Exhibit 4
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AMENDMENT TO RIGHTS AGREEMENT
THIS AMENDMENT (this "Amendment"), is entered into as of August 24, 2001,
by and between Triangle Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent").
RECITALS
A. The Company and the Rights Agent are parties to a Rights Agreement dated
as of February 1, 1999, as amended by the Amendment to Rights Agreement dated as
of June 2, 1999 (as so amended, the "Rights Agreement").
X. Xxxxxxx Xxxxxx Private Equity VIII, L.P. ("Warburg") and the Company
have entered into a Purchase Agreement dated as of August 24, 2001 (the "Warburg
Stock Purchase Agreement"), pursuant to which Warburg is to purchase shares of
Company Common Stock.
C. The Board of Directors of the Company has determined that an amendment
to the Rights Agreement as set forth herein is necessary and desirable to
reflect the foregoing and certain other matters and the Company and the Rights
Agent desire to evidence such amendment in writing.
Accordingly, the parties agree that:
1. Amendment to Definition of "Acquiring Person" set forth in Section 1(a).
The definition of "Acquiring Person" set forth in Section 1(a) of the Rights
Agreement is amended to read in its entirety as follows:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the shares of
Common Stock of the Company then outstanding but shall not include (1) the
Company, any Subsidiary (as such term is hereinafter defined) of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding shares of Common Stock for or pursuant to
the terms of any such plan, (2) during the Interim Period (as defined
below), Xxxxxx Laboratories, an Illinois corporation (the "Permitted
Investor"), or any U.S. wholly-owned subsidiaries of the Permitted Investor
(collectively with the Permitted Investor, the "Investor Group") but only
to the extent that the Permitted Investor may be deemed a Beneficial Owner
of the Shares (as defined below) as a result of the Permitted Investor
entering into the Xxxxxx Stock Purchase Agreement (as defined below),
unless the Permitted Investor becomes the Beneficial Owner (as defined in
the Xxxxxx Rights Agreement (as defined below)) of any additional
securities of the Company other than the Shares during the Interim Period,
(3) during the Threshold Period (as hereinafter defined), the Investor
Group, or (4) Warburg Pincus Private Equity VIII, L.P., together with all
its Affiliates ("Warburg"), unless and until Warburg becomes the Beneficial
Owner of more than the Permitted Percentage (as hereinafter defined);
provided, however, that if Warburg files a Schedule 13D (or comparable or
successor form or report) under the Exchange Act disclosing that Warburg
holds the Common Stock for any purpose of, or with the effect of, causing
the Company to enter into a merger, consolidation, business combination,
acquisition, restructuring, recapitalization, tender or
exchange offer, or similar transaction involving the Company, or its
securities or a material portion of its assets (other than such a
transaction approved by the Board of Directors of the Company), or in
connection with or as a participant in any transaction under Rule 13d-3(b)
under the Exchange Act and Warburg's Beneficial Ownership of Common Stock
equals fifteen percent (15%) or more, then Warburg shall become an
Acquiring Person. For purposes of this Agreement, the "Interim Period"
shall mean such period commencing as of the date of the Xxxxxx Stock
Purchase Agreement and ending on the earlier of (x) the "Effective Date" as
such term is defined in the Collaboration Agreement (as defined below) and
(y) termination of the Xxxxxx Stock Purchase Agreement. For purposes of
this Agreement, the "Threshold Period" shall mean such period commencing as
of the Effective Date under the Collaboration Agreement and ending on the
earlier of (xx) such time as the Permitted Investor holds less than the
Minimum Purchaser Interest in the Company (as defined in Section 1.11 of
the Xxxxxx Rights Agreement), (yy) such time as the Investor Group's
Beneficial Ownership (as the term Beneficial Ownership is defined in the
Xxxxxx Rights Agreement) exceeds the Beneficial Ownership Limitation (as
defined in Section 5.2(a) of the Xxxxxx Rights Agreement), and (zz) such
time as the Permitted Investor's rights under Section 7.1 of the Xxxxxx
Rights Agreement have terminated pursuant to the terms of the Xxxxxx Rights
Agreement. Notwithstanding the foregoing:
(i) no Person shall become an "Acquiring Person" as the result of an
acquisition of shares of Common Stock by the Company which, by reducing the
number of shares outstanding, (a) increases the proportionate number of
shares beneficially owned by such Person to 15% or more (or in the case of
Warburg, more than the Permitted Percentage) of the shares of Common Stock
of the Company then outstanding, or, (b) in the case of the Investor Group
during the Interim Period, increases the proportionate number of shares
which may be deemed beneficially owned by the Investor Group, unless the
Permitted Investor becomes the Beneficial Owner (as defined in the Xxxxxx
Rights Agreement) of any additional securities of the Company other than
the Shares during the Interim Period, or, (c) in the case of the Investor
Group during the Threshold Period, increases the proportionate number of
shares Beneficially Owned (as defined in the Xxxxxx Rights Agreement) by
the Investor Group to more than the Beneficial Ownership Limitation;
provided, however, that if by reason of share purchases by the Company, (1)
a Person shall become the Beneficial Owner of 15% or more (or in the case
of Warburg, more than the Permitted Percentage) of the shares of Common
Stock of the Company then outstanding or, (2) in the case of the Investor
Group, the Investor Group's ownership increases the Investor Group's
Beneficial Ownership (as defined in the Xxxxxx Rights Agreement) by any
amount during the Interim Period or results in the Investor Group's
Beneficial Ownership (as defined in the Xxxxxx Rights Agreement) to exceed
the Beneficial Ownership Limitation at any time during the Threshold
Period, and, in the case of (1) or (2) above, such Person or Investor Group
shall, after such share purchases by the Company, become the Beneficial
Owner of any additional shares of Common Stock of the Company, then such
Person, including the Investor Group, shall be deemed to be an "Acquiring
Person" hereunder; and
(ii) if the Board of Directors of the Company 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 shares of Common Stock so that such Person would no
longer be an "Acquiring Person" (as defined
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pursuant to the foregoing provisions of this paragraph (a)), then such
Person shall not be deemed to be an "Acquiring Person" for any purpose of
this Agreement."
2. Amendment to Definition of "Triggering Event" set forth in Section
1(oo). The definition of "Triggering Event" set forth in Section 1 (oo) of the
Rights Agreement is amended to add the following sentence to the end thereof:
"Notwithstanding anything in this Rights Agreement to the contrary, a
Triggering Event shall not be deemed to have occurred by virtue of (i) the
Warburg Stock Purchase Agreement or by virtue of any of the transactions
contemplated thereby, or (ii) the Xxxxxx Stock Purchase Agreement and the
Related Agreements (as such term is defined in the Xxxxxx Stock Purchase
Agreement) or by virtue of any of the transactions contemplated thereby
(excluding during the Interim Period, any purchases which result in the
Permitted Investor becoming the Beneficial Owner (as defined in the Xxxxxx
Rights Agreement) of any securities of the Company in addition to the
Shares and excluding, during the Threshold Period, any purchases permitted
by Section 5.3 of the Xxxxxx Rights Agreement or otherwise which cause the
Permitted Investor's Beneficial Ownership (as defined in Section 5.4 of the
Xxxxxx Rights Agreement) of shares of Common Stock to exceed 21% of the
then total outstanding shares of Common Stock of the Company)."
3. Amendment to Section 1. The following definitions are hereby added to
the end of Section 1 as Sections 1(tt) and 1(uu):
"(tt) "Warburg Stock Purchase Agreement" shall mean that certain Purchase
Agreement dated as of August 24, 2001, by and between the Company and
Warburg Pincus Private Equity VIII, L.P.
(uu) "Permitted Percentage" shall mean the lesser of (a) forty percent
(40%) of the capital stock of the Company then outstanding having the right
to vote or (b) (i) for the period effective immediately prior to the
Initial Closing (as such term is defined in the Warburg Stock Purchase
Agreement) and continuing until immediately prior to the Second Closing (as
such term is defined in the Warburg Stock Purchase Agreement), or if no
Second Closing occurs, then indefinitely, the percentage determined by
dividing 9,628,002 by the number of shares of Common Stock of the Company
outstanding (giving effect to the shares issued or to be issued in the
Initial Closing) and (ii) for the period effective immediately prior to the
Second Closing and continuing indefinitely, the sum of (x) the percentage
determined by dividing the number of shares of Common Stock of which
Warburg is then the Beneficial Owner, after giving effect to the purchases
of shares of Common Stock of the Company by Warburg at such Second Closing,
by the number of shares of Common Stock of the Company outstanding (giving
effect to the shares issued or to be issued in the Second Closing), plus
(y) five percent (5%); provided, however, that the Permitted Percentage
shall be reestablished on such date (the "Initial Reset Date") as, through
sales or other transfers (other than transfers to Affiliates of Warburg) by
Warburg, Warburg becomes the Beneficial Owner of less than seventy-five
percent (75%) of the number of shares of Common Stock of the Company
purchased by Warburg pursuant to the Warburg Stock Purchase Agreement, and
thereafter reestablished on each date (each such date along with the
Initial Reset Date being referred to herein as a "Reset Date") on which,
through sales or other transfers (other than transfers to Affiliates of
Warburg) by Warburg, the number of shares of Common Stock of the Company
Beneficially Owned by Warburg decreases from any
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previously established Permitted Percentage by more than two percent (2%)
of the then outstanding shares of Common Stock of the Company, to that
percentage of Common Stock of the Company Beneficially Owned by Warburg on
such Reset Date, plus five percent (5%). For purposes of clause (b) of this
Section 1(uu), determinations at any given point in time of the Permitted
Percentage or of the ownership of shares of Common Stock of the Company by
Warburg in relation to the then applicable Permitted Percentage shall be
calculated in accordance with Section 1(d)(iv) hereof. Notwithstanding the
foregoing, the Permitted Percentage shall be adjusted at any time so as to
permit Warburg to exercise its subscription rights under Section 8.5 of the
Warburg Stock Purchase Agreement."
4. Amendment of Section 3(a). The first sentence of Section 3(a) of the
Rights Agreement is amended to read in its entirety as follows:
"Until the earlier of (i) the Close of Business on the Shares Acquisition
Date and (ii) the Close of Business on the tenth Business Day (or such
later date as may be determined by action of the Company's Board of
Directors prior to such time as any Person becomes an Acquiring Person and
of which the Company will give the Rights Agent prompt written notice)
after the date that a tender or exchange offer by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity holding
shares of Common Stock for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act Regulations or any successor rule or of the first public
announcement of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company or any entity holding shares of Common Stock
for or pursuant to the terms of any such plan) to commence, a tender or
exchange offer, if upon consummation thereof such Person would be the
Beneficial Owner of 15% or more (or in the case of Warburg, more than the
Permitted Percentage) of the shares of Company Common Stock then
outstanding, or, in the case of the Investor Group during the Interim
Period, the Investor Group purchases any securities of the Company which
result in the Permitted Investor becoming the Beneficial Owner (as defined
in the Xxxxxx Rights Agreement) of any securities of the Company in
addition to the Shares, or in the case of the Investor Group during the
Threshold Period, the Permitted Investor's Beneficial Ownership (as defined
in the Xxxxxx Rights Agreement) would exceed the Beneficial Ownership
Limitation (as defined in the Xxxxxx Rights Agreement), (the earlier of (i)
and (ii) above being the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for shares of Common Stock registered in the names of the
holders thereof (which certificates shall also be deemed to be Rights
Certificates) and not by separate Rights Certificates, and (y) the right to
receive Rights Certificates will be transferable only in connection with
the transfer of shares of Common Stock."
5. Miscellaneous. This Amendment shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State. This Amendment
may be executed in any number of counterparts, each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. If any term, provision,
covenant or restriction of this Amendment is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants
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and restrictions of this Amendment shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
(signature on following page)
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(Signature Page to the Amendment to Rights Agreement)
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Rights
Agreement to be duly executed and attested, all as of the day and year first
above written.
ATTEST: TRIANGLE PHARMACEUTICALS, INC.
By: By:
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Name: Xxxxxx Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Executive Vice President, Title: President and
General Counsel and Chief Operating Officer
Secretary
ATTEST: AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: By:
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Name: Name:
Title: Title:
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