EXHIBIT 4.1
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: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
-------------------------------- -----------------------------------
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: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Vice President Title: Vice President
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