EXHIBIT 4.1
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
Amendment No. 1 to Rights Agreement (the "Amendment"), made as of
August 16, 2004, by and among Vion Pharmaceuticals, Inc. a Delaware corporation
(the "Company"), and American Stock Transfer & Trust Company (the "Rights
Agent"). Reference is made herein to that certain Rights Agreement, dated as of
October 26, 1998, by and between the Company and the Rights Agent (the "Rights
Agreement"). Capitalized terms not herein defined shall have the meaning
ascribed thereto in the Rights Agreement.
WHEREAS, the Rights Agreement may be amended by the parties pursuant to
Section 27; and
WHEREAS, the Company and the Rights Agent wish to amend the Rights
Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereby agree as follows:
1. Amendment to Section 11(a)(iii). Section 11(a)(iii) of the Rights
Agreement is hereby amended and restated in its entirety to read as follows:
(iii) In the event that the number of shares of Common Stock
which are authorized by the Company's certificate of incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii),
the Company shall: (A) determine the excess of (1) the value of the
shares of Common Stock issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess, the
"Spread"), and (B) with respect to each Right, make adequate provision
to substitute for the shares of Common Stock so issuable, upon payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock)
which the Board of Directors of the Company has deemed to have the
same economic value as shares of Common Stock (such shares of
preferred stock, "common stock equivalents"), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where
such aggregate value has been determined by the Board of Directors of
the Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above
within 30 days following the later of (x) the first occurrence of an
event described in Section 11(a)(ii) and (y) the date on which the
Company's right of redemption pursuant to Section 23 expires, then the
Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available) and then, if necessary,
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cash, which in the aggregate are equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is
likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the 30
day period set forth above may be extended to the extent necessary,
but not more than 120 days following the first occurrence of an event
described in Section 11(a)(ii), in order that the Company may seek
stockholder approval for the authorization of such additional shares
(such period as it may be extended, the "Substitution Period"). To the
extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or
to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the current market
price (as determined pursuant to Section 11(d)) per share of the
Common Stock on the date of the first occurrence of an event referred
to in Section 11(a)(ii) and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common Stock on such
date.
2. Rights Agreement Otherwise Unamended. The terms of the Rights
Agreement not amended hereby shall, except as the context unambiguously
requires, remain in full force and effect.
3. Entire Agreement. This Amendment, together with the provisions of
the Rights Agreement not amended hereby, constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and supersede all
other prior agreements, whether written or oral, between the parties hereto.
4. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same document.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed in its respective corporate name by one of its duly
authorized officers, all as of the date first above written.
VION PHARMACEUTICALS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Financial Officer
AMERICAN STOCK TRANSFER
TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President
