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EXHIBIT 1.2
RESOLVED, that Section 1(a) of the Rights Agreement between Pharmchem
Laboratories, Inc and ChaseMellon Shareholder Services, L.L.C. as Rights Agent
dated as of November 30, 1999 is hereby amended and restated as follows:
"Acquiring Person" means any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the aggregate number of Common Shares of the Company then
outstanding; provided, however that (i) in no event shall any Exempt Person be
deemed to be an Acquiring Person, (ii) no Person who or which, together with all
Affiliates and Associates of such Person, was the Beneficial Owner of 15% or
more of the aggregate number of Common Shares of the Company issued and
outstanding as of 5:00 p.m., California time, on November 30, 1999 shall be
deemed to be an "Acquiring Person" for purposes of this Agreement; provided,
however, that if such Person together with any Affiliates and Associates of such
Person, after 5:00 p.m., California time, on November 30, 1999, (A) acquires in
one or more transactions, Beneficial Ownership of an additional number of Common
Shares, and (B) beneficially owns after such acquisition 27% or more of Common
Shares of the Company then outstanding, then such Person shall be deemed to be
an "Acquiring Person," (iii) 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 the Company's Common Shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% (or, in the case of
Persons described in clause (ii) of this paragraph, 27%) or more of the Common
Shares then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% (or, in the case of Persons described in clause (ii) of
this paragraph, 27%) or more of the Common Shares of the Company then
outstanding by reason of share acquisitions by the Company and shall, after such
share acquisitions by the Company, (A) acquire, in one or more transactions,
beneficial ownership of an additional number of Common Shares which exceeds the
lesser of 10,000 Common Shares or 0.25% of the then-outstanding Common Shares
and (B) beneficially own after such acquisition 15% (or, in the case of Persons
described in clause (ii) of this paragraph, 27%) or more of the aggregate number
of Common Shares of the Company then outstanding, then such Person shall be
deemed to be an "Acquiring Person," and (iv) if the Board of Directors
determines in good faith that a Person who would otherwise be an Acquiring
Person, as defined pursuant to the foregoing provisions of this paragraph (a),
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, as defined pursuant to the foregoing provisions
of this paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.
