NOMINATION AND OBSERVER AGREEMENT
Exhibit 4.2
This NOMINATION AND OBSERVER AGREEMENT is entered into as of December 16, 2005, by and among
BioCryst Pharmaceuticals, Inc., a Delaware corporation, (the “Company”), and Xxxxxxx Xxxxxxx
Xxxxxxxx & Xxxxx Holdings, LLC, a Delaware limited liability company (“KPCB”).
RECITALS
WHEREAS, Concurrently herewith KPCB is acquiring 1,114,414 shares of Common Stock of the
Company (the “Purchased Shares”) pursuant to a Stock Purchase Agreement by and among the Company,
KPCB and the other parties thereto, dated as of even date herewith (the “Stock Purchase
Agreement”).
WHEREAS, as an inducement to KPCB to enter into the Stock Purchase Agreement, the Company has
agreed to grant the director nomination and board observer rights to KPCB.
NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth,
the Company and KPCB each agree as follows:
1. Director Nomination Rights.
a. Board Designee. Concurrently herewith, the Company shall take all action necessary
to: (i) increase the number of directors of the Company from ten (10) to eleven (11) directors;
(ii) appoint one director designated by KPCB who shall initially be Xxxx Xxxxxxxxxx to fill the
additional director position (the “KPCB Designee”); and (iii) appoint the initial KPCB Designee to
serve as a member of the third class of directors, with a term of office to expire at the annual
meeting of the stockholders Company to be held in 2007. In connection with any stockholder
solicitation or action relating to the election of the directors of the Company, the Company shall
provide KPCB with thirty (30) days prior written notice of such solicitation or action. After
receipt of such notice, KPCB may, by written notice sent to the Company within ten (10) days of
receipt of such notice, request that the Company nominate, and the Company shall nominate, for
election to the Company’s board of directors (the “Board of Directors”) the KPCB Designee. In the
event that KPCB shall desire to appoint the KPCB Designee otherwise than in connection with a
stockholder solicitation or action relating to the election of directors, then as soon as
practicable upon written notice from KPCB, the Company shall appoint the KPCB Designee to the Board
of Directors.
b. Resignation and Removal. The KPCB Designee may resign from the Board of Directors
at any time without notice but may not be removed from the Board of Directors by the Company
without “Cause.” For purposes of this Section 1.2, the following shall constitute “Cause”: (i) any
action by the KPCB Designee constituting fraud or embezzlement in the course of his tenure on the
Board of Directors, (ii) any conviction of KPCB Designee of a felony which would materially and
adversely interfere with the KPCB Designee’s ability to perform his or her duties as a member of
the Board of Directors; (iii) continued gross neglect or willful refusal by the KPCB Designee to
perform his or her duties hereunder for a
period of ten (10) days following notice to the Investor Director of such inaction; or (iv) a
material breach by the Investor Director of any other material obligations under this Agreement or
the Company’s By-laws if such breach is not curable or, if curable, is not cured within thirty (30)
days after written notice thereof by the Company to the Investor Director.
c. Vacancies. In the event that any KPCB Designee shall cease to serve as a director
of the Company for any reason, at the discretion of KPCB, the vacancy resulting therefrom shall be
filled by another KPCB Designee.
d. Equal Treatment. The Company shall provide the same compensation and rights and
benefits of indemnity to the KPCB Designee as are provided to other non-employee directors.
2. Audit Committee Observer Rights. In the event that the KPCB Designee is not a
member of the audit committee of the Board of Directors, the KPCB Designee shall have the right to
attend all meetings the audit committee in a non-voting observer capacity and, in this respect,
shall be provided copies of all notices, minutes, consents and other audit committee members’
materials. In no event shall the failure to provide the notice described above invalidate in any
way any action taken at a meeting of the audit committee.
3. Miscellaneous.
a. Termination. This Agreement shall terminate and have no further force or effect at
such time as KPCB and its affiliates cease to beneficially own, in the aggregate, at least 560,000
shares of Common Stock of the Company, subject to proportional adjustments to reflect stock splits,
combinations, subdivisions, or the like. The 371,472 shares of Common Stock originally purchased
by KPTV, LLC pursuant to the Stock Purchase Agreement shall be deemed to not be beneficially owned
by KPCB and its affiliates for the purposes of making such share ownership determination.
b. Specific Enforcement. It is agreed and understood that monetary damages would not
adequately compensate KPCB for the breach of this Agreement by any of the parties hereto, that this
Agreement shall be specifically enforceable, and that any breach or threatened breach of this
Agreement shall be the proper subject of a temporary or permanent injunction or restraining order.
Further, the Company agrees to waive any claim or defense that there is an adequate remedy at law
for such breach or threatened breach.
c. Assignment. The rights and obligations of this Agreement shall bind and inure to
the benefit of the parties and their respective successors and legal assigns.
d. Governing Law; Consent to Jurisdiction. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of Delaware applicable to
contracts executed and to be wholly performed within such State. THIS AGREEMENT SHALL BE ENFORCED,
GOVERNED AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PRINCIPLES. FURTHERMORE, THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA AND THE UNITED
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STATES OF AMERICA FOR THE NORTHERN DISTRICT OF CALIFORNIA IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT.
e. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
f. Headings. The headings contained in this Agreement are for convenience of
reference only and are not to be given any legal effect and shall not affect the meaning or
interpretation of this Agreement.
g. Notices. All notices, requests, demands, claims, and other communications
hereunder shall be in writing and shall be delivered by certified or registered mail (first class
postage pre-paid), guaranteed overnight delivery, or facsimile transmission if such transmission is
confirmed by delivery by certified or registered mail (first class postage pre-paid) or guaranteed
overnight delivery, to the following addresses and telecopy numbers (or to such other addresses or
telecopy numbers which such party shall subsequently designate in writing to the other party):
| (i) | if to the Company to: | |||
| BioCryst Pharmaceuticals, Inc. | ||||
| 0000 Xxxxxxx Xxxx Xxxxx | ||||
| Xxxxxxxxxx, XX 00000 | ||||
| Facsimile No. (000) 000-0000 | ||||
| (ii) | if to KPCB to: | |||
| Xxxxxxx Xxxxxxx Xxxxxxxx & Xxxxx Holdings, LLC | ||||
| 0000 Xxxx Xxxx Xxxx | ||||
| Xxxxx Xxxx, Xxxxxxxxxx 00000 | ||||
| Facsimile No. (000) 000-0000 | ||||
| Attention: Xxxx Xxxxxxxxx | ||||
| With a copy to: | ||||
| Fenwick & West LLP | ||||
| 000 Xxxxxxxxxx Xxxxxx | ||||
| Xxxxxxxx Xxxx, XX 00000 | ||||
| Attention: Xxxxx X. Xxxxxxx, Esq. |
Each such notice or other communication shall for all purposes of this Agreement be treated as
effective or having been given when delivered if delivered by hand, by messenger or by courier, or
if sent by facsimile, upon confirmation of receipt
h. Amendments; Waiver. This Agreement may not be modified, amended, supplemented,
canceled or discharged, except by written instrument executed by the Company
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and KPCB. No failure to exercise, and no delay in exercising, any right, power or privilege
under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude the exercise of any other right, power or privilege.
No waiver of any breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision, nor shall any waiver be implied from any
course of dealing between the parties. No extension of time for performance of any obligations or
other acts hereunder or under any other agreement shall be deemed to be an extension of the time
for performance of any other obligations or any other acts. The rights and remedies of the parties
under this Agreement are in addition to all other rights and remedies, at law or equity, that they
may have against each other.
i. Severability. The parties stipulate that the terms and provisions of this
Agreement are fair and reasonable as of the date of this Agreement. However, if any provision of
this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
If, moreover, any of those provisions shall for any reason be determined by a court of competent
jurisdiction to be unenforceable because excessively broad or vague as to duration, activity or
subject, it shall be construed by limiting, reducing or defining it, so as to be enforceable.
j. Entire Agreement. This Agreement contains the entire agreement and understanding
of the parties in respect of its subject matter and supersedes all prior agreements and
understandings between or among the parties with respect to such subject matter.
k. Further Assurances. From and after the date of this Agreement, upon the request of
KPCB or the Company, the Company and KPCB shall execute and deliver such instruments, documents or
other writings as may be reasonably necessary or desirable to confirm and carry out and to
effectuate fully the intent and purposes of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| BIOCRYST PHARMACEUTICALS, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||||
| Name: | ||||||
| Title: | Chief Financial Officer | |||||
| XXXXXXX XXXXXXX XXXXXXXX & XXXXX HOLDINGS, LLC | ||||||
| By: | /s/ Xxxxx X. Xxxxx | |||||
| Name: | ||||||
| Title: | Managing Member | |||||
[Signature Page to Nomination and Observer Agreement]
