Amendment No. 1 to Third Amended and Restated Investor Rights Agreement
Exhibit 4.2(b)
Amendment No. 1 to
Third Amended and Restated Investor Rights Agreement
THIS AMENDMENT NO. 1 to the Third Amended and Restated Investor Rights Agreement dated December 6, 2004 (this “Amendment”) amends the Third Amended and Restated Investor Rights Agreement dated May 12, 2004 (the “Future XXX”) by and among Targacept, Inc. (the “Company”) and the holders of shares of the Company’s Series C Convertible Preferred Stock, $0.001 par value per share (“Series C Stock”), Series B Convertible Preferred Stock, $0.001 par value per share (“Series B Stock”), or Series A Convertible Preferred Stock, $0.001 par value per share (“Series A Stock” and, together with the Series C Stock and Series B Stock, “Preferred Stock”) party thereto. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Future XXX.
R E C I T A L S:
WHEREAS, the Future XXX was entered into in contemplation of an initial public offering of the Company’s common stock in order to amend, effective as of the closing of such initial public offering, the Company’s Second Amended and Restated Investor Rights Agreement dated November 26, 2002, as amended (the “Current XXX”), which is currently in effect; and
WHEREAS, by its terms, the Future XXX will not become effective or affect the Current XXX unless and until the prospective initial public offering is completed and will not become effective at all if such initial public offering is not completed on or before December 31, 2004 (the “Trigger Date”); and
WHEREAS, Section 3 of the Future XXX provides that the Future XXX may be amended only with the prior written consent of the Company and the holders of a majority of the outstanding Series A Registrable Securities and Series B Registrable Securities and at least 65% of the outstanding Series C Registrable Securities (collectively, the “Required Investors”); and
WHEREAS, the prospective initial public offering may not be completed on or before the Trigger Date, and the Company and the undersigned holders of Preferred Stock, constituting the Required Investors, desire to amend the Future XXX as provided herein to extend the Trigger Date;
NOW, THEREFORE, the undersigned parties agree as follows:
1. Section 2.1(a) of the Future XXX is hereby amended by deleting the first sentence in its entirety and replacing it with the following:
“Subject to the other provisions of this Section 2.1, Section 2.8 and Section 2.9, if, at any time or from time to time following the Eligibility Date (but in no event prior to (x) six months after the effective date of the first registration of the Company’s securities on Form S-1 or (y) three months after the effective date of any other registration of the Company’s securities, other than registrations on Form X-0, Xxxx X-0 or comparable or successor forms and other than registrations for the account of selling stockholders on Form S-3 or a comparable or successor form), the Company shall receive a written
request (specifying that it is being made pursuant to this Section 2.1) from (i) Holders of at least a majority of the Series A Registrable Securities and Series B Registrable Securities, considered together, or (ii) Holders of Series C Registrable Securities that the Company file a registration statement under the Act covering the registration for offer and sale of (A) in the case of clause (i) above, at least thirty percent (30%) of all Series A Registrable Securities and Series B Registrable Securities, considered together, or (B) in the case of clause (ii) above, at least (1) thirty percent (30%) of all Series C Registrable Securities or (2) a number of Series C Registrable Securities for which the total gross proceeds in a public offering reasonably expected to be received by the requesting Holders is at least $7,500,000, then the Company shall, within ten (10) business days notify in writing all other Holders of such request.”
2. Section 9 of the Future XXX is hereby amended by replacing “December 31, 2004” therein with “June 30, 2005.”
3. As expressly amended hereby, the Future XXX shall continue in full force and effect.
4. For the avoidance of doubt, as used in the Future XXX and the Current XXX, the term “Series C Stock” shall include, without limitation, shares of Series C Stock issued and sold pursuant to the Series C Convertible Preferred Stock Purchase Agreement entered into on or about the date hereof.
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IN WITNESS WHEREOF, this Amendment No. 1 to the Third Amended and Restated XXX is executed as of the day and year first above written.
| TARGACEPT, INC. | ||||
| By: | /s/ J. Xxxxxx xxXxxxxxx | |||
| Name: |
J. Xxxxxx xxXxxxxxx | |||
| Title: |
President & CEO | |||
| X.X. XXXXXXXX TOBACCO HOLDINGS, INC. | ||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: |
Xxxxxxx X. Xxxxx | |||
| Title: |
President | |||
| EUCLIDSR PARTNERS, L.P. | ||||
| By: | EuclidSr Associates, L.P., | |||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Xxxxxx X. Xxxxx | ||||
| General Partner | ||||
| EUCLIDSR BIOTECHNOLOGY PARTNERS, L.P. | ||||
| By: | EuclidSr Biotechnology Associates, L.P., | |||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Xxxxxx X. Xxxxx | ||||
| General Partner | ||||
| XXXXXXX BIOTECHNOLOGY CAPITAL FUND, L.P. | ||||
| By: | Xxxxxxx & Company (Biotechnology GP), LLC, | |||
| By: | /s/ X. X. Xxxxxxx | |||
| G. Xxxxxx Xxxxxxx | ||||
| Managing Member | ||||
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| GENAVENT FUND | ||
| By: |
Société Générale Asset Management, S.A., its Manager | |
| By: |
/s/ Ferriere | |
| Xxxxxxx Xxxxxxxx | ||
| Deputy Head of Private Equity | ||
| FCPR SGAM AI BIOTECHNOLOGY FUND Represented by SGAM Alternative Investments, its management company with a share capital of 35 576 725 euros, having its registered office at 0, xxxxx xx xx Xxxxxxx, 00000 Xxxxx – La Défense cedex France, registered with the Nanterre Trade and Companies registry under the number B 410 704 571 | ||
| By: |
/s/ Ferriere | |
| Xxxxxxx Xxxxxxxx | ||
| Deputy Head of Private Equity | ||
| FCPR CDC INNOVATION 2000, a venture capital fund represented by CDC ENTREPRISES INNOVATION, its management company (“Societe de gestion”) with a share capital of EUR 762,000 | ||
| By: |
/s/ X. Xxxxxx | |
| Name: X. Xxxxxx | ||
| Title: Director d’investissement | ||
| ADVENT PRIVATE EQUITY FUND II, ‘A’ LIMITED PARTNERSHIP ADVENT PRIVATE EQUITY FUND II, ‘B’ LIMITED PARTNERSHIP ADVENT PRIVATE EQUITY FUND II, ‘C’ LIMITED PARTNERSHIP ADVENT PRIVATE EQUITY FUND II, ‘D’ LIMITED PARTNERSHIP | ||||
| By: |
Advent Venture Partner, General Partner | |||
| By: |
/s/ Xxxxxxx Xxx | |||
| Name: Xxxxxxx Xxx | ||||
| Title: General Partner | ||||
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| NOMURA PHASE4 VENTURES LIMITED AS MANAGER ON BEHALF OF INTERNATIONAL PLC AND NOMURA PHASE4 VENTURES LP | ||
| By: |
/s/ Xxxxxx Xxxxxxx-Xxxxxx | |
| Name: Xxxxxx Xxxxxxx-Xxxxxx | ||
| Title: Head of Nomura Phase4 Ventures Ltd. | ||
| NEW ENTERPRISE ASSOCIATES 10, LIMITED PARTNERSHIP | ||
| By: | NEA Partners 10, Limited Partnership, General Partner | |
| By: |
/s/ X. X. Xxxxxxx | |
| Name: Xxxxxx X. Xxxxxxx, III | ||
| Administrative General Partner & Chief Operating Officer | ||
| NEA VENTURES, 2002 LIMITED PARTNERSHIP | ||
| By: |
/s/ Xxxxxx X. Xxxxx | |
| Xxxxxx X. Xxxxx | ||
| General Partner | ||
| CDIB BIOSCIENCE VENTURES I, INC. | ||
| By: |
/s/ Xxxxx X. Xx | |
| Name: Xxxxx X. Xx | ||
| Title: Chairman | ||
| JAFCO G-9(A) VENTURE CAPITAL INVESTMENT LIMITED PARTNERSHIP | ||
| By: | JAFCO CO., LTD., its general partner | |
| By: |
/s/ Xxxxx Xxxxxx | |
| Name: Xxxxx Xxxxxx | ||
| Title: Executive Vice President | ||
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| JAFCO G-9(B) VENTURE CAPITAL INVESTMENT LIMITED PARTNERSHIP | ||
| By: |
/s/ Xxxxx Xxxxxx | |
| Name: Xxxxx Xxxxxx | ||
| Title: Executive Vice President | ||
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