Exhibit 10.20
NXSTAGE MEDICAL, INC.
FIFTH AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THIS FIFTH AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement")
is made and entered into this 8th day of July, 2005, by and among NxSTAGE
MEDICAL, INC., a Delaware corporation (the "Company"), Dr. C. Xxxxx Xxxxx, Xx.
Xxxxxxx X. Xxxxxx, and Xxxxxxx X. Xxxxxxx (collectively, the "Founders"), A.D. &
S.R. Burbank Trust and X.X. Xxxxxxx (together with the Founders, the "Key
Stockholders"), the persons and entities listed on Exhibit B hereto (the "
Initial Investors") and those persons and entities who shall, after the date
hereof, agree to become a party to and be bound by this Agreement by executing
and delivering to the Company a counterpart signature page hereto in such form
as the Company may designate (each an "Additional Investor", and together with
the Initial Investors, the "Investors"). Exhibit B to this Agreement shall be
amended and restated by the Company to reflect the admission of an Additional
Investor.
WITNESSETH:
WHEREAS, each of the Key Stockholders is the beneficial owner of those
shares of the Company's common stock, par value $0.001 per share (the "Common
Stock") set forth opposite his name on Exhibit A;
WHEREAS, certain of the Investors (the "Series B Investors," "Series C
Investors", "Series D Investors", "Series E Investors" and "Series F Investors")
hold that number of shares of the Company's Series B, Series C, Series D, Series
E and Series F Preferred Stock, par value $.001 per share (the "Series B, Series
C, Series D Preferred Stock, Series E and Series F Preferred Stock"), set forth
opposite their names on Exhibit B hereto and possess voting rights, rights of
first refusal, co-sale rights and other rights pursuant to that certain Fourth
Amended and Restated Stockholders Agreement dated as of August 18, 2004 by and
among the Company, the Series B Investors, the Series C Investors, the Series D
Investors, the Series E Investors, the Series F Investors and the Key
Stockholders (the "Prior Agreement");
WHEREAS, the Company proposes to sell to certain of the Investors (the
"Series F-1 Investors") that number of shares of its Series F-1 Preferred Stock,
par value $.001 per share (the "Series F-1 Preferred Stock"), as set forth
opposite such Investor's name on Exhibit B attached hereto pursuant to the terms
of the Series F-1 Preferred Stock Purchase Agreement by and among the Company
and the Series F-1 Investors of even date herewith (the "Purchase Agreement");
WHEREAS, the Series B, Series C, Series D, the Series E and Series F
Investors are the holders of at least a majority in interest of the Series B,
Series C, Series D, Series E and Series F Preferred Stock held by the Series B,
Series C, Series D, Series E and Series F Investors as of the date hereof and
the Key Stockholders are the holders of at least a majority in interest of the
shares held by Key Stockholders as of the date hereof, and the Series B, Series
C, Series D,
Series E and Series F Investors and Key Stockholders desire to terminate the
Prior Agreement and to accept the rights created pursuant hereto in lieu of the
rights granted to them under the Prior Agreement; and
WHEREAS, it is a condition to the closing of the sale of the Series F-1
Preferred Stock pursuant to the Purchase Agreement that this Agreement be
executed and delivered by the Investors, the Key Stockholders and the Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the Series B, Series C, Series D, Series E and Series F Investors,
the Key Stockholders and the Company hereby agree that the Prior Agreement shall
be superseded and replaced in its entirety by this Agreement, and the parties
hereto further agree as follows:
ARTICLE I
VOTING
1.1 COMMON SHARES; INVESTOR SHARES.
(A) The Key Stockholders each agree to hold all shares of voting
capital stock of the Company registered in their respective names or
beneficially owned by them as of the date hereof, and any and all other
securities of the Company legally or beneficially acquired by each of the Key
Stockholders after the date hereof (hereinafter collectively referred to as the
"Common Shares") subject to, and to vote the Common Shares in accordance with,
the provisions of this Agreement. Common Shares shall not include shares of
Common Stock issued upon conversion of shares of Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock,
Series F Preferred Stock or Series F-1 Preferred Stock.
(B) The Investors each agree to hold all shares of voting capital
stock of the Company now owned or hereinafter acquired by them (including, but
not limited to, all shares of Common Stock issued upon conversion of the Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and Series F-1 Preferred Stock (the
"Conversion Shares"), as adjusted for any combinations, consolidations,
recapitalizations, stock splits, reverse stock splits, stock distributions or
stock dividends with respect to such shares) registered in their respective
names or beneficially owned by them as of the date hereof (and any and all other
securities of the Company legally or beneficially acquired by each of the
Investors after the date hereof) (hereinafter collectively referred to as the
"Investor Shares") subject to, and to vote the Investor Shares in accordance
with, the provisions of this Agreement.
1.2 VOTING. At each election of directors in which the holders of Common
Stock, holders of Series B Preferred Stock, holders of Series C Preferred Stock,
holders of Series D Preferred Stock, holders of Series E Preferred Stock,
holders of Series F Preferred Stock and holders of Series F-1 Preferred Stock,
voting together as a single class, are entitled to elect directors of the
Company, the Key Stockholders and Investors shall consult each other and shall
vote Common Shares and Investor Shares, respectively so that at least (i) two
directors shall be
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nominees of the holders of a majority in interest of the Common Stock, voting as
a separate class, one of whom it is anticipated will be the Chief Executive
Officer of the Company, and one of whom shall be an industry expert and an
outside director who shall be reasonably satisfactory to the holders of a
majority in interest of the Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock and
Series F-1 Preferred Stock, and (ii) five directors shall be nominees of the
holders of a majority in interest of the Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F
Preferred Stock and Series F-1 Preferred Stock, voting together as a single
class, on an as-if-converted basis and not as separate series, (A) one of whom
shall be an industry expert and outside director which shall be reasonably
satisfactory to the holders of a majority in interest of the Common Stock and
BVCF IV, L.P., (B) one of which shall be designated by Xxxxx X. Xxxxxxxxx (or
upon his death, his estate) as long as Xx. Xxxxxxxxx'x ownership in NxStage does
not fall below 820,019 shares (as adjusted for any combinations, consolidations,
recapitalizations, stock splits, reverse stock splits, stock distributions or
stock dividends with respect to such shares) ("DSU Minimum Shares"), (C) one of
which shall be designated by the Sprout Group as long as the Sprout Group's
(together with its affiliates) ownership in NxStage does not fall below DSU
Minimum Shares, (D) one of which shall be designated by Atlas Venture Fund V,
L.P. as long as Atlas Venture Fund V, L.P.'s (together with its affiliates)
ownership in NxStage does not fall below DSU Minimum Shares and (E) one of which
shall be designated by Healthcare Investment Partners Holdings LLC as long as
Healthcare Investment Partners Holdings LLC's (together with its affiliates)
ownership in NxStage does not fall below DSU Minimum Shares. For purposes of
this Agreement an "affiliate" of an Investor shall mean any person or entity
which, directly or indirectly, controls, is controlled by or is under common
control with such Investor, including, without limitation, any general partner,
manager, managing member, officer or director of such Investor and any
investment fund now or hereafter existing which is controlled by one or more
general partners of, or shares the same management as, such Investor.
1.3 LEGEND.
(A) Concurrently with the execution of this Agreement, there shall
be imprinted or otherwise placed, on certificates representing the Common Shares
and the Investor Shares a restrictive legend in substantially the following form
(the "Legend"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A FIFTH AMENDED AND RESTATED STOCKHOLDERS
AGREEMENT DATED AS OF JULY 8, 2005, WHICH PLACES CERTAIN
RESTRICTIONS ON THE VOTING OF THE SHARES REPRESENTED HEREBY. ANY
PERSON ACCEPTING ANY INTEREST IN SUCH SHARES SHALL BE DEEMED TO
AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH
AGREEMENT. A COPY OF SUCH FIFTH AMENDED AND RESTATED STOCKHOLDERS
AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE
WITHOUT CHARGE UPON WRITTEN REQUEST
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TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS."
(B) The Company agrees that, during the term of this Agreement, it
will not remove, and will not permit to be removed (upon registration of
transfer, reissuance of otherwise), the Legend from any such certificate and
will place or cause to be placed the Legend on any new certificate issued to
represent the Common Shares or the Investor Shares theretofore represented by a
certificate carrying the Legend.
1.4 SUCCESSORS. The provisions of this Agreement shall be binding upon the
successors in interest to any of the Common Shares or Investor Shares. The
Company shall not permit the transfer of any of the Common Shares or Investor
Shares on its books or issue a new certificate representing any of the Common
Shares or Investor Shares unless and until the person to whom such security is
to be transferred shall have executed a written agreement, pursuant to which
such person becomes a party to this Agreement and agrees to be bound by all the
provisions hereof as if such person were a Key Stockholder or Investor, as
applicable.
1.5 OTHER RIGHTS. Except as provided by this Agreement, each Key
Stockholder and Investor shall exercise the full rights of a shareholder with
respect to the Common Shares and the Investor Shares, respectively.
1.6 BOARD OBSERVATION RIGHTS. So long as (i) BVCF IV, L.P. shall continue
to hold at least 500,000 shares of the Company's Preferred Stock (as adjusted
for any combinations, consolidations, recapitalizations, stock splits, reverse
stock splits, stock distributions or stock dividends with respect to such
shares), (ii) Marubeni Corporation shall continue to hold at least 300,000
shares of the Company's Preferred Stock (as adjusted for any combinations,
consolidations, recapitalizations, stock splits, reverse stock splits, stock
distributions or stock dividends with respect to such shares) and (iii) CSFB
Fund Co-Investment Program, L.P. shall continue to hold at least 200,000 shares
of the Company's Preferred Stock (as adjusted for any combinations,
consolidations, recapitalizations, stock splits, reverse stock splits, stock
distributions or stock dividends with respect to such shares), a representative
of each, reasonably acceptable to the Company (a "Representative"), shall have
the right to attend all meetings of the Company's Board of Directors in a
non-voting observer capacity and, in this respect, the Company shall give the
Representative, whether or not present at such meetings, copies of all notices,
minutes, consents and other materials that it provides to its directors in the
same manner and at the same time as provided to its directors; provided that (A)
the Representative shall agree to hold in strict confidence and trust, and to
act in a fiduciary manner with respect to, all information so provided; (B) the
Company reserves the right to withhold any information and to exclude the
Representative from any portion of any meeting, if the Board of Directors
determines in good faith that access to such information or attendance at such
portion of such meeting could materially and adversely affect the Company,
whether by way of adversely affecting the attorney-client privilege between the
Company and its counsel, or otherwise, and (C) in no event shall the failure to
provide the notice and materials described above invalidate in any way any
action taken at a meeting of the Company's Board of Directors. Such
Representatives shall bear their own costs associated with such attendance.
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ARTICLE II
TRANSFER RESTRICTIONS
2.1 COMPANY PURCHASE RIGHT; INVESTOR PURCHASE RIGHT. If a Founder receives
a bona fide offer to purchase any of the Common Shares held by such Founder, the
Company and its assignees shall have a right of first refusal to purchase from
Founder all, but not less than all, of the Common Shares that such Founder
proposes to transfer, assign or otherwise dispose of on the same terms and
conditions as those contained in the Offer Notice (defined below) (the "Company
Purchase Right"). If the Company should decide not to exercise such Company
Purchase Right with regard to any such Common Shares purchasable thereunder,
each Investor shall then have the right of first refusal to purchase his, her or
its pro rata share of such Common Shares on the same terms and conditions as
those contained in the Offer Notice (the "Investor Purchase Right"). Such
Investor's pro rata share, for purposes of the Investor Purchase Right, is the
ratio, the numerator of which is the number of shares of Common Stock issued or
issuable to the Investor pursuant to the conversion of all shares of Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and Series F-1 Preferred Stock held by
the Investor, and the denominator of which is the total number of shares of
Common Stock issued or issuable upon conversion of all outstanding shares of
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock, Series F Preferred Stock and Series F-1 Preferred
Stock. The Company Purchase Right and the Investor Purchase Right shall be
subject to the following provisions:
(A) "Offered Stock" shall mean any Common Shares that the Company
has the opportunity to purchase under the Company Purchase Right.
(B) At least twenty (20) days prior to any transfer of Common Shares
by any of the Founders (other than a transfer to a Permitted Transferee (as
defined below)), the Founder proposing to transfer such Common Shares (the
"Transferor"), shall deliver to the Company and to each of the Investors a
written notice (the "Offer Notice") specifying in reasonable detail the number
of Common Shares to be transferred and the price and terms upon which such
Common Shares are to be transferred. Within twenty (20) days from receipt of the
Offer Notice (the "Company Option Period"), the Company must send a written
notice to the Transferor and each of the Investors of its intention to purchase
the Offered Stock (the "Company Election Notice"). If the Company does not
intend to purchase all of the Offered Stock or the Company is not lawfully able
to purchase all such Offered Stock, the Company Election Notice shall state the
amount of Offered Stock that the Company will not purchase, and shall specify
each Investor's pro rata share thereof. The Investors shall have the right to
purchase all, but not less than all, of the Offered Stock not purchased by the
Company.
(C) Each Investor desiring to purchase such Offered Stock shall have
ten (10) days (the "Investor Option Period") from the date of mailing of the
Company Election Notice to provide written notice to the Transferor and the
Company of the number of shares of such Offered Stock that such Investor desires
to purchase (such number may be more than such Investor's pro rata share) (the
"Investor Election Notice"). None of the Investors shall have the right to
purchase any of such Offered Stock unless the Investors in the aggregate agree
to
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purchase all of the Offered Stock not purchased by the Company or by other
Company shareholders.
(D) If the total number of shares specified in Investor Election
Notices exceeds the number of shares of Offered Stock not purchased by the
Company on a pro rata basis no more favorable than the pro rata rights of the
Investors, then (unless the exercising Investors agree otherwise) each
exercising Investor shall have the right to purchase that number of shares of
Offered Stock that is obtained by multiplying the number of shares of Offered
Stock not being purchased by the Company or other shareholders as described
above by a fraction the numerator of which is the number of shares of Common
Stock issued or issuable to such exercising Investor pursuant to the conversion
of all shares of Preferred Stock held by such Investor, and the denominator of
which is the total number of shares of Common Stock issued or issuable to all
such exercising Investors pursuant to the conversion of all shares of Preferred
Stock held by all such exercising Investors. Any remaining shares of Offered
Stock may be purchased by exercising Investors that so elect, according to the
same principle of proration until all shares of Offered Stock not purchased by
the Company or other shareholders as described above are allocated to exercising
Investors.
(E) Within five (5) days after the expiration of the Investor Option
Period the Company shall give written notice (the "Expiration Notice") to the
Transferor and to each Investor specifying either (i) that all of the Offered
Stock was subscribed by the Company exercising its Company Purchase Right and/or
one or more Investors exercising their Investor Purchase Right or (ii) that
neither the Company nor the Investors have the right to purchase any of the
Offered Stock because the Investors, in the aggregate, did not timely exercise
their Investor Purchase Right to purchase all of the Offered Stock not purchased
by the Company.
(F) This Investor Purchase Right is assignable to any affiliate of
an Investor or in connection with a sale of Investor Shares, provided that the
transferee owns, at the time the Offered Stock is offered, at least two hundred
thousand (200,000) shares of Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock,
Series F-1 Preferred Stock or Conversion Shares (as adjusted for any
combinations, consolidations, recapitalizations, stock splits, reverse stock
splits, stock distributions or stock dividends with respect to such shares).
2.2 RIGHTS OF CO-SALE.
(A) Investors Co-Sale Option Covering Founder Shares. In the event
any Founder (including for all purposes of this Section 2.2 any Permitted
Transferees of a Founder) proposes to sell any Common Shares and any of such
shares are not purchased pursuant to Section 2.1 (the "Remaining Shares"), such
Founder may transfer the Remaining Shares only following compliance with this
Section 2.2(a):
(i) In such event, immediately upon receipt of the Expiration
Notice, the Transferor shall give an additional notice of the proposed sale to
the Investors if applicable, which shall identify the offeror and the number of
Remaining Shares proposed to be sold (the "Co-Sale Notice").
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(ii) Each of the Investors shall have the right, exercisable
upon written notice to the Transferor or any Permitted Transferee within 10 days
after the date of the Co-Sale Notice (the "Co-Sale Notice Period"), to
participate in the sale on the terms and conditions stated in the Co-Sale
Notice. Each of the Investors shall have the right to sell all or any portion of
its Investor Shares on the terms and conditions in the Co-Sale Notice (subject
to the foregoing), with the maximum number of Investor Shares equal to the
product obtained by multiplying the number of Remaining Shares proposed to be
sold as described in the Co-Sale Notice by a fraction, the numerator of which is
the number of Investor Shares owned by such Investor on the date of the Co-Sale
Notice, and the denominator of which is the sum of the number of shares of
Common Stock owned by the Founders and their Permitted Transferees and the
number of Investor Shares owned by all of the Investors as of the date of the
Co-Sale Notice. To the extent an Investor elects not to sell the full amount of
Investor Shares which they are entitled to sell pursuant to this Section 2.2,
the other participating Investors' rights to sell shares shall be increased
proportionately to their relative holdings of Investor Shares, such that the
Investors shall have the right to sell the full number of shares allocable to
them in the aggregate in any transaction subject to this Section 2.2 even if
some Investors elect not to participate.
(iii) Within five (5) days after the expiration of the Co-Sale
Notice Period, the Transferor shall notify each participating Investor of the
number of shares held by such Investor that will be included in the sale and the
date on which the sale will be consummated.
(iv) Each of the Investors may effect its participation in any
sale hereunder by delivery to the purchaser, or to the Transferor for transfer
to the purchaser, of one or more instruments, certificates and/or option
agreements, properly endorsed for transfer, representing the shares it elects to
sell therein, provided that no Investor shall be required to make any
representations or warranties or to provide any indemnities in connection
therewith other than with respect to title to the stock being conveyed. At the
time of consummation of the sale, the purchaser shall remit directly to each
Investor that portion of the sale proceeds to which such Investor is entitled by
reason of its participation therein. No shares may be purchased by a purchaser
from the Transferor or Permitted Transferee unless the purchaser simultaneously
purchases from the Investors all of the shares that they have elected to sell
pursuant to this Section 2.2(a).
(B) Investors/Founders Co-Sale Option covering Investor Shares. In
the event that any Investor (a "Transferring Investor") receives a bona fide
offer to purchase (an "Investor Offer") all or any portion of the Investor
Shares (the "Investor Offered Shares") from an offeror other than another
Investor or an affiliate of such Transferring Investor, such Transferring
Investor may transfer the Investor Offered Shares only pursuant to and in
accordance with the following provisions of this Section 2.2(b):
(i) Such Transferring Investor shall deliver a written notice
containing equivalent information to that required under Section 2.1 hereof to
the Company and each of the Investors and Founders (an "Investor Offer Notice").
Each of the Investors and Founders shall have the right to participate in the
Investor Offer on the terms and conditions herein stated (the "Investor/Founder
Co-Sale Option"), which right shall be exercisable upon written notice (an
"Acceptance Notice") to the Transferring Investor within the 10 days after the
date of the
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Investor Offer Notice (the "Investor/Founder Co-Sale Notice Period"). The
Acceptance Notice shall indicate the maximum number of Investor Shares such
Investor or Founder wishes to sell (including the number of shares it would sell
if one or more other Investors or Founders do not elect to participate in the
sale) on the terms and conditions stated in the Investor Offer Notice.
(ii) Each of the Investors and Founders shall have the right
to sell a portion of such Investor's Investor Shares or Founder's Common Shares,
as the case may be, pursuant to the Investor Offer Notice which is equal to or
less than the product obtained by multiplying the number of shares proposed to
be sold in the Investor Offer Notice by a fraction, the numerator of which is
the number of Investor Shares or Common Shares owned by such Investor or
Founder, as the case may be, on the date of the Investor Offer Notice, and the
denominator of which is the sum of the number of shares of Common Shares owned
by the Founders and their Permitted Transferees and the number of shares of
Investor Shares owned by all of the Investors as of the date of the Investor
Offer Notice. To the extent an Investor or Founder elects not to sell the full
amount of Investor Shares or Common Shares which they are entitled to sell
pursuant to this Section 2.2(b), the other participating Investors' and
Founders' rights to sell shares shall be increased proportionately by the full
amount of Investor Shares or Common Shares which the non-electing Investors or
Founders were entitled to sell pursuant to this Section 2.2(b).
(iii) Within five (5) days after the expiration of the
Investor/Founder Co-Sale Notice Period, the Transferring Investor shall notify
each participating Investor and Founder of the number of shares held by such
Investor or Founder that will be included in the sale and the date on which the
Investor Offer will be consummated.
(iv) Each of the Investors and Founders participating in the
sale pursuant to this Section 2.2(b) may effect its participation in any
Investor Offer hereunder by delivery to the purchaser, or to the Transferring
Investor for delivery to the purchaser, of one or more instruments or
certificates, properly endorsed for transfer, representing the Common Shares or
Investor Shares it elects to sell therein, provided that no Investor or Founder
shall be required to make any representations or warranties or provide any
indemnities in connection therewith other than with respect to title to the
stock being conveyed. At the time of consummation of the sale, the purchaser
shall remit directly to each Investor or Founder that portion of the sale
proceeds to which such Investor or Founder is entitled by reason of its
participation therein. No Investor Offered Shares may be purchased by a
purchaser from the relevant Investor or any of such Investor's Permitted
Transferees unless the purchaser simultaneously purchases from the other
Investors or Founders all of the shares that they have elected to sell pursuant
to this Section 2.2(b).
2.3 SALE PERIOD. Any shares held by an Investor or Founder or any of their
Permitted Transferees that the Investor, Founder or transferee desires to sell
following compliance with this Section 2.3 may be sold to a purchaser:
(i) by the later of (A) the 90-day period after the expiration
of the Co-Sale Notice Period or Investor/Founder Co-Sale Notice Period, as
applicable, or (B) the date upon which all governmental approval requirements,
if any, have been satisfied (the "Sale Period"); and
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(ii) only on terms no more favorable than those contained in
the relevant notice to the Investor or Founder.
Promptly after such sale, such Investor, Founder or Permitted Transferee
shall notify the parties hereto of the consummation thereof and shall furnish
such evidence of the completion and time of completion of such sale and of the
terms thereof as may reasonably be requested by the other parties hereto. If, at
the end of such Sale Period, such Investor, Founder or any Permitted Transferees
have not completed the sale of such shares as aforesaid, all the restrictions on
the transfer of shares contained in this Section 2 shall again be in effect with
respect to such shares.
2.4 PERMITTED TRANSFERS.
(A) Subject to Section 2.4(b), but notwithstanding any other
provision of this Agreement, the provisions of Sections 2.1 and 2.2 shall not
apply to:
(i) Any transfer of Common Shares or Investor Shares, as
applicable, by a Founder or Investor that is an individual to such Founder's or
Investor's Family Group (for purposes of this Agreement, "Family Group" means
the Founder's or Investor's spouse, descendants (whether natural or adopted),
parents, siblings and any trust, partnership, limited liability company or
similar entity created solely for the benefit of such Founder or Investor and/or
any such Founder's or Investor's spouse, descendants, parents and/or siblings);
or
(ii) Any transfer by a Founder or Investor that is not an
individual to such Founder's or Investor's members, former members, partners,
former partners, stockholders or affiliates.
(B) In the event of any transfer pursuant to Subsection 2.4(a), the
transferee (a "Permitted Transferee") of any such shares shall hold the shares
so acquired with all the rights conferred by, and subject to all the
restrictions imposed by, this Agreement (including, without limitation, those
set forth in Sections 1.2 and 4.5), and as a condition to any such transfer, the
Permitted Transferee shall execute and deliver to the Company an instrument of
accession in a form acceptable to the Company agreeing to become a party to and
be bound by the provisions of this Agreement to the same extent as if it/he were
an original party hereto in the same capacity as the transferor.
ARTICLE III
TERMINATION
3.1 This Agreement shall continue in full force and effect from the date
hereof through the earliest of the following dates, on which it shall terminate
in its entirety:
(A) the date of the closing of a Qualified Public Offering (as
defined in the Company's Certificate of Incorporation, as amended); or
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(B) at such time as the Investors hold less than an aggregate of one
hundred thousand (100,000) shares of Series B, Series C, Series D, Series E,
Series F and Series F-1 Preferred Stock (as adjusted for stock splits, stock
dividends, recapitalizations and the like); or
(C) ten (10) years from the date of this Agreement; or
(D) the date as of which the parties hereto terminate this Agreement
by written consent of a majority in interest of the Investors and a majority in
interest of the Key Stockholders.
ARTICLE IV
MISCELLANEOUS
4.1 OWNERSHIP. Each Key Stockholder represents and warrants to the
Investors that such Key Stockholder now owns the Common Shares, free and clear
of liens or encumbrances, and has not, prior to or on the date of this
Agreement, executed or delivered any proxy or entered into any other voting
agreement or similar arrangement other than the Prior Agreement or one which has
expired or terminated prior to the date hereof, and such Key Stockholder has
full power and capacity to execute, deliver and perform this Agreement, which
has been duly executed and delivered by, and evidences the valid and binding
obligation of, such Key Stockholder enforceable in accordance with its terms.
4.2 FURTHER ACTION. If and whenever the Common Shares or the Investor
Shares are sold, the Key Stockholders or the personal representative of the Key
Stockholders and the Investors shall do all things and execute and deliver all
documents and make all transfers, and cause any transferee of the Common Shares
to do all things and execute and deliver all documents, as may be necessary to
consummate such sale consistent with this Agreement.
4.3 SPECIFIC PERFORMANCE. The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
or to their heirs, personal representatives, or assigns by reason of a failure
to perform any of the obligations under this Agreement and agree that the terms
of this Agreement shall be specifically enforceable. If any party hereto or his
heirs, personal representatives, or assigns institutes any action or proceeding
to specifically enforce the provisions hereof, any person against whom such
action or proceeding is brought hereby waives the claim or defense therein that
such party or such personal representative has an adequate remedy at law, and
such person shall not offer in any such action or proceeding the claim or
defense that such remedy at law exists.
4.4 GOVERNING LAW. This Agreement, and the rights of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware as such laws apply to agreements among Delaware residents made and to
be performed entirely within the State of Delaware.
4.5 AMENDMENT. This Agreement may be amended only by an instrument in
writing signed by the Company, a majority in interest of the Investors and a
majority in interest of the
10
Key Stockholders; provided that no amendments may be made to (i) Section
1.2(ii)(A) hereof which adversely alter the rights of BVCF IV, L.P. without the
written consent of BVCF IV, L.P. so long as BVCF IV, L.P. maintains its full pro
rata share in the Company measured as of the original issuance date of the
Series D Preferred Stock, or (ii) Section 1.2(ii)(B), (C), (D) or (E) hereof
which adversely alters the rights of Xxxxx Xxxxxxxxx, the Sprout Group, Atlas
Venture Fund V, L.P., or Healthcare Investment Partners Holdings LLC,
respectively, without the written consent of Xx. Xxxxxxxxx, the Sprout Group,
Atlas Venture Fund V, L.P., or Caxton Healthcare Acquisition Partners,
respectively. For purposes of this Section 4.5(i) BVCF IV, L.P.'s "full pro rata
share" shall mean the quotient of the total number of shares of Preferred Stock
held by BVCF IV, L.P. and its affiliates divided by the total number of shares
of Preferred Stock issued by the Company.
4.6 SEVERABILITY. If any provision of this Agreement is held to be invalid
or unenforceable, the validity and enforceability of the remaining provisions of
this Agreement shall not be affected thereby.
4.7 SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors, assigns,
administrators, executors and other legal representatives.
4.8 ADDITIONAL SHARES. In the event that subsequent to the date of this
Agreement any shares or other securities (other than any shares or securities of
another corporation issued to the Company's shareholders pursuant to a plan of
merger) are issued on, or in exchange for, any of the Common Shares or Investor
Shares by reason of any stock dividend, stock split, consolidation of shares,
reclassification or consolidation involving the Company, such shares or
securities shall be deemed to be Common Shares or Investor Shares, as the case
may be, for purposes of this Agreement.
4.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same agreement.
4.10 WAIVER. No waivers of any breach of this Agreement extended by any
party hereto to any other party shall be construed as a waiver of any rights or
remedies of any other party hereto or with respect to any subsequent breach.
4.11 ATTORNEY'S FEES. In the event that any suit or action is instituted
to enforce any provision in this Agreement, the prevailing party shall be
entitled to all costs and expenses of maintaining such suit or action, including
reasonable attorneys' fees.
4.12 NOTICES. Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been made when given to the address and
telephone numbers set forth opposite such Key Stockholder or Investor's name on
Exhibit A or Exhibit B attached hereto, with a copy to Xxxxxxx | Procter LLP,
Xxxxxxxx Xxxxx, Xxxxxx, XX 00000, Attn: Xxxxxxxx X. Xxxxx, Esq., (telephone:
000-000-0000; facsimile: 617-523-1231) or in the case of the Company to:
NxSTAGE MEDICAL, INC.
11
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attn: General Counsel
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx, LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, Esq.
(or at such other address or telefax numbers as a party may specify by notice to
the other party given as aforesaid). Unless otherwise specifically provided in
this Agreement, such communication shall be deemed to have been given (a) three
days after mailing, when mailed by registered or certified postage-paid mail,
(b) on the next business day, when delivered to a same-day or overnight national
courier service or the U.S. Post Express Mail or (c) upon the date of receipt by
the addressee when delivered personally or (d) upon the date of receipt by the
addressee when delivered or by telecopier if such telecopy notice is followed by
any of the methods of delivery set forth in (a) through (c) of this section;
provided, however, that any notice of change of address shall be effective only
upon receipt. Notice may be given on behalf of a party by its counsel.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY:
NXSTAGE MEDICAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and CEO
KEY STOCKHOLDERS:
A.D. & S.R. BURBANK TRUST
By: /s/ A. Xxxxx Xxxxxxx
--------------------------------------
A. Xxxxx Xxxxxxx, Co-Trustee
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxx, Co-Trustee
/s/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx
/s/ C. Xxxxx Xxxxx
------------------------------------------
C. Xxxxx Xxxxx
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxx
INVESTORS:
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxxxx
/s/ Xxxx Xxxxx
------------------------------------------
Xxxx Xxxxx
MARUBENI CORPORATION
By: /s/ Xxxxxxx Xxxxx
---------------------------
Name: Xxxxxxx Xxxxx
Title: General Manager,
Business Incubation Dept.
MARUBENI AMERICA CORPORATION
By: /s/ Xxxxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: General Manager,
Investment Business Unit
BVCF IV, L.P.
By: Xxxxx Street Partners, LLC
Its General Partner
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Partner
WPG ENTERPRISE FUND III, L.L.C.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By: /s/ [illegible]
--------------------------
Name:
Title: Managing Member
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV, L.L.C.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By: /s/ [illegible]
--------------------------
Name:
Title: Managing Member
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV CAYMAN, L.P.
By: WPG VC Fund Adviser, L.L.C.,
General Partner
By: /s/ [illegible]
--------------------------
Name:
Title: Managing Member
ATLAS VENTURE FUND V, L.P.
ATLAS VENTURE PARALLEL FUND V-A, C.V.
ATLAS VENTURE PARALLEL FUND V-B, C.V.
ATLAS VENTURE ENTREPRENEURS' FUND V, L.P.
By: Atlas Venture Associates V, L.P.
their General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By: /s/ [illegible]
------------------------
Name:
Title: Vice President
ATLAS VENTURE FUND III, L.P.
ATLAS VENTURE ENTREPRENEURS'
FUND III, L.P.
By: Atlas Venture Associates III, L.P.
their General Partner
By: Atlas Venture Associates III, Inc.
Its General Partner
By: /s/ [illegible]
------------------------
Name:
Title: Vice President
SPROUT CAPITAL VIII, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corporation
Its General Partner
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
DLJ CAPITAL CORP.
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation
Its General Partner
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Attorney In Fact
SPROUT ENTREPRENEURS FUND, L.P.
By: DLJ Capital Corp.
Its General Partner
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
SPROUT CAPITAL IX, L.P.
By: DLJ Capital Corp.
Its Managing General Partner
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
SPROUT IX PLAN INVESTORS, L.P.
By: DLJ LBO Plans Management Corporation II
Its General Partner
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Attorney In Fact
SPROUT PLAN INVESTORS, L.P.
By: DLJ LBO Plans Management Corporation
Its General Partner
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Attorney In Fact
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corporation
Its General Partner
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
SPROUT CAPITAL VII, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
CSFB FUND CO-INVESTMENT PROGRAM, L.P.
By: DLJ Fund Partners, L.P.
Its General Partner
By: DLJMB Fund, Inc.
Its General Partner
By: /s/ [illegible]
---------------------
By:
Its: Vice President
WASATCH FUNDS, INC. FOR WASATCH ULTRA GROWTH
FUND
By: /s/ Venice X. Xxxxxxx
------------------------
Name: Venice X. Xxxxxxx
Title: Secretary
EXHIBIT A
LIST OF KEY STOCKHOLDERS
OPTION FOR TOTAL
NUMBER OF SHARES THE PURCHASE COMMON STOCK
NAME AND ADDRESS OF COMMON STOCK OF COMMON STOCK EQUIVALENT
---------------- --------------- --------------- ----------
Dr. C. Xxxxx Xxxxx 243,307 -0- 243,307
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (Fax)
Xx. Xxxxxxx X. Xxxxxx 216,969 27,491 244,460
0000 X. Xxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxx, XX 00000-0000
(000) 000-0000
(000) 000-0000 (Fax)
Xxxxxxx X. Xxxxxxx 598,409 330,347 928,756
00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
A.D.& S.R. Burbank Trust 37,641 -0- 37,641
c/o Xxxxxxx X. Xxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
X.X. Xxxxxxx 2,030 -0- 2,030
00000-X Xxxx Xxxx
Xxxx Xxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (Fax)
EXHIBIT B
LIST OF INVESTORS
Number of Number of Number of Number of Number of Number of
Shares Shares Shares Shares Shares Shares of
of Series B of Series C of Series D of Series E of Series F Series F-1
Preferred Preferred Preferred Preferred Preferred Preferred
Name and Address Stock Stock Stock Stock Stock Stock
---------------- ----- ----- ----- ----- ----- -----
Xxxxxxx X. Xxxxxxx 74,906 -0- -0- -0- -0- -0-
00 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
BVCF IV, L.P. -0- -0- 753,769 157,345 68,681 21,857
x/x Xxxxx Xxxxxx Partners, LLC
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
WPG Enterprise Fund III, L.L.C. 132,054 84,344 65,895 10,983 9,006 3,467
Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx,
Xxxxx 0000 CLOSING DATE:
San Francisco, 2,866 Xxxxxx
Xxxxxxxxxx 00000 on 7/08/05
Fax: (000) 000-0000
601 Shares
on 07/15/05
Xxxxx, Xxxx & Xxxxx Venture
Associates IV, L.L.C. 151,057 96,481 75,377 12,563 10,302 3,966
Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx,
Xxxxx 0000 CLOSING DATE:
Xxx Xxxxxxxxx, XX 00000 3,279 Shares
Fax: (000) 000-0000 on 7/08/05
687 Shares
on 07/15/05
Xxxxx, Xxxx & Xxxxx Venture
Associates IV 19,003 12,137 9,482 1,580 1,296 498
Cayman, L.P.
c/x Xxxxx, Xxxx & Xxxxx, LLC CLOSING DATE:
000 Xxxxxxxxxx Xxxxxx 412 Shares
Suite 3130 on 7/08/05
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000 86 Shares
on 07/15/05
Xxxxx X. Xxxxxxxxx 201,410 128,642 753,769 753,769 343,195 109,220
c/o Medisystems Corporation
000 Xxxx Xxxxxx -00xx Xxxxx,
Xxxxxxx, XX 00000-0000
Copy to Xxxx Xxxxxxx, Esq
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Atlas Venture Fund III, L.P. 164,268 104,920 72,536 192,783 118,490 37,709
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Atlas Venture Entrepreneurs'
Fund III, L.P. 3,572 2,281 1,577 4,192 2,576 820
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Atlas Venture Fund V, L.P. -0- -0- 1,133,073 424,146 260,692 82,964
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Atlas Venture Parallel
Fund V-A C.V. -0- -0- 140,746 52,686 32,382 10,305
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Atlas Venture Parallel
Fund V-B C.V. -0- -0- 140,746 52,686 32,382 10,305
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Atlas Venture Entrepreneurs'
Fund V, L.P. -0- -0- 18,860 7,060 4,339 1,381
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Sprout Capital VIII, L.P. 981,202 628,353 -0- 354,895 447,582 142,440
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Venture Capital, L.P. 58,872 37,732 -0- 21,300 26,863 8,549
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ Capital Corp. 3,273 2,096 18,910 36,094 6,489 2,065
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ ESC II, L.P. 85,383 54,646 -0- 30,756 -0- -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Capital VII, L.P. -0- -0- -0- 195,256 -0- -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Entrepreneurs Fund, L.P. -0- -0- 6,148 1,288 1,624 517
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
The Sprout CEO Fund, L.P. -0- -0- -0- 2,273 -0- -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Capital IX, L.P. -0- -0- 1,559,935 326,824 412,180 131,174
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout IX Plan Investors, L.P. -0- -0- 90,049 18,866 23,793 7,572
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Plan Investors, L.P. -0- -0- -0- -0- 38,788 12,344
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Xxxx Xxxxx -0- -0- 16,750 12,563 13,736 4,371
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Marubeni Corporation -0- -0- -0- -0- 370,880 -0-
0-0, Xxxxxxxxx 0-xxxxx
Xxxxxxx-xx
Xxxxx, Xxxxx
Marubeni America Corporation -0- -0- -0- -0- 41,208 -0-
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Wasatch Ultra Growth Fund -0- -0- -0- -0- 206,044 -0-
c/o Wasatch Ultra Growth Fund
000 Xxxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Wasatch Small Cap Growth Fund -0- -0- -0- -0- -0- 153,485
c/o Wasatch Small Cap
Growth Fund
000 Xxxxxx Xxxx Xxxxxx,
0xx Xxxxx
Xxxxx 000 CLOSING DATE:
Xxxx Xxxx Xxxx, Xxxx 00000 65,572 Shares
on 7/08/05
87,913 Shares
on 07/15/05
CSFB Fund Co-Investment
Program, L.P. -0- -0- -0- -0- 274,725 31,090
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Healthcare Investment Partners
Holdings LLC -0- -0- -0- -0- -0- 1,373,626
0000 Xxxx Xxx Xxxxx Xx.
Xxxxxxxxxx, XX 00000
The Bander Family
Partnership, LP -0- -0- -0- -0- -0- 13,736
00000 Xxx Xxxxx Xxxxx Xxxxx
Xx. Xxxxx, XX 00000
Xxxxxxx X. Carbon -0- -0- -0- -0- -0- 34,340
00 Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000 CLOSING DATE:
07/15/05
--------- --------- --------- --------- --------- ---------
TOTAL 1,875,000 1,151,632 4,857,622 2,669,908 2,747,253 2,197,801