Rights Agent and as are not
inconsistent with the provisions of this Rights Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 7, 11 and 23, the Right Certificates, whenever issued,
shall be dated as of the Distribution Date, and on their face shall entitle the
holders thereof to purchase such number of Common Shares as shall be set forth
therein for the Purchase Price set forth therein.
5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of NWBio by the
Chairman and President, the Chief Financial Officer or an Executive Vice
President of NWBio, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by Rights Agent and shall not be
valid or obligatory for any purpose unless so countersigned. In case any officer
of NWBio who shall have signed any of the Right Certificates shall cease to be
such an officer of NWBio before countersignature by Rights Agent and issuance
and delivery by NWBio, such Right Certificates may nevertheless be countersigned
by Rights Agent and issued and delivered by NWBio with the same force and effect
as though the person who signed the Right Certificate had not ceased to be such
an officer of NWBio; and any Right Certificate may be signed on behalf of NWBio
by any person who, at the actual date of execution of such Right Certificate,
shall be a proper officer of NWBio to sign such Right Certificate, although at
the date of execution of this Rights Agreement any such person was not an
officer of NWBio.
(b) Following the Distribution Date and receipt by Rights Agent of all
relevant information, Rights Agent will keep or cause to be kept, at its office
designated for such purpose, books for registration and transfer of the Right
Certificates issued under this Rights Agreement. Such books shall show the names
and addresses of the respective holders of the Right Certificates, the number of
Rights evidenced by each Right Certificate, the certificate number of each Right
Certificate and the date of each Right Certificate.
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6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; LOST,
STOLEN, DESTROYED OR MUTILATED RIGHT CERTIFICATES; UNCERTIFICATED RIGHTS.
(a) Subject to the provisions of Sections 7(e) and 15, at any time after
the Distribution Date, and at or prior to the Close of Business on the earlier
of the Redemption Date and the Expiration, any Right Certificate or Right
Certificates may be transferred, spilt-up, combined or exchanged for another
Right Certificate or Right Certificates representing, in the aggregate, the same
number of rights as the Right Certificate or Right Certificates surrendered then
represented. Any registered holder desiring to transfer, split-up, combine or
exchange any Right Certificate shall make such request in writing delivered to
Rights Agent and shall surrender the Right Certificate or Right Certificates to
be transferred, split-up, combined or exchanged at the office of Rights Agent
designated for such purpose; provided, however, that neither Rights Agent nor
NWBio shall be obligated to take any action whatsoever with respect to the
transfer of any Right Certificate surrendered for transfer until the registered
holder shall have completed and signed the Right Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as NWBio shall
reasonably request. Thereupon, Rights Agent shall, subject to the provisions of
Sections 7(e) and 15, countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, so requested. NWBio
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split-up, combination or
exchange of Right Certificates. The Rights Agent shall have no duty or
obligation under this Section unless and until it is satisfied that all such
taxes and/or governmental charges have been paid.
(b) Upon receipt by NWBio and Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a valid
Right Certificate, and in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and, at NWBio's request, reimbursement to NWBio
and Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to Rights Agent and cancellation of the Right Certificate of like
tenor, NWBio shall deliver such new Right Certificate to Rights Agent for
countersignature and delivery to the registered agent in lieu of the Right
Certificate so lost, destroyed or mutilated.
(c) Notwithstanding any other provision of this Rights Agreement, NWBio and
Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates.
7. EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS.
(a) Subject to 7(e) and except as otherwise provided in this Rights
Agreement (including Section 11), each Right shall entitle the registered holder
thereof, upon exercise thereof as provided in this Rights Agreement, to purchase
for the Purchase Price, at any time after the Distribution Date and at or prior
to the earlier of (i) the Close of Business on February 25, 2012 (the Close of
Business on such date being the "Expiration Date"), and (ii) the
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Redemption Date, upon payment of the Purchase Price, one Common Share, subject
to adjustment from time to time as provided in Sections 11 and 12.
(b) The registered holder of any Right Certificate may exercise the rights
evidenced thereby (except as otherwise provided in this Rights Agreement) 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 Rights Agent at the office of Rights Agent designated
for such purpose, together with payment of the Purchase Price for the Common
Shares as to which the Rights are exercised, at or prior to the earlier of (i)
the Expiration Date and (ii) the Redemption Date.
(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 Common Shares to be purchased together with an amount
equal to any applicable transfer tax, in lawful money of the United States of
America, in cash, certified check or money order payable to the order of NWBio,
equal to the Purchase Price of the Rights the holder elects to exercise, Rights
Agent shall thereupon (i) either (A) promptly request from any transfer agent of
the Common Shares (or make available if Rights Agent is the transfer agent)
certificates for the number of Common Shares to be purchased and NWBio hereby
irrevocably authorizes its transfer agent to comply with all such requests or
(B) if NWBio shall have elected to deposit the Common Shares with a depositary
agent under a depositary arrangement, promptly request from the depositary agent
depositary receipts representing the number of Common Shares to be purchased (in
which case certificates for the Common Shares to be represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and NWBio
will direct the depositary agent to comply with all such requests, (ii) when
appropriate, promptly request from NWBio the amount of cash to be paid in lieu
of the issuance of fractional shares in accordance with Section 15, (iii)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall exercise
fewer than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by Rights
Agent and delivered to the registered holder of such Right Certificate or to his
or her duly authorized assigns, subject to the provisions of Section 6 and
Section 15.
(e) Notwithstanding anything in this Rights Agreement to the contrary, any
Rights that are at any time beneficially owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.
(f) Notwithstanding anything in this Rights Agreement to the contrary,
neither Rights Agent nor NWBio shall be obligated to undertake any action with
respect to a registered holder
11
of any Right Certificates upon the occurrence of any purported exercise as set
forth in this Section 7, unless such registered holder shall have (i) properly
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as NWBio shall reasonably request.
(g) NWBio may temporarily suspend, for a period of time not to exceed 90
calendar days after the Distribution Date, the exercisability of the Rights in
order to prepare and file a registration statement under the Securities Act, on
an appropriate form, with respect to the Common Shares purchasable upon exercise
of the Rights and permit such registration statement to become effective,
provided, however, that no such suspension shall remain in effect after, and the
Rights shall without any further action by NWBio or any other Person become
exercisable immediately upon, the effectiveness of such registration statement.
Upon any such suspension, NWBio shall issue a public announcement (with prompt
written notice thereof to Rights Agent) stating that the exercisability of the
Rights has been temporarily suspended and shall issue a further public
announcement (with prompt written notice thereof to Rights Agent) at such time
as the suspension is no longer in effect. Notwithstanding any provision in this
Rights Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if any requisite qualification under the blue sky or securities
laws or such jurisdiction shall not have been obtained or the exercise of the
Rights shall not be permitted under applicable law.
8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right Certificates
surrendered or presented for the purpose of exercise, transfer, split-up,
combination or exchange shall, and any Right Certificate surrendered or
presented for any purpose that represents Rights that have become null and void
and nontransferable pursuant to Section 7(e) shall, if surrendered or presented
to NWBio or to any of its agents, be delivered to Rights Agent for cancellation
or in canceled form, or if surrendered or presented to Rights Agent, shall be
canceled by it, and no Right Certificates shall be issued in lieu thereof except
as expressly permitted by this Rights Agreement. NWBio shall deliver to Rights
Agent for cancellation and retirement, and Rights Agent shall so cancel and
retire, any Right Certificate purchased or acquired by NWBio. Rights Agent shall
deliver all canceled Right Certificates to NWBio, or shall, at NWBio's written
request, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to NWBio.
9. RESERVATION AND AVAILABILITY OF COMMON SHARES.
(a) NWBio covenants and agrees that it will use its best efforts to reserve
that number of authorized and unissued Common Shares that is sufficient to
permit the exercise in full of all outstanding Rights.
(b) In the event that there shall not be sufficient authorized and unissued
Common Shares to permit the exercise or exchange of Rights in accordance with
Section 11, NWBio covenants and agrees that, at the Distribution Date, it will
use its best efforts to have authorized additional Common Shares for issuance
upon the exercise or exchange of Rights pursuant to Section 11.
12
(c) NWBio covenants and agrees that it will take all such action as may be
necessary to ensure that all Common Shares delivered upon exercise or exchange
of Rights shall, at the time of delivery of the certificates for such Common
Shares (subject to the payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and non-assessable shares.
(d) So long as the Common Shares issuable upon the exercise or exchange of
Rights are to be listed on any national securities exchange or on Nasdaq, NWBio
covenants and agrees to use its best efforts to cause, from and after such time
as the Rights become exercisable or exchangeable, all Common Shares reserved for
such issuance to be listed on such securities exchange or on Nasdaq, upon
official notice of issuance upon such exercise or exchange.
(e) NWBio further covenants and agrees that it will pay when due and
payable any and all taxes and governmental charges that may be payable in
respect of the issuance and delivery of Right Certificates or of any Common
Shares upon the exercise or exchange of Rights. NWBio shall not, however, be
required to pay any tax or governmental charge that may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than or in
respect of the issuance or delivery of certificates for the Common Shares in a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or exchange or to issue or deliver
any certificates for Common Shares upon the exercise or exchange of any Rights
until any such tax shall have been paid (any such tax or charge being payable by
the holder of such Right Certificate at the time of surrender) or until it has
been established to NWBio's satisfaction that no such tax or charge is due.
10. COMMON SHARES RECORD DATE. Each Person in whose name any certificate for
Common Shares is issued upon the exercise or exchange of Rights shall for all
purposes be deemed to have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated, the date on which
any Right Certificate evidencing such Rights was duly surrendered and payment of
any Purchase Price (and any applicable taxes or charges) was made; provided,
however, that if the date of such surrender and payment is a date on which the
Common Share transfer books of NWBio 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 Common Share transfer books
of NWBio are open.
11. CERTAIN ADJUSTMENTS IN RIGHTS; EXCHANGE OF RIGHTS FOR SHARES; BUSINESS
COMBINATIONS.
(a) Upon a Person becoming an Acquiring Person, unless the event causing
such Person to become an Acquiring Person is a Permitted Offer, or an event
described in Section 11(c), then proper provision shall be made so that each
holder of a Right (except as provided in Section 7(e)) shall thereafter have a
right to receive, upon exercise thereof for the Purchase Price in accordance
with the terms of this Rights Agreement, such number of Common Shares as shall
equal the result obtained by multiplying the Purchase Price by a fraction, the
numerator of which is the number of Common Shares for which a Right is then
exercisable and the denominator of which is 50% of the Market Value of the
Common Shares on the date on which such Person
13
becomes an Acquiring Person. As soon as practicable after a Person becomes an
Acquiring Person (provided NWBio shall not have elected to make the exchange
permitted by Section 11(b)(i) for all outstanding Rights), NWBio covenants and
agrees to use its best efforts to:
(i) Prepare and file a registration statement under the Securities
Act, on an appropriate form, with respect to the Common Shares purchasable upon
exercise of the Rights;
(ii) Cause such registration statement to become effective as soon as
practicable after such filing;
(iii) Cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the Expiration Date; and
(iv) Qualify or register the Common Shares purchasable upon the
exercise of the Rights under blue sky or securities laws of such jurisdictions
as may be necessary or appropriate.
(b) (i) NWBio's Board of Directors may, at its option, at any time after a
Person becomes an Acquiring Person, mandatorily exchange all or part of the
then-outstanding and exercisable Rights (which shall not include Rights that
have become null and void and nontransferable pursuant to the provisions of
Section 7(e)) for consideration per right consisting of one-half of the
securities that would be issuable at such time upon the exercise of one Right in
accordance with Section 11(a) (the consideration issuable per Right pursuant to
this Section 11(b)(i) being the "Exchange Consideration"). If NWBio's Board of
Directors elects to exchange all the Rights for the Exchange Consideration
pursuant to this Section 11(b)(i) prior to the physical distribution of the
Right Certificates, NWBio may distribute the Exchange Consideration in lieu of
distributing Right Certificates, in which case for purposes of this Rights
Agreement holders of Rights shall be deemed to have simultaneously received and
surrendered for exchange Right Certificates on the date of such distribution.
(ii) Any action of NWBio's Board of Directors ordering the exchange of
any Rights pursuant to Section 11(b)(i) shall be irrevocable and, immediately
upon the taking of such action and without any further action and without any
notice, the right to exercise any such Right pursuant to Section 11(a) shall
terminate and the only right thereafter of a holder of such Right shall be to
receive the Exchange Consideration in exchange for each such Right held by such
holder of, if the Exchange Consideration shall not have been paid, to exercise
any such Right pursuant to Section 11(c)(i). NWBio shall promptly give the
Rights Agent and public notice, of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. NWBio promptly shall mail a notice of any such exchange to all
holders of such Rights at their last addresses as they appear on the registry
books of Rights Agent. Any notice that is mailed in the manner provided in this
Rights Agreement shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of Rights for the Exchange Consideration will be effected and, in the event of
any partial exchange, the number of Rights that will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
14
than Rights that shall have become null and void and nontransferable pursuant to
the provisions of Section 7(e)) held by each holder of Rights.
(c) (i) In the event that, following a Distribution Date, directly or
indirectly, any transactions specified in the following clause (A), (B) or (C)
of this Section 11(c)(i) (each such transaction being a "Business Combination")
shall be consummated:
(A) NWBio shall consolidate with, or merge with and into, any
other Person,
(B) any Person shall merge with and into NWBio and, in connection
with such merger, all or part of the Common Shares shall be changed into or
exchanged for capital stock or other securities of NWBio or any other Person or
cash or any other property, or
(C) NWBio shall sell, lease, exchange or otherwise transfer or
dispose of (or one or more of its subsidiaries shall sell, lease, exchange or
otherwise transfer or dispose of), in one or more transactions, the Major Part
of the assets of NWBio and its Subsidiaries (taken as a whole) to any other
Person or Persons,
then, in each such case, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, the securities specified below (or, at such
holder's option, if any Business Combination is consummated at any time after a
Person becomes an Acquiring Person, the securities specified in Section 11(a)):
(1) If the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter represent the
right to receive, upon the exercise thereof for the Purchase Price in accordance
with the terms of this Rights Agreement, such number of Registered Common Shares
of such Principal Party, free and clear of all liens, encumbrances or other
adverse claims, as shall have an aggregate Market Value equal to the result
obtained by multiplying the Purchase Price by a fraction, the numerator of which
is the number of Common Shares for which a Right is then exercisable and the
denominator of which is 50% of the Market Value of the Registered Common Shares
of such Principal Party on the date on which such Principal Party becomes an
Acquiring Person, or
(2) If the Principal Party in such Business Combination does
not have Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the Purchase Price
in accordance with the terms of this Rights Agreement, at the election of the
holder of such Right at the time of the exercise thereof, any of:
(x) such number of Common Shares of the Surviving
Person in such Business Combination as shall have an aggregate Book Value
immediately after giving effect to such Business Combination equal to the result
obtained by multiplying the Purchase Price by a fraction, the numerator of which
is the number of Common Shares for which a Right is then exercisable and the
denominator of which is 50% of the Market Value of the
15
Common shares of such Principal Party on the date such Principal Party becomes
an Acquiring Person;
(y) such number of Common Shares of the Principal Party
in such Business Combination (if the Principal Party is not also the Surviving
Person in such Business Combination) as shall have an aggregate Book Value
immediately after giving effect to such Business Combination equal to the result
obtained by multiplying the Purchase Price by a fraction, the numerator of which
is the number of Common Shares for which a Right is then exercisable and the
denominator of which is 50% of the Market Value of the Common shares of such
Principal Party on the date such Principal Party becomes an Acquiring Person; or
(z) if the Principal Party in such Business Combination
is an Affiliate of one or more Persons which have Registered Common Shares
outstanding, such number of Registered Common Shares of whichever of such
Affiliates of the Principal Party has Registered Common Shares with the greatest
aggregate Market Value on the date of consummation of such Business Combination
as shall have an aggregate Market Value on the date of such Business Combination
equal to the result obtained by multiplying the Purchase Price by a fraction,
the numerator of which is the number of Common Shares for which a Right is then
exercisable and the denominator of which is 50% of the Market Value of the
Common shares of such Principal Party on the date such Principal Party becomes
an Acquiring Person.
(ii) NWBio shall not consummate any Business Combination unless each
issuer of Common Shares for which Rights may be exercised, as set forth in this
Section 11(c), shall have sufficient authorized and unissued Common Shares that
have not been reserved for issuance (and that shall, when issued upon exercise
thereof in accordance with this Rights Agreement, be validly issued, fully paid
and non-assessable and free of preemptive rights, rights of first refusal or
other restrictions or limitations on the transfer or ownership thereof) to
permit the exercise in full of the Rights in accordance with this Section 11(c)
and unless prior thereto:
(A) a registration statement under the Securities Act, on an
appropriate form, with respect to the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights shall be effective under the
Securities Act; and
(B) NWBio and each such issuer shall have:
(1) executed and delivered to Rights Agent as a supplemental
agreement providing for the assumption by such issuer of the obligations set
forth in this Section 11(c) (including the obligation of such issuer to issue
Common Shares upon the exercise of Rights in accordance with the terms set forth
in Sections 11(c)(i) and 11(c)(iii) and further providing that such issuer, at
its own expense, will use its best efforts to:
(x) cause a registration statement under the Securities
Act, on an appropriate form, with respect to the Rights and Common Shares of
such issuer purchasable upon the exercise of the Rights to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date;
16
(y) qualify or register the Rights and Common Shares of
such issuer purchasable upon exercise of the Rights under the blue sky or
securities laws of such jurisdictions as may be necessary or appropriate; and
(z) list the Rights and Common Shares of such issuer
purchasable upon the exercise of the Rights on each national securities exchange
on which the Common Shares were listed prior to the consummation of the Business
Combination or, if the Common Shares were not listed on a national securities
exchange prior to the consummation of the Business Combination, on a national
securities exchange or on Nasdaq;
(2) furnished to Rights Agent a written opinion of
independent counsel stating that such supplemental agreement is a valid, binding
and enforceable agreement of such issuer; and
(3) filed with Rights Agent a certificate of a nationally
recognized firm of independent accountants, which Rights Agent may rely
conclusively on, setting forth the number of Common Shares of such issuer that
may be purchased upon the exercise of each Right after the consummation of such
Business Combination.
(iii) After consummation of any Business Combination and subject to
the provisions of Sections 11(c)(ii), (A) each issuer of Common Shares for which
Rights may be exercised as set forth in this Section 11(c) shall be liable for,
and shall assume, by virtue of such Business Combination, all the obligations
and duties of NWBio pursuant to this Rights Agreement, (B) the term "Company"
shall thereafter be deemed to refer to such issuer, (C) each such issuer shall
take such steps in connection with such consummation as may be necessary to
ensure that the provisions of this Rights Agreement (including the Provisions of
Section 11(a) and 11(b)) shall thereafter be applicable, as nearly as reasonably
may be, in relation to its Common Shares thereafter deliverable upon the
exercise of the Rights, and (D) the number of Common Shares of each such issuer
thereafter receivable upon exercise of any Right shall be determined in
accordance with the provisions of Sections 11(a) and 12(a), and the provisions
of Sections 7, 9 and 10 with respect to the Common Shares shall apply, as nearly
as reasonably may be, on like terms to any such Common Shares.
(d) In the event that the number of Common Shares that are authorized by
NWBio's Certificate of Incorporation 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,
NWBio shall, to the extent permitted by applicable law and regulation, (a)
determine the excess of (1) the value of the Common Shares issuable upon the
exercise of a Right (computed using the Current Market Price used to determine
the number of Common Shares (the "Current Market Value")) over (2) the Purchase
Price (such excess is herein referred to as the "Spread"), and (B) with respect
to each Right, make adequate provision to substitute for the Common Shares, upon
the exercise of the Rights and payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) other equity securities of
NWBio, (4) debt securities of NWBio, (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 of NWBio based
upon the advice of a nationally
17
recognized investment banking firm selected by the Board of Directors of NWBio;
provided, however, that if NWBio shall not have made adequate provision to
deliver value pursuant to clause (B) above within 30 days following the later of
(x) the first occurrence of the event significant to the Rights specifically and
(y) the date on which NWBio's right of redemption pursuant to Section 24(a)
expires (the later of (x) and (y) being referred to herein as the "Trigger
Date"), then NWBio shall be obligated to deliver, upon surrender for exercise of
a right and without requiring payment of the Purchase Price, Common Shares (to
the extent available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If the Board of Directors of NWBio
shall determine in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in full of the
Rights, the 30-day period set forth above may be extended to the extent
necessary, but not more than 90 days after the Trigger Date, in order that NWBio
may seek stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the extent
that NWBio determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(d), NWBio (x) shall provide, subject
to Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, NWBio shall issue a public announcement (with
prompt written notice thereof to Rights Agent) stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
(with prompt written notice thereof to Rights Agent) at such time as the
suspension is no longer in effect. For purposes of this Section 11(d), the value
of the Common Shares shall be the Current Market Price per share of the Common
Shares on the Trigger Date and the value of any Common Share Equivalent shall be
deemed to have the same value as the Common Shares on such date.
12. CERTAIN ADJUSTMENTS.
(a) To preserve the actual or potential economic value of the Rights, if at
any time after the date of this Rights Agreement there shall be any change in
the Common Shares whether by reason of stock dividend, stock split,
recapitalization, merger, consolidation, combination or exchange of securities,
split-up, split-off, spin off, liquidation or other similar change in
capitalization, any distribution or issuance of cash, assets, evidences of
indebtedness or subscription rights, options or warrants to holders of Common
Shares, other than the Rights or regular quarterly cash dividends) or otherwise,
then, in each such event NWBio's Board of Directors shall make appropriate
adjustments in the number of Common Shares (or the number and kind of other
securities) issuable upon exercise of each Right, the Purchase Price and
Redemption Price in effect at such time and the number of Rights outstanding at
such time (including the number of Rights or fractional Rights associated with
each Common Share) such that following such adjustment such event shall not have
had the effect of reducing or limiting the benefits the holders of the rights
would have had absent such event.
(b) If, as a result of an adjustment made pursuant to Section 12(a), the
holder of any Right thereafter exercised shall become entitled to receive any
securities other than Common Shares, then the number of such securities so
receivable upon exercise of any Right thereafter
18
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions of Sections 11(a) and 12(a),
and the provisions of Sections 8, 9 and 10 with respect to the Common Shares
shall apply, as nearly as reasonably as may be, on like terms to any such other
securities.
(c) All Rights originally issued by NWBio subject to any adjustment made in
the amount of Common Shares or other securities relating to a Right shall
evidence the right to purchase, for the Purchase Price, the adjusted number and
kind of securities purchasable from time to time under this Rights Agreement
upon exercise of the Rights, all subject to further adjustment as provided in
this Rights Agreement.
(d) Irrespective of any adjustment or change in the Purchase Price or the
number of Common Shares or number or kind of other securities issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the terms that were expressed in the initial Right
Certificates issued under this Rights Agreement.
(e) In any case in which action taken pursuant to Section 12(a) requires
that an adjustment be made effective as of a record date for a specified event,
NWBio may elect to defer (and shall provide Rights Agent prompt written notice
of any such election) until the occurrence of such event the issuing to a holder
of any Right exercised after such record date the Common Shares and/or other
securities, if any, issuable upon such exercise over and above the Common Shares
and/or other securities, if any, issuable before giving effect to such
adjustment; provided, however, that NWBio shall deliver to such holder a due
xxxx or other appropriate instrument evidencing such holder's right to receive
such additional securities upon the occurrence of the event requiring such
adjustment.
13. CERTIFICATE OF ADJUSTMENT. Whenever an adjustment is made as provided in
Section 11 or 12, NWBio shall (a) promptly prepare a certificate setting forth
such adjustment and file a brief statement of the facts and computations
accounting for such adjustments, (b) promptly file with Rights Agent and with
each transfer agent for the Common Shares a copy of such certificate, and (c)
mail a brief summary thereof to each holder of a Right Certificate (or, prior to
the Distribution Date, of the Common Shares) in accordance with Section 26. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment or statement therein contained and shall have no duty or
liability with respect to, and shall not be deemed to have knowledge of, any
adjustment or any such event unless and until it shall have received such a
certificate.
14. ADDITIONAL COVENANTS.
(a) NWBio covenants and agrees that, notwithstanding any provision of this
Rights Agreement, no adjustment to the number of Common Shares (or fractions of
a share) or other securities for which a Right is exercisable or the number of
Rights outstanding or associated with each Common Share or any similar or other
adjustment shall be made or be effective if such adjustment would have the
effect of reducing or limiting the benefits the holders of the Rights would have
had absent such adjustment, including, without limitation, the benefits under
19
Sections 11 and 12, unless the terms of this Rights Agreement are amended so as
to preserve such benefits.
(b) NWBio covenants and agrees that, after the Distribution Date, except as
permitted by Section 27, it will not take (or permit any Subsidiary of NWBio to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will reduce or otherwise limit the benefits the
holders of the Rights would have had absent such action, including, without
limitation, the benefits under Sections 11 and 12. Any action taken by NWBio
during any period after any Person becomes an Acquiring Person but prior to the
Distribution Date shall be null and void unless such action could be taken under
this Section 14(b) from and after the Distribution Date.
15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) NWBio may, but shall not be required to, issue fractions of rights or
distribute Right Certificates that evidence fractional Rights. In lieu of such
fractional Rights, NWBio may 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 purposes of this Section 15(a), the current market
value of a whole Right shall be the closing price of the Rights (as determined
pursuant to the second and third sentences of the definition of Market Value
contained in Section 1) for the Trading Day immediately prior to the date on
which such fractional rights would have been otherwise issuable.
(b) NWBio may, but shall not be required to, issue fractions of Common
Shares upon exercise of the Rights or distribute certificates that evidence
fractional Common Shares. In lieu of fractional Common Shares, NWBio may elect
to (i) utilize a depository arrangement as provided by the terms of the Common
Shares or (ii) in the case of a fraction of a Common Share, pay to the
registered holders of Right Certificates at the time such Rights are exercised
as provided in this Rights Agreement an amount in cash equal to the same
fraction of the current market value of one Common Share. For purposes of this
Section 15(b), the current Market Value of a Common Share shall be the closing
price of a Common Share (as determined pursuant to the second and third
sentences of the definition of Market Value contained in Section 1) for the
Trading Day immediately prior to the date of such exercise. If, as a result of
an adjustment made pursuant to Section 12(a), the holder of any Right thereafter
exercised shall be come entitled to receive any securities other than Common
Shares, the provisions of this Section 15(b) shall apply, as nearly as
reasonably may be, on like terms to such other securities.
(c) The holder of Rights, by the acceptance of the Rights, expressly waives
his or her right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as provided in this Section 15.
16. RIGHTS OF ACTION.
(a) All rights of action in respect of this Rights Agreement, except the
rights of action given to Rights Agent under this Rights Agreement, are vested
in the respective registered
20
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares), and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without
consent of Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Common Shares), may, in his or her own
behalf and for his or her own benefit, enforce, and may institute and maintain
any suit, action or proceeding against NWBio to enforce, or otherwise act in
respect of, his or her right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in the Rights
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 in this Rights Agreement
and shall be entitled to specific performance of the obligations of any Person
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the reasonable
costs and expenses, including attorneys' fees, incurred in such action.
17. TRANSFER AND OWNERSHIP OF RIGHTS AND RIGHT CERTIFICATES.
(a) Prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares.
(b) After the Distribution Date, the Right Certificates will be
transferable, subject to Section 7(e), only on the registry books of Rights
Agent if surrendered at the office of Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer.
(c) NWBio and Rights Agent may deem and treat the Person in whose name a
Right Certificate (or, prior to the Distribution Date, the associated Common
Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificate or the associated certificate for Common Shares made by
anyone other than NWBio or Rights Agent) for all purposes whatsoever, and
neither NWBio nor Rights Agent shall be affected by any notice to the contrary.
18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder, as such, of
any Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Common Shares or of any other
securities of NWBio that may at any time be issuable upon the exercise of the
Rights represented thereby.
21
19. CONCERNING RIGHTS AGENT.
(a) NWBio agrees to pay to Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, delivery, amendment, administration and execution
of this Rights Agreement and the exercise and performance of its duties
hereunder. NWBio also agrees to indemnity Rights Agent for, and to hold it
harmless against, any loss, liability, damage, judgment, fine, penalty, claim,
demand, settlement, cost or expense (including, without limitation, the
reasonable fees and expenses of legal counsel), incurred without gross
negligence or bad faith on the part of Rights Agent (which gross negligence or
bad faith must be determined by a final, non-appealable order, judgment, decree
or ruling of a court of competent jurisdiction), for any action taken, suffered
or omitted by Rights Agent in connection with the acceptance, administration,
exercise and performance of its duties under this Rights Agreement. The costs
and expenses incurred in enforcing this right of indemnification shall be paid
by NWBio. The provisions of this Section 19 and Section 21 below shall survive
the termination of this Rights Agreement, the exercise or expiration of the
Rights and the resignation or removal of Rights Agent.
(b) Rights Agent shall be authorized and protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with its acceptance and administration of this Rights Agreement and
the exercise and performance of its duties hereunder, in reliance upon any
Rights Certificate or certificate for the Common Shares or for other securities
of NWBio, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 21 hereof.
20. MERGER OR CONSOLIDATION OR CHANGE OF RIGHTS AGENT.
(a) Any Person into which Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the stock transfer or stockholder
services business of Rights Agent or any successor Rights Agent, shall be the
successor to Rights Agent under this Rights Agreement without execution or
filing of any paper or any further act on the part of any of the parties to this
Rights Agreement, provided, however, that such Person would be ineligible for
appointment as a successor Rights Agent under the provisions of Section 22. In
case, at the time such successor Rights Agent shall succeed to the agency
created by this Rights 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 Rights Agreement.
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(b) In case at any time the name of Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, Rights Agent may adopt the countersignature under its prior name and
deliver such Right Certificates so countersigned; and, in case at that time any
of the Right Certificates shall not have been so countersigned, Rights Agent may
countersign such Right Certificates either in its prior name or in hits changed
name; and, in all such cases, such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights Agreement.
21. DUTIES OF RIGHTS AGENT. Rights Agent undertakes only the duties and
obligations expressly imposed by this Rights Agreement upon the following terms
and conditions, by all of which NWBio and the holders of Right Certificates (or,
prior to the Distribution Date, of the Common Shares), by their acceptance
thereof, shall be bound:
(a) Rights Agent may consult with legal counsel (who may be legal counsel
for NWBio or an employee of Rights Agent), and the advice or opinion of such
counsel shall be full and complete authorization and protection to Rights Agent
and Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Rights Agreement
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) be proved
or established by NWBio prior to taking, refraining from taking or suffering any
action under this Rights Agreement, such fact or matter (unless other evidence
in respect thereof be specifically prescribed in this Rights Agreement) may be
deemed to be conclusively proved and established by a certificate signed by any
one of the Chairman and President, the Chief Financial Officer, any Executive
Vice President, the Treasurer or the Secretary of NWBio and delivered to Rights
Agent, and such certificate shall be full authorization and protection to Rights
Agent and Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitted in good faith by it under the provisions of this
Rights Agreement in reliance upon such certificate.
(c) Rights Agent shall be liable hereunder to NWBio and any other Person
only for its own gross negligence or bad faith (as determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction). Anything to the contrary notwithstanding, in no event shall
Rights Agent be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if Rights Agent has been advised of the likelihood of such
loss or damage. Any liability of Rights Agent under this Rights Agreement will
be limited to the amount of fees paid by NWBio to Rights Agent.
(d) Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights 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 NWBio only.
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(e) Rights Agent shall not have any liability for or be under any
responsibility in respect of the validity of this Rights Agreement or the
execution and delivery hereof (except the due execution of this Rights Agreement
by Rights Agent) or in respect of the validity or executions of any Right
Certificates (except its countersignature thereof); nor shall it be liable or
responsible for any breach by NWBio of any covenant or condition contained in
this Rights Agreement or in any Right Certificate; nor shall it be liable or
responsible for any adjustment required under the provisions of Section 11 or 12
or liable 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 under this Rights Agreement be deemed to make any representation or warranty
as to the authorization or reservation of any Common Shares or other such
securities to be issued pursuant to this Rights Agreement or any Right
Certificate or as to whether any Common Shares or other securities will, when so
issued, be validly authorized and issued, fully paid and non-assessable.
(f) NWBio 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 Rights
Agent for the carrying out or performance by Rights Agent of the provisions of
this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman and the President, the Chief Financial Officer, any
Executive Vice President, the Secretary or the Treasurer of NWBio, and to apply
to such officers for advice or instructions in connection with its duties, and
such instructions shall be full authorization and protection to Rights Agent and
Rights Agent shall not be liable for or in respect of any action taken, suffered
or omitted by it in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions. Rights Agent shall be
fully authorized and protected in relying upon the most recent instructions
received by any such officer. Any application by Rights Agent for written
instructions from NWBio may, at the option of Rights Agent, set forth in writing
any action proposed to be taken, suffered or omitted by Rights Agent under this
Rights Agreement and the date on and/or after which such action shall be taken
or suffered or such omission shall be effective, Rights Agent shall not be
liable for any action taken or suffered by, or omission of, Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of NWBio actually receives such application,
unless any such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case of an
omission), Rights Agent shall have received written instructions in response to
such application specifying the action to be taken, suffered or omitted.
(h) Rights Agent and any stockholder, Affiliate, director, officer or
employee of Rights Agent may buy, sell or deal in any of the Rights or other
securities of NWBio or become pecuniarily interested in any transaction in which
NWBio may be interested, or contract with or lend money to NWBio or otherwise
act as fully and freely as though Rights Agent were not Rights Agent under this
Rights Agreement. Nothing herein shall preclude Rights Agent or any
24
such stockholder, Affiliate, director, officer or employee from acting in any
other capacity for NWBio or for any other Person.
(i) Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself (through its
directors, officers and employees) or by or through its attorneys or agents, and
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 NWBio
or any other Person resulting from any such act, default, neglect or misconduct,
absent gross negligence or bad faith in the selection and continued employment
thereof (each as determined by a final, non-appealable order, judgment, decree
or ruling of a court of competent jurisdiction).
(k) No provision of this Rights Agreement shall require Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
22. CHANGE OF RIGHTS AGENT. Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Rights Agreement upon 30-day
notice in writing mailed to NWBio and to each transfer agent of the Common
Shares by registered or certified mail, and to the holders of the Right
Certificates (or, prior to the Distribution Date, of the Common Shares) by
first-class mail. NWBio may remove Rights Agent or any successor Rights Agent,
upon 30-day notice in writing mailed to Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Shares by
registered or certified mail, and to the holders of the Right Certificates (or,
prior to the Distribution Date, of the Common Shares) by first-class mail. If
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, NWBio shall appoint a successor to Rights Agent. If NWBio shall fail to
make such appointment within a period of 30 days after giving written 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 (or, prior to the Distribution Date, of the Common Shares)
(who shall, with such notice, submit his or her Right Certificate or, prior to
the Distribution Date, the certificate representing his or her Distribution
Date, for inspection by NWBio), then the registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares) may apply
to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by NWBio or by such a
court, shall be a Person in good standing organized and doing business under the
laws of the United States, which is authorized under such laws to exercise stock
transfer or stockholder services powers and is subject to supervision or
examination by federal or state authority, which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000. 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; provided, however,
that the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it under this Rights Agreement,
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,
NWBio shall file notice thereof in writing with the predecessor Rights Agent and
each transfer agent of
25
the Common Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates (or, prior to the Distribution Date, of the
Common Shares). Failure to give any notice provided for in this Section 22,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
23. ISSUANCE OF ADDITIONAL RIGHTS AND RIGHT CERTIFICATES. Notwithstanding the
provisions of this Rights Agreement or of the Rights to the contrary, NWBio may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change
made in accordance with the provisions of this Rights Agreement. In addition, in
connection with the issuance or sale of Common Shares following the Distribution
Date and prior to the earlier of the Redemption Date and the Expiration Date,
NWBio (a) shall issue, with respect to Common Shares so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement, or
upon the exercise, conversion or exchange of securities, notes or debentures
issued by NWBio, and (b) may issue, in any other case, if deemed necessary or
appropriate by NWBio's Board of Directors, Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if, and to the
extent that, NWBio shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to NWBio or to 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.
24. REDEMPTION AND TERMINATION.
(a) NWBio's Board of Directors may, at its option, at any time prior to the
earlier of (i) the Distribution Date and (ii) the Close of Business on the
Expiration Date, order the redemption of all, but not fewer than all, the
then-outstanding Rights at the Redemption Price (the date of such redemption
being the "Redemption Date"), and NWBio, at its option, may pay the Redemption
Price either in cash or Common Shares or other securities of NWBio deemed by
NWBio's Board of Directors, in the exercise of its sole discretion, to be at
least equivalent in value to the Redemption Price.
(b) Immediately upon the action of NWBio's Board of Directors ordering the
redemption of the Rights in accordance with Section 24(a), and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of rights shall be to
receive the Redemption Price. Within 10 Business Days after the action of
NWBio's Board of Directors ordering the redemption of the Rights, NWBio shall
give notice of such redemption to 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 transfer agent for the
Common Shares. Each such notice or redemption will state the method by which
payment of the Redemption Price will be made. The notice, if mailed in the
manner provided in this Rights Agreement, shall be conclusively presumed to have
been duly given, whether or not the holder of rights receives such notice. In
any case, failure to give such
26
notice by mail, or any defect in the notice, to any particular holder of Rights
shall not affect the sufficiency of the notice to other holders of Rights.
25. PERIODIC REVIEW. It is understood that a special committee of the Board of
Directors (the "Special Committee") shall review and evaluate this Rights
Agreement in order to consider whether the maintenance of this Rights Agreement
continues to be in the best interests of NWBio, its stockholders and any other
relevant constituencies of NWBio, at least every three years, or sooner if any
Person shall have made a proposal to NWBio, or taken any other action, that, if
effective, could cause such Person to become an Acquiring Person hereunder, if a
majority of the members of the Special Committee shall deem such review and
evaluation appropriate after giving due regard to all relevant circumstances.
Following such review, the Special Committee will communicate its conclusions to
the full Board of Directors, including any recommendation in light thereof as to
whether this Rights Agreement should be modified or the Rights should be
redeemed. The Special Committee shall be appointed by the Board of Directors of
NWBio and shall be comprised of Directors of NWBio, at least a majority of whom
are not officers, employees or Affiliates of NWBio.
26. NOTICES. Notices or demands authorized by this Rights Agreement to be given
or made by Rights Agent or by the holder of a Right Certificate (or, prior to
the Distribution Date, of the Common Shares) to or on NWBio shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with Rights Agent) as
follows:
Northwest Biotherapeutics, Inc.
00000 - 00xx Xxxxx XX, Xxxxx 000
Xxxxxxx, XX 00000
Attention: President
Subject to the provisions of Section 22, notices or demands authorized by this
Rights Agreement to be given or made by NWBio or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) to or on
Rights Agent shall be sufficiently given or made if in writing and sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with NWBio) as follows:
Mellon Investor Services LLC
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Relationship Manager
Notices or demands authorized by this Rights Agreement to be given or made by
NWBio or Rights Agent to any holder of a Right Certificate (or, prior to the
Distribution Date, of the Common Shares) shall be sufficiently given or made if
in writing and sent by first-class mail, postage prepaid, addressed to such
holder's address as shown on the registry books of Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent of the Common
Shares.
27
27. SUPPLEMENTS AND AMENDMENTS. At any time prior to the Distribution Date and
subject to the last sentence of this Section 27, NWBio may, and Rights Agent
shall if NWBio so directs, supplement or amend any provision of this Rights
Agreement (including, without limitation, the date on which the Distribution
Date shall occur, the time during which the Rights may be redeemed pursuant to
Section 24) without the approval of any holder of the Rights. From and after the
Distribution Date and subject to applicable law, NWBio may, and Rights Agent
shall if NWBio so directs, amend this Rights Agreement without the approval of
any holder of Right Certificates to (a) cure any ambiguity or correct or
supplement any provision contained in this Rights Agreement that may be
defective or inconsistent with any other provision of this Rights Agreement, (b)
shorten or lengthen any time period, or (c) make any other provisions in regard
to matters or questions arising under this Rights Agreement that NWBio may deem
necessary or desirable and that shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Any supplement or amendment adopted during
any period after any Person has become an Acquiring Person but prior to the
Distribution Date shall be null and void unless such supplement or amendment
could have been adopted under the prior sentence from and after the Distribution
Date. Upon the delivery of a certificate from an appropriate officer of NWBio
and, if requested by Rights Agent, an opinion of counsel, that states that the
proposed supplement or amendment complies with this Section 27, Rights Agent
shall execute such supplement or amendment, provided, however, Rights Agent may,
but shall not be obligated to, enter into any supplement or amendment that
affects the Rights Agent's own rights, duties, obligations or immunities under
this Rights Agreement. Notwithstanding anything contained in this Rights
Agreement to the contrary, any time after the time a Person becomes an Acquiring
person, (x) this Agreement may be supplemented or amended only if the Board of
Directors determines that such supplement or amendment is, in their judgment, in
the best interests of NWBio and its stockholders, and (y) no supplement or
amendment shall be made that decreases the Redemption Price, shortens the
Expiration Date, increases the initial Purchase Price or decreases the number of
shares of Common Stock for which a Right is initially exercisable. Prior to the
Distribution Date, the interests of the holders of rights shall be deemed
coincident with the interests of the holders of Common Stock. In addition,
notwithstanding anything to the contrary contained in this Rights Agreement, no
supplement or amendment to this Rights Agreement shall be made that (x) reduces
the Redemption Price (except as required by Section 12(a)), (y) provides for an
earlier Expiration Date, or (z) changes the last two sentences in the definition
of Acquiring Person contained in Section 1.
28. SUCCESSORS. All the covenants and provisions of this Rights Agreement by or
for the benefit of NWBio or Rights Agent shall bind and inure to the benefit of
their respective successors and assigns under this Rights Agreement.
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29. BENEFITS OF THIS RIGHTS AGREEMENT; DETERMINATIONS AND ACTIONS BY THE
COMPANY'S BOARD OF DIRECTORS.
(a) Nothing in this Rights Agreement shall be construed to give any Person
other than NWBio, Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, of the Common Shares) any
legal or equitable right, remedy or claim under this Rights Agreement; provided,
however, that this Rights Agreement shall be for the sole and exclusive benefit
of NWBio, Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, of the Common Shares).
(b) Except as explicitly otherwise provided in this Rights Agreement,
NWBio's Board of Directors shall have the exclusive power and authority to
administer this Rights Agreement and to exercise all rights and powers
specifically granted to NWBio's Board of Directors or to NWBio, or as may be
necessary or advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Rights Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Rights Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend this Rights Agreement and a determination of whether there is
an Acquiring Person). The Rights Agent is entitled always to assume the NWBio's
Board of Directors acted in good faith and shall be fully protected and incur no
liability in reliance thereon.
30. SEVERABILITY; CONFLICT WITH OTHER AGREEMENTS. If any term, provision,
covenant or other restriction of this Rights Agreement, including without
limitation the provisions of Section 24(a), 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 Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
31. GOVERNING LAW. This Rights Agreement and each Right Certificate issued
under this Rights Agreement shall be deemed to be a contract made under the laws
of the State of Delaware and for all purposes shall be governed by and construed
in accordance with the laws of Delaware applicable to a contract to be made and
performed entirely within Delaware.
32. DESCRIPTIVE HEADINGS. Descriptive headings of the several sections in this
Rights Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions of this Rights
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
29
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed as of the day and year above first written.
MELLON INVESTOR SERVICES LLC, as NORTHWEST BIOTHERAPEUTICS, INC.
Rights Agent
By: ______________________________ By: ______________________________
Its: _____________________________ Xxxxxx X. Xxxxx, President and
CEO
30
EXHIBIT A
FORM OF RIGHT CERTIFICATE
Certificate No. R-____________ __________________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF FEBRUARY __, 2012 AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY NWBIO AS SET FORTH IN THE
RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.0001 PER RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. AS SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR
BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF
SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID.
RIGHT CERTIFICATE
NORTHWEST BIOTHERAPEUTICS, INC.
This Right Certificate certifies that _____________________, or registered
assigns, is the registered holder of the number of Rights set forth above, which
entitles the holder thereof, subject to the terms and conditions set forth in
that certain Rights Agreement, dated as of February 26, 2002, (the "Rights
Agreement") between Northwest Biotherapeutics, Inc., a Delaware corporation (the
"Company") and Mellon Investor Services LLC, a New Jersey limited liability
company, as Rights Agent (the "Rights Agent"), to purchase from NWBio, at any
time after the Distribution Date (as such term is defined in the Rights
Agreement), one (1) fully paid, non-assessable share of Common Stock of NWBio,
at a purchase price of $[____] per share (the "Purchase Price"), payable in
lawful money of the United States of America, upon surrender of this Right
Certificate, with the form of election to purchase and related certificate duly
executed, and payment of the Purchase Price at an office of Rights Agent
designated for such purpose.
Terms used herein and not otherwise defined herein have the meanings
assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and the number
and kind of shares issuable upon exercise of each Right) and the Purchase Price
set forth above are as of March 4, 2002, and may have been or in the future may
be adjusted as a result of the occurrence of certain events, as more fully
provided in the Rights Agreement.
Upon the occurrence of a Business Combination, if the Rights evidenced by
this Right Certificate are beneficially owned by (a) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (b) a transferee of an Acquiring
Person (or any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person (or any such Associate or Affiliate) becomes such, or (c) under
certain circumstances specified in the Rights Agreement, a transferee
1
of an Acquiring Person (or any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person (or any such
Associate or Affiliate) becoming such, such Rights shall become null and void,
and no holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Business Combination.
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 Rights
Agent, NWBio and the holders of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of such Rights
under the specific circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file at the office of NWBio and are also available
upon written request to NWBio.
Upon surrender at the office of Rights Agent designated for such purpose
and subject to the terms and conditions set forth in the Rights Agreement, any
Right Certificate(s) may be transferred or exchanged for another Right
Certificate(s) evidencing a like number of Rights as the Right Certificate(s)
surrendered. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate(s)
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Board of Directors
of NWBio may, at its option,
(a) at any time prior to the earlier of the date of (i) the Close of
Business on the Distribution Date and (ii) the Expiration Date, redeem all
but not less than all of the then outstanding Rights at a redemption price
of $0.0001 per Right; or
(b) at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding Rights (other than Rights held by the
Acquiring Person and certain related Persons) for shares of Common Stock at
an exchange ratio of one-half of one (.50) share of Common Stock per Right.
If the Rights shall be exchanged in part, the holder of this Right
Certificate shall be entitled to receive upon surrender hereof another
Right Certificate(s) for the number of whole Rights not exchanged.
After the expiration of the redemption period, NWBio's right of redemption
may be reinstated if an Acquiring Person reduces his beneficial ownership to
twenty percent (20%) or less of the outstanding shares of Common Stock in a
transaction or series of transactions not involving NWBio and there is no other
Acquiring Person.
No fractional shares of Common stock are required to be issued upon the
exercise of any Right(s) evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital stock
which may at any time be
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issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of NWBio or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right(s) 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 Rights Agent.
IN WITNESS WHEREOF, NWBio has caused this instrument to be duly executed
under its corporate seal and by its authorized officers.
Dated as of ___________________ ___, 2002.
NORTHWEST BIOTHERAPEUTICS, INC.
By:_________________________________
[seal] Name:_______________________________
Title:______________________________
____________________________________
Secretary
Countersigned:
____________________________________
as Rights Agent
By:_________________________________
Authorized Representative
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[FORM OF REVERSE SIDE OF RIGHT CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers
unto ____________________________ (please print name and address of transferee),
this Right Certificate, together with all right, title and interest therein, and
does irrevocably constitute and appoint _______________________, Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ______________, __ 20__
______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program), pursuant to Rule 17Ad-15 of
the Securities Exchange Act of 1934, as amended.
------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).
______________________________
Signature
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[FORM OF REVERSE SIDE OF RIGHT CERTIFICATE, CONT.]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such
holder desires to exercise the Rights
represented by the Right Certificate)
To: NORTHWEST BIOTHERAPEUTICS, INC.
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Right Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that such certificates
for such Common Shares be issued in the name of:
______________________________
______________________________
______________________________
(Please print name and address and insert social security or other
identifying number)
If such number or 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 print name and address and insert social security or other
identifying number)
Dated: _______________ __, 20__
______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program), pursuant to Rule 17Ad-15 of
the Securities Exchange Act of 1934, as amended.
________________________________________________________________________________
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The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).
______________________________
Signature
________________________________________________________________________________
NOTICE
The signatures in this Form Assignment or Form Election to Purchase, as the
case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, NWBio
and Rights Agent will deem the beneficial owner of the Rights evidenced by this
Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
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