**Exhibit10.27**

 

AMENDMENT TORIGHTS AGREEMENT

 

This Amendment to Rights Agreement, dated as ofOctober 31, 2005 (the “Amendment”), is by and between AccessPharmaceuticals, Inc., a Delaware corporation (the “Company”), andAmerican Stock Transfer & Trust Company, a New York corporation (the “RightsAgent”), amending certain provisions of the Rights Agreement, dated as ofOctober 31, 2001 (as amended and in effect from time to time, the “Agreement”),by and between the Company and the Rights Agent. Terms not otherwise definedherein which are defined in the Agreement shall have the same respectivemeanings herein as therein.

 

WHEREAS, in accordance with Section 28 of theAgreement, the Company has directed prior to the Distribution Date that it andthe Rights Agent amend certain provisions of the Agreement as specifically setforth in this Amendment.

 

NOW, THEREFORE, in consideration of the mutualagreements contained herein and for other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties heretoagree as follows:

 

1.             Amendmentto Agreement. The Agreement is hereby amended as follows:

 

(a)           Thedefined term “Acquiring Person” in Section 1(a) of the Agreement is herebydeleted in its entirety and replaced with the following:

 

“Acquiring Person” means any Person who,together with all Affiliates and Associates of such Person, is the BeneficialOwner of 15% or more of the Common Shares of the Company then outstanding orwho was such a Beneficial Owner at any time after the date hereof, whether ornot such Person continues to be the Beneficial Owner of 15% or more of theCommon Shares then outstanding, but will not include the Company, anySubsidiary of the Company, any employee benefit plan of the Company or any Subsidiaryof the Company, or any entity holding securities of the Company organized,appointed, or established by the Company or any Subsidiary for or pursuant tothe terms of any such plan. Notwithstanding the foregoing, (i) Heartland, willnot be deemed to be an Acquiring Person so long as Heartland does not own, inthe aggregate, in excess of 20% of the issued and outstanding Common Shares,(ii) Oracle will not be deemed to be an Acquiring Person so long as Oracle doesnot own, in the aggregate, in excess of 35% of the issued and outstandingCommon Shares, and (iii) no Person will become an “Acquiring Person” solely asthe result of an acquisition of Common Shares by the Company which, by reducingthe number of shares outstanding, increases the proportionate number of sharesbeneficially owned by such Person to 15% or more of the Common Shares of theCompany then outstanding, or in the case of Heartland or Oracle, to 20% or 35%,respectively, or more of the Common Shares of the Company then outstanding; *provided, however*, that if a Person becomes the BeneficialOwner of 15% or more, or in the case of Heartland or Oracle, 20% or 35%,respectively, or more, of the

 

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Common Shares of theCompany then outstanding by reason of share purchases by the Company, and aftersuch share purchases by the Company becomes the Beneficial Owner of anyadditional Common Shares of the Company, then such Person will be deemed to bean “Acquiring Person.”  Notwithstandingthe foregoing, if the Board of Directors of the Company determines in goodfaith that a Person who would otherwise be an “Acquiring Person,” as definedpursuant to the foregoing provisions of this paragraph (a), has become suchinadvertently, and such Person divests as promptly as practicable a sufficientnumber of Common Shares so that such Person would no longer be an “AcquiringPerson,” as defined pursuant to the foregoing provisions of this paragraph (a),then such Person shall not be deemed to be an “Acquiring Person” for anypurposes of this Rights Agreement.”

 

(b)           Section3(a) of the Agreement is hereby deleted in its entirety and replaced with thefollowing:

 

“(a)         Untilthe earlier of:

 

(i)            theclose of business on the tenth Business Day after the Shares Acquisition Date;or

 

(ii)           thetenth Business Day (or such later date as may be determined by action of theBoard of Directors prior to such time as any Person becomes an AcquiringPerson) after the date of the commencement by any Person (other than theCompany, any Subsidiary of the Company, any employee benefit plan of theCompany or of any Subsidiary of the Company or any entity holding Common Sharesfor or pursuant to the terms of any such plan) of, or of the first publicannouncement of the intention of any Person (other than the Company, anySubsidiary of the Company, any employee benefit plan of the Company or of anySubsidiary of the Company or any entity holding Common Shares for or pursuantto the terms of any such plan) to commence, a tender or exchange offer, theconsummation of which would result in any Person (other than Heartland orOracle) becoming the Beneficial Owner of Common Shares aggregating 15% or moreof the then outstanding Common Shares, or in the case of Heartland or Oracle,the consummation of which would result in such Person becoming the BeneficialOwner of Common Shares aggregating 20% or 35%, respectively, or more of thethen outstanding Common Shares;

 

(including any such date which is after the date ofthis Agreement and prior to the issuance of the Rights; the earliest of suchdates being herein referred to as the “Distribution Date”):

 

(x)            noRight may be exercised;

 

(y)           theRights will be evidenced (subject to the provisions of Section 3(b) hereof) bythe certificates for Common Shares registered in the

 

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names of the holders thereof (which certificates willalso be deemed to be certificates for Rights) and not by separate certificates;and

 

(z)            theRights (and the right to receive certificates therefor) will be transferableonly in connection with the transfer of the underlying Common Shares.

 

As soon as practicable after the Distribution Date,the Company will prepare and execute, the Rights Agent will countersign, andthe Company will send or cause to be sent (and if requested, the Rights Agentwill send) by first-class, postage-prepaid mail or other appropriate means, toeach record holder of Common Shares as of the Close of Business on theDistribution Date, at the address of such holder shown on the records of theCompany, a certificate for Rights, in substantially the form of the attached ExhibitB (collectively, “Rights Certificates”), evidencing one Right foreach Common Share so held. As of and after the Distribution Date, the Rightswill be evidenced solely by Rights Certificates.”

 

(c)           Thesecond paragraph of Exhibit C of the Agreement is hereby deleted in itsentirety and replaced with the following:

 

“Initially, the Rights will be attached to allcertificates representing Common Shares then outstanding, and no separateRights certificates will be distributed. Until the earlier to occur of (i) 10business days following a public announcement that a person or group ofaffiliated or associated persons (an “Acquiring Person”) have acquiredbeneficial ownership of 15% or more, or in the case of Heartland Advisors,Inc., together with all of its affiliates and associates (“Heartland”),or Oracle Partners LP, together with all of its affiliates and associates (“Oracle”),20% or 35%, respectively, or more, of the outstanding Common Shares (the dateof such an announcement being a “Shares Acquisition Date”), or (ii) 10business days (or such later date as may be determined by action of the Boardof Directors prior to such time as any Person becomes an Acquiring Person)following the commencement of, or announcement of an intention to make, atender offer or exchange offer the consummation of which would result in thebeneficial ownership by a person or group (other than Heartland or Oracle) 15%or more, or in the case of Heartland or Oracle, 20% or 35%, respectively, ormore, of such outstanding Common Shares (in either case, (i) or (ii), the “DistributionDate”), the Rights will be evidenced, with respect to any of the CommonShare certificates outstanding as of the Record Date, by such Common Sharecertificates together with a copy of this Summary of Rights.”

 

2.             Conditionto Effectiveness. This Amendment shall not become effective until executedby the Company and the Rights Agent.

 

3.             Ratification,Etc. Except as expressly amended hereby, all terms and conditions of theAgreement are hereby ratified and confirmed in all respects and shall continuein full force and effect. The Agreement and this Amendment shall be read and

 

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construed as a singleagreement. All references to the Agreement shall hereafter refer to theAgreement, as amended hereby.

 

4.             NoWaiver. Nothing contained herein shall constitute a waiver of, impair orotherwise affect, any obligation of the Company under the Agreement or anyrights of any party consequent thereon.

 

5.             Counterparts.This Amendment may be executed in one or more counterparts, each of which shallbe deemed an original but which together shall constitute one and the sameinstrument.

 

6.             GoverningLaw. This amendment shall be governed by, and construed in accordancewith, the laws of the State of Delaware (without reference to conflict oflaws).

 

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IN WITNESSWHEREOF, the parties hereto have executed this Amendment as a document underseal as of the date first above written.

 
|   | ACCESS PHARMACEUTICALS, INC.                                  |
|--------|---------------------------------------------------------------|
|   |                                                          |
|   |                                                          |   |
|   | By:                                                           |   /s/ Stephen B. Thompson |
|   |                                                          | Name:  Stephen B. Thompson |
|   |                                                          | Title:  Vice President CFO |
|   |                                                          |   |
|   |                                                          |   |
|   | AMERICAN STOCK TRANSFER &  TRUST COMPANY, as Rights Agent |
|   |                                                          |
|   |                                                          |   |
|   | By:                                                           |   /s/ Herbert J. Lemmer |
|   | Name:  Herbert J. Lemmer                                 |
|   | Title:  Vice President                                   |

 

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