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EXHIBIT 4.1




AMENDMENT NO. 2 TO RIGHTS AGREEMENT




     This Amendment No. 2 (this “Amendment”) to Rights Agreement, effective as of December
3, 1998, as amended on July 21, 2000 (the “Rights Agreement”), is effective as of December
14, 2005, by and between La Jolla Pharmaceutical Company, a Delaware corporation (the
“Corporation”) and American Stock Transfer & Trust Company, a New York corporation (the
“Rights Agent”). Capitalized terms used herein but not defined herein shall have their
defined meanings set forth in the Rights Agreement.



     WHEREAS, the Corporation and the Rights Agent entered into the Rights Agreement, effective as
of December 3, 1998.



     WHEREAS, the Rights Agreement was amended, effective as of July 21, 2000, to amend the terms
of the Rights Agreement to eliminate the concept and powers of the Continuing Directors and to
amend the definition of “Acquiring Person” to permit the State of Wisconsin Investment Board to
invest up to a level of just under 20% beneficial ownership without triggering the Rights
Agreement.



     WHEREAS, the parties wish to further amend the definition of “Acquiring Person” to permit
Essex Woodlands Health Ventures Fund VI, L.P. to invest up to a level of just under 29% and to
permit Frazier Healthcare V, LP to invest up to a level of just under 19% beneficial ownership
without triggering the Rights Agreement.



     NOW, THEREFORE, the parties hereby agree as follows:



     1. Section 1(a) is hereby deleted in its entirety and the following is inserted in lieu thereof:




“(a) “Acquiring Person” shall mean any Person who or which, together with all Affiliates
and Associates of such Person, without the prior approval of the Board of Directors of
the Corporation, shall become, after the date hereof, the Beneficial Owner of 15% or more
(or, in the case of State of Wisconsin Investment Board, 20% or more; or, in the case of
Essex Woodlands Health Ventures Fund VI, L.P., 29% or more; or, in the case of Frazier
Healthcare V, LP, 19% or more) of the shares of Common Stock then outstanding, but shall
not include an Exempt Person, or a Person who or which, together with its Affiliates and
Associates, shall become the Beneficial Owner of 15% or more (or, in the case of State of
Wisconsin Investment Board, 20% or more; or, in the case of Essex Woodlands Health
Ventures Fund VI, L.P., 29% or more; or, in the case of Frazier Healthcare V, LP, 19% or
more) of the shares of Common Stock then outstanding solely as a result of a reduction in
the number of shares of Common Stock outstanding due to a repurchase of Common Stock by
the Corporation, unless such Person shall thereafter purchase or otherwise become the
Beneficial Owner of additional shares of Common Stock representing 1% of the shares of
Common Stock then outstanding. Notwithstanding the foregoing, if the Board of Directors
of the Corporation 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 pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an “Acquiring Person” for any
purposes of this Agreement. Furthermore, notwithstanding the foregoing, no stockholder
of the Corporation beneficially owning as of the Rights Dividend Declaration Date
(together with such stockholder’s Affiliates and Associates) 15% or more of the shares of
Common Stock outstanding as of the date of this Agreement (an “Original 15% Stockholder”)
shall be an Acquiring Person unless and until such Original 15% Stockholder or any of
such stockholder’s Associates or Affiliates shall, after the Rights Declaration Date,
acquire any additional shares of Common Stock without the prior approval of the Board of
Directors of the Corporation (set forth in a resolution of the Board), at which point
such stockholder shall be an Acquiring Person if, immediately following and giving effect
to such acquisition, such Original 15% Stockholder, together with all such stockholder’s
Affiliates and Associates, shall be the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding.”



2. Section 3(a) is hereby deleted in its entirety and the following is inserted in lieu thereof:




“(a) Until the earlier of (i) the Close of Business on the tenth (10th) day after the
Stock Acquisition Date (or, if the tenth (10th) day after the Stock Acquisition Date
occurs before the Record Date, the Close of Business on the Record Date), or (ii) the
Close of Business on the tenth (10th) day after the date that a tender or exchange offer
by any Person (other than an Exempt Person) is first published or sent or given within
the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act,
if, upon consummation thereof, such Person, together with its Affiliates and Associates,
would be the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, or, in the case of the State of Wisconsin Investment Board, Essex Woodlands
Health Ventures Fund VI, L.P. and Frazier Healthcare V, LP, if State of Wisconsin
Investment Board, together with its Affiliates and Associates, would be the Beneficial
Owner of 20%, Essex Woodlands Health Ventures Fund VI, L.P., together with its Affiliates
and Associates, would be the Beneficial Owner of 29%, or Frazier Healthcare V, LP,
together with its Affiliates and Associates, would be the Beneficial Owner of 19%, or
more of the shares of Common Stock then outstanding (irrespective of whether any shares
are actually purchased pursuant to any such offer) (each of the time periods in (i) and
(ii) being subject to extension as provided in Section 27 and the earliest of (i)
and (ii) being herein referred to as the “Distribution Date”), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) each Right will be transferable only in
connection with the transfer of the underlying share of Common Stock (including a
transfer to the Corporation). As soon as practicable after the Distribution Date, the
Rights Agent will send to each record holder of the Common Stock as of the Close of
Business on the Distribution Date, at the address of such holder shown on the records of
the Corporation, one or more rights certificates in substantially the form of Exhibit
B hereto (the “Rights Certificates”),



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evidencing one Right for each share of Common Stock so held, subject to adjustment as
provided herein. In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p), at the time of distribution
of the Rights Certificates, the Corporation shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a)) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash is paid
in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will
be evidenced solely by such Rights Certificates.”



3. Section 11(a)(ii) is hereby deleted in its entirety and the following is inserted in lieu
thereof:




“(ii) Subject to Section 23(a) and Section 24, in the event any Person
(other than an Exempt Person), alone or together with its Affiliates and Associates,
shall, at any time after the Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing the 15% threshold (or in the case of State of Wisconsin
Investment Board, 20% threshold; or, in the case of Essex Woodlands Health Ventures Fund
VI, L.P., 29% threshold; or, in the case of Frazier Healthcare V, LP, 19% threshold) to
be crossed is a transaction set forth in Section 13(a),
or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by the Board of
Directors of the Corporation, after receiving advice from one or more investment banking
firms, to be (a) at a price which is fair to stockholders of the Corporation (taking into
account all factors which such members of the Board deem relevant including, without
limitation, prices which could reasonably be achieved if the Corporation or its assets
were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the
best interests of the Corporation and its stockholders, then, proper provision shall be
made so that each holder of a Right (except as provided below and in Section
7(e)) shall thereafter have the right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, in lieu of a
number of one one-thousandths of a share of Preferred Stock, such number of shares of
Common Stock of the Corporation as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the occurrence of
a Section 11(a)(ii) Event, and (y) dividing that product (which, following such
occurrence, shall thereafter be referred to as the “Purchase Price” for each Right and
for all purposes of this Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d)) per share of Common Stock on the date of such
occurrence (such number of shares is herein called the “Adjustment Shares”); provided
that the Purchase Price and the number of Adjustment Shares shall be further adjusted as
provided in this Agreement to reflect any events occurring after the date of such
occurrence; and provided, further, that if the transaction that would otherwise give rise
to the foregoing adjustment is also subject to the provisions of Section 13, then
only the provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii).”



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     4. Exhibit C is hereby deleted in its entirety and Exhibit C attached hereto and incorporated
by reference herein is inserted in lieu thereof.



     5. Except as expressly set forth in this Amendment all other terms of the Rights Agreement
shall remain in full force and effect.



     6. This Amendment shall be governed by and construed in accordance with the laws of the State
of Delaware applicable to contracts made and to be performed entirely within such State.



     7. 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.



[The remainder of this page has been intentionally left blank; signature page follows.]





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     IN WITNESS WHEREOF, the Corporation and the Rights Agent have executed this Amendment
effective as of the date first above written.



	 	 	 	 	 
	 	THE
CORPORATION:

La Jolla
Pharmaceutical Company, 
a Delaware corporation

 	 
	 	By:  	/s/ Steven B. Engle
 	 
	 	 	Steven B. Engle 	 
	 	 	Chief Executive Officer 	 
	 



	 	 	 	 	 
	 	RIGHTS
AGENT:

American Stock
Transfer & Trust Company,
 a New York corporation

 	 
	 	By:  	/s/ Wilbert Myles
 	 
	 	 	Name:  	Wilbert Myles 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



EXHIBIT
C TO RIGHTS AGREEMENT




Summary of Rights to Purchase

Preferred Stock

of

La Jolla Pharmaceutical Company





     On November 19, 1998 (the “Rights Dividend Declaration Date”) the Board of Directors
of La Jolla Pharmaceutical Company (the “Corporation”) declared a dividend of one Right (a
“Right”) for each outstanding share of Corporation Common Stock to be distributed to
stockholders of record at the close of business on December 18, 1998 (the “Record Date”).
Each Right entitles the registered holder to purchase from the Corporation one one-thousandth of a
share (a “Unit”) of Series A Junior Participating Preferred Stock (the “Preferred
Stock”) at a “Purchase Price” of $30, subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (as amended from time to time, the “Rights
Agreement”) dated December 3, 1998, between the Corporation and American Stock Transfer & Trust
Company, as Rights Agent. Effective as of July 21, 2000, the Corporation and the Rights Agent
entered into an Amendment to the Rights Agreement (“Amendment No. 1”) which (a) eliminated
the concept and powers of the “Continuing Directors”; and (b) amended the definition of “Acquiring
Person” to permit the State of Wisconsin Investment Board to invest up to a level of just under 20%
beneficial ownership without triggering the Rights Agreement. Effective as of December 14, 2005,
the Corporation and the Rights Agent entered into Amendment No. 2 to Rights Agreement which further
amended the definition of “Acquiring Person” to permit Essex Woodlands Health Ventures Fund VI,
L.P. and Frazier Healthcare V, LP to invest up to a level of just under 29% and 19% beneficial
ownership, respectively, without triggering the Rights Agreement.



     A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 8-A dated December 4, 1998, a copy of Amendment No.
1 to the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit
to a Current Report on Form 8-K filed on January 26, 2001 and a copy of Amendment No. 2 to the
Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a
Current Report on Form 8-K filed on December 16, 2005. A copy of the Rights Agreement, Amendment
No. 1 and Amendment No. 2 to the Rights Agreement are available free of charge from the
Corporation. This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, Amendment No. 1 and Amendment No. 2
to the Rights Agreement, which are incorporated herein by reference. A more detailed summary is
also attached to the Post-Effective Amendment No. 2 to Form 8-A
filed on December 16, 2005 with the
Securities and Exchange Commission in connection with the amendment of the rights plan, and can be
viewed on the Securities and Exchange Commission’s web site at www.sec.gov or obtained from the
Corporation upon request.



     Each share of Common Stock of the Corporation outstanding at the close of business on the
Record Date received one Right. In addition, prior to the earliest of the Distribution Date, a
Section 13 Event or the Expiration Date (as each is described below), one additional Right



 









 







(as such
number may be adjusted pursuant to the provisions of the Rights Agreement) shall be
issued with each share of Common Stock issued after the Record Date. Following the
Distribution Date and prior to the expiration or redemption of the Rights, the Corporation will
issue one Right (as such number may be adjusted pursuant to the provisions of the Rights Agreement)
for each share of Common Stock issued pursuant to the exercise of stock options or under employee
plans or upon the exercise, conversion or exchange of securities issued by the Corporation prior to
the Distribution Date.



     Until the Distribution Date (as described below), (i) the Rights will attach to and be
evidenced by the Common Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after December 18, 1998 will contain
a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of
any certificates for Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.



     The Rights are not exercisable until the Distribution Date and will expire at the earliest of
(i) the close of business on December 2, 2008; the date of redemption of the Rights; (iii) the date
the Board of Directors of the Corporation orders the exchange of Rights; or (iv) the date of
consummation of a tender offer approved as fair to and in the best interests of the Corporation and
its stockholders and adequately priced with each stockholder receiving the same consideration per
share in the same manner (the “Expiration Date”).



     The Rights will separate from the Common Stock and a Distribution Date will occur (the
“Distribution Date”) upon the earlier of 10 days (or such longer time as may be determined
by the Corporation’s Board of Directors following (i) a public announcement (or determination by
the Corporation’s Board of Directors) that a person or group of affiliated or associated persons
(an “Acquiring Person”) has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more (or, in the case of State of Wisconsin Investment Board, one of the
Corporation’s stockholders, 20% or more; or, in the case of Essex Woodlands Health Ventures Fund
VI, L.P., 29% or more; or, in the case of Frazier Healthcare V, LP, 19% or more) of the outstanding
shares of Common Stock (the “Stock Acquisition Date”), or (ii) the commencement of a tender
offer or exchange offer that would result in a person or group beneficially owning 15% or more (or,
in the case of State of Wisconsin Investment Board, 20% or more; or, in the case of Essex Woodlands
Health Ventures Fund VI, L.P., 29% or more; or, in the case of Frazier Healthcare V, LP, 19% or
more) of such outstanding shares of Common Stock. Notwithstanding the foregoing, however, the
trigger percentage expressed in clauses (i) and (ii) above will not be triggered with respect to
Abbott Laboratories unless and until Abbott Laboratories (or its affiliated and associated persons)
acquires, after the Rights Dividend Declaration Date, any additional shares of Common Stock without
the prior approval of the Board of Directors of the Corporation and if, immediately following and
giving effect to such acquisition, Abbott Laboratories (together with its affiliated and associated
persons) is the beneficial owner of 15% or more of the shares of Common Stock then outstanding.



     As soon as practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of the Common Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent the Rights.



 









 





     At any time after the Distribution Date but prior to the Expiration Date of the Rights, each
right may be exercised at the stated purchase price of $30 (subject to adjustment, the
“Exercise Price”) for one one-thousandth of a share of the Preferred Stock; provided,
however, that upon the occurrence of any of the events described below, the Rights may no longer be
exercised for Preferred Stock and may only be exercised for certain other securities described
below.



     In the event that on or at any time following the Rights Dividend Declaration Date, either (i)
a person (other than Abbott Laboratories) becomes the beneficial owner of more than 15% (or, in the
case of State of Wisconsin Investment Board, more than 20%; or, in the case of Essex Woodlands
Health Ventures Fund VI, L.P., more than 29%; or, in the case of Frazier Healthcare V, LP, more
than 19%) of the then outstanding shares of Common Stock, or (ii) Abbott Laboratories acquires any
additional shares of Common Stock without the prior approval of the Board of Directors, and if,
immediately following and giving effect to such acquisition, Abbott Laboratories beneficially owns
15% or more of the then outstanding shares of Common Stock (in either case except pursuant to an
offer for all outstanding shares of Common Stock which the Board of Directors determines to be fair
to and otherwise in the best interests of the Corporation and its stockholders), then each holder
of a Right will thereafter have the right to receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of the Corporation) having a value equal to two
times the Purchase Price of the Right. Rights are exercisable following the occurrence of the
foregoing only after such time as the Rights are no longer redeemable by the Corporation, as set
forth below. Notwithstanding any of the foregoing, following the occurrence of the event set forth
in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and void.



     In the event that, at any time following the Stock Acquisition Date, (i) the Corporation is
acquired in a merger or other business combination transaction in which the Corporation is not the
surviving corporation or in which the Corporation’s outstanding Common Stock is exchanged for cash,
stock or other property (other than a merger which follows an offer for all outstanding shares
described in the preceding paragraph), or (ii) 50% or more of the Corporation’s assets or earning
power is sold or transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the Purchase Price of the Right. (An
event described in this paragraph is a “Section 13 Event.”).



     The Purchase Price payable, and the number of Units of Preferred Stock or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution, as set forth in the Rights Agreement. With certain exceptions, no adjustment in
the Purchase Price will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Rights, fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-thousandth of a share), or fractional shares of Common
Stock will be issued and, in lieu thereof, an adjustment in cash will be made based on the market
price of the Rights, Preferred Stock, or Common Stock, respectively, on the last trading date prior
to the date of exercise.



 









 





     In general, the Corporation may redeem the Rights in whole, but not in part, at a price of
$.001 per Right, at any time until ten days following the Stock Acquisition Date (or such later
date as may be determined by the Corporation’s Board of Directors). Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the $.001 redemption price.



     At any time after a person becomes beneficial owner of 15% or more (or, in the case of State
of Wisconsin Investment Board, 20% or more; or, in the case of Essex Woodlands Health Ventures Fund
VI, L.P., 29% or more; or, in the case of Frazier Healthcare V, LP, 19% or more) of the Common
Stock then outstanding, and prior to the first date upon which that person becomes the beneficial
owner of at least 50% of the outstanding Common Stock, the Corporation may, by majority vote of the
Board of Directors, exchange some or all of the outstanding Rights (other than those that have
become void) for shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted for splits, dividends, and similar transactions (the “Ratio of
Exchange”). Immediately upon the action of the Board of Directors ordering the exchange of the
Rights, the Rights will terminate and the only right of the holders of Rights will be to receive
the number of Common Shares equal to the Ratio of Exchange.



     Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Corporation, including, without limitation, the right to vote or to receive dividends.



     Other than those provisions relating to the redemption price of the Rights, any of the
provisions of the Rights Agreement may be supplemented or amended by the Board of Directors prior
to the Distribution Date, without approval of the Rights holders, whether or not a supplement or
amendment is adverse to the Rights holders. After the Distribution Date, the provisions of the
Rights Agreement (other than the provisions relating to the redemption price or the final
expiration date of the Rights) may be amended by the Board of Directors in order to make changes
which do not materially and adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), provided, however, that the Rights Agreement may not be amended
to (i) make the Rights again redeemable after the Rights have ceased to be redeemable, or (ii)
change any other time period unless such change is for the benefit of the holders (excluding any
Acquiring Person).