AMENDMENT TO
STOCKHOLDERS' RIGHTS AGREEMENT
BETWEEN
ALTEON INC.
AND
REGISTRAR AND TRANSFER COMPANY, AS RIGHTS AGENT
AMENDMENT TO STOCKHOLDERS' RIGHTS AGREEMENT dated as of December
1, 1997 between Alteon Inc., a Delaware corporation, (the "Company")
and Registrar and Transfer Company, as Rights Agent (the "Rights
Agent").
PRELIMINARY STATEMENTS
A. The Company and the Rights Agent are parties to the
Stockholders' Rights Agreement dated as of July 27, 1995, as amended
(the "Agreement").
B. Section 26 of the Agreement provides for the amendment of
the Agreement by the Company.
C. The Company wishes to amend the Agreement to provide for
certain exceptions to its terms.
NOW THEREFORE, for good and valuable consideration, the Company
and the Rights Agent agree as follows:
1. The Agreement is hereby amended by the addition of the
following Section 34:
SECTION 34. Certain Exceptions. For purposes of this
Agreement and subject to the following sentence, neither
Genentech, Inc. ("Genentech") nor its Affiliates (which
term shall, for purposes of this Section 34 only, have the
meaning given it below) shall be deemed to be a Beneficial
Owner of Common Shares which are (i) issuable (but
unissued) upon conversion of the Company's Series G
Preferred Stock or Series H Preferred Stock (collectively,
the "Preferred Stock") or (ii) issued upon conversion of
the Preferred Stock (the Common Shares referred to in
phrase (i) being referred to as the "Exempt Unissued
Shares" and the Common Shares referred to in phrase (ii)
being referred to as the "Exempt Issued Shares" and such
shares being referred to collectively as the "Exempt
Shares"). Genentech and its Affiliates shall not be deemed
to be the Beneficial Owners of the Exempt Issued Shares
only if, and for so long as, the total number of Common
Shares (excluding Exempt Unissued Shares and Exempt Shares
issued upon conversion of the Preferred Stock at the option
of the Company) of which Genentech, its Affiliates and any
"group" (within the meaning of Rule 13d-5 promulgated
pursuant to the Exchange Act) of which Genentech or any of
its Affiliates is a member
would be deemed to be the Beneficial Owner does not exceed
forty percent (40%) of the Company's issued and outstanding
Common Shares, provided that any increase in the percentage
of Common Shares Beneficially Owned by Genentech or an
Affiliate or a group of which Genentech or any of its
Affiliates is a member solely as the result of a reduction
in the Company's outstanding Common Shares shall be
disregarded for purposes of determining such forty percent
(40%) Beneficial Ownership. Common Shares which would be
Exempt Issued Shares but for the preceding sentence shall
be treated as Beneficially Owned for purposes of this
Agreement for so long as they are not eligible for the
exemption provided by the preceding sentence. For purposes
of this Section 34 only, "Affiliate" shall mean an
affiliate (as such term is defined in Rule 405 promulgated
under the Securities Act) of Genentech, provided, however,
that an affiliate of Genentech which is not controlled
(within the meaning of Rule 405) by Genentech shall not be
deemed to be an Affiliate unless such affiliate files
statements regarding the securities of the Company pursuant
to Regulation 13D-G under the Exchange Act and provided,
further, that neither Genentech nor its Affiliate(s) shall
be deemed to be a member of a group unless a member of such
group has filed statements regarding the securities of the
Company pursuant to Regulation 13D-G under the Exchange Act
stating that Genentech or its Affiliate(s) is a member of
such group.
2. Except as specifically modified by this Amendment, all terms
of the Agreement shall remain in full force and effect and shall be
unaffected by this Amendment.
* * * * * * * * *
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer as of the
date first written above.
ALTEON INC.
By:
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman and
Chief Executive Officer
REGISTRAR AND TRANSFER COMPANY
By:
-----------------------------
Name:
Title:
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