CADENCE PHARMACEUTICALS, INC. AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT February 21, 2006
EXHIBIT 4.2
CADENCE PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
February 21, 2006
CADENCE PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This Amended and Restated Investor Rights Agreement (this “Agreement”) is made as of
February 21, 2006, by and among Cadence Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), and each of the entities and persons listed on Schedule A hereto (collectively,
the “Investors”).
This Agreement supersedes and replaces that certain Amended and Restated Investor Rights
Agreement, dated September 30, 2005 (the “Prior Agreement”), entered into by and among the Company
and the other parties thereto, contingent upon and effective as of the Closing (as defined in the
Purchase Agreement).
Recitals
A. Certain of the Investors purchased shares of the Company’s Series A-1 Preferred Stock, par
value $0.0001 per share (the “Series A-1 Preferred Stock”), and Series A-2 Preferred Stock, par
value $0.0001 per share (the “Series A-2 Preferred Stock”), and are purchasing shares of the
Company’s Series A-3 Preferred Stock, par value $0.0001 per share (the “Series A-3 Preferred
Stock”) pursuant to that certain Series A-3 Preferred Stock Purchase Agreement of even date
herewith (the “Purchase Agreement”).
B. Certain of the obligations in the Purchase Agreement are conditioned upon the execution and
delivery of this Agreement.
C. The Prior Agreement provides that any amendment or waiver thereof shall be effective with
the written consent of the Company and by Persons holding at a majority of the Convertible
Securities (as such terms are defined in the Prior Agreement).
D. The undersigned parties constitute Persons holding at least a majority of the Convertible
Securities, and, therefore, are entitled to bind all holders of Convertible Securities (as such
terms are defined in the Prior Agreement).
The Parties Agree as Follows:
SECTION 1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the following respective meanings:
(a) “Affiliate” shall mean with respect to any Person, any Person which directly or indirectly
through one or more intermediaries, controls, is controlled by or is under common control with such
Person.
(b) “Board” shall mean the Board of Directors of the Company.
(c) “Commission” shall mean the Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act.
(d) “Common Stock” shall mean the Company’s common stock, par value $0.0001
per share.
(e) “Convertible Securities” shall mean the Series A-1 Preferred Stock, Series A-2 Preferred
Stock, Series A-3 Preferred Stock and, only to the extent circumstances arise which require their
creation, Series A-4 Preferred Stock and Series A-5 Preferred Stock.
(f) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all as the same shall
be in effect at the time.
(g) “Form S-3” shall mean Form S-3 issued by the Commission or any substantially similar form
then in effect.
(h) “Holder” shall mean any Person entering into this Agreement and any holder of outstanding
Registrable Securities or an assignee or transferee of Registration rights as permitted by Section
3.8.
(i) “Initiating Holders” shall mean Holders who in the aggregate hold at least twenty percent
(20%) of the Registrable Securities.
(j) “Material Adverse Event” shall mean an occurrence having a consequence that either (i) is
materially adverse as to the business, properties, prospects or financial condition of the Company
and its subsidiary, taken as a whole, or (ii) is reasonably foreseeable, has a reasonable
likelihood of occurring, and if it were to occur would reasonably be expected to materially
adversely affect the business, properties, prospects or financial condition of the Company and its
subsidiary, taken as a whole.
(k) “Person” shall mean an individual, a corporation, a partnership, a trust or unincorporated
organization or any other entity or organization.
(l) “Preferred Directors” shall mean the members of the Board elected by the holders of the
Convertible Securities voting together as a class and to the exclusion of all other classes of
capital stock of the Company.
(m) “Qualified Public Offering” shall mean a firmly underwritten public offering of the
Company’s Common Stock Registered under the Securities Act and involving gross proceeds to the
Company of at least Thirty Million Dollars ($30,000,000) (prior to deduction for underwriters’
discounts and other expenses relating to such public offering, including, without limitation, fees
of the Company’s counsel) and the price to the public is at least Three Dollars ($3.00) per share
(equitably adjusted for all stock splits, sub-divisions, stock dividends, combinations and the like
with respect to such shares).
(n) The terms “Register,” “Registered” and “Registration” refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities Act (“Registration
Statement”), and the declaration or ordering of the effectiveness of such Registration Statement.
(o) “Registrable Securities” shall mean (i) all Common Stock not previously sold to the public
issued or issuable upon conversion of any of the Convertible Securities purchased by or issued to
the Investors, (ii) all shares of Common Stock owned by the Investors, (iii) for the purposes of
Section 3.2, the shares of Common Stock owned by Xxxxxxxx X. Xxxxxxxxx and Xxxxx X. Socks, (iv) the
192,500 shares of Common Stock issuable upon conversion of the Convertible Securities issuable upon
exercise of
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that certain Warrant to Purchase Stock dated February 17, 2006 by and between the Corporation
and Silicon Valley Bank, (v) the 192,500 shares of Common Stock issuable upon conversion of the
Convertible Securities issuable upon exercise of that certain Warrant to Purchase Stock dated
February 17, 2006 by and between the Corporation and Oxford Finance Corporation, and (vi) any
Common Stock of the Company 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 Common Stock described in clauses (i) through (v) of this
definition.
(p) “Registration Expenses” shall mean all expenses incurred by the Company in complying with
Sections 3.1 or 3.2 of this Agreement, including, without limitation, all federal and state
registration, qualification and filing fees, printing expenses, fees and disbursements of counsel
for the Company and fees and disbursements of not more than one (1) special counsel for the Holders
(if different from the Company) not to exceed twenty-five thousand dollars ($25,000), blue sky fees
and expenses, and the expense of any special audits incident to or required by any such
Registration.
(q) “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
(r) “Selling Expenses” shall mean all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities pursuant to this Agreement.
(s) “Series A-1 Preferred Stock” shall mean the Company’s Series A-1 Preferred Stock, par
value $0.0001 per share.
(t) “Series A-2 Preferred Stock” shall mean the Company’s Series A-2 Preferred Stock, par
value $0.0001 per share.
(u) “Series A-3 Preferred Stock” shall mean the Company’s Series A-3 Preferred Stock, par
value $0.0001 per share.
(v) “Series A-4 Preferred Stock” shall mean the Company’s Series A-4 Preferred Stock, par
value $0.0001 per share, if the circumstances arise which require the creation of such series.
(w) “Series A-5 Preferred Stock” shall mean the Company’s Series A-5 Preferred Stock, par
value $0.0001 per share, if the circumstances arise which require the creation of such series.
(x) “Special Registration Statement” shall mean (i) a registration statement relating to any
employee benefit plan, (ii) with respect to any corporate reorganization or transaction under Rule
145 of the Securities Act, including any registration statements related to the resale of
securities issued in such a transaction, or (iii) a registration related to stock issued upon
conversion of debt securities.
SECTION 2. COVENANTS OF THE COMPANY
2.1 Financial Statements and Reports to Stockholders; Budget. (a) As soon as
practicable after the end of each fiscal year of the Company, and in any event within one hundred
twenty (120) days thereafter, the Company shall deliver to each Investor an audited consolidated
balance sheet of the Company as of the end of such year and audited consolidated statements of
income, stockholders’ equity and cash flows for such year, which year-end financial reports
shall be in reasonable detail and shall be
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accompanied by the opinion of independent public
accountants of recognized standing selected by the Company.
(b) So long as an Investor or subsequent holder of Convertible Securities holds or is deemed
to hold at least One Hundred Fifty Thousand (150,000) shares of Registrable Securities (subject to
adjustment for stock splits, reverse stock splits, stock dividends and other similar transactions
with respect to such shares), the Company shall deliver to such Investor:
(i) as soon as practicable after the end of each month, and in any event within thirty (30)
days thereafter, unaudited consolidated balance sheets of the Company and its subsidiaries, if any,
as of the end of each such month and unaudited consolidated statements of income and cash flow for
such month; and
(ii) within sixty (60) days prior to the end of each fiscal year, an operating budget and plan
respecting the Company’s next fiscal year in substantially the same form as that which will be
subject to the approval of the Board.
2.2 Qualified Small Business. The Company covenants that so long as any Convertible
Securities, or the Common Stock into which such shares are converted, are held by a Holder in whose
hands such shares of Common Stock are eligible to qualify as “qualified small business stock” as
defined in Section 1202(c) of the Internal Revenue Code of 1986, as amended (the “Code”)
(“Qualified Small Business Stock”), it will (i) comply with any applicable filing or reporting
requirements imposed by the Code on issuers of Qualified Small Business Stock and (ii) execute and
deliver to each Holder, from time to time, such forms, documents, schedules and other instruments
as may be reasonably requested thereby to cause the Convertible Securities, or the Common Stock
into which such shares are converted, to qualify as Qualified Small Business Stock. The Company
shall submit to the Investors and to the Internal Revenue Service any reports that may be required
under Section 1202(d)(1)(C) of the Code and any related Treasury Regulations. In addition, within
ten (10) days after any Investor has delivered to the Company a written request therefor, the
Company shall deliver to such Investor a written statement informing the Investor whether, in the
Company’s good-faith judgment after a reasonable investigation, such Investor’s interest in the
Company constitutes “qualified small business stock” as defined in Section 1202(c) of the Code, or
would constitute “qualified small business stock,” if determination of whether stock constitutes
“qualified small business stock” were made by taking into account the modifications set forth in
Section 1045(b)(4) of the Code. The Company’s obligation to furnish a written statement pursuant
to this Section 2.2 shall continue notwithstanding the fact that a class of the Company’s stock may
be traded on an established securities market.
2.3 Board Meeting; Compensation of Directors. The Company hereby covenants that so
long as the holders of the Convertible Securities are entitled to appoint any members of the Board
pursuant to the Company’s Restated Certificate of Incorporation, as amended, the Board shall not
meet less frequently than quarterly. All non-employee directors will be compensated by the Company
identically; provided however, that additional compensation may be provided to the Chairman of the
Board or the Chairman of any Committee of the Board; provided, that such compensation is approved
by the Board, including the approval of at least one (1) of the Preferred Directors. All
out-of-pocket and travel expenses of the directors incurred in attending Board meetings (or
meetings of committees thereof) or in connection with the performance of their duties as directors
shall be paid or reimbursed promptly by the Company. The Company shall also agree to indemnify
each of its officers and directors to the fullest extent permitted by the Delaware General
Corporation Law and enter into customary indemnification agreements with each of its officers
and directors evidencing such indemnification obligation.
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2.4 Employee Stock. With respect to any shares issued or options or rights granted to
employees, consultants and directors after the date hereof, unless otherwise approved by the Board,
the Company shall cause each employee, consultant, and director of the Company to enter into an
agreement providing for vesting of such shares or options or rights over forty-eight (48) months,
with no shares or options or rights being vested for twelve (12) months from the date of
commencement of services in the case of stock or option grants for new hires, or the date of
issuance or grant in the case of subsequent stock or option grants, at which time 1/4th of the
shares or options or rights shall be vested and 1/48th of such shares, options or rights shall be
vested monthly thereafter. Any options providing for early exercise and any grant of restricted
stock shall provide for a repurchase option so that upon termination of the employment or
consulting relationship of the stockholder, the Company or its assignee (to the extent permissible
under applicable securities law qualification) retains the option to repurchase at cost any
unvested shares held by such stockholder.
2.5 Board Observer Rights. For so long as an Investor or subsequent holder of
Convertible Securities holds or is deemed to hold at least One Million Five Hundred Thousand
(1,500,000) shares of Registrable Securities (subject to adjustment for stock splits, reverse stock
splits, stock dividends and other similar transactions with respect to such shares), the Company
shall allow one representative designated by such Investor (the “Observer”) to attend meetings of
the Board in a non-voting capacity; provided, however, that no Investor or subsequent holder of
Convertible Securities shall be entitled to designate an Observer if such holder or an Affiliate of
such holder is entitled to nominate a director to the Board pursuant to the Company’s Amended and
Restated Voting Agreement, dated as of the date hereof. The Company shall provide the Observer
with copies of all materials that are provided by the Company to its directors; provided, however,
that a majority of the members of the Board shall be entitled to recuse the Observer from portions
of any Board meeting and to redact portions of any Board or Board committee materials delivered to
the Observer where and to the extent that such majority determines, in good faith that (i) such
recusal is reasonably necessary, in the opinion of counsel to the Company, to preserve
attorney-client privilege with respect to a material matter, (ii) there exists, with respect to any
deliberation or Board materials, an actual or potential conflict of interest between the Investor
who has appointed such Observer and the Company or (iii) the presence of the Observer would
otherwise be materially injurious to the Company in such circumstances; provided, further, that
such Investor’s right to appoint an Observer to the Board shall automatically expire upon the
effectiveness of the registration statement for the Company’s Qualified Public Offering. Any
Observer will be subject to the confidentiality provisions set forth in Section 2.6. The Observer
shall receive no compensation from the Company for service as an Observer and shall not be
reimbursed for any expenses incurred by the Observer in connection with attendance of any meeting
of the Board.
2.6 Confidentiality. Each Investor agrees and will cause any representative of the
Investor, including any Observer, to hold in confidence and trust and not use or disclose any
information provided to or learned by it in connection with its rights under this Section 2, except
that such Investor may disclose such information to any general partner, limited partner, member,
subsidiary or parent (and their respective representatives) of such Investor for the purpose of
evaluating its investment in the Company as long as (a) such general partner, limited partner,
member, subsidiary or parent is advised of the confidentiality
provisions of this Section 2.6 and (b) such Investor uses its commercially reasonable best
efforts to ensure that such general partner, limited partner, member, subsidiary or parent holds
such information in confidence and trust and will not use or disclose any information provided to
or learned by it except as required by law. Notwithstanding the foregoing, however, the obligation
of each Investor to hold information confidential as provided herein or any other document or
agreement relating thereto shall not prohibit such Investor from disclosing such information: (i)
to its board of directors, investment advisers, attorneys, accountants, consultants and other
professionals to the extent necessary to obtain their services in connection with its investment in
the Company, provided that such persons agree to hold such information confidential as provided
herein; (ii) to any prospective purchaser of any shares of the
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Company owned by such Investor as
long as such prospective purchaser agrees in writing to be bound by the confidentiality provisions
as provided herein; (iii) to such Investor’s investment advisor or any investment companies managed
by such Investor’s investment advisor, provided that such persons agree to hold such information
confidential as provided herein; or (iv) as required by applicable law or regulation, regulatory
body, stock exchange, court or administrative order, or any listing or trading agreement concerning
such Investor or the Company. Furthermore, nothing in this Section 2.6 shall restrict any
Investor’s ability to disclose the existence or nature of its relationship with the Company, the
nature or amount of its investment in securities of the Company or to provide its affiliates with
quarterly, annual or other reports and such other information about the Company prepared by such
Investor in the ordinary course of its business, provided that said Investor takes commercially
reasonable measures to ensure that any such affiliates protect the confidential nature of such
confidential information.
2.7 Termination of Covenants. The covenants of the Company set forth in this Section
2 shall be terminated and be of no further force or effect upon the earlier of (a) the effective
date of the Company’s Registration Statement filed in connection with the Company’s first Qualified
Public Offering and (b) the date of the closing of a sale, lease, or other disposition of all or
substantially all of the Company’s assets or the Company’s merger into or consolidation with any
other corporation or other entity, or any other corporate reorganization, in which the holders of
the Company’s outstanding voting stock immediately prior to such transaction own, immediately after
such transaction, securities representing less than fifty percent (50%) of the voting power of the
corporation or other entity surviving such transaction, provided that this Section 2.7 shall not
apply to a merger effected exclusively for the purpose of changing the domicile of the Company or a
sale of shares by the Company for primarily equity financing purposes.
SECTION 3. REGISTRATION RIGHTS
3.1 Demand Registration.
3.1.1. Request for Registration on Form other than Form S-3. Subject to the terms of
this Agreement, in the event that the Company shall receive from the Initiating Holders, at any
time after, six (6) months from the effective date of the first registration statement for a public
offering of securities of the Company (other than a Special Registration Statement), a written
request that the Company effect any Registration with respect to all or a part of the Registrable
Securities on a form other than Form S-3 for an offering of all or a part of the then outstanding
Registrable Securities, the reasonably anticipated aggregate offering price to the public of which
would exceed Five Million Dollars ($5,000,000), net of Selling Expenses, the Company shall (i)
promptly give written notice of the proposed Registration to all other Holders and shall (ii) as
soon as practicable, use its reasonable best efforts to effect Registration of the Registrable
Securities specified in such request, together with any Registrable Securities of any Holder
joining in such request as are specified in a written request given within twenty (20) days after
written notice from the Company. The
Company shall not be obligated to take any action to effect any such Registration pursuant to
this Section 3.1.1:
(i) in any particular jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting such registration, unless the Company is already subject
to service in such jurisdiction and except as may be required under the Securities Act;
(ii) after the Company has effected two (2) such Registrations pursuant to this Section 3.1.1
and such Registrations have been declared effective;
(iii) during the period starting with the date sixty (60) days prior to the Company’s good
faith estimate of the date of filing of, and ending on the date one hundred eighty (180)
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days
following the effective date of the registration statement pertaining to any public offering, other
than pursuant to a Special Registration Statement; provided that the Company makes reasonable good
faith efforts to cause such registration statement to become effective;
(iv) if within thirty (30) days of receipt of a written request from the Initiating Holders
pursuant to Section 3.1.1, the Company gives notice to the Holders of the Company’s intention to
file a registration statement for a public offering, other than pursuant to a Special Registration
Statement, within one hundred twenty (120) days; or
(v) 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 3.1.3 below.
3.1.2. Right of Deferral of Registration on Form other Than Form S-3. If the Company
shall furnish to all such Holders who joined in the request a certificate signed by the President
of the Company stating that, in the good faith judgment of the Board, it would be seriously
detrimental to the Company for any Registration to be effected as requested under Section 3.1.1,
the Company shall have the right to defer the filing of a Registration Statement with respect to
such offering for a period of not more than one hundred twenty (120) days from delivery of the
request of the Initiating Holders; provided, however, that the Company may not utilize this right
more than once in any twelve (12)-month period.
3.1.3. Request for Registration on Form S-3. Subject to the terms of this Agreement,
in the event that the Company receives from Holders of twenty percent (20%) or more of the then
outstanding Registrable Securities, a written request that the Company effect any Registration on
Form S-3 (or any successor form to Form S-3 regardless of its designation) at a time when the
Company is eligible to Register securities on Form S-3 (or any successor form to Form S-3
regardless of its designation) for an offering of Registrable Securities which such Holders in
their good faith discretion determine would have an anticipated offering price of at least One
Million Dollars ($1,000,000), the Company will promptly give written notice of the proposed
Registration to all the Holders and will as soon as practicable use its best efforts to effect
Registration of the Registrable Securities specified in such request, together with all or such
portion of the Registrable Securities of any Holder joining in such request as are specified in a
written request delivered to the Company within twenty (20) days after written notice from the
Company of the proposed Registration. There shall be no limit to the number of occasions on which
the Company shall be obligated to effect Registration under this Section 3.1.3, but the Company
shall not be required to effect more than two (2)
such Registrations in any twelve (12)-month period. Notwithstanding the foregoing, the
Company shall not be obligated to effect any Registration pursuant to this Section 3.1.3:
(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 of less than One Million Dollars ($1,000,000) before
deduction of Selling Expenses;
(iii) if within thirty (30) days of receipt of a written request from any Holder or Holders
pursuant to this Section 3.1.3, the Company gives notice to such Holder or Holders of the Company’s
intention to make a public offering within ninety (90) days, other than pursuant to a Special
Registration Statement;
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(iv) 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, it would be seriously detrimental to
the Company for any Registration to be effected as requested under Section 3.1.3, the Company shall
have the right to defer the filing of a Registration Statement with respect to such offering for a
period of not more than ninety (90) days from delivery of the request of the Holders requesting
such Registration; provided, however, that the Company may not utilize this right more than once in
any twelve (12)-month period; or
(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.
3.1.4. Registration of Other Securities in Demand Registration. Any Registration
Statement filed pursuant to the request of the Initiating Holders under this Section 3 may, subject
to the provisions of Section 3.1.5, include securities of the Company other than Registrable
Securities.
3.1.5. Underwriting in Demand Registration.
a. Notice of Underwriting.
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 Section 3.1.1, and the Company shall include such information in the written
notice referred to in Section 3.1.1 or 3.1.3. The right of any Holder to Registration pursuant to
Section 3 shall be conditioned upon such Holder’s agreement to participate in such underwriting and
the inclusion of such Holder’s Registrable Securities in the underwriting.
b. Inclusion of other Holders in
Demand Registration.
If the Company, officers or directors of the Company holding Common Stock other than
Registrable Securities or holders of securities issued by the Company other than Registrable
Securities, request inclusion in such Registration, the Initiating Holders, to the extent they deem
advisable and consistent with the goals of such Registration, shall, on behalf of all Holders,
offer to any or all of the Company, such officers or directors and such holders of securities other
than Registrable
Securities that such securities other than Registrable Securities be included in the
underwriting and may condition such offer on the acceptance by such persons of the terms of this
Section 3.1.
c. Selection of Underwriter in
Demand Registration.
The Company shall (together with all Holders proposing to distribute their securities through
such underwriting) enter into an underwriting agreement with the representative (“Underwriter’s
Representative”) of the underwriter or underwriters selected for such underwriting by the Holders
of a majority of the Registrable Securities being Registered by the Initiating Holders and agreed
to by the Company.
d. Marketing Limitation in
Demand Registration.
In the event the Underwriter’s Representative advises the Initiating Holders in writing that
market factors (including, without limitation, the aggregate number of shares of Common Stock
requested to be Registered, the general condition of the market, and the status of the persons
proposing to sell securities pursuant to the Registration) require a limitation of the number of
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shares to be underwritten, then (i) first the securities other than Registrable Securities and (ii)
next the securities requested to be registered by the Company, shall be excluded from such
Registration to the extent required by such limitation. If a limitation of the number of shares is
still required, the Initiating Holders shall so advise all Holders and the number of shares of
Registrable Securities that may be included in the Registration and underwriting shall be allocated
among all Holders in proportion, as nearly as practicable, to the respective amounts of Registrable
Securities entitled to inclusion in such Registration held by such Holders at the time of filing
the Registration Statement. No Registrable Securities or other securities excluded from the
underwriting by reason of this Section 3.1.5(d) shall be included in such Registration Statement.
To facilitate the allocation of shares in accordance with the above provisions, the Company or the
Underwriter’s Representative may round the number of shares allocated to any Holder to the nearest
one hundred (100) shares.
e. Right of Withdrawal in Demand
Registration.
If any Holder of Registrable Securities, or a holder of other securities entitled (upon
request) to be included in such Registration, disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the Company, the underwriter and the
Initiating Holders delivered at least seven (7) business days prior to the effective date of the
Registration Statement. The securities so withdrawn shall also be withdrawn from the Registration
Statement.
3.1.6. Blue Sky in Demand Registration. In the event of any Registration pursuant to
Section 3.1, the Company will exercise its reasonable best efforts to Register and qualify the
securities covered by the Registration Statement under such other securities or Blue Sky laws of
such jurisdictions (not exceeding twenty (20) at the expense of the Company) as shall be reasonably
appropriate for the distribution of such securities; provided, however, that (i) the Company shall
not be required to qualify to do business or to file a general consent to service of process in any
such states or jurisdictions, and (ii) notwithstanding anything in this Agreement to the contrary,
in the event any jurisdiction in which the securities shall be qualified imposes a non-waivable
requirement that expenses incurred in connection with the qualification of the securities be borne
by selling stockholders, such expenses shall be payable pro rata by selling stockholders.
3.2 Piggyback Registration.
3.2.1. Notice of Piggyback Registration and Inclusion of Registrable Securities.
Subject to the terms of this Agreement, in the event the Company decides to Register any of its
Common Stock (either for its own account or the account of a security holder or holders or other
securities under the Securities Act in connection with the public offering of such securities
(other than a Special Registration Statement), the Company will: (i) promptly give each Holder
written notice thereof (which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable Blue Sky or other state
securities laws) and (ii) include in such Registration (and any related qualification under Blue
Sky laws or other compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request delivered to the Company by any Holder within fifteen
(15) days after delivery of such written notice from the Company.
3.2.2. Underwriting in Piggyback Registration.
a. Notice of Underwriting in
Piggyback Registration.
If the Registration of which the Company gives notice pursuant to Section 3.2.1 is for a
Registered public offering involving an underwriting, the Company shall so advise the Holders as a
part of the written notice given pursuant to Section 3.2.1. In such event the right of any
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Holder
to Registration shall be conditioned upon such underwriting and the inclusion of such Holder’s
Registrable Securities in such underwriting to the extent provided in this Section 3. All Holders proposing to distribute their securities through such underwriting shall (together with the Company
and the other holders distributing their securities through such underwriting) enter into an
underwriting agreement with the Underwriter’s Representative for such offering. The Holders shall
have no right to participate in the selection of the underwriters for an offering pursuant to this
Section 3.2.
b. Marketing Limitation in
Piggyback Registration.
In the event the Underwriter’s Representative advises the Holders seeking Registration of
Registrable Securities pursuant to Section 3.2 in writing that market factors (including, without
limitation, the aggregate number of shares of Common Stock requested to be Registered, the general
condition of the market, and the status of the persons proposing to sell securities pursuant to the
Registration) require a limitation of the number of shares to be underwritten, the Underwriter’s
Representative (subject to the allocation priority set forth in Section 3.2.2(c)) may:
i. in the case of the first registered offering of the Company’s securities, exclude some or
all Registrable Securities from such Registration and underwriting; and
ii. in the case of any subsequent registered public offering of the Company’s securities,
limit the number of shares of Registrable Securities to be included in such Registration and
underwriting to not less than thirty percent (30%) of the securities included in such Registration
(based on aggregate market values).
c. Allocation of Shares in
Piggyback Registration.
In the event that the Underwriter’s Representative limits the number of shares to be included
in a Registration pursuant to Section 3.2.2(b), the number of shares to be included in such
Registration shall be allocated (subject to Section 3.2.2(b)) in the following manner: The number
of shares, if any, that may be included in the Registration and underwriting by selling
stockholders shall first
be allocated among all the requesting Holders pro rata according to the respective amounts of
Registrable Securities entitled to be included in such offering by such requesting Holders and then
among all other holders of securities other than Registrable Securities requesting and legally
entitled to include shares in such Registration, in proportion, as nearly as practicable, to the
respective amounts of securities (including Registrable Securities) which such Holders and such
other holders would otherwise be entitled to include in such Registration. No Registrable
Securities or other securities excluded from the underwriting by reason of this Section 3.2.2(c)
shall be included in the Registration Statement. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the Underwriter’s Representative may round the
number of shares allocated to any Holder to the nearest one hundred (100) shares.
d. Withdrawal in Piggyback
Registration.
If any Holder disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the underwriter delivered at least seven (7)
business days prior to the effective date of the Registration Statement. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from
such Registration.
3.2.3. Blue Sky in Piggyback Registration. In the event of any Registration of
Registrable Securities pursuant to Section 3.2, the Company will exercise its best efforts to
Register and
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qualify the securities covered by the Registration Statement under such other
securities or Blue Sky laws of such jurisdictions (not exceeding twenty (20) unless otherwise
agreed to by the Company) as shall be reasonably appropriate for the distribution of such
securities; provided, however, that (i) the Company shall not be required to qualify to do business
or to file a general consent to service of process in any such states or jurisdictions, and (ii)
notwithstanding anything in this Agreement to the contrary, in the event any jurisdiction in which
the securities shall be qualified imposes a non-waivable requirement that expenses incurred in
connection with the qualification of the securities be borne by selling stockholders, such expenses
shall be payable pro rata by selling stockholders.
3.3 Expenses of Registration. All Registration Expenses incurred in connection with
two (2) Registrations pursuant to Section 3.1.1, all Registrations pursuant to Section 3.1.3 (Form
S-3) and all Registrations pursuant to Section 3.2 shall be borne by the Company. All Registration
Expenses incurred in connection with any other registration, qualification or compliance shall be
apportioned among the Holders and other holders of the securities so registered on the basis of the
number of shares so registered. Notwithstanding the above, the Company shall not be required to
pay for any expenses of any Registration proceeding begun pursuant to Section 3.1 if the
Registration request is subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be Registered (which Holders shall bear such expenses), unless the
Holders of a majority of the Registrable Securities agree to forfeit their right to demand
Registration pursuant to Section 3.1; provided further, however, that if at the time of such
withdrawal, (a) the Holders have learned of a Material Adverse Event either (i) not known to the
Holders at the time of their request or (ii) not made known to the Holders within fifteen (15) days
after their request and (b) the Holders have withdrawn the request with reasonable promptness
following the discovery of such Material Adverse Event, then the Holders shall not be required to
pay any of such expenses and shall retain their rights pursuant to Section 3.1. All Selling
Expenses shall be borne by the respective holders of the securities Registered pro rata on the
basis of the number of shares registered.
3.4 Registration Procedures. In the case of each registration, qualification or
compliance effected by the Company pursuant to this Section 3, the Company will:
(a) Keep each Holder whose Registrable Securities are included in any Registration pursuant to
this Agreement advised as to the initiation and completion of such Registration. At its expense
the Company will: (i) use its best efforts to keep such Registration effective for a period of one
hundred twenty (120) days or until the Holder or Holders have completed the distribution described
in the Registration Statement relating thereto, whichever first occurs; and (ii) furnish such
number of prospectuses (including preliminary prospectuses) and other documents as a Holder from
time to time may reasonably request. With respect to clause (i) of the preceding sentence, the
Company may at any time upon written notice to the participating Holders and for a period not to
exceed sixty (60) days thereafter (the “Suspension Period”) delay the filing or effectiveness of
any registration statement or suspend the use or effectiveness of any registration statement (and
the Holders hereby agree not to offer or sell any Registrable Securities pursuant to such
registration statement (or any prospectus relating thereto) during the Suspension Period) if the
Company reasonably believes that the Company may, in the absence of such delay or suspension
hereunder, be required under state or federal securities laws to disclose any corporate development
the disclosure of which could reasonably be expected to have an adverse effect upon the Company,
its stockholders, a potentially significant transaction or event involving the Company, or any
negotiations, discussions, or proposals directly relating thereto. In the event that the Company
shall exercise its rights hereunder, the applicable time period during which the registration
statement is to remain effective shall be extended by a period of time equal to the duration of the
Suspension Period. The Company may extend the Suspension Period for an additional consecutive
sixty (60) days with the consent of the holders of a majority of the Registrable Securities
proposed to be sold by the Holders in the applicable Registration, which consent shall not be
unreasonably withheld. If so
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directed by the Company, the Holders shall use their best efforts to
deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then
in such Holders’ possession, of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice. Notwithstanding anything to the contrary contained herein, the
Company shall not be required to file, cause to become effective or maintain the effectiveness of
any registration statement that contemplates a distribution of securities on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act.
(b) Prepare and file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statements 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 a period of up to one hundred twenty
(120) days;
(c) Promptly notify each Holder of Registrable Securities covered by the registration
statement at any time when the Company becomes aware of the happening of any event as a result of
which the registration statement or the prospectus included in such registration statement or any
supplement to the prospectus (as then in effect) contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein (in the case of the
prospectus, in light of the circumstances under which they were made) not misleading or, if for any
other reason it shall be necessary during such time period to amend or supplement the registration
statement or the prospectus in order to comply with the Securities Act, whereupon, in either case,
each Holder shall immediately cease to use such registration statement or prospectus for any
purpose and, as promptly as practicable thereafter, the Company shall prepare and file with the
Commission, and furnish without charge to the appropriate Holders and managing underwriters, if
any, a supplement or amendment to such registration statement or prospectus which will correct such
statement or omission or effect such compliance and such copies thereof as the Holders and any
underwriters may reasonably request;
(d) Use its reasonable best efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions except as may be required by law;
(e) Cause all such Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed;
(f) Provide a transfer agent and registrar for all Registrable Securities and a CUSIP number
for all such Registrable Securities, in each case not later than the effective date of such
registration;
(g) 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; and
(h) Use its reasonable best efforts to furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Section 3, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection with a registration
pursuant to this Section 3, 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
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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 (to the extent the then applicable standards of
professional conduct permit said letter to be addressed to the Holders).
3.5 Information Furnished by Holder. It shall be a condition precedent of the
Company’s obligations under this Agreement that each Holder of Registrable Securities included in
any Registration furnish to the Company such information regarding such Holder and the distribution
proposed by such Holder or Holders as the Company may reasonably request.
3.6 Indemnification.
3.6.1. Company’s Indemnification of Holders. To the extent permitted by law, the
Company will indemnify each Holder, each of its officers, directors and constituent partners, legal
counsel for the Holders, and each person controlling such Holder, with respect to which
Registration, qualification or compliance of Registrable Securities has been effected pursuant to
this Agreement, and each underwriter, if any, and each person who controls any underwriter, against
all claims, losses, damages or liabilities (or actions in respect thereof) to the extent such
claims, losses, damages or liabilities arise out of or are based upon any untrue statement (or
alleged untrue statement) of a material fact contained in any prospectus or other document
(including any related Registration Statement) incident to any such Registration, qualification or
compliance, or are based on
any 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 any violation by the Company
of any rule or regulation promulgated under the Securities Act or Exchange Act or state or federal
law applicable to the Company and relating to action or inaction required of the Company in
connection with any such Registration, qualification or compliance; and the Company will reimburse
each such Holder, each such underwriter and each person who controls any such Holder or underwriter
for any legal and any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action; provided, however, that the indemnity
contained in this Section 3.6.1 shall not apply to amounts paid in settlement of any such claim,
loss, damage, liability or action if settlement is effected without the consent of the Company
(which consent shall not unreasonably be withheld); and provided, further, that the Company will
not be liable in any such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based upon any untrue statement or omission based upon written
information furnished to the Company by such Holder, underwriter, or controlling person and stated
to be for use in connection with the offering of securities of the Company.
3.6.2. Holder’s Indemnification of Company. To the extent permitted by law, each
Holder will, if Registrable Securities held by such Holder are included in the securities as to
which such Registration, qualification or compliance is being effected pursuant to this Agreement,
indemnify the Company, each of its directors and officers that has signed the registration
statement, each underwriter, if any, of the Company’s securities covered by such a Registration
Statement, each person who controls the Company or such underwriter within the meaning of the
Securities Act, and each other such Holder, each of its officers, directors and constituent
partners and each person controlling such other Holder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based upon any untrue statement (or
alleged untrue statement) of a material fact contained in any such Registration Statement,
prospectus, offering circular or other document, or any 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 any violation by such Holder of any rule or regulation promulgated under the
Securities Act or Exchange Act or state or federal law applicable to such Holder and relating to
action or inaction
- 13 -
required of such Holder in connection with any such Registration, qualification
or compliance; and will reimburse the Company, such Holders, such directors, officers, partners,
persons, underwriters or control persons for any legal and any other expenses reasonably incurred
in connection with investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such Registration Statement, prospectus,
offering circular or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use in connection with
the offering of securities of the Company; provided, however, that each Holder’s liability under
this Section 3.6.2 shall be several, and not joint with other Holders, and shall not exceed such
Holder’s net proceeds from the offering of securities made in connection with such Registration,
except in the case of willful fraud by such holder.
3.6.3. Indemnification Procedure. Promptly after receipt by an indemnified party
under this Section 3.6 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party under this Section 3.6,
notify the indemnifying party in writing of the commencement thereof and generally summarize such
action. The indemnifying party shall have the right to participate in and to assume the defense of
such claim; provided, however, that the indemnifying party shall be entitled to select counsel for
the defense of such claim with the approval of any parties entitled to indemnification, which
approval shall not be unreasonably withheld; provided further, however, that if either party
reasonably determines that there may be a conflict between the position of the
indemnifying party and the indemnified party in conducting the defense of such action, suit or
proceeding by reason of recognized claims for indemnity under this Section 3.6, then counsel for
such party shall be entitled to conduct the defense to the extent reasonably determined by such
counsel to be necessary to protect the interest of such party. The failure to notify an
indemnifying party promptly of the commencement of any such action, if prejudicial to the ability
of the indemnifying party to defend such action, shall relieve such indemnifying party, to the
extent so prejudiced, of any liability to the indemnified party under this Section 3.6, but the
omission so to notify the indemnifying party will not relieve such party of any liability that such
party may have to any indemnified party otherwise other than under this Section 3.6.
3.6.4. Contribution. If the indemnification provided for in this Section 3.6 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. 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.
3.6.5. Underwriting Agreement. 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.
3.6.6. Survival. The obligations of the Company and Holders under this Section 3.6
shall survive the completion of any offering of Registrable Securities in a registration statement
under this Section 3, and otherwise. No indemnifying party, in defense of any claim of litigation
set forth under this
- 14 -
Section 3.6, shall, except with the consent of each indemnified party, consent
to 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.
3.7 Limitations on Registration Rights Granted to Other Securities. From and after
the date of this Agreement, the Company shall not enter into any other agreement with any holder or
prospective holder of any securities of the Company providing for the granting to such holder of
any Registration rights, except that, with the consent of the Holders of sixty-seven percent (67%)
of the Convertible Securities then outstanding, additional holders may be added as parties to this
Agreement with regard to any or all securities of the Company held by them. Any such additional
parties shall execute a counterpart of this Agreement, and upon execution by such additional
parties and by the Company, shall be considered an Investor for all purposes of this Agreement.
The additional parties and the additional Registrable Securities shall be identified in an
amendment to Schedule A hereto.
3.8 Transfer of Rights. The right to cause the Company to Register securities granted
by the Company to the Investors under Sections 3.1 and 3.2 may be assigned by any Holder to a
transferee or assignee of any Convertible Securities not sold to the public acquiring at least One
Hundred Fifty Thousand (150,000) shares of such Holder’s Convertible Securities (equitably adjusted
for all stock splits, subdivisions, stock dividends, combinations and the like with respect to such
shares); provided, however, that the Company must receive written notice prior to the time of said
transfer, stating the name and address of said transferee or assignee and identifying the
securities with respect to which such rights are being assigned. Notwithstanding the limitation
set forth in the foregoing sentence respecting the minimum number of shares which must be
transferred, (a) any Holder which is a partnership may transfer such Holder’s rights to such
Holder’s constituent partners, limited partners, retired partners (including spouses, ancestors,
lineal descendants and siblings of such partners or spouses who acquire Convertible Securities or
Registrable Securities by gift, will or intestate succession), (b) any Holder which is a limited
liability company may transfer such Holder’s rights to such Holder’s constituent members or retired
members (including spouses, ancestors, lineal descendants and siblings of such members or spouses
who acquire Convertible Securities or Registrable Securities by gift, will or intestate
succession), (c) any Holder which is a natural person may transfer such Holder’s rights to any
immediate family member, niece or nephew or to any trust created for the benefit of such Holder or
his or her immediate family members, nieces or nephews, (d) any Holder may transfer such Holder’s
rights to an Affiliate, subject in each case to such transferee’s agreeing to be bound by the
rights and restrictions of this Agreement, and (e) any Holder may transfer such Holder’s rights to
any other Holder who has the right to cause the Company to Register securities granted by the
Company to the Investors under Sections 3.1 and 3.2. The rights under Sections 4 and 5 may be
assigned by an Investor only as provided in such Sections.
3.9 Market Stand-off. If requested in writing by the underwriters for the initial
public offering of the Company’s Common Stock, each holder of Registrable Securities who is a party
to this Agreement shall agree not to sell publicly any shares of Registrable Securities or any
other securities of the Company (other than shares of Registrable Securities or other securities of
the Company being registered in such offering), without the consent of such underwriters, for a
period of not more than one hundred eighty (180 days) following the effective date of the
registration statement relating to such offering; provided, however that all executive officers and
directors of the Company and holders of at least one percent (1%) of the Company’s voting
securities shall also have agreed not to sell publicly their Common Stock under the circumstances
and pursuant to the terms set forth in this section. Each Holder agrees to execute and deliver
such other agreements as may be reasonably requested by the Company, or the Company’s underwriters,
which are consistent with the foregoing, or which are reasonably necessary to give further effect
thereto. In order to enforce the covenants of this Section 3.9, the Company shall have the right
to place restrictive legends on the certificates representing the securities of each Holder and may
impose stop-transfer instructions with respect to such securities.
- 15 -
3.10 No-Action Letter or Opinion of Counsel in Lieu of Registration; Conversion of
Convertible Securities. Notwithstanding anything else in this Agreement, if the Company shall
have obtained from the Commission a “no-action” letter in which the Commission has indicated that
it will take no action if, without Registration under the Securities Act, any Holder disposes of
Registrable Securities
covered by any request for Registration made under this Agreement in the specific manner in
which such Holder proposes to dispose of the Registrable Securities included in such request (such
as including, without limitation, the inclusion of such Registrable Securities in an underwriting
initiated by either the Company or the Holders), or if in the opinion of counsel for the Company
concurred in by counsel for such Holder, which concurrence shall not be unreasonably withheld, no
Registration under the Securities Act is required in connection with such disposition, the shares
included in such request shall not be eligible for Registration under this Agreement; provided,
however, that any Registrable Securities not so disposed of shall be eligible for Registration in
accordance with the terms of this Agreement with respect to other proposed dispositions to which
this Section 3.10 does not apply. The Registration rights of the Holders of Convertible Securities
set forth in this Agreement are conditioned upon the conversion of the Convertible Securities with
respect to which Registration is sought into Common Stock prior to the effective date of the
Registration Statement.
3.11 Rule 144 Requirements. Immediately after the date on which a Registration
Statement filed by the Company under the Securities Act becomes effective, the Company shall
undertake to make publicly available, and available to the Holders of Registrable Securities, such
information as is necessary to enable the holders of Registrable Securities to make sales of
Registrable Securities pursuant to Rule 144 of the Commission under the Securities Act. The
Company shall furnish to any holder of Registrable Securities, upon request, a written statement
executed by the Company as to the steps it has taken to comply with the current public information
requirements of Rule 144.
3.12 Reports Under Securities Exchange Act of 1934. With a view to making available
to the Investors the benefits of Rule 144 and any other rule or regulation of the Commission that
may at any time permit an Investor to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to use its commercially
reasonable efforts to:
(a) make and keep public information available, as those terms are defined in 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; file with the Commission in a
timely manner all reports and other documents required of the Company under the Securities Act and
the Exchange Act; and
(b) furnish to any Investor, so long as such Investor owns any Registrable Securities or
Convertible Securities, forthwith upon request (i) a written statement by the Company that it has
complied with the reporting requirements of 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 Investor of any rule or regulation of the Commission which
permits the selling of any such securities without registration or pursuant to such plan.
3.13 Termination of Company Agreements. The Registration rights set forth in Sections
3.1 and 3.2 shall terminate seven (7) years after the effective date of the Company’s Registration
Statement filed in connection with the Company’s first Qualified Public Offering or, as to any
Holder, at any time following the effective date of the Company’s first Qualified Public Offering,
when such Holder is
- 16 -
entitled to sell all of such Investor’s
Registrable Securities pursuant to Rule 144 (including Rule 144(k)) of the Commission under
the Securities Act.
SECTION 4. RIGHT OF FIRST OFFER
4.1 Right of First Offer. Subject to Section 4.4 hereof, the Company hereby grants to
each Investor the right of first refusal (the “Right of First Offer”) to purchase such Investor’s
pro rata share of New Securities (as defined in Section 4.2) which the Company may from time to
time propose to sell and issue. For purposes of the Right of First Offer an Investor’s pro rata
share (the “Pro Rata Share”) shall be determined as follows: an Investor’s Pro Rata Share shall be
equal to that number or amount of New Securities to be sold multiplied by a fraction, the numerator
of which shall be the number of shares of Common Stock owned by such Investor (including shares of
Common Stock issuable upon the full exercise and conversion of all convertible or exercisable
securities owned by such Investor) and the denominator of which shall be the total number of shares
of the Company’s Common Stock deemed to be outstanding assuming the conversion of all outstanding
convertible securities and the exercise of all outstanding options and warrants. Notwithstanding
the foregoing, any Investor that elects to purchase all of its respective Pro Rata Share (a
“Fully-Exercising Investor”) may, at the time it accepts the Company’s offer, subscribe to purchase
any or all of the securities offered (“Oversubscription Securities”) which may be available as a
result of the rejection, or partial rejection, of the offer by other Investors. All such
Oversubscription Securities shall be allocated among each Fully-Exercising Investor subscribing to
purchase them in a proportion equal to that number of shares of Common Stock owned by such
Fully-Participating Investor (including shares of Common Stock issuable upon the full exercise and
conversion of all convertible or exercisable securities owned by such Fully-Participating Investor)
bears to the total number of shares of Common Stock (including shares of Common Stock issuable upon
the full exercise and conversion of all convertible or exercisable securities) held by all
Fully-Exercising Investors who elected to purchase some of the Oversubscribed Securities.
Notwithstanding the foregoing, the Company shall not be required to offer or sell such New
Securities to any Investor who would cause the Company to be in violation of applicable federal
securities laws by virtue of such offer or sale. The Right of First Offer shall be subject to the
provisions of this Section 4.
4.2 Definition of New Securities. “New Securities” shall mean any shares of Common
Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options, or
warrants to purchase such shares of Common Stock or Preferred Stock, and all other securities
having equity features, such as convertible notes or notes issued in conjunction with options or
warrants; provided that “New Securities” shall not include:
(a) Securities issued pursuant to the Purchase Agreement;
(b) securities issued upon the conversion of any shares of the Convertible Securities;
(c) securities issued to the Company’s employees, officers, directors, advisors, outside
consultants or contractors pursuant to a plan, agreement or arrangement duly approved by the Board;
(d) securities issued or issuable pursuant to the exercise of options, warrants or convertible
securities outstanding as of the date hereof;
(e) securities issued in connection with obtaining equipment lease financing, credit
agreements, debt financing and other similar transactions, whether issued to a lessor, guarantor or
other Person, provided that such issuance is pursuant to an agreement or arrangement duly approved
by the Board, and provided, further, that such issuance shall not be primarily for general capital
raising purposes;
- 17 -
(f) securities issued to effect any stock split, stock dividend or recapitalization or like
transactions of the Company;
(g) securities issued in connection with the acquisition of all or a substantial portion of
the assets or the business of another entity by the Company, provided that such issuance is
pursuant to an agreement or arrangement duly approved by the Board;
(h) securities issued in connection with a research and development partnership, corporate
partnering transaction, licensing or collaborative arrangements, strategic alliance, technology
acquisition or transfer, or similar transaction, provided that such issuance is pursuant to an
agreement or arrangement duly approved by the Board; and
(i) securities issued pursuant to a Qualified Public Offering.
4.3 Notices. In the event the Company proposes to undertake an issuance of New
Securities, it shall give each Investor written notice (the “Notice”) of its intention, describing
the type of New Securities, the price, and the principal terms upon which the Company proposes to
issue the same. Each Investor shall have twenty (20) days from the delivery of the Notice to agree
to purchase up to such Investor’s Pro Rata Share plus, in the event of a Fully-Participating
Investor, any Oversubscription Securities, for the price and upon the terms specified in the Notice
by giving written notice to the Company and stating therein the quantity of New Securities and
Oversubscription Securities to be purchased.
4.4 Failure to Exercise Right. Unless (i) Investors holding at least 60% of the then
outstanding shares of Series A-3 Preferred Stock deem otherwise (by vote or by action by written
consent) or (ii) the Company requests in writing a lesser investment commitment of such holders, at
any time or from time to time following the date of the issuance of shares of Series A-3 Preferred
Stock in the Closing (as defined in the Purchase Agreement), if (A) any Investor holding an
aggregate of at least One Million Seven Hundred Thousand (1,700,000) shares of Series A-3 Preferred
Stock (as adjusted for all stock splits, stock dividends, consolidations, recapitalizations and
reorganizations with respect to such shares) (a “Significant Holder”) is entitled to exercise the
Right of First Offer provided in this Section 4, (B) the Company has complied with its obligations
under this Section 4 with respect to the Right of First Offer, and (C) such Significant Holder does
not by exercise of such Significant Holder’s Right of First Offer to acquire at least its Minimum
Share (as defined below) of New Securities (a “Non-Participating Holder”), then, effective
immediately prior to the issuance of such New Securities each Non-Participating Holder shall lose
its Right of First Offer for all subsequent issuances of New Securities which would otherwise
trigger the Right of First Offer pursuant to this Section 4. Each Significant Holder’s “Minimum
Share” of the New Securities shall be a number of shares equal to (X) the product of (i) 0.5
multiplied by (ii) (A) sixty percent (60%) of the aggregate original purchase price paid by such
Significant Holder for the shares of Series A-3 Preferred Stock held by such Significant Holder,
divided by (Y) the per share price of the New Securities, rounded down to a whole number.
Notwithstanding anything contained in this Agreement to the contrary, this Section 4.4 may not be
amended or modified in a manner that adversely affects the
rights or otherwise increases the obligations of a Significant Holder to purchase New
Securities without the written consent of such Significant Holder.
4.5 Company Right to Offer New Securities. In the event an Investor does not elect to
purchase all of such Investor’s Pro Rata Share of the New Securities pursuant to Section 4.1 and
such New Securities are not purchased by other Fully-Participating Investors, the Company shall
have ninety (90) days after the last date on which any Investor’s right to purchase lapsed to sell
or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be
closed, if at all, within ninety (90) days from the date of said agreement) to sell the New
Securities respecting which such
- 18 -
Investor’s option was not exercised, at or above the price and
upon terms not materially more favorable to the purchasers of such securities than the terms
specified in the initial Notice given in connection with such sale. In the event the Company has
not sold the New Securities within said 90-day period (or sold and issued New Securities in
accordance with the foregoing within ninety (90) days from the date of said agreement), the Company
shall not thereafter issue or sell any New Securities without first offering such New Securities to
the Investors in the manner provided in this Section 4.
4.6 Rights of Affiliated Investors. For the purposes of this Section 4, Investors who
are Affiliates of one or more other Investors shall, at the election of an Investor and one or more
such Affiliates, be treated as a group (an “Investor Group”). Members of an Investor Group shall
have the right to reallocate the rights granted by this Section 4 among themselves as they
determine.
4.7 Assignment. The Right of First Offer set forth in this Section 4 may not be
assigned or transferred, except that each Investor shall have the right to assign its right to
purchase securities under this Section 4 to any Affiliate of such Investor; provided such Affiliate
agrees in writing with the Company and the Investor, prior to and as a condition precedent to such
transfer, to be bound by all the provisions of Sections 3.9, 4, 5 and 6 of this Agreement.
4.8 Termination. The Right of First Offer granted under this Section 4 shall not
apply to, and shall terminate on and be of no further force or effect upon the earlier of (a) the
effective date of the Company’s Registration Statement filed in connection with the Company’s first
Qualified Public Offering and (b) the date of the closing of a sale, lease, or other disposition of
all or substantially all of the Company’s assets or the Company’s merger into or consolidation with
any other corporation or other entity, or any other corporate reorganization, in which the holders
of the Company’s outstanding voting stock immediately prior to such transaction own, immediately
after such transaction, securities representing less than fifty percent (50%) of the voting power
of the corporation or other entity surviving such transaction, provided that this Section 4.8 shall
not apply to a merger effected exclusively for the purpose of changing the domicile of the Company
or a sale of shares by the Company for primarily equity financing purposes.
SECTION 5. TRANSFERS OF SECURITIES BY INVESTORS.
5.1 Notices. If any Investor (the “Transferor”) proposes to sell, assign, hypothecate
or otherwise transfer (a “Transfer”) any securities of the Company owned by such Investor from and
after the date of
this Agreement, other than pursuant to the provisions of Section 5.6 of this Agreement, the
Transferor shall first give each of the other Investors the right to purchase such securities by
delivering to them a written offer which shall state the price and other terms and conditions of
the proposed Transfer. If the Transferor proposes to Transfer the securities for consideration
other than solely cash and/or promissory notes, the offer to the Investors shall, to the extent of
such consideration, permit each Investor to pay in lieu thereof, cash equal to the fair market
value of such consideration, and the offer shall state the estimate of such fair market value as
determined by the Board. The Transferor shall fix the period of the offer which shall be a minimum
of thirty (30) days or such longer period as is necessary to determine the fair market value of the
consideration referred to in the preceding sentence.
5.2 Acceptance of Offer. An Investor may accept an offer (“Purchasing Investor”) only
by giving written notice to the Transferor before the offer expires that such Purchasing Investor
has accepted the offer to purchase some or all of the securities offered (the “Accepted
Securities”); provided, however, that the maximum number or amount of securities a Purchasing
Investor shall be entitled to purchase shall be equal to that number or amount of securities to be
transferred multiplied by a fraction, the numerator of which shall be the number of shares of
Common Stock owned by such Purchasing Investor (including shares of Common Stock issuable upon the
full exercise and conversion of all convertible or exercisable
- 19 -
securities owned by such Investor)
and the denominator of which shall be the aggregate number of shares of Common Stock held by all
Investors (including shares of Common Stock issuable upon the full exercise and conversion of all
convertible or exercisable securities owned by all Investors), excluding the Transferor’s shares of
Common Stock. Notwithstanding the foregoing, any Purchasing Investor may, at the time it accepts
the offer, subscribe to purchase any or all securities offered which may be available as a result
of the rejection, or partial rejection, of the offer by other Investors, which securities shall be
allocated on a pro rata basis among those Purchasing Investors subscribing to purchase them.
5.3 Allocation of Securities and Payment. Promptly following the expiration of an
offer, the Transferor shall allocate the securities subscribed for among the Purchasing Investors
accepting or partially accepting the offer, pro rata, based upon their respective holdings as
aforesaid, and shall by written notice (the “Acceptance Notice”) advise all Purchasing Investors of
the number or amount of securities allocated to each of the Purchasing Investors. Within ten (10)
days following receipt of the Acceptance Notice, each of the Purchasing Investors shall deliver to
the Transferor payment in full for the Accepted Shares purchased by it against delivery by the
Transferor to each Purchasing Investor of a certificate or certificates evidencing the Accepted
Securities purchased by it.
5.4 Failure to Exercise. To the extent an offer pursuant to Section 5.1 is not
accepted by the other Investors, the Transferor may, for a period of ninety (90) days thereafter,
transfer the unaccepted securities, or any of them, at or above the price, and upon the other terms
and conditions specified in such offer, to any Person or Persons; provided that such Person or
Persons agrees in writing with the Company and the Investors, prior to and as a condition precedent
to such Transfer, to be bound by all of the provisions of Sections 3.9, 5 and 6 of this Agreement.
5.5 Assignment. The right of first refusal set forth in this Section 5 may not be
assigned or transferred, except that each Investor shall have the right to assign its rights to
purchase such securities under this
Section 5 to any Affiliate of such Investor; provided such Affiliate agrees in writing with
the Company and the Investors, prior to and as a condition precedent to such assignment, to be
bound by all of the provisions of Sections 3.9, 5 and 6 of this Agreement.
5.6 Permitted Transfers.
(a) Notwithstanding anything to the contrary contained herein, any Investor which is a
partnership or limited liability company may transfer, without first offering any securities of the
Company to any other Investor, all or any of its securities to any of its Affiliates or successor
funds or to a partner, limited partner, member or retired partner of such partnership or retired
member of such limited liability company or to the estate of any such partner or transfer by will
or intestate succession to his spouse or to the siblings, lineal descendants or ancestors of such
partner or his spouse; provided such transferee agrees in writing with the Company and the
Investors, prior to and as a condition precedent to such Transfer, to be bound by all of the
provisions of Sections 3.9, 5 and 6 of this Agreement.
(b) Notwithstanding anything to the contrary contained herein, any Investor which is a
corporation may Transfer, without first offering any securities of the Company to any other
Investor, all or any of its securities to any of its Affiliates, provided such Affiliate agrees in
writing with the Company and the Investors, prior to and as a condition precedent to such Transfer,
to be bound by all of the provisions of Sections 3.9, 5 and 6 of this Agreement.
(c) Notwithstanding anything to the contrary contained herein, any Investor who is an
individual may Transfer, without first offering any securities of the Company to any other
Investor, all or any of his or her securities to his or her spouse or their spouse’s siblings,
lineal descendants or ancestors, nieces or nephews, or any entity that is an Affiliate of such
Investor; provided such transferee
- 20 -
agrees in writing with the Company and the Investors, prior to
and as a condition precedent to such Transfer, to be bound by all of the provisions of Sections
3.9, 5 and 6 of this Agreement.
5.7 Termination. The right of first refusal granted under this Section 5 shall expire
upon the effective date of the Company’s registration statement filed in connection with the
Company’s first Qualified Public Offering and shall not be applicable to any shares sold pursuant
thereto.
SECTION 6. MISCELLANEOUS.
6.1 Entire Agreement; Successors and Assigns. This Agreement constitutes the entire
contract between the Company and the Investors relative to the subject matter hereof. Any previous
agreement between the Company, the Investors and the Holders concerning Registration rights and the
other matters set forth herein is superseded by this Agreement. Subject to the exceptions
specifically set forth in this Agreement, the terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective executors, administrators, heirs, successors and
assigns of the parties.
6.2 Aggregation of Stock. All Convertible Securities and Registrable Securities held
or acquired by affiliated entities or persons shall be aggregate together for the purpose of
determining the availability of any rights under this Agreement.
6.3 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS ENTERED INTO AND WHOLLY TO BE
PERFORMED WITHIN THE STATE OF CALIFORNIA BY CALIFORNIA RESIDENTS.
6.4 Counterparts. This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
6.5 Headings. The headings of the Sections of this Agreement are for convenience and
shall not by themselves determine the interpretation of this Agreement.
6.6 Notices. Any notice required or permitted hereunder shall be given in writing and
shall be conclusively deemed effectively given upon personal delivery, or five (5) days after
deposit in the United States mail, by registered or certified mail (or airmail, if notice shall be
sent outside the United States), postage prepaid, or two (2) days after delivery to a nationally
known air courier company, addressed (a) if to the Company, to the Company’s address as set forth
below the Company’s name on the signature page of this Agreement and (b) if to an Investor, to such
Investor’s address as set forth on the signature page of this Agreement, or at such other address
as the Company or such Investor may designate by ten (10) days, advance written notice to the other
parties hereto. Any notice sent outside the United States shall also be telexed or telecopied.
6.7 Amendment of Agreement; Waivers. Subject to Section 3.7 and Section 4.4, any
provision of this Agreement may be amended or waived by a written instrument signed by the Company
and by Persons holding at least 60% of the Convertible Securities issued or issuable upon
conversion of the Series A-3 Preferred Stock provided, however, if such amendment would adversely
affect the rights of a specific Investor in a manner different from the other Investors, then such
amendment shall require the consent of such Investor. Any amendment or waiver effected in
accordance with Section 3.7 or this Section 6.7 shall be binding upon the Company and all Holders
and each of their respective successors and assigns. In addition, the Company may waive performance
of any obligation owing to it, as to some or all of the Investors, or agree to accept alternatives
to such performance, without obtaining the consent of any Investor.
- 21 -
6.8 Effect of Amendment or Waiver. The Investors and their successors and
assigns acknowledge that by the operation of Section 6.7 hereof Investors holding at least sixty
percent (60%) of the Convertible Securities issued or issuable upon conversion of the Series A-3
Preferred Stock, acting in conjunction with the Company, will have the right and power to diminish
or eliminate any or all rights pursuant to this Agreement.
6.9 Waiver of Right of First Offer. Upon execution of this Agreement by the Company and Persons holding at least a
majority of the Convertible Securities under the Prior Agreement, all provisions of, rights granted
and covenants made in the Prior Agreement (including, without limitation, the rights of first offer
set forth in Section 4 of the Prior Agreement) are hereby waived, released and terminated in their
entirety and shall have no further force and effect (including, without limitation, with respect to
the Series A-3 Preferred Stock issued pursuant to the Purchase Agreement and the shares issued upon
conversion thereof).
[Remainder of Page Intentionally Left Blank]
- 22 -
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
| COMPANY: | ||||||||
| CADENCE PHARMACEUTICALS, INC. | ||||||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxxx | |||||||
| Name: | Xxxxxxxx X. Xxxxxxxxx | |||||||
| Title: | President and Chief Executive Officer | |||||||
| Address: | 00000 Xxxx Xxxxx Xxxxx, Xxxxx 000 | |||||||
| Xxx Xxxxx, Xxxxxxxxxx 00000 | ||||||||
| Fax No.: (000) 000-0000 | ||||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| XXXXXXX HEALTHCARE V, LP | ||||||
| By FHM V, LP, its general partner | ||||||
| By FHM V, LLC, its general partner | ||||||
| By | /s/ Xxxxxxx Xxxxx | |||||
| Xxxxxxx Xxxxx, Authorized Representative | ||||||
| Address: | 000 Xxxxx Xxxxx, Xxxxx 0000 | |||||
| Xxxxxxx, XX 00000 | ||||||
| Phone No.: (000) 000-0000 | ||||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| Versant Side Fund II, L.P. | ||||||
| By: | Versant Ventures II, L.L.C. | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: | Xxxxx X. Xxxxxx | |||||
| Title: | Managing Director | |||||
| Versant Venture Capital II, L.P. | ||||||
| By: | Versant Ventures II, L.L.C. | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: | Xxxxx X. Xxxxxx | |||||
| Title: | Managing Director | |||||
| Versant Affiliates Fund II-A, L.P. | ||||||
| By: | Versant Ventures II, L.L.C. | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: | Xxxxx X. Xxxxxx | |||||
| Title: | Managing Director | |||||
| Address: | 0000 Xxxx Xxxx Xxxx, Xxxx 0, Xxxxx 000 | |||||
| Xxxxx Xxxx, XX 00000 | ||||||
| Phone No.: (000) 000-0000 | ||||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
| INVESTOR: | ||||||
| TECHNOLOGY PARTNERS FUND VII, L.P. | ||||||
| By: | TP MANAGEMENT VII, L.L.C. | |||||
| By: | /s/ Xxxxxx Xxxxxx | |||||
| Managing Member | ||||||
| TECHNOLOGY PARTNERS AFFILIATES VII, L.P. | ||||||
| By: | TP MANAGEMENT VII, L.L.C. | |||||
| By: | /s/ Xxxxxx Xxxxxx | |||||
| Managing Member | ||||||
| Address: | 000 Xxxxxxxxx Xxx, Xxxxx 000, Xxxxxxxx X | |||||
| Xxxx Xxxxxx, XX 00000 | ||||||
| Phone No.: (000) 000-0000 | ||||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| XXXXXX INVESTMENT COMPANY, LLC | ||||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||||
| Name: | Xxxxx X. Xxxxxxxx | |||||
| Title: | President | |||||
| Address: | 0000 Xxxxx Xxxxx | |||||
| Xxxxxxxx, XX 00000 | ||||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||||
| DOMAIN PARTNERS VI, L.P. | ||||||||
| By: | One Xxxxxx Square Associates VI, L.L.C., its General Partner |
|||||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxxxx | |||||||
| Name: Xxxxxxxx X. Xxxxxxxxxx | ||||||||
| Title: Managing Member | ||||||||
| Address: | Domain Associates, L.L.C. | |||||
| Xxx Xxxxxx Xxxxxx | ||||||
| Xxxxxxxxx, Xxx Xxxxxx 00000 | ||||||
| Attn: Xxxxxxxx X. Xxxxxxxxxx | ||||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||||
| DP VI ASSOCIATES, L.P. | ||||||||
| By: | One Xxxxxx Square Associates VI, L.L.C., its General Partner |
|||||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxxxx | |||||||
| Name: | Xxxxxxxx X. Xxxxxxxxxx | |||||||
| Title: | Managing Member | |||||||
| Address: | Domain Associates, L.L.C. | |||||
| Xxx Xxxxxx Xxxxxx | ||||||
| Xxxxxxxxx, Xxx Xxxxxx 00000 | ||||||
| Attn: Xxxxxxxx X. Xxxxxxxxxx | ||||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||||
| PROQUEST INVESTMENTS III, L.P. | ||||||||
| By: | ProQuest Associates III LLC, its General Partner | |||||||
| By: | /s/ Xxxxxxxx XxXxxxxxx | |||||||
| Name: | Xxxxxxxx XxXxxxxxx | |||||||
| Title: | Managing Member | |||||||
| Address: | 90 Nassau Street, 5th Floor | |||||
| Princeton, New Jersey 08540 | ||||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| WINDAMERE III, LLC | ||||||
| By: | /s/ Xxxxx X. Xxxxx | |||||
| Name: | Xxxxx X. Xxxxx | |||||
| Title: | Managing Member | |||||
| Address: | c/o Windamere Venture Partners L.L.C. | |||||
| 6402 Cardeno Drive | ||||||
| La Jolla, California 92037 | ||||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| XXXXXX INVESTMENTS, L.L.C. | ||||||
| By: | /s/ Cam X. Xxxxxx | |||||
| Name: | Cam X. Xxxxxx | |||||
| Title: | President | |||||
| Address: | P.O. Box 675866 | |||
| 5900 Xxxxxxxxxx Xxxxx | ||||
| Xxxxxx Xxxxx Xx, Xxxxxxxxxx 00000 | ||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| XXXX FAMILY TRUST UDT 2/10/86, Xxxxx X. and Xxxxx X. Xxxx, Trustees |
||||||
| By: | /s/ Xxxxx X. Xxxx | |||||
| Name: | Xxxxx X. Xxxx | |||||
| Title: | Trustee | |||||
| Address: | 2110 Xxxxxxxxxx Road | |||||
| Carlsbad, California 92008 | ||||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
| INVESTOR: | ||||||
| By: | /s/ Cam X. Xxxxxxxxx | |||||
| Name: | Cam Xxxxxxx Xxxxxxxxx | |||||
| Address: | 3888 Quarter Mile Drive | |||||
| San Diego, California 92130 | ||||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| XXXXX X. XXXXXXXX XXX | ||||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||||
| Name: | Xxxxx X. Xxxxxxxx | |||||
| Address: | 5067 Shore Drive | |||||
| Carlsbad, California 92008 | ||||||
| Fax No.: (000) 000-0000 | ||||||
| Copy to: | Xxxxxx X. Xxxxx, CPA | |||||
| Xxxxx & Xxxx | ||||||
| 550 West C Street, #1700 | ||||||
| San Diego, California 92101 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
| INVESTOR: | ||||||
| XXXXX X. XXXXXXXX TRUST DATED 1/16/95 | ||||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||||
| Name: Xxxxx X. Xxxxxxxx, Trustee | ||||||
| Address: | 5000 Xxxxx Xxxxx | |||||
| Xxxxxxxx, Xxxxxxxxxx 00000 | ||||||
| Fax No.: (000) 000-0000 | ||||||
| Copy to: | Xxxxxx X. Xxxxx, CPA | |||||
| Xxxxx & Xxxx | ||||||
| 550 Xxxx X Xxxxxx, #0000 | ||||||
| Xxx Xxxxx, Xxxxxxxxxx 00000 | ||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| XXXXXXX GROUP GENERAL PARTNERSHIP | ||||||
| By: | /s/ Xxxxxxx X. Xxxx | |||||
| Name: Xxxxxxx X. Xxxx | ||||||
| Title: President | ||||||
| Address: | 5500 Xxxx Xxxxxxxx Xxxx | |||||
| Xxx Xxxxx, Xxxxxx 00000 | ||||||
| Fax No.: (000) 000-0000 | ||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| XXXXXX CAPITAL GROUP, LLC | ||||||
| By: | /s/ Xxxx Xxxxxx | |||||
| Name: Xxxx Xxxxxx | ||||||
| Title: Manager | ||||||
| Address: | 1500 Xxxxxxxx Xxxxxx X., Xxxxx 000 | |||||
| Xxxxxxx, Xxxxxxxxxx 00000 | ||||||
| Fax No.: (000) 000-0000 | ||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| XXXXXX PACIFIC, INC. | ||||||
| By: | /s/ Xxx Xxxxxx | |||||
| Name: Xxx Xxxxxx | ||||||
| Title: President | ||||||
| Address: | 1500 Xxxxxxxx Xxxxxx X., Xxxxx 000 | |||||
| Xxxxxxx, Xxxxxxxxxx 00000 | ||||||
| Fax No.: (000) 000-0000 | ||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| XXXXXX X. XXXXX TRUST II, dated 8/27/90 | ||||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Name: Xxxxxx X. Xxxxx | ||||||
| Title: Trustee | ||||||
| Address: | P.X. Xxx 000000 | |||||
| Xxxxx Xxxxx Xx, Xxxxxxxxxx 00000 | ||||||
| Fax No.: (000) 000-0000 | ||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
| INVESTOR: | ||||||
| BB BIOTECH VENTURES II, L.P. | ||||||
| By: | Its General Partner, BB
BIOTECH VENTURES GP (Guernsey) Limited |
|||||
| By: | /s/ Xxxxxxxxxxx Xxxxxxxx | |||||
| Name: Xxxxxxxxxxx Xxxxxxxx | ||||||
| Title: Director | ||||||
| Address: | Trxxxxxxx Xxxxx | |||||
| Xxx Xxxxxxx | ||||||
| Xx Xxxxx Xxxx | ||||||
| Xxxxxxxx | ||||||
| Xxxxxxx Xxxxxxx | ||||||
| XX0 0XX | ||||||
| Contact :X X Xxxxxxxx/P Mahieux | ||||||
| Fax 00 00 0000 000000 | ||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| CDIB BIOSCIENCE VENTURES I, INC. | ||||||
| By: | /s/ Xxxxx Xx | |||||
| Name: Xxxxx Xx | ||||||
| Title: Chairman | ||||||
| Address: | c/o CDIB BioScience Venture Management | |||||
| 9F-1, No. 000, Xxx 0, Xxxxxx Xxxx | ||||||
| Xxxxxxx Xxxx, Xxxxxx Xxxxxx 031, Taiwan | ||||||
| Attn: Xxxxx Xxxxx | ||||||
| Phone No.: 000-00-0000-0000 | ||||||
| Fax Nos.: 000-00-0000-0000 / 886-02-8913- 1726 | ||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
| INVESTOR: | ||||||
| XXXXXXX FAMILY TRUST DATED 4/14/93 | ||||||
| By: | /s/ Xxx Xxxxxxx | |||||
| Name: Xxx Xxxxxxx | ||||||
| Title: Trustee | ||||||
| Address: | c/o Con Am | |||||
| 3900 Xxxxxx Xxxx, Xxxxx 000 | ||||||
| Xxx Xxxxx, Xxxxxxxxxx 00000 | ||||||
| Fax No.: (000) 000-0000 | ||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||||
| By: | /s/ J. Xxxxxxx Xxxxxxxxx | |||||
| Name: J. Xxxxxxx Xxxxxxxxx | ||||||
| Address: | c/o Con Am | |||||
| 3900 Xxxxxx Xxxx, Xxxxx 000 | ||||||
| Xxx Xxxxx, Xxxxxxxxxx 00000 | ||||||
| Fax No.: (000) 000-0000 | ||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
| INVESTOR: | ||||
| XXXXXXX X. XXXXXXXXX, TRUSTEE WITH | ||||
| FIRST NATIONAL BANK, N.A., AS SUCCESSOR | ||||
| TRUSTEE U/A DATED MARCH 21, 2005 AS MAY | ||||
| BE AMENDED | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |||
| Name: Xxxxxxx X. Xxxxxxxxx | ||||
| Title: Trustee | ||||
| Address: | 3000 Xxxxxxx Xxxx | |||
| Xxxxxxxxxx, Xxxx 00000 | ||||
| Phone No.: (000) 000-0000 | ||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
| INVESTOR: | ||||
| XXXXX XXXXXXXXX | ||||
| By: | /s/ Xxxxx Xxxxxxxxx | |||
| Xxxxx Xxxxxxxxx | ||||
| Address: | 3000 Xxxxxxx Xxxx | |||
| Xxxxxxxxxx, Xxxx 00000 | ||||
| Phone No.: (000) 000-0000 | ||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
| INVESTOR: | ||||
| VP COMPANY INVESTMENTS 2004, LLC | ||||
| By: | /s/ Xxxxx Xxxx | |||
| Name: Xxxxx Xxxx | ||||
| Title: Member of Management Committee | ||||
| Address: | 550 X. Xxxxx Xxxxxx, Xxxxx 000 | |||
| Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000 | ||||
| Attention: Xxxxx Xxxxxxx | ||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||
| XXXX XXXXXX XXXXXXX TRUST UTD 7/11/88 | ||||
| By: | /s/ Xxxx X. Xxxxxxx | |||
| Name: Xxxx X. Xxxxxxx | ||||
| Title: Trustee | ||||
| Address: | c/o Latham & Xxxxxxx LLP | |||
| 12000 Xxxx Xxxxx Xxxxx, Xxxxx 000 | ||||
| Xxx Xxxxx, Xxxxxxxxxx 00000 | ||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||
| /s/ Xxxxx X. Xxxxx | ||
| Xxxxx X. Xxxxx |
| Address: | c/o Latham & Xxxxxxx LLP | |||
| 12000 Xxxx Xxxxx Xxxxx, Xxxxx 000 | ||||
| Xxx Xxxxx, Xxxxxxxxxx 00000 | ||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||
| /s/ Xxxxxxx X. Xxxxxx | ||
| Xxxxxxx X. Xxxxxx |
| Address: | c/o Latham & Xxxxxxx LLP | |||
| 12000 Xxxx Xxxxx Xxxxx, Xxxxx 000 | ||||
| Xxx Xxxxx, Xxxxxxxxxx 00000 | ||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||
| /s/ Xxxx X. Xxxxxxx | ||
| Xxxx X. Xxxxxxx |
| Address: | c/o Verus Pharmaceuticals, Inc. | |||
| 12000 Xxxx Xxxxx Xxxxx, Xxx 000 | ||||
| Xxx Xxxxx, Xxxxxxxxxx 00000 | ||||
| Fax No.: (000) 000-0000 |
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INVESTOR: | ||||
| Print Name: | ||||
| Signature: | ||||
| Title: | ||||
| (if signing on behalf of a partnership, corporation, trust Or other entity) | ||||
| Address: | ||||||
| Fax No.: | ||||||
Cadence Pharmaceuticals, Inc.
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Amended and Restated Investor Rights Agreement
Counterpart Signature Page
Schedule A
INVESTORS
| Series A-1 | Series A-2 | Series A-3 | ||||||||||
| Preferred | Preferred | Preferred | ||||||||||
| Investor | Stock | Stock | Stock | |||||||||
XXXXXXX HEALTHCARE V, LP |
— | — | 10,000,000 | |||||||||
VERSANT VENTURE CAPITAL II, L.P. |
— | — | 7,782,747 | |||||||||
VERSANT AFFILIATES FUND II-A, L.P. |
— | — | 147,695 | |||||||||
VERSANT SIDE FUND II, L.P. |
— | — | 69,558 | |||||||||
TECHNOLOGY PARTNERS FUND VII, L.P. |
— | — | 7,520,000 | |||||||||
TECHNOLOGY PARTNERS AFFILIATES VII, L.P. |
— | — | 480,000 | |||||||||
XXXXXX INVESTMENT COMPANY, LLC |
— | — | 400,000 | |||||||||
DOMAIN PARTNERS VI, L.P. |
3,947,061 | 6,297,638 | 12,367,456 | |||||||||
DP VI ASSOCIATES, L.P. |
42,301 | 67,492 | 132,544 | |||||||||
PROQUEST INVESTMENTS III, L.P. |
2,393,618 | 3,819,080 | 6,000,000 | |||||||||
WINDAMERE III, LLC |
531,915 | 848,684 | — | |||||||||
XXXXXX INVESTMENTS LLC |
106,383 | — | 100,000 | |||||||||
XXXX FAMILY TRUST UDT 2/10/86 |
106,383 | 50,000 | 100,000 | |||||||||
CAM XXXXXXX XXXXXXXXX |
106,383 | 20,000 | 10,000 | |||||||||
XXXXX X. XXXXXXXX XXX |
319,149 | 500,000 | — | |||||||||
XXXXX X. XXXXXXXX TRUST DATED 1/16/95 |
— | — | 1,000,000 | |||||||||
XXXXXXX GROUP GENERAL PARTNERSHIP |
319,149 | 500,000 | 1,400,000 | |||||||||
XXXXXX PACIFIC, INC. |
106,383 | 87,453 | — | |||||||||
XXXXXX CAPITAL GROUP, LLC |
— | — | 100,000 | |||||||||
XXXXXX X. XXXXX TRUST II, DATED 8/27/90 |
106,383 | — | 150,000 | |||||||||
BB BIOTECH VENTURES II, L.P. |
— | 3,000,000 | 4,000,000 | |||||||||
CDIB BIOSCIENCE VENTURES I, INC. |
— | 2,000,000 | 1,800,000 | |||||||||
XXXXXXX FAMILY TRUST DATED 4/14/93 |
— | 250,000 | 150,000 | |||||||||
J. XXXXXXX XXXXXXXXX |
— | 100,000 | 50,000 | |||||||||
XXXXXXX X. XXXXXXXXX, TRUSTEE WITH
FIRST NATIONAL BANK, N.A., AS SUCCESSOR
TRUSTEE U/A DATED MARCH 21, 2005 AS MAY
BE AMENDED |
— | 85,000 | 50,000 | |||||||||
XXXXX XXXXXXXXX |
— | — | 10,000 | |||||||||
VP COMPANY INVESTMENTS 2004, LLC |
— | 25,000 | 25,000 | |||||||||
| Series A-1 | Series A-2 | Series A-3 | ||||||||||
| Preferred | Preferred | Preferred | ||||||||||
| Investor | Stock | Stock | Stock | |||||||||
XXXX XXXXXX XXXXXXX TRUST UTD 7/11/88 |
— | 10,000 | 10,000 | |||||||||
XXXXX X. XXXXX |
— | 5,000 | 5,000 | |||||||||
XXXXXXX X. XXXXXX |
— | 5,000 | 5,000 | |||||||||
XXXX X. XXXXXXX |
— | 5,000 | 5,000 | |||||||||
TOTAL |
8,085,108 | 17,675,347 | 53,870,000 | |||||||||
