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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ALPHA-BETA TECHNOLOGY, INC.
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(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE PER SHARE
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(Title of Class of Securities)
02071K105
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(CUSIP Number)
MARK VANDEVELDE, ROSS FINANCIAL CORPORATION, P.O. Box 31363-SMB,
MIRCO COMMERCE CENTRE, CAYMAN ISLANDS B.W.I., (345) 949-7950
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 18, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or
(4), check the following box [ ].
Page 1 of 9 Pages
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CUSIP No. 02071K105 Page 2 of 9 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON
KENNETH B. DART
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
NONE
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
BELIZE
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NUMBER OF | 7. SOLE VOTING POWER -0-
SHARES |----------------------------------------------------
BENEFICIALLY | 8. SHARED VOTING POWER 3,487,795
OWNED BY |----------------------------------------------------
EACH | 9. SOLE DISPOSITIVE POWER -0-
REPORTING |----------------------------------------------------
PERSON |10. SHARED DISPOSITIVE POWER 3,487,795
WITH |
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,487,795 shares These shares are beneficially owned by Ross
Financial Corporation as to which Kenneth B.
Dart is the 100% shareholder.
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.266%
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14. TYPE OF REPORTING PERSON*
IN-INDIVIDUAL
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CUSIP No. 02071K105 Page 3 of 9 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON
ROSS FINANCIAL CORPORATION
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
WORKING CAPITAL
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
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NUMBER OF | 7. SOLE VOTING POWER -0-
SHARES |----------------------------------------------------
BENEFICIALLY | 8. SHARED VOTING POWER 3,487,795
OWNED BY |----------------------------------------------------
EACH | 9. SOLE DISPOSITIVE POWER -0-
REPORTING |----------------------------------------------------
PERSON |10. SHARED DISPOSITIVE POWER 3,487,795
WITH |
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,487,795 shares These shares may be beneficially owned by
Kenneth B. Dart who is the 100% shareholder.
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.266%
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14. TYPE OF REPORTING PERSON*
IN-CORPORATION
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Neither the filing of this Schedule 13D nor any of its contents
shall be deemed to constitute an admission by Ross Financial
Corporation, a Cayman Islands corporation, or by Kenneth B. Dart,
that it or he is the beneficial owner of any of the Common Stock
referred to in this Schedule 13D, other than shares of Alpha-Beta
Technology, Inc. issued and outstanding and owned of record by the
Ross Financial Corporation as of the date of this Schedule 13D, for
purposes of Section 13(d) of the Securities and Exchange Act of
1934, as amended, or for any other purpose, and such beneficial
ownership is expressly disclaimed.
ITEM 1. SECURITY AND ISSUER
This statement relates to the shares of voting common stock (the
"Common Stock"), of Alpha-Beta Technology, Inc, a Massachusetts
corporation (the "Company"). The principal executive offices of
the Company are located at One Innovation Drive, Worcester, MA
01605
ITEM 2. IDENTITY AND BACKGROUND
(A) - (F)
A. Kenneth B. Dart
(1) Business Address
P.O. Box 31300-SMB, Grand Cayman
Cayman Islands, B.W.I.
(2) Principal Employment: President of the following corporation:
(a) Dart Container Corporation
P.O. Box 31372-SMB
Grand Cayman, Cayman Islands, B.W.I. *
* The principal business activity is the manufacture, sale, and
recycling of polystyrene cups and plastic cutlery and dinnerware.
(3) This reporting person has not during the last five years,
(i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (ii) been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceedings was or is subject
to a judgement, decree, or final order enjoining future violations
of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
(4) Citizenship:
Belize
B. Ross Financial Corporation
(1) Country of Organization:
Cayman Islands
(2) Principal Business:
Investment in securities
Page 4 of 9 Pages
(3) Address of Principal Business:
P.O. Box 31363-SMB
Grand Cayman, Cayman Islands, B.W.I.
(4) Address of Principal Office:
P.O. Box 31363-SMB
Grand Cayman, Cayman Islands, B.W. I.
(5) Name and address of all members of the Board of Directors:
Kenneth B. Dart
P.O. Box 31363-SMB
Grand Cayman, Cayman Islands, B.W.I.
(6) Name and address of all officers:
Kenneth B. Dart President/Treasurer
P.O. Box 31363-SMB
Grand Cayman, Cayman Islands, B.W.I.
Mark VanDevelde Secretary
P.O. Box 31363-SMB
Grand Cayman, Cayman Islands, B.W.I.
Foreshore Corporate Services Assistant Secretary
P.O. Box 1994
Grand Cayman, Cayman Islands, B.W.I.
(7) Neither this reporting person, nor, to the best of its
knowledge, any of its directors and executive officers listed
above has, during the last five years, (i) convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors), or (ii) been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction
and as a result of such proceedings was or is subject to a
judgement, decree or final order enjoining future violations
of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
A. Kenneth B. Dart
Kenneth B. Dart has purchased no shares of Common Stock for his
own account but may be deemed to have purchased the shares of
Common Stock purchased by Ross Financial Corporation.
B. Ross Financial Corporation
Ross Financial Corporation purchased 3,487,795 shares of Common
Stock for total consideration of approximately $10,031,858.12
including brokerage commissions. Ross Financial Corporation
acquired shares of Common Stock by using funds from its working
capital account.
Page 5 of 9 Pages
ITEM 4. PURPOSE OF TRANSACTION
The purpose of the acquisition of Common Stock of each reporting
person is long-term passive investment. Each reporting person
intends to acquire additional Common Stock of the issuer,
subject to the availability of such stock at prices deemed
attractive by each of the respective reporting person. However,
each reporting person may determine to dispose of some or all of
its respective holdings. Other than as set forth herein, each
reporting person has no plans or proposals which relate to or would
result in any of the actions specified in Item 4 of Form 13D
promulgated by the Securities and Exchange Commission.
ITEM 5. INTEREST IN SECURITIES OF ISSUER
(A) - (B)
A. The information contained in the cover pages to this
Schedule 13D is incorporated herein by reference.
B. As of November 26, 1997, the Reporting Persons owned the
following shares of Common Stock.
(1) By virtue of his status as the sole shareholder of Ross
Financial Corporation, Kenneth B. Dart, for purposes of
this Schedule 13D, may be deemed to be a beneficial owner
of all of the shares of Common Stock owned by Ross
Financial Corporation.
(2) Ross Financial Corporation is the direct owner of 3,487,795
shares of Common Stock. The 3,487,795 shares represent
approximately 17.266% of the 20,200,805 shares of Common
Stock outstanding as of November 18, 1997, 16,834,046 as
reported by the Company on Form 10-Q dated November 17, 1997,
and 3,366,795 new shares because of a direct purchase from the
Company on November 18, 1997 (the "Outstanding Shares").
(3) After netting out the shares held by more than one person,
the Reporting Persons herein have beneficial ownership of an
aggregate of 3,487,795 shares of Common Stock representing
17.266% of the Outstanding Shares.
(c) See Exhibit A attached hereto, and which is incorporated
herein by reference. The transaction on Exhibit A
was because of the issuance of new stock directly from the
Company.
(d) No other person is known to have the right or power to direct
the receipt of dividends of the proceeds from the sale of
shares of Common Stock.
(e) Not applicable.
Page 6 of 9 Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS, OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
Kenneth B. Dart is the sole shareholder of Ross Financial
Corporation. The Agreement among the Reporting Persons with
respect to the filing of this Schedule 13D is incorporated by
reference as Exhibit B. There is a Shareholder Rights Agreement
dated as of February 2, 1995 by and between Alpha-Beta Technology,
Inc. and The First National Bank of Boston which is incorporated by
reference as Exhibit D, which was amended by a First Amendment to
Shareholder Rights Agreement dated as of November 13, 1997 by and
between Alpha-Beta Technology, Inc. and BankBoston, N.A. f/k/a The
First Bank of Boston, as Rights Agent, which is incorporated by
reference as Exhibit E. There is a Stock Purchase Agreement dated
as of November 18, 1997 by and between Alpha-Beta Technology, Inc.
and Ross Financial Corporation which is incorporated by reference
as Exhibit C.
ITEM 7. MATERIAL TO BE FILED WITH EXHIBITS
The following Exhibits are filed herewith.
A. Schedule of Transactions of the voting Common Stock
of the Issuer.
B. Agreement among the reporting person with respect to the
filing of the Schedule 13D and any amendments thereto.
C. Stock Purchase Agreement dated as of November 18, 1997 by
and between Alpha-Beta Technology, Inc. and Ross Financial
Corporation.
D. Shareholder Rights Agreement dated as of February 2, 1995 by
and between Alpha-Beta Technology, Inc. and The First
National Bank of Boston, as Rights Agent.
E. First Amendment to Shareholder Rights Agreement dated as of
November 13, 1997 by and between Alpha-Beta Technology, Inc.
and BankBoston, N.A. f/k/a The First Bank of Boston, as
Rights Agent.
After reasonable inquiry and to the best of our knowledge and
belief, we each certify that the information set forth in this
statement is true, complete and correct.
ROSS FINANCIAL CORPORATION
BY: KENNETH B. DART, President
November 26, 1997
AND
KENNETH B. DART
November 26, 1997
Page 7 of 9 Pages
EXHIBIT A
TRADE QUANTITY PRICE COST COMMISSION TOTAL COST
DATE
11/06/97 6,000 2.84 17,055.00 180 17,235.00
11/06/97 10,000 2.91 29,050.00 300 29,350.00
11/06/97 14,000 2.78 38,920.00 420 39,360.00
11/07/97 9,000 2.84 25,582.50 270 25,852.50
11/07/97 1,000 2.78 2,780.00 30 2,810.00
11/10/97 12,000 2.91 34,860.00 360 35,220.00
11/11/07 36,000 2.91 104,580.00 1,080 105,660.00
11/12/97 33,000 2.91 95,865.00 990 96,855.00
11/18/97 3,366,795 2.875 9,679,535.62 N/A 9,679,535.62
TOTALS 3,487,795 $10,028,228.12 3,630 $10,031,858.12
THE TRANSACTIONS REPORTED ON THIS EXHIBIT WERE EFFECTED
ON NASDAQ EXCEPT THE ONE DESIGNATED WITH THE * WHICH WAS EFFECTED
DIRECTLY WITH THE COMPANY.
Page 8 of 9 Pages
EXHIBIT B
This will confirm the agreement by and among all of the
undersigned that the reports this Schedule 13D and any
amendments thereto with respect to the beneficial ownership
of the undersigned of the shares of voting Common Stock, of
Alpha-Beta Technology, Inc., a Massachusetts corporation was, and
are being, filed on behalf of each of the parties named below.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
ROSS FINANCIAL CORPORATION
BY: KENNETH B. DART, President
November 26, 1997
AND
KENNETH B. DART
November 26, 1997
Page 9 of 9 Pages
[Exhibit C to Schedule 13D]
STOCK PURCHASE AGREEMENT
by and between
ALPHA BETA TECHNOLOGY, INC.,
and
ROSS FINANCIAL CORPORATION
Dated as of November 18, 1997
<PAGE>
TABLE OF CONTENTS Page
I. PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . .1
1.1. Purchase and Sale . . . . . . . . . . . . . . .1
1.2. Purchase Price. . . . . . . . . . . . . . . . .2
1.3. Closing . . . . . . . . . . . . . . . . . . . .2
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . .6
2.1. Due Organization, etc . . . . . . . . . . . . .6
2.2. Compliance with Law . . . . . . . . . . . . . .6
2.3. Authorization; Execution and
Delivery of Agreement . . . . . . . . . . . . .7
2.4. No Conflict; No Consent . . . . . . . . . . . .7
2.5. Capital Stock . . . . . . . . . . . . . . . . .8
2.6. SEC Reports . . . . . . . . . . . . . . . . . .9
2.7. Financial Statements. . . . . . . . . . . . . .9
2.8. No Brokers. . . . . . . . . . . . . . . . . . 10
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER . . . . 10
3.1. Due Organization, etc . . . . . . . . . . . . 10
3.2. Authorization; Execution and Delivery
of Agreement. . . . . . . . . . . . . . . . . 10
3.3. No Conflict; No Consent . . . . . . . . . . . 11
3.4. No Brokers. . . . . . . . . . . . . . . . . . 11
3.5. Investment Purposes . . . . . . . . . . . . . 12
IV. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . 13
4.1. Preemptive Rights . . . . . . . . . . . . . . 13
4.2. Exchange of Stock Certificates. . . . . . . . 14
4.3. Lost, Stolen, Destroyed or Mutilated Stock
Certificates . . . . . . . . . . . . . . . . 14
V. COVENANTS OF THE PURCHASER AND THE COMPANY. . . . . . . . 15
5.1. Public Disclosure and Confidentiality . . . . 15
5.2. Restrictions on Transfer. . . . . . . . . . . 15
5.3. Efforts to Consummate; Further Actions. . . . 16
VI. REGISTRATION RIGHTS. . . . . . . . . . . . . . . . . . . 16
6.1. Piggyback Registration. . . . . . . . . . . 16
6.2. Demand Registration . . . . . . . . . . . . . 17
6.3. General Provisions. . . . . . . . . . . . . . 19
6.4. Information, Documents, Etc.. . . . . . . . . 21
6.5. Expenses. . . . . . . . . . . . . . . . . . . 22
6.6. Cooperation . . . . . . . . . . . . . . . . . 22
6.7. Action to Suspend Effectiveness; Supplement to
Registration Statement . . . . . . . . . . . 23
6.8. Indemnification . . . . . . . . . . . . . . . 25
VII. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 31
7.1. Indemnification by the Company. . . . . . . . 31
7.2. Indemnification by the Purchaser. . . . . . . 32
VIII. TERMINATION . . . . . . . . . . . . . . . . . . . . . 32
8.1 Termination. . . . . . . . . . . . . . . . . . 32
IX. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 33
9.1. Survival of Representations, Warranties and
Agreements. . . . . . . . . . . . . . . . . . 33
9.2. Notices . . . . . . . . . . . . . . . . . . . 34
9.3. General . . . . . . . . . . . . . . . . . . . 34
9.4. Governing Law . . . . . . . . . . . . . . . . 35
9.5. Severability of Provisions. . . . . . . . . . 35
9.6. Captions. . . . . . . . . . . . . . . . . . . 36
9.7. Expenses. . . . . . . . . . . . . . . . . . . 36
9.8. Equitable Relief. . . . . . . . . . . . . . . 36
9.9. Definitions . . . . . . . . . . . . . . . . . 36
<PAGE>
STOCK PURCHASE AGREEMENT (this "Agreement") dated as of
November 18, 1997 by and between ALPHA BETA TECHNOLOGY, INC., a
Massachusetts corporation (the "Company"), and ROSS FINANCIAL
CORPORATION a Cayman Islands corporation (the "Purchaser").
WHEREAS, the Purchaser wishes to purchase from the
Company, and the Company wishes to sell to the Purchaser, three
million, three hundred and sixty six thousand, seven hundred and
ninety five (3,366,795) shares (the "Shares") of the Company's
authorized but unissued common stock, par value $.01 (the "Common
Stock"), at a price of $2 per share of Common Stock;
WHEREAS, the Purchaser and the Company are entering into
this Agreement to provide for such purchase and sale and to
establish various rights and obligations in connection therewith;
NOW THEREFORE, in consideration of these premises and for
other good and valuable consideration, the parties hereto hereby
agree as follows:
I. PURCHASE AND SALE
1.1. Purchase and Sale. Upon the terms and subject to
the conditions set forth in this Agreement, the Company agrees to
issue, sell and deliver to the Purchaser, and the Purchaser agrees
to purchase from the Company, three million, three hundred and
sixty six thousand, seven hundred and ninety five (3,366,795)
Shares. The Shares purchased and sold hereunder shall be free and
clear of any liens, security interests, pledges, voting
agreements, claims, options and encumbrances of every kind,
character and description whatsoever ("Encumbrances"), except as
contemplated by this Agreement.
1.2. Purchase Price. As consideration for the sale of
the Shares, at the Closing (as hereinafter defined) the Purchaser
shall pay to the Company in immediately available funds by wire
transfer, a purchase price of nine million, six hundred and seventy
nine thousand, five hundred and thirty five dollars and sixty two
cents ($9,679,535.62) to an account designated by the Company in
writing prior to the date hereof.
1.3. Closing. (a) On the terms and subject to the
conditions of this Agreement, the purchase and sale of the Shares
pursuant to this Agreement shall take place at the offices of
Cleary, Gottlieb, Steen & Hamilton, One Liberty Plaza, New York,
New York, 10006 at 10:00 a.m. (New York time) on November 18, 1997
or as soon thereafter as practicable. The consummation of the
purchase and sale transactions described in this Section 1.3 are
hereinafter referred to collectively as the "Closing". The date on
which the Closing occurs is hereinafter referred to as the "Closing
Date".
(b) Conditions Precedent to Purchaser's Obligations.
The obligation of the Purchaser to consummate the transactions
described in this Agreement shall be subject to the satisfaction of
the following conditions on or prior to the Closing: (i) the
representations and warranties of the Company contained in this
Agreement shall have been true and correct in all material respects
when made (to the extent any such representation or warranty is not
already qualified by materiality) and shall be true and
correct in all material respects on the Closing Date (to the extent
any such representation or warranty is not already qualified by
materiality) with the same effect as if they were made on such
date; (ii) the Company shall have performed and complied in all
material respects with all covenants and agreements required by
this Agreement to be performed or complied with by the Company on
or prior to the Closing Date; (iii) the Company shall
have delivered to the Purchaser a certificate, dated the Closing
Date and signed by a duly authorized officer of the Company,
certifying as to the matters described in the foregoing
clauses (i) and (ii); (iv) no action, suit, investigation or
proceeding shall have been instituted before any court,
administrative body or governmental agency (a "Governmental
Entity") which seeks to restrain the consummation of, prohibit or
declare illegal, or obtain a material amount of damages arising
from the transactions contemplated by this Agreement
and which is likely, in the Purchaser's reasonable judgment, to be
successful on the merits, and no temporary restraining order or
injunction shall have been issued by any Governmental Entity
restraining or prohibiting, and no other Legal Requirement (as
hereinafter defined) shall have come into effect making illegal,
the performance of this Agreement or the consummation of any of the
transactions contemplated hereby; and (v) all consents, approvals,
permits and authorizations required to be obtained from, and all
filings required to be made with, any Authority (as hereinafter
defined) in connection with the consummation of the transactions
contemplated hereby shall have been obtained or made, and all
waiting periods specified under applicable Legal Requirements and
all extensions thereof, the passing of which is required for such
consummation, shall have passed, except as to such consents,
approvals, permits, authorizations or filings that,
individually or in the aggregate, would not have a material adverse
effect on the condition (financial or otherwise), business,
operations, properties, assets or liabilities of the
Company (a "Material Adverse Effect"). In the event any of the
foregoing conditions to the Purchaser's obligation to close
hereunder is not satisfied on or before the Closing, the
Purchaser may waive such condition and proceed to Closing. As used
herein, "Legal Requirements" shall include laws, regulations,
ordinances, orders, decrees, permits, licenses, consents,
approvals, registrations, authorizations and qualifications
required by or from any federal, state, local or foreign
governmental or regulatory authority (each, an "Authority").
(c) Conditions Precedent to the Company's Obligations.
The obligation of the Company to consummate the transactions
described in this Agreement shall be subject to the satisfaction of
the following conditions on or prior to the Closing: (i) the
representations and warranties of the Purchaser contained in this
Agreement shall have been true and correct in all material respects
when made (to the extent any such representation or warranty is not
already qualified by materiality) and shall be true and
correct in all material respects on the Closing Date (to the extent
any such representation or warranty is not already qualified by
materiality) with the same effect as if they were made on such
date; (ii) the Purchaser shall have performed and complied in all
material respects with all covenants and agreements required by
this Agreement to be performed or complied with by the Purchaser on
or prior to the Closing Date; (iii) the Purchaser shall
have delivered to the Company a certificate, dated the Closing Date
and signed by a duly authorized signatory of the Purchaser,
certifying as to the matters described in the foregoing clauses (i)
and (ii); (iv) no action, suit, investigation or proceeding shall
have been instituted before any Governmental Entity which seeks to
restrain the consummation of, prohibit or declare illegal, or
obtain a material amount of damages arising from the transactions
contemplated by this Agreement and which is likely, in the
Company's reasonable judgment, to be successful on the merits and
no temporary restraining order or injunction shall have been issued
by any Governmental Entity restraining or prohibiting, and no other
Legal Requirement shall have come into effect making illegal, the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby; and (v) all consents, approvals,
permits and authorizations required to be obtained from, and all
filings required to be made with, any Authority in connection
with the consummation of the transactions contemplated hereby shall
have been obtained or made, and all waiting periods specified under
applicable Legal Requirements and all extensions thereof, the
passing of which is required for such consummation, shall have
passed, except as to such consents, approvals, permits,
authorizations or filings that, individually or in the aggregate
would not have a Material Adverse Effect. In the event
any of the foregoing conditions to the Company's obligation to
close hereunder is not satisfied on or before the Closing, the
Company may waive such condition and proceed to Closing.
(d) Company Closing Deliveries. At the Closing, the
Company will deliver to the Purchaser the following:
a stock certificate or certificates representing the
Shares registered in the name of the Purchaser; and
a certificate of the Secretary of the Company
certifying as to the adoption and effect of resolutions of the
Board of Directors of the Company (the "Board") authorizing the
execution, delivery and performance of this Agreement.
(e) Purchaser Closing Deliveries. At the Closing, the
Purchaser will deliver to the Company the following:
a certificate of an authorized officer of the
Purchaser certifying as to the adoption and effect of resolutions
of the Purchaser authorizing the execution, delivery and
performance of this Agreement; and
payment of the purchase price provided by Section
1.2.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. Due Organization, etc. The Company is a corporation
duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts, and it has all requisite
corporate or other necessary power and authority to own, operate
and lease its respective properties and assets and to conduct its
respective businesses as now conducted and is qualified to do
business in each state or other jurisdiction where the nature of
its properties, assets or businesses requires such qualification
other than where the failure to be so qualified would not have a
material adverse effect on the condition (financial or otherwise),
business, operations, properties, assets or liabilities of the
Company (a "Material Adverse Effect"). Except as set forth on
Schedule 2.1 attached hereto, the Company has no subsidiaries.
2.2. Compliance with Law. The Company has obtained and
maintains in full force and effect all permits, licenses, consents,
approvals, registrations, memberships, authorizations and
qualifications under all federal, state, local and foreign laws and
regulations, and with all Authorities, required for the conduct by
it of its business and the ownership or possession by it of its
properties and assets other than where the failure to obtain or
maintain such permits, licenses, consents, approvals,
registrations, memberships, authorizations or qualifications would
not, individually or in the aggregate, have a Material Adverse
Effect. The Company is in compliance with all laws, regulations,
ordinances, orders and decrees (including, without limitation, all
environmental and occupational, health and safety laws) of any
Authority applicable to the conduct by the Company of its
business and to its ownership and possession of its properties and
assets, other than where the failure so to comply would not,
individually or in the aggregate, have a Material Adverse Effect.
2.3. Authorization; Execution and Delivery of Agreement.
(a) The execution and delivery of this Agreement, the
issuance and sale of the Shares to the Purchaser and the
consummation of the transactions contemplated hereby (i) do not
require the approval or consent of any stockholders of the Company
and (ii) have been duly authorized by all necessary corporate
action on the part of the Company for all purposes. This Agreement
has been duly executed and delivered by the Company and this
Agreement constitutes the legal, valid, binding and enforceable
obligation of the Company, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to
creditors rights and general principles of equity. The Company
has full corporate power and authority to enter into this Agreement
and to perform its obligations hereunder.
(b) The Shares have been duly authorized by all
necessary corporate action on the part of the Company, and, when
issued and delivered by the Company pursuant to this Agreement
against payment of the consideration therefor set forth herein,
the Shares will be validly issued, fully paid and non-assessable.
The Purchaser will acquire valid and marketable title to the
Shares, free and clear of any Encumbrances except as contemplated
by this Agreement.
2.4. No Conflict; No Consent. The execution and delivery
of this Agreement, the issuance and sale of the Shares to the
Purchaser and the consummation of the transactions contemplated
hereby do not, and will not, conflict with, or result in any
violation of or default under, or permit the acceleration of any
obligation under, or the creation or imposition of any Encumbrance
on any of the properties or assets of the Company under, (i) any
provision of the articles of incorporation or by-laws or similar
constituent documents of the Company, (ii) any indenture, lease,
mortgage, deed of trust, loan agreement or other agreement or
instrument, or any permit, license, registration, membership,
authorization or qualification from any Authority, of the Company
or (iii) any judgment, order, decree, statute, law, ordinance, rule
or regulation of any Authority to which the Company is a party or
by which it is bound, other than, in the case of clause (ii) above,
where such conflict, violation, default, acceleration or
Encumbrance would not, individually or in the aggregate, have a
Material Adverse Effect. Except as has already been obtained or
made, no consent, approval, order or authorization of, or
registration, declaration, filing with or notice to, any Authority
or third party is required to be made or obtained by the Company
(including, without limitation, under any environmental or
occupational, health and safety laws) in order to execute or
deliver this Agreement, issue and sell the Shares or to consummate
the transactions contemplated hereby, other than as a result of the
periodic reporting requirements under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") or except where the
failure to make or obtain any such consent, approval, order,
authorization, registration, declaration, filing or notice would
not have a Material Adverse Effect.
2.5. Capital Stock. (a) The authorized capital stock of
the Company consists of (i) thirty million (30,000,000) shares of
Common Stock, par value $.01, of which, as of November 4, 1997,
sixteen million, eight hundred and thirty three thousand,
nine hundred and eighty (16,833,980) shares were outstanding and no
shares were held in treasury and two million, eight hundred and
sixty thousand, eight hundred and eleven (2,860,811) shares are
reserved for future issuance pursuant to any option, warrant or
other rights agreement, arrangement or other commitment and (ii)
one million (1,000,000) shares of preferred stock, par value $.01,
of which no shares are issued, outstanding or held in treasury.
All of the issued and outstanding shares of Common Stock have been
validly issued and are fully paid and non-assessable.
(b) (i) Other than this Agreement or as set forth on
Schedule 2.5(b) or in SEC Reports (as defined hereinafter), there
are not authorized or outstanding any subscriptions, options,
conversion rights, warrants or other agreements, securities or
commitments of any nature whatsoever (whether oral or written and
whether firm or conditional) obligating the Company to issue,
deliver or sell, or cause to be issued, delivered or sold, to any
Person any shares of Common Stock or any other shares of the
capital stock of the Company or any securities convertible into or
exchangeable for any such shares, or obligating any such Person to
grant, extend or enter into any such agreement or commitment; and
(ii) except as set forth in SEC Reports, there is no obligation,
contingent or otherwise, of the Company to repurchase, redeem or
otherwise acquire any share of capital stock or other equity
interests of the Company.
2.6. SEC Reports. The Company has filed with the
Securities and Exchange Commission (the "Commission") all proxy
statements, reports, forms and other documents required to be filed
by it after January 1, 1995 under the Exchange Act (collectively,
the "SEC Reports"). As of their respective dates, the SEC Reports
(i) complied as to form in all material respects with the
applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder and (ii) did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
2.7. Financial Statements. (a) The financial statements
(including any related notes) included in the SEC Reports (the
"Financial Statements") have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved (except as may be noted therein)
and fairly present the consolidated financial condition, results of
operations and cash flows of the Company as of the dates thereof
and for the periods ended on such dates (in each case subject, as
to interim statements, to changes resulting from year-end
adjustments (none of which were or, except as otherwise disclosed
to the Purchaser in writing, will be material in amount or effect)
and except as permitted by Form 10-Q pursuant to Section 13 or
15(d) of the Exchange Act).
(b) On the date hereof, except as disclosed in the SEC
Reports, the Company has no liabilities or obligations of any
nature, whether accrued, absolute, contingent or otherwise, and
whether due or to become due and whether or not required
to be disclosed in the SEC Reports, other than liabilities that
have been disclosed to the Purchaser in writing, have been incurred
in the ordinary course of business or are not in the aggregate
material to the Company.
2.8. No Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder s or other fee or commission
in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Company.
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company
that:
3.1. Due Organization, etc. The Purchaser is a
corporation duly organized and validly existing under the laws of
the Cayman Islands. The Purchaser has no direct or indirect
subsidiaries.
3.2. Authorization; Execution and Delivery of Agreement.
The Purchaser has all requisite power and authority to execute this
Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
action on the part of the Purchaser. This Agreement has been duly
executed and delivered by the Purchaser and this Agreement
constitutes the legal, valid, binding and enforceable obligation of
the Purchaser, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors
rights and general principles of equity.
3.3. No Conflict; No Consent. The execution and delivery
of this Agreement, the issuance and sale of the Shares to the
Purchaser and the consummation of the transactions contemplated
hereby do not, and will not, conflict with, or result in any
violation of or default under, or permit the acceleration of any
obligation under, or the creation or imposition of any Encumbrance
on any of the properties or assets of the Purchaser under, (i) any
provision of the charter and by-laws or similar constituent
documents of the Purchaser, (ii) any indenture, lease, mortgage,
deed of trust, loan agreement or other agreement or instrument, or
any permit, license, registration, membership, authorization or
qualification from any Authority, of the Purchaser or (iii) any
judgment, order, decree, statute, law, ordinance, rule or
regulation of any Authority to which the Purchaser is a party or by
which it is bound, other than, in the case of clause (ii) above,
where such conflict, violation, default, acceleration or
Encumbrance would not, individually or in the aggregate, have a
Purchaser Material Adverse Effect. Other than as a result of the
reporting requirements of the Exchange Act, no consent, approval,
order or authorization of, or registration, declaration, filing
with or notice to, any Authority is required to be made or obtained
by the Purchaser in order to execute or deliver this
Agreement or to consummate the transactions contemplated hereby.
3.4. No Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder s or other fee or commission
in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Purchaser.
3.5. Investment Purposes. (a) The Purchaser, by reason
of its business and financial experience, has such knowledge,
sophistication and experience in business and financial matters as
to be capable of evaluating the merits and risks of its investment
in the Shares, and is purchasing the Shares hereunder for its own
account, for investment only and not with a view to, or any present
intention of, effecting a distribution of such securities or any
part thereof. The Purchaser acknowledges that the Shares to be
purchased hereunder have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or the securities
laws of any state or other jurisdiction and cannot be disposed of
unless they are subsequently registered under the Securities Act
and any applicable state laws, or exemption from such registration
is available. Furthermore, the Purchaser acknowledges that the
Company shall place upon each certificate representing the Shares,
a legend substantially in the following form:
The securities represented by this certificate have been
issued without registration or qualification under the Securities
Act 1933, as amended (the "Securities Act"), or any applicable
state securities laws (the "State Acts"). Such securities may not
be sold, assigned, transferred or otherwise disposed of,
beneficially or on the records of the company, unless the
securities represented by this certificate have been registered or
qualified under the Securities Act and the applicable State Acts or
there has been delivered to the company an opinion of counsel,
reasonably satisfactory to the company, to the effect that such
registration and qualification are not required.
(b) The Purchaser is an "accredited investor" as that
term is defined in Rule 501 promulgated under the Securities Act.
(c) The Purchaser or its representative has had the
opportunity to ask questions and to receive answers concerning the
financial condition, operations and prospects of the Company and
the terms and conditions of the Purchaser s investment, as
well as the opportunity to obtain any additional information
necessary to verify the accuracy of information furnished in
connection therewith that the Company possesses or can acquire
without unreasonable effort or expense.
IV. COVENANTS OF THE COMPANY
The Company covenants and agrees that:
4.1. Preemptive Rights. For as long as the Purchaser
shall hold five hundred thousand (500,000) shares of Common Stock,
the Company shall not issue, reissue or otherwise dispose of any
shares of Common Stock or any securities convertible into, or
any rights, warrants or options to acquire, shares of Common Stock,
without affording the Purchaser the preemptive right to acquire
such shares of Common Stock or other securities in proportion to
its then-existing holdings of outstanding shares of Common Stock,
on the same terms and conditions and for the same consideration as
the Company proposes to issue such shares of Common Stock or other
securities to Persons other than the Purchaser; provided, however,
that the provisions of this Section 4.1 shall not apply to any of
the following:
(a) shares of Common Stock issued on a pro rata basis
pursuant to a stock split, subdivision or dividend;
(b) shares of Common Stock issued in connection with a
bona fide business acquisition of or by the Company, whether by
merger, consolidation, sale of assets, sale or exchange of stock or
otherwise;
(c) shares of Common Stock issued to a corporation,
partnership, educational institution or other entity in connection
with a research and development partnership or licensing or other
collaborative arrangement between the Company and such institution
or entity; or
(d) shares of Common Stock (or options, warrants or
other rights to purchase such shares of Common Stock) issuable or
issued to employees, consultants or directors of this corporation,
upon the express approval of the Board of Directors, whether
issued or issuable after the Closing Date; and provided, further,
however, that the aggregate number of shares of Common Stock
issued pursuant to Section 4.1(c) shall not exceed, on a cumulative
basis, ten percent (10%) of the outstanding shares of Common Stock
as of the date hereof.
The Company shall not issue shares of Common Stock, or any
securities convertible into shares of Common Stock, exceeding, on
a cumulative basis, ten percent (10%) of the outstanding shares of
Common Stock as of the date hereof, to any entity pursuant to
Section 4.1(c), without obtaining the prior written consent of the
Purchaser, which consent shall not be unreasonably withheld.
As used herein, "Person" means any individual, partnership, joint
venture, firm, corporation, association, trust or other entity or
any government or political subdivision or agency, department or
instrumentality thereof.
4.2. Exchange of Stock Certificates. Promptly upon
surrender of any certificates representing Shares at the office of
the Company, the Company will, at its expense, execute and deliver
to the Purchaser a new certificate or certificates in denominations
specified by the Purchaser for an aggregate number of Shares equal
to the number of Shares represented by the certificates
surrendered.
4.3. Lost, Stolen, Destroyed or Mutilated Stock
Certificates. Upon receipt of evidence satisfactory to the Company
of the loss, theft, destruction or mutilation of any certificate
for Shares and, in the case of loss, theft or destruction, upon
delivery of an affidavit of loss and an indemnity satisfactory to
the Company (which, in the case of the Purchaser may be an
undertaking by the Purchaser to so indemnify the Company), or, in
the case of mutilation, upon surrender and cancellation thereof,
the Company will issue a new certificate of like tenor for a number
of Shares equal to the number of Shares represented by the
certificate lost, stolen, destroyed or mutilated.
V. COVENANTS OF THE PURCHASER AND THE COMPANY
5.1. Public Disclosure and Confidentiality. Each party
hereby agrees that, prior to the Closing, except as required by
applicable law (or under the rules and regulations of the Nasdaq
Stock Market (or any national securities exchange on which the
Common Stock is listed)), no press release or public announcement
or communication will be made or caused to be made concerning the
execution or performance of this Agreement, the terms hereof or the
transactions contemplated hereby unless specifically approved in
advance by both parties. In the event that a party views
disclosure required by applicable law (or the rules and regulations
of the Nasdaq Stock Market or any such national stock exchange) as
contemplated by the previous sentence, such disclosing party shall
provide a copy of such disclosure to the other party within a
reasonable period of time prior to such disclosure.
5.2. Restrictions on Transfer. (a) The rights contained
in this Agreement, including the registration rights, may be
transferred by the Purchaser only to one of its Affiliates , as
determined under Rule 12b-2 of the General Rules and Regulations
under the Exchange Act. Prior to such transfer, the Company shall
be furnished with prior written notice of the name and address of
such transferee, the Company shall give its prior written consent
to such transfer, which consent shall not be unreasonably withheld,
and such transferee shall agree to be bound by the terms and
provisions of this Agreement.
(b) Except pursuant to the requirements of Rule 144, the
Shares may not be sold or otherwise disposed of except as follows:
(i) to a person or persons who, in the opinion of
counsel reasonably satisfactory to the Company, is a person to whom
the Shares may legally be transferred without registration and
without the delivery of a current prospectus with respect thereto;
or
(ii) to any person upon delivery of a prospectus then
meeting the requirements of the Securities Act relating to such
securities (as to which a registration statement under the
Securities Act shall then be in effect) and the offering thereof
for such sale or disposition.
5.3. Efforts to Consummate; Further Actions. Subject to
the terms and conditions herein provided, each of the parties
hereto agrees to use its reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate the transactions
contemplated by this Agreement.
VI. REGISTRATION RIGHTS
The Company covenants and agrees to provide the following
registration rights:
6.1. Piggyback Registration. If, at any time while the
Purchaser shall hold five hundred thousand (500,000) shares of
Common Stock, the Company proposes to file a registration statement
relating to the offering of any of its capital stock under the
Securities Act (other than (i) a registration statement required to
be filed in respect of employee benefit plans of the Company on
Form S-8 or any similar form from time to time in effect or (ii)
any registration statement on Form S-4 or similar successor form,
relating to a corporate reorganization or other transaction
pursuant to Rule 145 of the Securities Act), whether or not for
sale for its own account, the Company shall, at least twenty-one
days (or if such twenty-one day period is not practicable, then a
reasonable shorter period which shall not be less than seven days)
prior to such filing, give written notice of such proposed filing
to the Purchaser. Upon receipt by the Company not more than seven
days (unless the notice given to the Purchaser pursuant to the
previous sentence is less than ten days, in which case such
seven-day period shall be shortened to five days) after such notice
of a written request from the Purchaser for registration of
Purchaser's Stock (as hereinafter defined), (i) the Company shall,
subject to Section 6.3, include such Purchaser's Stock in such
registration statement, and shall use all reasonable efforts to
cause such registration statement to become effective with respect
to such Purchaser's Stock, unless the managing underwriter therefor
concludes in its reasonable judgment that the number of securities
requested to be included in such registration exceeds the number
which can reasonably be sold in (or during the time of) such
offering, in which case the Company may (i) include all securities
initially proposed by the Company to be sold for its own account
and (ii) decrease the number of shares of Purchaser s Stock and any
other securities (other than securities included by virtue of
clause (i) above) proposed to be sold to the extent necessary to
reduce the number of securities to be included in the registration
to the level recommended by the managing underwriter; provided,
however, that there shall be no such decrease in the number of
shares of Purchaser's Stock unless the number of shares of
Purchaser's Stock and such other securities (other than the
securities included by virtue of clause (i) above) proposed to be
sold has been decreased on a pro rata basis, calculated according
to the number of shares of Purchaser's Stock and other securities
requested to be included by the respective holders of each.
"Purchaser's Stock" means any shares of Common Stock held by the
Purchaser or its affiliates.
6.2. Demand Registration. (a) In the event that,
subsequent to 180 days following the Closing Date, the Company
shall receive a written request, on a one-time basis, from the
Purchaser requesting the Company to register any shares of
Purchaser's Stock under the Securities Act on Form S-3 (or if the
Company is not eligible to use Form S-3, then on Form S-1 or S-2),
or any other similar form then in effect, the Company shall,
as soon as practicable, effect such registration (including, if
requested, a registration of shares of Purchaser's Stock which are
intended to be offered on a continuous or delayed basis under Rule
415 of the Securities Act or any similar rule then in effect (such
registration a "Shelf Registration")) of all or such portion of
shares of Purchaser s Stock as are specified in such request. Any
Shelf Registration statement filed pursuant to this Section 6.2(a)
shall remain continuously effective for a period of two (2) years
(such period defined herein as the "First Demand Registration
Period").
(b) In the event that at any time after the First Demand
Registration Period the Company shall receive a written request, on
a one-time basis, from the Purchaser requesting the Company to
register any shares of Purchaser s Stock pursuant to a Shelf
Registration, the Company shall, as promptly as practicable, effect
such registration of all or such portion of shares of Purchaser s
Stock as are specified in such request. The Shelf Registration
statement filed pursuant to this Section 6.2(b) shall remain
continuously effective for a period of three (3) years (such period
defined herein as the "Second Demand Registration Period").
(c) After the expiration of the Second Demand
Registration Period, the Purchaser may request, on a one-time
basis, the Company to register any remaining shares of Purchaser's
Stock pursuant to a Shelf Registration for a period not to exceed
two (2) years (such period defined herein as the "Supplementary
Registration Period"). Upon receipt of a written request from the
Purchaser requesting a registration of shares of Purchaser's Stock
during the Supplementary Registration Period pursuant to this
Section 6.2(c), the Company shall, as promptly as practicable,
effect such registration of all or such portion of shares of
Purchaser s Stock as are specified in such request.
Notwithstanding any other provisions of this Agreement, the
Purchaser shall bear all expenses of registration (including
amendments and supplements related thereto) pursuant to this
Section 6.2(c).
(d) Notwithstanding the provisions of Sections 6.2(a),
6.2(b) and 6.2(c), the Company shall in no event be required to
register shares of Purchaser's Stock pursuant to this Section 6.2
unless the number of such shares of Purchaser's Stock exceeds five
hundred thousand (500,000). The Company may postpone for a limited
time, which in no event shall be longer than sixty (60) days,
compliance with a request for registration pursuant to this Section
6.2 if (i) the Company shall have given notice to the Purchaser of
the occurrence of a Suspension Event (as hereinafter defined) or
(ii) the Company is conducting a public offering of capital stock
and the managing underwriter concludes in its reasonable judgment
that such compliance would materially adversely affect such
offering. Notwithstanding anything in this Section 6.2 to the
contrary, the Company shall not be required to prepare or cause to
be prepared audited financial statements of the Company other than
those prepared in the normal course of the Company's business at
its fiscal year end.
6.3. General Provisions. (a) Whenever required to
effect the registration of any shares of Purchaser's Stock, the
Company shall, as expeditiously as reasonably possible: (i) prepare
and file with the SEC a registration statement with respect to such
Purchaser's Stock and use all reasonable efforts to cause such
registration statement to become effective and to remain effective
(with a prospectus at all times meeting the requirement of the
Securities Act); or (ii) in the case of any Shelf Registration,
prepare and file with the SEC a Shelf Registration statement with
respect to such Purchaser s Stock and use all reasonable efforts to
cause such registration statement to become effective and to remain
continuously effective in order to permit the prospectus forming
part thereof to be usable by the Purchaser for the relevant period
(as set forth in Sections 6.2(a), 6.2(b) and 6.2(c)) from the date
such registration statement is declared effective or such shorter
period of time that will terminate upon the earlier of the
following: (A) when all the shares of Purchaser's Stock covered by
the Shelf Registration Statement have been sold pursuant to such
registration statement and (B) when there cease to be any
outstanding shares of Purchaser's Stock. The provisions of
Sections 6.3(a)(i) and 6.3(a)(ii) are subject to the Company's
suspension rights set forth in Section 6.7(b). The Company will
use all reasonable efforts to effect such qualifications and
compliances under applicable Blue Sky or other state securities
laws as may be reasonably requested by the Purchaser (provided
that the Company shall not be obligated to file a general consent
to service of process or qualify to do business as a foreign
corporation or otherwise subject itself to taxation in any
jurisdiction solely for the purpose of any such qualification) to
permit or facilitate such sale or other distribution. The Company
will cause the Purchaser's Stock to be listed on the principal
stock exchange on which the shares of Common Stock are listed.
(b) The Purchaser agrees, if requested by the managing
underwriter or underwriters in an underwritten offering (an
"Offering"), not to effect any public sale or distribution of any
of the securities of the Company of any class included in such
Offering, including a sale pursuant to Rule 144 or Rule 144A under
the Securities Act (except as part of such Offering), during the
15-day period prior to, and during the 90-day period beginning on,
the date of pricing of each Offering, to the extent timely notified
in writing by the Company or the managing underwriters.
Furthermore, notwithstanding anything to the contrary set forth in
the Agreement, the Company's obligation under this Agreement to
cause a registration statement and any filings with any state
securities commission to be made or to become effective or to amend
or supplement such registration statement shall be suspended in the
event and during such period as the Company is proceeding with an
Offering if the Company is advised by the underwriters
that the sale of shares of Purchaser's Stock under such
registration statement would have a material adverse effect on the
Offering.
(c) Following the effectiveness of a registration
statement and the filings with any state securities commissions,
the Purchaser agrees that it will not effect any sales of the
Purchaser s Stock pursuant to such registration statement or any
such filings at any time after it has received notice from the
Company to suspend sales (i) as a result of the occurrence or
existence of any Suspension Event, or (ii) so that the Company may
amend or supplement such registration statement or such filing.
The Purchaser may recommence effecting sales of the Purchaser's
Stock pursuant to the registration statement or such filings
following further notice to such effect from the Company, which
notice shall be given by the Company not later than three (3)
business days after the conclusion of any such Suspension Event or
amendment or supplement.
6.4. Information, Documents, Etc. Upon making a request
for registration pursuant to Sections 6.1 or 6.2, the Purchaser
shall furnish to the Company such information regarding its
holdings and the proposed manner of distribution thereof as
the Company may reasonably request and as shall be required in
connection with any registration, qualification or compliance
referred to in this Article VI. The Company agrees that it will
furnish to the Purchaser the number of prospectuses, offering
circulars or other documents, or any amendments or supplements
thereto, incident to any registration, qualification or compliance
referred to in this Article VI as the Purchaser from time to
time may reasonably request.
6.5. Expenses. The Company will bear all expenses of
registrations (including amendments and supplements related
thereto) pursuant to Sections 6.1, 6.2(a) and 6.2(b) (in each case,
other than underwriting discounts and commissions and brokerage
commissions and fees, if any, payable with respect to shares of
Purchaser's Stock sold by the Purchaser, and fees and expenses of
any accountants, counsel or other parties retained or employed by
holders of Purchaser's Stock) including, without limitation,
registration fees, printing expenses, expenses of compliance with
Blue Sky or other state securities laws, and legal and audit fees
incurred by the Company in connection with such registration and
amendments or supplements in connection therewith.
6.6. Cooperation. In connection with any registration of
Purchaser's Stock pursuant to this Article VI, the Company agrees
to:
(a) enter into such customary agreement (including an
underwriting agreement containing such representations and
warranties by the Company and such other terms and provisions,
including indemnification provisions, as are customarily contained
in underwriting agreements for comparable offerings and, if no
underwriting agreement is entered into, an indemnification
agreement on such terms as is customary in transactions of
such nature) and take all such other actions as the Purchaser or
the underwriters, if any, participating in such offering and sale
may reasonably request in order to expedite or facilitate such
offering and sale;
(b) furnish, (i) at the request of any underwriters
participating in such offering and sale, a comfort letter or
letters, dated the date of the final prospectus with respect to
Purchaser's Stock and/or the date of the closing for the sale of
Purchaser's Stock from the independent certified public accountants
of the Company and addressed to any underwriters participating in
such offering and sale, which letter or letters shall state that
such accountants are independent with respect to the Company within
the meaning of Rule 1.01 of the Code of Professional Ethics of the
American Institute of Certified Public Accountants and shall be in
form reasonably satisfactory to the managing underwriter and
shall cover matters of the type customarily covered in "cold
comfort" letters in connection with transactions of a similar
nature for similar entities and (ii) at the request of the
Purchaser or any underwriters participating in such offering and
sale, an opinion, dated the date of the closing for the sale of
Purchaser's Stock, of the counsel representing the Company with
respect to such offering and sale (which counsel may be the General
Counsel of the Company or other counsel reasonably satisfactory to
the Purchaser), addressed to the Purchaser and any such
underwriters, which opinion shall be in form reasonably
satisfactory to the managing underwriter (or, if none, to the
Purchaser) and shall address such matters as are customary in
transactions of a similar nature for similar entities;
(c) make available for inspection by the Purchaser, the
underwriters, if any, participating in such offering and sale
(which inspecting underwriters shall, if reasonably possible, be
limited to any manager or managers for such participating
underwriters), the counsel for the Purchaser, one accountant or
accounting firm retained by the Purchaser and any such
underwriters, or any other agent retained by the Purchaser or such
underwriters, all financial and other records, corporate documents
and properties of the Company, and supply such additional
information, as they shall reasonably request;provided that any
such party shall keep the contents thereof confidential,
including,without limitation, in the manner prescribed by Section
5.1.
6.7. Action to Suspend Effectiveness; Supplement to
Registration Statement.
(a) The Company will notify the Purchaser and its
counsel promptly of (i) any action by the Commission to suspend the
effectiveness of the registration statement covering the Purchaser
s Stock or the institution or threatening of any proceeding for
such purpose (a "stop order") or (ii) the receipt by the Company of
any notification with respect to the suspension of the
qualification of the Purchaser's Stock for sale in any jurisdiction
or the initiation or threatening of any proceeding for such
purpose. Immediately upon receipt of any such notice, the
Purchaser shall cease to offer or sell any Purchaser's Stock
pursuant to the registration statement in the jurisdiction to which
such stop order or suspension relates. The Company will use all
reasonable efforts to prevent the issuance of any such stop order
or the suspension of any such qualification and, if any such stop
order is issued or any such qualification is suspended, to obtain
as soon as possible the withdrawal or revocation thereof, and will
notify the Purchaser and its counsel at the earliest practicable
date of the date on which the Purchaser may offer and sell
Purchaser's Stock pursuant to the registration statement.
(b) Notwithstanding anything to the contrary set forth
in this Agreement, the Company's obligation under this Agreement to
cause the registration of Purchaser's Stock and any filings with
any state securities commission to be made or to become effective
or to amend or supplement a registration statement shall be
suspended in the event and during such period that there are
pending negotiations relating to, or consummation of, a transaction
or the occurrence of an event that would require additional
disclosure of material information by the Company in such
registration statement or such filing (such circumstances being
hereinafter referred to as a "Suspension Event") that would make it
impractical or inadvisable to cause such registration statement or
such filings to be made or to become effective or to amend or
supplement such registration statement, but such suspension shall
continue only for so long as such event or its effect is continuing
but in no event will that suspension exceed sixty (60) days.
Immediately upon receipt by the Purchaser of notice of a Suspension
Event, the Purchaser shall cease to offer or sell any Purchaser's
Stock pursuant to such registration statement, cease to deliver or
use such registration statement and, if so requested by the
Company, return to the Company, at its expense, all copies (other
than permanent file copies) of such registration statement.
(c) In the event the Company shall determine that it is
necessary to amend or supplement any registration statement
relating to Purchaser's Stock, the Company will furnish copies of
such proposed amendment or supplement to the Purchaser and its
counsel and will not file or distribute such amendment or
supplement without the prior consent of the Purchaser, which
consent shall not be unreasonably withheld.
6.8. Indemnification . In the event any Purchaser's
Stock is included in a registration statement under this Article
VI:
(a) To the full extent permitted by law, the Company will
indemnify and hold harmless the Purchaser and each subsequent
holder of Purchaser's Stock as set forth in Section 9.3(d) hereof
(each such Person, including the Purchaser, a "Holder") and the
affiliates of such Holder, and their respective directors,
officers, employees, general and limited partners, members, agents
and representatives (and the directors, officers, affiliates and
controlling Persons thereof), and each other Person, if any, who
controls such Holder within the meaning of the Securities Act or
the Exchange Act, from and against any losses,claims, damages, or
liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively
a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any preliminary prospectus, any final
prospectus contained therein or any amendments or supplements
thereto, (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading, or (iii) any violation or alleged
violation by the Company in connection with the registration of
Purchaser's Stock under the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under
the Securities Act, the Exchange Act or any state securities law;
and the Company will pay to each such Holder, affiliate or
controlling Person, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that
the indemnity agreement contained in this Section 6.8(a) shall not
apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable hereunder in any such
case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by
the Holder or controlling Person; and provided, further, that the
Company shall not be liable hereunder in any such case to the
extent it is determined that any such loss, claim, damage,liability
or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made:
(A) in any such preliminary prospectus, if (I) it was
the responsibility of such Holder to provide the Person asserting
such loss, claim, damage, liability or expense with a current copy
of the prospectus and such Holder failed to deliver or cause to be
delivered a copy of the prospectus to such Person after the Company
had furnished such Holder with a sufficient number of copies of the
same and (II) the prospectus corrected such untrue statement or
omission; or
(B) in such prospectus, if such untrue statement or
omission is corrected in an amendment or supplement to such
prospectus and the Holder thereafter fails to deliver the
prospectus as so amended or supplemented prior to or concurrently
with the sale of Purchaser s Stock to the Person asserting such
loss, claim, damage, liability or expense after the Company had
furnished such Holder with a sufficient number copies of the same.
Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Holder
or any such director, officer, employee, general or limited
partner, member, agent, representative or controlling Person and
shall survive the transfer of such securities by such Holder. Each
Holder shall furnish such information regarding itself or the claim
in question as the Company may reasonably request in writing and as
shall be reasonably required in connection with defense of such
claim and litigation resulting therefrom.
(b) To the full extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration
statement, each Person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter, any other Holder
selling securities in such registration statement and any
controlling Person of any such underwriter or other Holder, against
any losses, claims, damages or liabilities (joint or several) to
which any of the foregoing Persons may become subject, under the
Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions
in respect thereto) arise out of or are based upon (i) any
Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in
connection with such registration or (ii) an untrue statement or
alleged untrue statement or omission or alleged omission made in
the circumstances described in clauses (A) or (B) of Section
6.8(a); and each such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any Person intended to be
indemnified pursuant to this Section 6.8(b), in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, that the indemnity agreement contained in this
Section 6.8(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder, which consent shall not
be unreasonably withheld; provided, that, in no event shall any
indemnity under this Section 6.8(b) exceed the gross proceeds from
the offering received by such Holder; and provided, further, that
the obligation to provide indemnification pursuant to this Section
6.8(b) shall be several, and not joint and several, among such
indemnifying parties. Such indemnity shall remain in full force
and effect, regardless of any investigation made by or on behalf of
the Company or any such director, officer, representative or
controlling Person and shall survive the transfer of such
securities by such prospective Seller.
(c) Promptly after receipt by an indemnified party under
this Section 6.8 of notice of the commencement of any action
(including any governmental action), such indemnified party will,
if a claim in respect thereof is to be made against any
indemnifying party under this Section 6.8, deliver to the
indemnifying party a written notice of the commencement thereof and
the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume the defense
thereof with counsel selected by the indemnifying party or parties.
The failure to deliver written notice to the indemnifying party
within a reasonable time after the indemnified party first learns
of the commencement of any such action, if materially prejudicial
to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under
this Section 6.8 to the extent of such prejudice, but the omission
so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 6.8. The indemnified party
shall have the right, but not the obligation, to participate in the
defense of any action referred to above through counsel of its own
choosing and shall have the right, but not the obligation, to
assert any and all separate defenses, cross claims or counterclaims
which it may have, and the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the
employment of such counsel has been specifically authorized in
advance by the indemnifying party, (ii) there is a conflict of
interest that prevents counsel for the indemnifying party from
adequately representing the interests of the indemnified party or
there are material defenses available to the indemnified party that
are different from, or additional to, the defenses that are
available to the indemnifying party, or (iii) the indemnifying
party fails to assume the defense or does not reasonably contest
such action in good faith, in which case, if the indemnified party
notifies the indemnifying party that it elects to employ separate
counsel, the indemnifying party shall not have the right to assume
the defense of such action on behalf of the indemnified party and
the reasonable fees and expenses of such separate counsel shall be
borne by the indemnifying party; provided, however, that, the
indemnifying party shall not, in connection with any proceeding or
related proceedings, be liable for the reasonable fees and expenses
of more than one separate firm (in addition to one firm acting as
local counsel) for all indemnified parties.
(d) Contribution. If for any reason (other than the
reasons expressly specified in this Section 6.8) the foregoing
indemnity and payment obligation is unavailable or is insufficient
to hold harmless an indemnified party under paragraphs (a) or (b)
of this Section 6.8, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result
of any loss, claim, damage or liability (or actions or proceedings
in respect thereof), including, without limitation, any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability,
action or proceeding, in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one
hand and the indemnified party on the other. If, however, the
allocation provided in the preceding sentence is not permitted by
applicable law, or if the allocation provided in the preceding
sentence provides a lesser sum to the indemnified party than the
amount hereinafter calculated, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such
relative fault but also the relative benefits to the indemnifying
party and the indemnified party as well as any other relevant
equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the action in
question, including any untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact has been taken or made by, or relates to information
supplied by, the indemnifying party or the indemnified party and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action, untrue statement or
omission. The parties agree that it would not be just and
equitable if contributions pursuant to this Section 6.8(d) were to
be determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in the preceding sentences of this
Section 6.8(d). Notwithstanding anything in this Section 6.8(d) to
the contrary, no indemnifying party (other than the Company) shall
be required pursuant to this Section 6.8(d) to contribute any
amount in excess of the gross proceeds received by such
indemnifying party from the sale of Purchaser's Stock in the
offering to which the losses, claims, damages or liabilities of the
indemnified parties relate. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and the Holders under
this Section 6.8 shall survive the completion of any offering of
Purchaser's Stock in a registration statement under this Article
VI.
(f) Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the
underwriting agreement (if any) entered into in connection with any
underwritten public offering of the Purchaser's Stock are in
conflict with the foregoing provisions, the provisions in such
underwriting agreement shall control.
VII. INDEMNIFICATION
7.1. Indemnification by the Company. The Company shall
indemnify and hold the Purchaser and each of its members,
employees, officers and agents harmless from and against any and
all losses, claims, damages or liabilities whatsoever (including
legal fees and expenses) incurred by any of them based upon,
resulting from or arising out of any material breach of any
representation, warranty, covenant or agreement of the Company
contained in this Agreement.
7.2. Indemnification by the Purchaser. The Purchaser
shall indemnify and hold the Company and each of its employees,
directors, officers and agents harmless from and against any and
all losses, claims, damages or liabilities whatsoever (including
legal fees and expenses) incurred by any of them resulting from or
arising out of any material breach of any representation, warranty,
covenant or agreement of the Purchaser contained in this Agreement.
VIII. TERMINATION
8.1 Termination. (a) This Agreement may be terminated
and the transactions contemplated herein may be abandoned at any
time prior to the Closing:
(i) by the Company or the Purchaser, if the Closing has
not occurred by November 21, 1997;
(ii) by mutual written consent of the Company and the
Purchaser;
(iii) by the Company, if there has been a material
misrepresentation or breach of warranty on the part of the
Purchaser in the representations and warranties contained herein or
a material breach of covenants on the part of the Purchaser and the
same has not been cured within 30 days after notice thereof;
(iv) by the Purchaser, if there has been a material
misrepresentation or breach of warranty on the part of the Company
in the representations and warranties contained herein or a
material breach of covenants on the part of the Company and the
same has not been cured within 30 days after notice thereof; or
(v) by either the Purchaser or the Company, if any court,
administrative body or governmental agency shall have issued a
final order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and nonappealable, provided
that the party seeking to terminate shall have used its best
efforts to appeal such order, decree, ruling or other action.
(b) Notwithstanding anything herein to the contrary, the
right to terminate this Agreement under this Section 8.1 shall not
be available to any party to the extent the failure of such party
to fulfill any of its obligations under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or
before such date (as a result, for example, of an action or failure
to act causing a failure of a condition precedent).
(c) A party terminating this Agreement pursuant to this
Section 8.1 shall give written notice thereof to the other party
hereto, whereupon this Agreement shall terminate and be of no
further force and effect, the transactions contemplated hereby
shall be abandoned without further action by any party and there
shall be no liability on the part of the Company or the Purchaser,
except as provided in Section 9.7 hereof and except for any
liability for any willful breach hereof; provided however that the
provisions of Sections 7.1 and 7.2 shall survive any such
termination.
(d) Notwithstanding anything to the contrary contained
in this Agreement, Sections 4.1, 6.1 and 6.2 shall terminate when
the Purchaser holds fewer than five hundred thousand (500,000)
shares of Purchaser s Stock.
IX. GENERAL PROVISIONS
9.1. Survival of Representations, Warranties and
Agreements. Notwithstanding any investigation conducted or notice
or knowledge obtained by or on behalf of any party hereto, each
representation and warranty in this Agreement and each agreement or
covenant in this Agreement which does not by its own terms expire
on or prior to the Closing shall survive the Closing without
limitation as to time, except as specifically referred to herein.
9.2. Notices. Any notice, request, instruction or other
document to be given hereunder by a party hereto shall be in
writing and shall be deemed to have been given, (i) when received
if given in Person, or (ii) one day after transmission if sent by
nationally recognized overnight courier, certified or registered
mail, return receipt requested or (iii) three days after being
deposited in the U.S. mail, postage prepaid:
(a) if to the Purchaser, addressed as follows:
Ross Financial Corporation
P. O. Box 31363
Seven Mile Beach
Grand Cayman, Cayman Islands
British West Indies
Attention: Kenneth B. Dart
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Lee C. Buchheit, Esq.
(b) if to the Company, addressed as follows:
Alpha Beta Technology, Inc.
One Innovation Drive
Worcester, MA 01605
Attention: Spiros Jamas
with a copy to:
Goodwin, Proctor & Hoar LLP
Exchange Place
Boston, Massachusetts 02109-2881
Attention: John J. Egan, Esq.
or to such other individual or address as a party hereto may
designate for itself by notice given as herein provided.
9.3. General. (a) This Agreement (including the
documents and instruments referred to or incorporated herein)
constitutes the entire agreement, and supersedes all of the prior
agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof.
(b) This Agreement is not intended to confer upon any
Person other than the parties hereto any rights or remedies
hereunder other than as contemplated in Article VI, Article VII and
Section 9.3(d) and shall not be assigned by any party by operation
of law or otherwise.
(c) This Agreement may be executed in two or more
counterparts which together shall constitute a single agreement.
(d) This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors, heirs
and permitted assigns. This Agreement is not assignable except by
consent of each of the parties hereto or by operation of law. Any
purported assignment of this Agreement in violation of this Section
9.3 shall be null and void.
9.4. Governing Law. (a) THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES CREATED HEREBY SHALL BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF
LAW RULES THEREOF.
(b) Each party agrees that any proceeding relating to
this Agreement shall be brought in a state court of New York. Each
party hereby consents to personal jurisdiction in any such action
brought in any such New York court, consents to service of process
by mail made upon such party and such party's agent and waives any
objection to venue in any such New York court or to any claim that
any such New York court is an inconvenient forum.
9.5. Severability of Provisions. If any provision or any
portion of any provision of this Agreement or the application of
any such provision or any portion thereof to any Person or
circumstance, shall be held invalid or unenforceable, to the extent
permitted by law, the remaining portion of such provision and the
remaining provisions of this Agreement, or the application of such
provision or portion of such provision as is held invalid or
unenforceable to Persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected
thereby.
9.6. Captions. All section titles or captions contained
in this Agreement are for convenience only, shall not be deemed a
part of this Agreement and shall not affect the meaning or
interpretation of this Agreement. All references herein to
Sections shall be deemed references to such parts of this
Agreement, unless the context shall otherwise require.
9.7. Expenses. Except as otherwise expressly provided in
this Agreement, each party hereto shall pay its own expenses
incidental to the preparation of this Agreement, the carrying out
of the provisions hereof and the consummation of the transactions
contemplated hereby.
9.8. Equitable Relief. Each party acknowledges that, in
the event of any breach of this Agreement by a party, the other
party would be irreparably and immediately harmed and could not be
made whole by monetary damages. It is accordingly agreed that such
other party, in addition to any other remedy to which it may be
entitled, shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to compel
specific performance of this Agreement. Any requirements for the
securing or posting of any bond with respect to such remedy are
hereby waived by each of the parties hereto.
9.9. Definitions. The following terms shall have the
respective meanings specified in the indicated Sections of this
Agreement:
Term Agreement Section
Agreement Recitals
Authority 2.2
Board 1.3(b)(ii)
Closing 1.3(a)
Closing Date 1.3(a)
Commission 2.6
Common Stock Recitals
Company Recitals
Encumbrances 1.1
Exchange Act 2.4
Financial Statements 2.7(a)
First Demand Registration Period 6.2(a)
Holder 6.8(a)
Material Adverse Effect 2.1
Offering 6.3(b)
Person 4.1
Purchaser Recitals
Purchaser Material Adverse Effect 1.3(c)
Purchaser's Stock 6.1
SEC Reports 2.6
Second Demand Registration Period 6.2(b)
Securities Act 3.5
Shares Recitals
Shelf Registration 6.2
Stop Order 6.7(a)
Supplemental Demand Registration
Period 6.2(c)
Suspension Event 6.7(b)
IN WITNESS WHEREOF, each of the parties hereto has duly
executed and delivered this Agreement as of the date first above
written.
ALPHA BETA TECHNOLOGY, INC.
By: /s/
Name: Spiros Jamas
Title: President/CEO
ROSS FINANCIAL CORPORATION
By: /s/
Name: Kenneth B. Dart
Title: President
Schedule 2.1 Subsidiaries
Myco Tex, Inc.
ABT Securities Corp.<PAGE>
Schedule 2.5(b) Capitalization
Stock options to purchase 1,630,681 shares of the Company
s Common Stock are currently outstanding. 1,229,950 shares of the
Company's Common Stock are currently available for future grants
under the Company s 1988 Stock Option Grant Plan and the Company's
1997 Stock Option and Grant Plan.
[Exhibit D to Schedule 13D]
Alpha-Beta Technology, Inc.
and
The First National Bank of Boston,
as Rights Agent
Shareholder Rights Agreement
Dated as of February 2, 1995
<PAGE>
TABLE OF CONTENTS
Section Page
1. Certain Definitions. . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent. . . . . . . . . . . . . . . . 5
3. Issue of Right Certificates. . . . . . . . . . . . . . . . 5
4. Form of Right Certificates . . . . . . . . . . . . . . . . 7
5. Countersignature and Registration. . . . . . . . . . . . . 8
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates . . . . . . . . . . . . . . . . . . . . . . . 9
7. Exercise of Rights; Exercise Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8. Cancellation and Destruction of Right Certificates . . . . 12
9. Reservation and Availability of Preferred Stock. . . . . . 12
10. Preferred Stock Record Date . . . . . . . . . . . . . . . 14
11. Adjustment of Exercise Price, Number and Kind of Shares
or Number of Rights . . . . . . . . . . . . . . . . . . . 14
12. Certificate of Adjusted Exercise Price or Number of
Shares. . . . . . . . . . . . . . . . . . . . . . . . . . 23
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . . . . . . . . . 23
14. Fractional Rights and Fractional Shares . . . . . . . . . 25
15. Rights of Action. . . . . . . . . . . . . . . . . . . . . 26
16. Agreement of Right Holders. . . . . . . . . . . . . . . . 26
17. Right Certificate Holder Not Deemed a Shareholder . . . . 27
18. Concerning the Rights Agent . . . . . . . . . . . . . . . 27
19. Merger or Consolidation or Change of Name of Rights
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 28
20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . 28
21. Change of Rights Agent. . . . . . . . . . . . . . . . . . 31
22. Issuance of New Right Certificates. . . . . . . . . . . . 32
23. Redemption and Termination. . . . . . . . . . . . . . . . 32
24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . 33
25. Notice of Certain Events. . . . . . . . . . . . . . . . . 34
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 35
27. Supplements and Amendments. . . . . . . . . . . . . . . . 36
28. Successors. . . . . . . . . . . . . . . . . . . . . . . . 37
29. Determinations and Actions by the Board of Directors. . . 37
30. Benefits of this Agreement. . . . . . . . . . . . . . . . 37
31. Severability. . . . . . . . . . . . . . . . . . . . . . . 37
32. Governing Law . . . . . . . . . . . . . . . . . . . . . . 38
33. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 38
34. Descriptive Headings. . . . . . . . . . . . . . . . . . . 38
<PAGE>
Exhibit A -- Certificate of Designation of
Series A Junior Participating
Cumulative Preferred Stock
Exhibit B -- Form of Right Certificate
SHAREHOLDER RIGHTS AGREEMENT
Agreement, dated as of February 2, 1995, between Alpha-Beta
Technology, Inc., a Massachusetts corporation (the "Company"),
and The First National Bank of Boston, a national banking
association organized under the laws of the United States (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company desires to
provide shareholders of the Company with the opportunity to
benefit from the long-term prospects and value of the Company and
to ensure that shareholders of the Company receive fair and equal
treatment in the event of any proposed takeover of the Company;
and
WHEREAS, effective February 2, 1995, the Board of Directors
of the Company authorized and declared a dividend distribution of
one Right (as such term is hereinafter defined) for each
outstanding share of Common Stock, par value $0.01 per share, of
the Company (the "Common Stock") outstanding as of the close of
business on February 22, 1995 (the "Record Date"), and
contemplates the issuance of one Right for each share of Common
Stock of the Company issued (whether originally issued or sold
from the Company's treasury) between the Record Date and the
earlier of the Distribution Date or the Expiration Date (as such
terms are hereinafter defined), each Right initially representing
the right to purchase one one-thousandth of a share of Series A
Junior Participating Cumulative Preferred Stock of the Company
having the rights, powers and preferences set forth on Exhibit A
hereto, upon the terms and subject to the conditions hereinafter
set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as
hereinafter defined) who or which, together with all Affiliates
(as such term is hereinafter defined) and Associates (as such
term is hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the shares of Common Stock then outstanding, but shall
not include (i) the Company, (ii) any Subsidiary (as such term is
hereinafter defined) of the Company, (iii) any employee benefit
plan or compensation arrangement of the Company or any Subsidiary
of the Company or (iv) any Person holding shares of Common Stock
organized, appointed or established by the Company or any
Subsidiary of the Company for or pursuant to the terms of any
such employee benefit plan or compensation arrangement (the
Persons described in clauses (i) through (iv) above are referred
to herein as "Exempt Persons").
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition 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 15% or more of the shares of
Common Stock then outstanding; provided, however, that if a
Person shall become the Beneficial Owner of 15% or more of the
shares of Common Stock of the Company then outstanding by reason
of share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any
additional shares (other than pursuant to a stock split, stock
dividend or similar transaction) of Common Stock of the Company
and immediately thereafter be the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding, then such Person
shall be deemed to be an "Acquiring Person."
In addition, notwithstanding the foregoing, a Person shall
not be an "Acquiring Person" if the Board of Directors of the
Company determines that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing
provisions of this Section 1(a), has become such inadvertently,
and such Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this Section 1(a).
(b) "Adverse Person" shall mean any Person declared to
be an Adverse Person by the Board of Directors upon a
determination of the Board of Directors that the criteria set
forth in Section 11(a)(ii)(B) apply to such Person.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations (the "Rules") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement; provided, however, that no
Person who is a director or officer of the Company shall be
deemed an Affiliate or an Associate of any other director or
officer of the Company solely as a result of his or her position
as director or officer of the Company.
(d) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly,
beneficially owns (as determined pursuant to Rule 13d-3 of
the Rules under the Exchange Act, as in effect on the date of
this Agreement);
(ii) 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 or only after the passage of
time or upon the satisfaction of any conditions or both)
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," (1)
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; (2)
securities issuable upon exercise of these Rights at any
time prior to the occurrence of a Triggering Event; or
(3) securities issuable upon exercise of Rights from and
after the occurrence of a Triggering Event, which Rights
were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date
or pursuant to Sections 3(a), 11(i) or 22 hereof; or
(B) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to "beneficially
own," any security under this clause (B) if the
agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy given
in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the Rules of
the Exchange Act and (2) is not also then reportable by
such person on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(C) the right to dispose of pursuant to any
agreement, arrangement or understanding (whether or not
in writing) (other than customary arrangements with and
between underwriters and selling group members with
respect to a bona fide public offering of securities);
or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing)
(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 pursuant to a revocable
proxy as described in clause (B) of Section 1(d)(ii) hereof)
or disposing of any securities of the Company;
provided, however, that (1) no Person engaged in business as an
underwriter of securities shall be deemed the Beneficial Owner of
any securities acquired through such Person's participation as an
underwriter in good faith in a firm commitment underwriting until
the expiration of 40 days after the date of such acquisition, and
(2) no Person who is a director or an officer of the Company
shall be deemed, as a result of his or her position as director
or officer of the Company, the Beneficial Owner of any securities
of the Company that are beneficially owned by any other director
or officer of the Company.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the
Commonwealth of Massachusetts are authorized or obligated by law
or executive order to close.
(f) "Close of business" on any given date shall mean
5:00 P.M., Boston, Massachusetts time, on such date; provided,
however, that if such date is not a Business Day it shall mean
5:00 P.M., Boston, Massachusetts time, on the next succeeding
Business Day.
(g) "Common Stock" shall mean the Common Stock, par
value $0.01 per share, of the Company, except that "Common Stock"
when used with reference to any Person other than the Company
shall mean the capital stock with the greatest voting power, or
the equity securities or other equity interests having power to
control or direct the management, of such Person or, if such
Person is a Subsidiary of another Person, the Person which
ultimately controls such first-mentioned Person and which has
issued and outstanding such capital stock, equity securities or
equity interests.
(h) "Distribution Date" shall have the meaning defined
in Section 3(a) hereof.
(i) "Exercise Price" shall have the meaning defined in
Section 4(a) hereof.
(j) "Expiration Date" and "Final Expiration Date" shall
have the meanings set forth in Section 7(a) hereof.
(k) "Fair Market Value" of any securities or other
property shall be as determined in accordance with Section 11(d)
hereof.
(l) "Person" shall mean an individual, a corporation, a
partnership, an association, a joint stock company, a trust, a
business trust, a government or political subdivision, any
unincorporated organization, or any other association or entity.
(m) "Preferred Stock" shall mean shares of Series A
Junior Participating Cumulative Preferred Stock, par value $0.01
per share, of the Company having the rights and preferences set
forth in the form of Certificate of Designation attached hereto
as Exhibit A.
(n) "Principal Party" shall have the meaning defined in
Section 13(b) hereof.
(o) "Redemption Price" shall have the meaning defined
in Section 23 hereof.
(p) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(q) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(r) "Stock Acquisition Date" shall mean the date of the
first public announcement (which for purposes of this definition
shall include, without limitation, the issuance of a press
release or the filing of a publicly-available report or other
document with the Securities and Exchange Commission or any other
governmental agency) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(s) "Subsidiary" shall mean, with respect to any
Person, any other Person of which a majority of the voting power
of the voting equity securities or voting interests is owned,
directly or indirectly, by such Person, or which is otherwise
controlled by such Person.
(t) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date (as hereinafter defined in
Section 3(a)) also be the holders of the Common Stock) in
accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time
to time appoint such Co-Rights Agents as it may deem necessary or
desirable. In the event the Company appoints one or more Co-
Rights Agents, the respective duties of the Rights Agent and any
Co-Rights Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates.
(a) From the date hereof until the earlier of (i) the
close of business on the tenth Business Day after the Stock
Acquisition Date, (ii) the close of business on the tenth
Business Day (or such other Business Day, if any, as the Board of
Directors may determine in its sole discretion) after the date of
the commencement by any Person, other than an Exempt Person, of a
tender or exchange offer if, upon consummation thereof, such
Person would be the Beneficial Owner of 15% or more of the shares
of Common Stock then outstanding or (iii) the determination by
the Board of Directors of the Company, pursuant to the criteria
set forth in Section 11(a)(ii)(B) hereof, that a Person is an
Adverse Person (including any such date which is after the date
of this Agreement and prior to the issuance of the Rights) (the
earliest of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject
to the provisions of Section 3(b) hereof) by the certificates for
the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed
also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common
Stock. As soon as practicable after the Company has notified the
Rights Agent of the occurrence of the Distribution Date, the
Rights Agent will, at the Company's expense send, by first-class,
insured, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the
Company, one or more certificates, in substantially the form of
Exhibit B hereto (the "Right Certificates"), evidencing one Right
for each share of Common Stock so held. In the event that an
adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11(o) hereof, the Company shall
make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) at the time of distribution
of the Right Certificates, so that Right Certificates
representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after
the close of business on the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.
(b) With respect to certificates for the Common Stock
issued prior to the close of business on the Record Date, the
Rights will be evidenced by such certificates for the Common
Stock on or until the Distribution Date (or the earlier
redemption, expiration or termination of the Rights), and the
registered holders of the Common Stock also shall be the
registered holders of the associated Rights. Until the
Distribution Date (or the earlier redemption, expiration or
termination of the Rights), the transfer of any of the
certificates for the Common Stock outstanding prior to the date
of this Agreement shall also constitute the transfer of the
Rights associated with the Common Stock represented by such
certificate.
(c) Certificates for the Common Stock issued after the
Record Date, but prior to the earlier of the Distribution Date or
the redemption, expiration or termination of the Rights, shall be
deemed also to be certificates for Rights, and shall bear a
legend, substantially in the form set forth below:
This certificate also evidences and
entitles the holder hereof to certain
Rights as set forth in a Shareholder
Rights Agreement between Alpha-Beta
Technology, Inc. and The First National
Bank of Boston, as Rights Agent, dated
as of February 2, 1995 (the "Rights
Agreement"), the terms of which are
hereby incorporated herein by reference
and a copy of which is on file at the
principal offices of Alpha-Beta
Technology, 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. Alpha-Beta Technology,
Inc. may redeem the Rights at a
redemption price of $0.01 per Right,
subject to adjustment, under the terms
of the Rights Agreement. Alpha-Beta
Technology, Inc. will mail to the holder
of this certificate a copy of the Rights
Agreement, as in effect on the date of
mailing, without charge promptly after
receipt of a written request therefor.
Under certain circumstances, Rights
issued to or held by Acquiring Persons,
Adverse Persons or any Affiliates or
Associates thereof (as defined in the
Rights Agreement), and any subsequent
holder of such Rights, may become null
and void.
With respect to such certificates containing the foregoing
legend, the Rights associated with the Common Stock represented
by such certificates shall be evidenced by such certificates
alone until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), and the transfer of
any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such
certificates. In the event that the Company purchases or
acquires any shares of Common Stock after the Record Date but
prior to the Distribution Date, any Rights associated with such
Common Stock shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated
with the shares of Common Stock which are no longer outstanding.
The failure to print the foregoing legend on any such Common
Stock certificate or any defect therein shall not affect in any
manner whatsoever the application or interpretation of the
provisions of Section 7(e) hereof.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election
to purchase shares and of assignment and certificate to be
printed on the reverse thereof) shall each be substantially in
the form of Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable
law, rule or regulation or with any rule or regulation of any
stock exchange on which the Rights may from time to time be
listed, or to conform to customary usage. The Rights
Certificates shall be in a machine printable format and in a
form reasonably satisfactory to the Rights Agent. Subject to
the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the
Record Date, shall show the date of countersignature, and on
their face shall entitle the holders thereof to purchase such
number of one one-thousandths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (the
"Exercise Price"), but the number of such shares and the
Exercise Price shall be subject to adjustment as provided
herein.
(b) Any Right Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially
owned by (i) an Acquiring Person, an Adverse Person or any
Associate or Affiliate of an Acquiring Person or an Adverse
Person, (ii) a transferee of an Acquiring Person or an Adverse
Person (or of any Associate or Affiliate of an Acquiring Person
or an Adverse Person) who becomes a transferee after the
Acquiring Person or Adverse Person becomes such, or (iii) a
transferee of an Acquiring Person or an Adverse Person (or of
any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person or Adverse Person
becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring
Person or Adverse Person to holders of equity interests in such
Acquiring Person or Adverse Person or to any Person with whom
the Acquiring Person or Adverse Person has any continuing
agreement, arrangement or understanding (whether or not in
writing) 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 Section 7(e) hereof,
and any Right Certificate issued pursuant to Section 6,
Section 11 or Section 22 upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this
sentence, shall have deleted therefrom the second sentence of
the existing legend on such Right Certificate and in
substitution therefor shall contain the following legend:
The Rights represented by this Right
Certificate are or were beneficially owned by
a Person who was or became an Acquiring
Person, an Adverse Person or an Affiliate or
an Associate of an Acquiring Person or an
Adverse Person (as such terms are defined in
the Rights Agreement). This Right
Certificate and the Rights represented hereby
may become null and void under certain
circumstances as specified in Section 7(e) of
the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after
it becomes aware of the existence and identity of any Acquiring
Person or Adverse Person or any Associate or Affiliate thereof.
The Company shall instruct the Rights Agent in writing of the
Rights which should be so legended. The failure to print the
foregoing legend on any such Right Certificate or any defect
therein shall not affect in any manner whatsoever the
application or interpretation of the provisions of Section 7(e)
hereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf
of the Company by its Chairman of the Board, or its President or
any Vice President and by its Treasurer or any Assistant
Treasurer, or by its Secretary or any Assistant Secretary,
either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which
shall be attested to by the Secretary or any Assistant Secretary
of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by an
authorized signatory of the Rights Agent and shall not be valid
for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates, nevertheless, may be
countersigned by an authorized signatory of the Rights Agent,
and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates
had not ceased to be such officer of the Company; and any Right
Certificates may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at one of its offices designated
as the appropriate place for surrender of Right Certificates
upon exercise or transfer, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face
by each of the Right Certificates and the date of each of the
Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close
of business on the Expiration Date, any Right Certificate or
Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-
thousandths of a share of Preferred Stock (or following a
Triggering Event, preferred stock, cash, property, debt
securities, common stock or any combination thereof) as the
Right Certificate or Certificates surrendered then entitled such
holder to purchase and at the same Exercise Price. Any
registered holder desiring to transfer, split up, combine or
exchange any Right Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Certificates to be transferred, split up,
combined or exchanged, with the form of assignment and
certificate duly executed, at the office or offices 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
Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Right Certificate or Certificates,
as the case may be, as so requested. The Company may require
payment by the registered holder of a Right Certificate, of a
sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(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 Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security
satisfactory to them, and reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right
Certificate, if mutilated, the Company will execute and deliver
a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the registered
holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole
or in part at any time after the Distribution Date upon
surrender of the Right Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office or offices of the
Rights Agent designated for such purpose, together with payment
of the aggregate Exercise Price for the total number of one one-
thousandths of a share of Preferred Stock (or other securities,
cash or other assets, as the case may be) as to which such
surrendered Rights are then exercised, at or prior to the
earlier of (i) the close of business on February 2, 2005 (the
"Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof
(the earlier of (i), (ii) or (iii) being herein referred to as
the "Expiration Date"). Except as set forth in Section 7(e)
hereof and notwithstanding any other provision of this
Agreement, any Person who prior to the Distribution Date becomes
a record holder of shares of Common Stock may exercise all of
the rights of a registered holder of a Right Certificate with
respect to the Rights associated with such shares of Common
Stock in accordance with the provisions of this Agreement, as of
the date such Person becomes a record holder of shares of Common
Stock.
(b) The Exercise Price for each one one-thousandth of
a share of Preferred Stock pursuant to the exercise of a Right
shall initially be $76.00, shall be subject to adjustment from
time to time as provided in Section 11 and Section 13 hereof and
shall be payable in lawful money of the United States of America
in accordance with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and
the certificate on the reverse side thereof duly executed,
accompanied by payment of the Exercise Price for the shares to
be purchased and an amount equal to any applicable transfer tax
(as determined by the Rights Agent) in cash, or by certified
check or bank draft payable to the order of the Company, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i)(A) requisition from any transfer agent of Preferred
Stock (or make available, if the Rights Agent is the transfer
agent therefor) certificates for the number of one one-
thousandths of a share 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 shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts
representing such number of one one-thousandths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash, if any, to be
paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after
receipt promptly deliver such cash to or upon the order of the
registered holder of such Right Certificate. In the event that
the Company is obligated to issue other securities (including
Common Stock) of the Company, pay cash or distribute other
property pursuant to Section 11(a) hereof, the Company will make
all arrangements necessary so that such other securities, cash
or other property are available for distribution by the Rights
Agent, if and when appropriate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person, an Adverse Person or any Associate or
Affiliate of an Acquiring Person or an Adverse Person, (ii) a
transferee of an Acquiring Person or an Adverse Person (or of
any Associate or Affiliate of an Acquiring Person or an Adverse
Person) who becomes a transferee after the Acquiring Person or
Adverse Person becomes such or (iii) a transferee of an
Acquiring Person or an Adverse Person (or of any Associate or
Affiliate of an Acquiring Person or an Adverse Person) who
becomes a transferee prior to or concurrently with the Acquiring
Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to
holders of equity interests in such Acquiring Person or Adverse
Person or to any Person with whom the Acquiring Person or
Adverse 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),
shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no
liability to any holder of Right Certificates or other Person as
a result of its failure to make any determinations with respect
to an Acquiring Person or Adverse Person or any Affiliates or
Associates of an Acquiring Person or an Adverse Person or any
transferee of any of them hereunder.
(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 of Rights 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 Right Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company.
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized
and unissued shares of Preferred Stock or any authorized and
issued shares of Preferred Stock held in its treasury, the
number of shares of Preferred Stock that will be sufficient to
permit the exercise in full of all outstanding and exercisable
Rights.
(b) The Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all
shares of Preferred Stock issued or reserved for issuance to be
listed, upon official notice of issuance, upon the principal
national securities exchange, if any, upon which the Common
Stock is listed or, if the principal market for the Common Stock
is not on any national securities exchange, to be eligible for
quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or any successor thereto
or other comparable quotation system.
(c) The Company shall use its best efforts to
(i) file, as soon as practicable following the earliest date
after the occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of
the Rights has been determined in accordance with
Section 11(a)(iii) hereof, or as soon as required by law
following the Distribution Date, as the case may be, a
registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the 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
that at all times meets 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 or (B) the Expiration
Date. The Company will also take such action as may be
appropriate under, and which will ensure compliance with, the
securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The Company
may temporarily suspend, for a period of time not to exceed
ninety (90) days after the date determined in accordance with
the provisions of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect, in each case with
prompt written notice to the Rights Agent. Notwithstanding any
such provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been
obtained.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of
Preferred Stock delivered upon the exercise of the Rights shall,
at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(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 Right Certificates or of any
certificates for shares 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 Right Certificates to a person other than, or in
respect of the issuance or delivery of securities in a name
other than that of, the registered holder of the Right
Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for securities in a name other
than that of the registered holder upon the exercise of any
Rights until such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in
whose name any certificate for Preferred Stock is issued upon
the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock
represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Exercise 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 transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock transfer
books of the Company are open. Prior to the exercise of the
Right evidenced thereby, the holder of a Right Certificate shall
not be entitled to any rights of a shareholder of the Company
with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Exercise Price, Number and Kind
of Shares or Number of Rights. The Exercise Price, the number
and kind of shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event 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 Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of
shares 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) and Section 7(e) hereof, the Exercise 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 issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books
of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration
to be paid upon the exercise of a Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of a Right. If an event
occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 24
hereof, in the event
(A) any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring
Person, or
(B) the Board of Directors of the Company,
by majority vote, shall declare any Person to be an
Adverse Person, after (x) a determination that such
Person, alone or together with its Affiliates and
Associates, has become the Beneficial Owner of 10% or
more of the outstanding shares of Common Stock and
(y) a determination by the Board of Directors, after
reasonable inquiry and investigation, including such
consultation, if any, with such persons as such
directors shall deem appropriate, that (a) such
Beneficial Ownership by such Person is intended to
cause, is reasonably likely to cause or will cause the
Company to repurchase the Common Stock beneficially
owned by such Person or to cause pressure on the
Company to take action or enter into a transaction or
series of transactions which would provide such Person
with short-term financial gain under circumstances
where the Board of Directors determines that the best
long-term interests of the Company and its
shareholders, but for the actions and possible actions
of such Person, would not be served by taking such
action or entering into such transactions or series of
transactions at that time or (b) such Beneficial
Ownership is causing or reasonably likely to cause a
material adverse impact (including, but not limited to,
impairment of relationships with customers or
impairment of the Company's ability to maintain its
competitive position) on the business or prospects of
the Company; provided, however, that the Board of
Directors of the Company may not declare a Person to be
an Adverse Person if, prior to the time that such
Person acquired 10% or more of the shares of Common
Stock then outstanding, such Person provided to the
Board of Directors in writing a statement of such
Person's purpose and intentions in connection with the
proposed acquisition of Common Stock, together with any
other information reasonably requested of such Person
by the Board of Directors, and the Board of Directors,
based on such statement and reasonable inquiry and
investigation, including such consultation, if any,
with such Person as the Board of Directors shall deem
appropriate, determines to notify and notifies such
Person in writing that it will not declare such Person
to be an Adverse Person; provided further, that the
Board of Directors may expressly condition in any
manner a determination not to declare a Person an
Adverse Person on such conditions as the Board of
Directors may select, including without limitation,
such Person's not acquiring more than a specified
amount of stock and/or on such Person's not taking
actions inconsistent with the purposes and intentions
disclosed by such Person in the statement provided to
the Board of Directors. No delay or failure by the
Board of Directors to declare a Person to be an Adverse
Person shall in any way waive or otherwise affect the
power of the Board of Directors subsequently to declare
a Person to be an Adverse Person. In the event that
the Board of Directors should at any time determine,
upon reasonable inquiry and investigation, including
consultation with such Persons as the Board of
Directors shall deem appropriate, that such Person has
not met or complied with any condition specified by the
Board of Directors, the Board of Directors may at any
time thereafter declare such Person to be an Adverse
Person pursuant to the provisions of this
Section 11(a)(ii)(B),
then, and in each such case, promptly following any such
occurrence, proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have a right to receive, upon
exercise thereof at the then current Exercise Price in
accordance with the terms of this Agreement, such number of
shares of Preferred Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Exercise
Price by the then number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section
11(a)(ii) Event and dividing that product by (y) 50% of the
Fair Market Value per one one-thousandth of a share of the
Preferred Stock (determined pursuant to Section 11(d)) on
the date of the occurrence of any one of the events listed
above in this Section 11(a)(ii).
(iii) In the event that there shall not be
sufficient authorized but unissued shares of Preferred
Stock to permit the exercise in full of the Rights in
accordance with the foregoing Section 11(a)(ii), the
Company shall take all action as may be necessary to
authorize and reserve for issuance such number of
additional shares of Preferred Stock as may from time
to time be required to be issued upon the exercise in
full of all Rights outstanding and, if necessary, shall
use its best efforts to obtain shareholder approval
thereof. Notwithstanding the foregoing provisions of
this Section 11(a)(iii), in lieu of issuing shares of
Preferred Stock in accordance with Section 11(a)(ii)
hereof, if a majority of the Directors then in office
determines that such action is necessary or appropriate
and is not contrary to the interests of the holders of
the Rights, they may elect to cause the Company to pay,
and if sufficient shares of Preferred Stock cannot be
issued for such purpose in accordance with the
provisions hereof, the Company shall issue or pay upon
the exercise of the Rights, cash, property, debt
securities, shares of preferred stock or common stock,
or any combination thereof, having an aggregate Fair
Market Value equal to the Fair Market Value of the
shares of Preferred Stock which otherwise would have
been issuable pursuant to Section 11(a)(ii). Any such
election by a majority of the Directors of the Company
must be made and publicly announced within 30 days of
the date on which any Section 11(a)(ii) Event first
occurs following the Stock Acquisition Date.
(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 45
calendar days after such record date) to subscribe for or
purchase Preferred Stock (or securities having the same or more
favorable rights, privileges and preferences as the shares of
Preferred Stock ("preferred stock equivalents")) or securities
convertible into Preferred Stock or preferred stock equivalents
at a price per share of Preferred Stock or per share of
preferred stock equivalents (or having a conversion price per
share, if a security convertible into Preferred Stock or
preferred stock equivalents) less than the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date, the Exercise Price to be in
effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number
of shares of Preferred Stock outstanding on such record date,
plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock
to be offered (and the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
Fair Market Value and the denominator of which shall be the
number of shares of Preferred Stock outstanding on such record
date, plus the number of additional shares of Preferred Stock
and preferred stock equivalents to be offered for subscription
or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in
no event shall the consideration to be paid upon the exercise of
a Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of a Right.
In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the
value of such consideration shall be the Fair Market Value
thereof determined in accordance with Section 11(d) hereof.
Shares 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 adjustments shall be made
successively whenever such a record date is fixed; and in the
event that such rights or warrants are not so issued, the
Exercise Price shall be adjusted to be the Exercise 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 the
making of a distribution to all holders 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 periodic cash dividend out of the earnings
or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or convertible
securities, subscription rights or warrants (excluding those
referred to in Section 11(b)), the Exercise Price to be in
effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the Fair
Market Value (as determined pursuant to Section 11(d) hereof)
per one one-thousandth of a share of Preferred Stock on such
record date, less the Fair Market Value (as determined pursuant
to Section 11(d) hereof) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such
convertible securities, subscription rights or warrants
applicable to one one-thousandth of a share of Preferred Stock
and the denominator of which shall be the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per one one-
thousandth of a share of Preferred Stock; provided, however,
that in no event shall the consideration to be paid upon the
exercise of a Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of
a Right. 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 Exercise Price shall again be
adjusted to be the Exercise Price which would be in effect if
such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair
Market Value" of any share of Preferred Stock, Common Stock or
any other stock or any Right or other security or any other
property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or
other security, the Fair Market Value on any date shall
be deemed to be the average of the daily closing prices
per share of such stock or per unit of such other
security for the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the
Fair Market Value per share of any share of stock is
determined during a period following the announcement
by the issuer of such stock of (x) a dividend or
distribution on such stock payable in shares of such
stock or securities convertible into shares of such
stock or (y) any subdivision, combination or
reclassification of such stock, and prior to the
expiration of the 30 Trading Day period after the ex-
dividend date for such dividend or distribution, or the
record date for such subdivision, combination or
reclassification, then, and in each such case, the Fair
Market Value shall be properly adjusted to take into
account ex-dividend trading. The closing price for
each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular
way, in either case as reported in the principal
consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New
York Stock Exchange or, if the securities are not
listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which such security is listed or admitted to trading;
or, if not listed or admitted to trading on any
national securities exchange, the last quoted price
(or, if not so quoted, the average of the last quoted
high bid and low asked prices) in the over-the-counter
market, as reported by NASDAQ or such other system then
in use; or, if on any such date no bids for such
security are 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 such security selected by the Board of
Directors of the Company. If on any such date no
market maker is making a market in such security, the
Fair Market Value of such security on such date shall
be determined reasonably and with utmost good faith to
the holders of the Rights by the Board of Directors of
the Company, provided, however, that if at the time of
such determination there is an Acquiring Person or an
Adverse Person, the Fair Market Value of such security
on such date shall be determined by a nationally
recognized investment banking firm selected by the
Board of Directors, which determination shall be
described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the
holders of the Rights. The term "Trading Day" shall
mean a day on which the principal national securities
exchange on which such security is listed or admitted
to trading is open for the transaction of business or,
if such security is not listed or admitted to trading
on any national securities exchange, a Business Day.
(ii) If a security is not publicly held or not so
listed or traded, "Fair Market Value" shall mean the
fair value per share of stock or per other unit of such
security, determined reasonably and with utmost good
faith to the holders of the Rights by the Board of
Directors of the Company, provided, however, that if at
the time of such determination there is an Acquiring
Person or an Adverse Person, the Fair Market Value of
such security on such date shall be determined by a
nationally recognized investment banking firm selected
by the Board of Directors, which determination shall be
described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the
holders of the Rights; provided, however, that for the
purposes of making any adjustment provided for by
Section 11(a)(ii) hereof, the Fair Market Value of a
share of Preferred Stock shall not be less than the
product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then
Dividend Multiple or Vote Multiple (as both of such
terms are defined in the Certificate of Designation
attached as Exhibit A hereto) applicable to the
Preferred Stock and shall not exceed 105% of the
product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then
Dividend Multiple or Vote Multiple applicable to the
Preferred Stock.
(iii) In the case of property other than
securities, the Fair Market Value thereof shall be
determined reasonably and with utmost good faith to the
holders of Rights by the Board of Directors of the
Company, provided, however, that if at the time of such
determination there is an Acquiring Person or an
Adverse Person, the Fair Market Value of such property
on such date shall be determined by a nationally
recognized investment banking firm selected by the
Board of Directors, which determination shall be
described in a statement filed with the Rights Agent
and shall be binding upon the Rights Agent and the
holders of the Rights.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at
least 1% in the Exercise 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 hundred-thousandth of a share of Common Stock or ten-
millionth of a share of Preferred Stock, as the case may be, or
to such other figure as the Board of Directors may deem
appropriate. 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 (3) years from the date
of the transaction which mandates such adjustment or (ii) the
Expiration Date.
(f) If as a result of any provision of Section 11(a)
hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the
Company other than Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Section 11(a), (b),
(c), (e), (g) through (k) and (m), inclusive, and the provisions
of Sections 7, 9, 10, 13 and 14 hereof 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 Exercise Price
hereunder shall evidence the right to purchase, at the adjusted
Exercise Price, the number of one one-thousandths of a share of
Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Exercise Price as a result of the calculations made in
Section 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Exercise Price, that number
of one one-thousandths of a share of Preferred Stock (calculated
to the nearest one ten-millionth) obtained by (i) multiplying
(x) the number of one one-thousandths of a share of Preferred
Stock for which a Right may be exercisable immediately prior to
this adjustment by (y) the Exercise Price in effect immediately
prior to such adjustment of the Exercise Price and (ii) dividing
the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
(i) The Company may elect on or after the date of any
adjustment of the Exercise Price to adjust the number of Rights,
in substitution for any adjustment in the number of shares of
Preferred Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-
thousandths of a share 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 one-hundred-thousandth) obtained by dividing the Exercise
Price in effect immediately prior to adjustment of the Exercise
Price by the Exercise Price in effect immediately after
adjustment of the Exercise 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 Exercise Price is
adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly
as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Exercise Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Exercise Price or the number of one one-thousandths of a share
of Preferred Stock issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may
continue to express the Exercise Price per share and the number
of shares which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Exercise Price below the then stated
value, if any, of the number of one one-thousandths of a share
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
shares of Preferred Stock at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Exercise Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date the number
of one one-thousandths of a share of Preferred Stock or other
capital stock or securities of the Company, if any, issuable
upon such exercise over and above the number of one one-
thousandths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Exercise Price in effect prior to
such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Exercise Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the
Preferred Stock, issuance wholly for cash of any shares of
Preferred Stock at less than the Fair Market Value, issuance
wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares
of Preferred Stock, stock dividends or issuance of rights,
options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred Stock,
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date and so long as the
Rights have not been redeemed pursuant to Section 23 hereof or
exchanged pursuant to Section 24 hereof, (i) consolidate with,
(ii) merge with or into, or (iii) sell or transfer (or permit
any Subsidiary to sell or transfer), in one transaction or a
series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries taken as a whole, to any other
Person or Persons if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights,
warrants or other instruments outstanding or agreements or
arrangements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights, or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale the shareholders of a
Person who constitutes, or would constitute, the "Principal
Party" for the purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates. The Company
further covenants and agrees that after the Distribution Date it
will not, except as permitted by Section 23 or Section 27
hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that
such action will substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
(o) In the event the Company shall at any time after
the date of this Agreement and prior to the Distribution Date
(i) declare or pay any dividend on the outstanding Common Stock
payable in shares of Common Stock or (ii) effect a subdivision,
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of
dividends in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in any such case (A) the
number of one one-thousandths of a share of Preferred Stock
purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one one-
thousandths of a share of Preferred Stock so purchasable
immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which is
the number of shares of Common Stock outstanding immediately
after such event, and (B) each share of Common Stock outstanding
immediately after such event shall have issued with respect to
it that number of Rights which each share of Common Stock
outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section
11(o) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or
consolidation is effected.
(p) The exercise of Rights under Section 11(a)(ii)
shall only result in the loss of rights under Section 11(a)(ii)
to the extent so exercised and shall not otherwise affect the
rights of holders of Right Certificates under this Rights
Agreement, including rights to purchase securities of the
Principal Party following a Section 13 Event which has occurred
or may thereafter occur, as set forth in Section 13 hereof.
Upon exercise of a Right Certificate under Section 11(a)(ii),
the Rights Agent shall return such Right Certificate duly marked
to indicate that such exercise has occurred.
Section 12. Certificate of Adjusted Exercise Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent and with each transfer agent
for the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 26 hereof.
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 any 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) In the event that, following the Stock 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 is not
prohibited by Section 11(n) hereof), 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
Company in a transaction which is not prohibited by Section
11(n) hereof) shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with
such merger, all or part of the shares of Common Stock 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, mortgage or otherwise transfer (or one or more of
its Subsidiaries shall sell, mortgage or otherwise transfer), in
one transaction or a series of related transactions, assets or
earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions, each of
which is not prohibited by Section 11(n) hereof), 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)
hereof, shall have the right to receive, upon the exercise
thereof at the then current Exercise Price in accordance with
the terms of this Agreement, such number of validly authorized
and issued, fully paid and nonassessable shares of freely
tradeable Common Stock of the Principal Party (as hereinafter
defined in Section 13(b)), free and clear of rights of call or
first refusal, liens, encumbrances or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the
then current Exercise Price by the number of one one-thousandths
of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event,
and dividing that product by (2) 50% of the Fair Market Value
(determined pursuant to Section 11(d) hereof) per share of the
Common Stock of such Principal Party on the date of consummation
of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale, mortgage
or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof
shall apply to such Principal Party; and (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
to permit exercise of all outstanding Rights in accordance with
this Section 13(a) and the making of payments in cash and/or
other securities in accordance with Section 11(a)(iii) hereof)
in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise
of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a),
the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such
merger or consolidation, and if no securities are so issued,
the Person that is the other party to the merger or
consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (x) if the Common
Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary or Affiliate of another Person the Common
Stock of which is and has been so registered, "Principal Party"
shall refer to such other Person; (y) in case such Person is a
direct or indirect Subsidiary or Affiliate of more than one
Person, the Common Stocks of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever
of such Persons is the issuer of the Common Stock having the
greatest aggregate market value of shares outstanding; and
(z) in case such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth
in (x) and (y) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such
party were a "Subsidiary" of both or all of such joint venturers
and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto (x)
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 (y) the Company
and each Principal Party and each other Person who may become a
Principal Party as a result of such consolidation, merger, sale
or transfer shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in Section 13(a) and (b) and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or
transfer of assets mentioned in Section 13(a), the Principal
Party at its own expense will:
(i) prepare and file a registration statement
under the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and use its best efforts to
cause such registration statement to remain effective (with
a prospectus that at all times meets the requirements of the
Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable upon exercise of
the Rights under the blue sky laws of such jurisdictions as
may be necessary or appropriate;
(iii) use its best efforts to list (or
continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirements
for quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all material respects with the
requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other
transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as
provided in Section 11(o) hereof, or to distribute Right
Certificates which evidence fractional Rights. If the Company
elects not to issue such fractional Rights, the Company shall
pay, in lieu of such fractional Rights, to the registered
holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the Fair Market Value of a whole
Right, as determined pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue
fractions of shares 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 shares of Preferred Stock
(other than fractions which are integral multiples of one one-
thousandth of a share of Preferred Stock). 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 may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
Fair Market Value of one one-thousandth of a share of Preferred
Stock. For purposes of this Section 14(b), the Fair Market
Value of one one-thousandth of a share of Preferred Stock shall
be determined pursuant to Section 11(d) hereof for the Trading
Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right, except
as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, other than rights of action vested in
the Rights Agent pursuant to Sections 18 and 20 hereof, are
vested in the respective registered holders of the Right
Certificates (or, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Right Agent or of the
holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, on his own behalf
and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce,
or otherwise act in respect of, his right to exercise the Right
evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach
of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of
any Person subject to this Agreement. Holders of Rights shall
be entitled to recover the reasonable costs and expenses,
including attorneys' fees, incurred by them in any action to
enforce the provisions of this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, each Right will be
transferable only simultaneously and together with the transfer
of shares of Common Stock;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the office or offices of the
Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and
treat the person in whose name a Right 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 Right 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 the
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 obligations; provided, however, that the
Company must use its best efforts to have any such order, decree
or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the shares of Preferred Stock or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent such
compensation as shall be agreed to in writing between the
Company and the Rights Agent for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution
of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly. The provisions of
this Section 18(a) shall survive the expiration of the Rights
and the termination of this Agreement.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any Right Certificate or
certificate for Common Stock, Preferred Stock, or other
securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed and
executed by the proper Person or Persons.
(c) The Rights Agent shall not be liable for
consequential damages under any provision of this Agreement or
for any consequential damages arising out of any act or failure
to act hereunder.
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
corporate trust or shareholder services business of the Rights
Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates
shall have been countersigned but not delivered, the Rights
Agent may adopt the countersignature under its prior name and
deliver Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name;
and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations expressly imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person or Adverse
Person and the determination of "Fair Market Value") be proved
or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in
respect thereof shall be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, a Vice Chairman of the Board, the
President, a Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or an Assistant Secretary of the
Company and delivered to the Rights Agent. Any such certificate
shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Right 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
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 7(e) hereof) or any adjustment
required under the provisions of Sections 11, 13 or 23(c) hereof
or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt
of a certificate describing any such adjustment furnished in
accordance with Section 12 hereof), nor shall it be responsible
for any determination by the Board of Directors of the Company
of the Fair Market Value of the Rights or Preferred Stock
pursuant to the provisions of Section 14 hereof; nor shall it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares
of Common Stock or Preferred Stock will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder and certificates delivered pursuant to any
provision hereof from any person believed by the Rights
Agent to be the Chairman of the Board, any Vice Chairman of the
Board, the President, a Vice President, the Clerk, an Assistant
Clerk, the Treasurer or an Assistant Treasurer of the Company,
and is authorized to apply to such officers for advice or
instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer.
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 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 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 receives such application, unless any such officer
shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the
case of an omission), 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 shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not the
Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to
the Company or to the holders of the Rights resulting from any
such act, omission, 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 there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause (1) or
clause (2) thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company by first class mail. The Company
may remove the Rights Agent or any successor Rights Agent (with
or without cause) upon thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock and
Preferred Stock by registered or certified mail, and to the
holders of the Right 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 (30) days after
giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the incumbent
Rights Agent or the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be
(a) a corporation organized and doing business under the laws of
the United States or of the Commonwealth of Massachusetts or the
State of New York (or of any other state of the United States so
long as such corporation is authorized to do business as a
banking institution in the Commonwealth of Massachusetts or the
State of New York), in good standing, which is authorized under
such laws to exercise stock transfer or corporate trust powers
and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000 or
(b) an Affiliate of a corporation described in clause (a) of
this sentence. 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 and the Preferred Stock, and mail a notice thereof
in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price per share and the
number or kind or class of shares of stock or other securities
or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale of shares of Common
Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee
plan or arrangement, or upon the exercise, conversion or
exchange of securities hereafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right
Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences
to the Company or the person to whom such Right Certificate
would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustments shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any dividend declared or paid on the Common
Stock in shares of Common Stock or any subdivision or
combination of the outstanding shares of Common Stock or similar
event occurring after the date of this Agreement (such
redemption price, as adjusted from time to time, being
hereinafter referred to as the "Redemption Price"). The Rights
may be redeemed only until the earliest to occur of (i) 5:00
P.M., Boston, Massachusetts time, on the tenth Business Day
after the Stock Acquisition Date, (ii) the declaration by the
Board of Directors that any Person is an Adverse Person or (iii)
the Final Expiration Date.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the
action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights by
mailing such notice to the Rights Agent and to all such holders
at their last addresses as they appear upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made. 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 Section 24 hereof or in connection with the purchase of
shares of Common Stock prior to the Distribution Date.
(c) The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the Fair Market
Value of the Common Stock as of the time of redemption) or any
other form of consideration deemed appropriate by the Board of
Directors.
(d) In the event the Company shall at any time after
the date of this Rights Agreement (i) pay any dividend on Common
Stock in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock into a greater number of shares or (iii)
combine the outstanding shares of Common Stock into a smaller
number of shares of the outstanding shares of Common Stock, then
and in each such event the Redemption Price after such event
shall equal the Redemption Price immediately prior to such event
multiplied by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately prior to such
event and the denominator of which is the number of shares of
Common Stock outstanding immediately after such event; provided,
however, that in each case such adjustment to the Redemption
Price shall be made only if the amount of the Redemption Price
shall be reduced or increased by $0.001 per Right.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time on or after the occurrence of a Section
11(a)(ii) Event, 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 shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than an
Exempt Person), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock of the Company.
(b) Immediately upon the action 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 shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give notice of any
such exchange in accordance with Section 26 hereof; provided,
however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. Each such
notice of exchange will state the method by which the exchange
of the shares of Common 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) hereof)
held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or
preferred stock equivalent, as such term is defined in Section
11(b) hereof) for Common Stock exchangeable for Rights, at the
initial rate of one one-thousandth of a share of Preferred Stock
(or preferred stock equivalent) for each share of Common Stock,
as appropriately adjusted to reflect adjustments in the voting
rights of the Preferred Stock pursuant to the terms thereof, so
that the fraction of a share of Preferred Stock delivered in
lieu of each share of Common Stock shall have the same voting
rights as one share of Common Stock.
(d) In the event that there shall not be sufficient
shares of Common Stock or Preferred Stock (or preferred stock
equivalent) issued but not outstanding or authorized but
unissued 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
Common Stock or Preferred Stock (or preferred stock equivalent)
for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue
fractions of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. If the Company
elects not to issue such fractional shares of Common Stock, the
Company shall pay, in lieu of such fractional shares of Common
Stock, to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would
otherwise be issuable, an amount in cash equal to the same
fraction of the Fair Market Value of a whole share of Common
Stock. For the purposes of this paragraph (e), the Fair Market
Value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to make
any other distribution to the holders of Preferred Stock (other
than a regular periodic cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for
or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only
the subdivision of outstanding shares of Preferred Stock), or
(iv) to effect any consolidation or merger into or with, or to
effect any sale, mortgage or other transfer (or to permit one or
more of its Subsidiaries to effect any sale, mortgage or other
transfer), in one transaction or a series of related
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 (other than a Subsidiary of the Company in one or
more transactions each of which is not prohibited by Section
11(n) hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, (vi) to declare or pay any dividend
on the Common Stock payable in Common Stock or to effect a
subdivision, combination or consolidation of the Common Stock
(by reclassification or otherwise than by payment of dividends
in Common Stock) then in each such case, the Company shall give
to each holder of a Right Certificate and to the Rights Agent,
in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to
take place and the date of participation therein by the holders
of the shares of Common Stock and/or 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 twenty (20) 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
twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of the shares of Common Stock and/or Preferred Stock,
whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur,
then, in any such case, the Company shall as soon as practicable
thereafter give to each registered holder of a Right Certificate
and to the Rights Agent, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof.
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 Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
The First National Bank of Boston
150 Royall Street, Mail Stop 45-02-16
Canton, MA 02021
Attention: Shareholder Services Division
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 Right Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
Alpha-Beta Technology, Inc.
One Innovation Drive
Worcester, MA 01605
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate (or, prior to the Distribution Date, to the
holder of any certificate representing shares of Common Stock)
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of
this Agreement as the Company may deem necessary or desirable
without the approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution Date,
the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval
of any holder of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereof
in any manner which the Company may deem necessary or desirable
and which shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person,
Adverse Person or any Affiliate or Associate of an Acquiring
Person or Adverse Person); provided, however, that from and
after the Distribution Date this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of
this sentence, (A) a time period relating to when the Rights may
be redeemed at such time as the Rights are not then redeemable
or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of,
and the benefits to, the holders of Rights. Without limiting
the foregoing, the Company may at any time prior to such time as
any Person becomes an Acquiring Person amend this Agreement to
lower the threshold set forth in Section 1(a) to not less than
the greater of (i) the sum of .001% and the largest percentage
of the outstanding Common Stock then known by the Company to be
beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding
Common Stock for or pursuant to the terms of any such plan) and
(ii) 10%. Upon the delivery of such certificate from an
appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Common Stock.
Notwithstanding any other provision hereof, the Rights Agent's
consent must be obtained regarding any amendment or supplement
pursuant to this Section 27 which alters the Rights Agent's
rights or duties.
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. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
Rules under the Exchange Act as in effect on the date hereof.
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 or to
the Company, or as may be necessary or advisable in the
administration of this Agreement, including without limitation,
the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made
by the Board of Directors in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject
any member of the Board of Directors to any liability to the
holders of the Rights or to any other person.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in
this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the
Company determines in its good faith judgment that severing the
invalid language from the Agreement would adversely affect the
purpose or effect of the Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following
the date of such determination by the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and
each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of The Commonwealth of
Massachusetts and for all purposes shall be governed by and
construed in accordance with the laws of such Commonwealth
applicable to contracts to be made and to be performed entirely
within Commonwealth.
Section 33. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
ATTEST: ALPHA-BETA TECHNOLOGY, INC.
By: By: /s/ Spires Jamas
Name: Spires Jamas
Title: President, CEO
ATTEST: THE FIRST NATIONAL BANK OF
BOSTON, as Rights Agent
By: By: /s/ Katherine S. Anderson
Name: Katherine S. Anderson
Title: Adminstration Manager
141873.c1
[Exhibit A to Shareholder's Rights Agreement]
Exhibit A
VOTE OF DIRECTORS
ESTABLISHING
SERIES A JUNIOR
PARTICIPATING CUMULATIVE
PREFERRED STOCK
of
ALPHA-BETA TECHNOLOGY, INC.
Pursuant to Section 26 of Chapter 156B of the General Laws of
the Commonwealth of Massachusetts:
VOTED, that pursuant to authority conferred upon and vested in
the Board of Directors by the Articles of Organization, as amended
(the "Articles"), of Alpha-Beta Technology, Inc. (the
"Corporation"), the Board of Directors hereby establishes and
designates a series of Preferred Stock of the Corporation, and
hereby fixes and determines the relative rights and preferences of
the shares of such series, in addition to those set forth in the
Articles, as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Cumulative
Preferred Stock" (the "Series A Junior Preferred Stock"), and the
number of shares constituting such series shall be 250,000.
Section 2. Dividends and Distributions.
(A) (i) 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 Junior Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Preferred
Stock, in preference to the holders of shares of common stock and
of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on
the first day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a share of
Series A Junior Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) $1.00 or (b) subject
to the provisions for adjustment hereinafter set forth, 1000 times
the aggregate per share amount of all cash dividends, and 1000
times the aggregate per share amount (payable in kind) of all non-
cash dividends or other distributions other than a dividend payable
in shares of common stock or a subdivision of the outstanding
shares of common stock (by reclassification or otherwise), declared
on the common stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Preferred Stock. The
multiple of cash and non-cash dividends declared on the common
stock to which holders of the Series A Junior Preferred Stock are
entitled, which shall be 1000 initially but which shall be adjusted
from time to time as hereinafter provided, is hereinafter referred
to as the "Dividend Multiple." In the event the Corporation shall
at any time after February 2, 1995 (the "Rights Declaration Date")
(i) declare or pay any dividend on common stock payable in shares
of common stock, or (ii) 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 Dividend Multiple
thereafter applicable to the determination of the amount of
dividends which holders of shares of Series A Junior Preferred
Stock shall be entitled to receive shall be the Dividend Multiple
applicable immediately prior to such event multiplied 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.
(ii) Notwithstanding anything else contained in this
paragraph (A), the Corporation shall, out of funds legally
available for that purpose, declare a dividend or distribution on
the Series A Junior Preferred Stock as provided in this paragraph
(A) immediately after it declares a dividend or distribution on the
common stock (other than a dividend payable in shares of common
stock); provided that, in the event no dividend or distribution
shall have been declared on the common stock during the period
between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on
the Series A Junior Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(B) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of
such shares of Series A Junior Preferred Stock, unless the date of
issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares,
or unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders of
shares of Series A Junior Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Junior Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-
share basis among all such shares at the time outstanding. The
Board of Directors may fix in accordance with applicable law a
record date for the determination of holders of shares of Series A
Junior Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more
than such number of days prior to the date fixed for the payment
thereof as may be allowed by applicable law.
Section 3. Voting Rights. In addition to any other voting
rights required by law, the holders of shares of Series A Junior
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Preferred Stock shall entitle
the holder thereof to 1000 votes on all matters submitted to a vote
of the stockholders of the Corporation. The number of votes which
a holder of a share of Series A Junior Preferred Stock is entitled
to cast, which shall initially be 1000 but which may be adjusted
from time to time as hereinafter provided, is hereinafter referred
to as the "Vote Multiple." In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare or pay any
dividend on common stock payable in shares of common stock, or (ii)
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 Vote Multiple thereafter applicable to the
determination of the number of votes per share to which holders of
shares of Series A Junior Preferred Stock shall be entitled shall
be the Vote Multiple immediately prior to such event multiplied by
a fraction, the numerator of which is the number of shares of
common stock outstanding immediately after such event and the
denominator of which is the number of shares of common stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Preferred Stock and the
holders of shares of common stock and the holders of shares of any
other capital stock of this 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 otherwise required by applicable law or as set
forth herein, holders of Series A Junior 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 dividends or distributions payable on the Series
A Junior 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
Junior Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Junior Preferred Stock,
except dividends paid ratably on the Series A Junior
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) except as permitted in subsection 4(A)(iv) below,
redeem, purchase or otherwise acquire for
consideration shares of any stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior
Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for
shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Junior
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Junior Preferred Stock, or any shares
of any stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the
Series A Junior Preferred Stock, except in accordance
with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders
of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend
rates and other relative rights and preferences of the
respective series and classes, shall determine in good
faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could,
under subsection (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of preferred
stock and may be reissued as part of a new series of preferred
stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation (voluntary or otherwise), dissolution or winding up of
the Corporation, no distribution shall be made (x) to the holders
of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Preferred Stock unless, prior thereto, the holders of shares of
Series A Junior Preferred Stock shall have received an amount equal
to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, plus an amount equal
to the greater of (1) $1000.00 per share or (2) an aggregate amount
per share, subject to the provision for adjustment hereinafter set
forth, equal to 1000 times the aggregate amount to be distributed
per share to holders of common stock, or (y) to the holders of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Preferred Stock, except distributions made ratably on the Series A
Junior Preferred Stock and all other 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 after the
Rights Declaration Date (i) declare or pay any dividend on common
stock payable in shares of common stock, or (ii) 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 per share to which holders of shares of Series A
Junior Preferred Stock were entitled immediately prior to such
event under clause (x) 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.
Neither the consolidation of nor merging of the Corporation
with or into any other corporation or corporations, nor the sale or
other transfer of all or substantially all of the assets of the
Corporation, shall be deemed to be a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 6.
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 the shares of
Series A Junior Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 1000 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, plus
accrued and unpaid dividends, if any, payable with respect to the
Series A Junior Preferred Stock. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare or
pay any dividend on common stock payable in shares of common stock,
or (ii) 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 Junior
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. Redemption. The shares of Series A Junior
Preferred Stock shall not be redeemable.
Section 9. Ranking. Unless otherwise provided in the
Articles of Organization of the Corporation or a Certificate of
Vote of Directors Establishing a Class of Stock relating to a
subsequently-designated series of preferred stock of the
Corporation, the Series A Junior Preferred Stock shall rank junior
to any other series of the Corporation's preferred stock
subsequently issued, as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up
and shall rank senior to the common stock.
Section 10. Amendment. The Articles of Organization of the
Corporation and this Certificate of Vote of Directors shall not be
amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Junior
Preferred Stock so as to affect them adversely (within the meaning
of Section 77 of Chapter 156B of the Massachusetts General Laws)
without the affirmative vote of the holders of two-thirds or more
of the outstanding shares of Series A Junior Preferred Stock,
voting separately as a class.
Section 11. Fractional Shares. Series A Junior Preferred
Stock may be issued in whole shares or in any fraction of a share
that is one one-thousandth (1/1000th) of a share or any integral
multiple of such fraction, which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series A Junior
Preferred Stock. In lieu of fractional shares, the Corporation may
elect to make a cash payment as provided in the Rights Agreement
for fractions of a share other than one one-thousandth (1/1000th)
of a share or any integral multiple thereof.
141909.c1<PAGE>
[Exhibit B to Shareholder's Rights Agreement]
Exhibit B
[Form of Right Certificate]
Certificate No. R-
Rights
NOT EXERCISABLE AFTER FEBRUARY 2, 2005 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF ALPHA-BETA TECHNOLOGY, INC., AT $0.01 PER RIGHT ON
THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT BETWEEN
ALPHA-BETA TECHNOLOGY, INC. AND THE FIRST NATIONAL BANK OF
BOSTON, AS RIGHTS AGENT, DATED AS OF FEBRUARY 2, 1995 (THE
"RIGHTS AGREEMENT"). UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED
BY AN ACQUIRING PERSON, AN ADVERSE PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
ALPHA-BETA TECHNOLOGY, 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
Shareholder Rights Agreement dated as of February 2, 1995 (the
"Rights Agreement") between Alpha-Beta Technology, Inc. (the
"Company") and The First National Bank of Boston, as Rights Agent
(the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to the close of business on February
2, 2005 at the office or offices of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one one-
thousandth of a fully paid, non-assessable share of the Series A
Junior Participating Cumulative Preferred Stock (the "Preferred
Stock") of the Company, at a purchase price of $76.00 per one
one-thousandth of a share (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the
Form of Election to Purchase and the related Certificate duly
executed. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Exercise Price per
share set forth above, are the number and Exercise Price as of
, based on the Preferred Stock as constituted at such
date.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Right Certificate are beneficially owned by (i) an
Acquiring Person, an Adverse Person or an Affiliate or Associate
of any such Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Adverse Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of
a Person who, after such transfer, became an Acquiring Person or
an Adverse Person, or an Affiliate or Associate of an Acquiring
Person or an Adverse Person, such Rights shall become null and
void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Rights Agreement, the Exercise Price and
the number of shares of Preferred Stock or other securities which
may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal
office of the Company and the designated office of the Rights
Agent and are also available upon written request to the Company
or the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or offices of the
Rights Agent designated for such purpose, may be exchanged for
another Right Certificate or Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights
evidenced by the Right Certificate or Certificates surrendered
shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right
Certificate or Certificates for the number of whole Rights not
exercised. If this Right Certificate shall be exercised in whole
or in part pursuant to Section 11(a)(ii) of the Rights Agreement,
the holder shall be entitled to receive this Right Certificate
duly marked to indicate that such exercise has occurred as set
forth in the Rights Agreement.
Under certain circumstances, subject to the provisions of
the Rights Agreement, the Board of Directors of the Company at
its option may exchange all or any part of the Rights evidenced
by this Certificate for shares of the Company's Common Stock or
Preferred Stock at an exchange ratio (subject to adjustment) of
one share of Common Stock or one one-thousandth of a share of
Preferred Stock per Right.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Board
of Directors of the Company at its option at a redemption price
of $0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors).
The Company is not obligated to issue fractional shares of
stock upon the exercise of any Right or Rights evidenced hereby
(other than fractions which are integral multiples of one one-
thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts).
If the Company elects not to issue such fractional shares, in
lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock, Common Stock or
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
Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by an
authorized signatory of the Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
[Corporate Seal] ALPHA-BETA TECHNOLOGY, INC.
Attested:
By
Name:
By Title:[Chairman, Vice
[Clerk or Assistant Clerk] Chairman, President or
Vice President]
Countersigned:
[_____________________________],
as Rights Agent
Authorized Signatory
Date of countersignature:
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and
address of transferee)
this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably
constitute and appoint
Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ,
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate
are are not being transferred by or on behalf of a
Person who is or was an Acquiring Person, an Adverse Person or an
Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did did not directly or
indirectly acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person.
Dated: ,
Signature<PAGE>
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To ALPHA-BETA TECHNOLOGY, INC.:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of the Rights
(or such other securities of the Company or of any other person
which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name
of:
Please insert social security
or other identifying taxpayer number:
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate or if the Rights are being
exercised pursuant to Section 11(a)(ii) of the Rights Agreement,
a new Right Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying taxpayer number:
(Please print name and address)
Dated: ,
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
are are not being exercised by or on behalf of a
Person who is or was an Acquiring Person, an Adverse Person or
an Affiliate or Associate of any such Person (as such terms
are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did did not directly or
indirectly acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any
such Person.
Dated: ,
Signature
<PAGE>
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the
face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
141908.c1
[Exhibit E to Schedule 13D]
FIRST AMENDMENT TO
SHAREHOLDER RIGHTS AGREEMENT
Amendment, dated as of November 13, 1997, to the Shareholder
Rights Agreement, dated as of February 2, 1995 (the "Rights
Agreement"), between Alpha-Beta Technology, Inc. (the "Company" )
and BankBoston, N.A. f/k/a The First National Bank of Boston, as
the rights agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, in accordance with the terms of the Rights Agreement,
the Company deems it desirable to make certain amendments to the
Rights Agreement; and
WHEREAS, Section 27 of the Rights Agreement provides that
prior to the Distribution Date (as defined therein) the Company and
the Rights Agent shall, if the Company so directs, amend or
supplement any provision of the Rights Agreement as the Company may
deem necessary or desirable without the approval of any holders of
the Company's common stock.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth the parties hereby agree that
the Rights Agreement is hereby amended as follows (capitalized
terms not otherwise defined herein shall have the respective
meanings ascribed to such terms in the Rights Agreement):
1. The first paragraph of Section 1(a) of the Rights
Agreement is amended and restated as follows:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, but shall not include (i) the Company, (ii)
any Subsidiary of the Company, (iii) any employee benefit plan or
compensation arrangement of the Company or any Subsidiary of the
Company, (iv) any Person holding shares of Common Stock
organized, appointed or established by the Company or any
Subsidiary of the Company for or pursuant to the terms of any such
employee benefit plan or compensation arrangement, or (v) Ross
Financial Corporation, a corporation organized and existing under
the laws of the Cayman Islands ("Ross Financial"), (the Persons
described in clauses (i) through (v) above are referred to
herein as "Exempt Persons").
2. Section 1(b) of the Rights Agreement is amended and
restated as follows:
(b) "Adverse Person" shall mean any Person, other than
Ross Financial, declared to be an Adverse Person by the Board of
Directors upon a determination of the Board of Directors that the
criteria set forth in Section 11(a)(ii)(B) apply to such Person.
3. Section 3(c) of the Rights Agreement is amended and
restated as follows:
(c) Certificates for the Common Stock issued after
November 13, 1997, but prior to the earlier of the Distribution
Date or the redemption, expiration or termination of the
Rights, shall be deemed also to be certificates for Rights, and
shall bear a legend, substantially in the form set forth below:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Shareholder
Rights Agreement between Alpha-Beta Technology, Inc. and
BankBoston, N.A. f/k/a The First National Bank of Boston,
as Rights Agent, dated as of February 2, 1995, as amended
on November 13, 1997 (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference and
a copy of which is on file at the principal offices of
Alpha-Beta Technology, 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. Alpha-Beta Technology,
Inc. may redeem the Rights at a redemption price of $0.01
per Right, subject to adjustment, under the terms of the
Rights Agreement. Alpha-Beta Technology, Inc. will mail
to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request
therefor. Under certain circumstances, Rights issued to
or held by Acquiring Persons, Adverse Persons or any
Affiliates or Associates thereof (as defined in the
Rights Agreement), and any subsequent holder of such
Rights, may become null and void.
4. Section 27 of the Rights Agreement is amended by adding
the following sentence at the end of such Section:
Notwithstanding any other provision hereof, the consent
of Ross Financial must be obtained regarding any amendment of or
supplement to this Agreement which at any time could result in Ross
Financial becoming an Acquiring Person or being declared an Adverse
Person pursuant to the terms hereof.
As amended hereby, the Rights Agreement shall continue in full
force and effect in accordance with its terms.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first set forth above.
This Amendment may be executed in one or more counterparts all of
which shall be considered one and the same amendment and each of
which shall be deemed to be an original.
ALPHA-BETA TECHNOLOGY, INC.
By: /s/ Spiros Jamas
Name: Spiros Jamas
Title: President & CEO
BANKBOSTON, N.A.
By:
Name:
Title:
DCSC\567220.4
