Exhibit I
AMENDMENT NO. 3 TO RIGHTS AGREEMENT
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This third amendment, dated as of September 30, 1998, amends the
Rights Agreement dated as of June 2, 1997, as amended by Amendment No. 1
dated as of June 13, 1997 and Amendment No. 2 dated as of July 2, 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
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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
financing transactions with Appaloosa Management, L.P., 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 Board of
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., together with its
Affiliates and Associates, (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
so long as Appaloosa does not become the Beneficial Owner of
Common Shares in an amount in excess of the Appaloosa
Threshold. For purposes of this Agreement, the Appaloosa
Threshold as at any date shall mean an amount equal to the
sum of (A) all Common Shares beneficially owned by Appaloosa
as of the date hereof (the "Grandfather Date"), including
any Common Shares which may be deemed to be Beneficially
Owned by Appaloosa through Warrants or other similar rights
held by Appaloosa as of the Grandfather Date, plus (B) all
Common Shares in which Appaloosa may acquire beneficial
ownership after the Grandfather Date (I) pursuant to the
Note Purchase Agreement (the "Note Purchase Agreement"),
dated as of September 30, 1998, among the Company, the
Purchasers listed on Exhibit A thereto and Appaloosa, (II)
pursuant to or in connection with the Exchange Offer (as
defined in the Note Purchase Agreement) as amended or
modified from time to time after the date hereof or (III)
through the exercise of preemptive or similar rights held by
Appaloosa. The provisions of clause (iv) above shall not
apply to (x) any third party transferees not Affiliated with
Appaloosa who may acquire any securities from Appaloosa, or
(y) any Common Shares in which Appaloosa may acquire
beneficial ownership of after the Grandfather Date other
than as described under (B) of clause (iv).
2. 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.
IN WITNESS WHEREOF, this Amendment No. 3 has been signed to be
effective as of the close of business on this 30th day of September, 1998
by authorized representatives of each of the Company and the Rights Agent.
INAMED CORPORATION
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Executive Vice President
U.S. STOCK TRANSFER CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Vice President
