Exhibit 4.2
CYTOKINETICS, INCORPORATED
FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Fourth Amended and Restated Investors' Rights Agreement (the
"Agreement") is made as of the 21st day of March, 2003 by and among
Cytokinetics, Incorporated, a Delaware corporation (the "Company") and the
investors listed on Exhibit A hereto, each of which is herein referred to as an
"Investor."
RECITALS
WHEREAS, certain of the Investors (the "Prior Parties") hold shares of
the Company's Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock and/or shares of Common Stock issued
upon conversion thereof (the "Prior Shares") and possess, registration rights,
information rights, rights of first refusal, and other rights pursuant to that
certain Third Amended and Restated Investor Rights Agreement dated as July 26,
2001 between the Company and such Prior Parties (the "Prior Agreement"); and
WHEREAS, the Prior Parties desire to amend and restate in its entirety
the Prior Agreement and to accept the rights created pursuant hereto in lieu of
the rights granted to them under the Prior Agreement; and
WHEREAS, certain Investors are parties to the Series E Preferred Stock
Purchase Agreement, dated as of March 21, 2003, between the Company and such
Investors (the "Purchase Agreement"), such Investors' obligations under which
are conditioned upon the execution and delivery of this Agreement by such
Investors, the Company and the execution of this Agreement or a written consent
to amend and restate the Prior Agreement by the Prior Parties holding in excess
of sixty percent (60%), on an as converted basis, of the Prior Shares:
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties to the Prior Agreement hereby and pursuant to
written consent agree that the Prior Agreement shall be superseded, amended and
restated in its entirety by this Agreement, and the parties hereto further agree
as follows:
AGREEMENT
The parties hereby agree as follows:
1. REGISTRATION RIGHTS. The Company and the Investors covenant
and agree as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities Act
of 1933, as amended (the "Securities Act"), the declaration or ordering of
effectiveness of such registration statement or document and the continuation in
effect of
such registration statement, not subject to any stop order issued by the
Securities and Exchange Commission ("SEC"), for the period set forth in Section
1.5(a) hereof;
(b) The term "Registrable Securities" means (i)
the shares of Common Stock issuable or issued upon conversion of the Series A
Preferred Stock ("Series A Stock"), Series B Preferred Stock ("Series B Stock"),
Series C Preferred Stock ("Series C Stock") Series D Preferred Stock (the
"Series D Stock"), and the Series E Preferred Stock ("Series E Stock", together
with the Series A Stock, Series B Stock, Series C Stock and Series D Stock,
collectively, the "Preferred Stock") and (ii) any other shares of 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, the
shares listed in this Section 1.1(b)(i); provided, however, that the foregoing
definition shall exclude in all cases any Registrable Securities sold by a
person in a transaction in which his or her rights under this Agreement are not
assigned. Notwithstanding the foregoing, Common Stock or other securities shall
only be treated as Registrable Securities if and so long as they have not been
(A) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (B) sold in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act under Section 4(l) thereof so that all transfer restrictions, and
restrictive legends with respect thereto, if any, are removed upon the
consummation of such sale; and provided further, that any reference in this
agreement to a specific number of Registrable Securities shall be subject to
adjustment for any stock splits, reverse stock splits, stock dividends,
combinations, recapitalizations and similar transactions;
(c) The number of shares of "Registrable
Securities then outstanding" shall be determined by the number of shares of
Common Stock outstanding which are, and the number of shares of Common Stock
issuable pursuant to then exercisable or convertible securities which are,
Registrable Securities;
(d) The term "Holder" means any person owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.12 of this Agreement;
(e) The term "Form S-3" means such form under
the Securities Act as in effect on the date hereof or any successor form under
the Securities Act;
(f) The term "SEC" means the Securities and
Exchange Commission; and
(g) The term "Qualified IPO" means a firm
commitment underwritten public offering by the Company of shares of its Common
Stock pursuant to a registration statement on Form S-1 under the Securities Act,
in which the aggregate cash proceeds to the Company are not less than
$40,000,000 (net of underwriting discounts and commissions).
1.2 REQUEST FOR REGISTRATION.
(a) Demand Rights.
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(i) If the Company shall receive at any
time after the earlier of (A) December 31, 2003 or (B) six (6) months after the
effective date of the first registration statement for a public offering of
securities of the Company (other than a registration statement relating either
to the sale of securities to employees of the Company pursuant to a stock
option, stock purchase or similar plan or an SEC Rule 145 transaction), a
written request from the Holders of (x) at least fifty-one percent (51%) of the
Registrable Securities then outstanding in the case of the first such request,
or (y) at least twenty-five percent (25%) of the Registrable Securities then
outstanding in the case of the second such request, that the Company file a
registration statement under the Securities Act covering the sale of at least
twenty percent (20%) of the Registrable Securities held by the Holders
requesting such registration, then the Company shall, within ten (10) days of
the receipt thereof, give written notice of such request in accordance with
Section 3.3 hereof to all Holders and shall, subject to the limitations of
subsection 1.2(b), use its best commercially reasonable efforts to effect as
soon as practicable, and in any event within 90 days of the receipt of such
request, the registration under the Securities Act of all Registrable Securities
which the Holders request to be registered within twenty (20) days of the
mailing of such notice by the Company.
(ii) If the Company shall receive at any
time after twelve (12) months from the effective date of the first registration
statement for a public offering of securities of the Company (other than a
registration statement relating either to the sale of securities to employees of
the Company pursuant to a stock option, stock purchase or similar plan or an SEC
Rule 145 transaction), a written request from the holders of at least thirty
percent (30%) of the aggregate number of shares of Common Stock heretofore
issued upon conversion of the Series C Stock and shares of Common Stock issuable
upon conversion of the Series C Stock then outstanding that the Company file a
registration statement under the Securities Act covering the registration of at
least thirty percent (30%) of the aggregate number of shares of Common Stock
heretofore issued upon conversion of the Series C Stock and shares of Common
Stock issuable upon conversion of Series C Stock then outstanding the Company
shall, within ten (10) days of the receipt thereof, give written notice in
accordance with Section 3.3 of such request to all holders of Common Stock
issued or issuable upon conversion of Series C Stock and shall, subject to the
limitations of subsection 1.2(b), use its best commercially reasonable efforts
to effect as soon as practicable, and in any event within 90 days of the receipt
of such request, the registration under the Securities Act of all Common Stock
issued or issuable upon conversion of the Series C Stock which the holders of
such Common Stock request to be registered within twenty (20) days of the
mailing of such notice by the Company, provided that any registration carried
out pursuant to this Section 1.2 (a)(ii) shall be on Form S-3 if such form is
available for such offering.
(b) If the Holders initiating the registration
request hereunder (collectively, 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 1.2 and the Company shall include such information in the written
notice referred to in subsection 1.2(a). The underwriter will be selected by a
majority in interest of the Initiating Holders and shall be reasonably
acceptable to the Company. In such event, the right of any Holder to include
their 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 (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their
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securities through such underwriting shall (together with the Company as
provided in subsection 1.5(e)) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting,
provided, however, that (A) no Holder shall be required to make any
representations or warranties to, or agreements with, the Company or any
underwriter other than representations, warranties or agreements regarding the
identity of such Holder, the title to the Registrable Securities being sold by
such Holder, the power and authority of such Holder to enter into the
underwriting agreement, the amount and ownership of the securities of the
Company held by such Holder, such Holder's intended method of distribution and
any other customary representations and warranties concerning the Holder and its
Registrable Securities reasonably requested by the Company or the underwriters
and (B) no Holder shall be required to make any representations or warranties
concerning the Company or its business, properties, prospects, financial
condition or related matters. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities, other than shares
sold by the Company which are included in such underwriting with the consent of
a majority in interest of the Initiating Holders, are first entirely excluded
from the underwriting.
(c) Notwithstanding the foregoing, if the
Company shall furnish to Holders requesting a registration statement pursuant to
this Section 1.2, a certificate signed by the President 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
registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, 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, however, that the Company may not utilize
this right more than once in any twelve-month period.
(d) In addition, the Company shall not be
obligated to effect, or to take any action to effect, any registration pursuant
to this Section 1.2:
(i) For purposes of registrations
requested pursuant to Section 1.2 (a)(i), (A) after the Company has effected two
(2) such registrations pursuant to Section 1.2(a)(i) and such registrations have
been declared or ordered effective and remained in effect, not subject to any
stop order issued by the SEC, in accordance with the provisions of Section
1.5(a) hereof or (B) within six (6) months of the effective date of another
registration;
(ii) For purposes of registrations
requested pursuant to Section 1.2 (a)(ii), (A) after the Company has effected
two (2) such registrations pursuant to Section 1.2(a)(ii) and such registrations
have been declared or ordered effective and remained in effect, not subject to
any stop order issued by the SEC, in accordance with the provisions of Section
1.5(a) hereof or (B) within six (6) months of the effective date of another
registration;
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(iii) During the period starting with the
date ninety (90) days prior to the Company's good faith estimate of the date of
filing of, and ending on a date one hundred eighty (180) days after the
effective date of, a registration subject to Section 1.3 hereof; provided that
the Company is actively employing in good faith all reasonable efforts to cause
such registration statement to become effective; or
(iv) 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 1.4 below.
1.3 COMPANY REGISTRATION. If (but without any obligation
to do so) the Company proposes to register (including for this purpose a
registration effected by the Company for stockholders other than the Holders)
any of its stock under the Securities Act in connection with the public offering
of such securities solely for cash (other than a registration relating solely to
the sale of securities to participants in a Company stock plan or a transaction
covered by Rule 145 under the Securities Act, a registration in which the only
stock being registered is Common Stock issuable upon conversion of debt
securities which are also being registered, or any registration on any form
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give each Holder written
notice of such registration in accordance with Section 3.3. Upon the written
request of each Holder given within twenty (20) days after mailing of such
notice by the Company, the Company shall, subject to the provisions of Section
1.8, cause to be registered under the Securities Act all of the Registrable
Securities that each such Holder has requested to be registered.
1.4 FORM S-3 REGISTRATION. In case the Company shall
receive from Holders of the Registrable Securities then outstanding a written
request or requests that the Company effect a registration on Form S-3 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;
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 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 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 1.4: (i) if Form S-3 is not available for such offering by the Holders;
(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 (net of any underwriters' discounts or commissions) of less than
$500,000; (iii) if the Company shall furnish to the Holders a certificate signed
by the President 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
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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 90 days
after receipt of the request of the Holder or Holders under this Section 1.4;
provided, however, that the Company shall not utilize this right more than once
in any twelve month period; (iv) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected one
registration on Form S-3 for the Holders pursuant to this Section 1.4 or within
six (6) months of the effective date of another registration; (v) 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; or (vi) during the period ending one
hundred eighty (180) days after the effective date of a registration statement
subject to Section 1.2 or Section 1.3.
(c) Subject to the foregoing, the Company shall
file a 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 1.4 shall not be counted as demands for registration or registrations
effected pursuant to Sections 1.2 or 1.3, respectively.
(d) All Holders proposing to distribute their
securities through an underwriting under this Section 1.4 shall (together with
the Company as provided in subsection 1.5(e)) enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting, provided, however, that (A) no Holder shall be required to
make any representations or warranties to, or agreements with, the Company or
any underwriter other than representations, warranties or agreements regarding
the identity of such Holder, the title to the Registrable Securities being sold
by such Holder, the power and authority of such Holder to enter into the
underwriting agreement, the amount and ownership of the securities of the
Company held by such Holder, such Holder's intended method of distribution and
any other customary representations and warranties concerning the Holder and its
Registrable Securities reasonably requested by the Company or the underwriters
and (B) no Holder shall be required to make any representations or warranties
concerning the Company or its business, properties, prospects, financial
condition or related matters.
1.5 OBLIGATIONS OF THE COMPANY. Whenever required under
this Section 1 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 commercially
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 one
hundred twenty (120) days.
(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 up to one hundred
twenty (120) days.
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(c) Furnish to the Holders such numbers 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 best commercially 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 of such
offering. Each Holder participating in such underwriting shall also enter into
and perform its obligations under such an agreement, provided, however, that
with respect to registrations pursuant to Sections 1.2 and 1.4 (A) no Holder
shall be required to make any representations or warranties to, or agreements
with, the Company or any underwriter other than representations, warranties or
agreements regarding the identity of such Holder, the title to the Registrable
Securities being sold by such Holder, the power and authority of such Holder to
enter into the underwriting agreement, the amount and ownership of the
securities of the Company held by such Holder, such Holder's intended method of
distribution and any other customary representations and warranties concerning
the Holder and its Registrable Securities reasonably requested by the Company or
the underwriters and (B) no Holder shall be required to make any representations
or warranties concerning the Company or its business, properties, prospects,
financial condition or related matters, and, provided further, that with respect
to registrations pursuant to Section 1.3 no Holder shall be required to make any
representations or warranties to, or agreements with, the Company or any
underwriter other than the representations set forth in Part (A) of this
paragraph, above, and, if the Holders are required by the underwriters, the same
representations and warranties required by the underwriters on the part of the
Company concerning the Company or its business, properties, prospects, financial
condition or related matters provided that such representations will be
qualified as to the knowledge of such selling Holder.
(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 light of the circumstances then
existing, such obligation to continue for one hundred twenty (120) days. In such
case, the Company shall promptly prepare a supplement or amendment to such
prospectus and furnish to each seller of Registrable Securities a reasonable
number of copies of such supplement to or an amendment of such prospectus as may
be necessary so that, after delivery to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The number of days during which the
Company is preparing such supplement or amendment shall be added to the period
set forth in Section 1.5(a) hereof.
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(g) Cause all such Registrable Securities
registered pursuant hereunder to be listed on each securities exchange on which
similar securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for
all Registrable Securities registered pursuant hereunder and a CUSIP number for
all such Registrable Securities, in each case not later than the effective date
of such registration.
(i) Use its best commercially reasonable efforts
to furnish, at the request of any Holder requesting registration of Registrable
Securities pursuant to this Section 1, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Section 1, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated 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 to the Holders requesting
registration of Registrable Securities and (ii) a letter dated 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,
if any, and to the Holders requesting registration of Registrable Securities.
(j) In the event of any underwritten public
offering, cooperate with the Holders requesting registration, the underwriter
participating in the offering and their counsel in any due diligence
investigation reasonably requested by the Holders or the underwriters in
connection therewith, and participate, to the extent reasonably requested by the
underwriter for the offering (including, without limitation, participating in
"roadshow" meetings with prospective investors) and that would be customary for
underwritten primary offerings of a comparable amount of equity securities by
the Company.
1.6 FURNISH INFORMATION. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 1 with respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be reasonably required to effect the registration of
such Holder's Registrable Securities. The Company shall have no obligation with
respect to any registration requested pursuant to Section 1.2 or Section 1.4 of
this Agreement if, as a result of the application of the preceding sentence, 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 subsection 1.2(a) or subsection 1.4(b), whichever is applicable;
provided, however, that such registration shall not be deemed a registration for
purposes of Section 1.2(d).
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1.7 EXPENSES OF REGISTRATION.
(a) DEMAND REGISTRATION. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Holders
selected by them (collectively "Registration Expenses") shall be borne by the
Company; provided, however, that if the Holders bear the Registration Expenses
for any registration proceeding begun pursuant to Section 1.2 and subsequently
withdrawn by the Holders registering shares therein, such registration
proceeding shall not be counted as a requested registration pursuant to Section
1.2 hereof, except in the event that such withdrawal is based upon material
adverse information relating to the Company that is different from the
information known or available (upon request from the Company or otherwise) to
the Holders requesting registration at the time of their request for
registration under Section 1.2, in which event such registration shall not be
treated as a counted registration for purposes of Section 1.2 hereof, even
though the Holders do not bear the Registration Expenses for such registration.
(b) COMPANY REGISTRATION. All expenses other
than underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications of Registrable Securities pursuant to
Section 1.3 for each Holder, including (without limitation) all registration,
filing, and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holder or Holders selected by them
shall be borne by the Company.
(c) REGISTRATION ON FORM S-3. All expenses other
than underwriting discounts and commissions incurred in connection with a
registration requested pursuant to Section 1.4, including (without limitation)
all registration, filing, qualification, printer's and accounting fees and the
reasonable fees and disbursements of one counsel for the selling Holder or
Holders selected by them shall be borne by the Company.
1.8 UNDERWRITING REQUIREMENTS. In connection with any
offering involving an underwriting of shares of the Company's capital stock, the
Company shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their good faith will not jeopardize
the success of the offering by the Company. If the total amount of securities,
including Registrable Securities, requested by stockholders to be included in
such offering exceeds the amount of securities sold other than by the Company
that the underwriters determine in their good faith is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their good faith will not jeopardize the
success of the offering. The Company will include in such registration (i)
first, the securities the Company proposes to sell for its own account; (ii)
second, to the extent that the number of securities the Company proposes to sell
is less than the number of securities which the Company has been advised can be
sold in such offering that is compatible with the success of the
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offering, such number of Registrable Securities which the Holders have requested
to be included in such registration pursuant to Section 1.3 hereof; provided,
however, in no event shall such number of Registrable Securities which the
Holders have requested to be included in such registration be reduced below
twenty-five percent (25%) of the total amount of securities included in such
registration, unless such offering is the Qualified IPO 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 sentence; and (iii) third, to the extent that the
number of securities which are to be included in such registration pursuant to
clauses (i) and (ii) is, in the aggregate, less than the number of securities
which the Company has been advised can be sold in such offering that is
compatible with the success of the offering, such number of other securities
requested to be included in the offering for the account of any holders not
contractually entitled to registration which, in the opinion of the
underwriters, is compatible with the success of the offering. In no event will
shares of any other selling stockholder be included in such registration which
would reduce the number of shares which have been requested to be included by
Holders without the written consent of Holders of not less than sixty six and
two thirds percent (66 2/3%) of the Registrable Securities proposed to be sold
in the offering. The number of Registrable Securities included in such
registration statement shall be allocated pro rata among the Holders based on
the number of Registrable Securities held by each Holder or in such other
proportions as shall mutually be agreed to by such selling Holders, but in no
event shall any shares being sold by a Holder exercising a demand registration
right similar to that granted in Section 1.2 be excluded from such offering. For
purposes of this Section 1.8 concerning apportionment, for any selling
stockholder which is a holder of Registrable Securities and 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 persons shall be
deemed to be a single "selling stockholder" and any pro-rata reduction with
respect to such "selling stockholder" shall be based upon the aggregate amount
of shares carrying registration rights owned by all entities and individuals
included in such "selling stockholder," as defined in this sentence.
1.9 DELAY OF REGISTRATION. 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 1.
1.10 INDEMNIFICATION. In the event any Registrable
Securities are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, its legal counsel, its
accountants, 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 Securities Exchange Act of 1934, as amended
(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"): (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
-10-
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; and the Company will pay to each such Holder, underwriter
or controlling person, as incurred, 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 subsection 1.10(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 to any Holder,
underwriter or controlling person 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 any such Holder,
underwriter or controlling person.
(b) To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors, each
of its officers who has signed the registration statement, each person, if any,
who controls the Company within the meaning of the Securities Act, its legal
counsel, its accountants, any underwriter, any other Holder selling securities
in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons 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 expressly for
use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection 1.10(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
1.10(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, that
in no event shall any indemnity under this subsection 1.10(b) exceed the net
proceeds from the offering received by such Holder, except in the case of
willful fraud by such Holder.
(c) Promptly after receipt by an indemnified
party under this Section 1.10 of notice of the commencement of any action
(including any governmental action), such indemnified party shall, if a claim in
respect thereof is to be made against any indemnifying party under this Section
1.10, 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 (together with all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the reasonable 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
-11-
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to so notify the indemnifying party
shall not relieve the indemnifying party of any liability (i) that it may have
to the indemnified party hereunder (except to the extent the indemnifying party
forfeits rights or defenses by reason of such failure), or (ii) that it may have
to any indemnified party other than under this 1.10.
(d) If the indemnification provided for in this
Section 1.10 is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, liability, claim, damage or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense 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 statements or omissions that resulted
in such loss, liability, claim, damage or expense as well as any other relevant
equitable considerations; provided, that in no event shall any contribution by a
Holder under this Subsection 1.10(d) exceed the net proceeds from the offering
received by such Holder, except in the case of willful fraud by such Holder. The
relative fault of the indemnifying party and of the indemnified party shall be
determined 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.
(e) Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.
(f) The obligations of the Company and Holders
under this Section 1.10 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section 1, and
otherwise.
1.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Securities Act and any other rule or regulation of the SEC that may at
any time permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available,
as those terms are understood and defined in SEC Rule 144, at all times after
ninety (90) days after the effective date of the first registration statement
filed by the Company for the offering of its securities to the general public so
long as the Company remains subject to the periodic reporting requirements under
Sections 13 or 15(d) of the Exchange Act;
(b) take such action, including the voluntary
registration of its Common Stock under Section 12 of the Exchange Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities, such action to be taken as soon as practicable
-12-
after the end of the fiscal year in which the first registration statement filed
by the Company for the offering of its securities to the general public is
declared effective;
(c) file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act; and
(d) furnish to any Holder, so long as the Holder
owns any Registrable Securities, forthwith upon request (i) a written statement
by the Company that it has complied with the reporting requirements of SEC Rule
144 (at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time after it so qualifies), (ii) 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 (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation of the
SEC which permits the selling of any such securities without registration or
pursuant to such form.
1.12 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to
cause the Company to register Registrable Securities pursuant to this Section 1
may be assigned (but only with all related obligations) by a Holder to (i) a
transferee or assignee of at least 400,000 shares of such securities, (ii) a
transferee or assignee of all of such Registrable Securities held by such
transferring Holder, if less than 400,000 shares, or (iii) a general partner,
limited partner, retired partner, member or retired member, affiliate, parent or
majority-owned subsidiary of the transferee or Holder, provided that prior to
such transfer or assignment the Company is furnished with 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 with an agreement to be
bound to the rights and obligations under Sections 1 and 3 of this Agreement as
a Holder hereunder executed by such transferee or assignee; and provided,
further, that such assignment shall be effective only if immediately following
such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act; and, provided further, that
such transferee or assignee is not a competitor of the Company as determined in
good faith by the Company's Board of Directors. For the purposes of determining
the number of shares of Registrable Securities held by a transferee or assignee,
the holdings of transferees and assignees of a partnership who are partners or
retired partners of such partnership (including spouses and ancestors, lineal
descendants and siblings of such partners or spouses who acquire Registrable
Securities by gift, will or intestate succession) shall be aggregated together
and with the partnership; provided that all assignees and transferees who would
not qualify individually for assignment of registration rights shall have a
single attorney-in-fact for the purpose of exercising any rights, receiving
notices or taking any action under Section 1.
1.13 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From
and after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder (a) to include such securities in any registration filed under Section
1.2 hereof, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of his securities will not reduce the amount of
-13-
the Registrable Securities of the Holders which is included or (b) to make a
demand registration which could result in such registration statement being
declared effective prior to the earlier of either of the dates set forth in
subsection 1.2(a) or within one hundred twenty (120) days of the effective date
of any registration effected pursuant to Section 1.2, provided, however, that
with respect to the inclusion by such holder or prospective holder of securities
in any registration under Section 1.2(a)(ii) of this Agreement, the consent
required under this Section 1.13 shall also include the prior written consent of
the holders of a majority of the shares of Series C Preferred Shares.
1.14 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby
agrees that, during the period of duration (up to, but not exceeding, 180 days)
specified by the Company and an underwriter of Common Stock or other securities
of the Company, following the effective date of a registration statement of the
Company filed under the Securities Act, it shall not, to the extent requested by
the Company and such underwriter, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to donees who
agree to be similarly bound) any securities of the Company held by it at any
time during such period except Common Stock included in such registration;
provided, however, that:
(a) such agreement shall be applicable only to
the first such registration statement of the Company which covers Common Stock
(or other securities) to be sold on its behalf to the public in an underwritten
offering; and
(b) all officers, directors, and key employees
of the Company, all five-percent security holders, and all other persons with
registration rights (whether or not pursuant to this Agreement) enter into
similar agreements.
In order to enforce the foregoing covenant and until the end of such
stand-off period (i) each certificate representing Registrable Securities shall
have a legend imprinted thereon that such Registrable Securities are subject to
a market stand-off agreement restricting the transfer thereof for a period of
180 days following the initial public offering of the Company's securities and
(ii) the Company may impose stop-transfer instructions with respect to the
Registrable Securities of each Holder (and the shares or securities of every
other person subject to the foregoing restriction). Each Holder agrees that, if
so requested, such Holder will execute an agreement in the form provided by the
underwriter containing terms which are essentially consistent with the
provisions of this Section 1.14.
Notwithstanding the foregoing, the obligations described in this
Section 1.14 shall not apply to a registration relating solely to employee
benefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated
in the future, or a registration relating solely to an SEC Rule 145 transaction
on Form S-4 or similar forms which may be promulgated in the future.
1.15 TERMINATION OF REGISTRATION RIGHTS. No Holder shall
be entitled to exercise any right provided for in this Section 1 after the
earlier of (i) five (5) years following the consummation of a Qualified IPO, or
(ii) such time as Rule 144 or another similar exemption under the Securities Act
is available for the sale of all of such Holder's shares during a three
(3)-month period without registration.
-14-
2. COVENANTS OF THE COMPANY.
2.1 DELIVERY OF FINANCIAL STATEMENTS. The Company shall
deliver to each Holder of at least 400,000 shares of Registrable Securities:
(a) as soon as practicable, but in any event
within ninety (90) days after the end of each fiscal year of the Company, an
income statement for such fiscal year, a balance sheet of the Company and
statement of stockholder's equity as of the end of such year, and a statement of
cash flows for such year, such year-end financial reports to be in reasonable
detail, prepared in accordance with generally accepted accounting principles
("GAAP"), and audited and certified by an independent public accounting firm of
nationally recognized standing selected by the Company;
(b) as soon as practicable, but in any event
within thirty (30) days after the end of each of the first three (3) quarters of
each fiscal year of the Company, an unaudited profit or loss statement, a
statement of cash flows for such fiscal quarter and an unaudited balance sheet
as of the end of such fiscal quarter;
(c) within thirty (30) days of the end of each
month, an unaudited income statement and a statement of cash flows and balance
sheet for and as of the end of such month, in reasonable detail;
(d) as soon as practicable, but in any event
thirty (30) days prior to the end of each fiscal year, a budget and business
plan for the next fiscal year, prepared on a monthly basis, and, as soon as
prepared, any other budgets or revised budgets prepared by the Company; and
(e) with respect to the financial statements
called for in subsections (b) and (c) of this Section 2.1, an instrument
executed by the Chief Financial Officer or President of the Company and
certifying that such financials were prepared in accordance with GAAP
consistently applied with prior practice for earlier periods (with the exception
of footnotes that may be required by GAAP) and fairly present the financial
condition of the Company and its results of operation for the period specified,
subject to year-end audit adjustment, provided that the foregoing shall not
restrict the right of the Company to change its accounting principles consistent
with GAAP, if the Board of Directors determines that it is in the best interest
of the Company to do so.
2.2 INSPECTION. The Company shall permit each Holder of
at least 400,000 shares of Registrable Securities, at such Holder's expense, to
visit and inspect the Company's properties, to examine its books of account and
records and to discuss the Company's affairs, finances and accounts with its
officers, all at such reasonable times as may be requested by the Investor;
provided, however, that the Company shall not be obligated pursuant to this
Section 2.2 to provide access to any information (i) which it reasonably
considers to be a trade secret or similar confidential information unless such
holder executes a nondisclosure agreement reasonably acceptable to the Company
or (ii) to any Holder that is a competitor to the Company or acting on behalf of
a competitor to the Company as determined in good faith by the Board of
Directors.
2.3 RIGHT OF FIRST OFFER. Subject to the terms and
conditions specified in this Section 2.3, the Company hereby grants to each
Holder a right of first offer with respect to future
-15-
sales by the Company of its Shares (as hereinafter defined). A Holder who
chooses to exercise the right of first offer may designate as purchasers under
such right, in accordance with the provisions of Section 2.3(e), itself or its
partners or affiliates in such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Company shall first make an offering of such Shares to
each Holder in accordance with the following provisions:
(a) The Company shall deliver a notice by
certified mail ("Notice") to the Holders stating (i) its bona fide intention to
offer such Shares, (ii) the number of such Shares to be offered, and (iii) the
price and material terms, if any, upon which it proposes to offer such Shares.
(b) Within 15 calendar days after delivery of
the Notice, the Holder may elect to purchase or obtain, at the price and on the
terms specified in the Notice, up to that portion of such Shares which equals
the proportion that the number of shares of Common Stock issued and held, or
issuable upon conversion and exercise of all convertible or exercisable
securities then held, by such Holder bears to the total number of shares of
Common Stock then outstanding (assuming full conversion and exercise of all
convertible or exercisable securities). After such 15-day period, the Company
will provide notice to all Holders as to whether or not the right of first offer
has been or will be exercised by all Holders. If any Holders do not exercise
their right of first offer, the Shares that would otherwise be allocated to such
non-exercising Holders shall be available for allocation to each exercising
Holder on a pro-rata basis (based upon the number of shares of Common Stock
issued and held, or issuable upon conversion and exercise of all convertible or
exercisable securities then held by such Holder relative to the total number of
such shares held by all exercising Holders), provided that the additional right
of first offer must be exercised, if at all, within five days after the
exercising Holder has received notice from the Company that the original right
of first offer was not exercised by all Holders.
(c) The Company may, during the 45-day period
following the expiration of the period provided in subsection 2.3(b) hereof,
offer the remaining unsubscribed portion of the Shares to any person or persons
at a price not less than, and upon terms no more favorable to the offeree than
those specified in the Notice. If the Company does not enter into an agreement
for the sale of the Shares within such period, or if such agreement is not
consummated within 60 days of the execution thereof, the right provided
hereunder shall be deemed to be revived and such Shares shall not be offered
unless first reoffered to the Holders in accordance herewith.
(d) The right of first offer in this paragraph
2.3 shall not be applicable (i) to the issuance or sale of Common Stock (or
options therefor) to employees, consultants and directors, pursuant to plans or
agreements approved by the Board of Directors for the primary purpose of
soliciting or retaining their services, (ii) to the sale of shares in connection
with a firm commitment underwritten public offering, (iii) to the issuance of
securities pursuant to the conversion or exercise of convertible or exercisable
securities, (iv) to the issuance of securities in connection with a bona fide
business acquisition of or by the Company, whether by merger, consolidation,
sale of assets, sale or exchange of stock or otherwise or in connection with a
corporate partnering agreement approved by the Board of Directors, (v) to the
issuance of securities to financial institutions or lessors in connection with
commercial credit arrangements, equipment
-16-
financing, or similar transactions approved by the Board of Directors, (vi) to
the issuance or sale of the Series E Preferred Stock, (vii) to the issuance of
dividends or distributions on shares of Preferred Stock, or (viii) warrants
which are currently outstanding for the purchase of shares of the Company's
Common Stock or Preferred Stock.
(e) The right of first offer set forth in this
Section 2.3 may be assigned by a Holder to (i) a transferee or assignee of at
least 400,000 shares of such securities, (ii) a transferee or assignee of all of
such Registrable Securities held by such Transferring Holder, if less than
400,000 shares, or (iii) a partner, affiliate or majority-owned subsidiary of
the transferee, provided that such transferee or assignee is not a competitor of
the Company as determined in good faith by the Company's Board of Directors.
2.4 QUALIFIED SMALL BUSINESS. The Company will use
reasonable efforts to comply with the reporting and record keeping requirements
of Section 1202 of the Code, any regulations promulgated thereunder and any
similar state laws and regulations, and agrees not to repurchase any stock of
the Company if such repurchase would cause the Stock not to so qualify as
"Qualified Small Business Stock," so long as the Company's Board of Directors
determines that it is in the best interests of and not unduly burdensome to the
Company to comply with the provisions of Section 1202 of the Code. The Company
further covenants to submit to its stockholders and to state and federal
taxation authorities such forms and filings as may be required to document such
compliance, including the California Franchise Tax Board Form 3565, Small
Business Stock Questionnaire, with its franchise or income tax return for the
current income year.
2.5 ADDITIONAL COVENANTS.
(a) For so long as an Investor of Series C Stock
holds 1,000,000 or more shares of Series C Stock, or the shares of Common Stock
issued on conversion thereof equivalent to 1,000,000 shares of Series C Stock (a
"Major Investor") the Company shall:
(i) Deliver to such Major Investor all
reports and information required by Section 2.1,
(ii) Permit such Major Investor
reasonable access, during regular business hours, to contact the Company's
senior management,
(iii) Provide to such Major Investor
other non-scientific information reasonably requested by such Major Investor,
provided that the Company consents to the provision of such information (which
consent shall not be unreasonably withheld), and, provided further, that such
Major Investor delivers to the Company a confidentiality agreement, in a form
reasonably satisfactory to the Company, which states, among other things and
without limitation, that such Major Investor shall not use such information for
any purpose other than for evaluation and monitoring its investment in the
Company, and
(iv) Provide to such Major Investor, on
a timely basis, management reports in form and substance mutually agreed to by
the Company and such Major Investor.
-17-
(b) For so long as an Investor, who was at any
time a Major Investor, holds any Registrable Securities of the Company, the
Company shall provide to such Investor any and all information that the Company
provides to non-affiliate holders of Common Stock holding a number of shares of
Common Stock equal to or less than the number of shares of Common Stock such
Investor holds or may be deemed to hold upon conversion of any Registrable
Securities held by such Investor at such time.
(c) Any Major Investor requesting disclosure,
reports or information from the Company pursuant to any provision of this
Section 2, shall work with and assist the Company to prevent the compilation and
delivery of any such requested material or information from placing an undue
burden on the Company or the Company's senior management.
(d) The Company's obligation under Section 2.5
(a)(iii) shall terminate as to any Major Investor upon the occurrence of both of
the following events:
(i) The Company undergoes (A) an
initial public offering of its Common Stock pursuant to a registration statement
filed under the Securities Act of 1933 or (B) a merger, consolidation or sale of
all or substantially all of its assets; and
(ii) After the occurrence of a
transaction listed in (i) above, such Major Investor no longer maintains a
representative director on the Board of Directors of the Company.
2.6 TERMINATION OF COVENANTS.
(a) The covenants set forth in Sections 2.1
through Section 2.3 shall terminate as to each Holder and be of no further force
or effect immediately prior to the consummation of a Qualified IPO.
(b) The covenants set forth in Sections 2.1 and
2.2 shall terminate as to each Holder and be of no further force or effect when
the Company first becomes subject to the periodic reporting requirements of
Sections 13 or 15(d) of the Exchange Act, if this occurs earlier than the events
described in Section 2.6(a) above; provided, however, that the Company covenants
and agrees to enter into an agreement including such covenants if the Company
ceases to be subject to such periodic reporting requirements.
3. MISCELLANEOUS.
3.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided
in this Agreement, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective permitted successors and assigns
of the parties (including transferees of any of the Preferred Stock or any
Common Stock issued upon conversion thereof). Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
-18-
3.2 AMENDMENTS AND WAIVERS. Any term of this Agreement
may be amended or waived only with the written consent of the Company and the
holders of at least sixty percent (60%) of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each holder of any Registrable Securities then
outstanding, each future holder of all such Registrable Securities, and the
Company, provided that, this Agreement shall not be changed in any way that
would adversely affect the rights and privileges of any Holder holding Series A
Preferred Stock, Series B Preferred Stock, Series C Stock, Series D Stock and/or
Series E Stock in a manner different from the Holders of the other series of
Preferred Stock without the written consent of the holders of a majority of the
adversely affected series of Preferred Stock. Notwithstanding anything herein to
the contrary, any Additional Purchaser who purchases Stock at the Second Closing
or the Third Closing, as the case may be, as such terms are defined in the
Purchase Agreement, in accordance with Section 1.2 of the Purchase Agreement
shall become a party to this Agreement as an Investor without any amendment of
this Agreement pursuant to this Section 3.2 or any consent or approval of any
other Investor. Exhibit A hereto shall be supplemented to reflect the addition
of any Additional Purchasers in the Second Closing.
3.3 NOTICES. Unless otherwise provided, any notice
required or permitted by this Agreement shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by overnight courier or
sent by telegram or fax, or seventy-two (72) hours after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid, and addressed
to the party to be notified at such party's address or fax number as set forth
on the signature page or Exhibit A hereto or as subsequently modified by written
notice.
3.4 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, the parties agree
to renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, then (a) such provision shall be excluded from this Agreement, (b)
the balance of the Agreement shall be interpreted as if such provision were so
excluded and (c) the balance of the Agreement shall be enforceable in accordance
with its terms.
3.5 GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto shall be governed, construed and interpreted in
accordance with the laws of the State of California, without giving effect to
principles of conflicts of laws.
3.6 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. 3.7 TITLES AND
SUBTITLES. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
3.8 AGGREGATION OF STOCK. All shares of the Preferred
Stock held or acquired by affiliated entities or persons shall be aggregated
together for the purpose of determining the availability of any rights under
this Agreement.
-19-
[Signature Page Follows]
-20-
The parties have executed this Investors' Rights Agreement as of the
date first above written.
COMPANY:
CYTOKINETICS, INCORPORATED
By:________________________________________
Print Name: Xxxxx Xxxxx
Title: President & CEO
Address: 000 X. Xxxxx Xxxxxx
Xx. Xxx Xxxxxxxxx, XX 00000
INVESTORS:
[Investor Signature Pages To Follow]
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
LIFE SCIENCE VENTURE FUND
By: ReqMed Company, Ltd.
Its General Partner
By:________________________________________
Name:______________________________________
Title:_____________________________________
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
XXXXX XXXXX FUND VII L.P.
By: SRB Associates VII L.P.,
Its General Partner
By:________________________________________
Name: Xxxx X. Xxxxxxx
Title: General Partner
XXXXX XXXXX VII AFFILIATES FUND L.P.
By: SRB Associates VII L.P.,
Its General Partner
By:________________________________________
Name: Xxxx X. Xxxxxxx
Title: General Partner
XXXXX XXXXX FUND VIII L.P.
By: SRB Associates VIII L.P.,
Its General Partner
By:________________________________________
Name: Xxxx X. Xxxxxxx
Title: General Partner
XXXXX XXXXX VIII AFFILIATES FUND L.P.
By: SRB Associates VIII L.P.,
Its General Partner
By:________________________________________
Name: Xxxx X. Xxxxxxx
Title: General Partner
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
XXXXXXXX IX,
A DELAWARE LIMITED PARTNERSHIP
By: Xxxxxxxx IX Management, L.L.C.
Its: General Partner
By:________________________________________
Name:______________________________________
Title: Managing Director
XXXXXXXX ASSOCIATES FUND IV,
A DELAWARE LIMITED PARTNERSHIP
By: Xxxxxxxx IX Management, L.L.C.
Its: General Partner
By:________________________________________
Name:______________________________________
Title: Managing Director
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
CELL TRUST II
By:________________________________________
Name:______________________________________
Title: Administrative Trustee
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
THE X. XXXXX III & XXXXXXXX XXXXXX
XXXXXXXX COMMUNITY PROPERTY TRUST
By: __________________________________
Name: ________________________________
Title: _______________________________
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
BIOMEDICINE, L.P.
By: International BM Biomedicine
Holdings
(Cayman) Ltd.
Its: General Partner
By: __________________________________
Name: Xx. Xxxxxxx X. Staehelin
Title: Chairman
By: __________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
By: __________________________________
Name: Xxxxx Xxxxxx
Title: Director
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
MIZUHO CAPITAL CO., LTD.
By: __________________________________
Name: Xxxxx Xxxx
Title: President
Address: Mizuho Capital Co., Ltd.
Attn: Kazumasa Aoe,
Chief Investment Officer
0-0 Xxxxxxxxxx-xxxxxxxxx,
Xxxx-xx,
Xxxxx 000-0000
Fax: x00-0-0000-0000
MHCC NO. 3 LIMITED LIABILITY FUND
By: Mizuho Capital Co., Ltd.
Its: General Partner
By: __________________________________
Name: Xxxxx Xxxx
Title: President
Address: Mizuho Capital Co., Ltd.
Attn: Kazumasa Aoe,
Chief Investment Officer
0-0 Xxxxxxxxxx-xxxxxxxxx,
Xxxx-xx,
Xxxxx 000-0000
Fax: x00-0-0000-0000
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
THE BOARD OF TRUSTEES OF THE XXXXXX
XXXXXXXX JUNIOR UNIVERSITY (SEVF2)
By: __________________________________
Name: Xxxxx Xxxxxxxxx
Title: Managing Director, Separate
Investments
Address: Stanford Management Company
Attn: Xxxxxxxx xxx Xxxxxx
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
GENERAL AMERICAN INVESTORS COMPANY,
INC.
By: __________________________________
Name: Xxxxxx X. XxXxxxxxxx, Xx.
Title: Vice-President, Administration
SIGNATURE PAGE - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS AGREEMENT
SCHWEIZERHALL INVESTMENT LTD
By: __________________________________
Name: ________________________________
Title: _______________________________
SIGNATURE PAGE - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS AGREEMENT
CREDIT SUISSE FIRST BOSTON EQUITY
PARTNERS, L.P.
By: Hemisphere Private Equity
Partners, Ltd., Its General
Partner
By: __________________________________
Name: ________________________________
Title: _______________________________
Address: c/o CSFB Advisory Partners,
L.L.C.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxx Xxxxxxx
Fax: (000) 000-0000
CREDIT SUISSE FIRST BOSTON EQUITY
PARTNERS (BERMUDA), L.P.
By: Hemisphere Private Equity
Partners, Ltd., Its General
Partner
By: __________________________________
Name: ________________________________
Title: _______________________________
Address: c/o CSFB Advisory Partners,
L.L.C.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxx Xxxxxxx
Fax: (000) 000-0000
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
CREDIT SUISSE FIRST BOSTON U.S.
EXECUTIVE ADVISORS, L.P.
By: Hemisphere Private Equity
Partners, Ltd., Its General
Partner
By: __________________________________
Name: ________________________________
Title: _______________________________
Address: c/o CSFB Advisory Partners,
L.L.C.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxx Xxxxxxx
Fax: (000) 000-0000
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
ALTA BIOPHARMA PARTNERS II, L.P.
By: Alta BioPharma Management
Partners II, LLC
By: __________________________________
Name: ________________________________
Title: Managing Director
Address: Alta Partners
Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx Xxxxx
Fax: (000) 000-0000
ALTA EMBARCADERO BIOPHARMA PARTNERS
II, LLC
By: __________________________________
Name: ________________________________
Title: V.P. of Finance & Admin.
Address: Alta Partners
Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx Xxxxx
Fax: (000) 000-0000
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
MVI MEDICAL VENTURE INVESTMENTS
LIMITED
By: __________________________________
Name: Xxxx Xxxxxx
Title: Director
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
GLAXO GROUP LIMITED
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Attorney-In-Fact
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
VULCAN VENTURES INC.
By: __________________________________
Name: Xxxxxxx X. Xxxxx
Title: Vice President
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
AEOLUS TECHNOLOGY CORPORATION
By: __________________________________
Name: ________________________________
Title: _______________________________
Address: TrustNet (British Virgin
Islands) Limited
TrustNet Xxxxxxxx
P.O. Box 3444
RoadTown, Tortola
British Virgin Islands
SIGNATURE PAGE - SERIES E - FOURTH AMENDED & RESTATED INVESTORS' RIGHTS
AGREEMENT
