EXHIBIT D
RIGEL PHARMACEUTICALS, INC.
SECOND INVESTOR RIGHTS AGREEMENT
[____________] [__], 2003
TABLE OF CONTENTS
PAGE
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SECTION 1. GENERAL.........................................................................1
1.1 Definitions.........................................................................1
SECTION 2. REGISTRATION; ADDITIONAL REGISTRATION RIGHTS; ETC...............................3
2.1 Registration of the Securities......................................................3
2.2 Suspension Periods..................................................................4
2.3 Piggyback Registrations.............................................................6
2.4 Demand Registration.................................................................7
2.5 Certain Obligations of the Company for Piggyback and Demand Registrations...........8
2.6 Restrictions on Transfer...........................................................11
2.7 Termination of Registration Rights.................................................13
2.8 Delay of Registration; Furnishing Information......................................13
2.9 Indemnification....................................................................13
2.10 Assignment of Registration Rights..................................................16
2.11 Amendment of Registration Rights...................................................16
SECTION 3. CERTAIN COVENANTS OF THE PARTIES...............................................16
3.1 Reservation of Common Stock........................................................16
3.2 Rule 144 Reporting.................................................................16
3.3 Observation Rights.................................................................16
3.4 Board of Directors Matters.........................................................17
3.5 Limitation on Subsequent Registration Rights.......................................18
3.6 Participation Rights...............................................................18
3.7 Nasdaq Listing.....................................................................20
SECTION 4. MISCELLANEOUS..................................................................20
4.1 Governing Law......................................................................20
4.2 No Inconsistent Agreements.........................................................21
4.3 Successors and Assigns.............................................................21
4.4 Entire Agreement...................................................................21
4.5 Specific Enforcement...............................................................21
4.6 Severability.......................................................................21
i.
TABLE OF CONTENTS
(CONTINUED)
4.7 Amendment and Waiver...............................................................21
4.8 Notices............................................................................22
4.9 Attorneys' Fees....................................................................22
4.10 Headings...........................................................................23
4.11 Counterparts.......................................................................23
4.12 Aggregation of Stock...............................................................23
4.13 Pronouns...........................................................................23
ii.
RIGEL PHARMACEUTICALS, INC.
SECOND INVESTOR RIGHTS AGREEMENT
THIS SECOND INVESTOR RIGHTS AGREEMENT (the "AGREEMENT") is entered into
as of [_________], 2003 by and among RIGEL PHARMACEUTICALS, INC., a Delaware
corporation (the "COMPANY"), and the investors listed on EXHIBIT A hereto,
referred to hereinafter as the "Investors" and each individually as an
"Investor."
RECITALS
WHEREAS, the Investors are purchasing shares of the Company's common
stock, par value $.001 per share (the "COMMON STOCK"), and warrants to purchase
shares of Common Stock pursuant to that certain Common Stock and Warrant
Purchase Agreement (the "PURCHASE AGREEMENT") dated as of April 29, 2003 (the
"FINANCING");
WHEREAS, the obligations in the Purchase Agreement are conditioned upon
the execution and delivery of this Agreement; and
WHEREAS, in connection with the consummation of the Financing, the
parties desire to enter into this Agreement in order to grant registration and
other rights to the Investors as set forth below.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. GENERAL.
1.1 DEFINITIONS. Capitalized terms used but not otherwise defined herein
shall have the meanings given them in the Purchase Agreement. As used in this
Agreement the following terms shall have the following respective meanings:
(a) "COMMON WARRANTS" means those certain warrants to purchase Common
Stock issued pursuant to the Purchase Agreement and held by the Investors listed
on EXHIBIT A hereto and their permitted assigns.
(b) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(c) "FORM S-3" means such form under the Securities Act as in effect
on the date hereof or any successor or similar registration form under the
Securities Act subsequently adopted by the SEC that permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
(d) "HOLDER" means any person owning of record or having the right to
acquire Registrable Securities, or any assignee of record thereof in accordance
with Section 2.10 hereof, which have not been sold to the public.
1.
(e) "INITIATING HOLDERS" means the Holders of at least thirty percent
(30%) of the Registrable Securities then outstanding.
(f) "PRIOR INVESTOR RIGHTS AGREEMENT" means that certain Amended and
Restated Investor Rights Agreement, dated as of [April ___], 2003, by and among
the Company and the investors named therein.
(g) "PRIOR REGISTRABLE SECURITIES" means the "Registrable Securities"
(as defined in the Prior Investor Rights Agreement) then outstanding under the
Prior Investor Rights Agreement, such Prior Rights Holders and their associated
amounts of Prior Registrable Securities are as set forth hereto on EXHIBIT B.
(h) "PRIOR RIGHTS HOLDERS" means the "Holders" of "Registrable
Securities" (each
as defined in the Prior Investor Rights Agreement) then outstanding under the
Prior Investor Rights Agreement.
(i) "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.
(j) "REGISTRABLE SECURITIES" means: (i) the Shares; (ii) the Warrant
Shares; and (iii) any shares of Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security that is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, the Shares and Warrant Shares. Notwithstanding the foregoing,
Registrable Securities shall not include any shares of Common Stock: (A) sold by
a person to the public either pursuant to a registration statement or Rule 144;
(B) sold in a private transaction in which the transferor's rights under Section
2 of this Agreement are not assigned; or (C) held by a Holder (together with its
affiliates) during such periods in which all of such shares may be sold by the
Holder pursuant to Rule 144 within 90 days.
(k) "REGISTRATION EXPENSES" means all expenses incurred by the
Company in complying with Sections 2.1, 2.3 and 2.4 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements not
to exceed $25,000 of a single special counsel for the Holders, blue sky fees and
expenses and the expense of any special audits incident to, or required by, any
such registration (but excluding the compensation of regular employees of the
Company that shall be paid in any event by the Company).
(l) "SEC" or "COMMISSION" means the Securities and Exchange
Commission.
(m) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(n) "SELLING EXPENSES" means all underwriting discounts and selling
commissions applicable to a sale of Registrable Securities.
2.
(o) "SHARES" means the shares of Common Stock issued pursuant to the
Purchase Agreement and held by the Investors listed on EXHIBIT A hereto and
their permitted assigns.
(p) "SPECIAL REGISTRATION STATEMENT" means: (i) a registration
statement relating to any employee benefit plan; (ii) a registration statement
relating to any corporate reorganization or transaction under Rule 145 of the
Securities Act, including any registration statements related to the issuance or
resale of securities issued in such a transaction; or (iii) a registration
statement in which the only securities being registered are shares of stock
issuable upon conversion of debt securities.
(q) "WARRANT SHARES" means the shares of Common Stock issuable or
issued upon exercise of the Common Warrants.
SECTION 2. REGISTRATION; ADDITIONAL REGISTRATION RIGHTS; ETC.
2.1 REGISTRATION OF THE SECURITIES. The Company shall:
(a) prepare and file with the SEC, as soon as practicable, but in no
event later than 10 business days after the Closing Date (as defined in the
Purchase Agreement), a registration statement on Form S-3 (the "REGISTRATION
STATEMENT") for an offering to be made on a delayed or continuous basis pursuant
to Rule 415 under the Securities Act registering the resale from time to time by
the Investors of the Registrable Securities;
(b) use its commercially reasonable best efforts to cause the
Registration Statement to become effective as soon as practicable and no later
than five business days after the receipt of a notice of "no review" from the
SEC or, in the event of SEC review, no later than 90 days after the Registration
Statement is initially filed by the Company with the SEC;
(c) subject to Section 2.2, use its commercially reasonable best
efforts to prepare and file with the SEC such amendments and supplements to the
Registration Statement and the related prospectus used in connection therewith
(the "PROSPECTUS") as may be necessary to keep the Registration Statement
current and effective for a period not exceeding the earlier of: (i) the second
anniversary of the initial effectiveness of the Registration Statement; (ii) the
date on which all Holders may sell all Registrable Securities then held by such
Holders without restriction under Rule 144 of the Securities Act; or (iii) such
time as all Registrable Securities have been sold (together, the "REGISTRATION
PERIOD");
(d) furnish to the Holders with respect to the Registrable Securities
registered under the Registration Statement such number of copies of the
Registration Statement and Prospectuses (including any preliminary prospectuses)
in conformity with the requirements of the Securities Act and such other
documents as the Holders may reasonably request, in order to facilitate the sale
or other disposition of all or any of the Registrable Securities by the Holders;
(e) use its commercially reasonable best efforts to register and
qualify the Registrable Securities covered by the Registration Statement under
such other securities or Blue Sky laws of such jurisdictions in the United
States as shall be reasonably requested by the Holders; provided, however, that
the Company shall not be required in connection therewith or
3.
as a condition thereto to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified or has not so
consented;
(f) advise the Holders promptly after it shall receive notice or
obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of the initiation
of any proceeding for that purpose; and it will promptly use its commercially
reasonable best efforts to prevent the issuance of any stop order or to obtain
its withdrawal at the earliest possible moment if such stop order should be
issued;
(g) notify each Holder of securities registered 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; and
(h) bear all Registration Expenses in connection with the procedures
in paragraphs (a) through (g) of this Section 2.1 and the registration of the
Registrable Securities pursuant to the Registration Statement.
2.2 SUSPENSION PERIODS.
(a) Except in the event that paragraph (b) below applies, the Company
shall: (i) if necessary to keep the Registration Statement current and
effective, promptly prepare and file from time to time with the SEC
post-effective amendments to the Registration Statement or supplements to the
related Prospectus or supplements or amendments to any document incorporated
therein by reference or file any other required document so that the
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and so that, as thereafter delivered
to purchasers of the Registrable Securities being sold thereunder, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (ii) provide the Holders with copies of any documents filed
pursuant to Section 2.2(a)(i); and (iii) inform the Holders that the Company has
complied with its obligations in Section 2.2(a)(i) (or that, if the Company has
filed a post-effective amendment to the Registration Statement that has not yet
been declared effective, the Company will notify the Holders to that effect,
will use its commercially reasonable best efforts to secure the effectiveness of
such post-effective amendment as promptly as possible and will promptly notify
the Holders pursuant to Section 2.2(a)(i) hereof when the amendment has become
effective).
(b) Subject to Section 2.2(c) below, in the event: (i) of any request
by the SEC or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related Prospectus or for
additional information so that the Registration Statement will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
otherwise fail to comply with the
4.
applicable rules and regulations of the federal securities laws; (ii) of the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding for such purpose, provided
that, considering the advice of counsel, the Company reasonably believes that it
must qualify in such jurisdiction; (iv) of any event or circumstance that,
considering the advice of counsel, the Company reasonably believes necessitates
the making of any changes in the Registration Statement or related Prospectus,
or any document incorporated or deemed to be incorporated therein by reference,
so that, in the case of the Registration Statement, it will not contain any
untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of a related Prospectus, it will not contain
any untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; or
(v) that the Company reasonably believes, considering the advice of counsel,
that the Company may, in the absence of a suspension described hereunder, be
required under state or federal securities laws to disclose any corporate
development, the disclosure of which could reasonably be expected to have a
material adverse effect upon the Company, its stockholders, a potentially
material transaction or event involving the Company, or any negotiations,
discussions or proposals directly relating thereto; then the Company shall
deliver a certificate in writing to each Holder (the "SUSPENSION Notice") to the
effect of the foregoing and, upon receipt of such Suspension Notice, the Holder
will refrain from selling any Registrable Securities pursuant to the
Registration Statement (a "SUSPENSION") until the Holder's receipt of copies of
a supplemented or amended Prospectus prepared and filed by the Company or until
the Holder is advised in writing by the Company that the current Prospectus may
be used and the Holder has received copies of any additional or supplemental
filings that are incorporated or deemed incorporated by reference in any such
Prospectus. In the event of any Suspension, the Company will use its
commercially reasonable best efforts to cause the use of the Prospectus so
suspended to be resumed as soon as reasonably practicable after delivery of a
Suspension Notice to the Holders. In the event that the Company shall exercise
its right to suspend the effectiveness of the Registration Statement hereunder,
the Registration Period during which the Registration Statement is to remain
effective shall be extended by a period of time equal to the duration of any
Suspensions.
(c) Notwithstanding the foregoing paragraphs of this Section 2.2, the
Holders shall not be prohibited from selling Registrable Securities under the
Registration Statement as a result of Suspensions on more than two occasions of
not more than 45 days each in any 12-month period; provided, however, that in no
event shall any Suspension pursuant to Section 2.2(b)(iv) exceed ten business
days.
(d) Provided that a Suspension is not then in effect, each Holder may
sell Registrable Securities under the Registration Statement, provided that it
arranges for delivery of a current Prospectus to the transferee of such
Registrable Securities. Upon receipt of a request therefor, the Company will
provide an adequate number of current Prospectuses to the Holder and supply
copies to any other parties requiring such Prospectuses.
5.
2.3 PIGGYBACK REGISTRATIONS.
(a) The Company shall notify all Holders of Registrable Securities
then outstanding in writing at least ten days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding Special Registration Statements) and shall afford each
such Holder an opportunity to include in such registration statement all or part
of such Registrable Securities held by such Holder. Each Holder desiring to
include in any such registration statement all or any part of the Registrable
Securities held by it shall, within ten days after the above-described notice
from the Company, so notify the Company in writing. Such notice shall state the
intended method of disposition of the Registrable Securities by such Holder. If
a Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
(b) If the registration statement under which the Company gives
notice under this Section 2.3 is for an underwritten public offering, the
Company shall so advise the Holders of Registrable Securities then outstanding.
In such event, the right of any such Holder to be included in a registration
pursuant to this Section 2.3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Agreement, if the underwriter
determines in good faith that marketing factors require a limitation of the
number of shares to be underwritten, the number of shares that may be included
in the underwriting shall be allocated: first, to the Company; second, to the
Holders and the Prior Rights Holders on a pro rata basis based on the aggregate
of the Registrable Securities then held by the Holders under this Agreement and
the Prior Registrable Securities then held by the Prior Rights Holders under the
Prior Investor Rights Agreement; and third, to any stockholders of the Company
(other than a Holder or Prior Rights Holder) on a pro rata basis; provided,
however, that: (i) no such reduction shall reduce the aggregate amount of
securities of the selling Holders, together with the securities of the Prior
Rights Holders, included in the registration below thirty percent (30%) of the
total amount of securities included in such registration; and (ii) no such
reduction shall reduce the amount of Registrable Securities of the selling
Holders included in the registration unless all Prior Rights Holders exercising
piggyback registration rights in such registration are subject to such reduction
in their Prior Registrable Securities. Except as provided above, in no event
will shares of any other selling stockholder of the Company be included in such
registration that would reduce the number of shares that may be included by the
Holders and the Prior Rights Holders without the written consent of the holders
of not less than a majority of the aggregate of the Registrable Securities and
the Prior Registrable Securities proposed to be sold in the offering. If any
participating Holder disapproves of the terms of any such underwriting, such
participating Holder may elect to withdraw therefrom by written notice to the
Company and the underwriter, delivered prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the
6.
registration. For any Holder that is a partnership, corporation, venture capital
fund or limited liability company, the partners, retired partners, members,
retired members and stockholders of such Holder, or the estates and family
members of any such partners, retired partners, members, retired members and any
trusts for the benefit of any of the foregoing person shall be deemed to be a
single "Holder," and any pro rata reduction with respect to such "Holder" shall
be based upon the aggregate amount of shares carrying registration rights owned
by all entities and individuals included in such "Holder," as defined in this
sentence.
(c) The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 2.3 prior to the effectiveness
of such registration whether or not any Holder has elected to include securities
in such registration.
2.4 DEMAND REGISTRATION.
(a) In the event that: (i) the Registration Statement is not declared
effective by the SEC as set forth in Section 2.1(b); (ii) the Holders still hold
Registrable Securities at the end of the Registration Period; or (iii) subject
to Section 2.2, the Registration Statement does not remain effective during the
Registration Period, and the Initiating Holders intend to distribute Registrable
Securities, then the Initiating Holders may deliver a written request to the
Company that the Company file a registration statement under the Securities Act
covering the registration of at least $3 million of the Registrable Securities
then outstanding in an underwritten offering. The Company shall, within 20
business days of the receipt of such request, give written notice of such
request to all Holders, and subject to the limitations of this Section 2.4,
effect, as expeditiously as reasonably possible, the registration under the
Securities Act of all Registrable Securities that all Holders request to be
registered on the form of registration statement then available to the Company.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.4,
and the Company shall include such information in the written notice referred to
in Section 2.4(a). In such event, the right of any Holder to include its
Registrable Securities in such registration under this Section 2.4 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 securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders (which underwriter or underwriters shall be reasonably acceptable to the
Company). Notwithstanding any other provision of this Section 2.4, if the
underwriter advises the Company that marketing factors require a limitation on
the number of securities underwritten (including Registrable Securities), then
the Company shall so advise all Holders of Registrable Securities that would
otherwise be underwritten pursuant hereto, and the number of shares that may be
included in the underwriting shall be allocated to the Holders of such
Registrable Securities pro rata based on the number of Registrable Securities
held by all such Holders (including the Initiating Holders). In no event shall
any Registrable Securities be excluded from such underwriting unless all other
securities
7.
are first excluded. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(c) The Company shall not be required to effect a registration
pursuant to this Section 2.4:
(i) after the Company has effected three registrations pursuant
to this Section 2.4, and such registrations have been declared or ordered
effective;
(ii) during the period starting with the date of filing of, and
ending on the date one hundred eighty (180) days following the effective date
of, a registration statement pertaining to a public offering as described in
Section 2.3, other than pursuant to a Special Registration Statement; provided
that the Company makes reasonable good faith efforts to cause such registration
statement to become effective;
(iii) if within 30 days of receipt of a written request from the
Initiating Holders pursuant to Section 2.4(a), the Company gives notice to the
Holders of the Company's intention to file a registration statement for a public
offering as described in Section 2.3, other than pursuant to a Special
Registration Statement, within 90 days; provided that if the Company does not
file such registration statement within such 90-day period, the Company shall
then effect the registration requested by the Initiating Holders pursuant to
Section 2.4;
(iv) if the Company shall file a registration statement pursuant
to this Section 2.3 and then furnish to the Initiating Holders requesting such
registration statement pursuant to this Section 2.4 a certificate signed by the
Chairman of the Board 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 become effective
at such time, in which event the Company shall have the right to defer seeking
acceleration of effectiveness of such filing for a period of not more than 30
days after receipt of a notice of "no review" or completion of the review
process from the SEC; provided that such right to delay effectiveness of a
requested registration shall be exercised by the Company not more than once in
any 12-month period; and provided further that the Company shall not register
any securities for the account of itself or any other stockholder during such
period (other than pursuant to a Special Registration Statement); and
(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.
2.5 CERTAIN OBLIGATIONS OF THE COMPANY FOR PIGGYBACK AND DEMAND
REGISTRATIONS.
(a) Whenever required to effect the registration of any Registrable
Securities pursuant to Section 2.3 or Section 2.4, the Company shall, as
expeditiously as reasonably possible:
8.
(i) prepare and file with the SEC a registration statement with
respect to such Registrable Securities, and use its commercially reasonable best
efforts to cause such registration statement to become effective as soon as
practicable;
(ii) subject to Section 2.5(b), use its commercially reasonable
best efforts to prepare and file with the SEC such amendments and supplements to
a registration statement and prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period not
exceeding, with respect to each Holder's Registrable Securities included in such
registration, the earlier of: (i) the second anniversary of the initial
effectiveness of such registration statement; (ii) the date on which the Holder
may sell all Registrable Securities then held by the Holder without restriction
under Rule 144 of the Securities Act; or (iii) such time as all Registrable
Securities held by such Holder have been sold;
(iii) furnish to the Holders with respect to the Registrable
Securities registered under a registration statement such number of copies of
such registration statement, and related prospectuses, including preliminary
prospectuses, in conformity with the requirements of the Securities Act, and
such other documents as such Holders may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities by
the Holders;
(iv) use its commercially 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 in the United States as
shall be reasonably requested by the Holders; provided, however, that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or consent to service of process in any jurisdiction
in which it is not now so qualified or has not so consented;
(v) advise the Holders promptly after it shall receive notice
or obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of a registration statement or of the initiation of
any proceeding for that purpose; and it will promptly use its commercially
reasonable best efforts to prevent the issuance of any stop order or to obtain
its withdrawal at the earliest possible moment if such stop order should be
issued;
(vi) in the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering; each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement;
(vii) notify each Holder of securities registered 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;
9.
(viii) cause all such Registrable Securities registered under
such registration statement to be listed on each securities exchange on which
similar securities issued by the Company are then listed;
(ix) provide a transfer agent and registrar for all Registrable
Securities registered under the registration statement and a CUSIP number for
all such Registrable Securities, in each case not later than the effective date
of such registration; and
(x) use its commercially reasonable efforts to furnish, at the
request of any Holder requesting registration of Registrable Securities under
the registration statement, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a registration under
the registration statement, 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, (A) an opinion, dated such date, of the counsel for the Company, in
form and substance as is customarily requested by the underwriters in an
underwritten public offering, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (B) a letter dated
such date, from the independent certified public accountants of the Company and
any company acquired by 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.
(b) Subject to Section 2.5(c) below, in the event: (i) of any request
by the SEC or any other federal or state governmental authority during the
period of effectiveness of a registration statement filed pursuant to Section
2.3 or Section 2.4 for amendments or supplements to such registration statement
or related prospectus or for additional information so that the Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or otherwise fail to comply with the
applicable rules and regulations of the federal securities laws; (ii) of the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of such registration statement or the
initiation of any proceedings for that purpose; (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding for such purpose, provided
that, considering the advice of counsel, the Company reasonably believes that it
must qualify in such jurisdiction; (iv) of any event or circumstance that,
considering the advice of counsel, the Company reasonably believes necessitates
the making of any changes in such registration statement or related prospectus,
or any document incorporated or deemed to be incorporated therein by reference,
so that, in the case of such registration statement, it will not contain any
untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of a related prospectus, it will not contain
any untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; or
(v) that the Company reasonably believes, considering the advice of counsel,
that the Company may, in the absence of a suspension described hereunder, be
required under state or federal securities laws to disclose any corporate
development, the disclosure of
10.
which could reasonably be expected to have a material adverse effect upon the
Company, its stockholders, a potentially material transaction or event involving
the Company, or any negotiations, discussions or proposals directly relating
thereto; then the Company shall deliver a Suspension Notice to each Holder to
the effect of the foregoing and, upon receipt of such Suspension Notice, the
Holder will refrain from selling any Registrable Securities pursuant to such
registration statement until the Holder's receipt of copies of a supplemented or
amended prospectus prepared and filed by the Company or until the Holder is
advised in writing by the Company that the current prospectus may be used and
the Holder has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in any such prospectus. In
the event of any Suspension, the Company will use its commercially reasonable
best efforts to cause the use of the prospectus so suspended to be resumed as
soon as reasonably practicable after delivery of a Suspension Notice to the
Holders. In the event that the Company shall exercise its right to suspend the
effectiveness of such registration statement hereunder, the period during which
such registration statement is to remain effective pursuant to Section
2.5(a)(ii) shall be extended by a period of time equal to the duration of any
Suspensions.
(c) Notwithstanding the foregoing paragraphs of this Section 2.5, the
Holders shall not be prohibited from selling Registrable Securities under a
registration statement filed pursuant to Section 2.4 as a result of Suspensions
on more than two occasions of not more than 45 days each in any 12-month period
(it being understood that (i) any delay in effectiveness of a registration
statement pursuant to Section 2.4(c)(iv) shall be counted as an occasion of
Suspension for purposes of this Section 2.5(c) and (ii) any days of delayed
effectiveness of a registration statement pursuant to Section 2.4(c)(iv) shall
be counted as part of the 45-day total allowed for Suspension under this Section
2.5(c)); provided, however, that in no event shall any Suspension pursuant to
Section 2.5(b)(iv) of a registration statement filed under Section 2.4 exceed
ten business days.
(d) Except as specifically provided herein, all Registration Expenses
incurred in connection with any registration under Section 2.3 or Section 2.4
shall be borne by the Company. All Selling Expenses incurred in connection with
any registrations under Section 2.3 or Section 2.4 shall be borne by the holders
of the securities so registered pro rata on the basis of the number of shares so
registered. The Company shall not, however, be required to pay the Registration
Expenses of any registration proceeding begun pursuant to Section 2.4, the
request of which has been subsequently withdrawn by the Initiating Holders
unless: (i) the withdrawal is based upon material adverse information concerning
the Company of which the Initiating Holders were not aware at the time of such
request; or (ii) the Holders of a majority of the Registrable Securities then
outstanding agree to forfeit their right to one requested registration pursuant
to Section 2.4 (in which event such right shall be deemed forfeited by all
Holders). If the Holders are required to pay the Registration Expenses, such
expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of shares
for which registration was requested.
2.6 RESTRICTIONS ON TRANSFER.
(a) Each Investor agrees that it will not sell, offer to sell,
solicit offers to buy, dispose of, loan, pledge or grant any right with respect
to (collectively, a "DISPOSITION") all or any portion of the Registrable
Securities unless and until:
11.
(i) there is then in effect a registration statement under the
Securities Act covering such proposed Disposition and such Disposition is made
in accordance with such registration statement; or
(ii) (A) if rights under this Agreement are assigned to the
transferee, the transferee has agreed in writing to be bound by the terms of
this Agreement, (B) such Holder shall have notified the Company of the proposed
Disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed Disposition and (C) if reasonably
requested by the Company, such Holder shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
Disposition will not require registration of such shares under the Securities
Act.
(b) Notwithstanding the provisions of Section 2.6(a) above, no such
restriction shall apply to a transfer by a Holder that is: (i) a partnership
transferring to its partners or former partners in accordance with partnership
interests; (ii) a corporation transferring to a wholly-owned subsidiary or a
parent corporation that owns all of the capital stock of the Holder; (iii) a
limited liability company transferring to its members or former members in
accordance with their interest in the limited liability company; (iv) an
affiliated venture fund transferring to another affiliated venture fund; or (v)
an individual transferring to the Holder's family member or trust for the
benefit of an individual Holder; provided that in each case the transferee will
agree in writing to be subject to the terms of this Agreement to the same extent
as if the transferee were an original Holder hereunder.
(c) Each certificate representing the Shares or Warrant Shares shall
be stamped or otherwise imprinted with legends substantially similar to the
following (in addition to any legend required under applicable state securities
laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SHARES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION
OR AN EXEMPTION THEREFROM. RIGEL PHARMACEUTICALS, INC. MAY
REQUIRE AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT THAT
A PROPOSED TRANSFER OR SALE IS IN COMPLIANCE WITH THE ACT."
"THE SALE, TRANSFER OR VOTING OF THE SHARES REPRESENTED BY
THIS CERTIFICATE IS RESTRICTED BY THE TERMS OF A SECOND
INVESTOR RIGHTS AGREEMENT BY AND AMONG RIGEL PHARMACEUTICALS,
INC. AND THE INVESTORS NAMED THEREIN. COPIES OF THE AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
HOLDERS OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF
RIGEL PHARMACEUTICALS, INC. AT
12.
THE PRINCIPAL EXECUTIVE OFFICES OF RIGEL PHARMACEUTICALS, INC."
(d) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any Holder thereof if the Holder shall have (i)
sold Registrable Securities pursuant to an effective registration statement or
(ii) obtained an opinion of counsel (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without registration,
qualification and legend.
(e) Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect upon
the earlier of: (i) the date on which the Holders may sell all Registrable
Securities then held by the Holders without restriction under Rule 144 of the
Securities Act; or (ii) such time as all Registrable Securities purchased by the
Investors in the Financing have been sold.
2.8 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of the
Company to register a Holder's Registrable Securities pursuant to Section 2.1,
Section 2.3 or Section 2.4 that such Holder shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them and
the intended method of disposition of such securities as shall be reasonably
required to effect the registration of such Holder's Registrable Securities.
Upon receipt of such information, the Company shall promptly update any
registration statement (whether or not such registration statement has been
declared effective) used or to be used to register Registrable Securities.
2.9 INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under Section 2.1, Section 2.3 or Section 2.4:
(a) To the extent permitted by law, the Company shall indemnify and
hold harmless each Holder, the partners, members, officers and directors of each
Holder, any underwriter (as defined in the Securities Act) for such Holder and
each person, if any, who controls such Holder or underwriter within the meaning
of the Securities Act or the Exchange Act, against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of, or are based upon, any of the following statements, omissions or violations
(collectively a "VIOLATION") by the Company: (i) any untrue statement or alleged
untrue statement of a material fact contained
13.
in such registration statement or incorporated by reference therein, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto; (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading; or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Company shall reimburse each
such Holder, partner, member, officer, director, underwriter or controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided however, that the indemnity
agreement contained in this Section 2.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of, or is based upon, a Violation that occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by or on behalf of such Holder, partner, member, officer,
director, underwriter or controlling person of such Holder.
(b) To the extent permitted by law, each Holder shall, if Registrable
Securities held by such Holder are included in such registration statement,
indemnify and hold harmless the Company, each of its directors, its officers and
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder, against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such
director, officer, controlling person, underwriter or other such Holder, or
partner, director, officer or controlling person of such other Holder may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of, or are based upon, any of the following
statements: (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement or incorporated by reference
therein, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto; (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading; or (iii) any violation
or alleged violation by the Company of the Securities Act (collectively, a
"HOLDER VIOLATION"), in each case to the extent (and only to the extent) that
such Holder Violation occurs in reliance upon and in conformity with written
information furnished by such Holder under an instrument duly executed by such
Holder and stated to be specifically for use in connection with such
registration; and each such Holder shall reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or other Holder, or partner, officer, director or
controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action if it is judicially
determined that there was such a Holder Violation; provided, however, that the
indemnity agreement contained in this Section 2.9(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided further, that in no event
14.
shall any indemnity under this Section 2.9 exceed the net proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
2.9 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.9, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of liability to the
indemnified party under this Section 2.9 to the extent of such prejudice, but
the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 2.9.
(d) If the indemnification provided for in this Section 2.9 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) or Holder Violation(s)
that resulted in such loss, claim, damage or liability, as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by a court of law by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, that in no event shall any
contribution by a Holder hereunder, when combined with amounts paid pursuant to
Section 2.9(b), exceed the net proceeds from the offering received by such
Holder.
(e) The obligations of the Company and the Holders under this Section
2.9 shall survive completion of any offering of Registrable Securities pursuant
to a registration statement under Section 2 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
the entry of any judgment or enter into any settlement that 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.
15.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 may be assigned by
a Holder to a transferee or assignee of Registrable Securities that: (a) is a
subsidiary, parent, general partner, limited partner, retired partner, member or
retired member, stockholder or affiliated venture fund of a Holder; (b) is a
Holder's family member or trust for the benefit of an individual Holder; (c)
acquires at least 100,000 shares of Registrable Securities (as adjusted for
stock splits and combinations); or (d) is an entity affiliated by common control
(or other related entity) with such Holder; provided, however, that: (i) the
transferor shall, within ten days after such transfer, furnish to the Company
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
and (ii) such transferee shall agree to be subject to all restrictions set forth
in this Agreement.
2.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section 2.11 shall be binding upon each Holder and the
Company. By acceptance of any benefits under this Section 2, the Holders of
Registrable Securities hereby agree to be bound by the provisions hereunder.
SECTION 3. CERTAIN COVENANTS OF THE PARTIES.
3.1 RESERVATION OF COMMON STOCK. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the exercise of the
Common Warrants, the Warrant Shares issuable from time to time upon such
exercise.
3.2 RULE 144 REPORTING. With a view to making available to each Holder
the benefits of Rule 144 under the Securities Act (or its successor rule) and
any other rule or regulation of the SEC that may at any time permit the Holder
to sell Registrable Securities to the public without registration or pursuant to
Form S-3, the Company covenants and agrees to: (a) make and keep public
information available, as those terms are understood and defined in Rule 144,
until such time as all Registrable Securities purchased by the Investors in the
Financing have been sold; (b) 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 (c) furnish to the Holder upon request, as long as the Holder
owns any Registrable Securities, (i) a written statement by the Company that it
has complied with the reporting requirements of Rule 144 of the Securities Act
and the Exchange Act or that it qualifies as a registrant whose securities may
be registered on Form S-3, (ii) a copy of the Company's most recent Annual
Report on Form 10-K or Quarterly Report on Form 10-Q and (iii) such other
information as may be reasonably requested in order to avail the Holder of any
rule or regulation of the SEC that permits the selling of any such Registrable
Securities without registration or pursuant to such form.
3.3 OBSERVATION RIGHTS. For so long as MPM BioVentures III, L.P. or its
affiliates ("MPM CAPITAL") shall own Registrable Securities representing not
less than 10% of the total shares of Common Stock then outstanding, the Company
shall allow Xx. Xxxxxx Xxxxxxxxx (or such other representative that may be
designated by MPM Capital in accordance with this Section 3.3) to serve as a
representative designated by MPM Capital (the "REPRESENTATIVE") to
16.
attend all regularly scheduled meetings of the Company's Board of Directors in a
nonvoting capacity, and in connection therewith, the Company shall give such
Representative copies of all notices, minutes, consents and other materials,
financial or otherwise, which the Company provides to its Board of Directors;
provided, however, that: (a) MPM Capital shall not change or substitute its
Representative without providing the Company with 20 days' prior notice of such
change or substitution; (b) the Representative shall agree to hold in confidence
and trust and to act in a fiduciary manner with respect to all information so
provided; and (c) the Company reserves the right to exclude such Representative
from access to any material or meeting or portion thereof if the Company
believes that such exclusion is reasonably necessary: (i) to preserve the
attorney-client privilege; (ii) to protect highly confidential information; or
(iii) to prevent the disclosure of trade secrets to a competitor.
3.4 BOARD OF DIRECTORS MATTERS. For so long as MPM Capital shall own
Registrable Securities representing not less than 10% of the total shares of
Common Stock then outstanding:
(a) the Company's Board of Directors shall consist of nine members,
and the Company's Board of Directors shall be divided into three classes, with
each class having a three-year term;
(b) the Company shall: (i) use its commercially reasonable best
efforts to cause Xx. Xxxxxx Xxxxxx, as designated by MPM Capital (the "CLASS II
DESIGNEE"), to be nominated and elected to Class II of the Company's Board of
Directors at each meeting or pursuant to each consent of the Company's
stockholders for the election of Class II directors; (ii) use its commercially
reasonable best efforts to cause Xx. Xxxx Xxxxx, as designated by MPM Capital
(the "CLASS III DESIGNEE" and collectively with the Class II Designee, the "MPM
DESIGNEES"), to be nominated and elected to Class III of the Company's Board of
Directors at each meeting or pursuant to each consent of the Company's
stockholders for the election of Class III directors; and (iii) if any MPM
Designee elected to the Company's Board of Directors ceases to be a member of
the Company's Board of Directors during such person's term as a director due to
such person's resignation, death or removal, the Company shall use its
commercially reasonable best efforts, subject to applicable laws and
regulations, to cause such vacancy to be filled by a replacement designated by
MPM Capital, and such designee shall be an MPM Designee for purposes of this
Agreement;
(c) as long as an MPM Designee remains on the Company's Board of
Directors pursuant to Section 3.4(b), then: (i) the Company shall use its
commercially reasonable best efforts to appoint one of the MPM Designees to the
Nominating Committee of the Company's Board of Directors; and (ii) the Company
shall not materially amend or modify the Charter of the Nominating Committee of
the Company's Board of Directors as in effect as of the date of this Agreement;
provided, however, that the Company shall not be required to make any
appointment to a committee of the Company's Board of Directors if such
appointment could reasonably be expected to conflict with federal securities
laws or any other rules or regulations then in effect of Nasdaq or any exchange
on which the Company's securities are listed for trading; and provided further
that the Company shall be able to amend or modify the Charter of the Nominating
Committee of the Company's Board of Directors as is necessary to not conflict
with any applicable federal securities laws, state laws or any other rules or
regulations then in effect of Nasdaq or any exchange on which the Company's
securities are listed for trading;
17.
(d) as long as an MPM Designee remains on the Company's Board of
Directors pursuant to Section 3.4(b), then the Company shall use its
commercially reasonable best efforts to appoint one of the MPM Designees to the
Compensation Committee of the Company's Board of Directors; provided, however,
that the Company shall not be required to make any appointment to a committee of
the Company's Board of Directors if such appointment could reasonably be
expected to conflict with federal securities laws or any other rules or
regulations then in effect of Nasdaq or any exchange on which the Company's
securities are listed for trading; and
(e) the Company shall use its commercially reasonable efforts to
maintain the Company's amended and restated certificate of incorporation and
bylaws, as amended, to permit the Company to indemnify its directors and
officers to the fullest extent permitted by law (including to seek to amend such
certificate and bylaws to the extent the law permits greater indemnification
than then permitted by such certificate and bylaws).
3.5 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. For so long as any
Registrable Securities remain outstanding, after the date of this Agreement, the
Company shall not, without the prior written consent of the holders of at least
a majority of the aggregate of (a) the Registrable Securities then outstanding
under this Agreement and (b) the Prior Registrable Securities then outstanding
under the Prior Investor Rights Agreement, enter into any agreement, other than
in connection with a Special Registration Statement, with any holder or
prospective holder of any securities of the Company that would grant such holder
registration rights on a parity with, or senior to, those granted to the Holders
hereunder.
3.6 PARTICIPATION RIGHTS.
(a) The parties hereby agree that each Investor, so long as such
Investor and its respective affiliates beneficially own at least 10% of all of
the outstanding shares of Common Stock, shall have the right (the "PARTICIPATION
RIGHT"), but not the obligation, to purchase its Pro Rata Share (as defined
below) of all (or any part) of any New Securities (as defined below). "PRO RATA
SHARE" equals a fraction, (i) the numerator of which shall be the number of
shares of Common Stock then owned by such Investor (or receivable by such
Investor upon conversion or exercise of all then outstanding convertible or
exercisable securities held by such Investor) and (ii) the denominator of which
shall be the total number of shares of Common Stock then outstanding.
(b) For purposes of this Agreement, "NEW SECURITIES" shall mean any
shares of, or securities convertible into or exchangeable or exercisable for any
shares of, the Company's capital stock; provided, however, that the term "New
Securities" does not include:
(i) any securities, including shares of Common Stock, to be
issued pursuant to a "public offering" (as such term is determined by the rules,
regulations and guidelines of the National Association of Securities Dealers) of
such securities, or issued pursuant to a registration statement on a Form S-4 or
S-8 or substantially equivalent successor form, or, upon the approval of a
majority of the entire Board of Directors of the Company (i.e., a majority of
the total number of directors then in office), any shares issued pursuant to
registration statement and offered publicly (the parties hereto agree that
merely because an offering is to be
18.
undertaken as a "take-down" from a shelf registration statement, that factor
will not be the sole determinative factor as to whether such offering is a
"public offering");
(ii) shares of Common Stock (or options therefor) issued or
issuable to employees, officers, directors, consultants or other service
providers of the Company pursuant to stock options or other stock incentive
agreements or plans approved by a majority of the Company's Board of Directors
and not for capital-raising transactions;
(iii) any securities issued upon the conversion or exercise of
an convertible or exercisable securities outstanding as of the date hereof;
(iv) any shares of Common Stock (or any other security) issued
in connection with any stock split, stock dividend, combination,
recapitalization or similar corporate action for which no consideration is paid
or payable;
(v) any shares of Common Stock (or any other security) issued
in connection with (A) any corporate collaboration agreement, (B) any licensing
agreement, (C) any payment or settlement of any obligation under a material
contract and (D) as compensation for any services rendered to the Company;
(vi) any securities issued pursuant to an acquisition of the
Company approved by its Board of Directors by means of (A) merger or other form
of corporate reorganization in which outstanding shares of the Company are
exchanged for securities or other consideration issued, or caused to be issued,
by the acquiring corporation or its subsidiary and pursuant to which the holders
of the outstanding voting securities of the Company immediately prior to such
merger or other form of corporate reorganization fail to hold equity securities
representing a majority of the voting power of the Company or surviving entity
immediately following such merger or other form of corporate reorganization or
(B) a sale of all or substantially all the assets of the Company approved by the
Company's Board of Directors;
(vii) any shares of Common Stock or Warrants issued pursuant to
the Financing;
(viii) any securities issued in connection with bona fide
equipment financings or bona fide lease agreements; or
(ix) any securities issued in transactions approved by the
Board of Directors (i.e., a majority of the total number of directors then in
office) as being excluded from the provisions of this Section 3.6.
(c) If the Company proposes to undertake any issuance of New
Securities, it shall, prior to any such issuance, give written notice to the
Investors of its bona fide intention to issue New Securities (the "COMPANY
NOTICE"), describing the type of New Securities proposed to be issued, the total
number or quantity of New Securities proposed to be issued, and the price and
the general terms upon which the Company proposes to issue such New Securities.
Each Investor may elect to purchase or acquire its Pro Rata Share of such New
Securities (an "ELECTING PARTY") by delivering written notice (the
"PARTICIPATION NOTICE") of its election to so purchase or acquire such New
Securities at the price and upon the general terms specified in the
19.
Company Notice and stating the quantity of New Securities to be purchased (not
to exceed its Pro Rata Share). The Participation Notice shall be delivered to
the Company within five (5) business days after the date of delivery of the
Company Notice, and the obligations of the Electing Party thereunder to purchase
the elected number or percentage of New Securities, and the obligations of the
Company to sell such New Securities to the Electing Party, shall be contingent
upon the consummation of the sale or other transaction pursuant to which the New
Securities are proposed to be issued. The number or amount of New Securities
specified in the Participation Notice shall be subject to automatic and
proportionate reduction in the event that the total number or quantity of New
Securities sold by the Company is reduced below the number or quantity specified
in the Company Notice. If any Investor fails to give the Participation Notice to
the Company within such five business-day period, or specifies in the
Participation Notice that such Investor will only purchase part, but not all, of
such Investor's Pro Rata Share (a "NONPURCHASING INVESTOR"), then such
Nonpurchasing Investor shall forfeit the right hereunder to purchase that part
of its Pro Rata Share of such New Securities that it did not so agree to
purchase, and the Company shall promptly give each Investor (if any) who has
timely agreed to purchase its full Pro Rata Share of such offering of New
Securities (a "PURCHASING INVESTOR") written notice of the failure of any
Nonpurchasing Investor to purchase such Nonpurchasing Investor's full Pro Rata
Share of such offering of New Securities (the "OVERALLOTMENT NOTICE"). Such
Overallotment Notice shall be given to each Purchasing Investor within three
business days of the expiration of the five business-day period. Each Purchasing
Investor shall have a right of overallotment such that such Purchasing Investor
may agree to purchase a portion of the Nonpurchasing Investor's unpurchased Pro
Rata Share of such offering on a pro rata basis according to the relative Pro
Rata Shares of the Purchasing Investor at any time within three business days
after receiving the Overallotment Notice.
(d) If the Investors fail to exercise in full the Participation Right
within such five plus three plus three business-day period, then the Company
shall have 180 calendar days thereafter to sell the New Securities with respect
to which the Investors' Participation Rights hereunder were not exercised, at a
price not less than, and upon general terms not more favorable than those
specified in the Company Notice. If the Company has not issued and sold the New
Securities within such 180 calendar-day period, then the Company shall not
thereafter issue or sell any New Securities without again first offering such
New Securities to the Investors pursuant to this Section 3.6.
(e) From and after the date of this Agreement, the Company shall not
enter into any agreement with any holder or prospective holder of any securities
that would allow such holder or prospective holder a participation right, right
of first refusal, right of first offer or other similar right which is on terms
materially more favorable to such holder or prospective holder than, or in
preference to, the Participation Right granted to the Investors hereunder.
3.7 NASDAQ LISTING. The Company shall use its commercially reasonable
best efforts to maintain the listing of the Registrable Securities on Nasdaq.
SECTION 4. MISCELLANEOUS.
4.1 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of California, without giving
effect to the
20.
principles of conflicts of law. The parties agree that any action brought by
either party under or in relation to this Agreement, including without
limitation to interpret or enforce any provision of this Agreement, shall be
brought in, and each party agrees to and does hereby submit to the jurisdiction
and venue of, any state or federal court located in the County of San Francisco,
California.
4.2 NO INCONSISTENT AGREEMENTS. The Company has not entered, as of the
date hereof, into any agreement with respect to any of its securities that is
inconsistent with, diminishes or otherwise limits, the rights granted to the
Holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof.
4.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the parties hereto and their respective successors, assigns, heirs,
executors and administrators and shall inure to the benefit of, and be
enforceable by, each person who shall be a Holder of Registrable Securities from
time to time; provided, however, that prior to the receipt by the Company of
adequate written notice of the transfer of any Registrable Securities specifying
the full name and address of the transferee, the Company may deem and treat the
person listed as the holder of such shares in its records as the absolute owner
and holder of such shares for all purposes, including the payment of dividends
or any redemption price.
4.4 ENTIRE AGREEMENT. This Agreement, including the Exhibits hereto,
constitutes the full and entire understanding and agreement between the parties
with regard to the subject hereof and no party shall be liable or bound to any
other in any manner by any oral or written representations, warranties,
covenants and agreements except as specifically set forth herein. Each party
expressly represents and warrants that it is not relying on any oral or written
representations, warranties, covenants or agreements outside of this Agreement;
provided, however, that the parties hereto acknowledge that the Investors have
relied on those certain Consents, Waivers and Agreements, dated as of April 29,
2003, executed by holders of a majority of the "Registrable Securities"
outstanding under (and as defined in) that certain Amended and Restated Investor
Rights Agreement, dated as of February 3, 2000, by and among the Company and the
investors named therein.
4.5 SPECIFIC ENFORCEMENT. It is agreed and understood that monetary
damages would not adequately compensate an injured party for the breach of
Section 3.4 of this Agreement by any other party, that Section 3.4 of this
Agreement shall be specifically enforceable, and that any breach or threatened
breach of Section 3.4 of this Agreement shall be the proper subject of a
temporary or permanent injunction or restraining order. Further, each party
hereto waives any claim or defense that there is an adequate remedy at law for
such breach or threatened breach Section 3.4 of this Agreement.
4.6 SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
4.7 AMENDMENT AND WAIVER.
21.
(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the Holders
of at least a majority of the Registrable Securities then outstanding.
(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 written consent of the Holders of at least a majority of the
Registrable Securities then outstanding.
(c) For the purposes of determining the number of Holders entitled to
vote or exercise any rights hereunder, the Company shall be entitled to rely
solely on the list of record holders of its stock as maintained by or on behalf
of the Company.
4.8 NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing; shall be mailed (a) if within the domestic United
States, by first-class registered or certified airmail, by nationally recognized
overnight express courier, postage prepaid, or by facsimile or (b) if delivered
from outside the United States, by International Federal Express or facsimile;
shall be deemed given: (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed; (ii) if delivered by
nationally recognized overnight carrier, one business day after so mailed; (iii)
if delivered by International Federal Express, two business days after so
mailed; or (iv) if delivered by facsimile, upon electric confirmation of
receipt; and shall be delivered as addressed as follows:
(a) if to the Company, to:
Rigel Pharmaceuticals, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
Chairman and Chief Executive Officer
Phone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx Xxxxxx
Phone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to the Investors, at the addresses as set forth on EXHIBIT A
hereto, or at such other address or addresses as may have been furnished to the
Company in writing.
4.9 ATTORNEYS' FEES. In the event that any suit or action is instituted
under or in relation to this Agreement, including without limitation to enforce
any provision in this Agreement, the prevailing party in such dispute shall be
entitled to recover from the losing party
22.
all fees, costs and expenses of enforcing any right of such prevailing party
under or with respect to this Agreement, including without limitation, such
reasonable fees and expenses of attorneys and accountants, which shall include,
without limitation, all fees, costs and expenses of appeals.
4.10 HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
4.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
4.12 AGGREGATION OF STOCK. All shares of Registrable Securities held or
acquired by affiliated entities or persons or persons or entities under common
management or control shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
4.13 PRONOUNS. All pronouns contained herein, and any variations thereof,
shall be deemed to refer to the masculine, feminine or neutral, singular or
plural, as to the identity of the parties hereto may require.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
23.
IN WITNESS WHEREOF, the parties hereto have executed this SECOND
INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.
COMPANY: INVESTORS:
RIGEL PHARMACEUTICALS, INC. MPM BIOVENTURES III, L.P.
By: By: MPM BioVentures III GP, L.P.,
------------------------------ its General Partner
Name: By: MPM BioVentures III LLC,
------------------------------ its General Partner
Title: By:
------------------------------ ------------------------------
Name:
------------------------------
Title: Series A Member
MPM BIOVENTURES III-QP, L.P.
By: MPM BioVentures III GP, L.P.,
its General Partner
By: MPM BioVentures III LLC,
its General Partner
By:
------------------------------
Name:
------------------------------
Title: Series A Member
SECOND INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
MPM BIOVENTURES III GMBH & CO.
PARALLEL-BETEILIGUNGS KG
By: MPM BioVentures III GP, L.P., in its
capacity as the Managing Limited
Partner
By: MPM BioVentures III LLC,
its General Partner
By:
------------------------------
Name:
------------------------------
Title: Series A Member
MPM BIOVENTURES III PARALLEL
FUND, L.P.
By: MPM BioVentures III GP, L.P.,
its General Partner
By: MPM BioVentures III LLC,
its General Partner
By:
------------------------------
Name:
------------------------------
Title: Series A Member
SECOND INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
MPM ASSET MANAGEMENT
INVESTORS 2003 BVIII LLC
By:
------------------------------
Name:
------------------------------
Title: Manager
MPM BIOEQUITIES MASTER FUND, L.P.
By: MPM BioEquities GP, L.P.,
its General Partner
By: MPM BioEquities GP LLC,
its General Partner
By:
------------------------------
Name:
------------------------------
Title: General Partner
SECOND INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
ALTA BIOPHARMA PARTNERS II, L.P.
By: Alta BioPharma Management Partners
II, LLC
By:
------------------------------
Managing Director
ALTA EMBARCADERO BIOPHARMA
PARTNERS II, LLC
By:
------------------------------
V.P. of Finance & Admin.
SECOND INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
XXXXXXX HEALTHCARE IV, L.P.
By: FHM IV, LP, its General Partner
By: FHM IV, LLC, its General Partner
By:
------------------------------
, Member
------------------------
XXXXXXX AFFILIATES IV, L.P.
By: FHM IV, LP, its General Partner
By: FHM IV, LLC, its General Partner
By:
------------------------------
, Member
------------------------
SECOND INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
HBM BIOVENTURES (CAYMAN) LTD.
By:
------------------------------
Name: Xxxx Xxxxxx
Title: Chairman and Managing Director
SECOND INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
EXHIBIT A
INVESTORS
TOTAL
AGGREGATE SHARES REGISTRABLE
INVESTOR PURCHASE PRICE PURCHASED WARRANT SHARES SECURITIES
--------------------------------------------- ------------------ ---------------- ------------------ -----------------
MPM BioVentures III, L.P. $ 1,399,249.92 2,186,328 437,265 2,623,593
[Address]
MPM BioVentures III-QP, L.P. $20,810,575.36 32,516,524 6,503,304 39,019,828
[Address]
MPM BioVentures III GmbH & Co.
Parallel-Beteiligungs KG $ 1,758,750.08 2,748,047 549,609 3,297,656
[Address]
MPM BioVentures III Parallel Fund, L.P. $ 628,499.84 982,031 196,406 1,178,437
[Address]
MPM Asset Management Investors 2003 BVIII
LLC $ 402,924.80 629,570 125,914 755,484
[Address]
MPM BioEquities Master Fund, L.P. $ 1,000,000.00 1,562,500 312,500 1,875,000
[Address]
Alta BioPharma Partners II, L.P. $ 7,233,884.80 11,302,945 2,260,589 13,563,534
[Address]
Alta Embarcadero BioPharma Partners II, LLC
$ 266,115.20 415,805 83,161 498,966
[Address]
Xxxxxxx Healthcare IV, L.P. $ 7,462,120.35 11,659,563 2,331,912 13,991,475
[Address]
Xxxxxxx Affiliates IV, L.P. $ 37,879.65 59,186 11,837 71,023
[Address]
HBM BioVentures (Cayman) Ltd. $ 5,000,000.00 7,812,500 1,562,500 9,375,000
Xxxx 00 Xxxxxxxxxx Xxxxxxxx
Xxxxx Xxxx
P.O. Box 30852 SMB
Grand Cayman, Cayman Islands
Attn: Xxxx Xxxxxx
(000) 000-0000 (T)
(000) 000-0000 (F)
TOTAL $46,000,000.00 71,874,999 14,374,997 86,249,996
EXHIBIT B
PRIOR RIGHTS HOLDERS
AS OF APRIL [__], 2003
INVESTOR NAME AND ADDRESS REGISTRABLE SECURITIES
----------------------------------------------------------------- --------------------------
Alta California Partners, L, P. 4,579,314
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Alta Embarcadero Partners, LLC
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000 104,618
CB Capital Investors, L.P.
c/o Chase Capital Partners
Partners 000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000 833,333
Fortune Maker Corporation
11/F Xxxx Xxxx Xxxxxxxx
00-00 Xxx Xxxxx Xxxx Xxxxxxx
XXXX XXXX 550,000
Xxxxxxx & Company, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000 15,234
Xxxxxxx Healthcare II, L.P.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000 4,332,575
Xxxxxxx & Xxxxxxx Development Corporation
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000 1,666,666
Lombard Odier Darier Xxxxxxx & Cie
00, xxx xx xx Xxxxxxxxxx 4,169,538
SECOND INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
0000 Xxxxxx
Xxxxxxxxxxx
Novartis Pharma AG
Head Financial Investments
XX-0000
Xxxxx, Xxxxxxxxxxx 2,000,000
Pfizer, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000 1,000,000
Xxxxxx Xxxxx
[Address] 33,333
Total: 19,284,611
SECOND INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
