AMENDMENT TO
STOCKHOLDERS' RIGHTS AGREEMENT
BETWEEN
ALTEON INC.
AND
REGISTRAR AND TRANSFER COMPANY, AS RIGHTS AGENT
AMENDMENT TO STOCKHOLDERS' RIGHTS AGREEMENT dated as of
April 23, 1997 between Alteon Inc., a Delaware corporation, (the
"Company") and Registrar and Transfer Company, as Rights Agent
(the "Rights Agent").
PRELIMINARY STATEMENTS
1. The Company and the Rights Agent are parties to the
Stockholders' Rights Agreement dated as of July 27, 1995 (the
"Agreement").
2. Section 26 of the Agreement provides for the amendment
of the Agreement by the Company.
3. 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 Agents agree as follows:
1. The Agreement is hereby amended by the addition of the
following Section 33:
SECTION 33. Certain Exceptions. For purposes of
this Agreement and subject to the following sentence,
none of Halifax Fund, L.P., Galileo Capital, L.L.C., RGC
International Investors, LDC, Heracles Fund, Xxxxx Xxxxxx
or Xxxxxx X. Xxxxxx (each an "Investor," collectively,
the "Investors") or their Permitted Transferees (as
defined below) shall be deemed to be a Beneficial Owner
of Common Shares which are (i) issuable upon conversion
of the Corporation's 6% Cumulative Convertible Preferred
Stock ("Preferred Stock"), (ii) issuable upon exercise of
the warrants issued to the Investors concurrently with
the issuance of the Preferred Stock (the "Warrants"),
(iii) issued upon conversion of the Preferred Stock or
(iv) issued upon exercise of the Warrants (the Common
Shares referred to in phrases (i) through (iv) being
referred to as the "Exempt Shares"). The exemption from
Beneficial Ownership for the Exempt Shares of an Investor
or Permitted Transferee shall be effective only if, and
for so long as, the total number of Common Shares of
which such Investor or Permitted Transferee would be
deemed to be the Beneficial Owner (exclusive of the
Exempt Shares and Common Shares Beneficially Owned by an
Affiliate or an Associate of such Investor or Permitted
Transferee which Common Shares are not Group Held Shares
(as hereinafter defined)), together with all Common
Shares (exclusive of the Exempt Shares) Beneficially
Owned by any person that is filing a Schedule 13D with
such Investor or Permitted Transferee, as the case may
be, as a "group" with regard to the Company ("Group Held
Shares"), does not exceed 4.9% of the Company's issued
and outstanding Common Shares, provided that any increase
in the percentage of Common Shares Beneficially Owned by
an Investor or a Permitted Transferee solely as the
result of a reduction in the Company's outstanding Common
Shares shall be disregarded for purposes of determining
such 4.9% Beneficial Ownership. For purposes of this
Section, "Permitted Transferee" shall mean an Investor,
an Affiliate of an Investor, any Person whose holdings of
Common Shares are under the investment management of The
Palladin Group, L.P. or its Affiliates, and any other
Person to whom an Investor or a Permitted Transferee has
transferred the Preferred Stock, the Warrants or the
Common Shares issued upon the conversion or exercise
thereof, as the case may be, with the prior written
consent of the Company, which consent shall not be
unreasonably withheld, provided that such Person shall be
a Permitted Transferee only with respect to the Exempt
Shares transferred with the consent of the Company and
not with respect to any Exempt Shares transferred without
the consent of the Company notwithstanding the fact that
such Person is a Permitted Transferee as the result of a
previous transfer of Exempt Shares with the consent of
the Company.
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.
* * * * * * * * *
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: /s/ Xxxxxxx X. Xxxx
____________________
Name: Xxxxxxx X. Xxxx
Title: SVP, Finance and
Business Development
REGISTRAR AND TRANSFER COMPANY
By: /s/ Xxxxxxx X. Tatler
_____________________
Name: Xxxxxxx X. Tatler
Title: Vice President
