EXHIBIT 4.0
RIGHTS AGREEMENT
BY AND BETWEEN
COLLATERAL THERAPEUTICS, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
AS RIGHTS AGENT
DATED AS OF
SEPTEMBER 19, 2001
TABLE OF CONTENTS
PAGE
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Section 1. CERTAIN DEFINITIONS.............................................................................1
Section 2. APPOINTMENT OF RIGHTS AGENT.....................................................................5
Section 3. ISSUE OF RIGHTS CERTIFICATES....................................................................6
Section 4. FORM OF RIGHTS CERTIFICATES.....................................................................7
Section 5. COUNTERSIGNATURE AND REGISTRATION...............................................................7
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES; MUTILATED,
DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES...................................................8
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS...................................8
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES............................................10
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK................................................11
Section 10. PREFERRED STOCK RECORD DATE....................................................................12
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.............................12
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.....................................20
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER...........................20
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES........................................................23
Section 15. RIGHTS OF ACTION...............................................................................24
Section 16. AGREEMENT OF RIGHTS HOLDERS....................................................................24
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.............................................25
Section 18. CONCERNING THE RIGHTS AGENT....................................................................25
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT......................................26
Section 20. DUTIES OF RIGHTS AGENT.........................................................................28
Section 21. CHANGE OF RIGHTS AGENT.........................................................................28
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES............................................................29
Section 23. REDEMPTION AND TERMINATION.....................................................................30
i.
Section 24. EXCHANGE.......................................................................................31
Section 25. NOTICE OF CERTAIN EVENTS.......................................................................32
Section 26. NOTICES........................................................................................33
Section 27. SUPPLEMENTS AND AMENDMENTS.....................................................................34
Section 28. SUCCESSORS.....................................................................................34
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS...........................................34
Section 30. BENEFITS OF THIS AGREEMENT.....................................................................35
Section 31. SEVERABILITY...................................................................................35
Section 32. GOVERNING LAW..................................................................................35
Section 33. COUNTERPARTS...................................................................................35
Section 34. DESCRIPTIVE HEADINGS...........................................................................35
EXHIBITS
Exhibit A Form of Certificate of Designation of Series A Junior
Participating Preferred Stock
Exhibit B Form of Rights Certificate
Exhibit C Summary of Rights to Purchase Shares of Series A Preferred
Stock
ii.
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of September 19, 2001 (the
"AGREEMENT"), by and between Collateral Therapeutics, Inc., a
Delaware
corporation (the "COMPANY"), and American Stock Transfer & Trust Company, (the
"RIGHTS AGENT").
WHEREAS, effective September 19, 2001 (the "RIGHTS DIVIDEND
DECLARATION DATE"), the board of directors of the Company authorized and
declared a distribution of one Right (each, a "RIGHT") for each share of Common
Stock (as hereinafter defined) of the Company outstanding as of the Close of
Business (as hereinafter defined) on October 1, 2001 (the "RECORD DATE"), each
Right initially representing the right to purchase one one-thousandth of a share
(a "UNIT") of Preferred Stock (as hereinafter defined) upon the terms and
subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each share of Common Stock of
the Company that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements herein set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
"ACQUIRING PERSON" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 20% or more of the shares of
Common Stock of the Company then outstanding, but shall not include (1) the
Company, any Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company, or
any entity holding shares of Common Stock of the Company for or pursuant to the
terms of any such plan Notwithstanding the foregoing:
(i) no Person shall become an "Acquiring Person" as the
result of an acquisition of shares of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 20%
or more of the shares of Common Stock of the Company then outstanding;
PROVIDED, HOWEVER, that if a Person shall become the Beneficial Owner
of 20% or more of the shares of Common Stock of the Company then
outstanding as a result of any such acquisition of shares of Common
Stock by the Company and shall, after such acquisition of shares by the
Company, become the Beneficial Owner of any additional shares of Common
Stock of the Company (other than as a result of a stock dividend, stock
split or similar transaction effected by the Company in which all
holders of Common Stock of the Company are treated equally) (or, in the
case of the members of the Investor Group, become the Beneficial Owner
of any additional shares of Common Stock of the Company), then such
Person shall be deemed to be an "Acquiring Person" hereunder;
1.
(ii) no Person who, alone or together with all Affiliates
and Associates of such Person, was, at the time of the public
announcement by the Company of the declaration by its Board of
Directors on September 19, 2001 of the dividend distribution of the
Rights, the Beneficial Owner of 20% or more of the Common Stock of the
Company then outstanding shall be deemed to have become an Acquiring
Person unless and until such time as (A) such Person or any Affiliate
or Associate of such Person thereafter becomes the Beneficial Owner of
any additional Common Stock of the Company (other than as a result of a
stock dividend, stock split or similar transaction effected by the
Company in which all holders of Common Stock of the Company are treated
equally); and
(iii) if the board of directors of the Company determines
in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the provisions of subparagraph (i), has
become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock of the
Company so that such Person would no longer be an "Acquiring Person,
then such Person shall not be deemed to be an "Acquiring Person" for
any purpose of this Agreement.
"ADJUSTMENT SHARES" shall have the meaning set forth in
Section 11(a)(ii).
"AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the Exchange Act Regulations (as
hereinafter defined) as in effect on the date of this Agreement.
A Person shall be deemed the "BENEFICIAL OWNER" of, and shall
be deemed to "beneficially own," any securities:
(A) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly, for purposes
of Section 13(d) of the Exchange Act (as hereinafter defined) and Rule
13d-3 thereunder (or any comparable or successor law or regulation); or
(B) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately, contingently or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing, other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; PROVIDED, HOWEVER, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; PROVIDED FURTHER, 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: (x) arises solely from a
revocable proxy given in
2.
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the Exchange Act
and the Exchange Act Regulations, and (y) is not reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(C) which are beneficially owned, directly or indirectly,
by any other Person (or any 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,
other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to clause (B) of subparagraph
(ii) above) or disposing of any securities of the Company; PROVIDED,
HOWEVER, that in no case shall an officer or director of the Company be
deemed (A) the Beneficial Owner of any securities beneficially owned by
another officer or director of the Company solely by reason of actions
undertaken by such persons in their capacity as officers or directors
of the Company or (B) the Beneficial Owner of securities held of record
by the trustee of any employee benefit plan of the Company or any
Subsidiary of the Company for the benefit of any employee of the
Company or any Subsidiary of the Company, other than such officer or
director, by reason of any influence that such officer or director may
have over the voting of the securities held in the plan;
Notwithstanding anything in this definition of "Beneficial Owner" and
"beneficially own" to the contrary, the phrase "then outstanding," when used
with reference to a Person who is the Beneficial Owner of securities of the
Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to beneficially own hereunder.
"BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
"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.
"COMMON STOCK" when used with reference to the Company shall
mean the shares of common stock, par value $.001, of the Company. "Common Stock"
when used with reference to any Person other than the Company shall mean the
capital stock (or other equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.
"COMPANY" shall have the meaning set forth in the forepart of
this Agreement.
"CURRENT PER SHARE MARKET PRICE" shall have the meaning set
forth in Section 11(d)(i).
3.
"CURRENT VALUE" shall have the meaning set forth in Section
11(a)(iii).
"DISTRIBUTION DATE" shall have the meaning set forth in
Section 3(a).
"EQUIVALENT PREFERRED SHARES" shall have the meaning set forth
in Section 11(b).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any successor statute.
"EXCHANGE ACT REGULATIONS" shall mean the Rules and
Regulations under the Exchange Act, as amended from time to time (including any
successor rules).
"EXCHANGE RATIO" shall have the meaning set forth in Section
24.
"EXPIRATION DATE" shall have the meaning set forth in Section
7(a).
"FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7(a).
"NASDAQ" shall have the meaning set forth in Section 11(d).
"PERSON" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
"PREFERRED STOCK" shall mean shares of Series A Preferred
Stock, par value $.001, of the Company having the rights and preferences set
forth in the Form of Certificate of Designation attached to this Agreement as
Exhibit A.
"PREFERRED STOCK EQUIVALENTS" shall have the meaning set forth
in Section 11(a)(iii).
"PRINCIPAL PARTY" shall have the meaning set forth in Section
13.
"PURCHASE PRICE" shall have the meaning set forth in Section
7(b).
"RECORD DATE" shall have the meaning set forth in the recitals
to this Agreement.
"REDEMPTION DATE" shall have the meaning set forth in Section
7(a).
"REDEMPTION PRICE" shall have the meaning set forth in Section
23(a).
"RIGHT" shall have the meaning set forth in the recitals to
this Agreement.
"RIGHTS AGENT" shall have the meaning set forth in the
forepart of this Agreement and shall include any Person that shall become a
successor Rights Agent pursuant to the terms of this Agreement.
"RIGHTS CERTIFICATE" shall have the meaning set forth in
Section 3(a).
4.
"RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning set
forth in the recitals to this Agreement.
"SECTION 11(A)(II) EVENT" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C).
"SECTION 11(A)(II) TRIGGER DATE" shall have the meaning set
forth in Section 11(a)(iii).
"SECTION 13 EVENT" shall mean any event described in clause
(x), (y) or (z) of Section 13(a).
"SECTION 24(A) EXCHANGE RATIO" shall have the meaning set
forth in Section 24(a).
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any successor statute.
"SHARE 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) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
"SPREAD" shall have the meaning set forth in Section
11(a)(iii).
"SUBSIDIARY" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
"SUMMARY OF RIGHTS" shall have the meaning set forth in
Section 3(b).
"TRADING DAY" shall have the meaning set forth in Section
11(d)(i).
"TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
"UNIT" shall have the meaning set forth in the recitals to
this Agreement.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions of this Agreement, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint co-Rights Agents as it
may deem necessary or desirable upon ten days prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights agent.
5.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on the tenth
(10th) day after the Share Acquisition Date and (ii) the Close of Business on
the tenth Business Day (or such later date as may be determined by action of the
Company's board of directors prior to such time as any Person becomes an
Acquiring Person and of which the Company will give the Rights Agent prompt
written notice) after the date that a tender 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 entity holding
shares of Common Stock for or pursuant to the terms of any such plan) is
commenced within the meaning of Rule 14d-4(a) of the Exchange Act Regulations,
if upon consummation thereof such Person would be the Beneficial Owner of 20% or
more of the shares of Common Stock of the Company then outstanding (the earlier
of (i) and (ii) above being the "DISTRIBUTION DATE"), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b)) by the certificates for
shares of Common Stock of the Company registered in the names of the holders
thereof (which certificates shall also be deemed to be Rights Certificates) and
not by separate Rights Certificates, and (y) the right to receive Rights
Certificates will be transferable only in connection with the transfer of shares
of Common Stock of the Company. As soon as practicable after the Distribution
Date, the Company will notify the Rights Agent of the occurrence of the
Distribution Date and the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of shares of Common Stock of the Company as of the Close
of Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Rights Certificate, in substantially the form of
EXHIBIT B (a "RIGHTS CERTIFICATE"), evidencing one Right for each share of
Common Stock so held. From and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form of EXHIBIT C (the "SUMMARY OF RIGHTS"), by first-class,
postage-prepaid mail, to each record holder of shares of Common Stock of the
Company as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Company. Until the Distribution Date (or the
Expiration Date), the surrender for transfer of any certificate for shares of
Common Stock of the Company outstanding on the Record Date shall also constitute
the transfer of the Rights associated with the shares of Common Stock
represented thereby.
(c) Rights will be issued by the Company in respect of all Common
Shares (other than Common Shares issued upon the exercise or exchange of any
Right) issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates for such
shares of Common Stock shall have impressed on, printed on, written on or
otherwise affixed to them the following legend (or such other legend as the
Company may deem appropriate that is not inconsistent with the provisions of
this Agreement):
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a
Rights Agreement between
Collateral Therapeutics, Inc. and American Stock Transfer &
Trust Company
6.
dated as of September 19, 2001 (the "
Rights Agreement"), the
terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices
of Collateral Therapeutics, Inc. Under certain circumstances,
as set forth in the
Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be
evidenced by this certificate. Collateral Therapeutics, Inc.
will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written
request therefor. Under certain circumstances, as set forth in
the
Rights Agreement, Rights issued to any Person who becomes
an Acquiring Person (as defined in the
Rights Agreement),
whether currently held by or on behalf of such person or by
any subsequent holder, may become null and void.
If the Company purchases or acquires any shares of Common Stock of the Company
after the Record Date but prior to the Distribution Date, any Rights associated
with such shares of Common Stock of the Company shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with any shares of Common Stock of the Company which are no longer
outstanding.
Section 4. FORM OF RIGHTS CERTIFICATES. The Rights
Certificates (and the forms of election to purchase Units of Preferred Stock and
of assignment to be printed on the reverse thereof) shall be substantially the
same as Exhibit B and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or transaction reporting system on which the Rights may from time to
time be listed or traded, or to conform to usage. Subject to the provisions of
Sections 11 and 22, the Rights Certificates shall entitle the holders thereof to
purchase the number of Units of Preferred Stock as shall be set forth therein at
the price per Unit of Preferred Stock set forth therein, but the number of such
Units of Preferred Stock and the Purchase Price shall be subject to adjustment
as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by any officer of the Company, either manually or by facsimile
signature, shall have affixed thereto the Company's seal or a facsimile thereof,
and shall be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates shall be
countersigned by the Rights Agent and shall not be valid for any purpose unless
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. Any Rights Certificate may be signed on behalf of the Company by
any Person who, at the actual date of the execution of such Rights Certificate,
shall be a proper
7.
officer of the Company to sign such Rights Certificate, although at the date of
this Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purpose, books for
registration and transfer of the Rights Certificates issued under this
Agreement. Such books shall 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 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 Sections 4(b), 7(e) and 14, at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the Expiration Date, any Rights Certificate or
Rights Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Rights Certificates evidencing exercisable Rights,
entitling the registered holder to purchase a like number of Units of Preferred
Stock (or, following a Triggering Event, other securities, cash or other assets,
as the case may be) as the Rights Certificate or Rights Certificates surrendered
then entitled such holder 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 office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 4(b), 7(e) and 14,
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 of indemnity or security reasonably satisfactory to
them, and, at the Company's request, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will make and deliver a new Rights Certificate of like tenor to the
Rights Agent for delivery to the registered holder in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) The registered holder of any Rights Certificate evidencing
exercisable Rights may exercise the Rights evidenced thereby (except as
otherwise provided in this Agreement) in whole
8.
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 related certification
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Purchase Price for each Rights
being exercised (as such amount may be reduced (including to zero) pursuant to
Section 11(a)(iii)) and an amount equal to any applicable transfer tax required
to be paid by the holder of such Rights Certificate in accordance with Section 9
in cash, or by certified check, wire transfer or bank draft payable to the order
of the Company), at or prior to the earliest of (i) the Close of Business on the
tenth (10th) anniversary hereof (the "FINAL EXPIRATION DATE"), (ii) the time at
which the Rights are redeemed as provided in Section 23 (the "REDEMPTION DATE"),
and (iii) the time at which such Rights are exchanged as provided in Section 24
(the earliest of (i), (ii) and (iii) being the "EXPIRATION DATE").
(b) The Purchase Price for each Unit of Preferred Stock pursuant
to the exercise of a Right shall initially be $85.00, shall be subject to
adjustment from time to time as provided in Sections 11 and 13, and shall be
payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate evidencing exercisable
Rights (with the form of election to purchase duly executed) accompanied by
payment as provided in Section 7(a), the Rights Agent shall, subject to Section
20(k), thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Stock a certificate or certificates for the number of Units of
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 Units of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent of a depositary receipt or depositary receipts representing
such number of Units of Preferred Stock as are to be purchased (in which case
certificates for the Units of Preferred Stock represented by such receipt or
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) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14;
(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) when appropriate, after receipt thereof, deliver such cash to
or upon the order of the registered holder of such Rights Certificate. If the
Company is obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a), the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
(d) If the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing a number of Rights equivalent to the number of Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of such
Rights Certificate or to such registered holder's duly authorized assigns,
subject to Section 14.
(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
9.
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; (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 which the board of directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e); or (iv) any
subsequent transferee 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 or any Rights Certificate which formerly evidenced such Rights, and
neither the Company nor the Rights Agent shall have any obligations whatsoever
with respect to such Rights or any Rights Certificate, whether under any
provision of this Agreement or otherwise. Without limiting the generality or
effect of the immediately preceding sentence, following the occurrence of a
Triggering Event, no Right Certificate will be issued pursuant to Section 3 or
Section 6 evidencing Rights that shall have become void pursuant to the
provisions of this Section 7(e), and any Rights Certificate surrendered to the
Company or the Rights Agent that formerly evidenced Rights that shall have
become void pursuant to the foregoing provisions of this Section 7(e) will be
canceled without any consideration being payable in respect thereof.
Notwithstanding anything to the contrary contained in this Agreement, neither
the Company nor the Rights Agent shall have any liability to any holder of
Rights Certificates or to any other Person as a result of its making or failing
to make any determinations with respect to an Acquiring Person or any of such
Acquiring Person's Affiliates, Associates or transferees or taking or failing to
take any actions with respect any Rights or Rights Certificates of any such
Person.
(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) 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 to any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by 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
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
10.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will use its best
efforts to cause to be reserved and kept available out of and to the extent of
its authorized and unissued Preferred Stock not reserved for another purpose
that will be sufficient to permit the exercise in full of all outstanding
Rights. Upon the occurrence of any events resulting in an increase in the
aggregate number of shares of Preferred Stock (or other equity securities of the
Company) issuable upon exercise of all outstanding Rights above the number then
reserved, the Company shall make appropriate increases in the number of shares
so reserved.
(b) If the Units of Preferred Stock to be issued and delivered
upon the exercise of the Rights are at any time listed on a national securities
exchange or included for quotation on any transaction reporting system, the
Company shall during the period from the Distribution Date to the Expiration
Date use its best efforts to cause all shares reserved for such issuance to be
listed on such exchange or included for quotation on any such transaction
reporting system upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is 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 Expiration Date. The Company
will also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection with
the exercisability of the Rights. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction, unless the requisite qualification of the offering made upon
exercise of the Rights in such jurisdiction shall have been obtained, or an
exemption therefrom shall be available and until a registration statement has
been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Units of Preferred Stock (and,
following the occurrence of a Triggering Event, any other securities that may be
delivered upon exercise of Rights) shall, at the time of delivery of the
certificates for such Units of Preferred Stock (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
non-assessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Rights Certificates
or of any Units of Preferred Stock upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for
Units of Preferred Stock in a name other than that of, the registered holder of
the Rights Certificate evidencing Rights
11.
surrendered for exercise or to issue or to deliver any certificates or
depositary receipts for Units of Preferred Stock upon the exercise of any Rights
until any such tax 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 reasonable satisfaction that no such tax is due.
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose
name any certificate for Units of Preferred Stock (or, following the occurrence
of a Triggering Event, other securities) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
other securities) represented thereby on, and such certificate shall be dated,
at the Close of Business on the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; PROVIDED, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or,
following the occurrence of a Triggering Event, other securities) transfer books
of the Company are closed, such Person shall be deemed to have become the record
holder of such shares at the Close of Business on, and such certificate shall be
dated, the next succeeding Business Day on which such transfer books are open;
PROVIDED FURTHER, however, that if delivery of Units of Preferred Stock (or such
other securities) is delayed pursuant to Section 9(c), such Persons shall be
deemed to have become the record holders of such Units of Preferred Stock (or
such other securities) only when such Units first become deliverable. 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 securities 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 expressly provided in this
Agreement.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kinds of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number of
shares Preferred Stock, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11(a),
the Purchase Price in effect at the time of the Record Date for such dividend or
of the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of capital stock for which the Rights shall be
exercisable, shall be proportionately adjusted so that the holder of any Rights
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
capital stock which, if such Rights had been exercised immediately prior to such
date and at a time when the applicable transfer books were open, such holder
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; PROVIDED, HOWEVER,
12.
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock
issuable upon exercise of one Right. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition, and shall
be made prior, to any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24, if:
(A) any Person shall become an Acquiring Person, unless
the event causing the Person to become an Acquiring Person is a
transaction to which the provisions of Section 13(a) apply;
(B) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, shall (1) merge into the Company or otherwise
combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and shares of
Common Stock of the Company shall remain outstanding and unchanged, (2)
in one transaction or a series of transactions, transfer any assets to
the Company or any of its Subsidiaries in exchange (in whole or in
part) for shares of Common Stock of the Company, for other equity
securities of the Company or any of its Subsidiaries, or for securities
exercisable for or convertible into shares of equity securities of the
Company or any of its Subsidiaries (whether shares of Common Stock of
the Company or otherwise) or otherwise obtain from the Company or any
of its Subsidiaries, with or without consideration, any additional
shares of such equity securities or securities exercisable for or
convertible into such equity securities (other than pursuant to a pro
rata distribution to all holders of shares of Common Stock of the
Company), (3) sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with the Company or any of its
Subsidiaries or any employee benefit plan maintained by the Company or
any of its Subsidiaries or any trustee or fiduciary with respect to
such plan acting in such capacity, assets (including securities) on
terms and conditions less favorable to the Company or such Subsidiary
or plan than those that could have been obtained in arm's-length
negotiations with an unaffiliated third party, other than pursuant to a
transaction set forth in Section 13(a), (4) sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose
of, in one transaction or a series of transactions, to, from or with
the Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity (other than
transactions, if any, consistent with those engaged in, as of the date
hereof, by the Company and such Acquiring Person or such Associate or
Affiliate), assets (including securities or intangible assets) having
an aggregate fair market value of more than $5,000,000, other than
pursuant to a transaction set forth in Section 13(a), (5) receive, or
any designee, agent or representative of such Acquiring Person or any
Affiliate or Associate of such Acquiring Person shall receive, any
compensation from the Company or any of its Subsidiaries other than
compensation for full-time employment as a regular employee at rates in
accordance with the
13.
Company's (or its Subsidiaries') past practices, or (6) receive the
benefit, directly or indirectly (except proportionately as a holder of
shares of Common Stock of the Company or as required by law or
governmental regulation), of any loans, advances, guarantees, pledges
or other financial assistance or any tax credits or other tax
advantages provided by the Company or any of its Subsidiaries or any
employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity; or
(C) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or any merger
or consolidation of the Company with any of its Subsidiaries or any
other transaction or series of transactions involving the Company or
any of its Subsidiaries, other than a transaction or transactions to
which the provisions of Section 13(a) apply (whether or not with or
into or otherwise involving an Acquiring Person), which has the effect,
directly or indirectly, of increasing by more than one percent the
proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries that is directly
or indirectly beneficially owned by any Acquiring Person or any Person
or any Associate or Affiliate of any Acquiring Person;
then promptly following the occurrence of an event described
in Section 11(a)(ii)(A), (B) or (C) (a "SECTION 11(A)(II) EVENT"),
proper provision shall be made so that each holder of a Right, except
as otherwise provided in Section 7(e), shall thereafter have the right
to receive for each Right, upon exercise thereof in accordance with the
terms of this Agreement and payment of the then-current Purchase Price,
in lieu of the number of Units of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, such number of Units of Preferred Stock as shall equal
the result obtained by multiplying the then-current Purchase Price by
the then number of Units of Preferred Stock for which a Right was
exercisable (or would have been exercisable if the Distribution Date
had occurred) immediately prior to the first occurrence of a Triggering
Event, and dividing that product by 50% of the Current Per Share Market
Price for shares of Common Stock on the date of occurrence of the
Triggering Event (such number of Units of Preferred Stock being
hereinafter referred to as the "ADJUSTMENT SHARES"). Upon the
occurrence of a Section 13 Event, any Rights that shall not have been
previously exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only pursuant to Section 13 and not pursuant
to this Section 11(a)(ii).
(iii) In the event that the number of shares of Preferred
Stock which 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 are not sufficient to permit the
exercise in full of the Rights, or if any necessary regulatory approval
for such issuance has not been obtained by the Company, the Company
shall, in lieu of issuing Units of Preferred Stock in accordance with
Section 11(a)(ii) hereof: (A) determine the excess of (1) the value of
the Units of Preferred Stock issuable upon the exercise of a Right (the
"CURRENT VALUE") over (2) the Purchase Price (such excess being
referred to as the "SPREAD") and (B) with respect to each Right, make
adequate provision to
14.
substitute for such Units of Preferred Stock, upon exercise of the
Rights, (1) cash, (2) a reduction in the Purchase Price, (3) other
equity securities of the Company (including, without limitation, Common
Stock of the Company or shares or units of shares of any series of
preferred stock which the board of directors of the Company shall have
conclusively deemed to have the same value as the Units of Preferred
Stock (such shares or units of preferred stock are herein called
"PREFERRED STOCK EQUIVALENTS")), except to the extent that the Company
has not obtained any necessary regulatory approval for such issuance,
(4) debt securities of the Company, except to the extent that the
Company has not obtained any necessary regulatory approval for such
issuance, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, as determined by
the board of directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the board of
directors of the Company (which determination shall be described in a
statement filed with the Rights Agent and shall be conclusive and
binding on the Rights Agent, the holders of the Rights and all other
Persons); PROVIDED, HOWEVER, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within
thirty calendar days following the later of (x) 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)(III) 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, Units of Preferred Stock (to the extent available), except to
the extent that the Company has not obtained any necessary regulatory
approval for such issuance, and then, if necessary, cash, having an
aggregate value equal to the Spread.
(b) If the Company shall fix a Record Date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within forty five calendar days after such Record Date)
to subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock (the "EQUIVALENT PREFERRED
STOCK")) or securities convertible into Preferred Stock or Equivalent Preferred
Stock at a price per Unit of Preferred Stock or Equivalent Preferred Share (or
having a conversion price per Unit, if a security convertible into Units of
Preferred Stock or Equivalent Preferred Stock) less than the then Current Per
Share Market Price (as determined pursuant to Section 11(d)) of a Unit of
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 sum of the number of Units of Preferred Stock outstanding on such
Record Date plus the number of Units of Preferred Stock which the aggregate
offering price of the total number of Units of 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
Per Share Market Price and the denominator of which shall be the sum of the
number of Units of Preferred Stock outstanding on such Record Date PLUS the
number of additional Units of 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). If such subscription
price may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in good
faith by the board of directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
15.
conclusive and binding on the Rights Agent and the holders of the Rights. Units
of 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 adjustment
shall be made successively whenever such a Record Date is fixed; and if such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such Record
Date had not been fixed.
(c) If the Company shall fix a Record Date for a distribution to
all holders of Units of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend), assets (other than a dividend payable in Units
of Preferred Stock but including any dividend payable in equity securities other
than Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(d)), the Purchase Price to be in effect after such
Record Date shall be determined by multiplying the Purchase Price in effect
immediately prior to such Record Date by a fraction, the numerator of which
shall be the then Current Per Share Market Price (as determined pursuant to
Section 11(d)) of the Preferred Stock on such Record Date, less the fair market
value (as determined in good faith by the board of directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive and binding on the Rights Agent and the holders of
the Rights) of the cash, assets or evidences of indebtedness to be distributed
or of such subscription rights or warrants distributable in respect of a share
of Preferred Stock, and the denominator of which shall be such Current Per Share
Market Price of a share of 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 again be adjusted to be
the Purchase Price which would then be in effect if such Record Date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"CURRENT PER SHARE MARKET PRICE" of any security on any date shall be
deemed to be the average of the daily closing prices per share of such
security for the thirty (30) consecutive Trading Days (as defined
below) ending on and including the Trading Day immediately prior to
such date; PROVIDED, HOWEVER, that in the event that the Current Per
Share Market Price of the security is determined during a period
following the announcement by the issuer of such security of (A) a
dividend or distribution on such security payable in shares of such
security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such security and prior
to the expiration of thirty Trading Days after and not including the
ex-dividend date for such dividend or distribution, or the Record Date
for such subdivision, combination or reclassification, then, and in
each such case, the Current Per Share Market Price shall be
appropriately adjusted to reflect the current market price per share
equivalent of such security. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the Nasdaq Stock Market ("NASDAQ") or, if the
security is not listed or admitted to trading on the NASDAQ, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the security is listed or admitted to trading or, if
the security
16.
is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by the NASDAQ or such other system then in use, or, if on any
such date the security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the security selected by
the board of directors of the Company. If on any such date no market
maker is making a market in the security, the Current Per Share Market
Price of such security on such date shall mean the fair value per share
or other trading unit as determined in good faith by the board of
directors of the Company as provided for above shall be used (which
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive and binding on the Rights Agent, the
holders of the Rights and all other Persons). The term "TRADING DAY"
shall mean a day on which the principal national securities exchange on
which the security is listed or admitted to trading is open for the
transaction of business or, if the security is not listed or admitted
to trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
Current Per Share Market Price of the Preferred Stock shall be
determined in accordance with the method set forth in Section 11(d)(i).
If the Current Per Share Market Price of the Preferred Stock cannot be
determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in Section
11(d)(i), the Current Per Share Market Price of the Preferred Stock
shall be conclusively deemed to be an amount equal to the product of
$1,000 (as such amount may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to
shares of Common Stock of the Company occurring after the date of this
Agreement) multiplied by the Current Per Share Market Price of Common
Stock of the Company. If no shares of the Common Stock of the Company
or the Preferred Stock are publicly held or so listed or traded,
"CURRENT PER SHARE MARKET PRICE" of the Preferred Stock shall mean the
fair value per share as determined in good faith by the board of
directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive and
binding on the Rights Agent and the holders of the Rights. For all
purposes of this Agreement, the Current Per Share Market Price of a
Unit of Preferred Stock shall be equal to the Current Per Share Market
Price of one share of Preferred Stock divided by 1000.
(e) 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 which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-millionth of
a share of Preferred Stock or one one-hundredth of any other share or security
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii), the holder of any Rights thereafter exercised shall become entitled
to receive any shares of capital stock of the
17.
Company other than Units of Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Rights 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 Preferred
Stock contained in Sections 11(a), (b), (c), (d), (e), (g), (h), (i), (j), (k),
(l) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price shall evidence the right to purchase, at
the adjusted Purchase Price, the number of Units of Preferred Stock purchasable
from time to time upon exercise of the Rights, all subject to further adjustment
as provided in this Agreement.
(h) Unless the Company shall have exercised its election under
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 Units of Preferred
Stock (calculated to the nearest one-millionth of a share of Preferred Stock)
obtained by dividing (i) the product obtained by multiplying (x) the number of
Units of Preferred Stock 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, by (ii) the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Units of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of Units of Preferred Stock
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one-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
ten 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, 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 to be so
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Rights Certificates on the Record Date specified in the public announcement.
18.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of Units of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per Unit and the number of Units of Preferred
Stock 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 par value of the number of Units of
Preferred Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
number of Units of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a Record Date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Rights exercised after such Record Date
of that number of Units of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the Units of
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) upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any Unit of Preferred Stock at less than the Current
Per Share Market Price, (iii) issuance wholly for cash of Preferred Stock or
securities which by their terms are convertible into or exchangeable for
Preferred Stock, (iv) dividends on Preferred Stock payable in Preferred Stock,
or (v) issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of Units of its Preferred Stock shall
not be taxable to such stockholders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), (ii) merge with or
into any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o)), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)), if (x)
at the time of or immediately after such consolidation, merger or sale there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
Person which constitutes, or would constitute, the Principal Party (as defined
in Section 13(b))
19.
shall have distributed or otherwise transferred to its stockholders or other
Persons holding an equity interest in such Person, Rights previously owned by
such Person or any of its Affiliates and Associates; PROVIDED, HOWEVER, this
Section 11(n) shall not affect the ability of any Subsidiary of the Company to
consolidate with, merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 26, take (or permit any of its Subsidiaries
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.
(p) If, at any time after the date of this Agreement and prior to
the Distribution Date, the Company shall (i) declare or pay any dividend on
outstanding shares of Common Stock of the Company payable in shares of Common
Stock of the Company or (ii) effect a subdivision, combination or consolidation
of the Common Stock of the Company (by reclassification or otherwise than by
payment of dividends in shares of Common Stock of the Company) into a greater or
lesser number of shares of Common Stock of the Company, then in any such case
the number of Units of Preferred Stock purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the number of Units of
Preferred Stock so purchasable immediately prior to such event by a fraction,
the numerator of which shall be the number of shares of Common Stock of the
Company outstanding immediately before such event and the denominator of which
shall be the number of shares of Common Stock of the Company outstanding
immediately after such event. The adjustments provided for in this Section 11(p)
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Sections 11 and 13, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the shares of Common Stock of
the Company or Units of Preferred Stock a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Rights Certificate in accordance
with Section 25 hereof. Notwithstanding the foregoing sentence, the failure by
the Company to make such certification or give such notice shall not affect the
validity of or the force or effect of the requirement for such adjustment. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment contained therein and shall not be deemed to have knowledge of
such adjustment unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) Except as provided in Section 13(b), in the event that,
following a Shares Acquisition Date, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
and the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the
20.
Company in a transaction which complies with Section 11(o)) shall consolidate
with the Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the shares of
Common Stock of the Company shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other property, or (z) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) to any Person or Persons (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
in one or more transactions, directly or indirectly, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole), (any such event being a "SECTION 13 EVENT"),
then, and in each such case, proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e), shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price,
such number of validly authorized and issued, fully paid and non-assessable
shares of Common Stock of the Principal Party, which shares shall not be subject
to any liens, encumbrances, rights of first refusal, transfer restrictions or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of Units of 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, multiplying the number of such Units
of Preferred Stock for which a Right would be exercisable hereunder but for the
occurrence of such Section 11(a)(ii) Event by the Purchase Price which would be
in effect hereunder but for such first occurrence) and (2) dividing that product
(which, following the direct occurrence of a Section 13 Event, shall be the
"PURCHASE PRICE" for all purposes of this Agreement) by 50% of the Current Per
Share Market Price of the shares of 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 pursuant to this Agreement; (iii)
the term "COMPANY" shall, for all purposes of this Agreement, thereafter be
deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 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 any
such transaction as may be necessary to ensure that the provisions of this
Agreement shall thereafter be applicable to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) shall be of no further 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), (A) the Person that
is the issuer of any securities into which shares of Common Stock of
the Company are converted in such merger or consolidation, or, if there
is more than one such issuer, the issuer whose outstanding shares of
Common Stock have the greatest aggregate Current Per Share Market Price
and (B) if no securities are so issued, the Person that is the other
party to such merger or consolidation, or, if there is more than one
such Person, the Person whose outstanding shares of Common Stock have
the greatest aggregate Current Per Share Market Price; and
21.
(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 largest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power transferred pursuant to
such transaction or transactions or if the Person receiving the largest
portion of the assets or earning power cannot be determined, whichever
Person whose outstanding shares of Common Stock have the greatest
aggregate Current Per Share Market Price; 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 twelve-month
period registered under Section 12 of the Exchange Act (the "REGISTERED
COMMON STOCK"), or such Person is not a corporation, and such Person is
a direct or indirect Subsidiary of another Person that has Registered
Common Stock outstanding, "Principal Party" shall refer to such other
Person; (2) if the Common Stock of such Person is not Registered Common
Stock or such Person is not a corporation, and such Person is a direct
or indirect Subsidiary of another Person but is not a direct or
indirect Subsidiary of another Person which has Registered Common Stock
outstanding, "Principal Party" shall refer to the ultimate parent
entity of such first-mentioned Person; (3) if the Common Stock of such
Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by
more than one Person, and one or more of such other Persons has
Registered Common Stock outstanding, "Principal Party" shall refer to
whichever of such other Persons is the issuer of the Registered Common
Stock having the highest aggregate Current Per Share Market Price; and
(4) if the Common Stock of such Person is not Registered Common Stock
or such Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and none of such other
Persons has Registered Common Stock outstanding, "Principal Party"
shall refer to whichever ultimate parent entity is the corporation
having the greatest stockholders' equity or, if no such ultimate parent
entity is a corporation, shall refer to whichever ultimate parent
entity is the entity having the greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13, and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as
practicable following the execution of such agreement, a registration
statement under the Securities Act with respect to the shares of Common
Stock of such Principal Party that may be acquired upon exercise of the
Rights, (B) cause such registration statement to remain effective (and
to include a prospectus complying with the requirements of the
Securities Act) until the Expiration Date, and (C) as soon as
practicable following the execution of such agreement take such action
as may be required to ensure that any acquisition of such shares of
Common Stock of such Principal Party upon the exercise of the Rights
complies with any applicable state securities or "blue sky" laws; and
22.
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 (or any successor form) under the Exchange Act.
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, bylaws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the Current Per
Share Market Price or securities exercisable for, or convertible into, shares of
Common Stock of such Principal Party at less than the Current Per Share Market
Price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection with
the issuance of the shares of Common Stock of such Principal Party pursuant to
the provisions of this Section 13, then, in such event, the Company shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The 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, except for Rights that have become null and void
pursuant to Section 11(a)(ii), Rights that shall not have been previously
exercised will cease to be exercisable in the manner provided in Section
11(a)(ii) and will thereafter be exercisable in the manner provided in section
13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Rights Certificates which 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 Per
Share Market Price of a whole Right. For the purposes of this Section 14(a), the
Current Per Share Market Price of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the NASDAQ
or, if the Rights are not listed or admitted to trading on the NASDAQ, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by
23.
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 of directors of the Company. If on any such date no
such market maker is making a market in the Rights, the fair value of the Rights
on such date as determined in good faith by the board of directors of the
Company shall be conclusively used.
(b) The Company shall not be required to issue fractions of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock). Fractions of Preferred Stock in integral multiples of one
one-thousandth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; PROVIDED,
HOWEVER, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as Beneficial Owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the Current Per Share Market Price of one share of Preferred Stock.
(c) The holder of a Right by the acceptance of the Right expressly
waives such holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Common Stock of the Company); and any
registered holder of any Rights Certificate (or, prior to the Distribution Date,
a certificate representing shares of Common Stock of the Company), without the
consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of a certificate representing shares of
Common Stock of the Company), may, in such holder's own behalf and for such
holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
such holder's right to exercise the Rights evidenced by such Rights Certificate
or, prior to the Distribution Date, in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations hereunder, and injunctive relief against actual or threatened
violations of the obligations 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:
24.
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common Stock of
the Company;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) subject to Sections 6(a) and 7(f), the Company and the Rights
Agent may deem and treat the Person in whose name the Rights Certificate (or,
prior to the Distribution Date, the associated Common 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 Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary; 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 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 shall use
commercially reasonably efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as practicable
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 deemed for any purpose the holder of the Units of
Preferred Stock or any other securities of the Company which may at any time be
issuable upon the exercise of the Rights represented thereby, nor shall anything
contained in this Agreement or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with this Agreement.
Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
under this Agreement and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without gross negligence or willful misconduct on the part of the Rights Agent,
for any action taken, suffered or omitted by the Rights Agent in connection with
the execution, acceptance and administration of this Agreement and the exercise
and performance of its duties, including the costs and expenses of defending
against and appealing any claim of liability in the premises.
25.
This indemnity shall survive the termination of this Agreement and the
expiration of the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company.
The Rights Agent may conclusively rely upon and 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 and the exercise and performance of its duties hereunder in reliance
upon any Rights Certificate or certificate for Units of Preferred Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the stock transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; PROVIDED, that such corporation must be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall 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 shall not have 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 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, all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent:
26.
(a) Before the Rights Agent acts or refrains from acting, it may
consult with legal counsel of its choice (who may be legal counsel for the
Company), and the advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.
(b) Whenever in the administration, exercise and performance of
its duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking, suffering or omitting any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
any officer of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence 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 (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the legality, validity or enforceability of this
Agreement or the execution and delivery hereof (except the due execution by the
Rights Agent) or in respect of the legality, validity or enforceability or the
execution of any Rights Certificate (except its countersignature); nor shall it
be liable or 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 change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii)) or any adjustment in the
terms of the Rights (including the manner, method or amount thereof) provided
for in Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Rights Certificates after receipt of the
certificate described in Section 12); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Units of Preferred Stock or other securities to be issued
upon the exercise of any Rights or as to whether any such security will, when
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the administration, exercise and performance of its
duties hereunder from any one officer of the Company, and to apply to such
officer for advice or instructions in connection with
27.
its duties, and it shall not be responsible or liable for any action taken,
suffered or omitted by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action proposed
to be taken or omitted by the Rights Agent under this Agreement and the date on
and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any officer of the Company
actually received such application, unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers vested in it or perform any duty under this Agreement either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) 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 the Rights Agent in good faith believes that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or exchange, the
certification on the form of assignment or form of election to purchase, as the
case may be, that the Rights evidenced by the Rights Certificate are not owned
by an Acquiring Person, or an Affiliate or Associate thereof, has either not
been completed or in any manner indicates any other response thereto, the Rights
Agent shall not take any further action with respect to such requested exercise,
transfer, split up, combination or exchange, 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 thirty days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock of the Company or Preferred Stock (as to
which the Rights Agent has received prior written notice) by registered or
certified mail, and the Company shall mail notice thereof to the holders
28.
of the Rights Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon thirty days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock or Preferred Stock (as to which the
Rights Agent has received prior written notice) by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty 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 such holder's Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state of the United
States, in good standing, authorized under such laws to exercise corporate trust
or stock transfer powers, and subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock or Preferred Stock, and 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 Common Stock of
the Company following the Distribution Date and prior to the Expiration Date,
the Company (a) shall, with respect to shares of Common Stock of the Company so
issued or sold pursuant to the exercise of stock options or under any employee
benefit plan or arrangement or upon the exercise, conversion or exchange of
securities of the Company currently outstanding or issued at any time in the
future by the Company and (b) may, in any other case, if deemed necessary or
appropriate by the board of directors of the Company 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
and this sentence shall be null and void AB INITIO if, and to the extent that,
such issuance or this sentence would create a significant risk of or result in
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued or would create a significant risk of or
result in such options' or employee plans' or arrangements' failing to qualify
for otherwise
29.
available special tax treatment and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Company may, at its option, upon approval by the board of
directors, at any time on or prior to the Close of Business (or such later date
as may be determined by its board of directors) on the earlier of (i) the
Distribution Date or (ii) the Final Expiration Date redeem all but not less than
all the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date of this Agreement (such redemption price
being hereinafter referred to as the "REDEMPTION PRICE"), and the Company may,
at its option, pay the Redemption Price either in cash, shares of Common Stock
of the Company (based on the Current Per Share Market Price thereof at the time
of redemption), or any other form of consideration deemed appropriate by its
board of directors. The redemption of the Rights by the board of directors of
the Company may be made effective at such time on such basis and with such
conditions as the board of directors of the Company in its sole discretion may
establish. Any such redemption will be effective immediately upon the action of
the board of directors of the Company ordering the same, unless such action of
the board of directors of the Company expressly provides that such redemption
will be effective at a subsequent time or upon the occurrence or nonoccurrence
of one or more specified events (in which case such redemption will be effective
in accordance with the provisions of such action of the board of directors of
the Company).
(b) Immediately upon the effectiveness of the redemption of the
Rights pursuant to Section 23(a), and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; PROVIDED,
HOWEVER, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 calendar days after the
effectiveness of the redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and shall mail a notice of redemption to all
the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Stock. Any
notice which is mailed in such manner shall be deemed given, whether or not the
holder receives the notice. Each notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24, and other than in connection with the purchase
of shares of Common Stock prior to the Distribution Date.
(c) Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section 7(a) at any
time when the Rights are redeemable hereunder.
30.
Section 24. EXCHANGE.
(a) The Company, at its option, upon approval by its board of
directors, at any time after any Person becomes an Acquiring Person, may
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for Units of Preferred Stock at an exchange ratio equal to, subject
to adjustment to reflect stock splits, stock dividends and similar transactions
occurring after the date hereof, that number obtained by dividing the Purchase
Price by the then Current Per Share Market Price per Unit of Preferred Stock on
the earlier of (i) the date on which any Person becomes an Acquiring Person and
(ii) the date on which a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) is commenced within the meaning of Rule
14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 20% or more of
the shares of Common Stock of the Company then outstanding (such exchange ratio
being hereinafter referred to as the "SECTION 24(A) EXCHANGE RATIO").
Notwithstanding the foregoing, the Company may not effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan maintained by the Company or any of its Subsidiaries,
or any trustee or fiduciary with respect to such plan acting in such capacity),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock of the Company
then outstanding.
(b) Immediately upon the action of the board of directors of the
Company 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 Units of Preferred Stock equal
to the number of such Rights held by such holder multiplied by the Section 24(a)
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 last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner provided in this Agreement shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of Units of Preferred Stock
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e)) held by each holder of Rights.
(c) In the event that the number of shares of Preferred Stock
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Preferred Stock for issuance upon exchange of the
Rights or make adequate provision to substitute (1) cash, (2) Common Stock of
the Company or other equity securities of the Company, (3) debt securities of
the Company, (4) other assets, or (5) any combination of the foregoing, having
an aggregate value equal to the aggregate Current
31.
Per Share Market Price of the Units of Preferred Stock that would otherwise be
issuable in such exchange, all as determined by the board of directors of the
Company (which determination shall be described in a statement filed with the
Rights Agent and shall be conclusive and binding on the Rights Agent, the
holders of the Rights and all other Persons). To the extent that the Company
determines that some action need be taken pursuant to Section 24(a), the board
of directors of the Company may temporarily suspend the exercisability of the
Rights for a period of up to sixty days following the date on which the event
described in Section 24(a) shall have occurred, in order to seek any
authorization of additional shares of Preferred Stock and/or to decide the
appropriate form of distribution to be made pursuant to the above provision 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.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any additional Units of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding Preferred
Stock), (iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o)), or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company or (vi) to declare or pay
any dividend on the Common Stock of the Company payable in shares of Common
Stock of the Company or to effect a subdivision, combination or consolidation of
the shares of Common Stock of the Company (by reclassification or otherwise than
by payment of dividends in shares of Common Stock), then, in each such case, the
Company shall give to each holder of a Rights Certificate, in accordance with
Section 26, a notice of such proposed action, which shall specify the Record
Date for the purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such 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 Common Stock of
the Company and/or shares of 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 ten days prior to the Record Date for determining
holders of the shares of Preferred Stock for purposes of such action, and in the
case of any such other action, at least ten 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 Common Stock of the Company and/or shares of Preferred Stock,
whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, in accordance with Section 26, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii). In
32.
the event any Person becomes an Acquiring Person, the Company will promptly
notify the Rights Agent thereof.
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 by the Company with the Rights Agent) as follows:
COLLATERAL THERAPEUTICS, INC.
00000 XX XXXXXX XXXX
XXX XXXXX, XX 00000
Attention: Xxxxx Xxxxx, 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 sent by registered or certified
mail and shall be deemed given upon receipt and addressed (until another address
is filed in writing by the Rights Agent with the Company) as follows:
AMERICAN STOCK TRANSFER & TRUST COMPANY
00 XXXXXX XXXX
XXX XXXX, XX 00000
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate 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, the Company may supplement or amend this Agreement in any
respect, without the approval of any holders of Rights, by action of its board
of directors. From and after the Distribution Date, the Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Rights, by action of its board of directors in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which 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), including, without limitation, to change the Purchase
Price, the Redemption Price, any time periods herein specified, and any other
term hereof, any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent; PROVIDED, however, that from and
after such time as any Person becomes an Acquiring Person, this Agreement shall
not be amended in any manner which would adversely affect the interests of the
holders of Rights. Upon receipt of a certificate from an appropriate officer of
the Company that the proposed supplement or amendment is consistent with this
Section 27 and, after such time as any Person
33.
has become an Acquiring Person, that the proposed supplement or amendment does
not adversely affect the interests of the holders of Rights, the Rights Agent
shall execute such supplement or amendment.
Section 28. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS.
(a) For all purposes of this Agreement, any calculation of the
number of shares of Common Stock of the Company outstanding at any particular
time, including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of the Company of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the Exchange Act. The board of directors of the Company shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the board of directors,
or 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), which are done or made by the board of directors of the Company in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights Certificates and all other parties and
(y) not subject the board of directors of the Company to any liability to the
holders of the Rights.
(b) It is understood that an independent directors evaluation
committee (the "INDEPENDENT DIRECTORS EVALUATION COMMITTEE") of the board of
directors of the Company shall review and evaluate this Agreement in order to
consider whether the maintenance of this Agreement continues to be in the best
interests of the Company and its stockholders every three years from the date of
this Agreement. Following each such review, the Independent Directors Evaluation
Committee will communicate its conclusions to the full board of directors of the
Company, including any recommendations in light thereof as to whether this
Agreement should be modified or the Rights should be redeemed. The Independent
Directors Evaluation Committee shall be appointed by the board of directors of
the Company and shall comprise Directors of the Company who are not officers,
employees or Affiliates of the Company, PROVIDED, HOWEVER, that for the purposes
of this Section 29(b), no Director shall be deemed an Affiliate of the Company
solely due to his status as a Director of the Company.
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 registered holders of the Rights Certificates (and, prior
to the Distribution Date, shares of Common Stock of the Company) 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, shares of Common Stock of the Company).
34.
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 of
directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement and the right of redemption set forth in Section 23
shall have expired, such right shall be reinstated and shall not expire until
the tenth Business Day following the date of such determination by the board of
directors of the Company.
Section 32. GOVERNING LAW. This Agreement 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 internal laws of the State of
Delaware
applicable to contracts to be made and performed entirely within such state,
without regard to the choice-of-law or conflict-of-laws principles of any
jurisdiction.
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
one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several sections of this Agreement are inserted or convenience only and shall
not control or affect the meaning or construction of any of the provisions of
this Agreement.
35.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
Collateral Therapeutics, Inc.
By: /S/ XXXXXXXXXXX X. XXXXXXXX
----------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
American Stock transfer & trust company
By: /S/ XXXXXXX X. XXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
Collateral Therapeutics, Inc.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
----------------------------------
Collateral Therapeutics, Inc., a corporation organized and
existing under the General Corporation Law of the State of
Delaware (hereinafter
called the "CORPORATION"), hereby certifies that the following resolution was
adopted by the board of directors of the Corporation as required by Section 151
of the General Corporation Law at a meeting duly called and held on September
19, 2001;
RESOLVED, that pursuant to the authority granted to and vested
in the board of directors of the Corporation (hereinafter the "BOARD") in
accordance with the provisions of the Certificate of Incorporation of the
Corporation, as currently in effect, the Board hereby creates a series of
Preferred Stock, par value $.001 per share (the "PREFERRED STOCK"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "SERIES A
PREFERRED STOCK") and the number of shares constituting the Series A Preferred
Stock shall be forty thousand (40,000). Such number of shares may be increased
or decreased by resolution of the Board of Directors; PROVIDED, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
A-1
(a) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, each holder of a share
of Series A Preferred Stock, in preference to the holders of shares of common
stock, par value $.001 per share (the "COMMON STOCK"), of the Corporation, and
of any other junior stock, shall be entitled to receive, when declared by the
Board out of funds legally available for the purpose, dividends in an amount per
share (rounded to the nearest cent) equal to, subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 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.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under 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 shares of Series A Preferred Stock as provided in Section 2(a) immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); PROVIDED, HOWEVER, that, in the
event no dividend or distribution shall be declared by the Board on the Common
Stock for which it does not declare the dividend required to be declared on the
Preferred Stock pursuant to Section 2(a).
(c) Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A 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 may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than sixty days prior to the date fixed for the payment
thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior
A-2
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, in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(c) Except as set forth herein, or as otherwise provided by law,
holders of Series A 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 A 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 A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, 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 A
Preferred Stock, except dividends paid ratably on the shares of Series A
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 junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
PROVIDED, that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior 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 A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined by the Board)
to all holders of such shares upon such terms as the Board, 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.
A-3
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Section 4(a),
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A 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
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received the greater of (x)
$1,000 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon to the date of such payment (the "SERIES A LIQUIDATION
PREFERENCE") and (y) an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock (the "COMMON
ADJUSTMENT"), or (ii) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (i) 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 (the "ADJUSTMENT NUMBER").
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series A 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.
A-4
(c) In the event the Corporation shall at any time after October
1, 2001 (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 and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A 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 A Preferred Stock shall
not be redeemable.
Section 9. RANK. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all series
of any other class of the Corporation's Preferred Stock.
Section 10. AMENDMENT. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least a majority of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
A-5
IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Corporation as of September 19, 2001.
Collateral Therapeutics, Inc.
By:
-------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
EXHIBIT B
Form of Rights Certificate
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER TEN YEAR ANNIVERSARY OF RECORD DATE OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
THE OPTION OF THE COMPANY AT $.01 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID.
Rights Certificate
Collateral Therapeutics, Inc.
This certifies that _____________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of September 19, 2001 (the "RIGHTS AGREEMENT"),
between Collateral Therapeutics, Inc. a
Delaware corporation (the "COMPANY"),
and American Stock Transfer & Trust Company, as Right Agent (the "Rights
AGENT"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M., New
York City time, on October 1, 2001 at the office of the Rights Agent designated
for such purpose, or at the office of its successor as Rights Agent, one
one-thousandth (a "UNIT") of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $.001 per share (the "SERIES A
PREFERRED STOCK") of the Company, at a purchase price of $85.00 per Unit of
Series A Preferred Stock (the "PURCHASE PRICE"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Rights Certificate (and the number of
Units of Series A Preferred Stock which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of October 1, 2001 based on the Series A Preferred Stock as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of Units of Series A Preferred Stock which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
B-1
of the Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office 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 Series A 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 a redemption
price of $.01 per Right.
No fractional shares of Series A Preferred Stock will be
issued upon the exercise of any Rights or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a share of
Series A Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Units of Series A Preferred Stock or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a 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 Rights or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
B-2
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the signature of the proper officers of the Company
and its corporate seal. Dated as of _______ __, 20__.
Collateral Therapeutics, Inc.
By:
-------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
COUNTERSIGNED:
AMERICAN STOCK TRANSFER & TRUST COMPANY
AS RIGHTS AGENT
By:
---------------------------------
Authorized Signatory
Name:
-------------------------
Title:
-------------------------
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: , 20
----------------------------- --
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a Securities Transfer
Association Inc. recognized signature guarantee medallion program.
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this
Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (each as defined in the Rights Agreement).
----------------------------------
Signature
_______________________
NOTICE
The signature in the foregoing Form of Assignment must conform to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment is not completed, the Company and the Rights Agent will deem the
beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (each as defined in the
Rights Agreement) and such Assignment will not be honored.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights Certificate.)
To Collateral Therapeutics, Inc.
The undersigned hereby irrevocably elects to exercise Rights
represented by this Rights Certificate to purchase the Units of Series A
Preferred Stock issuable upon the exercise of such Rights and requests that
certificates for such Series A Preferred Stock be issued in the name of:
Please insert social security
or other identifying number____________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number____________________________________________________
(Please print name and address)
DATED: , 20
----------------------------- --
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a Securities Transfer
Association Inc. recognized signature guarantee medallion program.
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this
Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (each as defined in the Rights Agreement).
----------------------------------
Signature
_______________________
NOTICE
The signature in the foregoing Form of Election to Purchase must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Election
to Purchase, as the case may be, is not completed, the Company and the Rights
Agent will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (each
as defined in the Rights Agreement) and such Election to Purchase will not be
honored.
EXHIBIT C
COLLATERAL THERAPEUTICS, INC.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On September 19, 2001, Collateral Therapeutics, Inc.'s board of
directors declared a dividend distribution of one right (a "RIGHT") for each
outstanding share of our common stock to stockholders of record at the close of
business on October 1, 2001. Each Right entitles the registered holder to
purchase from the company one one-thousandth of a share of Series A Junior
Participating preferred stock, par value $.001 per share, at a purchase price of
$85.00, subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "RIGHTS AGREEMENT") between the Company and
American Stock Transfer & Trust Company, as rights agent.
Initially, the Rights will be attached to all common stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will separate from the common stock and a
distribution date will occur upon the earlier of (i) ten days following a public
announcement that a person or group of affiliated or associated persons (an
"ACQUIRING PERSON") has (subject to certain exceptions) acquired, or obtained
the right to acquire, beneficial ownership of 20% or more of the outstanding
shares of our common stock (the "STOCK ACQUISITION DATE"), other than as a
result of repurchases of stock by the Company, or (ii) ten days (or such later
date as the board shall determine) following the commencement of a tender offer
or exchange offer that would result in a person or group beneficially owning 20%
or more of the outstanding shares of our common stock (the "DISTRIBUTION DATE").
Until the Distribution Date, (i) the Rights will be evidenced by the common
stock certificates and will be transferred with and only with such common stock
certificates, (ii) new common stock certificates issued after the record date
will contain a notation incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any certificates for common stock
outstanding will also constitute the transfer of the Rights associated with the
common stock represented by such certificate. Pursuant to the Rights Agreement,
the Company reserves the right to require prior to the occurrence of any
Triggering Event (as defined below) that, upon any exercise of Rights, a number
of Rights be exercised so that only whole shares of preferred stock will be
issued.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on October 1, 2011, unless earlier redeemed by
the Company as described below.
As soon as practicable AFTER the Distribution Date, Rights certificates
will be mailed to holders of record of our common stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
certificates alone will represent the Rights. Except as otherwise determined by
the board, only shares of our common stock issued prior to the Distribution Date
will be issued with Rights.
C-1
In the event that an Acquiring Person becomes (subject to certain
exceptions) the beneficial owner of 20% or more of the then outstanding shares
of common stock (other than pursuant to an offer for all the outstanding shares
of common stock that our board of directors determines to be fair to and
otherwise in the best interests of the company and its stockholders), each
holder of a Right will thereafter have the right to receive, upon exercise,
preferred stock (or, in certain circumstances, cash, property or other
securities of the company) having a value equal to two times the exercise price
of the Right. Notwithstanding any of the foregoing, following the occurrence of
any of the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
For example, at an exercise price of $85.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase
$170.00 worth of preferred stock (or other consideration, as noted above) for
$85.00. Assuming that our preferred stock had a per share value of $10.00 at
such time, the holder of each valid Right would be entitled to purchase 17
shares of preferred stock for $85.00.
In the event that, at any time following the Stock Acquisition Date,
(i) we are acquired in a merger or other business combination transaction in
which we are not the surviving corporation (other than a merger which follows an
offer described in the second preceding paragraph), or (ii) 50% or more of our
assets, cash flow or earning power is sold or transferred, each holder of a
Right (except Rights which previously have been voided) shall have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Right. The events set forth in this
paragraph and in the second preceding paragraph are referred to as "TRIGGERING
EVENTS."
At any time after a person becomes an Acquiring Person and prior to the
acquisition by such person or group of 50% or more of the outstanding common
stock, the board of directors may exchange the Rights (other than Rights owned
by the person or group which have become void), in whole or in part, at an
exchange ratio of one share of common stock, or one one-thousandth of a share of
preferred stock (or of a share of a class or series of our preferred stock
having equivalent rights, preferences and privileges), per Right (subject to
adjustment).
At any time until 10 business days following the Stock Acquisition
Date, the board may redeem the Rights in whole, but not in part, at a price of
$0.01 per Right (payable in cash, common stock or other consideration deemed
appropriate by the board). Immediately upon the action of the board of directors
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the $.01 redemption price.
An independent directors evaluation committee (the "INDEPENDENT
DIRECTORS EVALUATION Committee") of the Company, consisting of Directors of the
Company who are neither officers, employees nor affiliates of the Company will
review the Rights Agreement every three years and, if a majority of the members
of the Independent Directors Evaluation Committee deems it appropriate, may
recommend a modification or termination of the Rights Agreements.
C-2
Until a Right is exercised, the holder of a Right will have no rights
by virtue of ownership as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for preferred stock (or other consideration)
of the Company or for common stock of the acquiring company.
Any of the provisions of the Rights Agreement may be amended by the
board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the board in order to cure
any ambiguity, to make changes which do not adversely affect the interests of
holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement; PROVIDED, HOWEVER, that no amendment may be made at such time as the
Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Current Report on Form 8-K. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated herein
by reference.
C-3
