<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) DECEMBER 15, 1998
-----------------
CALYPTE BIOMEDICAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 000-20985 06-1226727
- ----------------------------- ------------------------- ---------------------
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
1440 Fourth Street
Berkeley, California 94710
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(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (510) 749-5100
--------------
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Item 5. OTHER EVENTS.
On December 15, 1998, Calypte Biomedical Corporation (the
"Corporation") issued a press release relating to the adoption by the Board
of Directors (the "Board") of a Stockholder Rights Plan. The December 15,
1998 press release of the Corporation is attached hereto as Exhibit 99.1.
On December 15, 1998, the Board declared a dividend distribution of
one preferred share purchase right (a "Right") for each outstanding share of
Common Stock, par value $.001 per share (the "Common Stock"), of the
Corporation. The dividend is payable to the stockholders of record on January
5, 1999 (the "Record Date") with respect to shares of Common Stock issued
thereafter until the Distribution Date (as defined below) and, in certain
circumstances, with respect to shares of Common Stock issued after the
Distribution Date. Except as set forth below, each Right, when it becomes
exercisable, entitles the registered holder to purchase from the Corporation
one one-thousandth (1/1000th) of a share of Series RP Preferred Stock of the
Corporation, $.001 par value per share (the "Preferred Stock"), at a price of
$15 per one one-thousandth (1/1000th) of a share of Preferred Stock (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Corporation and ChaseMellon Shareholder Services, L.L.C., as Rights Agent
(the "Rights Agent"), dated as of December 15, 1998.
Initially, the Rights will be attached to certificates representing
shares of Common Stock then outstanding, and no separate certificates
representing the Rights ("Right Certificates") will be distributed. The
Rights will separate from the Common Stock upon the earlier to occur of (i) a
person or group of affiliated or associated persons having acquired, without
the prior approval of the Board, beneficial ownership of 15% or more of the
outstanding shares of Common Stock or (ii) 10 days, or such later date as the
Board may determine, following the commencement of or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in a person or group of affiliated or associated persons
becoming an Acquiring Person (as hereinafter defined) except pursuant to a
Permitted Offer (as hereinafter defined) (the "Distribution Date"). A person
or group whose acquisitions of shares of Common Stock cause a Distribution
Date pursuant to clause (i) above is an "Acquiring Person," with certain
exceptions as set forth in the Rights Agreement. The date that a person or
group is first publicly announced to have become such by the Corporation or
such Acquiring Person is the "Shares Acquisition Date."
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the associated shares of Common
Stock. Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuance of shares of Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for shares of Common Stock outstanding as of the
Record Date, even without attaching thereto such notation or a copy of the
Summary of Rights attached to the Rights Agreement as Exhibit C, will also
constitute the transfer of the Rights associated with the shares of Common
Stock represented by
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such certificate. As soon as practicable following the Distribution Date,
Right Certificates will be mailed to the holders of record of shares of the
Common Stock as of the Close of Business (as defined in the Rights Agreement)
on the Distribution Date (and to each initial record holder of certain shares
of Common Stock issued after the Distribution Date), and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 15, 2008, unless earlier redeemed
by the Corporation as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding shares of
Common Stock at a price and on terms which a majority of certain members of
the Board determines to be adequate and in the best interests of the
Corporation, its stockholders and other relevant constituencies, other than
such Acquiring Person, its affiliates and associates (a "Permitted Offer")),
each holder of a Right will thereafter have the right (the "Flip-In Right")
to receive upon exercise the number of shares of Common Stock (or, in certain
circumstances, of one one-thousandths (1/1000ths) of a share of Preferred
Stock or other securities of the Corporation) having a value (immediately
prior to such triggering event) equal to two times the then-applicable
Purchase Price of the Right. Notwithstanding the foregoing, following the
occurrence of the event described above, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person or any affiliate or associate thereof will be
null and void. The Board has the option, at any time after any person becomes
an Acquiring Person, to exchange all or part of the then-exercisable Rights
(excluding those that have become void, as described in the immediately
preceding sentence) for shares of Common Stock, at an exchange ratio
determined by dividing the then-applicable Purchase Price by the then-current
market price per share of Common Stock as determined in accordance with the
Rights Agreement. However, this option generally terminates if any person
becomes the beneficial owner of 50% or more of the Common Stock.
In the event that, at any time following the Shares Acquisition
Date, (i) the Corporation is acquired in a merger or other business
combination transaction in which the holders of all of the outstanding shares
of Common Stock immediately prior to the consummation of the transaction are
not the holders of all of the surviving corporation's voting power, or (ii)
more than 50% of the Corporation's assets or earning power is sold or
transferred, in either case with or to (x) an Acquiring Person or any
affiliate or associate thereof or (y) any other person in which such
Acquiring Person, affiliate or associate has an interest or any person acting
on behalf of or in concert with such Acquiring Person, affiliate or
associate, or (z) if, in such transaction, all holders of shares of Common
Stock are not treated alike, any other person, then each holder of a Right
(except Rights which previously have been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise,
common shares of the acquiring company (or, in certain circumstances, its
parent) having a value equal to two times the exercise price of the Right.
The holder of a Right will continue to have the Flip-Over Right whether or
not such holder exercises or surrenders the Flip-In Right.
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The Purchase Price payable, and the number of shares of Preferred
Stock, shares of Common Stock or other securities issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
shares of the Preferred Stock of certain rights or warrants to subscribe for
or purchase shares of Preferred Stock at a price, or securities convertible
into Preferred Stock with a conversion price, less than the then current
market price of the Preferred Stock or (iii) upon the distribution to holders
of shares of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-thousandths (1/1000ths) of a share of Preferred Stock issuable upon
exercise of each Right are also subject to adjustment in the event of a stock
split of the Common Stock or a stock dividend on the Common Stock payable in
Common Stock or subdivisions, consolidations or combinations of the Common
Stock occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
At any time prior to the earlier to occur of (i) a person becoming
an Acquiring Person or (ii) the expiration of the Rights, and under certain
other circumstances, the Corporation may redeem the Rights in whole, but not
in part, at a price (payable in cash or, at the Corporation's election, in
Common Stock) of $.001 per Right (the "Redemption Price"), which redemption
shall be effective upon the action of the Board. Additionally, following the
Shares Acquisition Date, the Corporation may redeem the then outstanding
Rights in whole, but not in part, at the Redemption Price, provided that such
redemption is in connection with a merger or other business combination
transaction or series of transactions involving the Corporation in which all
holders of shares of Common Stock are treated alike but not involving an
Acquiring Person or its affiliates or associates.
Other than those provisions relating to the rights, duties and
obligations of the Rights Agent and certain principal economic terms of the
Rights, all of the provisions of the Rights Agreement may be amended by the
Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to
cure any ambiguity, defect or inconsistency, to make changes that do not
adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Corporation, including, without limitation,
the right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to stockholders of the Corporation, stockholders
may, depending upon the circumstances, recognize taxable income should the
Rights become exercisable or upon the occurrence of certain events thereafter.
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This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
As of December 14, 1998, there were 13,460,198 shares of Common
Stock outstanding. Each share of Common Stock outstanding on the Record Date
will receive one Right. As long as the Rights are attached to the shares of
Common Stock, the Corporation will issue one Right with each new share of
Common Stock so that all such shares will have attached rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Corporation without conditioning the offer on the Rights being redeemed or a
substantial number of Rights being acquired. However, the Rights should not
interfere with any tender offer or merger approved by the Corporation (other
than with an Acquiring Person) because the Rights do not become exercisable
in the event of a Permitted Offer or other acquisition exempted by the Board.
Attached hereto as Exhibit 4.1 and incorporated herein by reference
are copies of the Rights Agreement and the exhibits thereto, as follows:
Exhibit A -- Form of Certificate of Designation, Preferences and Rights of
Series RP Preferred Stock of Calypte Biomedical Corporation; Exhibit B --
Form of Right Certificate; and Exhibit C -- Summary of Rights to Purchase
Series RP Preferred Stock. The foregoing description of the Rights is
qualified in its entirety by reference to the Rights Agreement and such
exhibits thereto.
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Item 7. EXHIBITS.
<TABLE>
<CAPTION>
<S> <C>
4.1 Rights Agreement, dated as of December 15, 1998, between
Calypte Biomedical Corporation and ChaseMellon Shareholder
Services, L.L.C. as Rights Agent, which includes: as Exhibit A
thereto, the Form of Certificate of Designation, Preferences
and Rights of Series RP Preferred Stock of Calypte Biomedical
Corporation; Exhibit B thereto, the Form of Right Certificate;
and, as Exhibit C thereto, the Summary of Rights to Purchase
Series RP Preferred Stock.
99.1 Press Release issued by the Corporation on December 15, 1998
</TABLE>
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
CALYPTE BIOMEDICAL CORPORATION
By: /s/ John J. Dipietro
------------------------------------
John J. DiPietro
Chief Operating Officer,
Vice President - Finance,
Chief Financial Officer and Secretary
Date: December 15, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
4.1 Rights Agreement, dated as of December 15, 1998, between
Calypte Biomedical Corporation and ChaseMellon
Shareholder Services, L.L.C. as Rights Agent, which
includes: as Exhibit A thereto, the Form of Certificate
of Designation, Preferences and Rights of Series RP
Preferred Stock of Calypte Biomedical Corporation; as
Exhibit B thereto, the Form of Right Certificate; and,
as Exhibit C thereto, the Summary of Rights to Purchase
Series RP Preferred Stock.
99.1 Press Release issued by the Corporation on December 15, 1998.
</TABLE>
<PAGE>
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CALYPTE BIOMEDICAL CORPORATION
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF DECEMBER 15, 1998
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Appointment Of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . . .6
3. Issuance Of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . .7
4. Form Of Right Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
5. Countersignature And Registration. . . . . . . . . . . . . . . . . . . . . . . .9
6. Transfer, Split-Up, Combination And Exchange Of Right Certificates;
Mutilated, Destroyed, Lost Or Stolen Right Certificates . . . . . . . . . . . 10
7. Exercise Of Rights; Purchase Price; Expiration Date Of Rights. . . . . . . . . 11
8. Cancellation And Destruction Of Right Certificates . . . . . . . . . . . . . . 13
9. Reservation And Availability Of Preferred Stock. . . . . . . . . . . . . . . . 14
10. Preferred Stock Record Date.. . . . . . . . . . . . . . . . . . . . . . . . . 15
11. Adjustment Of Purchase Price, Number And Kind Of Shares Or Number Of
Rights.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
12. Certificate Of Adjusted Purchase Price Or Number Of Shares. . . . . . . . . . 22
13. Consolidation, Merger Or Sale Or Transfer Of Assets Or Earning Power. . . . . 22
14. Fractional Rights And Fractional Shares.. . . . . . . . . . . . . . . . . . . 25
15. Rights Of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
16. Agreement Of Right Holders. . . . . . . . . . . . . . . . . . . . . . . . . . 27
17. Right Certificate Holder Not Deemed A Stockholder . . . . . . . . . . . . . . 28
18. Concerning The Rights Agent.. . . . . . . . . . . . . . . . . . . . . . . . . 28
19. Merger Or Consolidation Or Change Of Name Of Rights Agent . . . . . . . . . . 29
20. Duties Of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
21. Change Of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
22. Issuance Of New Right Certificates. . . . . . . . . . . . . . . . . . . . . . 33
23. Redemption And Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 34
24. Notice Of Certain Events. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
25. Miscellaneous.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
26. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Exhibit A - Form of Certificate of Designation, Preferences and Rights
of Series RP Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
Exhibit B - Form of Right Certificate. . . . . . . . . . . . . . . . . . . . . . .B-1
Exhibit C - Form of Summary of Rights. . . . . . . . . . . . . . . . . . . . . . .C-1
</TABLE>
<PAGE>
RIGHTS AGREEMENT
This RIGHTS AGREEMENT (the "AGREEMENT") is made as of this 15th day
of December, 1998 by and between Calypte Biomedical Corporation, a Delaware
corporation (the "CORPORATION"), and ChaseMellon Shareholder Services,
L.L.C., a New Jersey limited liability company (the "RIGHTS AGENT"), with
respect to the following facts and circumstances.
A. The Board of Directors of the Corporation has authorized and
declared a dividend of one preferred share purchase right (a "RIGHT") for
each share of Common Stock (as hereinafter defined) of the Corporation
outstanding at the Close of Business (as hereinafter defined) on January 5,
1999 (the "RECORD DATE"), each Right representing the right to purchase one
one-thousandth (1/1000th) of a share of Preferred Stock (as hereinafter
defined), upon the terms and subject to the conditions herein set forth.
B. The Board of Directors of the Corporation has further
authorized and directed the issuance of one Right with respect to each share
of Common Stock that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date (as such terms are hereinafter defined); PROVIDED, HOWEVER,
that Rights may be issued with respect to shares of Common Stock that shall
become outstanding after the Distribution Date and prior to the earlier of
the Redemption Date and the Final Expiration Date in accordance with the
provisions of Section 22 of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the meanings
indicated:
1.1. "ACQUIRING PERSON" means any Person who or which,
together with all Affiliates and Associates of such Person, without the prior
approval of the Corporation's Board of Directors, shall be the Beneficial
Owner of 15% or more of the then outstanding shares of Common Stock (other
than as a result of a Permitted Offer) or was such a Beneficial Owner at any
time after the date hereof, whether or not such person continues to be the
Beneficial Owner of 15% or more of the then outstanding shares of Common
Stock. Notwithstanding the foregoing: (A) the term "Acquiring Person" shall
not include (i) the Corporation, (ii) any Subsidiary of the Corporation,
(iii) any employee benefit plan of the Corporation or of any Subsidiary of
the Corporation, (iv) any Person or entity organized, appointed or
established by the Corporation or any Subsidiary of the Corporation for or
pursuant to the terms of any such plan, or (v) any Person who or which,
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 15% or more of the then outstanding shares of Common
Stock
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as a result of the acquisition of shares of Common Stock directly from the
Corporation; and (B) no Person shall be deemed to be an "Acquiring Person"
either (i) as a result of the acquisition of Common Stock by the Corporation
which, by reducing the number of shares of Common Stock outstanding,
increases the proportional number of shares beneficially owned by such Person
together with all Affiliates and Associates of such Person; PROVIDED,
HOWEVER, that if (X) a Person would become an Acquiring Person (but for the
operation of this subclause (B)(i)) as a result of the acquisition of shares
of Common Stock by the Corporation, and (Y) after such share acquisition by
the Corporation, such Person, or an Affiliate or Associate of such Person,
becomes the Beneficial Owner of any additional shares of Common Stock, then
such Person shall be deemed an Acquiring Person, or (ii) if (X) within eight
(8) days after such Person would otherwise have become an Acquiring Person
(but for the operation of this subclause (B)(ii)), such Person notifies the
Board of Directors of the Corporation that such Person did so inadvertently
and (Y) within two (2) Business Days (as defined in Section 1.8 hereof) after
such notification, such Person is the Beneficial Owner of less than 15% of
the outstanding shares of Common Stock.
1.2. "ACT" means the Securities Act of 1933, as amended.
1.3. "ADJUSTED NUMBER OF SHARES" and "ADJUSTED PURCHASE
PRICE" have the respective meanings set forth in Section 11.1.3 hereof.
1.4. "ADJUSTMENT SHARES" has the meaning set forth in
Section 11.1.2 hereof.
1.5. "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
1.6. The term "CURRENT PER SHARE MARKET PRICE" shall have the
meaning set forth in Section 11.4.1 hereof when used with respect to a
"Security" (as defined in said Section 11.4.1) and shall have the meaning set
forth in Section 11.4.2 when used with respect to the Preferred Stock.
1.7. A Person is the "BENEFICIAL OWNER" of and "BENEFICIALLY
OWNS" any securities which:
1.7.1. such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
1.7.2. such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of
2
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time) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or (B) the
right to vote pursuant to any agreement, arrangement or understanding;
PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy
or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
1.7.3. 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 relating to the acquisition, holding,
voting (except to the extent contemplated by the proviso to subclause (B) of
Section 1.7.2), or disposing of any securities of the Corporation.
Notwithstanding anything in this Section 1.7 to the
contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Corporation, shall mean
the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
Notwithstanding anything in this Section 1.7 to the
contrary, no Person shall be deemed to beneficially own any securities solely
by reason of such Person being a party to a customary agreement pursuant to
which such Person acts or agrees to act as an underwriter with respect to a
bona fide public offering of securities.
No decision reached, or action taken, by the Board of
Directors of the Corporation or any committee thereof shall cause any Person
(or any Affiliate or Associate of such Person) who is a member of the Board
of Directors of the Corporation or such committee to be deemed, for the
purposes of this Agreement, to be a Beneficial Owner of any securities
beneficially owned by any other Person (or any Affiliate or Associate of such
Person) who is a member of the Board of Directors of the Corporation or any
committee thereof solely by reason of such membership of the Board of
Directors or any committee thereof or participation in the decisions or
actions thereof on the part of either or both of such Persons.
1.8. "BUSINESS DAY" means any day other than a Saturday, a
Sunday, a day on which banking institutions in the State of New York are
obligated by law or executive order to close, or a United States federal
holiday.
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1.9. "CAPITAL STOCK EQUIVALENTS" has the meaning set forth
in Section 11.1.3 hereof.
1.10. "CLOSE OF BUSINESS" on any given date means 5:00 P.M.,
California time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it means 5:00 P.M., California time, on the next succeeding
Business Day.
1.11. "COMMON STOCK" when used with reference to the
Corporation means the Common Stock of the Corporation or, in the event of a
subdivision, combination or consolidation with respect to such shares of Common
Stock, the shares of Common Stock resulting from such subdivision, combination
or consolidation. "Common Stock" when used with reference to any Person other
than the Corporation means the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
1.12. "CORPORATION" means Calypte Biomedical Corporation, a
Delaware corporation, and also means a Principal Party to the extent provided in
Section 13.1 hereof.
1.13. "DISTRIBUTION DATE" has the meaning set forth in
Section 3.1 hereof.
1.14. "EQUIVALENT PREFERRED STOCK" has the meaning set forth
in Section 11.2 hereof.
1.15. "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
1.16. "EXCHANGE RATIO" has the meaning set forth in
Section 26.1 hereof.
1.17. "FINAL EXPIRATION DATE" has the meaning set forth in
Section 7.1 hereof.
1.18. "INTERESTED STOCKHOLDER" means any Acquiring Person or
any Affiliate or Associate of an Acquiring Person or any other Person in which
any such Acquiring Person, Affiliate or Associate has an interest, or any other
Person acting directly or indirectly on behalf of or in concert with any such
Acquiring Person, Affiliate or Associate.
1.19. "NASDAQ" has the meaning set forth in Section 11.4.1
hereof.
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1.20. "PERMITTED OFFER" means a tender or exchange offer
which is for all outstanding shares of Common Stock of the Corporation at a
price and on terms determined, prior to the purchase of shares under such
tender or exchange offer, by at least a majority of the members of the Board
of Directors who are not officers of the Corporation and who are not
Acquiring Persons or Affiliates, Associates, nominees or representatives of
an Acquiring Person, to be adequate (taking into account all factors that
such directors deem pertinent including, without limitation, prices that
could reasonably be achieved if the Corporation or its assets were sold on an
orderly basis designed to realize maximum value) and otherwise in the best
interests of the Corporation, its stockholders (other than the Person or any
Affiliate or Associate thereof on whose basis the offer is being made) and
other relevant constituencies, taking into account all factors that such
directors may deem pertinent.
1.21. "PERSON" means any individual, firm, partnership,
corporation, limited liability company, limited liability partnership, trust,
association, joint venture or other entity, and includes any successor (by
merger or otherwise) of such entity.
1.22. "PREFERRED STOCK" means shares of the Corporation's
Series RP Preferred Stock, par value $0.001 per share, having the relative
rights, preferences and limitations set forth in the Form of Certificate of
Designation, Preferences and Rights of Series RP Preferred Stock attached to
this Agreement as Exhibit A.
1.23. "PRINCIPAL PARTY" has the meaning set forth in
Section 13.2 hereof.
1.24. "PRORATION FACTOR" has the meaning set forth in
Section 11.1.3 hereof.
1.25. "PURCHASE PRICE" has the meaning set forth in Section
4.1 hereof.
1.26. "RECORD DATE" has the meaning set forth in Recital A
hereof.
1.27. "REDEMPTION DATE" has the meaning set forth in
Section 7.1 hereof.
1.28. "REDEMPTION PRICE" has the meaning set forth in
Section 23.1.1 hereof.
1.29. "RIGHT CERTIFICATE" has the meaning set forth in
Section 3.1 hereof.
1.30. "RIGHTS" has the meaning set forth in Recital A
hereof.
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1.31. "RIGHTS AGENT" means ChaseMellon Shareholder
Services, L.L.C., a New Jersey limited liability company, as Rights Agent
hereunder, and, from the time of its succession, any successor Rights Agent
under Section 19 or Section 21 hereof.
1.32. "SECTION 11.1.2 EVENT" has the meaning set forth in
Section 11.1.2 hereof.
1.33. "SECTION 13 EVENT" means any event described in
clause (x), (y) or (z) of Section 13.1 hereof.
1.34. "SHARES ACQUISITION DATE" means the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to the Exchange Act) by the
Corporation or an Acquiring Person that an Acquiring Person has become such
or that facts exist as a result of which there exists an Acquiring Person;
PROVIDED, that, if such Person is determined by the Board of Directors of the
Corporation not to have become an Acquiring Person pursuant to subclause
(B)(ii) of Section 1.1 hereof, then no Shares Acquisition Date shall be
deemed to have occurred.
1.35. "SUBSIDIARY" of any Person means any corporation or
other Person of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
1.36. "SUMMARY OF RIGHTS" has the meaning set forth in
Section 3.2 hereof.
1.37. "TRADING DAY" has the meaning set forth in Section
11.4.1 hereof.
1.38. "TRIGGERING EVENT" means any Section 11.1.2 Event or
any Section 13 Event.
1.39. The term "VOTING SECURITIES" has the meaning set
forth in Section 13.1 hereof.
2. APPOINTMENT OF RIGHTS AGENT.
2.1. The Corporation hereby appoints the Rights Agent to
act as agent for the Corporation in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The
Corporation may from time to time appoint such co-Rights Agents as it may
deem necessary or desirable. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions of any
such co-Rights Agent.
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3. ISSUANCE OF RIGHT CERTIFICATES.
3.1. Until the earlier of (i) the Shares Acquisition Date
or (ii) the Close of Business on the tenth (10th) day (or such later date as
may be determined by action of the Corporation's Board of Directors) after
the date of the commencement by any Person (other than the Corporation, any
Subsidiary of the Corporation, any employee benefit plan of the Corporation
or of any Subsidiary of the Corporation or any Person or entity organized,
appointed or established by the Corporation or any Subsidiary of the
Corporation for or pursuant to the terms of any such plan) of, or after the
date of the first public announcement of the intention of any Person (other
than the Corporation, any Subsidiary of the Corporation, any employee benefit
plan of the Corporation or of any Subsidiary of the Corporation or any Person
or entity organized, appointed or established by the Corporation or any
Subsidiary of the Corporation for or pursuant to the terms of any such plan)
to commence (which intention to commence remains in effect for five (5)
Business Days after such announcement), a tender or exchange offer the
consummation of which would result in any Person becoming an Acquiring Person
(including, in the case of both (i) and (ii), any such date which is after
the date of this Agreement and prior to the issuance of the Rights) (the
"DISTRIBUTION DATE"), (x) the Rights will be evidenced (subject to the
provisions of Section 3.2 hereof) by the certificates for shares of Common
Stock registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Corporation); PROVIDED, HOWEVER,
that if a tender or exchange offer is terminated prior to the occurrence of a
Distribution Date, then no Distribution Date shall occur as a result of such
tender or exchange offer. As soon as practicable after the Distribution
Date, the Corporation will prepare and execute, the Rights Agent will
countersign, and the Corporation will send or cause to be sent by
first-class, postage-prepaid mail, to each record holder of shares of Common
Stock as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Corporation, a Right Certificate,
substantially in the form of Exhibit B hereto (a "RIGHT CERTIFICATE"),
evidencing one Right for each share of Common Stock so held. As of and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
3.2. As promptly as practicable following the Record Date,
the Corporation will send a copy of a Summary of Rights to Purchase Preferred
Stock, in substantially the form of Exhibit C hereto (the "SUMMARY OF RIGHTS"),
by first-class, postage-prepaid mail, to each record holder of shares of Common
Stock as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Corporation. With respect to certificates
for shares of Common Stock outstanding as of the Record Date, until the
Distribution Date the Rights will be evidenced by such certificates registered
in the names of the holders thereof together with a copy of the Summary of
Rights attached thereto. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender for transfer of any
certificate for shares of Common Stock outstanding on the Record Date, with or
without a copy
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of the Summary of Rights attached thereto, shall also constitute the transfer
of the Rights associated with such shares of Common Stock.
3.3. Certificates for shares of Common Stock that become
outstanding (including, without limitation, reacquired shares of Common Stock
referred to in the last sentence of this Section 3.3) after the Record Date
but prior to the earliest of the Distribution Date, the Redemption Date or
the Final Expiration Date, shall be deemed also to be certificates for
Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights
Agreement between Calypte Biomedical Corporation and
ChaseMellon Shareholder Services, L.L.C., a New Jersey
limited liability company, as Rights Agent, dated as of
December 15, 1998 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive
offices of Calypte Biomedical Corporation. 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. Calypte Biomedical Corporation will mail
to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written
request therefor. Under certain circumstances set forth
in the Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring Person or
an Affiliate or Associate thereof (as defined in the
Rights Agreement) and certain related persons, whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the shares of Common Stock
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the shares of Common Stock represented
thereby. In the event that the Corporation purchases or acquires any shares of
Common Stock after the Record Date but prior to the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), any Rights
associated with such shares of Common Stock shall be deemed cancelled and
retired so that the Corporation shall not be entitled to exercise any Rights
associated with the Common Stock that are no longer outstanding.
4. FORM OF RIGHT CERTIFICATE.
4.1. The Right Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends,
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summaries or endorsements printed thereon as the Corporation may deem
appropriate (which may not affect the duties and responsibilities of the
Rights Agent) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Section 11 and Section 22
hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of one one-thousandths (1/1000ths) of a share of Preferred Stock
as shall be set forth therein at the price per one one-thousandth (1/1000th)
of a share of Preferred Stock set forth therein in accordance with Section
7.2 hereof (the "PURCHASE PRICE"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
4.2. Any Right Certificate issued pursuant to Section 3.1
or Section 22 hereof that represents Rights that are null and void pursuant
to Section 7.6 of this Agreement and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible and upon notice by the Corporation to the
Rights Agent that this Section 4.2 has become applicable) 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 or an
Affiliate or Associate of an Acquiring Person
(as such terms are defined in the Rights
Agreement). Accordingly, this Right Certificate
and the Rights represented hereby are null and
void.
The provisions of Section 7.6 of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Right Certificate.
5. COUNTERSIGNATURE AND REGISTRATION.
5.1. The Right Certificates shall be executed on behalf of
the Corporation by its President or any Vice President and the Secretary or an
Assistant Secretary, either manually or by facsimile signature, shall have
affixed thereto the Corporation's seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Corporation, either
manually or by facsimile signature. The Right Certificates shall be
countersigned, either manually or by facsimile signature, by the Rights Agent
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Corporation who shall have signed any of the Right Certificates
shall cease to be such officer of the Corporation before countersignature by the
Rights Agent and issuance and delivery by the Corporation, such Right
Certificates may nevertheless be countersigned by the Rights Agent and issued
and delivered by the Corporation with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such officer of
the Corporation; and any Right Certificate may be signed on behalf of the
Corporation by any Person who, at the actual date of the execution of such Right
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Certificate, shall be a proper officer of the Corporation to sign such Right
Certificate, although at the date of the execution of this Rights Agreement
any such Person was not such an officer.
5.2. Following the Distribution Date, and receipt by the
Rights Agent of a list of record holders of Rights, the Rights Agent will
keep or cause to be kept, at its office designated pursuant to Section 25
hereof as the appropriate place for surrender or transfer of the Right
Certificates, 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 the face of each of the Right Certificates and the certificate number and
the date of each of the Right Certificates.
6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES.
6.1. Subject to the provisions of Section 4.2, Section 7.6
and Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the earlier of
the Redemption Date or the Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-thousandths (1/1000ths) of a share of
Preferred Stock (or, following a Triggering Event, other securities, as the case
may be) as the Right Certificate or Right Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent designated for such purpose. Neither the Rights Agent nor the
Corporation 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 Corporation or the
Rights Agent shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 4.2, Section 7.6 and Section 14 hereof, countersign and
deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Corporation may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates. The Rights Agent may in its sole discretion require the
Corporation or the Person entitled to such Right Certificate to provide evidence
that such payment has been made prior to countersigning and delivering any Right
Certificate pursuant to this Section 6.1.
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6.2. Upon receipt by the Corporation 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, at the Corporation's
request, reimbursement to the Corporation 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 Corporation will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
7.1. Subject to Section 7.6 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 of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price for the
total number of one one-thousandths (1/1000ths) of a share of Preferred Stock
(or other securities, as the case may be) as to which such surrendered Rights
are exercised, at or prior to the earlier of (i) the Close of Business on
December 15, 2008 (the "FINAL EXPIRATION DATE"), or (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the "REDEMPTION DATE").
7.2. The Purchase Price for each one one-thousandth
(1/1000th) of a share of Preferred Stock pursuant to the exercise of a Right
shall initially be $15, shall be subject to adjustment from time to time as
provided in the next sentence and in Sections 11 and 13.1 hereof and shall be
payable in accordance with paragraph 7.3 below. Anything in this Agreement to
the contrary notwithstanding, in the event that at any time after the date of
this Agreement and prior to the Distribution Date, the Corporation shall (i)
declare or pay any dividend on the Common Stock payable in Common Stock or (ii)
effect a subdivision, combination or consolidation of the 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, each share of Common Stock outstanding following such subdivision,
combination or consolidation shall continue to have a Right associated therewith
and the Purchase Price following any such event shall be proportionately
adjusted to equal the result obtained by multiplying the Purchase Price
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Common Stock outstanding immediately following the occurrence of
such event. The adjustment provided for in the preceding sentence shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
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7.3. 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 Purchase
Price for the Preferred Stock (or other securities, as the case may be) to be
purchased and an amount equal to any applicable tax or governmental charge
required to be paid by the holder of such Right Certificate in accordance with
Section 6 hereof by certified check, cashier's check or money order payable to
the order of the Corporation, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Stock certificates for the
number of shares of Preferred Stock to be purchased, and the Corporation hereby
irrevocably authorizes its transfer agent to comply with all such requests, or
(B) if the Corporation, in its sole discretion, shall have elected to deposit
the Preferred Stock issuable upon exercise of the Rights hereunder into a
depositary, requisition from the depositary agent depositary receipts
representing such number of one one-thousandths (1/1000ths) of a share of
Preferred Stock as are to be purchased (in which case certificates for the
Preferred Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Corporation will direct the depositary
agent to comply with such requests, (ii) when appropriate, requisition from the
Corporation the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, and (iv) when appropriate,
after receipt thereof, deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Corporation is
obligated to issue other securities (including shares of Common Stock) of the
Corporation pursuant to Section 11.1 hereof, the Corporation will make all
arrangements necessary so that such other securities are available for
distribution by the Rights Agent, if and when necessary to comply with this
Agreement.
7.4. In addition, in the case of an exercise of the Rights by
a holder pursuant to Section 11.1.2, the Rights Agent shall return such Right
Certificate to the registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the Rights represented by such Right
Certificate no longer include the rights provided by Section 11.1.2 of the
Rights Agreement and if less than all the Rights represented by such Right
Certificate were so exercised, the Rights Agent shall indicate on the Right
Certificate the number of Rights represented thereby that continue to include
the rights provided by Section 11.1.2.
7.5. 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 to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 6 and Section 14 hereof, or the Rights Agent shall place an appropriate
notation on the Right Certificate with respect to those Rights exercised.
7.6. Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11.1.2 Event, any
Rights beneficially owned by (i) an Acquiring
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Person or an Affiliate or Associate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any Affiliate or Associate thereof) who becomes
a transferee after the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any Affiliate or Associate thereof) who becomes
a transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person (or from any Affiliate or
Associate thereof) to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has a continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer that the Board of Directors of the Corporation has determined is
part of a plan, arrangement or understanding that has as a primary purpose or
effect the avoidance of this Section 7.6, 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 Corporation shall notify the Rights Agent when
this Section 7.6 applies and shall use all reasonable efforts to insure that
the provisions of this Section 7.6 and Section 4.2 hereof are complied with,
but neither the Corporation nor the Rights Agent shall have any liability to
any holder of Right Certificates or other Person as a result of the
Corporation's failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
7.7. Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Corporation shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) properly completed and signed the certificate contained in
the form of election to purchase set forth on the reverse side of the 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 Corporation or the Rights Agent shall
reasonably request.
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
Corporation or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall
be cancelled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by the provisions of this Rights Agreement. The
Corporation 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 Corporation otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Right Certificates to the
Corporation, or shall, at the written request of the Corporation, destroy such
cancelled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Corporation.
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9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK.
9.1. The Corporation covenants and agrees that, at all times
prior to the occurrence of a Section 11.1.2 Event, it will cause to be reserved
and kept available out of its authorized and unissued Preferred Stock, or any
authorized and issued 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 Rights and, after the occurrence of a Section 11.1.2 Event, shall,
to the extent reasonably practicable, so reserve and keep available a sufficient
number of shares of Common Stock (and/or other securities) that may be required
to permit the exercise in full of the Rights pursuant to this Agreement.
9.2. So long as the shares of Preferred Stock (and, after the
occurrence of a Section 11.1.2 Event, shares of Common Stock or any other
securities) issuable upon the exercise of the Rights may be listed on any stock
exchange, the Corporation shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares or other securities
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
9.3. The Corporation covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of Preferred Stock
(or shares of Common Stock and/or other securities, as the case may be)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares or other securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
non-assessable shares or securities.
9.4. The Corporation covenants and agrees that it will pay
when due and payable any and all taxes and governmental charges that may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The Corporation
shall not, however, be required to pay any tax or governmental charge that may
be payable in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates or depositary
receipts for the shares of Preferred Stock (or shares of Common Stock and/or
other securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise, or to issue or to deliver any certificates or depositary receipts for
shares of Preferred Stock (or shares of Common Stock and/or other securities, as
the case may be) upon the exercise of any Rights, until any such tax or
governmental charge shall have been paid (any such tax or governmental charge
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Corporation's reasonable satisfaction
that no such tax or governmental charge is due.
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9.5. The Corporation shall use its best efforts to (i) file,
as soon as practicable following the Shares Acquisition Date, a registration
statement under the Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act and the rules and regulations
thereunder) until the date of the expiration of the period for exercise of the
Rights provided by Section 11.1.2. The Corporation will also take such action
as may be appropriate under the blue sky laws of the various states.
10. PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for shares of Preferred Stock
(or shares of Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable taxes and governmental charges) was made;
PROVIDED, HOWEVER, that, if the date of such surrender and payment is a date
upon which the shares of Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) transfer books of the Corporation 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 shares of Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) transfer books of the Corporation are open.
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS.
The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
11.1. ADJUSTMENT EVENTS.
11.1.1. In the event the Corporation shall at any time
after the date of this Agreement (A) declare a dividend on the Preferred Stock
payable in Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of Preferred Stock
or (D) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Corporation is the continuing or surviving
corporation), except as otherwise provided in this Section 11.1 and Section 7.6
hereof, the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of 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 that, if such Right had been
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exercised immediately prior to such date and at a time when the Preferred
Stock transfer books of the Corporation were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; PROVIDED, HOWEVER,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value, if any, of the shares of capital
stock of the Corporation issuable upon exercise of one Right. If an event
occurs that would require an adjustment under both Section 11.1.1 and Section
11.1.2, the adjustment provided for in this Section 11.1.1 shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11.1.2.
11.1.2. In the event (a "SECTION 11.1.2 EVENT") that
any Person, alone or together with its Affiliates and Associates, shall
become an Acquiring Person, then proper provision shall be made so that each
holder of a Right (except as provided below and in Section 7.6 hereof) shall,
for a period of sixty (60) days (or such longer period as the Corporation's
Board of Directors may determine at any time prior to or during such period
of sixty (60) days) after the later of the occurrence of any such event or
the effective date of an appropriate registration statement under the Act
pursuant to Section 9.5 hereof, have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price, in accordance
with the terms of this Agreement, such number of shares of Common Stock (or,
in the discretion of the Corporation's Board of Directors, one
one-thousandths (1/1000ths) of a share of Preferred Stock) as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the
then number of one one-thousandths (1/1000ths) of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first occurrence
of a Section 11.1.2 Event, and (y) dividing that product by 50% of the then
current per share market price of the Common Stock (determined pursuant to
Section 11.4 hereof) on the date of such first occurrence (such number of
shares being referred to as the "ADJUSTMENT SHARES"); PROVIDED, HOWEVER, that
if the transaction that would otherwise give rise to the foregoing adjustment
is also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment shall be made
pursuant to this Section 11.1.2.
11.1.3. In the event that there shall not be sufficient
treasury or authorized but unissued (and unreserved) Common Stock to permit the
exercise in full of the Rights in accordance with Section 11.1.2 and the Rights
become so exercisable (and the Board of Directors of the Corporation has not
determined to make the Rights exercisable solely into fractions of a share of
Preferred Stock), notwithstanding any other provision of this Agreement, to the
extent necessary and permitted by applicable law, each Right (except as provided
below and in Section 7.6 hereof) shall thereafter represent the right to
receive, upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, (x) a number of (or fractions of) shares of
Common Stock calculated by dividing the maximum number of shares of Common Stock
that may permissibly be issued by the number of outstanding Rights and (y) a
number of one one-thousandths (1/1000ths) of shares of Preferred Stock or a
number of, or fractions of, other equity securities of the Corporation (or, in
the discretion of the Board of Directors of the Corporation, debt) that the
Board of Directors of the Corporation has determined to have an aggregate
current market value (determined pursuant to Section 11.1.1 and Section 11.1.2
hereof,
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to the extent applicable) equal to the difference between (1) the aggregate
current market value of the Adjustment Shares (assuming such shares of Common
Stock could be issued pursuant to Section 11.1.2 hereof) and (2) the
aggregate current market value of the shares of Common Stock issued in
respect of such Right pursuant to the preceding clause (x) (such number of,
or fractions of, shares of Preferred Stock, debt or other equity securities
or debt of the Corporation being referred to as a "CAPITAL STOCK
EQUIVALENT"); PROVIDED, HOWEVER, if sufficient shares of Common Stock and/or
Capital Stock Equivalents are unavailable, then the Corporation shall, to the
extent permitted by applicable law, take all such action as may be necessary
to authorize additional shares of Common Stock or Capital Stock Equivalents
for issuance upon exercise of the Rights, including the calling of a meeting
of stockholders; and PROVIDED, FURTHER, that if the Corporation is unable to
cause sufficient shares of Common Stock and/or Capital Stock Equivalents to
be available for issuance upon exercise in full of the Rights, then each
Right shall thereafter represent the right to receive the Adjusted Number of
Shares upon exercise at the Adjusted Purchase Price (as such terms are
hereinafter defined). As used herein, the term "ADJUSTED NUMBER OF SHARES"
shall be equal to that number of (or fractions of) shares of Common Stock
(and/or Capital Stock Equivalents) equal to the product of (x) the number of
Adjustment Shares and (y) a fraction, the numerator of which is the number of
shares of Common Stock (and/or Capital Stock Equivalents) available for
issuance upon exercise of the Rights and the denominator of which is the
aggregate number of Adjustment Shares otherwise issuable upon exercise in
full of all Rights (assuming there were a sufficient number of shares of
Common Stock available) (such fraction being referred to as the "PRORATION
FACTOR"). The "ADJUSTED PURCHASE PRICE" shall mean the product of the
Purchase Price and the Proration Factor. The Board of Directors of the
Corporation may, but shall not be required to, establish procedures to
allocate the right to receive shares of Common Stock and Capital Stock
Equivalents upon exercise of the Rights among holders of Rights.
11.2. In case the Corporation shall fix a record date for the
issuance of rights (other than the 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 shares of Preferred Stock
(or shares having the same rights, privileges and preferences as the Preferred
Stock ("EQUIVALENT PREFERRED STOCK")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into shares of Preferred Stock or Equivalent Preferred
Stock) less than the then current per share market price of the Preferred Stock
(as determined pursuant to Section 11.4 hereof) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock that the aggregate offering price of the total number of shares of
Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current per share market price, and the
denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible); PROVIDED, HOWEVER, that in no event shall the
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consideration to be paid upon the exercise of one Right be less than the
aggregate par value, if any, of the shares of capital stock of the
Corporation issuable upon exercise of one 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 determined in good
faith by the Board of Directors of the Corporation, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holders of the Rights. Preferred Stock owned by
or held for the account of the Corporation shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price that would then be in effect if such record
date had not been fixed.
11.3. In case the Corporation shall fix a record date for
the making of a distribution to all holders of the Preferred Stock (including
any such distribution made in connection with a consolidation or merger in
which the Corporation is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11.2 hereof), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the then current per
share market price (as determined pursuant to Section 11.4 hereof) of the
Preferred Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Corporation, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holders of the Rights) of
the portion of the assets or evidences of indebtedness so to be distributed
or of such subscription rights or warrants applicable to one share of
Preferred Stock, and the denominator of which shall be such current per share
market price of the Preferred Stock; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value, if any, of the shares of capital stock of the
Corporation to be issued upon exercise of one 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 Purchase Price shall again be
adjusted to be the Purchase Price that would then be in effect if such record
date had not been fixed.
11.4. COMPUTATION OF "CURRENT PER SHARE MARKET PRICE."
11.4.1. For the purpose of any computation hereunder,
the "current per share market price" of any security (a "Security" for the
purpose of this Section 11.4.1) on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days immediately prior to and not including such date;
PROVIDED, HOWEVER, that in the event that the current per share market price of
the Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of such
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Security and prior to the expiration of thirty (30) Trading Days after (but
not including) the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and
in each such case, the current per share market price shall be appropriately
adjusted to reflect the current market price per share equivalent of such
Security. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors of the Corporation.
If on any such date no such market maker is making a market in the Security,
the fair value of the Security on such date as determined in good faith by
the Board of Directors of the Corporation shall be used. The term "TRADING
DAY" shall mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.
11.4.2. For the purpose of any computation
hereunder, the "current per share market price" of the Preferred Stock shall
be determined in accordance with the method set forth in Section 11.4.1. If
the shares of Preferred Stock are not publicly traded, the "current per share
market price" of the Preferred Stock shall be conclusively deemed to be the
current per share market price of the Common Stock as determined pursuant to
Section 11.4.1 (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof), multiplied
by 1,000. If neither the Common Stock nor the Preferred Stock are publicly
held or so listed or traded, "current per share market price" shall mean,
with respect to the Preferred Stock, the fair value per share as determined
in good faith by the Board of Directors of the Corporation, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holders of the Rights.
11.5. Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; PROVIDED,
HOWEVER, that any adjustments that by reason of this Section 11.5 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-thousandth (1/1000th) of a share of
Preferred Stock or of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11.5, any
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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 that mandates
such adjustment or (ii) the Final Expiration Date.
11.6. If as a result of an adjustment made pursuant to
Section 11.1.2 or Section 13.1 hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Corporation other than Preferred Stock, thereafter the number of 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 11.1
through 11.3, inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred Stock shall apply on like terms to any such
other shares.
11.7. All Rights originally issued by the Corporation
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-thousandths (1/1000ths) 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.
11.8. The Corporation may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one one-thousandths (1/1000ths) of a share of
Preferred Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-thousandths (1/1000ths) 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
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Corporation 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, and shall deliver a copy of such public
announcement to the Rights Agent. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 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 11.8,
the Corporation 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 Corporation, 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 Corporation, 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
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the manner provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
11.9. Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths (1/1000ths) 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
Purchase Price and the number of one one-thousandths (1/1000ths) of a share
of Preferred Stock that were expressed in the initial Right Certificates
issued hereunder.
11.10. Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value, if any, of
the number of one one-thousandths (1/1000ths) of a share of Preferred Stock,
share of Common Stock or other securities issuable upon exercise of the
Rights, the Corporation shall take any corporate action that may, in the
opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue such number of fully paid and non-assessable one
one-thousandths (1/1000ths) of a share of Preferred Stock, share of Common
Stock or other securities at such adjusted Purchase Price.
11.11. In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Corporation may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised
after such record date of the Preferred Stock, shares of Common Stock or
other securities of the Corporation, if any, issuable upon such exercise over
and above the Preferred Stock, shares of Common Stock or other securities of
the Corporation, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; PROVIDED, HOWEVER, that
the Corporation 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 and shall deliver
to the Rights Agent a notice describing the terms of such due bill or other
appropriate instrument.
11.12. Anything in this Section 11 to the contrary
notwithstanding, the Corporation shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that the Corporation in its sole
discretion shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for
cash of Preferred Stock at less than the current market price, (iii) issuance
wholly for cash of Preferred Stock or securities that by their terms are
convertible into or exchangeable for Preferred Stock, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Corporation to holders of its Preferred Stock shall not
be taxable to such holders.
11.13. The Corporation covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the
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Corporation in a transaction that does not violate Section 11.14 hereof),
(ii) merge with or into any other Person (other than a Subsidiary of the
Corporation in a transaction that does not violate Section 11.14 hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Corporation
and its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Corporation and/or any of its Subsidiaries in one or more
transactions each of which does not violate Section 11.14 hereof), if (x) at
the time of or immediately after such consolidation, merger, sale or
transfer, there are any charter or bylaw provisions or any rights, warrants
or other instruments or securities outstanding or agreements in effect or
other actions taken that would materially 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, sale or
transfer, the stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13.1 hereof shall
have received a distribution of Rights previously owned by such Person or any
of its Affiliates and Associates. The Corporation shall not consummate any
such consolidation, merger, sale or transfer unless prior thereto the
Corporation and such other Person shall have executed and delivered to the
Rights Agent a supplemental agreement evidencing compliance with this Section
11.13.
11.14. The Corporation covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section
25.2 hereof, take (or permit any Subsidiary to take) any action the purpose
of which is to, or if at the time such action is taken it is reasonably
foreseeable that the effect of such action is to, materially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
11.15. The exercise of Rights under Section 11.1.2 shall
only result in the loss of rights under Section 11.1.2 to the extent so
exercised and shall not otherwise affect the rights represented by the Rights
under this Agreement, including the rights represented by Section 13.
12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Corporation shall promptly (a) prepare a certificate setting
forth such adjustment and a brief, reasonably detailed statement of the
facts, computations and methodology accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the Common Stock and
the Preferred Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25.1
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall have no duty
with respect to, and shall not be deemed to have knowledge of, such
adjustment unless and until it shall have received such certificate.
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
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13.1. In the event that, on or following the Shares
Acquisition Date, directly or indirectly, (x) the Corporation shall
consolidate with, or merge with and into, any Interested Stockholder or, if
in such merger or consolidation all holders of shares of Common Stock are not
treated alike, any other Person, (y) the Corporation shall consolidate with,
or merge with, any Interested Stockholder or, if in such merger or
consolidation all holders of shares of Common Stock are not treated alike,
any other Person, and the Corporation shall be the continuing or surviving
corporation of such consolidation or merger (other than, in a case of any
transaction described in (x) or (y), a merger or consolation that would
result in all of the securities generally entitled to vote in the election of
directors of the Corporation ("voting securities") outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into securities of the surviving entity) all of the voting
securities of the Corporation or such voting surviving entity outstanding
immediately after such merger or consolidation and the holders of such
securities not having changed as a result of such merger or consolidation),
or (z) the Corporation shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Corporation and its Subsidiaries
(taken as a whole) to any Interested Stockholder or Stockholders or, if in
such transaction all holders of Common Stock are not treated alike, any other
Person (other than the Corporation or any Subsidiary of the Corporation in
one or more transactions each of which does not violate Section 11.14
hereof), then, and in each such case (except as provided in Section 13.4
hereof), proper provision shall be made so that (i) each holder of a Right,
except as provided in Section 7.6 hereof, shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current
Purchase Price, in accordance with the terms of this Agreement and in lieu of
Preferred Stock, such number of freely tradeable shares of Common Stock of
the Principal Party, not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one
one-thousandths (1/1000ths) of a share of Preferred Stock for which a Right
is then exercisable (without taking into account any adjustment previously
made pursuant to Section 11.1.2) and dividing that product by (B) 50% of the
then current per share market price of the Common Stock of such Principal
Party (determined pursuant to Section 11.4 hereof) on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Corporation pursuant to this
Agreement; (iii) the term "Corporation" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions
of Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; and (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of a
sufficient number of its shares of Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of Common Stock thereafter deliverable upon the
exercise of the Rights.
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13.2. "PRINCIPAL PARTY" shall mean:
13.2.1. in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13.1, the Person that is
the issuer of any securities into which shares of Common Stock of the
Corporation are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such merger
or consolidation (including, if applicable, the Corporation if it is the
surviving corporation); and
13.2.2. in the case of any transaction described in
clause (z) of the first sentence of Section 13.1, 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 of the foregoing cases, (1) if the Common
Stock of such Person is not at such time and has not been continuously over
the preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the shares of Common Stock of which are and have been so registered,
"Principal Party" shall refer to such other Person; (2) in case such Person
is a Subsidiary, directly or indirectly, of more than one Person, the shares
of Common Stock of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of
the Common Stock having the greatest aggregate market value; and (3) 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 (1) and (2) 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.
13.3. The Corporation shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have
a sufficient number of its authorized shares of Common Stock that have not
been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the
Corporation and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
Sections 13.1 and 13.2 and further providing that, as soon as practicable
after the date of any consolidation, merger, sale or transfer mentioned in
Section 13.1, the Principal Party at its own expense shall:
13.3.1. prepare and file a registration statement
under the Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best efforts
to cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a prospectus at
all times meeting the requirements of the Act) until the Final Expiration
Date;
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13.3.2. 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;
and
13.3.3. deliver to holders of the Rights historical
financial statements for the Principal Party that comply in all 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.
The rights under this Section 13 shall be in addition to the rights to
exercise Rights and adjustments under Section 11.1.2 and shall survive any
exercise thereof.
13.4. Notwithstanding anything in this Agreement to the
contrary, the foregoing provisions of this Section 13 shall not be applicable
to a transaction described in clauses (x) and (y) of Section 13.1 if: (i)
such transaction is consummated with a Person or Persons who acquired shares
of Common Stock pursuant to a Permitted Offer (or a wholly owned Subsidiary
of any such Person or Persons); (ii) the price per share of Common Stock
offered in such transaction is not less than the price per share of Common
Stock paid to all holders of shares of Common Stock whose shares were
purchased pursuant to such Permitted Offer; and (iii) the form of
consideration offered in such transaction is the same as the form of
consideration paid pursuant to such Permitted Offer. Upon consummation of
any such transaction contemplated by this Section 13.4, all Rights hereunder
shall expire.
14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
14.1. The Corporation shall not be required to issue
fractions of Rights or to distribute Right Certificates that evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to
the registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole Right. For the purposes
of this Section 14.1, the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Rights are
not listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by NASDAQ or such other system
then in use or, if on any such date the Rights are not quoted by
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any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Corporation. If on any such date
no such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Corporation shall be used.
14.2. The Corporation shall not be required to issue
fractions of shares of Preferred Stock (other than fractions that are one
one-thousandth (1/1000th) or integral multiples of one one-thousandth
(1/1000th) of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates that evidence fractional shares of Preferred Stock
(other than fractions that are one one-thousandth (1/1000th) or integral
multiples of one one-thousandth (1/1000th) of a share of Preferred Stock).
Fractions of shares of Preferred Stock in integral multiples of one
one-thousandth (1/1000th) of a share of Preferred Stock may, at the election
of the Corporation, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Corporation and a depositary selected by
it; PROVIDED that such agreement shall provide that the holders of such
depositary receipts shall have the rights, privileges and preferences to
which they are entitled as beneficial owners of the Preferred Stock
represented by such depositary receipts. In lieu of fractional shares of
Preferred Stock that are not one one-thousandth (1/1000th) or integral
multiples of one one-thousandth (1/1000th) of a share of Preferred Stock, the
Corporation shall pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one share of Preferred
Stock. For the purposes of this Section 14.2, the current market value of a
share of Preferred Stock shall be the closing price of a share of Preferred
Stock (as determined pursuant to Section 11.4.2 hereof) for the Trading Day
immediately prior to the date of such exercise.
14.3. Following the occurrence of one of the transactions
or events specified in Section 11 giving rise to the right to receive shares
of Common Stock, Capital Stock Equivalents (other than Preferred Stock) or
other securities upon the exercise of a Right, the Corporation shall not be
required to issue fractions of shares or units of such shares of Common
Stock, Capital Stock Equivalents or other securities upon exercise of the
Rights or to distribute certificates that evidence fractions of such shares
of Common Stock, Capital Stock Equivalents or other securities. In lieu of
fractional shares or units of such shares of Common Stock, Capital Stock
Equivalents or other securities, the Corporation 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 current market
value of a share or unit of such shares of Common Stock, Capital Stock
Equivalents or other securities. For purposes of this Section 14.3, the
current market value shall be determined in the manner set forth in Section
11.4 hereof for the Trading Day immediately prior to the date of such
exercise and, if such Capital Stock Equivalent is not traded, each such
Capital Stock Equivalent shall have the value of one one-thousandth
(1/1000th) of a share of Preferred Stock.
14.4. The holder of a Right by the acceptance of the Right
expressly waives such holder's right to receive any fractional Rights or any
fractional share upon exercise of a
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Right (except as provided above). The Rights Agent shall not be deemed to
have knowledge of, and shall have no duty in respect of, the issuance of
fractional Rights or fractional shares unless and until it shall have
received instructions from the Corporation concerning the issuance of such
fractional Rights or fractional shares.
15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, excepting the
rights of action given to the Rights Agent under Section 18 hereof, are
vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of shares of the
Common Stock); and any registered holder of any Right Certificate (or, prior
to the Distribution Date, of shares of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of shares of the Common Stock), may, in such
registered holder's own behalf and for such registered holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of, such
registered holder's right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations
of any Person subject to, this Agreement. Nothing in this Section 15 is
intended to modify or limit the authority of the Board of Directors under
Section 25.3.
16. AGREEMENT OF RIGHT HOLDERS.
Every holder of a Right, by accepting the same, consents and agrees
with the Corporation and the Rights Agent and with every other holder of a
Right that:
16.1. prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the associated shares of
Common Stock;
16.2. after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate form fully executed;
16.3. subject to Section 6 and Section 7.7 hereof, the
Corporation and the Rights Agent may deem and treat the Person in whose name the
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 Certificate or the associated Common Stock certificate made by anyone
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other than the Corporation or the Rights Agent) for all purposes whatsoever,
and neither the Corporation nor the Rights Agent, subject to the last
sentence of Section 7.6 hereof, shall be required to be affected by any
notice to the contrary; and
16.4. Notwithstanding anything in this Agreement to the
contrary, neither the Corporation nor the Rights Agent shall have any
liability to any holder of a Right or a beneficial interest in a Right or
other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree, judgment or ruling (whether interlocutory or final)
issued by a court of competent jurisdiction or by a governmental, regulatory
or administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
PROVIDED, HOWEVER, that the Corporation must use its best efforts to have any
such order, decree, judgment or ruling lifted or otherwise overturned as soon
as practicable.
17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of shares of
the Preferred Stock or any other securities of the Corporation that 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 stockholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 24 hereof), or to receive dividends or other
distributions or to exercise any preemptive 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.
18. CONCERNING THE RIGHTS AGENT.
18.1. The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration,
preparation, delivery, amendment and execution of this Agreement and the
exercise and performance of its duties hereunder. The Corporation also
agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, damage, judgment, fine, penalty, claim, demand,
settlement, cost or expense incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including without limitation the costs and
expenses of defending against any claim of liability in respect of any such
action. The costs and expenses of enforcing this right of indemnification
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shall also be paid by the Corporation. The indemnity provided for herein
shall survive the expiration of the Rights and the termination of this
Agreement.
18.2. The Rights Agent may conclusively rely upon and shall
be authorized and protected and shall incur no liability for, or in respect
of, any action taken, suffered or omitted by it in connection with the
acceptance and administration of this Agreement in reliance upon any Right
Certificate or certificate for shares of Common Stock or for other securities
of the Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons. The Rights Agent shall not be deemed to have
knowledge of, and shall have no duty in respect of, any fact contained in
such Right Certificate or certificate for shares of Common Stock or for other
securities of the Corporation, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document unless and until it shall
have received the same.
18.3. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect, punitive, incidental or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
19.1. Any Person into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any Person resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any Person
succeeding to the stock transfer or all or substantially all of the
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 Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof.
19.2. 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.
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20. DUTIES OF RIGHTS AGENT.
20.1. The Rights Agent undertakes those duties and
obligations, and only the duties and obligations, expressly imposed by this
Agreement (and no implied duties or obligations) upon the following terms and
conditions, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Corporation and the
holders of Right Certificates, by their acceptance thereof, shall be bound.
20.2. Before the Rights Agent acts or refrains from acting,
the Rights Agent may consult with legal counsel (who may be legal counsel for
the Corporation), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent, and the Rights
Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.
20.3. 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 an Acquiring Person
and the determination of the current market price of any security) be proved
or established by the Corporation prior to taking, suffering or omitting any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of
the Board, the Chief Executive Officer, the President, any Vice President,
the Treasurer or the Secretary of the Corporation and delivered to the Rights
Agent; and such certificate shall be full authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for or in respect
of any action taken, suffered or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
20.4. The Rights Agent shall be liable hereunder only for
its own gross negligence, bad faith or willful misconduct.
20.5. 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 on such
Right Certificates) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the
Corporation only.
20.6. The Rights Agent shall not be under any liability or
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
Corporation of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void
pursuant to Section 7.6 hereof) or any adjustment
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required under the provisions of Section 11, Section 13 or Section 26 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 the certificate described in Section 12
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 Preferred Stock or shares of Common Stock to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Stock
or shares of Common Stock will, when issued, be validly authorized and
issued, fully paid and non-assessable.
20.7. The Corporation 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.
20.8. The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President or the Secretary of the Corporation, and to
apply to such officers for advice or instructions in connection with its
duties, and such instructions shall be full authorization and protection of
the Rights Agent and the Rights Agent shall incur no liability for or in
respect of any action taken, suffered or omitted by it in good faith or lack
of action in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions. The Rights Agent shall
incur no liability for or in respect of its reliance upon the most recent
instructions received by any such officer. Any application by the Rights
Agent for written instructions from the Corporation 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 or suffered by, or omission of, the
Rights Agent in accordance with a proposal included in any such application
on or after the date specified in such application (which date shall not be
less than five (5) Business Days after the date any officer of the
Corporation 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 instruction in response to such application
specifying the action to be taken, suffered or omitted.
20.9. The Rights Agent and any stockholder, affiliate,
director, officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Corporation or become
pecuniarily interested in any transaction in which the Corporation may be
interested, or contract with or lend money to the Corporation or otherwise
act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Corporation or for any other Person or legal entity.
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20.10. The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, negligence or
misconduct of any such attorneys or agents or for any loss to the Corporation
or any other Person resulting from any such act, default, negligence or
misconduct, absent gross negligence, bad faith or willful misconduct in the
selection and continued employment thereof.
20.11. 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 it believes that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
20.12. If, with respect to any Rights 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 not been completed, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without
first consulting with the Corporation.
20.13. The Rights Agent shall not be required to take notice
or be deemed to have notice of any fact, event or determination (including,
without limitation, any dates or events defined in this Agreement or the
designee of a Person as an Acquiring Person, Affiliate or Associate), under
this Agreement unless and until the Rights Agent shall be specifically
notified in writing by the Corporation of such fact, event or determination.
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 Corporation and to each transfer agent of the Common
Stock or Preferred Stock by registered or certified mail, and, at the expense
of the Corporation, to the holders of the Right Certificates by first-class
mail. The Corporation may remove the Rights Agent or any successor Rights
Agent upon sixty (60) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock or Preferred Stock by registered or certified mail, and to
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
Corporation shall appoint a successor to the Rights Agent. If the
Corporation shall fail to make such appointment within a period of sixty (60)
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 Corporation), then
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 Corporation or by such a
court, shall be (i) a Person
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organized and doing business under the laws of the United States or of any of
the States of New York, New Jersey or California (or of any other state of
the United States so long as such Person is authorized to do business in any
of the States of New York, New Jersey or California), in good standing,
having an office in any of such States, which is subject to supervision or
examination by federal or state authority and which (or the parent
corporation of which) has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (ii) an affiliate of
such Person. 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. 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 succesor Rights Agent may adopt the
countersignature of a 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. Not later than the effective date of any
such appointment, the Corporation shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common Stock or
Preferred Stock, and mail a notice thereof in writing to the registered
holders of the 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.
22. ISSUANCE OF NEW RIGHT CERTIFICATES.
22.1. Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Corporation 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
Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with
the provisions of this Agreement.
22.2. In connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Corporation (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, notes or debentures issued by the Corporation, and (b)
may in any other case, if deemed necessary or appropriate by the Board of
Directors of the Corporation, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
PROVIDED, HOWEVER, that (i) the Corporation shall not be obligated to issue any
such Right Certificates if, and to the extent that, the Corporation shall be
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advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Corporation or the Person to whom
such Right Certificate would be issued, and (ii) no Right Certificate shall
be issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
23. REDEMPTION AND TERMINATION.
23.1. REDEMPTION
23.1.1. The Board of Directors of the Corporation
may, at its option, redeem all but not less than all of the then outstanding
Rights at a redemption price of $.001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "REDEMPTION PRICE"), at any time prior to the
earlier of the occurrence of a Section 11.1.2 Event or the Final Expiration
Date. The Corporation may, at its option, pay the Redemption Price either in
shares of Common Stock (based on the current per share market price of the
Common Stock at the time of redemption) or cash; PROVIDED that if the
Corporation elects to pay the Redemption Price in shares of Common Stock, the
Corporation shall not be required to issue any fractional shares of Common
Stock and the number of shares of Common Stock issuable to each holder of
Rights shall be rounded down to the next whole share.
23.1.2. In addition, the Board of Directors of the
Corporation may, at its option, at any time following the occurrence of a
Section 11.1.2 Event and the expiration of any period during which the holder
of Rights may exercise the Rights under Section 11.1.2 but prior to any
Section 13 Event redeem all but not less than all of the then outstanding
Rights at the Redemption Price (x) in connection with any merger,
consolidation or sale or other transfer (in one transaction or in a series of
related transactions) of assets or earning power aggregating 50% or more of
the earning power of the Corporation and its Subsidiaries (taken as a whole)
in which all holders of shares of Common Stock are treated alike and not
involving (other than as a holder of shares of Common Stock being treated
like all other such holders) an Interested Stockholder or (y) (i) if and for
so long as the Acquiring Person is not thereafter the Beneficial Owner of 15%
or more of the Common Stock, and (ii) at the time of redemption no other
Persons are Acquiring Persons.
23.2. In the case of a redemption permitted under
Section 23.1.1, immediately upon the date for redemption set forth in (or
determined in the manner specified in) a resolution of the Board of Directors of
the Corporation 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. In the case of a redemption permitted
only under Section 23.1.2, the right to exercise the Rights will terminate and
represent only the right to receive the Redemption Price
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upon the later of ten (10) Business Days following the giving of such notice
or the expiration of any period during which the Rights may be exercised
under Section 11.1.2. The Corporation shall promptly give public notice of
any such redemption; PROVIDED, HOWEVER, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption.
Within ten (10) days after such date for redemption set forth in a resolution
of the Board of Directors of the Corporation ordering the redemption of the
Rights, the Corporation shall mail a notice of redemption to the Rights Agent
and all the holders of the then outstanding Rights at (in the case of notice
to holders) their 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
Corporation nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than as
specifically set forth in this Section 23 and other than in connection with
the purchase of shares of Common Stock prior to the Distribution Date.
23.3. The Corporation may, at its option, discharge all of
its obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights in accordance with this
Agreement and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their addresses as they appear on the registry books
of the Rights Agent or, prior to the Distribution Date, on the registry books
of the Transfer Agent of the Common Stock, and upon such action, all
outstanding Rights and Right Certificates shall be null and void without any
further action by the Corporation.
24. NOTICE OF CERTAIN EVENTS.
24.1. In case the Corporation shall propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred Stock
or to make any other distribution to the holders of its Preferred Stock
(other than a regular quarterly cash dividend), (ii) to offer to the holders
of its Preferred Stock rights or warrants to subscribe for or to purchase any
additional Preferred Stock or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision
of outstanding Preferred Stock), (iv) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the Corporation in
a transaction which does not violate Section 11.14 hereof), or to effect any
sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer) in one or more transactions, of 50% or
more of the assets or earning power of the Corporation and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Corporation
and/or any of its Subsidiaries in one or more transactions each of which does
not violate Section 11.14 hereof), or (v) to effect the liquidation,
dissolution or winding up of the Corporation, then, in each such case, the
Corporation shall give the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 25 hereof, a notice of such proposed
action which shall specify the record date for the purposes of such stock
dividend or distribution of rights or warrants, or the date on which such
reclassification,
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consolidation, merger, sale, transfer, liquidation, dissolution or winding up
is to take place and the date of participation therein by the holders of the
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
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 Preferred Stock, whichever shall be the earlier.
24.2. In case of a Section 11.1.2 Event, then (i) the
Corporation shall as soon as practicable thereafter give to each holder of a
Right Certificate, in accordance with Section 25.1.3 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11.1.2 hereof, and
(ii) all references in the preceding Section 24.1 to Preferred Stock shall be
deemed thereafter to refer also to shares of Common Stock and/or, if
appropriate, other securities of the Corporation.
25. Miscellaneous.
25.1. NOTICES.
25.1.1. 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 Corporation shall be sufficiently given or
made if sent by registered or certified mail and shall be deemed given upon
receipt, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Calypte Biomedical Corporation
1440 Fourth Street
Berkeley, California 94710
Attention: Corporate Secretary
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25.1.2. Subject to the provisions of Section 21
hereof, any notice or demand authorized by this Agreement to be given or made
by the Corporation or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent registered or
certified mail and shall be deemed given upon receipt, addressed (until
another address is filed in writing with the Corporation) as follows:
ChaseMellon Shareholder Services, L.L.C.
235 Montgomery Street
23rd Floor
San Francisco, California 94104
Attention: Relationship Manager
25.1.3. Notices or demands authorized by this
Agreement to be given or made by the Corporation or the Rights Agent to the
holder of any Right Certificate or, if prior to the Distribution Date, to the
holder of certificates 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 Corporation.
25.2. SUPPLEMENTS AND AMENDMENTS. The Corporation may from
time to time supplement or amend any provision of this Agreement without the
approval of any holders of Rights in order to cure any ambiguity, to correct,
supplement or amend any provision herein, or to make any other provision with
respect to the Rights which the Corporation may deem necessary or desirable,
any such supplement or amendment to be evidenced by a writing signed by the
Corporation and the Rights Agent; PROVIDED, HOWEVER, that from and after any
Shares Acquisition Date this Agreement shall not be amended in any manner
which will adversely affect the interests of the holders of Rights. Upon the
delivery of a certificate from an appropriate officer of the Corporation
which states that the proposed supplement or amendment is in compliance with
the terms of this Section 25.2, and, if requested by the Rights Agent, an
opinion of counsel, 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 shares
of Common Stock. This Agreement shall not be amended, without the prior
written consent of the Rights Agent, in any manner that changes or increases
the duties or obligations of the Rights Agent.
25.3. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. The Board of Directors of the Corporation shall have the exclusive
power and authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board, or the Corporation, 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, without
limitation, a determination to redeem or not redeem the Rights or to amend
the Agreement and whether any proposed amendment adversely affects the
interests of
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the holders of Right Certificates). For all purposes of this Agreement, any
calculation of the number of shares of Common Stock or other securities
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock or any other
securities 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 General Rules
and Regulations under the Exchange Act as in effect on the date of this
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 in good
faith, shall (x) be final, conclusive and binding on the Corporation, the
Rights Agent, the holders of the Right Certificates and all other Persons,
and (y) not subject the Board to any liability to the holders of the Right
Certificates. The Rights Agent shall be fully protected and shall incur no
liability for or in respect of its reliance on the good faith of the
Corporation's Board of Directors with respect to actions done or made in
connection with such calculation. Nothing in Section 15 hereof is intended
to modify or limit this Section 25.3.
25.4. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
25.5. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person or corporation other than
the Corporation, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the shares of Common
Stock) any legal or equitable right, remedy or claim under this Agreement.
This Agreement shall be for the sole and exclusive benefit of the
Corporation, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the shares of Common
Stock).
25.6. 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.
25.7. 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 State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State;
except that all provisions regarding the rights, duties and obligations of
the Rights Agent shall be governed and construed in accordance with the laws
of the State of New York applicable to contracts made and to be performed
entirely within such state.
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25.8. 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.
25.9. 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.
26. EXCHANGE.
26.1. Notwithstanding any other provision hereof, the Board
of Directors of the Corporation may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section 7.6 hereof) for
shares of Common Stock of the Corporation at an exchange ratio determined by
dividing the then-applicable exercise price of the Rights determined under
Section 7.2 by the "current per share market price" as defined in Section
11.4.1 (such exchange ratio being hereinafter referred to as the "EXCHANGE
RATIO"). Notwithstanding the foregoing, the Corporation's Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than the Corporation, any Subsidiary of the Corporation, any employee
benefit plan of the Corporation or any such Subsidiary, or any Person
organized, appointed or established by the Corporation for or pursuant to the
terms of any such plan or any trustee, administrator or fiduciary of such a
plan), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Common Stock then outstanding.
26.2. Immediately upon the action of the Board of Directors
of the Corporation ordering the exchange of any Rights pursuant to Section
26.1 and without any further action and without any notice, the right to
exercise such rights shall terminate and the only right thereafter of the
holder of such Rights (other than a holder of Rights that have become null
and void pursuant to the provisions of Section 7.6 hereof) 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 Corporation
shall promptly give public notice, and shall promptly give notice to the
Rights Agent, of any such exchange; PROVIDED, HOWEVER, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Corporation promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange shall state the method by
which the exchange of the 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 7.6) held by each holder of Rights.
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26.3. In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this
Section 26, the Corporation shall take all such action as may be necessary to
issue additional shares of Common Stock, Preferred Stock and/or Capital Stock
Equivalents with an aggregate current market value (as determined by the
Board of Directors of the Corporation) equal to the aggregate current market
value of a number of shares of Common Stock equal to the Exchange Ratio.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the date and year first
above written.
CALYPTE BIOMEDICAL CORPORATION
Attest:
By: /s/ William A. Boeger
----------------------------------
William A. Boeger
President, Chief Executive Officer and
Chairman of the Board of Directors
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
By: /s/ Joseph Thatcher
----------------------------------
Joseph Thatcher
Asst. Vice President
<PAGE>
EXHIBIT A
Certificate of Designation, Preferences and
Rights of Series RP Preferred Stock
of
Calypte Biomedical Corporation
(Pursuant to Section 151 of the Delaware General Corporation Law)
I, John J. DiPietro, Secretary of Calypte Biomedical Corporation (the
"CORPORATION"), a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions
of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
of the Corporation by the Restated Certificate of Incorporation of the
Corporation, the said Board of Directors on December 15, 1998, adopted the
following resolutions creating a series of 30,000 shares of Preferred Stock
designated as Series RP Preferred Stock.
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Corporation in accordance with the provisions of
the Restated Certificate of Incorporation of the Corporation, the Board of
Directors hereby creates a series of Series RP Preferred Stock, with a par
value of $0.001 per share, of the Corporation and hereby states the
designation and number of shares, and fixes the relative rights, preferences
and limitations thereof as follows (the following provisions being intended
to operate in addition to any other provisions of said Restated Certificate
of Incorporation applicable to any series of Preferred Stock):
Series RP Preferred Stock
Section 1. DESIGNATION, PAR VALUE AND AMOUNT. The shares of such
series shall be designated as "Series RP Preferred Stock" (hereinafter
referred to as "SERIES RP PREFERRED STOCK"), the shares of such series shall
be with par value of $0.001 per share, and the number of shares constituting
such series shall be 30,000; PROVIDED, HOWEVER, that, if more than a total of
30,000 shares of Series RP Preferred Stock shall be issuable upon the
exercise of Rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of December 15, 1998, between the Corporation and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (as amended from time to time,
the "RIGHTS AGREEMENT"), the Board of Directors of the Corporation shall
direct by resolution or resolutions that a certificate be properly executed,
acknowledged and filed providing for the total number of shares of Series RP
Preferred Stock authorized to be issued to be increased (to the extent that
the Restated Certificate of Incorporation then permits) to the largest number
of whole shares (rounded up to the nearest whole number) issuable upon
exercise of the Rights.
<PAGE>
Section 2. DIVIDENDS AND DISTRIBUTIONS.
2.1 Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series RP Preferred Stock with respect to
dividends, the holders of shares of Series RP Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out
of assets legally available for the purpose, quarterly dividends payable in
cash on the first business 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 RP 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 provision for adjustment set forth
in Section 6.1, 1,000 times the aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock, par value $.001 per share, of the
Corporation (the "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 RP Preferred Stock.
2.2 The Corporation shall declare a dividend or
distribution on the Series RP Preferred Stock as provided in Section 2.1
above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); PROVIDED
THAT, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$1.00 per share on the Series RP Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
2.3 Dividends shall begin to accrue and be cumulative on
outstanding shares of Series RP Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series RP
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 RP 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 RP Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series RP Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be not more than 30 days prior to the date fixed for
the payment thereof.
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Section 3. VOTING RIGHTS. The holders of shares of Series RP
Preferred Stock shall have the following voting rights:
3.1 Except as provided in Section 3.3 and subject to the
provision for adjustment hereinafter set forth, each share of Series RP
Preferred Stock shall entitle the holder thereof to 1,000 votes on all
matters submitted to a vote of the stockholders of the Corporation.
3.2 Except as otherwise provided herein or by law, the
holders of shares of Series RP Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
3.3 The following additional provisions shall apply with
respect to the voting of shares of Series RP Preferred Stock:
3.3.1 If, on the date used to determine
stockholders of record for any meeting of stockholders for the election of
directors, a default in preference dividends (as defined in Section 3.3.5
below) on the Series RP Preferred Stock shall exist, the holders of the
Series RP Preferred Stock shall have the right, voting as a class as
described in Section 3.3.2 below, to elect two directors (in addition to the
directors elected by holders of Common Stock of the Corporation). Such right
may be exercised (a) at any meeting of stockholders for the election of
directors or (b) at a meeting of the holders of shares of Voting Preferred
Stock (as hereinafter defined), called for the purpose in accordance with the
Bylaws of the Corporation, until all such cumulative dividends (referred to
above) shall have been paid in full or until non-cumulative dividends have
been paid regularly for at least one year.
3.3.2 The right of the holders of Series RP
Preferred Stock to elect two directors, as described above, shall be
exercised as a class concurrently with the rights of holders of any other
series of Preferred Stock upon which voting rights to elect such directors
have been conferred and are then exercisable. The Series RP Preferred Stock
and any additional series of Preferred Stock that the Corporation may issue
and that may provide for the right to vote with the foregoing series of
Preferred Stock are collectively referred to herein as "VOTING PREFERRED
STOCK."
3.3.3 Each director elected by the holders of
shares of Voting Preferred Stock shall be referred to herein as a "PREFERRED
DIRECTOR." A Preferred Director shall continue to serve as such for a term of
one year, except that upon any termination of the right of all holders of
Voting Preferred Stock to vote as a class for Preferred Directors, the term
of office of Preferred Directors then serving shall terminate. Any Preferred
Director may be removed by, and shall not be removed except by, the vote of
the holders of record of a majority of the outstanding shares of Voting
Preferred Stock then entitled to vote for the election of directors, present
(in person or by proxy) and voting together as a single class (a) at a
meeting of the stockholders, or (b) at a meeting of the holders of shares of
such Voting Preferred Stock, called for the purpose in accordance with the
Bylaws of the Corporation.
3.3.4 So long as a default in any preference dividends
of the Series RP Preferred Stock shall exist or the holders of any other series
of Voting Preferred Stock shall be
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entitled to elect Preferred Directors, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following clause
(b)) by an instrument in writing signed by the remaining Preferred Director
and filed with the Corporation and (b) in the case of the removal of any
Preferred Director, the vacancy may be filled by the vote or written consent
of the holders of a majority of the outstanding shares of Voting Preferred
Stock then entitled to vote for the election of directors, present (in person
or by proxy) and voting together as a single class, at such time as the
removal shall be effected. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes hereof, to be
a Preferred Director. Whenever (x) no default in preference dividends on the
Series RP Preferred Stock shall exist and (y) the holders of other series of
Voting Preferred Stock shall no longer be entitled to elect such Preferred
Directors, then the number of directors constituting the Board of Directors
of the Corporation shall be reduced by two.
3.3.5 For purposes hereof, a "DEFAULT IN PREFERENCE
DIVIDENDS" on the Series RP Preferred Stock shall be deemed to have occurred
whenever the amount of cumulative and unpaid dividends on the Series RP
Preferred Stock shall be equivalent to six full quarterly dividends or more
(whether or not consecutive), and, having so occurred, such default shall be
deemed to exist thereafter until, but only until, all cumulative dividends on
all shares of the Series RP Preferred Stock then outstanding shall have been
paid through the last Quarterly Dividend Payment Date or until, but only
until, non-cumulative dividends have been paid regularly for at least one
year.
3.4 Except as set forth herein (or as otherwise required
by applicable law), holders of Series RP Preferred Stock shall have no
general or special voting rights and their consent shall not be required for
taking any corporate action.
Section 4. CERTAIN RESTRICTIONS.
4.1 Whenever quarterly dividends or other dividends or
distributions payable on the Series RP 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 RP Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
4.1.1 declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series RP Preferred
Stock;
4.1.2 declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series RP
Preferred Stock, except dividends paid ratably on the Series RP 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;
4.1.3 redeem or purchase or otherwise acquire for
consideration (except as provided in Section 4.1.4 below) shares of any stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series RP Preferred Stock, provided that the
4
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Corporation may at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series RP Preferred Stock;
4.1.4 redeem or purchase or otherwise acquire for
consideration any shares of Series RP Preferred Stock, or any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series RP 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.
4.2 The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under Section 4.1,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series RP Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock subject to the conditions and restrictions on
issuance set forth herein, in the Certificate of Incorporation, in any other
Certificate of Amendment creating a series of Preferred Stock or as otherwise
required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
6.1 Subject to the prior and superior rights of holders
of any shares of any series of Preferred Stock ranking prior and superior to
the shares of Series RP Preferred Stock with respect to rights upon
liquidation, dissolution or winding up (voluntary or otherwise), no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to
the Series RP Preferred Stock unless, prior thereto, the holders of shares of
Series RP Preferred Stock shall have received per share an amount equal to
the greater of 1,000 times $15 or 1,000 times the payment made per share of
Common Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "SERIES RP LIQUIDATION PREFERENCE"). Following the payment of the full
amount of the Series RP Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series RP Preferred Stock unless,
prior thereto, the holders of shares of Common Stock shall have received an
amount per share (the "CAPITAL ADJUSTMENT") equal to the quotient obtained by
dividing (i) the Series RP Liquidation Preference by (ii) 1,000 (as
appropriately adjusted as set forth in Section 6.3 to reflect such events as
stock splits, stock dividends and recapitalizations with respect to the
Common Stock) (such number in clause (ii) being hereafter referred to as the
"ADJUSTMENT NUMBER"). Following the payment of the full amount of the Series
RP Liquidation Preference and the Capital
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Adjustment in respect of all outstanding shares of Series RP Preferred Stock
and Common Stock, respectively, holders of Series RP Preferred Stock and
holders of Common Stock shall receive their ratable and proportionate share
of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
6.2 In the event, however, that there are not sufficient
assets available to permit payment in full of the Series RP Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity with the Series RP Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of
Series RP Preferred Stock and the holders of such parity shares in proportion
to their respective liquidation preferences. In the event, however, that
there are not sufficient assets available to permit payment in full of the
Capital Adjustment, then such remaining assets shall be distributed ratably
to the holders of Common Stock.
6.3 In the event the Corporation shall (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the Adjustment Number
in effect immediately prior to such event shall be adjusted by multiplying
such Adjustment Number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series RP Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share equal to the Adjustment Number
(as appropriately adjusted as set forth in Section 6.3 to reflect such events
as stock splits, stock dividends and recapitalizations with respect to the
Common Stock) 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.
Section 8. NO REDEMPTION. The shares of Series RP Preferred Stock
shall not be redeemable.
Section 9. RANKING. The Series RP Preferred Stock shall rank junior
to all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such other
series shall provide otherwise.
Section 10. AMENDMENT. The Restated Certificate of Incorporation of
the Corporation shall not be further amended in any manner that would
materially alter or change the powers, preferences or special rights of the
Series RP Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
shares of Series RP Preferred Stock, voting separately as a class.
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Section 11. FRACTIONAL SHARES. Series RP Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and have the benefit of all other
rights of holders of Series RP Preferred Stock.
RESOLVED, that the proper officers of the Corporation be, and each of
them hereby is, authorized to execute a Certificate of Designation with
respect to the Series RP Preferred Stock pursuant to Section 151 of the
General Corporation Law of the State of Delaware and to take all appropriate
action to cause such Certificate to become effective, including, but not
limited to, the filing and recording of such Certificate with and/or by the
Secretary of State of the State of Delaware.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, I have executed and subscribed to this Certificate
and do affirm the foregoing as true under penalty of perjury this 15th day of
December, 1998.
--------------------------------------
John J. DiPietro
Chief Financial Officer and Secretary
8
<PAGE>
EXHIBIT B
Form of Right Certificate
Certificate No. RP- _____ Rights
NOT EXERCISABLE AFTER DECEMBER 15, 2008 OR
EARLIER IF REDEEMED BY THE CORPORATION. THE
RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.
Right Certificate
CALYPTE BIOMEDICAL CORPORATION
This certifies that __________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of December 15, 1998 (the "Rights Agreement"), between
Calypte Biomedical Corporation, a Delaware corporation (the "Corporation"),
and ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company, (the "Rights Agent") to purchase from the Corporation at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., California time, on December 15, 2008, unless the
Rights evidenced hereby shall have been previously redeemed by the
Corporation, at the principal office or offices of the Rights Agent
designated for such purpose, or at the office of its successor as Rights
Agent, one one-thousandth (1/1000th) of a fully paid non-assessable share of
Series RP Preferred Stock (the "Preferred Stock") of the Corporation, at a
purchase price of $15 per one one-thousandth (1/1000th) of a share of
Preferred Stock (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the number of
one one-thousandths (1/1000ths) of a share of Preferred Stock that may be
purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of January 5, 1999, based
on the Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11.1.2 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 or an Affiliate or
Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any Affiliate or Associate thereof) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of an Affiliate or Associate thereof) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person (or from any Affiliate or Associate thereof) to
holders of equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has a continuing agreement, arrangement or
understanding regarding the transferred Rights or
<PAGE>
(B) a transfer that the Board of Directors of the Corporation has determined
is part of a plan, arrangement or understanding that has as a primary purpose
or effect the avoidance of Section 7.6 of the Rights Agreement, shall become
null and void without any further action and no holder hereof shall have any
rights whatsoever with respect to such Rights, whether under any provision of
the Rights Agreement or otherwise.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-thousandths (1/1000ths) of a share of Preferred Stock or other
securities that 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, including Triggering Events (as such term is
defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, covenants and
restrictions of the Rights Agreement, which terms, covenants and restrictions
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 Corporation 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 executive offices of the Corporation and the office of the Rights
Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of Preferred Stock or other securities as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Corporation at a redemption price
of $.001 per Right (subject to adjustment as provided in the Rights
Agreement) payable in cash.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions that are one
one-thousandth (1/1000th) or integral multiples of one one-thousandth
(1/1000th) of a share of Preferred Stock, which may, at the election of the
Corporation, be evidenced by depository receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of the Preferred
Stock or of any other securities of the Corporation that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Corporation or any right to vote
for the election of
2
<PAGE>
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 other
distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate
shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal. Dated as of __________, _____.
[SEAL]
ATTEST: CALYPTE BIOMEDICAL CORPORATION
By By
----------------------------- -------------------------------
Name Name
--------------------------- -----------------------------
Title Title
-------------------------- ----------------------------
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By
-----------------------------
Name
---------------------------
Title
--------------------------
3
<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-in-Fact, to transfer the within Right Certificate on the books of
the within-named Corporation, with full power of substitution.
Dated:__________, _____ __________________________________________
Signature
Signature Guaranteed:
______________________________
Signatures must be guaranteed by an "Eligible Guarantor Institution" as
defined in Rule 17Ad-15 (or any successor rule or regulation) promulgated
pursuant to the Securities Exchange Act of 1934, as amended (this term means,
in general, banks, stock brokers, savings and loan associations, and credit
unions, in each case with membership in an approved signature guarantee
medallion program).
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being sold, assigned or transferred by or on behalf
of a Person who is or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), (2) this Right
Certificate is not being sold, assigned or transferred to or on behalf of any
such Acquiring Person, Affiliate or Associate, and (3) after due inquiry and
to the best knowledge of the undersigned, the undersigned did not acquire the
Rights evidenced by this Right Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).
____________________________________
Signature
<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise Rights represented by the Right Certificate)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock, shares of Common Stock or other securities issuable upon the exercise of
such Rights and requests that certificates for such shares of Preferred Stock,
shares of Common Stock or other securities be issued in the name of:
Please insert social security number
or other identifying number __________________________________________________
______________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security number
or other identifying number __________________________________________________
______________________________________________________________________________
(Please print name and address)
Dated: __________, _____
________________________________________
Signature
Signature Guaranteed:
______________________________
Signatures must be guaranteed by an "Eligible Guarantor Institution" as
defined in Rule 17Ad-15 (or any successor rule or regulation) promulgated
pursuant to the Securities Exchange Act of 1934, as amended (this term means,
in general, banks, stock brokers, savings and loan associations, and credit
unions, in each case with membership in an approved signature guarantee
medallion program).
<PAGE>
Form of Reverse Side of Right Certificate -- continued
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being exercised by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), (2) this Right Certificate is not
being sold, assigned or transferred by or on behalf of any such Acquiring
Person, Affiliate or Associate, and (3) after due inquiry and to the best
knowledge of the undersigned, the undersigned did not acquire the Rights
evidenced by this Right Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).
______________________________________
Signature
Notice
The signature on the foregoing Forms of Assignment and Election and
certificates must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Corporation and the Rights Agent will deem the Beneficial
Owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Right Agreement) and such Assignment or Election to Purchase will not be
honored.
<PAGE>
EXHIBIT C
CALYPTE BIOMEDICAL CORPORATION
1440 Fourth Street
Berkeley, California 94710
SUMMARY OF RIGHTS TO PURCHASE
SERIES RP PREFERRED SHARES
On December 15, 1998, the Board of Directors (the "Board") of
Calypte Biomedical Corporation (the "Corporation") declared a dividend
distribution of one preferred share purchase right (a "Right") for each
outstanding share of Common Stock (the "Common Stock") of the Corporation.
The dividend is payable to the stockholders of record on January 5, 1999 (the
"Record Date"), and with respect to shares of Common Stock issued thereafter
until the Distribution Date (as defined below) and, in certain circumstances,
with respect to shares of Common Stock issued after the Distribution Date.
Except as set forth below, each Right, when it becomes exercisable, entitles
the registered holder to purchase from the Corporation one one-thousandth
(1/1000th) of a share of Series RP Preferred Stock, $.001 par value per share
(the "Preferred Stock"), of the Corporation at a price of $15 per one
one-thousandth (1/1000th) of a share of Preferred Stock (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement") between the
Corporation and ChaseMellon Shareholder Services, L.L.C., as Rights Agent
(the "Rights Agent"), dated as of December 15, 1998.
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no separate
certificates representing the Rights ("Right Certificates") will be
distributed. The Rights will separate from the Common Stock upon the earliest
to occur of (i) a person or group of affiliated or associated persons having
acquired, without the prior approval of the Corporation's Board of Directors,
beneficial ownership of 15% or more of the outstanding shares of Common Stock
(except pursuant to a Permitted Offer, as hereinafter defined) or (ii) 10
days (or such later date as the Board may determine) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in a person or group of
affiliated or associated persons becoming an Acquiring Person (as hereinafter
defined) (the "Distribution Date"). A person or group whose acquisitions of
shares of Common Stock cause a Distribution Date pursuant to clause (i) above
is an "Acquiring Person," with certain exceptions as set forth in the Rights
Agreement. The date that a person or group is first publicly announced to
have become such by the Corporation or such Acquiring Person is the "Shares
Acquisition Date."
The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the associated shares of
Common Stock. Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuance of shares of Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for transfer
of any certificates for shares of
<PAGE>
Common Stock outstanding as of the Record Date, even without such notation or
a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, Right Certificates will be mailed to the holders of record
of the shares of Common Stock as of the Close of Business (as defined in the
Rights Agreement) on the Distribution Date (and to each initial record holder
of certain shares of Common Stock issued after the Distribution Date), and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 15, 2008, unless earlier redeemed
by the Corporation as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding shares of
Common Stock at a price and on terms which a majority of certain members of
the Board determines to be adequate and in the best interests of the
Corporation, its stockholders and other relevant constituencies, other than
such Acquiring Person, its affiliates and associates (a "Permitted Offer")),
each holder of a Right will thereafter have the right (the "Flip-In Right")
to receive, upon exercise, the number of shares of Common Stock (or, in
certain circumstances, of one one-thousandths (1/1000ths) of a share of
Preferred Stock or other securities of the Corporation) having a value
(immediately prior to such triggering event) equal to two times the exercise
price of the Right. Notwithstanding the foregoing, following the occurrence
of the event described above, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person or any affiliate or associate thereof will be null and
void. The Board has the option, at any time after any person becomes an
Acquiring Person, to exchange all or part of the then-exercisable Rights
(excluding those that have become void, as described in the immediately
preceding sentence) for shares of Common Stock, at an exchange ratio
determined by dividing the then-applicable Purchase Price by the then-current
market price per share of Common Stock as determined in accordance with the
Rights Agreement. However, this option generally terminates if any person
becomes the beneficial owner of 50% or more of the Common Stock.
In the event that, at any time following the Shares Acquisition
Date, (i) the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding shares of Common
Stock immediately prior to the consummation of the transaction are not the
holders of all of the surviving corporation's voting power, or (ii) more than
50% of the Corporation's assets or earning power is sold or transferred, in
either case with or to (x) an Acquiring Person or any affiliate or associate
thereof or (y) any other person in which such Acquiring Person, affiliate or
associate has an interest or any person acting on behalf of or in concert with
such Acquiring Person, affiliate or associate, or (z) if, in such transaction,
all holders of shares of Common Stock are not treated alike, any other person,
then each holder of a Right (except Rights which previously have been voided as
set forth above) shall thereafter have the right (the "Flip-Over Right") to
receive, upon exercise, common shares of the acquiring company (or, in certain
circumstances, its parent), having a value equal to two
2
<PAGE>
times the exercise price of the Right. The holder of a Right will continue
to have the Flip-Over Right whether or not such holder exercises or
surrenders the Flip-In Right.
The Purchase Price payable, and the number of shares of Preferred
Stock, shares of Common Stock or other securities issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
shares of the Preferred Stock of certain rights or warrants to subscribe for
or purchase Preferred Stock at a price, or securities convertible into
Preferred Stock with a conversion price, less than the then current market
price of the Preferred Stock or (iii) upon the distribution to holders of
shares of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-thousandths (1/1000ths) of a share of Preferred Stock issuable upon
exercise of each Right are also subject to adjustment in the event of a stock
split of the Common Stock or a stock dividend on the Common Stock payable in
Common Stock or subdivisions, consolidations or combinations of the Common
Stock occurring, in any such case, prior to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but, if greater,
will be entitled to an aggregate dividend per share of 1,000 times the
dividend declared per share of Common Stock. In the event of liquidation,
the holders of shares of the Preferred Stock will be entitled to a minimum
preferential liquidation payment per share in an amount equal to the greater
of $15 or 1,000 times the payment made per share of Common Stock plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series RP
Liquidation Preference"); thereafter, and after the holders of shares of the
Common Stock receive a liquidation payment of an amount equal to the quotient
obtained by dividing the Series RP Liquidation Preference by 1,000 (subject
to certain adjustments for stock splits, stock dividends and
recapitalizations with respect to the Common Stock), the holders of shares of
the Preferred Stock and the holders of the Common Stock will share the
remaining assets in the ratio of 1,000 to 1 (as adjusted) for each share of
Preferred Stock and Common Stock so held, respectively. Finally, in the
event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each share of Preferred Stock will be entitled to
receive 1,000 times the amount received per share of Common Stock. These
rights are protected by customary antidilution provisions. In the event that
the amount of accrued and unpaid dividends on the Preferred Stock is
equivalent to six full quarterly dividends or more, the holders of shares of
the Preferred Stock shall have the right, voting as a class, to elect two
directors in addition to the directors elected by the holders of shares of
the Common Stock until all cumulative dividends on the Preferred Stock have
been paid or set apart for payment through the last quarterly dividend
payment date. No fractional shares of Preferred Stock will be issued (other
than fractions which are one one-thousandth (1/1000th) or integral multiples
of one one-thousandth (1/1000th) of a share of Preferred Stock, which may, at
the election of the Corporation, be evidenced by
3
<PAGE>
depositary receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Stock on the last trading day
prior to the date of exercise.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price.
At any time prior to the earlier to occur of (i) a person becoming
an Acquiring Person or (ii) the expiration of the Rights, and under certain
other circumstances, the Corporation may redeem the Rights in whole, but not
in part, at a price (payable in cash or, at the Corporation's election, in
Common Stock) of $0.001 per Right (the "Redemption Price"), which redemption
shall be effective upon the action of the Board. Additionally, following the
Shares Acquisition Date, the Corporation may redeem the then outstanding
Rights in whole, but not in part, at the Redemption Price, provided that such
redemption is in connection with a merger or other business combination
transaction or series of transactions involving the Corporation in which all
holders of shares of Common Stock are treated alike but not involving an
Acquiring Person or its affiliates or associates.
Other than those provisions relating to the rights, duties and
obligations of the Rights Agent and certain principal economic terms of the
Rights, all of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Corporation prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board of Directors of the Corporation in order to cure any ambiguity,
defect or inconsistency, to make changes that do not adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring
Person), or, subject to certain limitations, to shorten or lengthen any time
period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Corporation, including, without limitation,
the right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to stockholders of the Corporation, stockholders
may, depending upon the circumstances, recognize taxable income should the
Rights become exercisable or upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A. A copy of the Rights Agreement is available free of charge from the
Corporation. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
4
<PAGE>
CALYPTE BIOMEDICAL CORPORATION ADOPTS STOCKHOLDER RIGHTS PLAN
BERKELEY, CA -- December 15, 1998 -- Calypte Biomedical Corporation
(NASDAQ:CALY) today adopted a Stockholder Rights Plan to assist its
stockholders in realizing fair value and equal treatment in the event of any
attempted takeover of the Company and to protect the Company and its
stockholders against coercive takeover tactics.
Under the Stockholder Rights Plan, a dividend of one Preferred Stock
Purchase Right is being declared for each share of Common Stock outstanding
at the close of business on January 5, 1999. No separate certificates
evidencing the Rights will be issued unless and until they become exercisable.
The Rights generally will not become exercisable until a person or group
acquires 15% or more of the Common Stock of the Company in a transaction that
is not approved in advance by the Board of Directors. In that event, each
Right will entitle the holder, other than the unapproved acquiror and its
affiliates, to buy Common Stock of the Company at 50% of its market value for
the Right's then current exercise price (initially $15, subject to
adjustment). In addition, if the Rights were triggered by such a
non-approved acquisition and the Company were thereafter to be acquired in a
merger in which all stockholders were not treated alike, stockholders with
unexercised Rights, other than the unapproved acquiror and its affiliates,
would be entitled to purchase common stock of the acquiror with a value of
twice the exercise price of the Rights.
The Company's Board of Directors may redeem the Rights for a nominal
amount at any time prior to an event that causes the Rights to become
exercisable. The Rights will expire on December 15, 2008.
CALYPTE BIOMEDICAL CORPORATION IS A BERKELEY, CALIFORNIA-BASED HEALTH
CARE COMPANY DEDICATED TO THE DEVELOPMENT AND COMMERCIALIZATION OF
URINE-BASED DIAGNOSTIC PRODUCTS AND SERVICES FOR HIV-1, SEXUALLY TRANSMITTED
DISEASES, AND OTHER CHRONIC ILLNESSES.
FOR MORE INFORMATION, PLEASE CONTACT:
William Boeger (Chairman/CEO), 510/749-5158
John DiPietro(COO), 510/749-5157
