EXHIBIT 4.3
EXECUTION COPY
CORECOMM LIMITED
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
(as Rights Agent)
Rights Agreement
Dated as of September 29, 2000
TABLE OF CONTENTS
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PAGE #
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Section 1. Certain Definitions..........................................1
Section 2. Appointment of Rights Agent..................................6
Section 3. Issue of Rights Certificates.................................7
Section 4. Form of Rights Certificates..................................8
Section 5. Countersignature and Registration............................9
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates................................................10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights; Termination.........................................11
Section 8. Cancellation and Destruction of Rights Certificates.........13
Section 9. Reservation and Availability of Capital Stock...............13
Section 10. Series C Preferred Stock Record Date........................15
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights.........................................15
Section 12. Certificate of Adjusted Purchase Price or Number of Shares..23
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power...............................................24
Section 14. Fractional Rights and Fractional Shares.....................26
Section 15. Rights of Action ...........................................27
Section 16. Agreement of Rights Holders.................................28
Section 17. Rights Certificate Holder Not Deemed a Stockholder..........29
Section 18. Concerning the Rights Agent.................................29
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.......................................................29
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PAGE #
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Section 20. Duties of Rights Agent......................................30
Section 21. Change of Rights Agent......................................32
Section 22. Issuance of New Rights Certificates.........................33
Section 23. Redemption and Termination..................................33
Section 24. Exchange....................................................34
Section 25. Notice of Certain Events....................................35
Section 26. Notices.....................................................36
Section 27. Supplements and Amendments..................................37
Section 28. Successors..................................................37
Section 29. Determinations and Actions by the Board of Directors, etc...37
Section 30. Benefits of this Agreement..................................38
Section 31. Severability................................................38
Section 32. Governing Law...............................................38
Section 33. Counterparts................................................38
Section 34. Descriptive Headings........................................39
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EXECUTION COPY
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of September 29, 2000 (the
"AGREEMENT"), between CoreComm Limited, a Delaware corporation ("CORECOMM" or
the "COMPANY"), and Continental Stock Transfer & Trust Company, a New York
corporation (the "RIGHTS AGENT").
W I T N E S S E T H
WHEREAS, the predecessor company to CoreComm, incorporated in
Bermuda, also known as CoreComm Limited ("CORECOMM (BERMUDA)"), had a
shareholder rights plan which was canceled after the shares of common stock and
the rights attached the shares of the common stock of CoreComm (Bermuda) were
exchanged for common stock of CoreComm.
WHEREAS, the Board of Directors of the Company wishes to
implement a stockholder rights plan for the stockholders of CoreComm and have
authorized that plan and all transactions contemplated by that plan by a
resolution adopted as of September 29, 2000.
WHEREAS, the Board of Directors of the Company has authorized
and declared a dividend of one preferred share purchase right (a "RIGHT") (as
such number may be hereinafter adjusted pursuant to Section 11(p) hereof) for
each share of Company Common Stock outstanding at the Close of Business (as
hereinafter defined) on October 16, 2000 (the "RECORD DATE"), each Right
initially representing the right to purchase, upon the terms and subject to the
conditions set forth herein, one one-hundredth (1/100) of a share of Series C
Junior Participating Preferred Stock, par value $0.01 per share, of the Company,
having the rights, powers and preferences set forth in the form of Certificate
of Designation, Preferences and Rights attached hereto as EXHIBIT A, upon the
terms and subject to the conditions hereinafter set forth. The Board of
Directors of the Company has further authorized and directed the issuance of one
Right with respect to each share of Company Common Stock that shall become
outstanding (whether originally issued or delivered from the Company's treasury)
after the Record Date and on or prior to the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (each as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Adverse Person
(or any Affiliate or Associate thereof) or Person who or which, together with
all Affiliates and Associates of such Person, after the Record Date, is the
Beneficial Owner of 18% or more of the shares of Company Common Stock then
outstanding, but shall not include
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the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan; PROVIDED, HOWEVER, that any Person, who, together with all Affiliates and
Associates of such Person, on the date of this Agreement is the Beneficial Owner
of 18% or more of the outstanding Company Common Stock shall not be, or be
deemed to be, an "Acquiring Person" unless and until such Person becomes the
Beneficial Owner of an additional one percent (1%) or more of the outstanding
Company Common Stock. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as a result of an acquisition of Common Shares by the Company
which acquisition, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 18% or more
of the Company Common Stock then outstanding; PROVIDED, HOWEVER, that if a
Person becomes the Beneficial Owner of 18% or more of the Company Common Stock
then outstanding by reason of share purchases by the Company and, after such
share purchases, becomes the beneficial owner of any additional shares of
Company Common Stock, then such Person shall be an "Acquiring Person." In
addition, a Person shall not be deemed an Acquiring Person who has reported or
is required to report such Beneficial Ownership of shares of Company Common
Stock (but less than 20%) on Schedule 13G under the Exchange Act or on Schedule
13D under the Exchange Act, which Schedule 13D does not state any intention to
or reserve the right to control or influence the management or policies of the
Company or engage in any of the actions specified in Item 4 of such Schedule
(other than the disposition of the Company Common Stock) and, within 10 Business
Days after being requested by the Company to advise it regarding the same,
certifies to the Company that such Person acquired shares of Company Common
Stock representing 18% or more of the shares of Company Common Stock then
outstanding inadvertently or without knowledge of the terms of the Rights and
who, together with all Affiliates and Associates, thereafter does not acquire
additional shares of Company Common Stock while the Beneficial Owner of 18% or
more of the shares of Company Common Stock then outstanding; provided, however,
that if the Person requested to so certify fails to do so within 10 Business
Days, then such Person shall become an Acquiring Person immediately after such
10-Business Day period. Notwithstanding the foregoing, if the Board determines
in good faith that a Person who would otherwise be an "Acquiring Person," as
defined pursuant to the foregoing provisions, has become such inadvertently, and
such Person divests as promptly as practicable sufficient shares of Company
Common Stock so that such Person would no longer be an "Acquiring Person," as
defined pursuant to the foregoing provisions, then such Person shall not be an
"Acquiring Person."
(b) "ADVERSE PERSON" shall mean any Person, who (x)
alone or together with its Affiliates and Associates has become the Beneficial
Owner of an amount of Common Shares which a majority of the Board determines to
be substantial (which amount shall in no event be less than 5% of the Common
Shares then outstanding) and (y) with respect to which a majority of the Board
has determined after reasonable inquiry and investigation, including
consultation with such Person as such directors shall deem appropriate, that (a)
such Beneficial ownership by such Person is
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intended to cause the Company to repurchase the Common Shares beneficially owned
by such Person or to cause pressure on the Company to take action or enter into
a transaction or series of transactions intended to provide such Person with
short-term financial gain under circumstances where the Board determines that
the best long-term interests of the Company and its stockholders, would not be
served by taking such action or entering into such transaction or series of
transactions at that time or (b) such Beneficial Ownership is causing or is
reasonably likely to cause a material adverse impact (including, but not limited
to, impairment of relationships with customers or suppliers, impairment of the
Company's ability to maintain its competitive position, adverse consequences to
the communities in which the Company is located and impairment of the short-term
and long-term interests of the Company (including benefits that may accrue from
the continued independence of the Company) on the business or prospects of the
Company.
(c) "AFFILIATE" and "ASSOCIATE" shall have the
respective meanings ascribed to such terms in Rule 12b-2 under the Exchange Act
as in effect on the date of this Agreement.
(d) A Person shall be deemed the "BENEFICIAL OWNER"
of, and shall be deemed to "beneficially own," any securities:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, now or hereafter owns or has
(or by agreement with the Company is, on the date of this Agreement, entitled to
receive) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (A) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of Rights at any time prior
to the occurrence of a Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering Event which
Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or Section
22 hereof (the "ORIGINAL RIGHTS") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any Original Rights; PROVIDED
FURTHER, that a Person shall not be deemed to be the "Beneficial Owner" of, or
to "beneficially own," securities that such Person has the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) upon the exercise of (D) employee stock options now or hereafter (but
prior to the Distribution Date) issued by the Company, or (E) conversion rights
conferred in any class or series of preferred stock of the Company issued prior
to the Distribution Date if the resolutions of the Board providing for the
issuance of such class or series of preferred stock shall specifically refer to
this Agreement and provide that the right to acquire securities upon the
exercise of
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conversion rights so conferred shall not be deemed to constitute beneficial
ownership of such securities;
(ii) that such Person or any of such
Person's Affiliates or Associates, directly or indirectly, has the right to vote
(except as hereinafter provided) or dispose of, or of which any of them,
directly or indirectly, has "beneficial ownership" of (as determined pursuant to
Rule 13d-3 under the Exchange Act), including, except as hereinafter provided,
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 (ii)
as a result of an agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding: (A) arises solely from a
revocable proxy given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions under the
Exchange Act (and the rules and regulations thereunder), and (B) is not also
then reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report);
(iii) that are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph (c)) or
disposing of any voting securities of the Company; and
(iv) that are, pursuant to the foregoing
subparagraphs of this paragraph (c), or otherwise, deemed to be owned by a
voting trust, voting agent, recipient of a proxy that is not immediately
revocable (a "NON-REVOCABLE PROXY") or any other Person to whom such Person (the
"GRANTOR PERSON") has contributed, conveyed, delegated, given, granted,
tendered, transferred or otherwise assigned or conferred (collectively, "GIVEN")
some or all of the voting rights attributable to the Common Shares of which the
Grantor Person (alone or in conjunction with any other Person) is also deemed to
be a Beneficial Owner. Solely for purposes of this Agreement, the Grantor Person
shall be deemed to be the Beneficial Owner of all Common Shares that such voting
trust, voting Agent, proxy holder or other Person has the right, by
Non-revocable Proxy, agreement, assignment, tender, grant or otherwise, to
exercise some or all of the voting rights attributable thereto, whether or not
the Grantor Person shall have contributed or given voting rights that constitute
all or less (even substantially less) than all of the voting rights held by the
voting trust, voting Agent, proxy holder or other Person to whom or to which the
Grantor Person has given some or all of the voting rights attributable to Common
Shares otherwise beneficially owned by the Grantor Person;
PROVIDED, HOWEVER, that nothing in this paragraph (c) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired through such person's
participation in good
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faith in a firm commitment underwriting until the expiration of 40 days after
the date of such acquisition.
(e) "BOARD" shall mean the Board of Directors of the
Company.
(f) "BUSINESS DAY" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(g) "CLOSE OF BUSINESS" on any given date shall mean
5:00 p.m., New York City time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 p.m., New York City time, on the
next succeeding Business Day.
(h) "COMMON STOCK" of a Person means the capital
stock of such Person with the greatest voting power, or the equity securities or
other equity interest having power to control or direct the management, of such
Person.
(i) "COMPANY COMMON STOCK" shall mean the common
stock, par value $0.01 per share, of the Company.
(j) "DISTRIBUTION DATE" shall have the meaning
ascribed to such term in Section 3(a) hereof.
(k) "EXCHANGE ACT" shall mean the Securities Exchange
Act of 1934.
(l) "PRINCIPAL PARTY" shall have the meaning ascribed
to such term in Section 13(b) hereof.
(m) "PERSON" shall mean any individual, firm,
corporation, partnership or other entity.
(n) "SERIES C PREFERRED STOCK" shall mean shares of
Series C Junior Participating Preferred Stock, par value $0.01 per share, of the
Company, and, to the extent that there are not a sufficient number of shares of
Series C Junior Participating Preferred Stock authorized to permit the full
exercise of the Rights, any other series of preferred stock, par value $0.01 per
share, of the Company designated for such purpose containing terms substantially
similar to the terms of the Series C Junior Participating Preferred Stock.
(o) "RECORD DATE" shall have the meaning ascribed to
it in the preamble.
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(p) "RIGHT" shall have the meaning ascribed to it in
the preamble.
(q) "RIGHTS CERTIFICATES" shall have the meaning
ascribed to it in Section 3(a) hereof.
(r) "SECURITIES ACT" shall mean the Securities Act of
1933.
(s) "SECTION 11(A)(II) EVENT" shall mean any event
described in Section 11(a)(ii) hereof.
(t) "SECTION 13 EVENT" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(u) "STOCK ACQUISITION DATE" shall mean the first
date of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d) or 14(d)
under the Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(v) "SUBSIDIARY" shall mean, with reference to any
Person, any corporation or other entity of which an amount of voting securities
sufficient to elect at least a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
(w) "TRIGGERING EVENT" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
All references in this Agreement to acts, laws, rules,
regulations and to forms and schedules thereunder shall be deemed, unless
specifically stated, to be references to such acts, laws, rules, regulations,
forms and schedules as amended (or to successors thereto).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, prior to the Distribution
Date, are the holders of the Company Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment and
agrees to act as Rights Agent under this Agreement. The Company may from time to
time appoint such Co-Rights Agents as it may deem necessary or desirable.
Section 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on
the tenth Business Day after the Stock Acquisition Date, and (ii) the Close of
Business on the tenth Business Day (or such later date as the Board shall
determine) after the date that a tender
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or exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first commenced within
the meaning of Rule 14d-2(a) under the Exchange Act, if upon consummation
thereof, such Person would be the Beneficial Owner of 18% or more of the shares
of Company Common Stock then outstanding (the earlier of (i) and (ii) being
herein referred to as the "DISTRIBUTION DATE"), (x) the Rights shall be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
for Company Common Stock registered in the names of the holders of the Company
Common Stock (which certificates for Company Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates; and (y) the
Rights shall be transferable only in connection with the transfer of the
underlying shares of Company Common Stock (including a transfer to the Company).
As soon as practicable after the Distribution Date, the Rights Agent shall send,
by first-class, insured, postage prepaid mail, to each record holder of Company
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of EXHIBIT B hereto (the "RIGHTS
CERTIFICATES"), evidencing one Right for each share of Company Common Stock so
held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Company Common Stock has been made pursuant
to Section 11(p) hereof, at the time of distribution of the Rights Certificates,
the Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Rights Certificates.
(b) With respect to certificates for Company Common
Stock outstanding as of the Record Date, until the Distribution Date, the Rights
shall be evidenced by such certificates for Company Common Stock, and the
registered holders of Company Common Stock shall also be the registered holders
of the associated Rights. Until the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date (as such term is defined in Section
7 hereof), the surrender or transfer of any certificates representing shares of
Company Common Stock in respect of which Rights have been issued shall also
constitute the surrender or transfer (respectively) of the Rights associated
with such shares of Company Common Stock.
(c) Rights shall be issued in respect of all shares
of Company Common Stock that are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date.
Certificates representing such shares of Company Common Stock shall also be
deemed to be certificates for Rights, and shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
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"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement between
CoreComm Limited (the "COMPANY") and Continental Stock Transfer & Trust
Company (the "RIGHTS AGENT") dated as of September 29, 2000 (the
"RIGHTS AGREEMENT"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. The Company shall
mail to the holder of this certificate a copy of the Rights Agreement,
as in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to, or held by, any Person
who is, was or becomes an Acquiring Person or any Affiliate or
Associates 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 become null and void."
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date, (ii) the Redemption Date, or (ii) the
Final Expiration Date, the Rights associated with Company Common Stock
represented by such certificates shall be evidenced by such certificates alone
and registered holders of Company Common Stock shall also be the registered
holders of the associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with Company Common
Stock represented by such certificates.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in EXHIBIT B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one one-hundredths
of a share of Series C Preferred Stock as shall be set forth therein at the
price set forth therein (such exercise price per one one-hundredth of a share,
the "PURCHASE PRICE"), but the amount and type of securities purchasable (or
other consideration to be made available) upon the exercise of each Right and
the Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person
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or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board has determined is part of a plan,
arrangement or understanding that has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
"The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement."
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, or its President, Chief
Executive Officer or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal, or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary or
Assistant Treasurer of the Company, either manually or by facsimile signature.
The Rights Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificates may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent
shall keep or cause to be kept, at its principal office or offices designated as
the appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
or to be issued hereunder. Such books shall
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show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates, the certificate number of each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the Close of Business on
the Distribution Date, and at or prior to the Close of Business on the earlier
of the Redemption Date or the Final Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase
a like number of one one-hundredths of a share of Series C Preferred Stock (or,
following a Triggering Event, Company Common Stock, other securities, cash or
other assets or property, as the case may be) as the Rights Certificate or
Rights Certificates surrendered then entitled such holder (or former holder in
the case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Rights Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be transferred, split
up, combined or exchanged at the principal office or offices of the Rights Agent
designated, pursuant to Section 26 hereof, for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until the
registered holder shall have properly completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign
and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company shall execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
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Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS; TERMINATION.
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and
Section 23(a) hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to the
Rights Agent at the principal office or offices of the Rights Agent designated,
pursuant to Section 26 hereof, for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of one one-hundredths
of a share (or other securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior to the Close of
Business on the earlier of (i) the tenth anniversary of the Record Date (the
"FINAL EXPIRATION DATE"), or (ii) the date on which the Rights are redeemed as
provided in Section 23 hereof (the "REDEMPTION DATE") as provided in Section 23
hereof or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of
a share of Series C Preferred Stock pursuant to the exercise of a Right shall
initially be $50.00, and shall be subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof and shall be payable in lawful money of
the United States of America accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one one-hundredth of a share of Series C Preferred
Stock (or other shares, securities, cash or other assets or property, as the
case may be) to be purchased as set forth below and an amount equal to any
applicable tax or governmental charge required to be paid by the holder of such
Rights Certificate in accordance with Section 9 hereof, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) either (A) requisition
from any transfer agent of the shares of Series C Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-hundredths of a share of Series C
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of Series C Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-hundredths of a share of Series C Preferred Stock as are to be
purchased (in which case certificates for the shares of Series C Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply
with such request, (ii) if and when necessary to comply with this Agreement,
requisition
12
from the Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii) 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 Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv) after
receipt thereof, promptly deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the Purchase Price
(as such amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be
made in cash or by certified bank check or cashier's check payable to the order
of the Company. In the event that the Company is obligated to issue other
securities (including Company Common Stock), pay cash and/or distribute other
assets pursuant to Section 11(a) hereof, the Company shall make all arrangements
necessary so that such other securities, cash and/or other assets are available
for distribution by the Rights Agent, if and when appropriate. The Company
reserves the right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be exercised so that only
whole shares of Series C Preferred Stock would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificate or to his duly
authorized assigns, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 6 and Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that the Board has determined
is part of a plan, arrangement or understanding that has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null and void without
any further action, and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but the Company shall have no liability to any holder of Rights
Certificates or other Person as a result of the Company's failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.
13
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder 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 Rights
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 the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company shall cause to be reserved and kept
available out of its authorized and unissued shares of Series C Preferred Stock
(and, following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Company Common Stock and/or other securities or out of its
authorized and issued shares held in its treasury), the number of shares of
Series C Preferred Stock (and, following the occurrence of a Triggering Event,
Company Common Stock and/or other securities) that, as provided in this
Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights. Prior to the occurrence of a
Triggering Event, the Company shall not be obliged to cause to be reserved and
kept available out of its authorized and unissued common stock or shares of
Series C Preferred Stock (other than the Series C Preferred Stock), any such
shares of Company Common Stock or any shares of preferred stock (other than the
Series C Preferred Stock) to permit exercise of outstanding Rights.
(b) So long as the shares of Series C Preferred Stock
(and, following the occurrence of a Triggering Event, Company Common Stock
and/or other securities) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange or automated quotation
system, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all
14
shares reserved for such issuance to be listed on such exchange or automated
quotation system upon official notice of issuance upon such exercise.
(c) If then required by applicable law, the Company
shall use its best efforts to (i) file, as soon as practicable following the
earliest date after the first occurrence of a Triggering Event as to which the
consideration to be delivered by the Company upon exercise of the Rights has
been determined pursuant to this Agreement, or as soon as required by law
following the Distribution Date, as the case may be, a registration statement
under the Securities Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the Final Expiration Date. If then required by applicable
law, the Company shall also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. In addition, if the Company shall
determine that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective.
(d) The Company shall take all such action as may be
necessary to ensure that all one one-hundredths of a share of Series C Preferred
Stock (and, following the occurrence of a Triggering Event, Company Common Stock
and/or other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company shall pay when due and payable any
and all taxes and governmental charges that may be payable in respect of the
issuance or delivery of the Rights Certificates and of any certificates for a
number of one one-hundredths of a share of Series C Preferred Stock (or Company
Common Stock and/or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax that
may be payable in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or
15
delivery of a number of one one-hundredths of a share of Series C Preferred
Stock (or Company Common Stock and/or other securities, as the case may be) in
respect of a name other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to issue or deliver
any certificates for a number of one one-hundredths of a share of Series C
Preferred Stock (or Company Common Stock and/or other securities, as the case
may be) in a name other than that of the registered holder upon the exercise of
any Rights until such tax or charge shall have been paid (any such tax being
payable by the holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax or
charge is due.
Section 10. SERIES C PREFERRED STOCK RECORD DATE. Each person
in whose name any certificate for a number of one one-hundredths of a share of
Series C Preferred Stock (or Company Common Stock and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such fractional shares of Series C
Preferred Stock (or Company Common Stock and/or other securities, as the case
may be) represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and all applicable taxes and governmental
charges) was made; PROVIDED, HOWEVER, that if the date of such surrender and
payment is a date upon which the Series C Preferred Stock (or Company Common
Stock and/or other securities, as the case may be) transfer books of the Company
are closed, such Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall be dated, the
next succeeding Business Day on which the Series C Preferred Stock (or Company
Common Stock and/or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event that the Company at any
time after the Record Date (A) declares a dividend on the Series C Preferred
Stock payable in shares of Series C Preferred Stock, (B) subdivides the
outstanding Series C Preferred Stock, (C) combines the outstanding Series C
Preferred Stock into a smaller number of shares, or (D) issues any shares of its
capital stock in a reclassification of the Series C Preferred Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as otherwise
16
provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of
shares of Series C Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive, upon payment
of the Purchase Price then in effect, the aggregate number and kind of shares of
Series C Preferred Stock or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date and at a time when the
Series C Preferred Stock transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs that
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof. In no event shall adjustments under this Section
11(a)(i) be made to the extent that such adjustments result in the consideration
payable in respect of the exercise of one Right being less than the aggregate
par value of the shares of capital stock of the Company issuable upon the
exercise of that Right.
(ii) In the event that (A) a Stock
Acquisition Date occurs; or (B) a majority of the Board declares any Person to
be an Adverse Person; then, in each such case, promptly following the occurrence
of any such event, proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of Series C Preferred
Stock, such number of shares of Company Common Stock of the Company as shall
equal the result obtained by dividing (x) the product of (1) the then current
Purchase Price times (2) the then number of one one-hundredths of a share of
Series C Preferred Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event (such product, following such
first occurrence, shall thereafter be the "PURCHASE PRICE" for each Right and
for all purposes of this Agreement) by (y) the greater of (1) 50% of the Current
Market Price per share of Company Common Stock on the date of such first
occurrence and (2) the par value per share of Company Common Stock (such number
of shares, the "ADJUSTMENT SHARES").
(iii) In the event that (x) the total number
of shares of Company Common Stock that are issued but not outstanding plus the
total number of shares of Company Common Stock that are authorized but unissued
(less the number of shares of Company Common Stock reserved for issuance
pursuant to specific terms of any indenture, option plan or other agreement
other than this Agreement) is not sufficient to permit the exercise in full of
the Rights in accordance with of this Section 11(a)(ii) hereof; or (y) the total
number of shares of Company Common Stock available for exercise of the Rights in
accordance with Section 11(a)(ii) hereof is sufficient to permit such exercise
in full but the Board determines that such exercise of the Rights will not
afford adequate protection to the shareholders of the Company and that
shareholders
17
should be given an option to acquire a substitute for the Adjustment Shares,
then, subject to such limitations as are necessary to prevent a default under
any agreement for money borrowed to which the Company is a party and to comply
with applicable law, the Company shall (A) determine the value of the Adjustment
Shares issuable upon the exercise of a Right (the "CURRENT VALUE"), and (B) with
respect to each Right (subject to Section 7(e) hereof), make adequate provision
to substitute for the Adjustment Shares, upon the exercise of a Right and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock,
such as the Series C Preferred Stock, which the Board has deemed to have
essentially the same value or economic rights as shares of Company Common Stock
(such shares of preferred stock being referred to as "COMMON STOCK
EQUIVALENTS")), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value (less the amount of any reduction in the Purchase Price), where such
aggregate value has been determined by the Board with the advice of a nationally
recognized investment banking firm selected by the Board; provided, however,
that if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the later of (X)
the first occurrence of a Section 11(a)(ii) Event and (Y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the later of
(X) and (Y) being referred to herein as the "SECTION 11(A)(II) TRIGGER DATE"),
then the Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, shares of
Company Common Stock (to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to the Spread. For
purposes of the preceding sentence, the term "SPREAD" shall mean the excess of
(i) the Current Value over (ii) the Purchase Price. If the Board determines in
good faith that it is likely that sufficient additional shares of Company Common
Stock could be authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek all necessary approvals for the authorization of
such additional shares (such period, as it may be extended, is herein called the
"SUBSTITUTION PERIOD"). To the extent that the Company determines that some
action needs to be taken pursuant to the first and/or third sentences of this
Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights, and
(2) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek the necessary approvals for such
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
value of each Adjustment Share shall be the Current Market Price per share of
Company Common Stock on the Section 11(a)(ii) Trigger Date and the per
18
share or per unit value of any Company Common Stock Equivalent shall be deemed
to equal the Current Market Price per share of Company Common Stock on such
date.
(b) In case the Company fixes a record date for the
issuance of rights, options or warrants to all holders of Series C Preferred
Stock entitling them to subscribe for or purchase (for a period expiring within
45 calendar days after such record date) Series C Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of Series C
Preferred Stock ("equivalent preferred stock")) or securities convertible into
Series C Preferred Stock or equivalent preferred stock at a price per share of
Series C Preferred Stock or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible into Series C Preferred
Stock or equivalent preferred stock) less than the then current market price (as
determined pursuant to Section 11(d) hereof) per share of Series C Preferred
Stock on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Series C Preferred Stock outstanding on such record date,
plus the number of shares of Series C Preferred Stock that the aggregate
offering price of the total number of shares of Series C Preferred Stock and/or
equivalent preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price, and the denominator of which shall be the number
of shares of Series C Preferred Stock outstanding on such record date, plus the
number of additional shares of Series C Preferred Stock and/or equivalent
preferred stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case such
subscription price may be paid in whole or in part by delivery of non-cash
consideration, the value of such non-cash consideration shall be as determined
in good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Series C Preferred Stock owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price that would then be in effect if such record date had not been
fixed.
(c) In case the Company fixes a record date for a
distribution to all holders of Series C Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of any evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a dividend
payable in Series C Preferred Stock, but including any dividend payable in stock
other than Series C Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the
19
then current market price (as determined pursuant to Section 11(d) hereof) per
share of Series C Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Series C Preferred
Stock and the denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of Series C Preferred
Stock. Such adjustments shall be made successively whenever such a record date
is fixed, and in the event that such distribution is not so made, the Purchase
Price shall be readjusted to be the Purchase Price that would have been in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, the "CURRENT MARKET PRICE" per share of Company Common Stock on any
date shall be the lesser of (x) the average of the daily closing prices per
share of such Company Common Stock for the 30 consecutive Trading Days
immediately prior to such date, and (y) the average of the daily closing prices
per share of such Company Common Stock for the 30 consecutive Trading Days
immediately following (but not including) such date; provided, however, that in
the event that the Current Market Price per share of Company Common Stock is
determined during a period following the announcement by the issuer of such
Company Common Stock of (A) a dividend or distribution on such Company Common
Stock payable in shares of such Company Common Stock or securities convertible
into shares of such Company Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Company Common Stock, and
prior to the expiration of 20 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then the Current Market Price shall be properly adjusted to
take into account ex-dividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the principal national
securities exchange, if any, on which the shares of Company Common Stock are
then listed or admitted to trading, or, if the shares of Company Common Stock
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the Nasdaq or such
other system then in use, or, if on any such date the shares of Company Common
Stock are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
Company Common Stock selected by the Board. If on any such date no market maker
is making a market in Company Common Stock, the fair value of such shares on
such date as determined in good faith by the Board shall be used. The term
"TRADING DAY" shall mean a day on which the principal national securities
exchange or automated quotation system on which the shares of Company Common
Stock are listed or admitted to trading is open for the transaction of business
or, if the shares of Company Common Stock are not listed or admitted to trading
on any national securities exchange or automated quotation system, a Business
Day. If Company Common Stock is not
20
publicly held or not so listed or traded, Current Market Price per share shall
mean the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the "current market price" per share of Series C Preferred Stock
shall be determined in the same manner as set forth above for Company Common
Stock in clause (i) of this Section 11(d) (other than the last sentence
thereof). If the current market price per share of Series C Preferred Stock
cannot be determined in the manner provided above or if the Series C Preferred
Stock is not publicly held or listed or traded in a manner described in clause
(i) of this Section 11(d), the current market price per share of Series C
Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as
such number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to Company Common Stock occurring
after the date of this Agreement) multiplied by the Current Market Price per
share of Company Common Stock. If neither Company Common Stock nor the Series C
Preferred Stock is publicly held or so listed or traded, current market price
per share of the Series C Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent in the Purchase
Price; provided, however, that any adjustments that by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share of
Company Common Stock or other share or one-millionth of a share of Series C
Preferred Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment provided for in this Section 11 shall be made no
later than the earlier of (i) three years after the date of the transaction that
requires such adjustment, or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a) hereof, the holder of any Right thereafter
exercised becomes entitled to receive any property or securities other than
Series C Preferred Stock, thereafter the number or amount of such other property
or securities so receivable upon exercise of any Right and the Purchase Price
thereof shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Series C Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h),
(i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof
with respect to the Series C Preferred Stock shall apply on like terms to any
such property or securities.
21
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the Purchase Price adjusted as of the date of such
issuance, the number of one one-hundredths of a share of Series C Preferred
Stock purchasable hereunder upon exercise of the Rights as of the date of such
issuance, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Series C Preferred Stock (calculated to the
nearest one-millionth) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-hundredths of a share of Series C Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the number
of one one-hundredths of a share of Series C Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and
22
shall be registered in the names of the holders of record of Rights Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of Series C
Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per one one-hundredth of a share and the number of one
one-hundredths of a share which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value, if any, of
the number of one one-hundredths of a share of Series C Preferred Stock issuable
upon exercise of the Rights, the Company shall take any corporate action that
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of one
one-hundredths of a share of Series C Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 requires
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date the number of one one-hundredths of a share of Series C Preferred Stock and
other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-hundredths of a share of Series C
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such holder's right
to receive such additional shares (fractional or otherwise) or securities upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Series C Preferred Stock, (ii) issuance wholly for cash of
any shares of Series C Preferred Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Series C Preferred Stock or
securities that by their terms are convertible into or exchangeable for shares
of Series C Preferred Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Series C Preferred Stock are not taxable to such
stockholders.
(n) The Company shall not, at any time after the
Distribution Date consummate any Section 13 Event, if (x) at the time of or
immediately after such
23
Section 13 Event there are any rights, warrants or other instruments or
securities outstanding or agreements in effect that would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such Section 13 Event, the
shareholders of the Person who constitutes, or would constitute, the Principal
Party for purposes of Section 13(a) hereof have received a distribution of
Rights previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it shall not, except as permitted by Section 23 or Section 27
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights; provided, however, that the issuance of additional Rights pursuant to
this Agreement shall not be deemed to violate this Section 11(o).
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company at any time after the Record Date
(i) declares a dividend on the outstanding shares of Company Common Stock
payable in shares of Company Common Stock, (ii) subdivides the outstanding
shares of Company Common Stock or (iii) combines the outstanding shares of
Company Common Stock into a smaller number of shares, the number of Rights
associated with each share of Company Common Stock then outstanding, or issued
or delivered thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated (whether before or after the Distribution Date)
with each share of Company Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with each share
of Company Common Stock immediately prior to such event by a fraction, the
numerator of which shall be the total number of shares of Company Common Stock
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Company Common Stock outstanding
immediately following the occurrence of such event. For purposes of this Section
11(p), any shares of Company Common Stock issued after the Distribution Date
that were not issued together with a Right (pursuant to the preamble hereto or
by action of the Board pursuant to Section 22 hereof) shall not be counted as
outstanding.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Series C Preferred Stock and Company Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Company Common Stock) in accordance with
Section 25 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained.
24
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company consolidates with, or
merges with and into, any other Person (other than a Subsidiary of the Company
in a transaction that complies with Section 11(o) hereof), and the Company is
not the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) consolidates with, or merges with or into,
the Company, and the Company is the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Company Common Stock is changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (z) the Company sells or otherwise transfers (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets, cash flow or earning power aggregating 50% or
more of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or any Subsidiary of the Company in one or more transactions each of that
complies with Section 11(o) hereof), then, and in each such case (except as may
be contemplated by Section 13(d) hereof):
(i) proper provision shall be made so that
each holder of a Right, except as provided in Section 7(e) hereof, thereafter
has the right to receive, upon the exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of Series C
Preferred Stock such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common Stock of the Principal
Party, not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by dividing (x) the
product of (1) the then current Purchase Price times (2) the number of
one-one-hundredths of a share of Series C Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event (or,
if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, the product of (1) the number of such one one-hundredths of a
share for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event times (2) the Purchase Price in effect
immediately prior to such first occurrence) (such product, following the first
occurrence of a Section 13 Event, shall be the "PURCHASE PRICE" for each Right
and for all purposes of this Agreement) by (y) 50% of the current market price
(determined in the same manner as the Current Market Price of the Company Common
Stock pursuant to Section 11(d)(i) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter
be liable for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company under this Agreement;
25
(iii) the term "COMPANY" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of a Section 13
Event as may be necessary to assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii)
hereof shall be of no further force and effect following the first occurrence of
any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of Section 13(a), the Person that is
the issuer of any securities into which shares of Company Common Stock are
converted in such merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction
described in clause (z) of the first sentence of Section 13(a), the Person that
is the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stock of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate a Section 13
Event unless (x) the Principal Party has a sufficient number of authorized
shares of its Common Stock that have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Agreement; and
(y) prior to such consummation, the Company and such Principal Party have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
26
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party shall:
(i) prepare and file a registration
statement under the Securities Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form, and
shall use its best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the Final Expiration Date; and
(ii) deliver to holders of the Rights
historical financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for registration on
Form 10 under the Exchange Act.
(d) The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other transfers. In
the event that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights that have not theretofore been
exercised shall thereafter become exercisable in the manner described in Section
13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates that evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the principal national securities exchange or automated quotation
system on which the Rights are listed or admitted to trading, or if the Rights
are not listed or admitted to trading on any national securities exchange or
automated quotation system, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the Nasdaq or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board. If on any such date no such market maker is
making a market in the Rights the fair value of the Rights on such date as
determined in good faith by the Board shall be used.
27
(b) The Company shall not be required to issue
fractions of shares of Series C Preferred Stock (other than fractions that are
integral multiples of one one-hundredth of a share of Series C Preferred Stock)
upon exercise of the Rights or to distribute certificates that evidence
fractional shares of Series C Preferred Stock (other than fractions that are
integral multiples of one one-hundredth of a share of Series C Preferred Stock).
Fractions of Series C Preferred Stock in integral multiples of one one-hundredth
of a share of Series C Preferred Stock may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Series C Preferred Stock. In lieu of fractional shares of Series C Preferred
Stock that are not integral multiples of one one-hundredth of a share of Series
C Preferred Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one
one-hundredth of a share of Series C Preferred Stock. For purposes of this
Section 14(b), the current market value of a share of Series C Preferred Stock
shall be the closing price of a share of Series C Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares of Company Common
Stock upon exercise of the Rights or to distribute certificates that evidence
fractional shares of Company Common Stock. In lieu of fractional shares of
Company Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one share of
Company Common Stock. For purposes of this Section 14(c), the current market
value of one share of Company Common Stock shall be the closing price of one
share of Company Common Stock (as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this Section
14.
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
Company Common Stock); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the Company Common Stock), without the
consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of Company Common Stock), may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act
28
in respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall
be transferable only in connection with the transfer of the Company Common Stock
associated therewith;
(b) after the Distribution Date, the Rights
Certificates shall be transferable (subject to Section 7(e) hereof) only on the
registry books of the Rights Agent if surrendered at the principal office or
offices of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Company
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Company Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be affected by any notice
to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its reasonable best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be
29
deemed for any purpose the holder of the number of one one-hundredths of a share
of Series C Preferred Stock or any other securities of the Company that may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights of
a stockholder of the Company, including, without limitation, any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or other distributions,
subscription rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. CONCERNING THE RIGHTS AGENT. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered or omitted by
it in connection with its administration of this Agreement in reliance upon any
Rights Certificate or certificate for Company Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or
any successor Rights Agent is merged or with which it is consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent is a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; PROVIDED, HOWEVER, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement, any of the Rights Certificates have been
countersigned but not
30
delivered, any such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates have not been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force and effect provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent
is changed and at such time any of the Rights Certificates have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates have not been countersigned,
the Rights Agent may countersign such Rights Certificates either in its prior
name or in its changed name; and in all such cases such Rights Certificates
shall have the full force and effect provided in the Rights Certificates and in
this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent deems it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "current market price") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates or be required to verify the same (except as to
its countersignature on such
31
Rights Certificates), but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after actual notice
of any such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Company Common Stock or Series C Preferred Stock to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any shares of Company
Common Stock or Series C Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company shall perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or
32
for any loss to the Company resulting from any such act, default, neglect or
misconduct provided, however, reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without first consulting
with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company, and to each
transfer agent of Company Common Stock and Series C Preferred Stock, by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of
Company Common Stock and Series C Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If the
Rights Agent resigns or is removed or otherwise becomes incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company fails to
make such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or of the State of New York (or of any other
state of the United States so long as such corporation is authorized to do
business as a banking institution in the State of New York), in good standing,
having a principal office in the State of New York, which is authorized under
such laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$100,000,000. 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; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it
33
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Company Common Stock and
the Series C Preferred Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Company Common
Stock following the Distribution Date and prior to the redemption or expiration
of the Rights, the Company (a) shall, with respect to shares of Company Common
Stock so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, granted or awarded as of the Distribution Date, or
upon the exercise, conversion or exchange of securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued if, and to the extent that, the Company
is advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment otherwise has been
made in lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION. (a) The Board may, at
its option, at any time prior to the earlier of (i) the Close of Business on the
tenth day following the Stock Acquisition Date (or, if not a Trading Day, the
nearest Trading Day after such tenth day), or (ii) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a redemption
price of $0.01 per Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"REDEMPTION PRICE"). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company's right of redemption
hereunder has expired. The Company may, at its option, pay the Redemption Price
in cash, shares of Company Common Stock (based on the Current Market Price per
share of Company Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
34
(b) Upon the action of the Board ordering the
redemption of the Rights and the filing of evidence thereof with the Rights
Agent, without any further action and without any notice, the right to exercise
the Rights shall terminate, and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each Right so held. Promptly
after the action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent and
the holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the Transfer Agent for Company Common Stock. Any notice that is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption shall state the method by which the
payment of the Redemption Price will be made.
Section 24. EXCHANGE. (a) The Board may, at its option, at any
time after the right of the Company to redeem the Rights has expired or
terminated, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that become void pursuant to the provisions of
the Section 7(e) hereof) for shares of Company Common Stock or Company Common
Stock Equivalents, or any combination thereof, at an exchange ratio of one share
of Company Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "EXCHANGE RATIO").
(b) Immediately upon the action of the Board ordering
the exchange of any Rights pursuant to subsection (a) of this Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Company Common Stock and/or Company
Common Stock Equivalents equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; PROVIDED, HOWEVER, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their latest addresses as they appear upon the registry books of the
Rights Agent. Any notice that is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange shall state the method by which the exchange of the shares of Company
Common Stock for Rights 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 than Rights that
have become void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In the event that the number of shares of Company
Common Stock that are authorized by the Company's Certificate of Incorporation
but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights
35
are not sufficient to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company may, at its option, take all such
action as may be necessary to authorize additional shares of Company Common
Stock for issuance upon exchange of the Rights. In any exchange pursuant to this
Section 24, the Company, at its option, may substitute Series C Preferred Stock
for Company Common Stock at the rate of one one-hundredth of a share of Series C
Preferred Stock for each Right.
(d) The Company shall not be required to issue
fractions of shares of Company Common Stock or to distribute certificates that
evidence fractional shares of Company Common Stock. In lieu of such fractional
shares of Company Common Stock, the Company shall pay to the registered holders
of Rights with regard to which such fractional shares of Company Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of the
value of a whole share of Company Common Stock. For purposes of this Section 24,
the value of a whole share of Company Common Stock shall be the closing price
(as determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24, and the value of any common stock equivalent shall be deemed to have
the same value as the common stock on such date.
Section 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company
shall propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Series C Preferred Stock or to
make any other distribution to the holders of Series C Preferred Stock (other
than a regular quarterly cash dividend out of earnings or retained earnings of
the Company), or (ii) to offer to the holders of Series C Preferred Stock rights
or warrants to subscribe for or to purchase any additional shares of Series C
Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Series C Preferred
Stock (other than a reclassification involving only the subdivision of
outstanding shares of Series C Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(o) hereof), or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one transaction or a series of related
transactions, of 50% or more of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of that complies with Section 11(o) hereof), or (v) to effect
the liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Series C Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 20 days prior to the record date
for determining holders of the shares of Series C Preferred Stock
36
for purposes of such action, and in the case of any such other action, at least
20 days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Series C Preferred Stock
whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the Company shall as
soon as practicable thereafter give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Series C Preferred Stock shall be
deemed thereafter to refer to Company Common Stock and/or, if appropriate, other
securities.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
CoreComm Limited
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Continental Stock Transfer & Trust Company
0 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman of the Board
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of certificates
representing shares of Company Common Stock) shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this
37
Agreement without the approval of any holders of certificates representing
shares of Company Common Stock. From and after the Distribution Date and subject
to the penultimate sentence of this Section 27, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable and that shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person); provided, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Company Common Stock.
Section 28. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. For all purposes of this Agreement, any calculation of the
number of shares of Company Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Company Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
under the Exchange Act. The Board shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) that are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the
38
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of Company Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of Company Common Stock).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent Jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board determines
in its good faith judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 hereof shall be reinstated and shall
not expire until the Close of Business on the tenth day following the date of
such determination by the Board of Directors.
Section 32. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Attest: CORECOMM LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
---------------------- -------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Senior Vice President - Title:Chairman of the Board of
General Counsel and Secretary Directors
Attest: CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------- ------------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxxx
Title:Asst. Secretary Title: Vice President
EXHIBIT A
[Form of Certificate of Designation]
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF THE
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
CORECOMM LIMITED
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Section 1. Designation and Amount. The shares of this series of
preferred stock, par value $0.01 per share, shall be designated as "Series C
Junior Participating Preferred Stock," and the number of shares constituting
such series shall be 1,000,000.
Section 2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series C Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series C Junior Participating Preferred
Stock shall be entitled to receive, in preference to the holders of the Common
Stock, par value $0.01 per share, of the Corporation (the "Common Stock"), when,
as and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the fifteenth day of March,
June, September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series C Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $0.01 or (b)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series C Junior Participating Preferred Stock. In the event the
Corporation shall at any time after October 16, 2000 (the "Rights Declaration
Date") (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case, the amount to which holders of shares of Series C Junior Participating
Preferred Stock
2
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution
on the Series C Junior Participating Preferred Stock as provided in paragraph
(A) above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per share on the
Series C Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series C Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series C Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series C Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series C Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series C Junior
Participating Preferred Stock shall have the following voting rights:
(a) Subject to the provisions for adjustment hereinafter set
forth, each share of Series C Junior Participating Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which
3
holders of shares of Series C Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(b) Except as otherwise provided herein or by law, the holders
of shares of Series C Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(c) (i) If at any time dividends on any Series C Junior
Participating Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency shall xxxx the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series C Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series C Junior
Participating Preferred Stock) with dividends in arrears in an amount equal to
six (6) quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of
the holders of Series C Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the right
of the holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the holders of Preferred Stock
shall exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series C Junior
Participating Preferred Stock.
4
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding, irrespective of series,
may request, the calling of special meeting of the holders of Preferred Stock,
which meeting shall thereupon be called by the President, a Vice- President or
the Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to vote pursuant to
this paragraph (C) (iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him at his last address as the same
appears on the books of the Corporation. Such meeting shall be called for a time
not earlier than 20 days and not later than 60 days after such order or request
or in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (C) (iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed for the
next annual meeting of the stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until the holders
of Preferred Stock shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except as
provided in paragraph (C)(ii) of this Section 3) be filled by vote of a majority
of the remaining Directors theretofore elected by the holders of the class of
stock which elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the holders of a
particular class of stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the holders of
Preferred Stock as a class shall terminate, and (z) the number of Directors
shall be such number as may be provided for in the certificate of incorporation
or by-laws irrespective of any increase made pursuant to the provisions of
paragraph (C)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the certificate of
incorporation or bylaws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled by
a majority of the remaining Directors.
5
(d) Except as set forth herein, holders of Series C Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series C Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
C Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series C Junior
Participating Preferred Stock, except dividends paid ratably on the Series C
Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series C Junior
Participating Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series C Junior
Participating Preferred Stock;
(iv) purchase or otherwise acquire for consideration
any shares of Series C Junior Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series C Junior Participating Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation
6
unless the Corporation could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series C Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series C Junior Participating
Preferred Stock shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series C Liquidation Preference"). Following
the payment of the full amount of the Series C Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series C
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series C
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such event as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
C Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series C Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series C Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(b) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series C Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity with the Series C Junior Participating
Preferred Stock, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
7
(c) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash/or any other property, then in any such case the shares of
Series C Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind) as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series C Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series C Junior Participating
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series C Junior Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. The Restated Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series C Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Series C Junior Participating Preferred Stock, voting separately as a class.
Section Section 11. Fractional Shares. Series C Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to
8
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series C Junior Participating Preferred Stock.
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER __________ __, 200_ OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.
Rights Certificate
CORECOMM LIMITED
This certifies that ________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of August __, 1998 (the "Rights
Agreement"), between CoreComm Limited, a Bermuda corporation (the "Company"),
and Continental Stock Transfer & Trust Company, a New York corporation (the
"Rights Agent"), to purchase from the Company at any time prior to 5:00 P.M.
(New York City time) on __________ __, 200_ at the office or offices of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a full paid, non-assessable share of Series C Junior
Participating Preferred Stock (the "Series C Preferred Stock") of the Company,
at a purchase price of $50.00 per one one-hundredth of a share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed. The number
of Rights evidenced by this Rights Certificate (and the number of shares that
may be purchased upon exercise thereof) set forth above, and the Purchase Price
per share set forth above, are the number and Purchase Price as of [___________,
199_ ], based on the Series C Preferred Stock as constituted at such date. The
Company reserves the right to require prior to the occurrence of a Triggering
Event (as such term is defined in the Rights Agreement) that a number of Rights
be exercised so that only whole shares of Series C Preferred Stock will be
issued.
2
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, 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 Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Series C Preferred Stock or other securities,
that may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights 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
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-hundredths
of a share of Series C Preferred Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase. If this Rights Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $0.01 per Right at any time prior to the earlier of the
close of business on (i) the tenth day following the Stock Acquisition Date (as
such time period may be extended pursuant to the Rights Agreement), and (ii) the
Final Expiration Date.
No fractional shares of Series C Preferred Stock will be
issued upon the exercise of any Right or Rights evidenced hereby (other than
fractions that are integral
3
multiples of one one-hundredth of a share of Series C Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment shall be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of Series
C Preferred Stock or of any other securities of the company that may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
4
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated:
ATTEST: CORECOMM LIMITED
By: ______________________ By: ______________________
Name: Name:
Title: Title:
Countersigned:
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By: _______________________
Name:
Authorized Officer
5
(Form of Reverse Side of Rights Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: __________ , 2000
Signature
Signature Guaranteed:
6
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ______________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
7
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To: CORECOMM LIMITED:
The undersigned hereby irrevocably elects to exercise
___________ Rights represented by this Rights Certificate to purchase the shares
of Series C Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person that may be issuable upon
the exercise of the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced
by this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ______________
Signature
Signature Guaranteed:
8
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [
] are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ______________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
9
(a) Section 1(a) of the Rights Agreement is hereby amended by
adding the following to the end thereof:
"In addition, a Person shall not be deemed an Acquiring Person who has
reported or is required to report such Beneficial Ownership of shares
of Company Common Stock (but less than 20%) on Schedule 13G under the
Securities and Exchange Act of 1934, as amended and in effect on the
date of the Agreement (the "Exchange Act") (or any comparable or
successor report) or on Schedule 13D under the Exchange Act (or any
comparable or successor report) which Schedule 13D does not state any
intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the actions
specified in Item 4 of such schedule (other than the disposition of the
Company Common Stock) and, within 10 Business Days of being requested
by the Company to advise it regarding the same, certifies to the
Company that such Person acquired shares of Company Common Stock in
excess of 14.9% inadvertently or without knowledge of the terms of the
Rights and who, together with all Affiliates and Associates, thereafter
does not acquire additional shares of Company Common Stock while the
Beneficial Owner of 15% or more of the shares of Company Common Stock
then outstanding; provided, however, that if the Person requested to so
certify fails to do so within 10 Business Days, then such Person shall
become an Acquiring Person immediately after such 10-Business Day
period."
