exv4w1



 





Exhibit 4.1




AMENDMENT NO. 2 TO RIGHTS AGREEMENT




     This Amendment no. 2 to Rights Agreement is entered into as of November 1, 2007 (the
“Amendment”) by and between Aspect Medical Systems, Inc., a Delaware corporation (the “Company”)
and Computershare Trust Company, N.A., formerly EquiServe Trust Company, N.A., a national banking
association, as Rights Agent (the “Rights Agent”).



     Whereas, the Company and the Rights Agent are parties to that certain Rights
Agreement dated November 29, 2004 (the “Rights Agreement”), as amended on May 23, 2005;



     Whereas, the Rights (as defined in the Whereas clause at the beginning of
the Rights Agreement) are still redeemable; and



     Whereas, the Company has directed the Rights Agent to enter into this Amendment No. 2
pursuant to Section 27 of the Rights Agreement;



     Now, Therefore, in consideration of the premises and mutual agreements set forth
herein, the parties agree as follows:



     1. Section 1 (e) of the Rights Agreement is hereby amended by deleting such section in its
entirety and substituting therefore the following:




     A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially
own,” any securities:




     (i) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, owns or has the right to acquire (whether such right is exercisable immediately,
only after the passage of time, or after the occurrence of other events) pursuant to any
agreement, arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public offering of
securities or agreements with or between Persons and the Company with respect to any other
bona fide issuance of securities by the Company to such Persons for resale within 40 days,
including without limitation pursuant to Section 4(2) of the Act or Rule 144A or Regulation S
promulgated under the Act), whether or not in writing, or upon the exercise of conversion
rights, exchange rights, other rights, warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” (A)
securities tendered pursuant to a tender or exchange offer made by 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) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event, or (C) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person’s Affiliates or Associates prior to the Distribution Date
or pursuant to Section 3(a) or Section 22 hereof (the “Original Rights”) or pursuant to
Section 11(i) hereof in connection with an adjustment made with respect to any Original
Rights;




     (ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act, or any comparable or successor rule), including pursuant to any agreement, arrangement
or



 









 






understanding (other than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of securities or agreements with or
between Persons and the Company with respect to any other bona fide issuance of securities by
the Company to such Persons for resale within 40 days, including without limitation pursuant
to Section 4(2) of the Act or Rule 144A or Regulation S promulgated under the Act), whether
or not in writing; provided, however, that a Person shall not be deemed the “Beneficial
Owner” of, or to “beneficially own,” any security under this subparagraph (ii) as a result of
an agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations under the Exchange Act, and (B) is not
then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or




     (iii) which are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates or
Associates) has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona fide public
offering of securities or agreements with or between Persons and the Company with respect to
any other bona fide issuance of securities by the Company to such Persons for resale within
40 days, including without limitation pursuant to Section 4(2) of the Act or Rule 144A or
Regulation S promulgated under the Act) whether or not in writing, for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy or consent as described in
the proviso to subparagraph (ii) of this paragraph (e)) or disposing of any voting securities
of the Company.




For all purposes of this Agreement, when making any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, any securities not outstanding which are subject to options, warrants,
rights or conversion privileges shall be deemed to be outstanding for the purpose of
computing the percentage of outstanding securities of the class owned by such Person,
including for purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, but shall not be deemed to be
outstanding for the purpose of computing the percentage of the class by any other Person.



     2. Section 1(r) of the Rights Agreement is hereby amended by deleting such section in its
entirety and substituting therefore the following:




          (r) “Exempted Person” shall mean any Person that would be deemed an Acquiring Person
solely as a result of being the Beneficial Owner of shares of Common Stock issuable (but not
yet issued) upon conversion or exchange of the Company’s 2.50% Convertible Senior Notes due
2014 (the “Notes”), unless and until such time as such Person, together with its Affiliates
and Associates, directly or indirectly, becomes the Beneficial Owner of 21.0% or more of the
shares of Common Stock then outstanding (other than under the circumstances described in the
second sentence of Section 1(a) hereof (replacing for this purpose all references in Section
1(a) to 17.5% with 21.0%)), in which event each Person immediately shall cease to be an
Exempted Person.



 









 





     3.
Section 3(a) of the Rights Agreement is hereby amended by deleting such section in its
entirety and substituting therefore the following:




	 	 	“(a) 	Until the earlier of (i) the close of business on the tenth Business Day (or
such later date as may be determined by the Board) after the Stock Acquisition Date
(or, if the tenth Business Day after the Stock Acquisition Date occurs before the
Record Date, the close of business on the Record Date), or (ii) the close of business
on the tenth Business Day (or such later date as may be determined by action of the
Board) after the date that a tender or exchange offer (other than a Permitted Offer) by
any Person (other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person organized,
appointed or established by the Company for or pursuant to the terms of any such plan)
is first published or sent or given within the meaning of Rule 14d-2 of the General
Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person
would be an Acquiring Person (the earlier of (i) and (ii) being herein referred to as
the “Distribution Date”), (x) the Rights will be evidenced by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for Rights) and
not by separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock (including a
transfer to the Company). As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, insured, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit B hereto (the “Rights
Certificates”), evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. With respect
to certificates for the Common Stock outstanding as of the close of business on the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution Date and
prior to the redemption or expiration of the Rights, the Company (i) shall, with
respect to shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee benefit plan or arrangement, or upon the exercise,
conversion or exchange of securities granted or issued by the Company prior to the
Distribution Date, and (ii) may, in any other case, if deemed necessary or appropriate
by the Board, issue Rights Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that (x) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate would be
issued, and (y) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.
In the event that an adjustment in the number of Rights per share of Common Stock has
been made pursuant to Sections 11(i) or 11(p) hereof, at the time of distribution of
the Rights Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid in lieu of
any fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.





     4.
The Rights Agreement, as supplemented and modified by this Amendment, together with the
other writings referred to in the Rights Agreement or delivered pursuant thereto which form a part
thereof, contain the entire agreement among the parties with respect to the subject matter thereof
and amend, restate and supersede all prior and contemporaneous arrangements or understandings with
respect thereto.



 









 





     5. Upon the effectiveness of this Amendment, on and after the date hereof, each reference in
the Rights Agreement to “this Agreement, “hereunder,” “hereof,” “herein” or words of like import,
shall mean and be a reference to the Rights Agreement, as amended hereby. Except as specifically
amended above, the Rights Agreement shall remain in full force and effect and is hereby ratified
and confirmed.



     6. This Amendment shall be governed by the laws of the State of Delaware, exclusive of its
choice of law and conflicts of law rules.



     7. This Amendment may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such counterparts together
shall constitute but one agreement.



[END OF TEXT]




 









 








     In Witness Whereof, the parties have duly executed this Amendment No. 2 to Rights
Agreement, intending that it be executed under seal, as of the date first written above.



	 	 	 	 	 	 	 	 	 	 	 	 	 
	ASPECT MEDICAL SYSTEMS, INC.	 	 	 	Computershare Trust Company, N.A.,	 	 
	 	 	 	 	 	 	AS RIGHTS AGENT
	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Nassib Chamoun
	 	 	 	By:
	 	/s/ Dennis V. Moccia	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Nassib Chamoun	 	 	 	 	 	Name: Dennis V. Moccia	 	 
	 	 	President and Chief Executive Officer	 	 	 	 	 	Title: Managing Director