EXHIBIT 4.2
AMENDMENT NO. 2 TO
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
THIS AMENDMENT NO. 2 dated as of May 10, 2001 (the "Amendment") to the
Shareholder Protection Rights Agreement dated as of September 15, 1997, as
amended by Amendment No. 1 thereto dated March 16, 1999 (the "Agreement"),
between CollaGenex Pharmaceuticals, Inc., a Delaware company (the "Company") and
American Stock Transfer & Trust Company, as Rights Agent (the "Agent").
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. AMENDMENT. The definition of an Acquiring Person, as contained in
Section 1.1 of the Agreement shall be revised in its entirety to read as
follows:
""Acquiring Person" shall mean any Person who is a Beneficial Owner of more
than the Specified Percentage of the outstanding shares of Common Stock;
provided, however, that the term "Acquiring Person" shall not include any
Person (i) who is the Beneficial Owner of more than the Specified
Percentage (as defined below) of the outstanding shares of Common Stock on
the date of this Agreement, or who shall become the Beneficial Owner of
more than the Specified Percentage of the outstanding shares of Common
Stock solely as a result of an acquisition by the Company of shares of
Common Stock, or who shall become the Beneficial Owner of more than the
Specified Percentage of the outstanding shares of Common Stock as a result
of the transactions contemplated by that certain Stock Purchase Agreement
dated March 1999, by and among the Company and the Investor and Purchasers
set forth therein, until such time as any of such Persons shall become the
Beneficial Owner (other than by means of a stock dividend or stock split)
after the date hereof of an additional 1% of the outstanding shares of
Common Stock, provided, that, for the purpose of determining whether any
Person has become the Beneficial Owner of an additional 1% of the
outstanding shares of Common Stock, compensatory management stock options
and other stock-based management awards issued by the Company subsequent to
the date of this Agreement shall not be included, (ii) who becomes the
Beneficial Owner of more than the Specified Percentage of the outstanding
shares of Common Stock but who acquired Beneficial Ownership of shares of
Common Stock without any plan or intention to seek or affect control of the
Company, if such Person promptly enters into an irrevocable commitment to
divest, and thereafter promptly divests (without exercising or retaining
any power, including voting, with respect to such shares), sufficient
shares of Common Stock (or securities convertible into, exchangeable into
or exercisable for Common Stock) so that such Person ceases to be the
Beneficial Owner of more than the Specified Percentage of the outstanding
shares of Common Stock or (iii) who Beneficially Owns shares of Common
Stock consisting solely of one or more of (A) shares of Common Stock
Beneficially Owned pursuant to the grant or exercise of an option granted
to such Person (an "Option Holder") by the Company in connection with an
agreement to
merge with, or acquire, the Company entered into prior to a Flip-in Date,
(B) shares of Common Stock (or securities convertible into, exchangeable
into or exercisable for Common Stock), Beneficially Owned by such Option
Holder or its Affiliates or Associates at the time of grant of such option,
and (C) shares of Common Stock (or securities convertible into,
exchangeable into or exercisable for Common Stock) acquired by Affiliates
or Associates of such Option Holder after the time of such grant which, in
the aggregate, amount to less than 1% of the outstanding shares of Common
Stock. In addition, the Company, any wholly-owned Subsidiary (as defined
below) of the Company and any employee stock ownership or other employee
benefit plan of the Company or a wholly-owned Subsidiary of the Company
shall not be an Acquiring Person. For purposes of clarification, the word
"promptly," as used in subsection (ii) of this definition of "Acquiring
Person," shall mean the divestiture by such Person of such ownership within
thirty (30) days of first having knowledge of such ownership, provided they
thereafter divest within such thirty (30) day period or, if such thirty
(30) day period ends on a date on which such Person is prohibited from
divesting shares of Common Stock pursuant to the terms of the Company's
"xxxxxxx xxxxxxx policy" or "blackout period" then in effect, within five
(5) days of the termination of such restricted trading period (without
exercising or retaining any power, including voting power, with respect to
such shares), sufficient shares of Common Stock (or securities convertible
into, exchangeable into or exercisable for Common Stock) so that such
Person ceases to be the Beneficial Owner of more than the Specified
Percentage of the outstanding shares of Common Stock, without triggering
the Rights Plan."
2. EFFECT ON THE AGREEMENT. Except as expressly amended by this Amendment,
the Agreement shall remain in full force and effect.
3. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware.
4. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single instrument.
5. EFFECTIVE DATE. This Amendment shall be effective immediately upon
execution by the Company and the Agent.
* * * * * *
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IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
as of the date first above written.
COLLAGENEX PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
Vice President and Chief Financial Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Vice President
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