October 22, 2006 Computershare Trust Company, N.A. 150 Royall Street Canton, MA 02021 Re: Amendment No. 1 to Rights Agreement Ladies and Gentlemen:
Exhibit 4.2
October 22, 2006
Computershare Trust Company, N.A.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Amendment No. 1 to Rights Agreement
Ladies and Gentlemen:
Pursuant to Section 27 of the Amended and Restated Preferred Stock Rights Agreement, dated as
of November 21, 2001 (the “Rights Agreement”), between Connetics Corporation, a Delaware
corporation (the “Company”) and Computershare Trust Company, N.A., as Rights Agent (the “Rights
Agent”), the Company, by resolution adopted by its Board of Directors, hereby amends the Rights
Agreement as follows:
1. Amendment of Section 1. Section 1 of the Rights Agreement is hereby supplemented
and amended to add the following definitions in the appropriate alphabetical locations:
“Parent” shall mean Xxxxxxx Laboratories, Inc., a Delaware corporation.
“Merger” shall mean the “Merger” as such term is defined in the Merger
Agreement.
“Merger Agreement” shall mean the Agreement and Plan of Merger, dated as of
October 22, 2006, by and among the Company, Parent, and Merger Sub, as amended or
supplemented from time to time.
“Merger Sub” shall mean Clear Acquisition Sub, Inc., a Delaware corporation and
a wholly owned subsidiary of Parent.
“Voting Agreements” shall mean the voting agreements referred to in Clause C of
the Recitals to the Merger Agreement.
2. Amendment of Definition of “Acquiring Person”. The definition of “Acquiring
Person” in Section 1(a) of the Rights Agreement is hereby supplemented and amended by inserting the
following sentence after the last sentence thereof:
“Notwithstanding anything in this Agreement to the contrary, neither Parent, Merger
Sub nor any of their respective Affiliates or Associates shall be deemed to be an
Acquiring Person as a result of the public announcement, approval, execution,
delivery or performance of the Merger Agreement or the Voting
Agreements or the consummation of the Merger or any of the other transactions
contemplated by the Merger Agreement.”
3. Amendment of Definition of “Distribution Date”. The definition of “Distribution
Date” in Section 1(k) of the Rights Agreement is supplemented and amended by inserting the
following sentence after the last sentence thereof:
“Notwithstanding anything in this Agreement to the contrary, a Distribution Date
shall not be deemed to have occurred as a result of the public announcement,
approval, execution, delivery or performance of the Merger Agreement or the Voting
Agreements or the consummation of the Merger or any of the other transactions
contemplated by the Merger Agreement.”
4. Amendment of Definition of “Final Expiration Date”. The definition of “Final
Expiration Date” in Section 1(q) of the Rights Agreement is amended and restated in its entirety to
read as follows:
“‘FINAL EXPIRATION DATE’ shall mean the earlier of (i) November 19, 2011, and (ii)
the day on which the Effective Time (as such term is defined in the Merger
Agreement) occurs, with the Final Expiration Date being deemed to occur as of
immediately prior to the Effective Time on such date.”
5. Amendment of Definition of “Shares Acquisition Date”. The definition of “Shares
Acquisition Date” in Section 1(gg) of the Rights Agreement is supplemented and amended by inserting
the following sentence after the last sentence thereof:
“Notwithstanding anything in this Agreement to the contrary, a Shares Acquisition
Date shall not be deemed to have occurred as a result of the public announcement,
approval, execution, delivery or performance of the Merger Agreement or the Voting
Agreements or the consummation of the Merger or any of the other transactions
contemplated by the Merger Agreement.”
6. Amendment to Section 7(a). Section 7(a) of the Rights Agreement is hereby
supplemented and amended by inserting the following sentence immediately after the last sentence
thereof:
“Notwithstanding anything in this Agreement to the contrary, none of the Rights may
be exercised as a result of the public announcement, approval, execution, delivery
or performance of the Merger Agreement or the Voting Agreements or the consummation
of the Merger or any of the other transactions contemplated by the Merger
Agreement.”
7. Amendment to Section 21. Section 21 of the Rights Agreement is hereby supplemented
and amended by inserting the following sentence immediately after the first sentence thereof:
“In the event the transfer agency relationship in effect between the Company and the
Rights Agent terminates, the Rights Agent will be deemed to resign
automatically on the effective date of such termination, and any required notice
will be sent to the Company.”
8. New Section 35. A new Section 35 is hereby added to the Rights Agreement
immediately following Section 34 of the Rights Agreement, and such new Section 35 shall read as
follows:
“Effect of Merger. For the avoidance of doubt, and in addition to the other
provisions in this Agreement to such effect, the public announcement, approval,
execution, delivery and performance of the Merger Agreement and the Voting
Agreements and the consummation of the Merger and any other transactions
contemplated by the Merger Agreement shall not have any effect on the rights of any
Person under this Agreement (except as set forth in Section 1(q) hereof) and this
Agreement shall otherwise be inapplicable to the Merger Agreement, the Voting
Agreements, the Merger, and any other transactions contemplated thereby. Upon
consummation of the Merger, neither the Company, Parent, Merger Sub, the Surviving
Corporation (as such term is defined in the Merger Agreement), nor any of their
respective Affiliates shall have any obligations to any holder or former holder of
Rights as of and following the Effective Time (as such term is defined in the Merger
Agreement).”
9. New Section 36. A new Section 36 is hereby added to the Rights Agreement
immediately following Section 35 of the Rights Agreement, and such new Section 36 shall read as
follows:
“Force Majeure. Notwithstanding anything to the contrary contained herein,
the Rights Agent shall not be liable for any delays or failures in performance
resulting from acts beyond its reasonable control including, without limitation,
acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions,
interruptions or malfunction of computer facilities, or loss of data due to power
failures or mechanical difficulties with information storage or retrieval systems,
labor difficulties, war, or civil unrest.”
10. Wavier of Notice(s). The Rights Agent and the Company hereby waive any notice
requirement(s) under the Rights Agreement pertaining to the matters covered by this Amendment.
11. Other Provisions Unaffected. This Amendment shall be deemed to be in full force
and effect immediately prior to the execution and delivery of the Merger Agreement. Except as
expressly modified hereby, all arrangements, agreements, terms, conditions and provisions of the
Rights Agreement remain in full force and effect, and this Amendment and the Rights Agreement, as
hereby modified, shall constitute one and the same instrument.
12. Miscellaneous.
a. Counterparts. This Amendment may be executed in any number of counterparts
and 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.
b. Governing Law. This Amendment, the Rights Agreement, each Right and each
Right Certificate issued hereunder or thereunder 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.
c. Further Assurances. Each Party shall cooperate and take such action as may
be reasonably requested by another Party in order to carry out the transactions and purposes
of this Amendment, the Rights Agreement, and the transactions contemplated hereunder and/or
thereunder.
d. Descriptive Headings. Descriptive headings of the several sections of this
Amendment and the Rights Agreement are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof or thereof.
e. Entire Agreement. This Amendment and the Rights Agreement, and all of the
provisions hereof and thereof, shall be binding upon and inure to the benefit of the Parties
and their respective successors and permitted assigns and executors, administrators and
heirs. This Amendment, together with the Rights Agreement, sets forth the entire agreement
and understanding among the Parties as to the subject matter hereof and merges with and
supercedes all prior discussions and understandings of any and every nature among them.
Without limiting the foregoing, the Rights Agent shall not be subject to, nor required to
interpret or comply with, or determine if any Person has complied with, the Merger Agreement
even though reference thereto may be made in this Amendment and the Rights Agreement.
f. Severability. 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, then such term, provision, covenant or restriction shall be enforced
to the maximum extent permissible, and the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
[Signature page follows]
| Very truly yours, CONNETICS CORPORATION |
|||||
| By: | /s/ Xxxxxx X. Xxxxxxx | ||||
| Name: | Xxxxxx X. Xxxxxxx | ||||
| Title: | Chairman and Chief Executive Officer | ||||
Accepted and agreed to as of the effective time specified above:
COMPUTERSHARE TRUST COMPANY, N.A.
| By: | /s/ Xxxxx Xxxxxx-Xxxx | |||
| Name: | Xxxxx Xxxxxx-Xxxx | |||
| Title: | Managing Director | |||
[Signature Page to Amendment No. 1 to the Rights Agreement]
