Unassociated Document


    Execution
      Version


    SECOND
      AMENDMENT TO

    RIGHTS
      AGREEMENT

     

    SECOND
      AMENDMENT TO RIGHTS AGREEMENT, dated as of October 31, 2008 (this “Amendment”),
      between ImClone Systems Incorporated, a Delaware corporation (the “Company”)
      and
      Computershare Trust Company, N.A. (formerly known as EquiServe Trust Company,
      N.A.) as Rights Agent (the “Rights
      Agent”).

     

    WHEREAS,
      on February 15, 2002, the Company and the Rights Agent entered into the Rights
      Agreement, and on May 4, 2006, the Company and the Rights Agent entered into
      the
      first amendment to the Rights Agreement (as so amended, the “Rights
      Agreement”);

     

    WHEREAS,
      pursuant to Section 23 of the Rights Agreement, at any time prior to the
      occurrence of a Section 8(a)(ii) Event (as defined in the Rights Agreement),
      the
      Company may, and the Rights Agent shall if the Company so directs, supplement
      or
      amend any provision of the Rights Agreement in any respect without the approval
      of any holders of Rights (as defined in the Rights Agreement);

     

    WHEREAS,
      the board of directors (the “Board”)
      of the
      Company has approved an Agreement and Plan of Merger (the “Merger
      Agreement”)
      by and
      among the Company, Eli Lilly and Company, an Indiana corporation (“Lilly”),
      and
      Alaska Acquisition Corporation, a Delaware corporation wholly owned by Lilly
      (“Merger
      Sub”),
      pursuant to which, among other things, Merger Sub shall commence a cash tender
      offer (the “Offer”)
      to
      purchase all of the outstanding shares of the common stock, par value $0.001
      per
      share (the “Common Stock”) of the Company and the associated Rights (as defined
      in the Rights Agreement); and following the consummation of the Offer, Merger
      Sub will merge with and into the Company (the “Merger”)
      and
      the Common Stock shall be converted into the right to receive $70.00 per share
      in cash; and

    


    WHEREAS,
      the Board has determined that it is in the best interest of the Company and
      its
      stockholders to amend the Rights Agreement so that in connection with the Merger
      Agreement and the transactions contemplated thereby (i) each of Lilly, Merger
      Sub or any of their Affiliates and Associates shall not become an Acquiring
      Person under the Rights Agreement, (ii) neither a Distribution Date nor a Stock
      Acquisition Date shall occur or be deemed to occur, (iii) a Section 8(a)(ii)
      Event shall not have occurred, (iv) a Section 10 Event shall not have occurred,
      and (v) the Expiration Date shall be immediately prior to the Effective Time
      (as
      defined in the Merger Agreement).

    


    NOW,
      THEREFORE, the parties hereto agree as follows:

     

    Section
      1.01.  Definitions.
      Capitalized terms used but not defined herein that are defined in the Rights
      Agreement shall have the meanings ascribed to them in the Rights
      Agreement.

     

    Section
      1.02.  Amendments
      to Original Agreement.

     

    (a)  The
      definition of “Acquiring
      Person”
is
      hereby amended by: (i) deleting the word “and” from the end of clause (v)
      thereof; (ii) adding the word “and” at the end of clause (vi) thereof; and (iii)
      adding the following text as clause (vii) thereof:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    “(vii) Eli
      Lilly
      and Company, Alaska Acquisition Corporation, or any of their Affiliates or
      Associates, individually or collectively, in connection with: (1) the
      approval, adoption, execution or delivery of the Agreement and Plan of Merger
      (as it may be amended and supplemented, the “Merger
      Agreement”)
      among
      the Company, Eli Lilly and Company, an Indiana corporation (“Parent”),
      and
      Alaska Acquisition Corporation, a Delaware corporation and a wholly-owned
      subsidiary of Parent (“Merger
      Sub”),
      (2) the commencement or consummation of a tender offer by Merger Sub or any
      of its Affiliates to purchase all of the shares of Common Stock and the Rights
      pursuant to the Merger Agreement (the “Offer”),
      (3) the exercise of the option to purchase shares of Common Stock granted
      pursuant to Section 1.8 of the Merger Agreement (the “Top-Up
      Option”),
      (4) the consummation of the merger of Merger Sub or any of its Affiliates
      and the Company (the “Merger”),
      (5) the approval, execution or delivery of the Support Agreements or any
      amendments thereof or (6) the consummation of any of the other transactions
      contemplated by the Merger Agreement or the Support Agreements; provided,
      however,
      that if
      the Merger Agreement is terminated prior to the Acceptance Time (as defined
      in
      the Merger Agreement), this sub-clause (vii) shall be of no further force and
      effect; provided,
      further,
      that
      unless approved by the Board, this sub-clause (vii) shall not apply to any
      purchases prior to the Acceptance Time by Parent, Merger Sub or any Affiliate
      or
      Associate of Parent other than pursuant to the Merger Agreement.”

     

    (b)  The
      definition of “Final
      Expiration Date”
is
      hereby deleted and replaced in its entirety with the following
      text:

     

    ““Final
      Expiration Date” shall mean the earlier of (i) the close of business on
      February 15, 2012 and (ii) the Effective Time, as such term is defined in
      the Merger Agreement. In the event that the Final Expiration Date means the
      Effective Time, the Company shall promptly notify the Rights Agent after the
      occurrence of such Effective Time.”

     

    (c)  The
      definition of “Distribution
      Date”
is
      hereby amended to add the following new sentence at the end
      thereof:

     

    “Notwithstanding
      anything in this Agreement to the contrary, no Distribution Date shall be deemed
      to occur or have occurred in connection with (u) the approval, adoption,
      execution or delivery of the Merger Agreement, (v) the commencement or
      consummation of the Offer, (w) the exercise of the Top-Up Option,
      (x) the consummation of the Merger, (y) the approval, execution or
      delivery of the Support Agreements or any amendments thereof or (z) the
      consummation of any of the other transactions contemplated by the Merger
      Agreement or the Support Agreements.”


     

    (d)  The
      definition of “Stock
      Acquisition Date”
is
      hereby amended to add the following new sentence at the end
      thereof:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    “Notwithstanding
      anything in this Agreement to the contrary, no Stock Acquisition Date shall
      be
      deemed to occur or have occurred in connection with (u) the approval,
      adoption, execution or delivery of the Merger Agreement, (v) the
      commencement or consummation of the Offer, (w) the exercise of the Top-Up
      Option, (x) the consummation of the Merger, (y) the approval,
      execution or delivery of the Support Agreements or any amendments thereof or
      (z) the consummation of any of the other transactions contemplated by the
      Merger Agreement or the Support Agreements.”


     

    (e)  Section
      1
      is hereby amended to add the following definition between the definitions of
      “Subsidiary”
and
      “Trading
      Day”:

     

    ““Support
      Agreements” means the Tender and Support Agreements, dated on or about
      October 6, 2008, between Parent and each of the respective stockholders of
      the Company party thereto.”

    


    (f)  Section
      8(a)(ii) is hereby amended to add the following sentence at the end
      thereof:

     

    “notwithstanding
      anything in this Agreement to the contrary, a Section 8(a)(ii) Event shall
      be deemed not to occur or have occurred, and the provisions of such section
      shall not be made or given effect, in connection with (u) the approval,
      adoption, execution or delivery of the Merger Agreement, (v) the
      commencement or consummation of the Offer, (w) the exercise of the Top-Up
      Option, (x) the consummation of the Merger, (y) the approval,
      execution or delivery of the Support Agreements or any amendments thereof or
      (z) the consummation of any of the other transactions contemplated by the
      Merger Agreement or the Support Agreements.”

     

    (g)  Section
      10(c) is hereby amended by adding the following sentence at the end
      thereof:

     

    “Notwithstanding
      anything in this Agreement to the contrary, a Section 10 Event shall be
      deemed not to occur or have occurred, and the provisions of such section shall
      not be made or given effect, in connection with (u) the approval, adoption,
      execution or delivery of the Merger Agreement, (v) the commencement or
      consummation of the Offer, (w) the exercise of the Top-Up Option,
      (x) the consummation of the Merger, (y) the approval, execution or
      delivery of the Support Agreements or any amendments thereof or (z) the
      consummation of any of the other transactions contemplated by the Merger
      Agreement or the Support Agreements.”

     

    (h)  The
      description of “Acquiring Person” contained in Exhibit B is hereby amended by:
      (i) deleting the word “and” from the end of clause (vi) thereof; and (ii) adding
      the following text at the end thereof:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    “,
      and
      (vii) Eli Lilly and Company, Alaska Acquisition Corporation or any Affiliate
      or
      Associate of Eli Lilly and Company, in connection with (u) the approval,
      adoption, execution or delivery of the Merger Agreement, (v) the commencement
      or
      consummation of the Offer, (w) the exercise of the Top-Up Option, (x) the
      consummation of the Merger, (y) the approval, execution or delivery of the
      Support Agreements or any amendments thereof or (z) the consummation of any
      of
      the other transactions contemplated by the Merger Agreement or the Support
      Agreements; provided,
      however,
      that if
      the Merger Agreement is terminated prior to the Acceptance Time (as defined
      in
      the Merger Agreement), this sub-clause (vii) shall be of no further force and
      effect; provided,
      further,
      that
      unless approved by the Board of Directors of the Company, this sub-clause (vii)
      shall not apply to any purchases prior to the Acceptance Time by Eli Lilly
      and
      Company, Alaska Acquisition Corporation or any Affiliate or Associate of Eli
      Lilly and Company other than pursuant to the Merger Agreement.”

     

    Section
      1.03.  No
      Implied Amendments.
      Except
      as herein amended, all of the terms of the Rights Agreement shall remain in
      full
      force and effect and are ratified in all respects. On and after the
      effectiveness of this Amendment, each reference in the Rights Agreement to
“this
      Agreement”, “hereunder”, “hereof”, “herein” or words of like import, and each
      reference to the Rights Agreement in any other agreements, documents or
      instruments executed and delivered pursuant to the Rights Agreement, shall
      mean
      and be a reference to the Rights Agreement, as amended by this
      Amendment.

     

    Section
      1.04.  Governing
      Law.
      This
      Amendment shall be governed by and interpreted and enforced in accordance with
      the terms of the Rights Agreement.

     

    Section
      1.05.  Counterparts.
      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 one and the same instrument.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
      executed by their respective authorized officers as of the day and year first
      above written.

     

     

     

     

    
      	 	 	 
	 	IMCLONE
              SYSTEMS INCORPORATED
	 
 	 
 	 
 
	 	By:  	/s/ Gregory
              T. Mayes
	 	
              

              Name: Gregory
                T. Mayes

            
	 	
              
                Title: Vice
                  President, Deputy General Counsel

                180
                  Varick Street

                New
                  York, NY 10014

                Attention:
                  General Counsel

              

            


    

    


    
      	
            	 	 
	 	COMPUTERSHARE
              TRUST COMPANY, N.A.
	 
 	 
 	 
 
	 	By:  	/s/ Dennis
              V.
              Moccia
	 	
              

              Name: Dennis
                V. Moccia

            
	 	
              
                
                  Title: Managing
                    Director

                  250
                    Royall Street

                  Canton,
                    MA 02021

                  Attention:
                    Relationship Management