Exhibit 10.18
COMBINATORX, INCORPORATED
OMNIBUS AMENDMENT AND WAIVER AGREEMENT
This Omnibus Amendment and Waiver Agreement ("Agreement") is made effective
as of December 8, 2004 ("Effective Date") by and among CombinatoRx,
Incorporated, a Delaware corporation (the "Company"), and the following holders
of the Company's stock and warrants (collectively, the "Holders") as have
executed a counterpart signature page to this Agreement.
WHEREAS, the Company is planning on consummating the sale of shares of its
$0.001 par value per share common stock ("Common Stock") pursuant to a
registration statement filed or to be filed by the Company under the federal
Securities Act of 1933, as amended, in connection with an underwritten offering
of such shares to the general public (the "Public Offering");
WHEREAS, the Company is a party to each of the following agreements and
each of the Holders is a party to one or more of the following agreements:
(a) that certain Second Amended and Restated Investors' Rights Agreement
dated as of February 18, 2004, as amended by that certain Omnibus Consent,
Waiver, and Amendment Agreement dated August 5, 2004 (as amended, the
"Investors' Rights Agreement");
(b) that certain Second Amended and Restated Voting Agreement dated as of
February 18, 2004, as amended by that certain Omnibus Consent, Waiver, and
Amendment Agreement dated August 5, 2004 (as amended, the "Voting
Agreement");
(c) that certain Second Amended and Restated Co-Sale Agreement dated as of
February 18, 2004, as amended by that certain Omnibus Consent, Waiver, and
Amendment Agreement dated August 5, 2004 (as amended, the "Co-Sale
Agreement" and with the Investors' Rights Agreement and the Voting
Agreement, collectively, the "Stockholder Agreements"); and
(d) that certain Registration Rights Agreement ("Registration Rights
Agreement") entered into as of April 25, 2001 by and between the Company
and Silicon Valley Bank ("SVB");
WHEREAS, various provisions of the Stockholders Agreements are triggered by
or may apply to a transaction in which the Company sells shares of its capital
stock (whether or not pursuant to a registered underwritten offering to the
general public);
WHEREAS, certain of the Holders possess rights to register shares of Common
Stock pursuant to the Investors' Rights Agreement or pursuant to the
Registration Rights Agreement;
WHEREAS, the Company may effect a stock dividend, combination, split,
recapitalization, or similar capital reorganization (a "Reorganization") prior
to the Public Offering;
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WHEREAS, various provisions of the Stockholders Agreements refer to
specific numbers of shares which need to be changed in connection with any
Recapitalization; and
WHEREAS, the Company and the undersigned Holders desire to ensure the
orderly consummation of the Public Offering and the orderly administration of
the terms and provisions of the Stockholder Agreements pending and following the
Public Offering and any Recapitalization;
NOW, THEREFORE, in consideration of the foregoing and the terms and
provisions set forth below, the sufficiency of which consideration is
acknowledged by all parties to be adequate, the parties executing below agree to
the terms and provisions set forth below.
SECTION 1. AMENDMENT OF STOCKHOLDER AGREEMENTS.
(a) Pursuant to section 5.7 of the Investors' Rights Agreement, effective as of
the Effective Date, the Company and those of the Holders who are parties to the
Investors' Rights Agreement, being the holders of a majority of the "Registrable
Securities" (as that term is defined in the Investors' Rights Agreement) hereby
amend the Investors' Rights Agreement as follows:
(i) the first paragraph of section 2.1 of the Investors' Rights
Agreement is hereby amended by adding after the reference to "100,000" the
following passage "(as adjusted for any stock dividends, combinations,
splits, recapitalizations, and the like with respect to such shares)";
(ii) sections 2.2(h)(iii), (iv), (v), and (vi) of the Investors' Rights
Agreement are deleted in their entirety and there are hereby substituted
the following paragraphs:
"(iii) up to an aggregate of 20,250 (as adjusted for any stock
dividends, combinations, splits, recapitalizations, and the like with
respect to such shares) shares of Common Stock issued upon the
exercise of the outstanding warrants issued to Xxxx Xxxxx, Xxxxx
Xxxxxx and Xxxxxxxx Xxxxxx-Xxxxx,
"(iv) up to an aggregate of 17,534 (as adjusted for any stock
dividends, combinations, splits, recapitalizations, and the like with
respect to such shares) shares of Common Stock or 15,750 (as adjusted
for any stock dividends, combinations, splits, recapitalizations, and
the like with respect to such shares) shares of Series B Preferred
Stock upon the exercise of an outstanding warrant issued to Silicon
Valley Bank,
"(v) up to an aggregate of 49,000 (as adjusted for any stock
dividends, combinations, splits, recapitalizations, and the like with
respect to such shares) shares of Common Stock or Series C Preferred
Stock issued upon the exercise of outstanding warrants issued to
Comerica Incorporated (formerly Comerica Bank - California and
Comerica Bank),
"(vi) up to an aggregate of 128,000 (as adjusted for any stock
dividends, combinations, splits, recapitalizations, and the like with
respect
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to such shares) shares of Common Stock issued upon the exercise of an
outstanding warrant issued to Rockport Venture Securities, LLC,";
(iii) section 2.4 of the Investors' Rights Agreement is deleted in its
entirety and there is hereby substituted the following paragraph:
"2.4 TERMINATION OF CERTAIN COVENANTS. The covenants set forth in
Sections 2.1, 2.2, and 2.3 shall terminate and be of no further force
or effect upon the consummation of the sale of equity securities
pursuant to a registration statement filed by the Company under the
Act in connection with an underwritten public offering of its equity
securities with a price per share as approved by a committee of the
Company's Board of Directors designated as the "Pricing Committee"
("Qualified Public Offering").";
(iv) section 3.3 of the Investors' Rights Agreement is deleted in its
entirety and there is hereby substituted the following paragraph:
"3.3 TERMINATION. All covenants under this Section 3 shall
terminate upon the completion of a Qualified Public Offering."; and
(v) section 5.7 of the Investors' Rights Agreement is deleted in its
entirety and there is hereby substituted the following paragraphs:
"5.7 AGREEMENTS OR WAIVER. Any provision of this Agreement may be
amended or the observance thereof may be waived (either generally or
specifically and either retroactively or prospectively), only by an
instrument in writing executed by (a) the Company and (b) the holders
of a majority of the Registrable Securities then outstanding; provided
that this Agreement may be amended to add a new investor purchasing
shares of Common Stock or Series D Preferred Stock from the Company
pursuant to any of the following:
(i) those certain warrants to purchase Common Stock or
Series D Preferred Stock originally issued by the Company to
Lighthouse Capital Partners IV, L.P. on September 7, 2004;
(ii) those certain warrants to purchase Common Stock or
Series D Preferred Stock originally issued by the Company to
Lighthouse Capital Partners V, L.P. on September 7, 2004; or
(iii) that certain warrant to purchase Common Stock or Series
D Preferred Stock originally issued to General Electric
Capital Corporation on September 15, 2004,
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as an Investor hereunder by an instrument executed solely by the
Company and such new investor and upon such amendment Schedule A
hereto shall be amended to add such new investor. Any amendment or
waiver so effected shall be binding upon the Company, each of the
other parties hereto and any assignee or successor of any such party."
(b) Pursuant to section 3.5 of the Voting Agreement, effective as of the
Effective Date, the Company and those of the Holders who are parties to the
Voting Agreement, being the holders of a majority of the "Investor Shares" (as
that term is defined in the Voting Agreement) and the holders of a majority of
the "Founder Shares" (as that term is defined in the Voting Agreement) hereby
amend the Voting Agreement as follows:
(i) section 2 of the Voting Agreement is deleted in its entirety and
there is hereby substituted the following paragraph:
"2. TERMINATION. This Agreement shall continue in full force and
effect from the date hereof through the date of the closing of an
underwritten public offering of the common stock of the Company,
$0.001 par value per share (the "Common Stock") pursuant to a
registration statement filed with the Securities and Exchange
Commission, and declared effective under the Securities Act of 1933,
as amended, in which the price per share of Common Stock to the public
is that amount approved by a committee of the Company's Board of
Directors designated as the "Pricing Committee"."; and
(ii) the last sentence of section 3.5 of the Voting Agreement is deleted
in its entirety and there is hereby substituted the following sentence:
"Notwithstanding the foregoing, this Agreement may be amended to add a
new investor purchasing shares of Common Stock or Series D Preferred
Stock from the Company pursuant to any of the following:
(i) those certain warrants to purchase Common Stock or
Series D Preferred Stock originally issued by the Company to
Lighthouse Capital Partners IV, L.P. on September 7, 2004;
(ii) those certain warrants to purchase Common Stock or
Series D Preferred Stock originally issued by the Company to
Lighthouse Capital Partners V, L.P. on September 7, 2004; or
(iii) that certain warrant to purchase Common Stock or Series
D Preferred Stock originally issued to General Electric
Capital Corporation on September 15, 2004,
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as an Investor hereunder by an instrument executed solely by the
Company and such new investor and upon such amendment Schedule A
hereto shall be amended to add such new investor."
(c) Pursuant to section 11.6 of the Co-Sale Agreement, effective as of the
Effective Date, the Company and those of the Holders who are parties to the
Co-Sale Agreement, being the holders of a majority of the voting power of all
"Shares" then held by "Preferred Stockholders" (as those terms are defined in
the Co-Sale Agreement) and the holders of a majority of the voting power of all
"Shares" held by "Founders" and "Management Members" (as those terms are defined
in the Co-Sale Agreement) hereby amend the Co-Sale Agreement as follows:
(i) section 9.1 of the Co-Sale Agreement is deleted in its entirety and
there is hereby substituted the following paragraph:
"9.1 This Agreement shall terminate in its entirety upon the
closing of the Company's underwritten public offering of the Common
Stock pursuant to a Form S-1 (or any successor form) which has been
declared effective by the Securities and Exchange Commission and in
which the Common Stock is sold to the public at a per share price
approved by a committee of the Company's Board of Directors designated
as the "Pricing Committee" (the "Qualified Public Offering")."
(ii) the last sentence of section 11.6 is deleted in its entirety and
there is hereby substituted the following sentence:
"Notwithstanding the foregoing, this Agreement may be amended to add a
new investor purchasing shares of Common Stock or Series D Preferred
Stock from the Company pursuant to any of the following:
(i) those certain warrants to purchase Common Stock or
Series D Preferred Stock originally issued by the Company to
Lighthouse Capital Partners IV, L.P. on September 7, 2004;
(ii) those certain warrants to purchase Common Stock or
Series D Preferred Stock originally issued by the Company to
Lighthouse Capital Partners V, L.P. on September 7, 2004; or
(iii) that certain warrant to purchase Common Stock or Series
D Preferred Stock originally issued to General Electric
Capital Corporation on September 15, 2004,
as a Preferred Stockholder hereunder by an instrument executed
solely by the Company and such new investor and upon such amendment
Schedule A hereto shall be amended to add such new investor."; and
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(iii) section 11.7 is hereby amended by adding after the reference to
"100,000" the following passage "(as adjusted for any stock dividends,
combinations, splits, recapitalizations, and the like with respect to such
shares)".
SECTION 2. WAIVERS.
(a) Pursuant to section 5.7 of the Investors' Rights Agreement, the Company and
those of the Holders who are parties to the Investors' Rights Agreement, being
the holders of a majority of the "Registrable Securities" (as that term is
defined in the Investors' Rights Agreement), for themselves and for all other
parties to the Investors' Rights Agreement, hereby waive the following rights
under the Investors' Rights Agreement solely in connection with the Public
Offering and the shares of Common Stock issuable by the Company in connection
with the Public Offering:
(i) those rights of first offer and other rights described in
Section 2.2 of the Investors' Rights Agreement; and
(ii) those rights with respect to the "Directed Share Program" and other
rights described in Section 4 of the Investors' Rights Agreement.
(b) Pursuant to section 2.1 of the Registration Rights Agreement, SVB hereby
waives its rights as described in Section 1.2 of the Registration Rights
Agreement to include in the Public Offering shares of the Company's capital
stock held by or issuable to SVB.
SECTION 3. CONFIRMATION OF CONTINUED EFFECT; AUTHORITY TO MAKE CHANGES.
(a) The Company and the Holders executing a counterpart signature page to this
Agreement agree that the Investors' Rights Agreement as modified herein shall
remain in full force and effect as so modified, the Voting Agreement as modified
herein shall remain in full force and effect as so modified, and the Co-Sale
Agreement as modified herein shall remain in full force and effect as so
modified.
(b) In order to reduce the costs associated with the foregoing amendments and
waivers, and the consummation of the Public Offering and any Recapitalization,
the undersigned Holders hereby give the authority to the officers of the Company
to make non-substantive changes to the amendments described in this Agreement
without first seeking the consent of the Company's stockholders and directors.
SECTION 4. MISCELLANEOUS PROVISIONS.
(a) This Agreement shall be governed by and construed under the laws of the
Commonwealth of Massachusetts without regard to the principles of conflicts of
laws.
(b) This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, successors, assigns, administrators,
executors, and other legal representatives.
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(c) This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
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