(a)(40)
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
THIS AMENDMENT (this "Amendment"), dated as of July 5, 2005,
between NeighborCare, Inc., a Pennsylvania corporation (the "Company"), and
StockTrans, Inc., as Rights Agent (the "Rights Agent").
R E C I T A L S
WHEREAS, the Company and the Rights Agent are parties to a Rights
Agreement, dated as of December 18, 2003 (the "Rights Agreement");
WHEREAS, the Company intends to enter into an Agreement and Plan of
Merger, dated as of the date hereof (as it may be amended or supplemented from
time to time, the "Merger Agreement") among the Company, Omnicare, Inc., a
Delaware corporation ("Buyer"), and Nectarine Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Buyer ("Merger Sub");
WHEREAS, the Board of Directors of the Company has approved the Merger
Agreement and the transactions contemplated by the Merger Agreement; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, for as long as
the Rights are then redeemable, the Company may in its sole and absolute
discretion, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of the Rights Agreement in accordance with the provisions of
such section. All acts and things necessary to make this Amendment a valid
agreement, enforceable in accordance with its terms, have been done and
performed, and the execution and delivery of this Amendment by the Company has
been in all respects duly authorized by the Company.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth in the Rights Agreement and herein, the parties hereto
agree as follows:
A G R E E M E N T
NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
1. AMENDMENT OF SECTION 1(a). Section 1(a) of the Rights Agreement is
hereby modified and amended by adding the following sentence at the end thereof:
"Notwithstanding anything in this Agreement to the contrary, none of the
parties to the Agreement and Plan of Merger, dated as of July 5, 2005,
among the Company, Omnicare, Inc. and Nectarine Acquisition Corp. (as it
may be amended or supplemented from time to time, and including all
exhibits and schedules thereto (the "Merger Agreement") or any agreements
reference therein, as same may be amended or supplemented from time to
time),
nor any of their Affiliates and Associates, shall be deemed, individually
or collectively, to be an Acquiring Person by virtue of (i) the approval,
execution or delivery of the Merger Agreement, (ii) the consummation of
the Offer or the Merger (as defined in the Merger Agreement, including any
support agreement) or (iii) the consummation of any of the other
transactions contemplated by the Merger Agreement; provided, however, that
nothing contained in this sentence shall prevent any one or more parties
to the related agreements (including any support agreement), or any of
their Affiliates or Associates, from being deemed an Acquiring Person as a
result of the acquisition of additional Common Share or the taking of any
action not contemplated by the Merger Agreement and related agreements."
2. AMENDMENT OF SECTION 7(a). Section 7(a) of the Rights Agreement is
hereby modified, amended and restated in its entirety as follows:
"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 on the reverse side
thereof duly executed, to the Rights Agent at the principal office of the
Rights Agent, together with the payment of the Purchase Price for each one
one-hundredth of a Preferred Share as to which the Rights are exercised, at
or prior to the earliest of (i) the Close of Business on December 1, 2013
(the "Final Expiration Date"); (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"); (iii)
the time at which such Rights are exchanged as provided in Section 24
hereof; or (iv) the time immediately prior to the Closing of the Merger
contemplated by the Merger Agreement (the earliest of (i), (ii), (iii) and
(iv) being herein referred to as the "Expiration Date)."
3. AMENDMENT OF SECTION 20. The Rights Agreement is hereby further
modified and amended by adding a new Section 20(j) to the end thereof to read in
its entirety as follows:
"The Rights Agent shall not be subject to, nor be required to comply with,
or determine if any person or entity has complied with, the Merger
Agreement or any other agreement between or among the parties thereto,
even though reference thereto may be made in this Agreement, or to comply
with any notice, instruction, direction, request or other communication,
paper or document other than as expressly set forth in this Agreement."
4. AMENDMENT OF SECTION 29. Section 29 of the Rights Agreement is
hereby modified and amended to add the following sentence at the end thereof:
"Nothing in this Agreement shall be construed to give any holder of Rights
or any other Person any legal or equitable rights, remedies or claims
under this Agreement by virtue of (i) the approval, execution or delivery
of the Merger Agreement or any related agreements, (ii) the consummation
of the Offer or the Merger, (iii)
the consummation of any of the other transactions contemplated by the
Merger Agreement and related agreements or (iv) the public announcement of
any of the foregoing."
5. ADDITION OF SECTION 34. The Rights Agreement is hereby further
modified and amended by adding a new Section 34 to the end thereof to read in
its entirety as follows:
"Section 34. MERGER AGREEMENT. Notwithstanding any other provision of this
Agreement, neither the approval, execution or delivery of the Merger
Agreement, or any related agreement (including any support agreement), nor
the consummation of the Offer or the Merger or other related transactions
contemplated by the Merger Agreement is or shall be deemed to be an event
described in Section 11(a)(ii) or Section 13 hereof, nor will such
performance or consummation result in the occurrence of a Share
Acquisition Date, a Distribution Date or any other separation of the
Rights from the underlying Common Share, nor entitle or permit the holders
of the Rights to exercise the Rights or otherwise affect the rights of the
holders of the Rights, including giving the holders of the Rights the
right to acquire securities of any party to the Merger Agreement."
6. ADDITION OF SECTION 35. The Rights Agreement is hereby further
modified and amended by adding a new Section 35 to the end thereof to read in
its entirety as follows:
"Section 35. TERMINATION OF THE AGREEMENT. As of the Effective Time (as
defined in the Merger Agreement), this Agreement shall terminate and shall
forthwith become void and have no effect, without any liability or
obligation on the part of the Company, the Rights Agent or the holders of
any Rights."
7. MISCELLANEOUS.
(a) Except as otherwise expressly provided, or unless the context
otherwise requires, capitalized terms used herein shall have the respective
meanings assigned to them in the Rights Agreement.
(b) This Amendment shall be deemed to be a contract made under the
laws of the Commonwealth of Pennsylvania 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.
(c) This Amendment may be executed in any number of counterparts,
each of which shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument.
(d) If any term, provision, covenant or restriction of this Amendment
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 Amendment shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. It is the intent of the parties
hereto to enforce the remainder of the terms, provisions, covenants and
restrictions to the maximum extent permitted by law.
IN WITNESS WHEREOF, this Amendment has been duly executed by the
Company and the Rights Agent as of the day and year first written above.
NEIGHBORCARE, INC.
By: /s/ John J. Arlotta
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Name: John J. Arlotta
Title: Chairman and CEO
STOCKTRANS, INC.
By: /s/ Gina Hardin
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Name: Gina Hardin
Title: Vice President