ANTHERA PHARMACEUTICALS, INC. SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT JULY 17, 2009
EXHIBIT 4.2
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
JULY 17, 2009
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This Second Amended and Restated Investor Rights Agreement (the “Agreement”) is made
and entered into as of July 17, 2009, by and among Anthera Pharmaceuticals, Inc., a
Delaware corporation (the “Company”) and the investors listed on Exhibit A hereto, referred
to hereinafter as the “Investors” and each individually as an “Investor.”
RECITALS
A. The Company and certain of the Investors are entering into the Note and Warrant Purchase
Agreement of even date herewith (the “Purchase Agreement”) with respect to the purchase and sale of
senior secured convertible promissory notes (the “Notes”) and warrants (the “Warrants”) of the
Company.
B. The parties hereto are party to that certain Amended and Restated Investors’ Rights
Agreement, dated as of August 4, 2006, as amended on August 12, 2008 (the “Prior Agreement”), and
desire to hereby amend and restate the Prior Agreement, concurrently with the execution and
delivery of the Purchase Agreement and as a condition of Investors’ obligations thereunder, in
order to facilitate the sale and purchase of the Notes and the Warrants pursuant to the Purchase
Agreement.
C. The Prior Agreement may be amended and restated pursuant to Section
5.5(a) thereof only with the written consent of the Company and the holders of two-thirds (2/3) of
the then-outstanding Registrable Securities (the “Required Parties”) and the undersigned constitute
the Required Parties.
AGREEMENT
The parties agree as follows:
SECTION 1.
1.1 Definitions. As used in this Agreement the following terms shall have the following
respective meanings:
(a) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(b) “Form S-3” means such form under the Securities Act as in effect on the date hereof or any
successor or similar registration form under the Securities Act subsequently adopted by the SEC
which permits inclusion or incorporation of substantial information by reference to other documents
filed by the Company with the SEC.
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(c) “Holder” means any person owning of record Registrable Securities that have not been sold
to the public or any assignee of record of such Registrable Securities in accordance with Section
2.10 hereof.
(d) “Initial Offering” means the Company’s first firm commitment underwritten public offering
of its Common Stock registered under the Securities Act.
(e) “New Preferred Stock” means the Company’s Series A-2 Preferred, Series B-1 Preferred and
Series B-2 Preferred.
(f) “Preferred Stock” means the Company’s Series A-1 Preferred, Series A-2 Preferred, Series
B-1 Preferred and Series B-2 Preferred.
(g) “Register,” “registered,” and “registration” refer to a registration effected by preparing
and filing a registration statement in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(h) “Registrable Securities” means (a) Common Stock of the Company issuable or issued upon
conversion of the Shares, (b) Common Stock of the Company acquirable or acquired as a result of the
conversion or exercise of any warrant, right or other security, or (c) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, such above-described securities. Notwithstanding the foregoing, Registrable
Securities shall not include any securities (i) sold by a person to the public either pursuant to a
registration statement or Rule 144, (ii) sold in a private transaction in which the transferor’s
rights under Section 2 of this Agreement are not assigned or (iii) held by a Holder (together with
its affiliates) if, as reflected on the Company’s list of stockholders, such Holder (together with
its affiliates) holds less than one percent (1%) of the Company’s outstanding Common Stock
(treating all shares of Preferred Stock on an as converted basis), the Company has completed its
Initial Offering and all shares of Common Stock of the Company issuable or issued upon conversion
of the Shares held by and issuable to such Holder (and its affiliates) may be sold pursuant to Rule
144 during any ninety (90) day period.
(i) “Registrable Securities then outstanding” shall be the number of shares of the Company’s
Common Stock that are Registrable Securities and either (a) are then issued and outstanding or (b)
are issuable pursuant to then exercisable or convertible securities.
(j) “Registration Expenses” shall mean all expenses incurred by the Company in complying with
Sections 2.2, 2.3 and 2.4 hereof, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, reasonable fees and
disbursements not to exceed twenty-five thousand dollars ($25,000) of a single special counsel for
the Holders, blue sky fees and expenses and the expense of any special audits incident to or
required by any such registration (but excluding the compensation of regular employees of the
Company which shall be paid in any event by the Company).
(k) “SEC” means the Securities and Exchange Commission.
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(l) “Securities Act” shall mean the Securities Act of 1933, as amended.
(m) “Selling Expenses” shall mean all underwriting discounts and selling commissions
applicable to the sale.
(n) “Series A-1 Preferred” means the Series A-1 Preferred Stock of the
Company, par value $0.001 per share.
(o) “Series A-2 Preferred” means the Series A-2 Preferred Stock of the
Company, par value $0.001 per share.
(p) “Series B-1 Preferred” means the Series B-1 Preferred Stock of the
Company, par value $0.001 per share.
(q) “Series B-2 Preferred” means the Series B-2 Preferred Stock of the
Company, par value $0.001 per share.
(r) “Shares” shall mean the Company’s Series A-1 Preferred, Series A-2 Preferred, Series B-1
Preferred and Series B-2 Preferred held by the Investors listed on Exhibit A and Exhibit B hereto
and their permitted assigns.
(s) “Special Registration Statement” shall mean (i) a registration statement relating to any
employee benefit plan or (ii) with respect to any corporate reorganization or transaction under
Rule 145 of the Securities Act, including any registration statements related to the issuance or
resale of securities issued in such a transaction or (iii) a registration related to stock issued
upon conversion of debt securities.
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.
2.1 Restrictions on Transfer.
(a) Each Holder agrees not to make any disposition of all or any portion of the Shares or
Registrable Securities unless and until:
(i) there is then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such registration statement;
or
(ii) (A) The transferee has agreed in writing to be bound by the terms of this Agreement, (B)
such Holder shall have notified the Company of the proposed disposition and shall have furnished
the Company with a detailed statement of the circumstances surrounding the proposed disposition,
and (C) if reasonably requested by the Company, such Holder shall have furnished the Company with
an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of such shares under the Securities Act. It is agreed that the Company will
not require opinions of counsel for transactions made pursuant to Rule 144, except in unusual
circumstances. After its Initial
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Offering, the Company will not require the transferee to be bound by the terms of this
Agreement.
(b) Notwithstanding the provisions of subsection (a) above, no such restriction shall apply to
a transfer by a Holder that is (A) an individual or entity transferring to an affiliate (as defined
in rule 405 under the Securities Act), (B) a partnership transferring to its partners or former
partners in accordance with partnership interests, (C) a corporation transferring to a wholly-owned
subsidiary or a parent corporation that owns all of the capital stock of the Holder, (D) a limited
liability company transferring to its members or former members in accordance with their interest
in the limited liability company, or (E) an individual transferring to the Holder’s family member
or trust for the benefit of an individual Holder; provided that in each case the transferee will
agree in writing to be subject to the terms of this Agreement to the same extent as if he were an
original Holder hereunder.
(c) Each certificate representing Shares or Registrable Securities shall be stamped or
otherwise imprinted with legends substantially similar to the following (in addition to any legend
required under applicable state securities laws):
| THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. | |||
| THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT BY AND BETWEEN THE STOCKHOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY. |
(d) The Company shall be obligated to reissue promptly unlegended certificates at the request
of any Holder thereof if the Company has completed its Initial Offering and the Holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company) reasonably acceptable
to the Company to the effect that the securities proposed to be disposed of may lawfully be so
disposed of without registration, qualification and legend.
(e) Any legend endorsed on an instrument pursuant to applicable state securities laws and the
stop-transfer instructions with respect to such securities shall be removed upon receipt by the
Company of an order of the appropriate blue sky authority authorizing such removal.
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2.2 Demand Registration.
(a) Subject to the conditions of this Section 2.2, if the Company shall receive a written
request from (i) the Holders of a majority of the Registrable Securities issuable upon conversion
of the Series A-1 Preferred, or (ii) the Holders of two-thirds of the Registrable Securities
issuable upon conversion of the New Preferred Stock (in each case, the “Initiating Holders”) that
the Company file a registration statement under the Securities Act covering the registration of at
least a majority of the Registrable Securities then outstanding (or a lesser percent if the
anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed
$5,000,000), then the Company shall, within thirty (30) days of the receipt thereof, give written
notice of such request to all Holders, and subject to the limitations of this Section 2.2, effect,
as expeditiously as reasonably possible, the registration under the Securities Act of all
Registrable Securities that all Holders request to be registered.
(b) If the Initiating Holders intend to distribute the Registrable Securities covered by their
request by means of an underwriting, they shall so advise the Company as a part of their request
made pursuant to this Section 2.2 or any request pursuant to Section 2.4 and the Company shall
include such information in the written notice referred to in Section 2.2(a) or Section 2.4(a), as
applicable. In such event, the right of any Holder to include its Registrable Securities in such
registration shall be conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or underwriters selected for
such underwriting by a majority in interest of the Initiating Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company). Notwithstanding any other provision
of this Section 2.2 or Section 2.4, if the underwriter advises the Company that marketing factors
require a limitation of the number of securities to be underwritten (including Registrable
Securities) then the Company shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares that may be included in the
underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis
based on the number of Registrable Securities held by all such Holders (including the Initiating
Holders); provided, however, that the number of shares of Registrable Securities to be included in
such underwriting and registration shall not be reduced unless all other securities of the Company
are first entirely excluded from the underwriting and registration. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from the registration.
(c) The Company shall not be required to effect a registration pursuant to this Section 2.2:
(i) prior to the earlier of (A) the third anniversary of the date of this Agreement or (B) one
hundred eighty (180) days following the effective date of the registration statement pertaining to
the Initial Offering;
(ii) after the Company has effected one (1) registration pursuant to Section 2.2(a)(i), and
two (2) registrations pursuant to Section 2.2(a)(ii), and such registrations have been declared or
ordered effective;
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(iii) during the period starting with the date of filing of, and ending on the date one
hundred eighty (180) days following the effective date of the Initial Offering, other than pursuant
to a Special Registration Statement; provided that the Company makes reasonable good faith efforts
to cause such registration statement to become effective;
(iv) if within thirty (30) days of receipt of a written request from Initiating Holders
pursuant to Section 2.2(a), the Company gives notice to the Holders of the Company’s intention to
file a registration statement for its Initial Offering within ninety (90) days;
(v) if the Company shall furnish to Holders requesting a registration statement pursuant to
this Section 2.2, a certificate signed by the Chairman of the Board stating that in the good faith
judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company
and its stockholders for such registration statement to be effected at such time, in which event
the Company shall have the right to defer such filing for a period of not more than one hundred
twenty (120) days after receipt of the request of the Initiating Holders; provided that such right
to delay a request shall be exercised by the Company not more than once in any twelve (12) month
period;
(vi) if the Initiating Holders propose to dispose of shares of Registrable Securities that may
be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.4 below; or
(vii) in any particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such registration,
qualification or compliance.
2.3 Piggyback Registrations. The Company shall notify all Holders of Registrable Securities
in writing at least fifteen (15) days prior to the filing of any registration statement under the
Securities Act for purposes of a public offering of securities of the Company (including, but not
limited to, registration statements relating to secondary offerings of securities of the Company,
but excluding Special Registration Statements) and will afford each such Holder an opportunity to
include in such registration statement all or part of such Registrable Securities held by such
Holder. Each Holder desiring to include in any such registration statement all or any part of the
Registrable Securities held by it shall, within fifteen (15) days after the above-described notice
from the Company, so notify the Company in writing. Such notice shall state the intended method of
disposition of the Registrable Securities by such Holder. If a Holder decides not to include all
of its Registrable Securities in any registration statement thereafter filed by the Company, such
Holder shall nevertheless continue to have the right to include any Registrable Securities in any
subsequent registration statement or registration statements as may be filed by the Company with
respect to offerings of its securities, all upon the terms and conditions set forth herein.
(a) Underwriting. If the registration statement under which the Company gives notice under
this Section 2.3 is for an underwritten offering, the Company shall so advise the Holders of
Registrable Securities. In such event, the right of any such Holder to be included in a
registration pursuant to this Section 2.3 shall be conditioned upon such Holder’s
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participation in such underwriting and the inclusion of such Holder’s Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to distribute their
Registrable Securities through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Agreement, if the underwriter determines in good faith
that marketing factors require a limitation of the number of shares to be underwritten, the number
of shares that may be included in the underwriting shall be allocated, first, to the Company;
second, to the Holders on a pro rata basis based on the total number of Registrable Securities held
by the Holders; and third, to any stockholder of the Company (other than a Holder) on a pro rata
basis; provided, however, that no such reduction shall reduce the amount of securities of the
selling Holders included in the registration below thirty percent (30%) of the total amount of
securities included in such registration, unless such offering is the Initial Offering and such
registration does not include shares of any other selling stockholders, in which event any or all
of the Registrable Securities of the Holders may be excluded in accordance with the immediately
preceding clause. In no event will shares of any other selling stockholder be included in such
registration that would reduce the number of shares which may be included by Holders without the
written consent of Holders of not less than a majority of the Registrable Securities proposed to be
sold in the offering. If any Holder disapproves of the terms of any such underwriting, such Holder
may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at
least ten (10) business days prior to the effective date of the registration statement. Any
Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the registration. For any Holder which is a partnership or corporation, the partners, retired
partners and stockholders of such Holder, or the estates and family members of any such partners
and retired partners and any trusts for the benefit of any of the foregoing person shall be deemed
to be a single “Holder,” and any pro rata reduction with respect to such “Holder” shall be based
upon the aggregate amount of shares carrying registration rights owned by all entities and
individuals included in such “Holder,” as defined in this sentence.
(b) Right to Terminate Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 2.3 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the Company in accordance
with Section 2.5 hereof.
2.4 Form S-3 Registration. In case the Company shall receive from any Holder or Holders of
Registrable Securities a written request or requests that the Company effect a registration on Form
S-3 (or any successor to Form S-3) or any similar short-form registration statement and any related
qualification or compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration, and any related qualification
or compliance, to all other Holders of Registrable Securities; and
(b) as soon as practicable, effect such registration and all such qualifications and
compliances as may be so requested and as would permit or facilitate the sale and distribution of
all or such portion of such Holder’s or Holders’ Registrable Securities as are
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specified in such request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a written request given
within fifteen (15) days after receipt of such written notice from the Company; provided, however,
that the Company shall not be obligated to effect any such registration, qualification or
compliance pursuant to this Section 2.4:
(i) if Form S-3 is not available for such offering by the Holders, or
(ii) if the Holders, together with the holders of any other securities of the Company entitled
to inclusion in such registration, propose to sell Registrable Securities and such other securities
(if any) at an aggregate price to the public of less than one million dollars ($1,000,000), or
(iii) if within thirty (30) days of receipt of a written request from any Holder or Holders
pursuant to this Section 2.4, the Company gives notice to such Holder or Holders of the Company’s
intention to make a public offering within ninety (90) days, other than pursuant to a Special
Registration Statement;
(iv) if the Company shall furnish to the Holders a certificate signed by the Chairman of the
Board of Directors of the Company stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its stockholders for such Form
S-3 registration to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not more than one hundred
twenty (120) days after receipt of the request of the Holder or Holders under this Section 2.4;
provided, that such right to delay a request shall be exercised by the Company not more than once
in any twelve (12) month period,
(v) if the Company has, within the twelve (12) month period preceding the date of such
request, already effected two (2) registrations on Form S-3 for the Holders pursuant to this
Section 2.4, or
(vi) in any particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such registration,
qualification or compliance.
(c) Subject to the foregoing, the Company shall file a Form S-3 registration statement
covering the Registrable Securities and other securities so requested to be registered as soon as
practicable after receipt of the requests of the Holders. Registrations effected pursuant to this
Section 2.4 shall not be counted as demands for registration or registrations effected pursuant to
Section 2.2.
2.5 Expenses of Registration. Except as specifically provided herein, all Registration
Expenses incurred in connection with any registration, qualification or compliance pursuant to
Section 2.2 or any registration under Section 2.3 or Section 2.4 herein shall be borne by the
Company. All Selling Expenses incurred in connection with any registrations hereunder, shall be
borne by the holders of the securities so registered pro rata on the basis of the number of shares
so registered. The Company shall not, however, be required to pay for expenses of any registration
proceeding begun pursuant to Section 2.2 or 2.4, the request of which has been
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subsequently withdrawn by the Initiating Holders unless (a) the withdrawal is based upon
material adverse information concerning the Company of which the Initiating Holders were not aware
at the time of such request or (b) the Holders of a majority of Registrable Securities agree to
forfeit their right to one requested registration pursuant to Section 2.2, as applicable, in which
event such right shall be forfeited by all Holders). If the Holders are required to pay the
Registration Expenses, such expenses shall be borne by the holders of securities (including
Registrable Securities) requesting such registration in proportion to the number of shares for
which registration was requested. If the Company is required to pay the Registration Expenses of a
withdrawn offering pursuant to clause (a) above, then the Holders shall not forfeit their rights
pursuant to Section 2.2 to a demand registration.
2.6 Obligations of the Company. Whenever required to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use all reasonable efforts to cause such registration statement to become effective,
and, upon the request of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to thirty (30) days or, if earlier,
until the Holder or Holders have completed the distribution related thereto; provided, however,
that at any time, upon written notice to the participating Holders and for a period not to exceed
sixty (60) days thereafter (the “Suspension Period”), the Company may delay the filing or
effectiveness of any registration statement or suspend the use or effectiveness of any registration
statement (and the Initiating Holders hereby agree not to offer or sell any Registrable Securities
pursuant to such registration statement during the Suspension Period) if the Company reasonably
believes that the Company may, in the absence of such delay or suspension hereunder, be required
under state or federal securities laws to disclose any corporate development the disclosure of
which could reasonably be expected to have a material adverse effect upon the Company, its
stockholders, a potentially significant transaction or event involving the Company, or any
negotiations, discussions, or proposals directly relating thereto. In the event that the Company
shall exercise its right to delay or suspend the filing or effectiveness of a registration
hereunder, the applicable time period during which the registration statement is to remain
effective shall be extended by a period of time equal to the duration of the Suspension Period.
The Company may extend the Suspension Period for an additional consecutive sixty (60) days with the
consent of the holders of a majority of the Registrable Securities registered under the applicable
registration statement, which consent shall not be unreasonably withheld. No more than two such
Suspension Periods shall occur in any twelve (12) month period, and in no event shall any
Suspension Period, when taken together with all prior Suspension Periods, exceed 120 days in the
aggregate. If so directed by the Company, all Holders registering shares under such registration
statement shall use their best efforts to deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies then in such Holders’ possession, of the prospectus
relating to such Registrable Securities current at the time of receipt of such notice. The Company
shall not be required to file, cause to become effective or maintain the effectiveness of any
registration statement other than a registration statement on Form S-3 that contemplates a
distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.
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(b) Prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement for the period set forth in subsection (a)
above.
(c) Furnish to the Holders such number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such other documents as
they may reasonably request in order to facilitate the disposition of Registrable Securities owned
by them.
(d) Use its reasonable efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by the Holders; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of
such offering. Each Holder participating in such underwriting shall also enter into and perform
its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing. The Company will use reasonable efforts to amend or
supplement such prospectus in order to cause such prospectus not to include any untrue statement of
a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances then existing.
(g) Use its reasonable efforts to furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold through underwriters, (i)
an opinion, dated as of such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date,
from the independent certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters.
2.7 Termination of Registration Rights. All registration rights granted under this Section 2
shall terminate and be of no further force and effect seven (7) years after the date of the
Company’s Initial Offering.
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2.8 Delay of Registration; Furnishing Information.
(a) No Holder shall have any right to obtain or seek an injunction restraining or otherwise
delaying any such registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of the Company to take any action
pursuant to Section 2.2, 2.3 or 2.4 that the selling Holders shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them and the intended method
of disposition of such securities as shall be required to effect the registration of their
Registrable Securities.
(c) The Company shall have no obligation with respect to any registration requested pursuant
to Section 2.2 or Section 2.4 if, due to the operation of subsection 2.2(b), the number of shares
or the anticipated aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated aggregate offering
price required to originally trigger the Company’s obligation to initiate such registration as
specified in Section 2.2 or Section 2.4, whichever is applicable.
2.9 Indemnification. In the event any Registrable Securities are included in a registration
statement under Sections 2.2, 2.3 or 2.4:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder,
the partners, members, officers and directors of each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a “Violation”) by the Company: (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration statement or
incorporated reference therein, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the statements therein
not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Company will reimburse each such Holder, partner,
member, officer, director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided however, that the indemnity agreement contained in this
Section 2.9(a) shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for
any such loss, claim, damage, liability or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such
11
registration by such Holder, partner, member, officer, director, underwriter or controlling
person of such Holder.
(b) To the extent permitted by law, each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration qualifications or compliance is
being effected, indemnify and hold harmless the Company, each of its directors, its officers and
each person, if any, who controls the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration statement or any of
such other Holder’s partners, directors or officers or any person who controls such Holder, against
any losses, claims, damages or liabilities (joint or several) to which the Company or any such
director, officer, controlling person, underwriter or other such Holder, or partner, director,
officer or controlling person of such other Holder may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereto) arise out of or are based upon any of the following statements: (i)
any untrue statement or alleged untrue statement of a material fact contained in such registration
statement or incorporated reference therein, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged violation by the Company of
the Securities Act (collectively, a “Holder Violation”), in each case to the extent (and only to
the extent) that such Holder Violation occurs in reliance upon and in conformity with written
information furnished by such Holder under an instrument duly executed by such Holder and stated to
be specifically for use in connection with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or other Holder, or partner, officer, director or controlling
person of such other Holder in connection with investigating or defending any such loss, claim,
damage, liability or action if it is judicially determined that there was such a Holder Violation;
provided, however, that the indemnity agreement contained in this Section 2.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement
is effected without the consent of the Holder, which consent shall not be unreasonably withheld;
provided further, that in no event shall any indemnity under this Section 2.9 exceed the net
proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 2.9 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 2.9,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of the commencement of
any such action, if materially prejudicial to its
12
ability to defend such action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 2.9, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 2.9.
(d) If the indemnification provided for in this Section 2.9 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages
or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the Violation(s) or Holder
Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of the indemnified
party shall be determined by a court of law by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that in no event shall any contribution by a Holder hereunder
exceed the net proceeds from the offering received by such Holder.
(e) The obligations of the Company and Holders under this Section 2.9 shall survive completion
of any offering of Registrable Securities in a registration statement and the termination of this
Agreement. No indemnifying party, in the defense of any such claim or litigation, shall, except
with the consent of each indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect to such claim or
litigation.
2.10 Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or
assignee of Registrable Securities that (a) is a subsidiary, parent, general partner, limited
partner, retired partner, member or retired member, or stockholder of a Holder, (b) is a Holder’s
family member or trust for the benefit of an individual Holder, or (c) acquires at least one
hundred thousand (100,000) shares of Registrable Securities (as adjusted for stock splits and
combinations); or (d) is an entity affiliated by common control (or other related entity) with such
Holder provided, however, (i) the transferor shall, within ten (10) days after such transfer,
furnish to the Company written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being assigned and (ii) such
transferee shall agree to be subject to all restrictions set forth in this Agreement.
2.11 Amendment of Registration Rights. Any provision of this Section 2 may be amended and the
observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the Holders of at
least a majority of the Registrable Securities then outstanding provided, however, that the
provisions of Section 2.2(a)(ii) may not be amended without the written consent of holders of at
least two-thirds Registrable Securities issued or issuable upon conversion of the
13
New Preferred Stock. Any amendment or waiver effected in accordance with
this Section 2.11 shall be binding upon each Holder and the Company. By acceptance of any benefits
under this Section 2, Holders of Registrable Securities hereby agree to be bound by the provisions
hereunder.
2.12 Limitation on Subsequent Registration Rights. Other than as provided in Section 5.10,
after the date of this Agreement, the Company shall not, without the prior written consent of the
Holders of at least a majority of the Registrable Securities then outstanding and the Holders of at
least two-thirds Registrable Securities issued or issuable upon conversion of the New Preferred
Stock, enter into any agreement with any holder or prospective holder of any securities of the
Company that would grant such holder registration rights on a parity with or senior to those
granted to the Holders hereunder, other than the right to a Special Registration Statement.
2.13 “Market Stand-Off” Agreement. Each Holder hereby agrees that such Holder shall not sell,
transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any Common Stock (or other
securities) of the Company held by such Holder (other than those included in the registration) for
a period specified by the representative of the underwriters of Common Stock (or other securities)
of the Company not to exceed one hundred eighty (180) days following the effective date of a
registration statement of the Company filed under the Securities Act; provided that:
(i) such agreement shall apply only to the Company’s Initial Offering; and
(ii) all officers and directors of the Company and holders of at least one percent (1%) of the
Company’s voting securities enter into similar agreements.
2.14 Agreement to Furnish Information. Each Holder agrees to execute and deliver such other
agreements as may be reasonably requested by the Company or the underwriter that are consistent
with the Holder’s obligations under Section 2.13 or that are necessary to give further effect
thereto. In addition, if requested by the Company or the representative of the underwriters of
Common Stock (or other securities) of the Company, each Holder shall provide, within ten (10) days
of such request, such information as may be required by the Company or such representative in
connection with the completion of any public offering of the Company’s securities pursuant to a
registration statement filed under the Securities Act. The obligations described in Section 2.13
and this Section 2.14 shall not apply to a Special Registration Statement. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject
to the foregoing restriction until the end of said one hundred eighty (180) day period. Each
Holder agrees that any transferee of any shares of Registrable Securities shall be bound by
Sections 2.13 and 2.14. The underwriters of the Company’s stock are intended third party
beneficiaries of Sections 2.13 and 2.14 and shall have the right, power and authority to enforce
the provisions hereof as though they were a party hereto.
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2.15 Rule 144 Reporting. With a view to making available to the Holders the benefits of
certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to
the public without registration, the Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are understood and defined in
SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times
after the effective date of the first registration filed by the Company for an offering of its
securities to the general public;
(b) File with the SEC, in a timely manner, all reports and other documents required of the
Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon
request: a written statement by the Company as to its compliance with the reporting requirements
of said Rule 144 of the Securities Act, and of the Exchange Act (at any time after it has become
subject to such reporting requirements); a copy of the most recent annual or quarterly report of
the Company filed with the SEC; and such other reports and documents as a Holder may reasonably
request in connection with availing itself of any rule or regulation of the SEC allowing it to sell
any such securities without registration.
SECTION 3. COVENANTS OF THE COMPANY.
3.1 Basic Financial Information and Reporting.
(a) The Company will maintain true books and records of account in which full and correct
entries will be made of all its business transactions pursuant to a system of accounting
established and administered in accordance with generally accepted accounting principles
consistently applied (except as noted therein or as disclosed to the recipients thereof), and will
set aside on its books all such proper accruals and reserves as shall be required under generally
accepted accounting principles consistently applied.
(b) So long as a Investor (with its affiliates) shall own not less than five hundred thousand
(500,000) shares of Registrable Securities (as adjusted for stock splits and combinations) (a
“Major Investor”), to the extent requested by such Major Investor the Company will furnish each
such Major Investor, as soon as practicable after the end of each fiscal year of the Company, and
in any event within one hundred twenty (120) days thereafter, the Company will furnish such Major
Investor a balance sheet of the Company, as at the end of such fiscal year, and a statement of
income and a statement of cash flows of the Company, for such year, all prepared in accordance with
generally accepted accounting principles consistently applied (except as noted therein or as
disclosed to the recipients thereof) and setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail. Such financial statements shall be
accompanied by a report and opinion thereon by independent public accountants of national standing
selected by the Company’s Board of Directors.
(c) To the extent requested by a Major Investor, the Company will furnish such Major Investor,
as soon as practicable after the end of the first, second and third quarterly accounting periods in
each fiscal year of the Company, and in any event within forty-five (45)
days thereafter, a balance sheet of the Company as of the end of each such quarterly period,
and
15
a statement of income and a statement of cash flows of the Company for such period and for the
current fiscal year to date, prepared in accordance with generally accepted accounting principles
consistently applied (except as noted therein or as disclosed to the recipients thereof), with the
exception that no notes need be attached to such statements and year-end audit adjustments may not
have been made.
3.2 Inspection Rights. Each Investor shall have the right to visit and inspect any of the
properties of the Company or any of its subsidiaries, and to discuss the affairs, finances and
accounts of the Company or any of its subsidiaries with its officers, and to review such
information as is reasonably requested all at such reasonable times and as often as may be
reasonably requested; provided, however, that the Company shall not be obligated under this Section
3.2 with respect to a competitor of the Company or with respect to information which the Board of
Directors determines in good faith is confidential or attorney-client privileged and should not,
therefore, be disclosed.
3.3 Confidentiality of Records. Each Investor agrees to use, and to use the same degree of
care as such Investor uses to protect its own confidential information to keep confidential any
information furnished to that the Company identifies as being confidential or proprietary (so long
as such information is not in the public domain), except that such Investor may disclose such
proprietary or confidential information (i) to any partner, subsidiary or parent of such Investor
for the purpose of evaluating its investment in the Company as long as such partner, subsidiary or
parent is advised of the confidentiality provisions of this Section 3.3; (ii) at such time as it
enters the public domain through not fault of such Investor; (iii) that is communicated to it free
of any obligation of confidentiality; or (iv) that is developed by Investor or its agents
independently of and without reference to any confidential information communicated by the Company.
Notwithstanding the foregoing, an Investor shall be free to use for any purpose the residuals
resulting from access to or work with the confidential information of the Company, provided that
the Investor shall not disclose the confidential information except as expressly permitted pursuant
to the terms of this Agreement. The term “residuals” means information in intangible form, which
is retained in memory by persons who have had access to the confidential information, including
ideas, concepts, know-how or techniques contained therein.
3.4 Reservation of Common Stock. The Company will at all times reserve and keep available,
solely for issuance and delivery upon the conversion of the Preferred Stock, all Common Stock
issuable from time to time upon such conversion.
3.5 Proprietary Information and Inventions Agreement; Lock Up Agreements. The Company shall
require all employees and consultants to execute and deliver a Proprietary Information and
Inventions Agreement substantially in a form approved by the Company’s counsel. The Company shall
further require future stockholders to enter into agreements with Market Stand-Off language no less
restrictive than as provided herein in Section 2.13. The Company shall cause such future
stockholders who hold more than one percent (1%) of the outstanding shares of Common Stock,
calculated as of the date of original issuance of the Common Stock, to counter-sign this Agreement
and thereby enter into this Agreement and become subject to the provisions of this Section 3.5.
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3.6 Directors’ Expenses. For so long as the holders of the Preferred Stock are entitled to
appoint any members of the Board of Directors pursuant to the Company’s Fourth Amended and Restated
Certificate of Incorporation (as amended and in effect from time to time, the “Restated Charter”),
the reasonable out-of-pocket and travel expenses of the directors incurred in attending Board
meetings (or meetings of committees thereof) or in connection with the performance of their duties
as directors shall be paid or reimbursed promptly by the Company. To the extent that holders of
Preferred Stock are entitled to appoint members of the Board of Directors pursuant to the Restated
Charter, such directors shall be accorded no less favorable treatment than any other member of the
Board designated by venture capital firm investors in the Company with respect to all matters,
including without limitation, expense reimbursement, equity or other compensation, benefits or
access to Company information and management.
3.7 Stock Vesting; Repurchase Option. Unless approved by the Board of Directors, including a
majority of the directors elected by the holders of the Preferred Stock (all such directors, the
“Preferred Directors”), all stock options and other stock equivalents issued after the date of this
Agreement to employees, directors, consultants and other service providers shall be subject to
vesting as follows: (a) twenty-five percent (25%) of such stock shall vest at the end of the first
year following the earlier of the date of issuance or such person’s services commencement date with
the company, and (b) seventy-five percent (75%) of such stock shall vest monthly over the remaining
three (3) years. All shares of stock subject to a Company repurchase option shall provide that
upon the termination of employment of such stockholder, the Company or its assignees (to the extent
permissible under applicable securities laws qualifications) retain the option to repurchase such
stock at the lower of fair market value or cost any unvested shares held by such shareholder.
3.8 Key Man Insurance. Subject to the approval of the Board of Directors, including the
majority of the Preferred Directors, as soon as reasonably possible after the date of this
Agreement, the Company will obtain and will use its best efforts to maintain in full force and
effect term life insurance in the amount of one million dollars ($1,000,000) on the life of the
Company’s Chief Executive Officer; naming the Company as beneficiary.
3.9 Director and Officer Insurance. Subject to the approval of VantagePoint Venture Partners
IV (Q), L.P., VantagePoint Venture Partners IV, L.P., and VantagePoint Venture Partners IV
Principals Fund, L.P. (collectively, “VPVP”), Sofinnova Venture Partners VI, L.P. (“Sofinnova”) and
Caxton Advantage Life Sciences Fund, L.P. (“Caxton”) as soon as reasonably possible after the date
of this Agreement, the Company will obtain and use its best efforts to maintain in full force and
effect director and officer liability insurance in the amount of one million dollars ($1,000,000),
and will increase such coverage immediately prior to the Initial Offering to at least ten million
dollars ($10,000,000).
3.10 Proprietary Information and Inventions Agreement. The Company shall require all
employees and consultants to execute and deliver a Proprietary Information and Inventions Agreement
substantially in a form approved by the Company’s counsel or Board of Directors.
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3.11 Termination of Covenants. All covenants of the Company contained in Section 3 of this
Agreement, with the exception of Sections 3.6 and 3.9, which shall survive for so long as
affiliates of VPVP, Sofinnova and Caxton serve on the Board of Directors, shall expire and
terminate as to each Investor upon the earlier of (i) the effective date of the registration
statement pertaining to the Initial Offering or (ii) upon an “Acquisition”, each as defined in the
Company’s Restated Charter, with the exception of Sections 3.6 and 3.9, which shall survive until
affiliates of none of VPVP, Sofinnova nor Caxton serve on the Board.
SECTION 4. RIGHTS OF FIRST REFUSAL.
4.1 Subsequent Offerings. Subject to applicable securities laws, each Major Investor shall
have a right of first refusal to purchase its pro rata share of all Equity Securities, as defined
below, that the Company may, from time to time, propose to sell and issue after the date of this
Agreement, other than the Equity Securities excluded by Section 4.7 hereof. Each Major Investor’s
pro rata share is equal to the ratio of (a) the number of shares of the Company’s Common Stock
(including all shares of Common Stock issued or issuable upon conversion of the Shares or upon the
exercise of any outstanding warrants or options) which such Major Investor is deemed to be a holder
immediately prior to the issuance of such Equity Securities to (b) the total number of shares of
the Company’s outstanding Common Stock (including all shares of Common Stock issued or issuable
upon conversion of the Shares or upon the exercise of any outstanding warrants or options)
immediately prior to the issuance of the Equity Securities. The term “Equity Securities” shall
mean (i) any Common Stock, Preferred Stock or other security of the Company, (ii) any security
convertible into or exercisable or exchangeable for, with or without consideration, any Common
Stock, Preferred Stock or other security (including any option to purchase such a convertible
security), (iii) any security carrying any warrant or right to subscribe to or purchase any Common
Stock, Preferred Stock or other security or (iv) any such warrant or right. For the purposes of
this Section 4, shares of Common Stock issued upon conversion of an Investor’s Preferred Stock
pursuant to Article IV, Section E(5) of the Restated Charter shall be excluded from the definition
of Registrable Securities and such Investor’s share ownership for the purpose of determining
whether such Investor is a “Major Investor.”
4.2 Exercise of Rights. If the Company proposes to issue any Equity Securities, it shall give
each Major Investor written notice of its intention, describing the Equity Securities, the price
and the terms and conditions upon which the Company proposes to issue the same. Each Major
Investor shall have fifteen (15) days from the giving of such notice to agree to purchase its pro
rata share of the Equity Securities for the price and upon the terms and conditions specified in
the notice by giving written notice to the Company and stating therein the quantity of Equity
Securities to be purchased. Notwithstanding the foregoing, the Company shall not be required to
offer or sell such Equity Securities to any Major Investor who would cause the Company to be in
violation of applicable federal securities laws by virtue of such offer or sale.
4.3 Issuance of Equity Securities to Other Persons. If not all of the Major Investors elect
to purchase their pro rata share of the Equity Securities, then the Company shall promptly notify
in writing the Major
Investors who do so elect and shall offer such Major Investors the right to acquire such
unsubscribed shares on a pro rata basis. Each Major Investor shall have five (5) days after
receipt of such notice to notify the Company of its election to purchase all or a portion thereof
of the unsubscribed shares (subject to pro rata reduction if the
18
elections of all Major Investors
exceed the actual number of unsubscribed shares). If the Major Investors fail to exercise in full
the rights of first refusal, the Company shall have ninety (90) days thereafter to sell the Equity
Securities in respect of which the Major Investors’ rights were not exercised, at a price and upon
general terms and conditions not materially more favorable to the purchasers thereof than specified
in the Company’s notice to the Major Investors pursuant to Section 4.2 hereof. If the Company has
not sold such Equity Securities within ninety (90) days of the notice provided pursuant to Section
4.2, the Company shall not thereafter issue or sell any Equity Securities, without first offering
such securities to the Major Investors in the manner provided above.
4.4 Sale Without Notice. In lieu of giving notice to the Major Investors prior to the
issuance of Equity Securities as provided in Section 4.2, the Company may elect to give notice to
the Major Investors within thirty (30) days after the issuance of Equity Securities. Such notice
shall describe the type, price and terms of the Equity Securities. Each Major Investor shall have
twenty (20) days from the date of receipt of such notice to elect to purchase up to the number of
shares that would, if purchased by such Major Investor, maintain such Major Investor’s pro rata
share (as set forth in Section 4.1) of the Company’s equity securities. The closing of such sale
shall occur within sixty (60) days of the date of notice to the Major Investors.
4.5 Termination and Waiver of Rights of First Refusal. The rights of first refusal
established by this Section 4 shall not apply to, and shall terminate upon the earlier of (i) the
effective date of the registration statement pertaining to the Company’s Initial Offering or (ii) a
upon an “Acquisition,” as defined in the Company’s Restated Charter. The rights of first refusal
established by this Section 4 may be amended, or any provision waived with the written consent of
Major Investors holding two-thirds of the Registrable Securities held by all Major Investors, or as
permitted by Section 5.5.
4.6 Transfer of Rights of First Refusal. The rights of first refusal of each Major Investor
under this Section 4 may be assigned by a Holder to a transferee or assignee of Registrable
Securities that (a) is a subsidiary, parent, general partner, limited partner, retired partner,
member or retired member, or stockholder of a Holder; (b) is a Holder’s family member or trust for
the benefit of an individual Holder; (c) acquires at least one hundred thousand (100,000) shares of
Registrable Securities (as adjusted for stock splits and combinations); or (d) is an entity
affiliated by common control (or other related entity) with such Holder, provided, however, (i) the
transferor shall, within ten (10) days after such transfer, furnish to the Company written notice
of the name and address of such transferee or assignee and the securities with respect to which
such registration rights are being assigned and (ii) such transferee shall agree to be subject to
all restrictions set forth in this Agreement.
4.7 Excluded Securities. The rights of first refusal established by this Section 4 shall have
no application to any of the following Equity Securities:
(a) shares of Common Stock issued pursuant to the Initial Offering;
(b) shares of Common Stock and/or options, warrants or other Common Stock purchase rights and
the Common Stock issued pursuant to such options, warrants or other rights issued or to be issued
after the Original Issue Date (as defined in the Company’s Restated
19
Charter) to employees, officers
or directors of, or consultants or advisors to the Company or any subsidiary, pursuant to stock
purchase or stock option plans or other arrangements that are approved by the Board of Directors,
including the majority of the Preferred Directors;
(c) stock issued or issuable pursuant to any rights or agreements, options, warrants or
convertible securities outstanding as of the date of this Agreement; and stock issued pursuant to
any such rights or agreements granted after the date of this Agreement, so long as the rights of
first refusal established by this Section 4 were complied with or were inapplicable pursuant to any
provision of this Section 4.7 with respect to the initial sale or grant by the Company of such
rights or agreements;
(d) any Equity Securities issued for consideration other than cash pursuant to a merger,
consolidation, strategic alliance, acquisition or similar business combination;
(e) shares of Common Stock issued in connection with any stock split, stock dividend or
recapitalization by the Company;
(f) shares of Common Stock issued upon conversion of shares of the Company’s Preferred Stock;
(g) any Equity Securities issued pursuant to any equipment loan or leasing arrangement, real
property leasing arrangement, or debt financing from a bank or similar financial or lending
institution;
(h) any Equity Securities that are issued by the Company pursuant to a registration statement
filed under the Securities Act;
(i) any Equity Securities issued in connection with strategic transactions involving the
Company and other entities, including (i) joint ventures, manufacturing, marketing or distribution
arrangements approved by the Board, including the majority of the Preferred Directors or (ii)
technology transfer or development arrangements approved by the Board, including the majority of
the Preferred Directors; and
(j) any Equity Securities issued by the Company pursuant to the Purchase Agreement.
SECTION 5. MISCELLANEOUS.
5.1 Governing Law. This Agreement shall be governed by and construed under the laws of the
State of California in all respects as such laws are applied to agreements among California
residents entered into and performed entirely within California, without giving effect to conflict
of law principles thereof. The parties agree that any action brought by either party under or in
relation to this Agreement, including without limitation to interpret or enforce any provision of
this Agreement, shall be brought in, and each party agrees to and does hereby submit to the
jurisdiction and venue of, any state or federal court located in the County of Alameda, California.
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5.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the parties hereto and their respective
successors, assigns, heirs, executors, and administrators and shall inure to the benefit of and be
enforceable by each person who shall be a holder of Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate written notice of the
transfer of any Registrable Securities specifying the full name and address of the transferee, the
Company may deem and treat the person listed as the holder of such shares in its records as the
absolute owner and holder of such shares for all purposes, including the payment of dividends or
any redemption price.
5.3 Entire Agreement. This Agreement and the Exhibits hereto, the Purchase Agreement and the
other documents delivered pursuant thereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and no party shall be liable or
bound to any other in any manner by any oral or written representations, warranties, covenants and
agreements except as specifically set forth herein and therein. Each party expressly represents
and warrants that it is not relying on any oral or written representations, warranties, covenants
or agreements outside of this Agreement.
5.4 Severability. If any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable, or void, portions of such provision, or such
provision in its entirety, to the extent necessary, shall be severed from this Agreement and the
balance of this Agreement shall be enforceable in accordance with its terms.
5.5 Amendment, Modification and Waiver.
(a) Except as otherwise expressly provided, this Agreement may be amended or modified only
upon the written consent of the Company and the holders of at least a two-thirds of the
then-outstanding Registrable Securities.
(b) For the purposes of determining the number of Holders or Investors entitled to vote or
exercise any rights hereunder, the Company shall be entitled to rely solely on the list of record
holders of its stock as maintained by or on behalf of the Company.
5.6 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power,
or remedy accruing to any party, upon any breach, default or noncompliance by another party under
this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar
breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on any party’s
part of any breach, default or noncompliance under the Agreement or any waiver on such party’s part
of any provisions or conditions of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under this Agreement, by
law, or otherwise afforded to any party, shall be cumulative and not alternative.
5.7 Notices. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if
21
not, then on the next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the party to be notified at the address as set forth
on the signature pages hereof or Exhibit A hereto or at such other address or electronic mail
address as such party may designate by ten (10) days’ advance written notice to the other parties
hereto. If notice is given to the Company, a copy shall also be sent to Xxxxxxx X. Xxxxxxxxxxx,
Xxxxxxx Procter, LLP, Three Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, XX 00000 (which copy
shall not constitute notice to the Company).
5.8 Attorneys’ Fees. In the event that any suit or action is instituted under or in relation
to this Agreement, including without limitation to enforce any provision in this Agreement, the
prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and expenses of appeals.
5.9 Titles and Subtitles. The titles of the sections and subsections of this Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.
5.10 Additional Investors. Notwithstanding anything to the contrary contained herein, if the
Company shall issue additional shares of its Preferred Stock pursuant to the Purchase Agreement,
any purchaser of such shares of Preferred Stock shall become a party to this Agreement by executing
and delivering an additional counterpart signature page to this Agreement and shall be deemed an
“Investor,” a “Holder” and a party hereunder.
5.11 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument.
5.12 Aggregation of Stock. All shares of Registrable Securities held or acquired by
affiliated entities or persons or persons or entities under common management or control shall be
aggregated together for the purpose of determining the availability of any rights under this
Agreement.
5.13 Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to
refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties
hereto may require.
5.14 Dispute Resolution. Any dispute arising out of or in connection with the transactions
contemplated by this Agreement will be resolved solely by confidential binding arbitration in San
Francisco, California according to the then current commercial arbitration rules of JAMS. Each
party shall bear its own attorneys’ fees, expert witness fees, and costs connected to such
arbitration.
5.15 Prior Agreement. This Agreement amends and restates the Prior Agreement in its entirety,
and the Prior Agreement is hereby void and of no further force or effect. By execution of this
Agreement, each Investor expressly waives (i) any right of first refusal or other participation
right with respect to Equity Securities issuable pursuant to the Purchase Agreement
22
(including,
without limitation, senior secured promissory notes convertible into shares of New Preferred Stock
and warrants exercisable for shares of New Preferred Stock) granted to such Investor pursuant to
Section 4 of the Prior Agreement and (ii) all rights it may have to notice of such sale of Equity
Securities pursuant to the Purchase Agreement pursuant to Sections 4.2 and 4.4 hereof.
[THIS SPACE INTENTIONALLY LEFT BLANK]
23
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| COMPANY: | INVESTOR: | |||||||||
| ANTHERA PHARMACEUTICALS, INC. | VANTAGEPOINT VENTURE PARTNERS IV (Q), L.P. | |||||||||
| VANTAGEPOINT VENTURE PARTNERS IV, L.P. | ||||||||||
| By: | /s/ Xxxx X. Xxxxx | VANTAGEPOINT VENTURE PARTNERS IV PRINCIPALS FUND, L.P. | ||||||||
| Xxxx X. Xxxxx | ||||||||||
| President and Chief Executive Officer | By: | VantagePoint Venture Associates IV, | ||||||||
| L.L.C., its General Partner | ||||||||||
| Address: | 00000 Xxxxxxxxxx Xxxx. | |||||||||
| Xxxxx X | By: | /s/ Xxxx X. Xxxxxxx | ||||||||
| Hayward, CA 94545 | Name: Xxxx X. Xxxxxxx | |||||||||
| Title: Managing Member | ||||||||||
| INVESTOR: | ||||||||||
| SOFINNOVA VENTURE PARTNERS VI, L.P., | ||||||||||
| as nominee for SOFINNOVA VENTURE PARTNERS VI, L.P. SOFINNOVA VENTURE PARTNERS VI GMBH CO. K.G. SOFINNOVA VENTURE AFFILIATES VI, L.P. |
||||||||||
| By: | Sofinnova Management VI, LLC | |||||||||
| its General Partner | ||||||||||
| By: | /s/ Xxxxx Xxxxx | |||||||||
| Name: Xxxxx Xxxxx | ||||||||||
| Title: Managing Member | ||||||||||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Amendment to the Amended and
Restated Investors’ Rights Agreement on the date first above written.
| INVESTOR: MC LIFE SCIENCES VENTURES, INC. |
||||
| By: | /s/ Xxxxxxxxx Xxxxxxxxxx | |||
| Name: | Xxxxxxxxx Xxxxxxxxxx | |||
| Title: | President | |||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| INVESTOR: A. M. XXXXXX LIFE SCIENCE VENTURES III, L.P. |
||||
| By: | /s/ Ford S. Worthy | |||
| Name: | Ford S. Worthy | |||
| Title: | Partner and CFO | |||
| INVESTOR: PV III CEO FUND, L.P. |
||||
| By: | /s/ Ford S. Worthy | |||
| Name: | Ford S. Worthy | |||
| Title: | Partner and CFO | |||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| INVESTOR: CAXTON ADVANTAGE LIFE SCIENCES FUND, L.P. |
||||||
| By: Caxton Advantage Venture Partners, L.P., | ||||||
| Its General Partner | ||||||
| By: Advantage Life Science Partners, LLC, | ||||||
| its Managing Partner | ||||||
| By: | /s/ Xxxxxx Xxxxxx | |||||
| Name: | Xxxxxx Xxxxxx | |||||
| Title: | Member | |||||
| INVESTOR: HBM BIOCAPITAL HBM BioCapital (EUR) L.P. |
||||||
| By: HBM BioCapital Ltd. | ||||||
| Its: General Partner | ||||||
| /s/ Xxxx Xxxxxx | ||||||
| By: Xxxx Xxxxxx | ||||||
| Its: Chairman & Managing Director | ||||||
| HBM BioCapital (USD) L.P. | ||||||
| By: HBM BioCapital Ltd. | ||||||
| Its: General Partner | ||||||
| /s/ Xxxx Xxxxxx | ||||||
| By: Xxxx Xxxxxx | ||||||
| Its: Chairman & Managing Director | ||||||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| INVESTOR: SHIONOGI & CO., LTD. |
||||
| By: | /s/ Sachio Tokaji | |||
| Name: | Sachio Tokaji | |||
| Title: | Director of the Board, Senior Executive Officer | |||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| INVESTOR: THE SEARS TRUST DTD. 3/11/91 |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Trustee | |||
| INVESTOR: XXXXXXX CAPITAL ADVISORS, LLC |
||||
| By: | /s/ Xxxxxx Xxxxxxx | |||
| Name: | Xxxxxx Xxxxxxx | |||
| Title: | President | |||
| INVESTOR: XXXXXXXXXXX X. XXXXXX, PH.D. |
||||
| By: | /s/ Xxxxxxxxxxx X. Xxxxxx | |||
| INVESTOR: XXXX X. XXXXX |
||||
| By: | /s/ Xxxx X. Xxxxx | |||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| INVESTOR: THE XXXXX XXXXX LIVING TRUST |
||||
| By: | /s/ Xxxxx Xxxxx | |||
| INVESTOR: XXXXXX XXXXXXX |
||||
| By: | /s/ Xxxxxx Xxxxxxx | |||
| INVESTOR: XXXXXX XXXXXXX |
||||
| By: | /s/ Xxxxxx Xxxxxxx | |||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| INVESTOR: XXXXXXXXXXX XXXXX XXXX |
||||
| By: | /s/ Xxxxxxxxxxx Xxxx | |||
| INVESTOR: BIOVEST III |
||||
| By: | /s/ Xxxxxxxxxxx Xxxx | |||
| Name: | Xxxxxxxxxxx Xxxxx Xxxx | |||
| Title: | Partner | |||
| INVESTOR: XXXXXX XXXXX, PH.D. |
||||
| By: | /s/ Xxxxxx Xxxxx | |||
| INVESTOR: EVERST INVESTMENT PARTNERSHIP XXXXXX XXXXX |
||||
| By: | /s/ Xxxxxx Xxxxx | |||
| Name: | Xxxxxx Xxxxx | |||
| Title: | Partner | |||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| INVESTOR: XXXXXX XXXXXX |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| INVESTOR: XXXX XXXXXX |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| INVESTOR: XXXX XXX |
||||
| By: | /s/ Xxxx Xxx | |||
| INVESTOR: XXXXXX XXXX |
||||
| By: | /s/ Xxxxxx Xxxx | |||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| INVESTOR: XXXXXXX XXXXXXXXXXX |
||||
| By: | /s/ Xxxxxxx Xxxxxxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxxxxxx | |||
| Title: | Individual | |||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
IN WITNESS WHEREOF, the parties hereby have executed this Second Amended and Restated
Investors’ Rights Agreement on the date first above written.
| INVESTOR: XXX LILLY AND COMPANY |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Vice President/Treasurer - Finance | |||
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT OF
ANTHERA PHARMACEUTICALS, INC.
