AMENDMENT TO RIGHTS AGREEMENT
This AMENDMENT, dated as of September 21, 1999, is between U.S.
Bioscience, Inc., a Delaware corporation (the "Company"), and American
Stock Transfer & Trust Company, as rights agent (the "Rights Agent").
RECITALS
A. The Company and the Rights Agent are parties to a Rights
Agreement dated as of May 19, 1995 (the "Rights Agreement").
B. MedImmune, Inc., a Delaware corporation ("Parent"), Marlin
Merger Sub Inc., a Delaware corporation ("Merger Subsidiary"), and the
Company have entered into an Agreement and Plan of Merger dated as of
September 21 , 1999, as it may be amended from time to time (the "Merger
Agreement"), pursuant to which Merger Subsidiary, a newly formed and
wholly-owned subsidiary of Parent, will merge with and into the Company
(the "Merger"). The Board of Directors of the Company has approved the
Merger Agreement and the Merger.
C. Parent and the Company have entered into a stock option
agreement (the "Option Agreement") pursuant to which the Company is
granting Parent the option (the "Option") to purchase shares of Common
Stock, par value $0.01 per share, of the Company, upon the terms and
subject to the conditions set forth therein.
D. The Company deems it advisable to amend the Rights Agreement
to eliminate references to actions that are required to be taken by
"Continuing Directors" (as defined in the Rights Agreement).
E. Pursuant to Section 26 of the Rights Agreement, the Board of
Directors of the Company has determined that an amendment to the Rights
Agreement as set forth herein is necessary and desirable in connection with
the Merger and the Option and the Company and the Rights Agent desire to
evidence such amendment in writing.
Accordingly, the parties agree as follows:
1. AMENDMENT OF SECTION 1(a). The final sentence of Section
1(a) of the Rights Agreement is hereby amended and restated as follows:
"Notwithstanding the foregoing, (x) if the Board of Directors of
the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" as defined pursuant to the
foregoing provisions of this paragraph (a) has become such
inadvertently, and such Person divests as promptly as practicable
a sufficient number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person" as defined pursuant to
the foregoing provisions of this paragraph (a), then such Person
shall not be deemed an "Acquiring Person" for any purposes of
this Rights Agreement and (y) none of Parent (as defined herein),
Merger Subsidiary (as defined herein) or any of their respective
existing or future Affiliates or Associates shall be deemed an
"Acquiring Person" solely by reason or as a result of the
execution or delivery of the Merger Agreement or the Option
Agreement (each as defined herein), the consummation of the
Merger (as defined herein), the exercise of the Option (as
defined herein) or the consummation of the other transactions
contemplated by the Merger Agreement or the Option Agreement."
2. DELETION OF SECTION 1(h). Section 1(h) of the Rights
Agreement is hereby deleted in its entirety.
3. DELETION OF SECTION 1(r). Section 1(r) of the Rights
Agreement is hereby deleted in its entirety.
4. AMENDMENT OF SECTION 1(u). Section 1(u) of the Rights
Agreement is hereby amended and restated in its entirety as follows:
"Stock Acquisition Date" shall mean the first date on which there
shall be a public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such (which, for
purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act) or
such earlier date as a majority of the Board of Directors shall
become aware of the existence of an Acquiring Person. A "Stock
Acqusition Date" shall not occur as a result of the execution or
delivery of the Merger Agreement or the Option Agreement, the
consummation of the Merger, the exercise of the Option or the
consummation of the other transactions contemplated by the Merger
Agreement or the Option Agreement."
5. AMENDMENT OF SECTION 1. Section 1 of the Rights Agreement
is hereby further amended to add the following subparagraphs after
subparagraph 1(z) therein:
(aa) "Merger" shall have the meaning set forth in the
Merger Agreement.
(bb) "Merger Agreement" shall have the meaning set forth in
Section 33 hereof.
(cc) "Merger Subsidiary" shall have the meaning set forth
in Section 33 hereof.
(dd) "Option" shall have the meaning set forth in the
Option Agreement.
(ee) "Option Agreement" shall have the meaning set forth in
the Merger Agreement.
(ff) "Parent" shall have the meaning set forth in Section
33 hereof.
6. AMENDMENT OF SECTION 3(b). Section 3(b) of the Rights
Agreement is hereby amended to add the following sentence at the end
thereof:
"Notwithstanding anything in this Rights Agreement to the
contrary, a Distribution Date shall not be deemed to have
occurred solely by virtue of (i) the execution of the Merger
Agreement or the Option Agreement, (ii) the acquisition of Common
Stock or other capital stock of the Company pursuant to the
Merger Agreement, the Option Agreement, the consummation of the
Merger or the exercise of the Option or (iii) the consummation of
the other transactions contemplated by the Merger Agreement or
the Option Agreement."
7. AMENDMENT OF SECTION 7(a). Section 7(a) of the Rights
Agreement is hereby amended and restated in its entirety as follows:
"The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date (unless otherwise provided
herein, including, without limitation, the restrictions on
exercisability set forth in Section 7(e) and 23(a) hereof).
Except as otherwise provided herein, the Rights may be exercised,
in whole or in part, at any time commencing with the Distribution
Date upon surrender of the Right Certificate, with the form of
election to purchase and certificate on the reverse side thereof
duly executed (with signatures duly guaranteed), to the Rights
Agent at the principal office of the Rights Agent in New York,
New York, together with payment of the Exercise Price for each
Right exercised, subject to adjustment as hereinafter provided,
on the earlier of (i) immediately prior to the Effective Time (as
defined in the Merger Agreement) or May 19, 2005, whichever
occurs first (the "Final Expiration Date") or (ii) the date on
which the Rights are redeemed as provided in Section 23 hereof
(such earlier date being herein referred to as the "Expiration
Date"). Notwithstanding anything in this Rights Agreement to the
contrary, none of (i) the execution of the Merger Agreement or
the Option Agreement, (ii) the acquisition of Common Stock or
other capital stock of the Company pursuant to the Merger
Agreement, the Option Agreement, the consummation of the Merger
or the exercise of the Option or (iii) the consummation of the
other transactions contemplated by the Merger Agreement or the
Option Agreement shall be deemed to be events that cause the
Rights to become exercisable pursuant to the provisions of this
Section 7 or otherwise."
8. AMENDMENT OF SECTION 7(e). The first sentence of Section
7(e) of the Rights Agreement is hereby amended and restated as follows:
"Notwithstanding any provision of this Rights Agreement to the
contrary, from and after the time (the "invalidation time") when
any Person first becomes an Acquiring Person, any Rights that are
beneficially owned by (x) such Acquiring Person (or any Associate
or Affiliate of such Acquiring Person), (y) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes
a transferee after the invalidation time or (z) a transferee of
such Acquiring Person (or any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the
invalidation time pursuant to either (I) a transfer from the
Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (II) a transfer
which the Board of Directors has determined is part of a plan,
arrangement or understanding which has the purpose or effect of
avoiding the provisions of this Section 7(e), and subsequent
transferees of such Persons referred to in clause (y) and (z)
above, shall be void without any further action and any holder of
such Rights shall thereafter have no rights whatsoever with
respect to such Rights under any provision of this Rights
Agreement."
9. AMENDMENT OF SECTION 11. Section 11 of the Rights Agreement
is hereby amended to add the following sentence after the first sentence of
said Section:
"Notwithstanding anything in this Rights Agreement to the
contrary, none of (i) the execution of the Merger Agreement or
the Option Agreement, (ii) the acquisition of Common Stock or
other capital stock of the Company pursuant to the Merger
Agreement, the Option Agreement, the consummation of the Merger
or the exercise of the Option or (iii) the consummation of the
other transactions contemplated in the Merger Agreement and the
Option Agreement shall be deemed to be events of the type
described in this Section 11 or to cause the Rights to be
adjusted or to become exercisable in accordance with this Section
11."
10. AMENDMENT OF SECTION 11(a)(ii). Section 11(a)(ii) of the
Rights Agreement is hereby amended and restated in its entirety as follows:
"In the event that any Person (other than an Exempt Person),
alone or together with its Affiliates and Associates, shall
become an Acquiring Person, then, subject to the last sentence of
Section 23(a) and except as otherwise provided in this Section
11, each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive upon exercise
of such Right in accordance with the terms of this Rights
Agreement and payment of the Exercise Price, the greater of (1)
the number of one one-hundredths of a share of Preferred Stock
for which such Right was exercisable immediately prior to the
first occurrence of the event described in this Section 11(a)(ii)
or (2) such number of one one-hundredths of a share of Preferred
Stock, based on the per share Fair Market Value of the Preferred
Stock (determined pursuant to Section 11(b) hereof) on the date
of such first occurrence, having a value equal to twice the
Exercise Price; 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(a)(ii)."
11. AMENDMENT OF SECTION 11(a)(iii). The second sentence of
Section 11(a)(iii) of the Rights Agreement is hereby amended and restated
as follows:
"In lieu of issuing shares of Preferred Stock in accordance with
the foregoing subparagraphs (i) and (ii), the Company may, if the
Board of Directors determines that such action is necessary or
appropriate and not contrary to the interests of holders of
Rights, elect to issue or pay, upon the exercise of the Rights,
cash, property, shares of Preferred or Common Stock, or any
combination thereof, having an aggregate Fair Market Value equal
to the Fair Market Value of the shares of Preferred Stock which
otherwise would have been issuable pursuant to Section 11(a)(ii),
which Fair Market Value shall be determined by an investment
banking firm selected by the Board of Directors."
12. AMENDMENT OF SECTION 13. Section 13 of the Rights Agreement
is hereby amended to add a new paragraph (e) at the end thereof:
"(e) Notwithstanding anything in this Rights Agreement to the
contrary, none of (i) the execution of the Merger Agreement or
the Option Agreement, (ii) the acquisition of Common Stock or
other capital stock of the Company pursuant to the Merger
Agreement, the Option Agreement, the consummation of the Merger
or the exercise of the Option or (iii) the consummation of the
other transactions contemplated in the Merger Agreement or the
Option Agreement shall be deemed to be events of the type
described in this Section 13 or to cause the Rights to be
adjusted or to become exercisable in accordance with this Section
13."
13. AMENDMENT OF SECTION 13(a). The first clause of Section
13(a) of the Rights Agreement is hereby amended and restated as follows:
"Except for any transaction approved by the Board of Directors,
in the event that, at any time on or after the Distribution Date
. . ."
14. AMENDMENT OF SECTION 23. Section 23(a) of the Rights
Agreement is hereby amended and restated in its entirety as follows:
"The Company may, at its option, but only by the vote of a
majority of the Board of Directors, redeem all but not less than
all of the then outstanding Rights, at any time prior to the
Close of Business on the earlier of (i) the tenth day following
the Stock Acquisition Date (subject to extension by the Company
as provided in Section 26 hereof) or (ii) the Final Expiration
Date, at a redemption price of $.001 per Right, subject to
adjustments as provided in subsection (c) below (the "Redemption
Price"). Notwithstanding anything contained in this Agreement to
the contrary, the Rights shall not be exercisable pursuant to
Section 11(a)(ii) prior to the expiration of the Company's right
of redemption hereunder."
15. AMENDMENT OF SECTION 26. The final sentence of Section 26
of the Rights Agreement is hereby amended and restated as follows:
"Notwithstanding anything contained in this Rights Agreement to
the contrary, no supplement or amendment shall be made which
changes the Redemption Price or the Final Expiration Date."
16. ADDITION OF SECTION 33. The Rights Agreement is hereby
modified, supplemented and amended to add the following new Section 33:
"Section 33. Merger With Merger Subsidiary.
The Company, MedImmune, Inc., a Delaware corporation
("Parent"), and MedImmune Merger Sub Inc., a Delaware
corporation ("Merger Subsidiary"), have entered into an Agreement
and Plan of Merger, dated as of September 21, 1999 as it may be
amended from time to time (the "Merger Agreement"), pursuant to
which Merger Subsidiary, a newly formed and wholly-owned
subsidiary of Parent, shall merge with and into the Company.
Notwithstanding anything in this Rights Agreement to the
contrary, if the Merger Agreement shall be terminated for any
reason, then clause (y) in the last sentence of Section 1(a)
hereof shall be deemed repealed and deleted without any further
action on the part of the Company or the Rights Agent.
17. EFFECTIVENESS. This Amendment shall be deemed effective as
of the date first written above, as if executed on such date. Except as
amended hereby, the Rights Agreement shall remain in full force and effect
and shall be otherwise unaffected hereby.
18. MISCELLANEOUS. This Amendment 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 the State
of Delaware applicable to contracts to be made and performed entirely
within the State of Delaware without giving effect to the principles of
conflict of laws thereof. This Amendment may be executed in any number of
counterparts, 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. If any provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, illegal 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.
EXECUTED under seal as of the date first set forth above.
Attest: U.S. BIOSCIENCE, INC.
By: /s/ C. Boyd Clarke
- ------------------- -------------------------------------------
Name: Name: C. Boyd Clarke
Title: Title: President and Chief Executive Officer
Attest: RIGHTS AGENT: AMERICAN STOCK
TRANSFER & TRUST COMPANY
-------------------- By: -------------------------------------------
Name: Name:
Title: Title: