AMENDMENT NO. 2 TO RIGHTS AGREEMENT
This second amendment, dated as of July 2, 1997, amends the Rights
Agreement dated as of June 2, 1997, as amended by Amendment No. 1 dated as of
June 13, 1997 (the "Rights Agreement") between Inamed Corporation (the
"Company") and U.S. Stock Transfer Corporation, as Rights Agent (the "Rights
Agent"). Terms defined in the Rights Agreement and not otherwise defined herein
are used herein as so defined.
W I T N E S S E T H
WHEREAS, on May 23, 1997, the Board of Directors of the Company
authorized the issuance of Rights to purchase, on the terms and subject to the
provisions of the Rights Agreement, one share of the Company's Common Stock; and
WHEREAS, the Board of Directors of the Company authorized and declared
a dividend distribution of one Right for every share of Common Stock of the
Company outstanding on June 13, 1997 and authorized the issuance of one Right
(subject to certain adjustments) for each share of Common Stock of the Company
issued between the Record Date and the Distribution Date; and
WHEREAS, simultaneously herewith the Company is entering into a letter
agreement (the "Letter Agreement") dated July 2, 1997 with Appaloosa Management,
L.P. ("Appaloosa") and Xxxxxx X. XxXxxx, pursuant to which the Company has
agreed to amend certain provisions of the Rights Agreement; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Continuing
Directors now unanimously desire to amend certain provisions of the Rights
Agreement in order to supplement certain provisions therein;
NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
1. Section 1(a) is hereby amended by deleting Section 1(a)
in its entirety and substituting the following therefor:
"(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which,
together with all Affiliates and Associates (as
such terms are hereinafter defined) of such Person,
after the date hereof, shall become the Beneficial
Owner (as such term is hereinafter defined) of 15%
or more of the Common Shares of the Company then
outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of
the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any
entity holding Common Shares for or pursuant to the
terms of any such plan.
Notwithstanding anything in this Agreement
that might otherwise be deemed to the contrary; (i)
no Person shall become an "Acquiring Person" as the
result of an acquisition of Common Shares by the
Company which, by reducing the number of shares
outstanding, increases the proportionate number of
shares beneficially owned by such Person to 15% or
more of the Common Shares of the Company then
outstanding; provided, however, that if a Person
shall become the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding by
reason of share purchases by the Company and shall,
after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of
the Company, then such Person shall be deemed to be
an "Acquiring Person"; (ii) if the Board of Directors
of the Company determines in good faith that a Person
who would otherwise be an "Acquiring Person" has
become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an
"Acquiring Person," then such Person shall not be
deemed to be an "Acquiring Person" for any purposes
of this Agreement; (iii) no officer or director of
the Company who or which, together with all
Affiliates of such Person, is the Beneficial Owner of
15% or more of the outstanding shares of Common Stock
of the Company as of the Record Date shall be deemed
an "Acquiring Person" for any purpose of this
Agreement, provided, that such officer or director
together with his Affiliates does not become the
Beneficial Owner of 20% or more of the outstanding
shares of Common Stock of the Company, and provided
further that such officer or director need not
continue in such capacity after the Record Date; and
(iv) Appaloosa Management L.P. and its affiliated
entities identified in the Schedule 13D filing dated
May 13, 1997 (collectively, "Appaloosa") shall not be
deemed an "Acquiring Person" for any purpose of this
Agreement with respect to Beneficial Ownership of 15%
or more of the outstanding shares of the Company's
Common Stock arising solely from the conversion by
Appaloosa of any of the Company's Senior Notes or
Convertible Debentures which were held by Appaloosa
on the Record Date, the exercise of any Warrants
issued to Appaloosa arising from its ownership of
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Convertible Debentures, or the exercise of any
preemptive rights of Appaloosa under Section 8.12 of
the Indenture governing the Convertible Debentures,
it being understood that the exception provided in
this clause (iv) shall not apply to (x) any
transferees who may acquire any securities from
Appaloosa, or (y) shares of the Company's Common
Stock, Notes, Convertible Debentures or other
securities of the Company which may be acquired
(other than through conversion or exercise of the
instruments or rights described above) by Appaloosa
after the Record Date."
2. Section 1(g) is hereby deleted in its entirety.
3. Section 23(a) is hereby amended to delete the following
text from the last sentence of such section:
"; provided, however, if the Board of Directors of the Company
authorized redemptions of the Rights then there must be
Continuing Directors then in office and such authorization
shall require the concurrence of a majority of such Continuing
Directors".
4. Section 27 is hereby amended by deleting Section 27 in
its entirety and substituting the following therefor:
"Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may (and
the Rights Agent shall at the direction of the Company) from
time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure
any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with
any other provisions herein, or to make any other provisions
with respect to the Rights which the Company may deem
necessary or desirable, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights
Agent. This Agreement shall not be amended or supplemented in
any manner which would adversely affect the interests of the
holders of Rights (other than an Acquiring Person or Affiliate
or Associate of an Acquiring Person). Upon delivery of a
certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding
the foregoing, the Company shall not amend, modify supplement
or replace provision (iv) of Section 1(a) or otherwise amend,
modify or supplement any other provision of this Agreement
which adversely affects the rights and benefits of Appaloosa
under such provision, in any such
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case without the prior written consent of Appaloosa. It is
understood and agreed that Appaloosa is a third party
beneficiary to this Rights Agreement and may enforce the
provisions of this Section as if it were a party to the Rights
Agreement."
5. Section 29 is hereby amended to delete each reference to the
following text from such section:
"(with, where specifically provided for herein, the
concurrence of the Continuing Directors)".
6. Section 31 is hereby amended to delete the last sentence from
such section which reads as follows:
"Without limiting the foregoing, if any provision requiring a
majority of the Board of Directors of the Company to be
Continuing Directors to act is held by any court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the
Board of Directors of the Company in accordance with
applicable law and the Company's Articles of Incorporation and
By-Laws."
7. Except as expressly herein set forth, the remaining provisions
of the Rights Agreement shall remain in full force and effect.
8. This Amendment 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.
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IN WITNESS WHEREOF, this Amendment No. 2 has been signed to be
effective as of the close of business on this 2nd day of July, 1997 by
authorized representatives of each of the Company and the Rights Agent.
INAMED CORPORATION
By:/s/ Xxxxxx X. XxXxxx
------------------------
Xxxxxx X. XxXxxx
Chairman and
Chief Executive Officer
U.S. STOCK TRANSFER CORPORATION
By:/s/ Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx
Vice President
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