EXHIBIT 5
---------
AUXILIUM PHARMACEUTICALS, INC.
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
THIS THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this
"Agreement") is entered into as of October 31, 2003, by and among Auxilium
Pharmaceuticals, Inc., a Delaware corporation (the "Company"), the holders of
the Company's Series A Preferred Stock, par value $0.01 per share (the "Series A
Preferred Stock"), set forth on EXHIBIT A (the "Series A Investors"), the
holders of the Company's Series B Preferred Stock, par value $0.01 per share
(the "Series B Preferred Stock"), set forth on EXHIBIT B (the "Series B
Investors"), the holders of the Company's Series C Preferred Stock, par value
$0.01 per share (the "Series C Preferred Stock"), set forth on EXHIBIT C (the
"Series C Investors") and the holders of the Company's Series D Preferred Stock,
par value $0.01 per share (the "Series D Preferred Stock"), set forth on EXHIBIT
D (the "Series D Investors").
RECITALS
WHEREAS, the Company, the Series A Investors, the Series B Investors
and the Series C Investors entered into an Amended and Restated Investor Rights
Agreement, dated as of June 21, 2003 (the "Prior Investor Rights Agreement"), in
connection with the Company's sale of up to 10,283,336 shares of its Series C
Preferred Stock to the Series C Investors and warrants to purchase 3,085,001
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock");
WHEREAS, the Company and the Series D Investors have entered into the
Series D Preferred Stock Purchase Agreement, dated of even date herewith (the
"Purchase Agreement"), providing for, among other things, the sale and issuance
of an aggregate of 28,752,365 shares of the Series D Preferred Stock and
warrants to purchase up to 8,634,339 shares of the Series D Preferred Stock in
accordance with the terms and conditions set forth in the Purchase Agreement;
WHEREAS, Section 5.6 of the Prior Investor Rights Agreement provides
that such agreement may be amended by the written agreement of the Company, the
holders of at least a majority of the shares of the Series A Preferred Stock,
the holders of at least a majority of the shares of the Series B Preferred
Stock, and the holders of at least a majority of the shares of the Series C
Preferred Stock;
WHEREAS, the Series A Investors that are signatories hereto own at
least a majority of the Series A Preferred Stock necessary to amend the
Investors' Rights Agreement;
WHEREAS, the Series B Investors that are signatories hereto own at
least a majority of the Series B Preferred Stock necessary to amend the
Investors' Rights Agreement;
WHEREAS, the Series C Investors that are signatories hereto own at
least a majority of the Series C Preferred Stock necessary to amend the
Investors' Rights Agreement;
WHEREAS, in order to induce the Company to enter into the Purchase
Agreement and to induce the Series D Investors to invest funds in the Company
pursuant to the Purchase Agreement, the Series A Investors, the Series B
Investors, the Series C Investors and the Company hereby desire to amend and
restate the Prior Investor Rights Agreement, such that this Agreement shall
govern the rights of the Series A Investors, the Series B Investors, the Series
C Investors and the Series D Investors (the Series A Investors, the Series B
Investors, the Series C Investors and the Series D Investors hereinafter
collectively referred to as the "Investors") to cause the Company to register
its shares of Common Stock issuable to the Investors upon conversion of the
Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock and the Series D Preferred Stock and to address certain other matters as
set forth herein; and
WHEREAS, the execution and delivery of this Agreement by the Company
and the Investors is a condition to the closing of the issuance, sale and
purchase of the Series D Preferred Stock pursuant to the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and the investment of the Series D Investors in the Series D Preferred
Stock, the parties, intending to be legally bound hereby, mutually agree as
follows:
SECTION 1. GENERAL
1.1 Definitions. As used in this Agreement the following terms shall
have the following respective meanings:
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FORM S-3" means such form under the Securities Act as in effect
on the date hereof or any successor 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.
"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 2.9.
"INITIAL PUBLIC OFFERING" means the Company's first firm
commitment underwritten public offering of its Common Stock registered under the
Securities Act.
"LITIGATION" means the litigation resulting from the complaints
filed against the Company, Auxilium Holdings, Inc., and Xxxxxxxxx Xxxxxxx in the
Superior Court of Delaware in April 2002 (C.A. No. 02C-03-208).
"QUALIFIED PUBLIC OFFERING" means an underwritten, firm
commitment public offering registered under the Securities Act covering the
offer and sale by the Company of its Common Stock in which (i) the aggregate
proceeds to the Company equal or exceed $40,000,000 (calculated after deducting
underwriters' discounts and commissions and other offering
2
expenses), and (ii) at a price per share to the public that is at least two
times the then applicable conversion price of the Series D Preferred Stock.
"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.
"REGISTRABLE SECURITIES" means (a) Common Stock of the Company
issued or issuable upon conversion of the Shares; (b) any Common Stock of the
Company issued or issuable upon exercise and conversion, if applicable, of the
warrants issued to the Investors under the Series A Preferred Stock Purchase
Agreement, dated July 18, 2000, by and among the Company and the Series A
Investors, the Series B Preferred Stock Purchase Agreement, dated October 12,
2001, by and among the Company and the Series B Investors, the Series C
Preferred Stock Purchase Agreement, dated June 21, 2003, by and among the
Company and the Series C Investors and the Purchase Agreement (collectively, the
"Warrants"); and (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 sold by a
person to the public pursuant to a registration statement or Rule 144 or sold in
a private transaction in which the transferor's rights under Section 2 of this
Agreement are not assigned.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of
shares determined by calculating the total number of shares of the Company's
Common Stock that are Registrable Securities and are then issued, outstanding or
issuable pursuant to then exercisable or convertible securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Sections 2.2, 2.3 and 2.4, including all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, reasonable fees and disbursements 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).
"SEC" or "COMMISSION" means the Securities and Exchange
Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SELLING EXPENSES" shall mean all underwriting discounts and
selling commissions applicable to the sale.
"SHARES" shall mean the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock
issued to the Investors and their permitted assigns, and the shares of Series D
Preferred Stock issued or issuable upon the exercise and conversion, if
applicable, of the warrants to purchase Series D Preferred Stock issued to the
Investors under the Purchase Agreement.
3
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER
2.1 RESTRICTIONS ON TRANSFER.
(a) In addition to the restriction of transfer contained in
the Third Amended and Restated Stockholders Agreement, dated as of the date
hereof, no Holder shall 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;
(ii) Such disposition is made pursuant to and in
compliance with Rule 144; or
(iii) (A) The proposed transferee has agreed in writing
to be bound by the terms of this Agreement by executing a counterpart signature
page in the form attached as ANNEX A (the "Counterpart Signature Page") (which
shall not be deemed to be an amendment hereto), (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.
Notwithstanding the provisions of paragraphs (i), (ii) and (iii) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by a Holder which is: (A) a Holder's transfer of any or all shares held
either during such Holder's lifetime or on death by will or intestacy to such
Holder's immediate family or to any custodian or trustee for the account of such
Holder or such Holder's immediate family ("immediate family" as used herein
shall mean spouse, lineal descendant, father, mother, brother, or sister of the
Holder making such transfer); (B) a Holder's transfer of any or all of such
Holder's shares to the Company or to any other stockholder of the Company; (C) a
Holder's transfer of any or all of such Holder's shares to a person who, at the
time of such transfer, is an officer or director of the Company; (D) a corporate
Holder's transfer of any or all of its shares pursuant to and in accordance with
the terms of any merger, consolidation, reclassification of shares or capital
reorganization of the corporate Holder, or pursuant to a sale of all or
substantially all of the stock or assets of a corporate Holder; (E) a corporate
Holder's transfer of any or all of its shares to any or all of its stockholders;
(F) a transfer by a Holder which is a limited or general partnership to any or
all of its partners or former partners in connection with a liquidation or
withdrawal event; (G) a transfer by a Holder to a limited partnership (or other
similar entity) in which at least 90% of the general and limited partnership
interests are held by, or in trust for, the Holder's immediate family; (H) a
transfer by a limited liability company to its members or former members in
accordance with their interest in the limited liability company; (I) a transfer
by a Holder to an affiliate; and (J) a transfer by a Holder to a retirement plan
(regardless of form) created by a Holder for the primary benefit of, or in trust
for, the Holder and/or such Holder's immediate family or a transfer from such
retirement plan to the designated beneficiary or beneficiaries thereof; PROVIDED
that in each of the cases provided above the transferee has agreed in writing to
4
be bound by the terms of this Agreement by executing a Counterpart Signature
Page (which shall not be deemed to be an amendment hereto), and such transfer is
in compliance with all applicable federal and state securities laws.
(b) Each certificate representing Shares or Registrable
Securities shall (unless otherwise permitted by the provisions of the Agreement)
be stamped or otherwise imprinted with a legend 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, AS AMENDED (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 OR OTHER EVIDENCE
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
(c) The Company shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if 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 unlegended may lawfully be so disposed of without registration,
qualification or legend.
(d) 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.
2.2 DEMAND REGISTRATION.
(a) Subject to the conditions of this Section 2.2, if the
Company receives a request from the Holders of at least 50% of the Registrable
Securities then outstanding (the "Initiating Holders") that the Company file a
Registration Statement under the Securities Act then the Company shall, within
15 days of the receipt thereof, give notice of such request to all Holders. The
Holders shall have the right, by giving written notice to the Company within 15
days after the Company provides its notice, to elect to have included in such
registration such of their Registrable Shares as such Holders may request in
such notice of election, and the Company shall use its best efforts to effect,
as soon as practicable, the registration of all Registrable Securities that the
Holders request to be registered in such notice of election (and shall promptly
notify in writing the Holders registering Registrable Securities registered
under any such Registration Statement once any such Registration Statement has
been declared effective).
5
(b) If the Initiating Holders intend to distribute the
Registrable Securities by means of an underwriting, they shall so advise the
Company as a part of their demand pursuant to this Section 2.2 or Section 2.4
and the Company shall include such information in the 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 participation in such underwriting. The underwriter or
underwriters for such offering shall be selected by a majority in interest of
the Holders participating in such offering, subject to the approval of the Board
of Directors of the Company (the "Board"), which approval shall not be
unreasonably withheld. 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 participating
Holders, and the number of shares that may be included in the underwriting and
registration shall be allocated pro rata to the participating Holders based on
the number of Registrable Securities held; 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
proposed to be included in such underwriting and registration by holders of the
Company's securities are first entirely excluded from the underwriting and
registration. If all of the Registrable Securities so requested for registration
by the Holders requesting registration are excluded from an offering under
Section 2.2(a) by the underwriter or underwriters for such offering (a "Reload
Event"), then such Holders shall have the right to one additional Demand
Registration under Section 2.2(a) upon the occurrence of each Reload Event.
(c) The Company shall not be required to effect any such
registration pursuant to this Section 2.2:
(i) prior to the earlier of (A) the second anniversary
of the date of this Agreement or (B) six months following the effective date of
the registration statement pertaining to an Initial Public Offering;
(ii) the aggregate offering price of the proposed
underwriting and registration is less than $5.0 million;
(iii) after the Company has effected two registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective, and the securities offered pursuant to such registrations
have been sold;
(iv) during the period starting with the date of filing
of, and ending on the date six months following the effective date of a
registration statement pertaining to the Initial Public Offering or to any other
underwritten public offering made pursuant to this Section 2.2 or Section 2.4 or
in which the Holders were given the opportunity to participate pursuant to
Section 2.3 and no more than 25% of the Registrable Securities so requested to
be registered by the Holders were excluded from any such registration; PROVIDED
that the Company makes reasonable and diligent good faith efforts to cause such
registration statement to become effective;
6
(v) if within 15 days of receipt of a written request
from the Initiating Holders pursuant to Section 2.2(a), the Company gives notice
to the Holders of the Company's intention to make its Initial Public Offering
within 120 days;
(vi) if the Company shall furnish to the Initiating
Holders a certificate signed by the Chairman of the Board stating that in the
good faith judgment of the Board, 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 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 12-month period; or
(vii) 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.
(d) If any Holder of Registrable Securities disapproves of the
terms of the underwriting, such person may elect to withdraw therefrom by
written notice to the Company, the underwriter and the Initiating Holders
delivered at least 15 days prior to the effective date of the Registration
Statement; PROVIDED, HOWEVER, that if the number of Registrable Securities
withdrawn in accordance herewith would result in the registration of less than
20% of the Registrable Securities then outstanding (or a lesser percent if the
anticipated aggregate offering price would exceed $5,000,000), then the Company
shall not be required to effect a registration pursuant to this Section 2.2, and
the Company shall not be required to pay the Registration Expenses incurred to
date. The securities so withdrawn shall also be withdrawn from the Registration
Statement.
2.3 PIGGYBACK REGISTRATIONS. Following the Company's Initial Public
Offering, the Company shall notify all Holders at least 30 days prior to the
filing of any registration statement under the Securities Act for a public
offering of securities of the Company (including registration statements
relating to secondary offerings of securities of the Company, but excluding
registration statements relating to employee benefit plans or corporate
reorganizations or other transactions under Rule 145 of the Securities Act) and
will afford each such Holder an opportunity to include in such registration
statement all or part of the Registrable Securities held by such Holder. Each
Holder desiring to include Registrable Securities in any such registration
statement shall notify the Company within 15 days after the notice from the
Company. 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 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, 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. In such event, the right of any Holder
to be included in a registration pursuant to this Section 2.3 shall be
conditioned upon the Holder's participation in the underwriting. Notwithstanding
any other provision of the Agreement, if the underwriter determines in good
7
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 pro rata 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.
Notwithstanding the foregoing, no such reduction shall reduce the amount of
securities of the selling Holders included in the registration below 25% of the
total amount of securities included in such registration, unless such offering
is the Initial Public Offering.
(b) RIGHT TO TERMINATE REGISTRATION. The Company shall give
written notice of its determination to terminate or withdraw any registration
initiated by it under this Section 2.3 promptly after the occurrence thereof.
The Registration Expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 2.5.
(c) If any Holder disapproves of the terms of any such
underwriting, such person may elect to withdraw therefrom by written notice to
the Company and the underwriter delivered at least fifteen days prior to the
effective date of the Registration Statement. Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be withdrawn
from such Registration.
2.4 FORM S-3 REGISTRATION.
(a) If the Company shall receive from any Holder or Holders a
request 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:
(i) promptly give notice of the proposed registration,
and any related qualification or compliance, to all other Holders of Registrable
Securities; and
(ii) as soon as practicable, effect such registration
and all such qualifications and compliances as would permit or facilitate the
sale and distribution of the Registrable Securities specified in such request,
together with the Registrable Securities of any other Holder or Holders joining
in such request by notice to the Company given within 15 days after receipt of
such 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:
(1) if Form S-3 (or any successor or similar form)
is not available for such offering by the Holders, or
(2) 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 $1,000,000, or
(3) if the Company shall furnish to the Holders a
certificate signed by the Chairman of the Board stating that in the good faith
judgment of the Board of Directors, 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
8
defer the filing of the Form S-3 registration statement for a period of not more
than 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 12-month period, or
(4) if the Company has, within the 12-month period
preceding the date of such request, already effected a registration on Form S-3
for the Holders pursuant to this Section 2.4, or
(5) 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.
(b) 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 request or 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 Sections 2.2 or 2.3, respectively. If the Initiating
Holders intend to distribute Registrable Shares pursuant to an underwriting,
they shall so advise the Company in the demand pursuant to Section 2.2(a).
(c) After the Company's Initial Public Offering, the Company
will use its commercially reasonable efforts to qualify for the registration of
its shares of Common Stock on Form S-3.
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 Company or the stockholders selling the securities on a pro-rata basis,
as the case may be. The Company shall not, however, be required to pay for
expenses of any registration proceeding begun pursuant to Section 2.2, the
request of which has been subsequently withdrawn by the Initiating Holders
unless the withdrawal is based upon material adverse information concerning the
Company (including a material drop in the market price of the Company's common
stock) of which the Initiating Holders were not aware at the time of such
request. 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. Notwithstanding the foregoing, the Holders
shall be solely responsible for the fees and expenses of any counsel retained by
such Holders on a pro-rata basis in connection with such withdrawn registration
(other than a withdrawal which is based upon material adverse information
concerning the Company, including a material drop in the market price of the
Company's common stock, of which the Initiating Holders were not aware at the
time of such request) and any transfer taxes or Selling Expenses incurred by the
Holders in connection therewith.
2.6 OBLIGATIONS OF THE COMPANY. Whenever required to register any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
9
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415 promulgated under the Securities Act for a
registration pursuant to Section 2.4, 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 six months for a registration
pursuant to Section 2.2 and for up to twenty-four months for a registration
pursuant to Section 2.4 or, if earlier, until the Holder or Holders have
completed the distribution related thereto; PROVIDED, HOWEVER, that (x) before
filing a registration statement or prospectus or any amendments or supplements
thereto, the Company shall provide counsel selected by the Holders holding a
majority of the Registrable Securities being registered in such registration
("Holders' Counsel") with an adequate and appropriate opportunity to review and
comment on such Registration Statement and each prospectus included therein (and
each amendment or supplement thereto) to be filed with the SEC, subject to such
documents being under the Company's control, and (y) the Company shall notify
the Holders' Counsel and each seller of Registrable Securities of any stop order
issued or threatened by the SEC and take all action required to prevent the
entry of such stop order or to remove it if entered or of the receipt of any SEC
comment letter (a copy of which shall be provided to Holders' Counsel).
(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
paragraph (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 best 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.
(f) Notify in writing 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.
10
(g) Use its reasonable best 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.
(h) Keep Holders' Counsel advised in writing as to the
initiation and progress of any registration under Sections 2.2, 2.3 and 2.4
hereunder.
(i) Take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
2.7 FURNISHING INFORMATION. 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 and such other information as shall be
required to effect the registration of their Registrable Securities as the
Company may reasonably request in writing.
2.8 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 and the partners, officers, directors,
stockholders and Affiliates (as defined below) 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, 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 pay as incurred to
each such Holder, partner, officer, director, stockholder, underwriter,
Affiliate 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 (subject to recoupment if this
indemnification is determined to be inapplicable); PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 2.8(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement
11
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
registration by such Holder, partner, officer, director, stockholder,
underwriter, Affiliate or controlling person of such Holder. The term
"Affiliate" for purposes of this Section 2.8 shall mean, with respect to any
person, any other person that, directly or indirectly, controls, is controlled
by, or is under common control with, such person.
(b) To the extent permitted by law, each Holder, will severally
and not jointly, if Registrable Securities held by such Holder are included in
the securities as to which such registration, qualification 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, officers, stockholders, Affiliates or any person who
controls such Holder, against any losses, claims, damages or liabilities to
which the Company or any such person 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 Violation, in each case to the extent (and only to the
extent) that such 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, severally and not jointly, will pay as
incurred any legal or other expenses reasonably incurred by the Company or any
such person in connection with investigating or defending any such loss, claim,
damage, liability or action if it is judicially determined that there was such a
Violation; provided, HOWEVER, that the indemnity agreement contained in this
Section 2.8(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 2.8
exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 2.8 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 2.8, 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 ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.8, but the omission so to deliver
written notice to the
12
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2.8.
(d) If the indemnification provided for in this Section 2.8 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) 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. The parties hereto hereby acknowledge that it would not be just and
equitable if contribution pursuant to this Section 2.8(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company, Holders under this Section
2.8 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.
2.9 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 which
(a) is a subsidiary, parent, general partner, limited partner, retired partner,
member, retired member or affiliate of a Holder, (b) is a Holder's immediate
family member or trust for the benefit of an individual Holder or immediate
family members or (c) any third party purchaser; PROVIDED, HOWEVER, (i) the
transferor shall, within 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,
(ii) such transferee or assignee receives in such transfer or assignment at
least 800,000 shares, PROVIDED, HOWEVER, if the transferee or assignee is a
subsidiary, parent, general partner, limited partner, retired partner, member,
retired member or affiliate of a Holder, or is a Holder's immediate family
member or trust for the benefit of an individual Holder or immediate family
members no such minimum amount of shares shall be required for the assignment of
the registration rights; (iii) such transferee shall agree to be subject to all
restrictions set forth in this Agreement by executing a Counterpart Signature
Page (which shall not be deemed to be an
13
amendment hereto), and (iv) such assignment or transfer shall be in compliance
with all federal and state securities laws.
2.10 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 held by the Series A Investors then outstanding, at least
a majority of the Registrable Securities held by the Series B Investors then
outstanding, at least a majority of the Registrable Securities held by the
Series C Investors then outstanding and at least a majority of the Registrable
Securities held by the Series D Investors then outstanding, each voting as a
separate class. Any amendment or waiver effected in accordance with this Section
2.10 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.
2.11 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date
of this Agreement, the Company shall not, without the prior written consent of
the Holders of a majority of the Registrable Securities then outstanding held by
the Series A Investors, a majority of the Registrable Securities then
outstanding held by the Series B Investors, a majority of the Registrable
Securities then outstanding held by the Series C Investors and a majority of the
Registrable Securities then outstanding held by the Series D Investors, enter
into any agreement with any holder or prospective holder of any securities of
the Company that would grant such holder registration rights pari passu or
senior to those granted to the Holders hereunder.
2.12 "MARKET STAND-OFF" AGREEMENT; AGREEMENT TO FURNISH INFORMATION.
No Holder shall sell or otherwise transfer (other than transfers by a Holder to
an affiliate of such Holder) or dispose of 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 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 Public Offering;
(ii) all officers, directors and 5% stockholders of the
Company enter into similar agreements; and
(iii) each Holder shall execute and deliver such other
agreements as may be reasonably requested by the Company or the underwriter
which are consistent with the foregoing or which 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 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 this
Section 2.12 shall not apply to a registration relating solely to employee
benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated
in the future, or a registration relating solely to a Commission Rule 145
transaction on Form S-4 or similar forms that may be
14
promulgated in the future. 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 180-day period.
2.13 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 shall 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; and such other reports and documents so filed
by the Company, and such other information as a Holder may reasonably request in
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, 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) As soon as practicable after the end of each fiscal year of
the Company, and in any event within 90 days thereafter, the Company will
furnish each Investor with audited financial statements of the Company prepared
by a major accounting firm selected by the Board and in accordance with
generally accepted accounting principles consistently applied.
(c) As soon as practicable, and in any event not later at the
Company's December Board meeting, the Company will furnish each Investor with an
annual budget for the next fiscal year approved by the Board (and as soon as
available, any subsequent revisions thereto) including projected income
statements, cash flows and balance sheets on a quarterly basis for the ensuing
fiscal year.
(d) As soon as practicable after the end of each calendar
month, and in any event within 30 days thereafter, consolidated balance sheets
of the Company as of the end of each
15
calendar month, and consolidated statements of income and cash flows of the
Company for such month and for the current fiscal year to date, prepared in
accordance with generally accepted accounting principles consistently applied,
excluding footnotes and year-end adjustments, and a narrative discussion and
analysis, of the results of operations and financial condition of the Company
and setting forth in each case in comparative form the figures for such month
and the figures from the most recent budget approved by the Board, and an
analysis of the Company's compliance with applicable loan covenants, if any, all
in reasonable detail. Such financial statements shall include a narrative
discussion and analysis of the financial condition of the Company prepared by
the Chief Financial Officer of the Company summarizing the foregoing.
(e) In the event that the Company fails to provide the
financial statements and/or monthly reports required by Sections 3.1(b) and
3.1(d), the Investors may, at the Company's expense, request an audit by an
accounting firm of their own choice such that such financial statements and/or
monthly reports are produced to the Investors' satisfaction.
(f) Within 10 days after discovery of any default in the
performance of the covenants and agreements contained in this Section 3.1, the
Company shall furnish each Investor a statement outlining such default or event,
and management's proposed response to such default or event.
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 during normal business hours following reasonable notice 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 any Investor that is a
competitor of the Company.
3.3 CONFIDENTIALITY OF RECORDS. Each Investor shall use, and shall
use its reasonable best efforts to cause its authorized representatives to use,
the same degree of care as such Investor uses to protect its own confidential
information to keep confidential any information furnished to it which the
Company identifies in writing 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 to any partner,
subsidiary, affiliate or parent of such Investor for the purpose of evaluating
its investment in the Company as long as such partner, subsidiary, affiliate or
parent is advised of the confidentiality provisions of this Section 3.3.
Notwithstanding the foregoing, information shall not be deemed confidential if
(a) at the time of disclosure it is generally available to and known by the
public (other than as a result of a disclosure directly by the recipient or any
of its representatives), (b) was available to the recipient on a
non-confidential basis from a source that is not and was not prohibited from
disclosing such information to the recipient by a contractual, legal or
fiduciary obligation or (c) is known to the recipient prior to or independently
of its relationship with the Company.
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 Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock, the Series D Preferred Stock and the
16
exercise of the Warrants, all shares of Common Stock issuable from time to time
upon such conversion and exercise.
3.5 STOCK VESTING. Unless otherwise approved by the Board, 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 over four years. With respect to any shares of stock purchased by any
such person pursuant to the exercise of any stock options, the Company shall
have the following rights (to the extent permissible under applicable securities
laws and other laws): (a) until the Company's Initial Public Offering, the
Company or its assignee shall have a right of first refusal to purchase such
shares of stock should the holder thereof desire to sell any such shares; and
(b) the Company's repurchase option shall provide that upon such person's
termination of employment or service with the Company, with or without cause,
the Company or its assignee (to the extent permissible under applicable
securities laws and other laws) shall have the option until the Initial Public
Offering, to purchase at fair market value (as determined in good faith by the
Board) any vested shares of stock held by such person.
3.6 EMPLOYEE NON-DISCLOSURE, ASSIGNMENT OF DEVELOPMENTS AND
NON-SOLICITATION AGREEMENT. The Company shall require all employees and
consultants to execute and deliver an Employee Non-Disclosure, Assignment of
Developments and Non-Solicitation Agreement substantially in the form attached
as Exhibit 3.15 to the Purchase Agreement.
3.7 BOARD OBSERVATION.
(a) Prior to a Qualified Public Offering, the following Holders shall
have the right to have a representative attend all meetings of the Board of
Directors (whether in person, by telephone or otherwise) in a non-voting
observer capacity and shall be entitled to receive, concurrently with the
members of the Board, and in the same manner, notice of such meeting and a copy
of all materials, consents and resolutions provided to such members of the
Board:
(i) The Sprout Group, beginning on the date on which
Sprout Capital IX, L.P. and its affiliates are not represented on the Board and
ending on the date that Sprout Capital IX, L.P. and its affiliates owns less
than 20% of the Series D Preferred Stock purchased by Sprout Capital IX, L.P.
and its affiliates on the date hereof or Common Stock issuable upon conversion
of such series of Preferred Stock;
(ii) Perseus-Xxxxx Biopharmaceutical Fund, L.P. ("PSBF"),
beginning on the date on which PSBF is not represented on the Board and ending
on the date that PSBF owns less than 20% of the Series B Preferred Stock
purchased by it on October 12, 2001 and the Series C Preferred Stock purchased
by it on June 21, 2002 or Common Stock issuable upon conversion of such series
of Preferred Stock;
(iii) Orbimed Advisors, LLC, beginning on the date on
which Caduceus Private Investments II, LP ("Caduceus") and its affiliates are
not represented on the Board and ending on the date that Caduceus and its
affiliates own less than 20% of the Series D Preferred Stock purchased by it on
the date hereof or Common Stock issuable upon conversion of such series of
Preferred Stock;
17
(iv) BB Biotech ("BB"), or an affiliate thereof, until
such time as BB and its affiliates own less than 20% of the Series D Preferred
Stock purchased by BB on the date hereof or Common Stock issuable upon
conversion of such series of Preferred Stock;
(v) SCP Private Equity Partners II, L.P. ("SCP"),
beginning on the date on which SCP is not represented on the Board and ending on
the date that SCP and its affiliates own less than 1.0 million shares of the
capital stock of the Company;
(vi) Xxxxxx Brothers Healthcare Venture Capital L.P.
("Xxxxxx"), or an affiliate thereof, until such time as Xxxxxx and its
affiliates own less than 20% of the Series C Preferred Stock purchased by Xxxxxx
and its affiliates on June 21, 2002 or the Common Stock issuable upon conversion
thereof; and
(vii) Xxxxxxxx Ventures Life Sciences Fund II LPI
("Schroders"), or an affiliate thereof, until such time as Schroders and its
affiliates own less than 20% of the Series C Preferred Stock purchased by
Schroders and its affiliates on June 21, 2002 or the Common Stock issuable upon
conversion thereof.
(b) The Company shall hold meetings of the Board not less than
quarterly.
(c) After the date hereof the Company shall create a search
committee to initiate a search for a President/Chief Operating Officer, which
search committee shall include at least one director designated by the holders
of a majority of the shares of Series D Preferred Stock.
3.8 DIRECTORS' EXPENSES. The Company shall reimburse each member of
the Board for all reasonable expenses incurred by the director to attend board
meetings and any other expenses incurred in connection with the Company's
business approved by the Chief Executive Officer or President of the Company.
3.9 DIRECTORS' LIABILITY AND INDEMNIFICATION. The Company's Fourth
Restated Certificate of Incorporation and By-laws shall provide (a) for
elimination of the liability of directors to the maximum extent permitted by law
and (b) for indemnification of directors for acts on behalf of the Company to
the maximum extent permitted by law.
3.10 INDEMNIFICATION. The Company will indemnify members of the Board
to the broadest extent permitted by applicable law and will indemnify each
Investor for any claims brought against the Investors by any third party
(including any other stockholder of the Company) as a result of this financing.
3.11 REAL PROPERTY HOLDING CORPORATION. The Company covenants that it
will operate in a manner such that it will not become a "United States real
property holding corporation" ("USRPHC") as that term is defined in Section
897(c)(2) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder ("FIRPTA"). The Company shall make determinations as to its status as
a USRPHC, and will file statements concerning those determinations with the
Internal Revenue Service, in the manner and at the times required under Reg. ss.
1.897-2(h), or any supplementary or successor provision thereto. Within 30 days
of a request from an Investor or any of its partners, the Company will inform
the requesting party, in
18
the manner set forth in Reg. ss. 1.897-2(h)(1) (but in any event, one business
day prior to the close of any sale of an interest in the Company by such
Investor) or any supplementary or successor provision thereto, whether that
party's interest in the Company constitutes a United States real property
interest (within the meaning of Internal Revenue Code Section 897(c)(1) and the
regulations thereunder) and whether the Company has provided to the Internal
Revenue Service all required notices as to its USRPHC status.
3.12 SETTLEMENT OF LITIGATION. If the Company is adjudged liable in
connection with the Litigation in an amount that is less than $2.0 million, the
Company promptly shall give The Sprout Group written notice of such judgement
promptly after the Company receives notice that such judgement was entered. The
Company shall not appeal any such judgment without the written approval of The
Sprout Group; PROVIDED, that The Sprout Group delivers written notice of its
objection to any such appeal at least five calendar days prior to the last date
on which the Company may enter a notice of appeal with respect to such judgment.
If the Company negotiates the terms of a settlement agreement with the
plaintiffs in the Litigation for an amount less than $2.0 million, then the
Company shall promptly deliver written notice thereof to The Sprout Group, which
notice shall include the specific terms thereof. The Sprout Group shall have
five business days from the date of its receipt of such notice to require the
Company to consummate such settlement agreement. If The Sprout Group fails to
notify the Company in writing of its approval within such five-business day
period, then The Sprout Group shall be deemed to have waived its rights under
this Section 3.12 as to requiring the Company to consummate any such settlement
agreement. Additionally, the Company shall promptly notify The Sprout Group in
writing of any settlement proposal relating to the Litigation.
3.13 TERMINATION OF COVENANTS. Except for the covenants contained
in Section 3.3, 3.4 and 3.10, all covenants of the Company contained in Section
3 of this Agreement shall expire and terminate as to each Holder upon the
earlier of (i) the effective date of the registration statement pertaining to
the Initial Public Offering or (ii) upon an acquisition of the Company by
another corporation or entity by consolidation, merger or other reorganization
in which the holders of the Company's outstanding voting stock immediately prior
to such transaction, together with their affiliates, own immediately after such
transaction securities representing less than 50% of the voting power of the
corporation or other entity surviving such transaction.
SECTION 4. RIGHT OF FIRST REFUSAL
4.1 SUBSEQUENT OFFERINGS. The Holders shall have Pro Rata, a right
of first refusal to purchase 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 4.6 The term
"Equity Securities" shall mean (i) any Common Stock or Preferred Stock of the
Company, (ii) any security convertible, with or without consideration, into any
of the Common Stock or the Company's Preferred Stock, par value $0.01 per share
(the "Preferred Stock") (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 or Preferred Stock or (iv) any such warrant or right.
The term "Pro Rata" means the number quotient determined by dividing the (x) the
sum of the number of shares of Common Stock held by each Holder immediately
prior to the issuance of the Equity Securities, assuming full exercise and/or
conversion of all shares of Preferred Stock, all other Company securities
exercisable
19
and/or convertible into the Company's Common Stock held by all Holders, by the
total number of common shares held by all Holders, assuming full exercise and/or
conversion of all Preferred Stock, and all other Company securities exercisable
and/or convertible into the Company's Common Stock held by all Holders.
4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give the Holders 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 Holder shall have 20 days from the date of
delivery of any such notice to agree to purchase the Equity Securities for the
price and upon the terms and conditions specified in the notice by giving notice
to the Company and stating therein the quantity of Equity Securities it agrees
to purchase. Such 20 day limited period is subject to the Company then being in
compliance with its covenants in Sections 3.1 and 3.2. If some but not all of
the Holders elect to purchase their Pro Rata share of the offered Equity
Securities, those electing Holders shall have 10 additional days to agree to
purchase any or all of the offered Equity Securities that were available for
purchase by the non-electing Holders, allocated Pro Rata among the electing
Holders who choose to purchase such additional offered Equity Securities, based
on the number of common shares held by each electing Holder assuming conversion
of all shares of Preferred Stock held by such Holder.
4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If the Holders
fail to exercise in full the rights of first refusal, the Company shall have 90
days thereafter to sell all such Equity Securities to any other person(s), at
the same price and upon general terms and conditions materially no more
favorable to the purchasers thereof than were offered to the Holders pursuant to
Section 4.2, and shall have no obligation to sell any such equity securities to
the Holders.
4.4 TERMINATION AND WAIVER OF RIGHT OF FIRST REFUSAL. The right of
first refusal established by this Section 4 shall not apply to, and shall
terminate upon the effective date of the registration statement pertaining to
the Company's first Qualified Public Offering. The provisions of this Section 4
may be amended or waived only by the agreement of the Company and the holders of
at least a majority of the Series A Preferred Stock, a majority of the Series B
Preferred Stock, a majority of the Series C Preferred Stock of the Company and
66 2/3% of the Series D Preferred Stock of the Company each voting as a separate
class.
4.5 TRANSFER OF RIGHTS OF FIRST REFUSAL. Each Holder may assign its
right of first refusal under this Section 4 in whole or in part to one or more
of the following: any subsidiary, parent, general partner, limited partner,
retired partner, member, retired member, general partner of a general partner,
affiliate or family trust of such Holder, who shall agree to be bound by this
Agreement in connection with and following such assignment by executing a
Counterpart Signature Page (which shall not be deemed to be an amendment
hereto).
4.6 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 (and/or options, warrants or other
Common Stock purchase rights issued pursuant to such options, warrants or other
rights) issued or to be issued to employees, officers or directors of, or
consultants or advisors to the Company or any subsidiary, pursuant to
compensation plans, agreements, or other arrangements that are approved
20
by the Board, including the Company's 2000 Equity Compensation Plan, as amended
from time to time.
(b) stock issued pursuant to convertible securities outstanding
as of the date of this Agreement or issued pursuant to the Purchase Agreement;
(c) any Equity Securities issued pursuant to the acquisition
of another business entity by the Company by merger, purchase of substantially
all of the assets or shares or other reorganization whereby the Company will own
not less than a majority of the voting power of the surviving or successor
corporation;
(d) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;
(e) shares of Common Stock issued upon conversion of the Shares
or upon exercise of the Warrants issued pursuant to the Purchase Agreement;
(f) any Equity Securities not to exceed 1.0% of the outstanding
capital stock of the Company on a fully diluted and as-converted basis on the
date of issuance issued pursuant to any equipment leasing arrangement, or debt
financing from a bank or similar financial institution;
(g) any Equity Securities issued in connection with strategic
transactions involving the Company and other entities, including (i) joint
ventures, manufacturing, marketing or distribution arrangements or (ii)
technology transfer or development arrangements; PROVIDED that such strategic
transactions and the issuance of shares therein has been approved by the Board;
or
(h) any Series D Preferred Stock sold 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 Delaware, regardless of the conflicts of laws
principles thereof.
5.2 SURVIVAL. Except as expressly provided herein, the
representations, warranties, covenants, and agreements made herein shall survive
any investigation made by any Holder and the closing of the transactions
contemplated hereby. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties by the Company hereunder solely as
of the date of such certificate or instrument.
5.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto 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
21
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.
5.4 ENTIRE AGREEMENT. This Agreement and the Exhibits and Schedules,
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 and no party shall be liable or bound to any other
in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
5.5 SEVERABILITY. In case any provision of this Agreement shall
be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
5.6 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, this Agreement may
be amended or modified only upon the consent of (i) the Company, and (ii) the
holders of at least a majority of the Series A Preferred Stock, a majority of
the Series B Preferred Stock, a majority of the Series C Preferred Stock and 66
2/3% of the Series D Preferred Stock, each voting as a separate class.
(b) Except as otherwise expressly provided, the obligations of
the Company and the rights of the Holders under this Agreement may be waived
only with the consent of the holders of at least a majority of the Series A
Preferred Stock, a majority of the Series B Preferred Stock, a majority of the
Series C Preferred Stock and 66 2/3% of the Series D Preferred Stock, each
voting as a separate class.
5.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company 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 Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder'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 Holders, shall be cumulative and not
alternative.
5.8 NOTICES AND CONSENTS. All notices and consents required or
permitted hereunder must be in writing and shall be deemed effectively given:
(a) upon personal delivery to the party to be notified, (b) when sent by
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day, (c) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one business
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
22
signature pages or Exhibit A or at such other address as such party may
designate by 10 days advance written notice to the other parties hereto.
5.9 FORUM SELECTION. Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement shall be
brought against any of the parties in the Chancery Court of the State of
Delaware, if permitted, or in such other appropriate court of the State of
Delaware, County of New Castle or, if it has or can acquire jurisdiction, in the
United States District Court for the District of Delaware and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
5.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts (delivery of which may occur via facsimile), each of which shall be
an original, but all of which together shall constitute one instrument. The
parties hereto confirm that any facsimile copy of another party's executed
counterpart of this Agreement (or the signature page thereof) shall be deemed to
be an executed original thereof.
5.11 ADJUSTMENTS. All references to numbers of shares, per share price
or other share amounts in this Agreement, the Purchase Agreement or in any of
the agreement delivered in connection herewith or therewith shall be
appropriately adjusted to reflect any stock dividend, split, combination or
other recapitalization of shares by the Company occurring after the date of this
Agreement.
5.12 INTERPRETATION. Unless the context of this Agreement clearly
requires otherwise, (a) references to the plural include the singular, the
singular the plural, the part the whole, (b) references to any gender include
all genders, (c) "including" has the inclusive meaning frequently identified
with the phrase "but not limited to" and (d) references to "hereunder" or
"herein" relate to this Agreement. The section and other headings contained in
this Agreement are for reference purposes only and shall not control or affect
the construction of this Agreement or the interpretation thereof in any respect.
Section, subsection, Annex, Schedule and Exhibit and similar references are to
this Agreement unless otherwise specified. Each accounting term used herein that
is not specifically defined herein shall have the meaning given to it under
GAAP. Any reference to a party's being satisfied with any particular item or to
a party's determination of a particular item presumes that such standard will
not be achieved unless such party shall be satisfied or shall have made such
determination in its sole or complete discretion.
5.13 AGGREGATION. All shares of Series A Preferred Stock held by
Series A Investors that are affiliates shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement to
such Series A Investors. All shares of Series B Preferred Stock held by Series B
Investors that are affiliates shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement to such Series B
Investors. All shares of Series C Preferred Stock held by Series C Investors
that are affiliates shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement to such Series C Investors.
All shares of Series D Preferred Stock held by Series D Investors that are
affiliates shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement to such Series D Investors.
23
5.14 NEGOTIATED AGREEMENT. The parties hereto hereby acknowledge that
the terms and language of this Agreement were the result of negotiations among
the parties and, as a result, there shall be no presumption that any ambiguities
in this Agreement shall be resolved against any particular party. Any
controversy over construction of this Agreement shall be decided without regard
to events of authorship or negotiation.
5.15 PRIOR INVESTOR RIGHTS AGREEMENT. The Prior Investor Rights
Agreement is hereby amended and restated in full to read as set forth herein.
[SIGNATURE PAGES TO FOLLOW]
24
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
AUXILIUM PHARMACEUTICALS, INC.
By:
-----------------------------
Name: Xxxx X. Xxxxxxxxxxxxx
Title: Executive Vice President
000 X. Xxxxxxxxxx Xxxx, Xxxxx X-0
Xxxxxxxxxx, XX 00000
AS A SERIES D INVESTOR:
SPROUT ENTREPRENEURS FUND, L.P.
By: DLJ Capital Corporation
Its: General Partner
---------------------------
By: Xxxxxxxx X. Xxxxxxx
Its: Managing Director
Address: 00 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention:
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SPROUT CAPITAL IX, L.P.
By: DLJ Capital Corporation
Its: Managing General Partner
---------------------------
By: Xxxxxxxx X. Xxxxxxx
Its: Managing Director
Address: 00 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention:
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
DLJ CAPITAL CORPORATION
---------------------------
By: Xxxxxxxx X. Xxxxxxx
Its: Managing Director
Address: 00 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention:
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
CADUCEUS PRIVATE INVESTMENTS II, L.P.
---------------------------
By:
Title: Partner
Address:
Attention:
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
CADUCEUS PRIVATE INVESTMENTS II (QP), L.P.
---------------------------
By:
Title: Partner
Address:
Attention:
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
UBS JUNIPER CROSSOVER FUND, L.L.C.
---------------------------
By:
Title: Partner
Address:
Attention:
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
BIOTECH GROWTH N.V.
By:
------------------------------
Name:
Title:
Address: Asset Managment BAB X.X.
X.Xxxxxx Xxxxxxxxxx Xxxxxxxxx 00
Xxxxxxx, Xxxxxxxxxxx Antilles
Attention: Xxx Xxxxxxx
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
AS A SERIES A, SERIES B, SERIES C INVESTOR AND SERIES D INVESTOR:
SCP PRIVATE EQUITY PARTNERS II, L.P.
By: SCP Private Equity II General Partner, L.P.,
its General Partner
By: SCP Private Equity II, LLC
By:
-----------------------------------
Name:
Title:
Address: 000 Xxxxx Xxxx Xxxxx, Xxxxxxxx 000
Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Fax: 000.000.0000
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
AS A SERIES A, SERIES C AND SERIES D INVESTOR:
CIP CAPITAL, L.P.
By: CIP Capital Management, Inc.
By:
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
Address: 000 Xxxxx Xxxx Xxxxx, Xxxxxxxx 000
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Fax: 000.000.0000
AS A SERIES B, SERIES C AND SERIES D INVESTOR:
PERSEUS-XXXXX BIOPHARMACEUTICAL FUND, LP
By: Perseus-Xxxxx Partners, LLC,
Its General Partner
By: SFM Participation, L.P.,
Its Managing Member
By: SFM AH, Inc.,
Its General Partner
By: Xxxxx Private Funds Management LLC
Its Managing Member
-----------------------------------
By:
Title: Attorney-in-Fact
Address: Perseus-Xxxxx Biopharmaceutical Fund, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxx
with a copy to:
Perseus-Xxxxx Biopharmaceutical Fund, L.P.
C/O Soros Fund Management LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx., Esq.
and
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
XXXXXX BROTHERS P.A. LLC
By:
------------------------------
Name: Xxxxxx Xxxxxxxxxx
Its: Senior Vice President
Address: Xxxxxx Brothers
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
XXXXXX BROTHERS PARTNERSHIP ACCOUNT 2000/2001, L.P.
By: LB I Group Inc., its General Partner
By:
------------------------------
Name: Xxxxxx Xxxxxxxxxx
Its: Senior Vice President
Address: Xxxxxx Brothers
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
XXXXXX BROTHERS OFFSHORE PARTNERSHIP ACCOUNT 2000/2001, L.P.
By: Xxxxxx Brothers Offshore Partners Ltd.,
its General Partner
By:
------------------------------
Name: Xxxxxx Xxxxxxxxxx
Its: Senior Vice President
Address: Xxxxxx Brothers
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP1
By: Xxxxxxxx Venture Managers Inc., as General Partner
By:
-------------------------------
Name:
Title:
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP2
By: Xxxxxxxx Venture Managers Inc., as General Partner
By:
------------------------------
Name:
Title:
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP3
By: Xxxxxxxx Venture Managers Inc., as General Partner
By:
-------------------------------
Name:
Title:
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II STRATEGIC PARTNERS LP
By: Xxxxxxxx Venture Managers Inc., as General Partner
By:
----------------------------------
Name:
Title:
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SITCO NOMINEES LTD. VC01903
By: Xxxxxxxx Venture Managers Inc., as General Partner
By:
---------------------------------
Name:
Title:
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SV (NOMINEES) LIMITED AS NOMINEE OF XXXXXXXX VENTURES INVESTMENTS LIMITED
By: Xxxxxxxx Venture Managers Inc., as General Partner
By:
---------------------------------
Name:
Title:
Address: Attention: Xxxxxxx Xxxxxxx
Xxxxxxxx House
St. Julian's Avenue
St. Xxxxx Port, Guernsey
CHANNEL ISLANDS
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
XXXXXX BROTHERS HEALTHCARE VENTURE CAPITAL L.P.
By: Xxxxxx Brothers HealthCare Venture Capital Associates L.P.,
its General Partner
By: LB I Group Inc., its General Partner
By:
------------------------------
Name: Xxxxxx Xxxxxxxxxx
Its: Senior Vice President
Address: Xxxxxx Brothers
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
AS A SERIES C AND SERIES D INVESTOR:
INTERNATIONAL BIOTECHNOLOGY TRUST PLC
By:
---------------------------------
Name:
Title:
Address: F.A.O. Xxxx Xxxxxxx
Xxxxxxxx Ventures Life Sciences
Xxxxx Xxxxx
00 Xxxxxxxx
Xxxxxx
XX0X 0XX
XXXXXX XXXXXXX
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
AS A SERIES B AND SERIES C INVESTOR:
X.X. XXXXXXXXX, TOWBIN PRIVATE EQUITY PARTNERS II-Q, L.P.
By: UTCM, LLC, its General Partner
By:
----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: A Managing Member
Address: 000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
X.X. XXXXXXXXX, TOWBIN PRIVATE EQUITY PARTNERS, L.P.
By: UTCM, LLC, its General Partner
By:
----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: A Managing Member
Address: 000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
AS A SERIES C INVESTOR:
XXXXXXX XXXXX VENTURES L.P. 2001
By: Xxxxxxx Xxxxx Ventures LLC, as General Partner
By:
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Co-Chief Investment Officer
Address: 00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
PH: 000.000.0000
FAX: 000.000.0000
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
EXHIBIT A
SERIES A INVESTORS
NAME
----
SCP PRIVATE EQUITY PARTNERS II, L.P.
C.I.P. CAPITAL L.P.
EXHIBIT B
SERIES B INVESTORS
NAME
----
PERSEUS-XXXXX BIOPHARMACEUTICAL FUND L.P.
SCP PRIVATE EQUITY PARTNERS II, L.P.
LB I GROUP INC.
XXXXXX BROTHERS P.A. LLC
XXXXXX BROTHERS PARTNERSHIP ACCOUNT 2000/2001, X.X.
XXXXXX BROTHERS OFFSHORE PARTNERSHIP ACCOUNT 2000/2001, L.P.
C.E. UNTERBERG, TOWBIN PRIVATE EQUITY PARTNERS II-Q, L.P.
C.E. UNTERBERG, TOWBIN PRIVATE EQUITY PARTNERS II, X.X.
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP1
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP2
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP3
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II STRATEGIC PARTNERS LP
SITCO NOMINEES LTD. VC01903
SV (NOMINEES) LIMITED AS NOMINEE OF XXXXXXXX VENTURES INVESTMENTS LIMITED
EXHIBIT C
SERIES C INVESTORS
NAME
----
PERSEUS-XXXXX BIOPHARMACEUTICAL FUND L.P.
SCP PRIVATE EQUITY PARTNERS II, L.P.
C.I.P. CAPITAL X.X.
XXXXXX BROTHERS HEALTHCARE VENTURE CAPITAL X.X.
XXXXXX BROTHERS P.A. LLC
XXXXXX BROTHERS PARTNERSHIP ACCOUNT 2000/2001, X.X.
XXXXXX BROTHERS OFFSHORE PARTNERSHIP ACCOUNT 2000/2001, L.P.
C.E. UNTERBERG, TOWBIN PRIVATE EQUITY PARTNERS II-Q, L.P.
C.E. UNTERBERG, TOWBIN PRIVATE EQUITY PARTNERS II, X.X.
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP1
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP2
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP3
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II STRATEGIC PARTNERS LP
SITCO NOMINEES LTD. VC01903
SV (NOMINEES) LIMITED AS NOMINEE OF XXXXXXXX VENTURES INVESTMENTS LIMITED
INTERNATIONAL BIOTECHNOLOGY TRUST PLC
XXXXXXX XXXXX VENTURES L.P. 2001
EXHIBIT D
SERIES D INVESTORS
NAME
----
SPROUT ENTREPRENEURS FUND, L.P.
SPROUT CAPITAL IX, L.P.
DLJ CAPITAL CORPORATION
UBS JUNIPER CROSSOVER FUND, L.L.C.
CADUCEUS PRIVATE INVESTMENTS II, LP
CADUCEUS PRIVATE INVESTMENTS II (QP), LP
BIOTECH GROWTH N.V.
PERSEUS-XXXXX BIOPHARMACEUTICAL FUND L.P.
SCP PRIVATE EQUITY PARTNERS II, L.P.
C.I.P. CAPITAL X.X.
XXXXXX BROTHERS HEALTHCARE VENTURE CAPITAL X.X.
XXXXXX BROTHERS P.A. LLC
XXXXXX BROTHERS PARTNERSHIP ACCOUNT 2000/2001, X.X.
XXXXXX BROTHERS OFFSHORE PARTNERSHIP ACCOUNT 2000/2001, X.X.
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP1
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP2
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II LP3
XXXXXXXX VENTURES INTERNATIONAL LIFE SCIENCES FUND II STRATEGIC PARTNERS LP
SITCO NOMINEES LTD. VC01903
SV (NOMINEES) LIMITED AS NOMINEE OF XXXXXXXX VENTURES INVESTMENTS LIMITED
INTERNATIONAL BIOTECHNOLOGY TRUST PLC
ANNEX A
COUNTERPART SIGNATURE PAGE
TO
AUXILIUM PHARMACEUTICALS, INC.
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
The undersigned, as a purchaser of shares of Series C Preferred Stock, par value
$0.01 per share, of Auxilium Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), hereby adopts and agrees to be bound by all of the terms and
provisions of, and shall be entitled to all of the benefits and privileges of an
Investor as defined in, the Second Amended and Restated Prior Investor Rights
Agreement by and among the Company, and the investors listed on EXHIBIT A,
EXHIBIT B and EXHIBIT C thereto (the "Prior Investor Rights Agreement"), and
further authorizes the Company to attach this signature page to the Prior
Investor Rights Agreement in order to make the undersigned a party to the Prior
Investor Rights Agreement.
--------------------------
[Investor Name]
Dated: _____________, 200__
