exv4w1



 





Exhibit 4.1




AMENDMENT

TO

RIGHTS AGREEMENT




     This
AMENDMENT NO. 1 TO RIGHTS AGREEMENT (the “Amendment”) is
entered into as of March 5,
2008, between Penwest Pharmaceuticals Co., a Washington corporation (the “Company”), and Mellon
Investor Services LLC, a New Jersey limited liability company, as Rights Agent (the “Rights
Agent”). Capitalized terms not otherwise defined herein shall have the meanings given them in the
Rights Agreement, dated as of July 27, 1998 (the “Rights Agreement”), between the parties hereto.



RECITALS




     WHEREAS, the Board has determined that it is in the best interest of the Company to amend the
Rights Agreement to modify the definition of Exempted Person as provided for in this Amendment;



     WHEREAS, Section 27 of the Rights Agreement provides that, for so long as the Rights (as
defined in the Rights Agreement) are then redeemable, the Company may, in its sole and absolute
discretion, and the Rights Agent shall, if the Company so directs, supplement or amend any
provision of the Rights Agreement in any respect without the approval of any holders of the Rights
and, as of the date of this Amendment, the Rights issued pursuant to the Rights Agreement are
currently redeemable; and



     WHEREAS, the Company has determined that the Rights Agreement be amended in accordance with
Section 27 of the Rights Agreement, as set forth herein, and the Rights Agent is hereby directed to
join in the amendment to the Rights Agreement as set forth herein.



AGREEMENT



NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:




1. Section 1(n) of the Rights Agreement is hereby amended to read in its entirety as follows:




	 	“(n) 	 	“Exempted Person” shall mean Perceptive Life Sciences Master Fund Ltd.,
together with its Affiliates and Associates (“Perceptive”), until the earlier of (i)
the date on which Perceptive, directly or indirectly, becomes the Beneficial Owner of
more than 19.9% of the shares of Common Stock then outstanding or (ii) the date on
which Perceptive becomes the holder of less than 10% of the shares of Common Stock then
outstanding, at which time Perceptive immediately shall cease to be an Exempted
Person.”




 









 










2. Except as amended hereby, the Rights Agreement shall remain unchanged and shall remain in full
force and effect.



3. This Amendment may be executed in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one instrument.



4. This Amendment shall be deemed to be a contract made under the laws of the State of Washington
and for all purposes shall be governed by and construed in accordance with the laws of the State of
Washington applicable to contracts made and to be performed entirely within the State of
Washington; provided, however, that all rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such state.




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     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective
duly authorized representatives as of the date first above written.



	 	 	 	 	 
	PENWEST PHARMACEUTICALS CO.

 	 	 
	By:  	/s/
Benjamin L. Palleiko 	 	 
	 	Name:  	Benjamin L. Palleiko 	 	 
	 	Title:  	Chief Financial Officer 	 	 
	 
	MELLON INVESTORS SERVICES LLC,

as Rights Agent

 	 	 
	By:  	/s/
John J. Boryczki 	 	 
	 	Name:  	 	 	 
	 	Title: