EXHIBIT 10.9
NxSTAGE MEDICAL, INC.
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (this "Agreement") is entered into as of
the 30th day of June, 1999, by and among NxSTAGE MEDICAL, INC. (formerly known
as Qb Medical, Inc.), a Delaware corporation (the "Company"), and the purchasers
of the Company's Series B Preferred Stock par value $0.001 per share (the
"Series B Preferred Stock") set forth on the List of Investors attached hereto
as Exhibit A (hereinafter, the "Investors" and each individually an "Investor").
RECITALS
WHEREAS, the Company and the Investors have entered into a Series B
Preferred Stock Purchase Agreement of even date herewith (the "Purchase
Agreement"), pursuant to which the Investors will purchase that number of shares
of Series B Preferred Stock set forth opposite its name on Exhibit A;
WHEREAS, the Company proposes to issue and sell an aggregate of One
Million Eight Hundred Seventy-Five Thousand (1,875,000) shares of its Series B
Preferred Stock pursuant to the Purchase Agreement;
WHEREAS, as a condition of entering into the Purchase Agreement, the
Investors have requested that the Company extend to them registration rights,
information rights and other rights as set forth below.
NOW THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and in the
Purchase Agreement, the parties mutually agree as follows:
1. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall have
the following respective meanings:
"CONVERSION SHARES" means the shares of the Company's common stock, par
value $0.001 per share ("Common Stock") issued upon conversion of the Shares.
"EQUITY SECURITIES" means (i) any common stock, preferred stock or other
security of the Company, (ii) any security convertible, with or without
consideration, into any common stock, preferred stock or other security
(including any option to purchase such a convertible security), (iii) any
security carrying any warrant or right to subscribe to or purchase any common
stock, preferred stock or other security or (iv) any such warrant or right.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FORM S-3" means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which
permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC.
"HOLDER" means any person owning of record Registrable Securities that
have not been sold to the public or any assignee of record of such Registrable
Securities in accordance with Section 2.10 hereof.
"INITIAL OFFERING" means the Company's first firmly underwritten public
offering of its Common Stock registered under the Securities Act.
"REGISTER," "REGISTERED," AND "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"REGISTRABLE SECURITIES" means (i) Common Stock of the Company issued or
issuable upon conversion of the Shares or upon conversion pursuant to the
Purchase Agreement of shares of the Company's Series A Preferred Stock held by
any of the Investors; and (ii) any Common Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, such above-described securities.
Notwithstanding the foregoing, Registrable Securities shall not include any
securities sold by a person to the public either pursuant to a registration
statement or Rule 144 or sold in a private transaction in which the transferor's
rights under Section 2 of this Agreement are not assigned.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall mean the total number of
shares of the Company's Common Stock that are Registrable Securities and either
(1) are then issued and outstanding, or (2) are issuable pursuant to then
exercisable or convertible securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company in
complying with Sections 2.2, 2.3 and 2.4 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements not to exceed Fifteen
Thousand Dollars ($15,000) of a single special counsel for the Holders, blue sky
fees and expenses and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sate.
"SEC" or "COMMISSION" means the United States Securities and Exchange
Commission.
"SHARES" shall mean the Company's Series B Preferred Stock issued pursuant
to the purchase Agreement.
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2. REGISTRATION; RESTRICTIONS ON TRANSFER
2.1 RESTRICTIONS ON TRANSFER.
a. Each Holder agrees not to make any disposition of all or any
portion of the Shares or Registrable Securities unless and until:
i. There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
ii. (A) The transferee has agreed in writing to be bound by
this Section 2.1. (B) such Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (C) if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require a Holder to
obtain an opinion of counsel to such Holder for transactions made pursuant to
Rule 144 except in unusual circumstances.
iii. Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by a Holder which is (A) a partnership to its partners or former
partners in accordance with partnership interests, (B) a corporation to its
shareholders in accordance with their interest in the corporation, (C) a limited
liability company to its members or former members in accordance with their
interest in the limited liability company, or (D) to the Holder's family member
or trust for the benefit of an individual Holder, provided the transferee will
be subject to the terms of this Section 2.1 to the same extent as if such
transferee were an original Holder hereunder.
b. Each certificate representing Shares or Registrable Securities
shall (unless otherwise permitted by the provisions of the Agreement) be stamped
or otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws or as
provided elsewhere in this Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED.
c. The Company shall be obligated to reissue promptly unlegended
certificates at the request of any Holder thereof if the Holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company
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to the effect that the securities proposed to be disposed of may lawfully be so
disposed of without registration, qualification or legend.
d. Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
2.2 DEMAND REGISTRATION.
a. Subject to the conditions of this Section 2.2, if the Company
shall receive a written request from the Holders of more than thirty percent
(30%) of the Shares or the Registrable Securities (or a combination of such
Shares and Registrable Securities) then outstanding (the "Initiating Holders")
that the Company file a registration statement under the Securities Act covering
the registration of Registrable Securities having a reasonably anticipated
aggregate offering price to the public, net of underwriting discounts and
commissions, in excess of $5,000,000 (a "Qualified Public Offering"), then the
Company shall, within thirty (30) days of the receipt thereof, give written
notice of such request to all Holders, and subject to the limitations of this
Section 2.2, effect, as soon as practicable, the registration under the
Securities Act of all Registrable Securities that the Holders request to be
registered.
b. If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
and the Company shall include such information in the written notice referred to
in this Section 2.2. In such event, the right of any Holder to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by a
majority in interest of the Initiating Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company). Notwithstanding any
other provision of this Section 2.2, if the underwriter advises the Company that
marketing factors require a limitation of the number of securities to be
underwritten (including Registrable Securities) then the Company shall so advise
all Holders of Registrable Securities which would otherwise be underwritten
pursuant hereto, and the number of shares that May be included in the
underwriting shall be allocated to the Holders of such Registrable Securities on
a pro rata basis based on the number of Registrable Securities held by all
Holders (including the initiating Holders). Any Registrable Securities excluded
or withdrawn from such underwriting shall be withdrawn from the registration.
c. The Company shall not be required to effect a registration
pursuant to this Section 2.2:
i. After the Company has effected two (2) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective; or
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ii. During the period starting with the date of filing of, and
ending on the date one hundred eighty (180) days following the effective date of
the registration statement pertaining to the Initial Offering, provided that the
Company is making reasonable and good faith effects to cause such registration
statement to become effective; or
iii. If within thirty (30) days of receipt of a written
request from Initiating Holders pursuant to Section 2.2 the Company gives notice
to the Holders of the Company's intention to make its Initial Offering within
ninety (90) days; or
iv. If the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 2.2, a certificate signed by the
Chairman of the Board of Directors of the Company (the "Board") stating that in
the good faith judgment of the Board, it would be seriously detrimental to the
Company and its shareholders for such registration statement to be effected at
such time, in which event the Company shall have the right to defer such filing
for a period of not more than ninety (90) days after receipt of the request of
the Initiating Holders; provided, however, that such right to delay a request
shall be exercised by the Company no more than once in any one-year period.
2.3 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans or with respect to corporate reorganizations or other transactions under
Rule 145 of the Securities Act) and will afford each such Holder an opportunity
to include in such registration statement all or part of such Registrable
Securities held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by it
shall, within fifteen (15) days after the above-described notice from the
Company, so notify the Company in writing. Such notice shall state the intended
method of disposition of the Registrable Securities by such Holder. If a Holder
decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, such Holder shall nevertheless
continue to have the right to include any Registrable Securities in any
subsequent such registration statement or registration statements as may be
filed by the Company with respect to offerings of its securities, all upon the
terms and conditions set forth herein.
a. If the registration statement under which the Company gives
notice under this Section 2.3 is for an underwritten offering, the Company shall
so advise the Holders of Registrable Securities. In such event, the right of any
such Holder to be included in a registration pursuant to this Section 2.3 shall
be conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to the Holders on a pro rata basis based on the total
number of Registrable Securities held by the
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Holders; and third, to any shareholder of the Company (other than a Holder) on a
pro rata basis. No such reduction shall reduce the securities being offered by
the Company for its own account to be included in the registration and
underwriting, and in no event shall the amount of securities of the selling
Holders included in the registration be reduced below twenty percent (20%) of
the total amount of securities requested by the selling Holders to be included
in such registration, unless such offering is the Initial Offering and such
registration does not include shares of any other selling shareholders, in which
event any or all of the Registrable Securities of the Holders may be excluded in
accordance with the immediately preceding sentence. In no event will shares of
any other selling shareholder be included in such registration which would
reduce the number of shares which may be included by Holders without the written
consent of Holders of not less than two-thirds (66 2/3%) of the Registrable
Securities proposed to be sold in the offering.
b. The Company shall have the right to terminate or withdraw any
registration initiated or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.5 hereof.
2.4 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of Registrable Securities a written request or requests that
the Company effect a registration on Form S-3 or any similar short-form
registration statement and any related qualification or compliance with respect
to all or a part of the Registrable Securities owned by such Holder or Holders,
the Company will:
a. Promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders of Registrable
Securities; and
b. As soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.4:
i. If Form S-3 is not available for such offering by the
Holders, or
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 five hundred thousand dollars ($500,000), or
iii. If the Company shall furnish to the Holders a certificate
signed by the Chairman of the, Board of Directors of the Company stating that in
the good faith judgment of the, Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such Form S-3
Registration to be effected at such time, in which event the
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Company shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than ninety (90) days after receipt of the
request of the Holder or Holders under this Section 2.4; provided, that such
right to delay a request shall be exercised by the Company nor more than twice
in any one-year period, or
iv. If the Company has, already effected two (2) registrations
on Form S-3 for the Holders pursuant to this Section 2.4, 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.
c. Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All such Registration Expenses incurred in
connection with registrations requested pursuant to this Section 2.4 after the
first two (2) registrations shall be paid by the selling Holders pro rata in
proportion to the number of shares sold by each.
2.5 EXPENSES OF REGISTRATION. Except as specifically provided herein, all
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.2 or any registration under
Section 2.3 or Section 2.4 herein shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder, shall be borne
by the holders of the securities so registered pro rata on the basis of the
number of shares so registered. The Company shall not, however, be required to
pay for expenses of any registration proceeding begun pursuant to Section 2.2 or
2.4, the request of which has been subsequently withdrawn by the Initiating
Holders unless (a) the withdrawal is based upon material adverse information
concerning the Company of which the Initiating Holders were not aware at the
time of such request or (b) the Holders of a majority of Registrable Securities
agree to forfeit their right to one requested registration pursuant to Section
2.2 or Section 2.4, as applicable, in which event such right shall be forfeited
by all Holders). If the Holders are required to pay the Registration Expenses,
such expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of shares
for which registration was requested. If the Company is required to pay the
Registration Expenses of a withdrawn offering pursuant to clause (a) above, then
the Holders shall not forfeit their rights pursuant to Section 2.2 or Section
2.4 to a demand registration.
2.6 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
a. Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all reasonable efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to ninety (90) days or, if earlier,
until the Holder or Holders have completed the distribution related thereto.
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b. Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement 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.
c. Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
d. Use all reasonable 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.
e. In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
f. Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
g. Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, 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 as of 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
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
publics accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.
2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect seven
(7) years after the date of the Company's Initial Offering. In addition, a
Holder's registration rights shall expire if (i) the Company has completed its
Initial Offering and is subject to the provisions of the Exchange Act
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and (ii) all Registrable Securities held by and issuable to such Holder may be
sold under Rule 144 during any ninety (90) day period.
2.8 DELAY OF REGISTRATION; FURNISHING INFORMATION.
a. No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.
b. It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.2, 2.3 or 2.4 that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.
2.9 INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under Sections 2.2, 2.3 or 2.4:
a. To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers, directors and legal counsel
of each Holder, any underwriter (as defined in the Securities Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation") by the Company: (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with the offering covered by such registration statement; and the
Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided however, that the indemnity
agreement contained in this Section 2.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.
b. 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 qualifications or
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compliance is being effected, indemnify and hold harmless the Company, each of
its directors, its officers, and legal counsel and each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter
and any other Holder selling securities under such registration statement or any
of such other Holder's partners, directors or officers or any person who
controls such Holder, against any losses, claims, damages or liabilities (joint
or several) to which the Company or any such director, officer, controlling
person, underwriter or other such Holder, or partner, director, officer or
controlling person of such other Holder may become subject under the Securities
Act, the Exchange Act or other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder under an instrument duly executed
by such Holder and stated to be specifically for use in connection with such
registration; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or other Holder, or partner, officer, director or
controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 2.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; and provided further, that in no event shall
any indemnity under this Section 2.9 exceed the proceeds from the offering
received by such Holder.
c. Promptly after receipt by an indemnified party under this Section
2.9 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.9.
d. If the indemnification provided for in this Section 2.9 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s)
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that resulted in such loss, claim, damage or liability, as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by a court of law by reference
to, among other things, whether the untrue or alleged true statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, that in no event shall any
contribution by a Holder hereunder exceed the proceeds from the offering
received by such Holder.
e. The obligations of the Company and Holders under this Section 2.9
shall survive completion of any offering of Registrable Securities in a
registration statement. No indemnifying party, in the defense of any such claim
or litigation, shall, except with the consent of each indemnified party, consent
to entry of any judgment or enter into any settlement which 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. In the event any offering of Registrable Securities is underwritten,
and the underwriting agreement provides for indemnification and/or contribution
by the Company and the Holders offering securities thereunder, the
indemnification and/or contribution obligations of the Company and the Holders
hereunder shall in no event exceed the obligations of the parties set forth in
such underwriting agreement.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to this Section 2 may be assigned by a
Holder to a transferee or assignee of Registrable Securities which (i) is a
subsidiary, parent, general partner, limited partner or retired partner of a
Holder. (ii) is a Holder's family member or trust for the benefit of an
individual Holder, or (iii) acquires at least one hundred thousand (100,000)
shares of Registrable Securities (as presently constituted and as adjusted for
stock splits, reverse stock splits, stock dividends, recapitalizations,
combinations and the like); provided, however, (A) the transferor shall, within
ten (10) days after such transfer, furnish to the Company written notice of the
name and address of such transferee or assignee and the securities with respect
to which such registration rights are being assigned and (B) such transferee
shall agree to be subject to all restrictions set forth in this Agreement.
2.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2 may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least sixty-six and
two-thirds percent (66 2/3 %) of the Registrable Securities. Any amendment or
waiver effected in accordance with this Section 2.11 shall be binding upon each
Holder and the Company. By acceptance of any benefits under this Section 2,
Holders of Registrable Securities hereby agree to be bound by the provisions
hereunder.
2.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of this
Agreement, the Company shall not, without the prior written consent of the
Holders of sixty-six and two-thirds percent (66 2/3%) of the Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company that would grant such holder registration rights
senior to those granted to the Holders hereunder.
-11-
2.13 "MARKET STAND-OFF" AGREEMENT. If requested by the Company as the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Holder shall not sell or otherwise transfer or dispose of any
Shares Common Stock (or other securities) of the Company held by such each
Holder (other than those included in the registration) for a period specified by
the representative of the underwriters not to exceed one hundred eighty (180)
days following the effective date of a registration statement of the Company
filed under the Securities Act, provided that all officers and directors of the
Company and holders of at least one percent (1%) of the Company's voting
securities enter into similar agreements.
The obligations described in this Section 2.13 shall not apply to a
registration relating solely to employee benefit plans on Form S-3 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period.
2.14 RULE 144 REPORTING. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
a. Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;
b. File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act;
c. So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act and of the Exchange Act (at any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.
3. COVENANTS OF THE COMPANY
3.1 BASIC FINANCIAL INFORMATION AND REPORTING.
a. The Company will maintain true books and records of account in
which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied, and will set
aside on its books all such proper accruals and reserves as shall be required
under generally accepted accounting principles consistently applied.
-12-
b. As soon as practicable after the end of each fiscal year of the
Company, and in any event within ninety (90) days thereafter, the Company will
furnish each Investor a consolidated balance sheet of the Company, as at the end
of such fiscal year, and a consolidated statement of income and a consolidated
statement of cash flows of the Company, for such year all prepared in accordance
with generally accepted accounting principles consistently applied and setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail. Such financial statements shall be accompanied by a
report and opinion thereon by independent public accountants of national
standing selected by the Company's Board of Directors.
c. The Company will furnish each Investor, as soon as practicable
after the end of the first, second and third quarterly accounting periods in
each fiscal year of the Company, and any event within forty-five (45) days
thereafter, a consolidated balance sheet of the Company as of the end of each
such quarterly period, and a consolidated statement of income and a consolidated
statement of cash flows of the Company for such period and for the current
fiscal year to date, prepared in accordance with generally accepted accounting
principles, with the exception that no notes need be attached to such statements
and year-end audit adjustments may not have been made.
d. So long as an Investor (with its affiliates) shall own not less
than one hundred thousand (100,000) shares of Registrable Securities (as
presently constituted and subject to subsequent adjustment for stock splits,
reverse stock splits, stock dividends, recapitalizations, combinations and the
like) (a "Major Investor"), the Company will furnish each such Major Investor
(i) at least thirty (30) days prior to the beginning of each fiscal year an
annual budget and operating plan for such fiscal year (and as soon as available,
any subsequent revisions thereto); and (ii) as soon as practicable after the end
of each month, and in any event within twenty (20) days thereafter, a
consolidated balance sheet of the Company as of the end of each such month, and
a consolidated statement of income and a consolidated statement of cash flows of
the Company for such month and for the current fiscal year to date, including a
comparison to plan figures for such period, prepared in accordance with
generally accepted accounting principles consistently applied, with the
exception that no notes need be attached to such statements and year-end audit
adjustments may not have been made.
3.2 INSPECTION RIGHTS. Each Major Investor shall have the right to visit
and inspect any of the properties of the Company or any of its subsidiaries, and
to discuss the affairs, finances and accounts of the Company or any of its
subsidiaries with its officers, and to review such information as is reasonably
requested all at such reasonable times and as often as may be reasonably
requested; provided, however, that the Company shall not be obligated under this
Section 12 with respect to a competitor of the Company or with respect to
information which the Board of Directors determines in good faith is
confidential and should not, therefore, be disclosed.
3.3 CONFIDENTIALITY OF RECORDS.
a. Each Investor agrees not to use Confidential Information (as
hereinafter defined) of the Company for its own use or for any purpose except to
evaluate and enforce its equity investment in the Company. Each Investor shall
undertake to treat such Confidential
-13-
Information in a manner consistent with the treatment of its own information of
such proprietary nature and agrees that it shall protect the confidentiality of
and use reasonable best efforts to prevent disclosure of the Confidential
Information to prevent it from falling into the public domain or the possession
of unauthorized persons. Each transferee of any Investor who receives
Confidential Information shall agree to be bound by such provisions. For
purposes of this Section, "Confidential Information" means any information,
technical data, or know-how, including, but not limited to, the Company's
research, products, software, services, development, inventions, processes,
designs, drawings, engineering, marketing, or finances, disclosed by the Company
either directly or indirectly in writing, orally or by drawings or inspection of
parts or equipment.
b. Confidential Information does not include information, technical
data or know-how which (i) is in the Investor's possession at the time of
disclosure as shown by Investor's files and records immediately prior to the
time of disclosure; (ii) before or after it has been disclosed to the Investor,
it is part of the public knowledge or literature, not as a result of any action
or inaction of the Investor; or (iii) is disclosed to an Investor on a
non-confidential basis by third party having a legal right to such information,
(iv) is reasonably demonstrated by Investor have been independently developed by
Investor, or (v) is approved for release by written authorization of Company.
c. The provisions of this Section shall not apply (i) to the extent
that an Investor is required to disclose Confidential Information pursuant to
any law, statue, rule or regulation or any order of any court or jurisdiction
process or pursuant to any direction, request or requirement (whether or not
having the force of law but if not having the force of law being of a type with
which institutional investors in the relevant jurisdiction are accustomed to
comply) of any self-regulating organization or any governmental, fiscal,
monetary or other authority provided that the Company is given notice and an
opportunity to restrict reasonably the scope of such disclosure; (ii) to the
disclosure of Confidential Information to an Investor's employees, counsel,
accountants or other professional advisors provided such recipients also are
bound by obligations of confidentiality; (iii) to the extent that an Investor
needs to disclose Confidential Information for the protection of any of such
Investor's rights or interest against the Company, whether under this Agreement
or otherwise; or (iv) with the prior written consent of the Company, which
consent shall not be unreasonably withheld, to the disclosure of Confidential
Information to a prospective transferee of securities which agrees in writing to
be bound by the provisions of this Section in connection with the receipt of
such Confidential Information.
d. The Company covenants and agrees that, promptly after the
issuance of the Series B Preferred Stock pursuant to the Purchase Agreement, it
shall adopt a confidentiality reasonably acceptable to the Investors, and that
it will at all times use reasonable efforts to stamp or otherwise conspicuously
xxxx written and other tangible Confidential Information "Confidential" or
"Proprietary" or, if and to the extent that Confidential Information is
disclosed orally, to promptly confirm in writing that such information is
Confidential Information.
3.4 RESERVATION OF COMMON STOCK. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the conversion of the
Shares, all Common Stock issuable from time to time upon such conversion.
-14-
3.5 STOCK VESTING. Unless otherwise approved by seventy-five percent (75
%) of the of Directors, with all Directors voting:
a. The Common Stock to be granted and issued to Directors pursuant
to Section 3.9 hereof shall vest at the rate of one third (1/3rd) of the stock
so granted to a Director at the end of each year for a period of three (3) years
commencing upon the date on which such Director is elected and qualified to
serve on the Board.
b. All other stock options and other stock equivalents issued after
the date of Agreement to employees, officers, directors, consultants and other
service providers shall be subject to vesting as follows: (i) twenty-five
percent (25 %) of such stock shall vest at the end of the first year following
the earlier of the date of issuance or such person's services commencement date
with the company, and (ii) seventy-five percent (75 a) of such stock shall vest
at the rate of one thirty-sixth (1/36th) per month over the remaining three (3)
years. With respect to any shares of stock purchased by any such person, the
Company's repurchase option shall provide that upon such person's termination of
employment or service with the Company, with or without cause, the Company or
its assignee (to the extent permissible under applicable securities laws and
other laws) shall have the option to purchase at cost any unvested shares of
stock held by such person.
3.6 KEY PERSON INSURANCE. Subject to the approval of the Board, the
Company will use its best efforts to obtain and maintain in full force and
effect term life insurance in the amount of one million ($1,000,000) dollars on
the life of the Chief Executive Officer of the Company naming the Company as
beneficiary.
3.7 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. The Company shall
require all employees to execute and deliver a Proprietary Information and
Inventions Agreement substantially in the form attached to the Purchase
Agreement.
3.8 APPROVAL OF RELATED PARTY AGREEMENTS. The Company shall not without
the approval of a majority of the Board of Directors, with all non-interested
Directors voting, authorize or enter into any transactions with any director or
management employee, or such director's or employee's immediate family.
3.9 DIRECTORS' EXPENSES. The Company shall reimburse all members of the
Company's Board of Directors for all reasonable and necessary costs and expenses
incurred by such members in connection with the performance of their duties as a
Director. In addition, as compensation for the performance of their duties as a
Director, the Company shall grant to each member Fifteen Thousand (15,000)
shares of the Company's Common Stock out of the pool of Common Stock reserved
for issuance to the Company's employees, consultants and directors, which shares
shall vest at the rate of one-third (1/3rd) per year at the end of each year
over a three (3) year period commencing upon the date such member is elected and
qualified as a Director.
3.10 DIRECTORS' INDEMNIFICATION. The Company shall enter into and use its
best efforts to at all times maintain indemnification contracts, in a form
reasonably satisfactory to the
-15-
designees of the Series B Preferred Stock and their counsel, with each of its
directors to indemnify such directors to the maximum extent permissible under
Delaware law.
3.11 REAL PROPERTY HOLDING CORPORATION. The Company covenants that it will
operate in a manner such that it will not become a "United States real property
holding corporation" ("USRPHC") as that term is defined in Section 897(c)(2) of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
The Company agrees to make determinations as to its status as a USRPHC, and will
file statements concerning those determinations with the Internal Revenue
Service, in the manner and at the times required under Reg. Section 1.897-2(h),
or any supplementary or successor provision thereto. Within 30 days of a request
from an Investor or any of its partners, the Company will inform the requesting
party, in the manner set forth in Reg. Section 1.897 -2(h)(l)(iv) or any
supplementary or successor provision thereto, whether that party's interest in
the Company constitutes a United States real property interest (within the
meaning of Internal Revenue Code Section 897(c)(l) and the regulations
thereunder) and whether the Company has provided to the Internal Revenue Service
all required notices as to its USRPHC status.
3.12 TERMINATION OF COVENANTS. All covenants of the Company contained in
Section 3 of this Agreement shall expire and terminate as to each Investor on
the effective date of the registration statement pertaining to the Initial
Offering.
4. RIGHTS OF FIRST REFUSAL
4.1 SUBSEQUENT OFFERINGS. Each Investor shall have a right of first
refusal to purchase its pro rata share of all Equity Securities that the Company
may, from time to time, propose to sell and issue after the date of this
Agreement, other than the Equity Securities excluded by Section 4.6 hereof. Each
Investor's pro rata share is equal to the ratio of (A) the number of shares of
the Company's Common Stock, including Conversion Shares or shares issuable upon
conversion of the Shares, which such Investor is deemed to be a holder of
immediately prior to the issuance of such Equity Securities to (B) the total
number of shares of the Company's outstanding Common Stock (including all shares
of Common Stock issued or issuable upon conversion of the Shares) immediately
prior to the issuance of the Equity Securities and assuming exercise of all
outstanding options and warrants to purchase securities of the Company.
4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Investor written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each Investor shall have fifteen
(15) days from the giving of such notice to agree to purchase his, her or its
pro rata share of the Equity Securities for the price and upon the terms and
conditions specified in the notice by giving written notice to the Company and
stating therein the quantity of Equity Securities to be purchased.
Notwithstanding the foregoing, the Company shall not be required to offer or
sell such Equity 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.
4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If not all of the
Investors elect to purchase their pro rata share of the Equity Securities, then
the Company shall promptly notify
-16-
in writing the Investors who do so elect and shall offer them the right to
acquire their pro rata shares of such unsubscribed shares. Such Investors shall
have five (5) days after receipt of such notice to notify the Company of his,
her or its election to purchase all or a portion thereof of the unsubscribed
shares. If the Investors so notified fail to exercise in full the rights of
first refusal, the Company shall have ninety (90) days thereafter to sell the
Equity Securities in respect of which the Investors' rights were not exercised,
at a price and upon general terms and conditions materially no more favorable to
the purchasers thereof than specified in the Company's notice to the Investors
pursuant to Section 4.2 hereof. If the Company has not sold such Equity
Securities within ninety (90) days of the notice provided pursuant to Section
4.2, the Company shall not thereafter issue or sell any Equity Securities,
without first offering such securities to the Investors in the manner provided
above.
4.4 TERMINATION OF RIGHTS OF FIRST REFUSAL. The rights of first refusal
established by this Section 4 shall terminate upon the effective date of the
registration statement pertaining to a Qualified Public Offering.
4.5 TRANSFER OF RIGHTS OF FIRST REFUSAL. The rights of first refusal of
each Investor under this Section 4 may be transferred to the same parties
subject to the same restrictions as those restrictions on transfer of
registration rights set forth in Section 2.10 hereof.
4.6 EXCLUDED SECURITIES. The rights of first refusal established by this
Section 4 shall have no application to any of the following Equity Securities:
a. Shares of Common Stock (and/or options, warrants or other Common
Stock purchase rights issued pursuant to such options, warrants or other rights)
issued or to be issued to employees, officers or directors of, or consultants or
advisors to the Company or any subsidiary, pursuant to stock purchase or stock
option plans or other arrangements that are approved by the Board of Directors;
b. Stock issued pursuant to any rights or agreements outstanding as
of the date of this Agreement, options and warrants outstanding as of the date
of this Agreement; and stock issued pursuant to any such rights or agreements
granted after the date of this Agreement, provided that the rights of first
refusal established by this Section 4 applied with respect to the initial sale
or grant by the Company of such rights or agreements;
c. Any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination;
d. Shares of Common Stock issued in connection with any stock split,
stock dividend or recapitalization by the Company;
e. Shares of Common Stock issued upon conversion of the Shares;
f. Any Equity Securities issued pursuant to any equipment leasing
arrangement, or bank financing;
g. Any Equity Securities that are issued by the Company pursuant to
a registration statement filed under the Securities Act; and
-17-
h. Equity Securities issued in connection with strategic
transactions involving the Company and other entities, including (i) joint
ventures, manufacturing, marketing or distribution arrangements or (ii)
technology transfer or development arrangements; provided that such strategic
transactions and the issuance of shares therein, has been approved by not less
than seventy-five percent (75%) the Company's Board of Directors, with all
Directors voting.
5. MISCELLANEOUS
5.1 GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of Delaware as applied to agreements among Delaware
residents entered into and to be performed entirely within Delaware.
5.2 SURVIVAL. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
5.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of Registrable Securities from time to time; provided, however, that
prior to the receipt by the Company of adequate written notice of the transfer
of any Registrable Securities specifying the full name and address of the
transferee, the Company may deem and treat the person listed as the holder of
such shares in its records as the absolute owner and holder of such shares for
all purposes, including the payment of dividends or any redemption price.
5.4 SEVERABILITY. In case any provision of the Agreement shall be invalid,
illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
5.5 AMENDMENT AND WAIVER.
a. Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of at least two-thirds (66 2/3%) of the Registrable Securities.
b. Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the holders of at least two-thirds (66 2/3%) of the
Registrable Securities.
c. Notwithstanding the foregoing, this Agreement may be amended with
only the written consent of the Company to include additional purchasers of
Shares as "Investors," "Holders" and parties hereto.
-18-
5.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.
5.7 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
party to be notified at the address as set forth on the signature pages hereof
or Exhibit A hereto or at such other address as such party may designate ten
(10) days advance written notice to the other parties hereto.
5.8 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the using party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
5.9 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
5.10 COUNTERPARTS. 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.
-19-
IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date first set forth above.
COMPANY:
NxSTAGE MEDICAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
-20-
INVESTORS
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxxx
WPG ENTERPRISE FUND III, L.L.C.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By: /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Managing Member
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV, L.L.C.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By: /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Managing Member
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV CAYMAN, L.P.
By: WPG Venture Advisers, Ltd.,
Administrative General Partner
By: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: Director
-21-
ATLAS VENTURE FUND III, L.P.
By: Atlas Venture Associates III,
LLC
Its General Partner
By: /s/ [illegible]
-----------------------------
Name:
Title:
ATLAS VENTURE ENTREPRENEURS'
FUND III, L.P.
By: Atlas Venture Associates III,
LLC
Its General Partner
By: /s/ [illegible]
-----------------------------
Name:
Title:
-00-
XXXXXX XXXXXXX XXXX, X.X.
By: DLJ CAPITAL CORP.
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
SPROUT VENTURE CAPITAL, L.P.
By: DLJ CAPITAL CORP.
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
DLJ CAPITAL CORP.
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
DLJ ESC II, L.P.
By: DLJ LBO Plans Management
Corporation
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
-23-
EXHIBIT A
LIST OF INVESTORS
Number Aggregate
Name and Address of Shares Purchase Price
------------------------------------------- --------- ---------------
Xxxxxxx X. Xxxxxxx 74,906 $ 199,999.02
00 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Sprout Capital VIII, L.P. 981,202 $ 2,619,809.34
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Venture Capital, L.P. 58,872 $ 157,188.24
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ Capital Corp. 3,273 $ 8,738.91
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ ESC II, L.P. 85,383 $ 227,972.61
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
WPG Enterprise Fund II, L.L.C 132,054 $ 352,584.18
Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx, Xxxx & Xxxxx Venture 151,057 $ 403,322.19
Associates IV, L.L.C
Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
-24-
Number Aggregate
Name and Address of Shares Purchase Price
------------------------------------------- --------- ---------------
Xxxxx, Xxxx & Xxxxx Venture Associates IV 19,003 $ 50,738.01
Cayman, L.P.
Bank American Trust & Banking Corporation
(Cayman) Limited
P.O. Box 1092
BankAmerica House, Fort Street
Xxxxxx Town, Grand Cayman
Cayman Islands, British West Indies
Xxxxx X. Xxxxxxxxx 201,410 $ 537,764.70
c/o Medisystems Corporation
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Atlas Venture Fund III, L.P. 164,268 $ 438,595.56
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Atlas Venture Entrepreneurs' Fund III, L.P. 3,572 $ 9,537.24
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
--------- ---------------
TOTAL 1,875,000 $ 5,006,250.00
-25-
NxSTAGE MEDICAL, INC.
FIRST AMENDMENT TO THE
INVESTOR RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT (this "First
Amendment") is entered into as of the 24th day of January, 2000, by and among
NxSTAGE MEDICAL, INC., a Delaware corporation (the "Company"), and the
purchasers of the Company's Series B Preferred Stock par value $0.001 per share
(the "Series B Preferred Stock") and the Company's Series C Preferred Stock par
value $0.001 per share (the "Series C Preferred Stock") set forth on the
signature pages hereto (hereinafter, the "Investors" and each individually an
"Investor").
RECITALS
WHEREAS, the Investors purchased, in the aggregate, 1,875,000 shares of
Series B Preferred Stock pursuant to the Series B Preferred Stock Purchase
Agreement dated June 30, 1999 (the "Series B Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series B Preferred
Stock, the Company and the Investors entered into an Investor Rights Agreement
dated as of June 30, 1999 (the "Investor Rights Agreement");
WHEREAS, the Company and the Investors have entered into a Series C
Preferred Stock Purchase Agreement of even date herewith (the "Series C Purchase
Agreement"), pursuant to which each of the Investors will purchase that number
of shares of Series C Preferred Stock set forth opposite his or its name on
Exhibit A totaling an aggregate of 1,151,632 shares of Series C Preferred Stock;
and
WHEREAS, it is a condition to the closing of the sale of the Series C
Preferred Stock pursuant to the Series C Purchase Agreement, that the Company
grant to the Investors, with respect to the Series C Preferred Stock, those
registration rights, information rights and other rights as set forth in the
Investor Rights Agreement;
NOW THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth herein and in the Series C
Purchase Agreement, the parties hereby agree as follows:
1. AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT. In accordance with Section 5.5 of
the Investors Agreement, the Investors and the Company hereby agree to amend the
Investor Rights Agreement as follows:
a. The definition of "Shares" set forth in Section 1 of the Investor
Rights Agreement is amended to read in its entirety as follows:
"SHARES" means the Company's Series B Preferred Stock issued pursuant
to the Series B Purchase Agreement and the Company's Series C Preferred Stock
issued pursuant to the Series C Purchase Agreement.
b. All references to "Shares" throughout the Investor Rights Agreement
shall be read to refer to the amended definition of "Shares" as set forth above.
c. Exhibit A to the Investor Rights Agreement is amended and restated as
set forth on the Exhibit A attached hereto.
d. The remainder of the Investor Rights Agreement not amended hereby
remains unchanged and in full force and effect
2. MISCELLANEOUS
2.1 GOVERNING LAW. This First Amendment is governed by and construed under
the laws of the Stare of Delaware as applied to agreements among Delaware
residents entered into and be performed entirely within Delaware.
2.2 SEVERABILITY. In case any provision of this First Amendment is
determined to be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
2.3 TITLES AND SUBTITLES. The titles of the sections of this First
Amendment are for convenience of reference only and are not to be considered in
construing this Agreement.
2.4 COUNTERPARTS. This First Amendment may be executed in any number of
counterparts, each of which is an original, and all of which together
constitutes one instrument.
*THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK*
-2-
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to the Investor Rights Agreement as of the date first set forth above.
COMPANY:
NxSTAGE MEDICAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
INVESTORS:
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxx
-3-
ATLAS VENTURE FUND III, L.P.
By: Atlas Venture Associates III, LLC
Its General Partner
By: /s/ Xxxx-Xxxxxxxx Forinela
----------------------------
Name: Xxxx-Xxxxxxxx Forinela
Title: Member Manager
ATLAS VENTURE ENTREPRENEURS'
FUND III, L.P.
By: Atlas Venture Associates III, LLC
Its General Partner
By: /s/ Xxxx-Xxxxxxxx Forinela
----------------------------
Name: Xxxx-Xxxxxxxx Forinela
Title: Member Manager
-4-
WPG ENTERPRISE FUND III, L.L.C.
By: WPG VC FUND ADVISER, L.L.C.,
Fund Investment Advisory Member
By: /s/ Xxxxx Xxxxxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Managing Member
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV, L.L.C.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By: /s/ Xxxxx Xxxxxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Managing Member
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV CAYMAN, L.P.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By: /s/ Xxxxx Xxxxxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Managing Member
-5-
SPROUT CAPITAL VIII, L.P.
By: DJL CAPITAL CORP.
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
SPROUT VENTURE CAPITAL, L.P.
By: DJL CAPITAL CORP.
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
DLJ CAPITAL CORP.
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
-6-
NxSTAGE MEDICAL, INC.
SECOND AMENDMENT TO THE
INVESTOR RIGHTS AGREEMENT
THIS SECOND AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT (this "Second
Amendment") is entered into as of the 24th day of May, 2001, by and among
NxSTAGE MEDICAL, INC., a Delaware corporation (the "Company"), and certain of
the purchasers of the Company's Series B Preferred Stock, par value $0.001 per
share (the "Series B Preferred Stock"), the Company's Series C Preferred Stock,
par value $0.001 per share (the "Series C Preferred Stock"), and all of the
purchasers of the Company's Series D Preferred Stock, par value $0.001 per share
(the "Series D Preferred Stock"), set forth on the signature pages hereto
(hereinafter, the "Investors" and each individually an "Investor").
RECITALS
WHEREAS, certain of the Investors purchased, in the aggregate, 1,875,000
shares of Series B Preferred Stock pursuant to the Series B Preferred Stock
Purchase Agreement dated as of June 30, 1999 (the "Series B Purchase
Agreement");
WHEREAS, in connection with the acquisition of the Series B Preferred
Stock, the Company and certain of the Investors entered into an Investor Rights
Agreement dated as of June 30, 1999 (the "Investor Rights Agreement");
WHEREAS, certain of the Investors purchased, in the aggregate, 1,151,632
shares of Series C Preferred Stock pursuant to the Series C Preferred Stock
Purchase Agreement dated as of January 24, 2001 ("the Series C Purchase
Agreement").
WHEREAS, in connection with the acquisition of the Series C Preferred
Stock, the Company and certain of the Investors entered into a First Amendment
to the Investor Rights Agreement dated as of January 24, 2000 (the "First
Amendment").
WHEREAS, the Company and certain of the Investors have entered into a
Series D Preferred Stock Purchase Agreement of even date herewith (the "Series D
Purchase Agreement"), pursuant to which each of the Investors will purchase that
number of shares of Series D Preferred Stock set forth opposite his or its name
on Exhibit A totaling an aggregate of 4,857,622 shares of Series D Preferred
Stock; and
WHEREAS, it is a condition to the closing of the sale of the Series D
Preferred Stock, pursuant to the Series D Purchase Agreement, that the Company
grant to the Investors, with respect to the Series D Preferred Stock, those
registration rights, information rights and other rights as set forth in the
Investor Rights Agreement, as amended by the First Amendment;
WHEREAS, the Investors executing this Second Amendment are the holders of
at least 66 2/3 % of the Registrable Securities, as defined in the Investor
Rights Agreement as amended.
NOW THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth herein and in the Series D
Purchase Agreement, the parties hereby agree as follows:
1. SECOND AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT. In accordance with
Section 5.5 of the Investors Agreement, as amended by the First Amendment, the
Investors and the Company hereby agree to amend the Investor Rights Agreement as
follows:
a. The definition of "Shares" set forth in Section 1 of the Investor
Rights Agreement is amended to read in its entirety as follows:
"SHARES" means the Company's Series B Preferred Stock issued pursuant to
the Series B Purchase Agreement, the Company's Series C Preferred Stock issued
pursuant to the Series C Purchase Agreement and the Company's Series D Preferred
Stock issued pursuant to the Series D Purchase Agreement.
b. All references to "Shares" throughout the Investor Rights Agreement
shall be read to refer to the amended definition of "Shares" as set forth above.
c. Section 5.5 a. of the Agreement is amended to read in its entirety as
follows:
"Except as otherwise expressly provided, this Agreement may be amended or
modified only upon the written consent of the Company and the holders of
at least two-thirds (662/3%) of the Registrable Securities.
Notwithstanding the foregoing, this Agreement may not be amended without
the prior written consent of eighty-five percent (85%) of the Series D
Preferred Stock if such amendment adversely applies to the holders of the
Series D Preferred Stock in a different manner from the holders of any
other series of Preferred Stock.
d. Exhibit A to the Investor Rights Agreement is amended and restated as
set forth on the Exhibit A attached hereto.
e. The remainder of the Investor Rights Agreement not amended hereby
remains unchanged and in full force and effect.
2. MISCELLANEOUS
2.1. GOVERNING LAW. This Second Amendment is governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents entered into and to be performed entirely within Delaware.
2.2. SEVERABILITY. In case any provision of this Second Amendment is
determined to be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
2.3. TITLES AND SUBTITLES. The titles of the sections of this Second
Amendment are for convenience of reference only and are not to be considered in
construing this Agreement.
-2-
2.4. COUNTERPARTS. This Second Amendment may be executed in any number of
counterparts, each of which is an original, and all of which together
constitutes one instrument.
*THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK*
-3-
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to the Investor Rights Agreement as of the date first set forth above.
COMPANY
NxSTAGE MEDICAL, INC.
000 XXXXX XXXXX XXXXXX, 0XX XXXXX
XXXXXXXX, XX 00000
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
INVESTORS:
/s/ Xxxxxxx X. Xxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
--------------------------
Xxxxx X. Xxxxxxxxx
/s/ Xxxx Xxxxx
--------------------------
Xxxx Xxxxx
-4-
WPG ENTERPRISE FUND III, L.L.C
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By: [illegible]
----------------------
Name:
Title:
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV, L.L.C.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By: /s/ [illegible]
----------------------
Name:
Title:
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV CAYMAN, L.P.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Partner
By: /s/ [illegible]
----------------------
Name:
Title:
-5-
ATLAS VENTURE FUND III, L.P.
By: Atlas Venture Associates III, L.P.
Its General Partner
By: Atlas Venture Associates III, Inc.
Its General Partner
By: /s/ [illegible]
----------------------
Name:
Title: Vice President
ATLAS VENTURE ENTREPRENEURS'
FUND III, L.P.
By: Atlas Venture Associates III, L.P.
Its General Partner
By: Atlas Venture Associates III, Inc.
Its General Partner
By: /s/ [illegible]
----------------------
Name:
Title: Vice President
ATLAS VENTURE FUND V, L.P.
By: Atlas Venture Associates V, L.P.
Its General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By: /s/ [illegible]
----------------------
Name:
Title: Vice President
-6-
ATLAS VENTURE PARALLEL FUND
V-A C.V.
By: Atlas Venture Associates V, L.P.
Its General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By: /s/ [illegible]
----------------------
Name:
Title: Vice President
ATLAS VENTURE PARALLEL FUND
V-B C.V.
By: Atlas Venture Associates V, L.P.
Its General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By: /s/ [illegible]
----------------------
Name:
Title: Vice President
ATLAS VENTURE ENTREPRENEURS'
FUND V, L.P.
By: Atlas Venture Associates V, L.P.
Its General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By: /s/ [illegible]
----------------------
Name:
Title: Vice President
-7-
SPROUT CAPITAL VIII, L.P.
By: DLJ CAPITAL CORP.
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Managing Director
SPROUT VENTURE CAPITAL, L.P.
By: DLJ CAPITAL CORP.
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
DLJ CAPITAL CORP.
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
DLJ ESC II, L.P.
By: DLJ LBO Plans Management
Corporation
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Attorney In Fact
SPROUT ENTREPRENEURS FUND, L.P.
By: DLJ Capital Corp.
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Managing Director
-8-
SPROUT CAPITAL IX, L.P.
By: DLJ Capital Corp.
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Managing Director
-9-
WPG Enterprise Fund III, L.L.C 132,054 90,133 65,895
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx, Xxxx & Xxxxx Venture 151,057 96,481 75,377
Associates IV, L.L.C.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxx, Xxxx & Xxxxx Venture 19,003 6,348 9,482
Associates IV Cayman, L.P.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxxxx 201,410 128,642 753,769
c/o Medisystems Corporation
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Atlas Venture Fund III, L.P. 164,268 104,920 72,536
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Atlas Venture Entrepreneurs' 3,572 2,281 1,577
Fund III, L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Atlas Venture Fund V, L.P. 164,268 104,920 1,133,073
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Atlas Venture Parallel 3,572 2,281 140,746
Fund V-A C.V.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Atlas Venture Parallel -0- -0- 140,746
Fund V-B C.V.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
-10-
Atlas Venture Entrepreneurs' -0- -0- 18,860
Fund V L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Xxxx Xxxxx -0- -0- 16,750
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
TOTAL 1,875,000 1,151,632 4,857,622
-11-
NxSTAGE MEDICAL, INC.
THIRD AMENDMENT TO THE
INVESTOR RIGHTS AGREEMENT
THIS THIRD AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT (this "Third
Amendment") is entered into as of the 15th day of April, 2003, by and among
NxSTAGE MEDICAL, INC., a Delaware corporation (the "Company"), and certain of
the purchasers of the Company's Series B Preferred Stock, par value $0.001 per
share (the "Series B Preferred Stock"), Series C Preferred Stock, par value
$0.001 per share (the "Series C Preferred Stock"), Series D Preferred Stock, par
value $0.001 per share (the "Series D Preferred Stock") and all of the
purchasers of the Company's Series E Preferred Stock, par value $0.001 per share
(the "Series E Preferred Stock"), set forth on the signature pages hereto
(hereinafter, the "Investors" and each individually an "Investor").
RECITALS
WHEREAS, certain of the Investors purchased, in the aggregate, 1,875,000
shares of Series B Preferred Stock pursuant to the Series B Preferred Stock
Purchase Agreement dated as of June 30, 1999 (the "Series B Purchase
Agreement");
WHEREAS, in connection with the acquisition of the Series B Preferred
Stock, the Company and certain of the Investors entered into an Investor Rights
Agreement dated as of June 30, 1999 (the "Investor Rights Agreement");
WHEREAS, certain of the Investors purchased, in the aggregate, 1,151,632
shares of Series C Preferred Stock pursuant to the Series C Preferred Stock
Purchase Agreement dated as of January 24, 2001 ("the Series C Purchase
Agreement");
WHEREAS, in connection with the acquisition of the Series C Preferred
Stock, the Company and certain of the Investors entered into a First Amendment
to the Investor Rights Agreement dated as of January 24, 2000 (the "First
Amendment");
WHEREAS, certain of the Investors purchased, in the aggregate, 4,857,622
shares of Series D Preferred Stock pursuant to the Series D Preferred Stock
Purchase Agreement dated as of May 24, 2001 (the "Series D Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series D Preferred
Stock, the Company and certain Investors entered into a Second Amendment to the
Investor Rights Agreement dated as of May 24, 2001 (the "Second Amendment");
WHEREAS, the Company and certain of the Investors have entered into a
Series E Preferred Stock Purchase Agreement of even date herewith (the "Series E
Purchase Agreement"), pursuant to which each of the Investors will purchase that
number of shares of Series E Preferred Stock set forth opposite his or its name
on Exhibit A totaling an aggregate of 669,908 shares of Series E Preferred
Stock; and
WHEREAS, it is a condition to the closing of the sale of the Series E
Preferred Stock, pursuant to the Series E Purchase Agreement, that the Company
grant to the Investors, with respect to the Series E Preferred Stock, those
registration rights, information rights and other rights as set forth in the
Investor Rights Agreement, as amended by the First and Second Amendments;
WHEREAS, the Investors executing this Third Amendment are the holders of
at least 66 2/3% of the Registrable Securities, as defined in the Investor
Rights Agreement as amended by the First and Second Amendments.
NOW THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth herein and in the Series E
Purchase Agreement, the parties hereby agree as follows:
1. THIRD AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT. In accordance with
Section 5.5 of the Investors Agreement, as amended by the First and Second
Amendments, the Investors and the Company hereby agree to amend the Investor
Rights Agreement as follows:
a. The definition of "Shares" set forth in Section 1 of the Investor
Rights Agreement is amended to read in its entirety as follows:
"SHARES" means the Company's Series B Preferred Stock issued
pursuant to the Series B Purchase Agreement, the Company's Series C Preferred
Stock issued pursuant to the Series C Purchase Agreement, the Company's Series D
Preferred Stock issued pursuant to the Series D Purchase Agreement and the
Company's Series E Preferred Stock issued pursuant to the Series E Purchase
Agreement.
b. All references to "Shares" throughout the Investor Rights Agreement
shall be read to refer to the amended definition of "Shares" as set forth above.
c. Sections 4.1, 4.2, and 4.3 of the Agreement are amended to read in
their entirety as follows:
"4.1 SUBSEQUENT OFFERINGS. Each Investor shall have a right of first
refusal to purchase its Adjusted Pro Rata Share (as defined below)
of all Equity Securities that the Company may, form time to time,
propose to sell and issue after the date of this Agreement, other
than the Equity Securities excluded by Section 4.6 hereof. For
purposes hereof, pro rata share shall mean the quotient of the
holder's total number of issued and outstanding shares in the
Corporation (Preferred and Common) on a fully converted basis,
divided by the total number of issued and outstanding shares in the
Corporation (Preferred and Common) on a fully converted basis. Each
Investor's Adjusted Pro Rata Share, shall be equal to its pro rata
share, multiplied by a fraction, the numerator of which is the
actual number of shares of Series E Preferred Stock held by such
Investor, the denominator of which is the shares of Series E
-2-
Preferred Stock associated with the Investor's name in the following
table (in no event shall the resultant fraction exceed 100%):
Sprout Group 987,552.0
Lightspeed (WPG) 201,338.0
Xxxxx Xxxxxxxxx 270,592.0
Atlas Venture 409,062.0
Xxxxx Street 157,345.0
Xxxx Xxxxx 3,496.0
4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it all give each Investor written notice of its
intention, describing the Equity Securities, the price and the terms
and conditions upon which the Company proposes to issue the same.
Each Investor shall have fifteen (15) days from the giving of such
notice to agree to purchase his, her or its Adjusted Pro Rata share
of the Equity Securities for the price and upon the terms and
conditions specified in the notice by giving written notice to the
Company and stating therein the quantity of Equity Securities to be
purchased. Notwithstanding the foregoing, the Company shall not be
required to offer or sell such Equity 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.
4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If not all of
the Investors elect to purchase their Adjusted Pro Rata share of the
Equity Securities, then the Company shall promptly notify in writing
the Investors who do so elect and shall offer them the right to
acquire their Adjusted Pro Rata shares of such unsubscribed shares.
Such Investors shall have five (5) days after receipt of such notice
to notify the Company of his, her or its election to purchase all or
a portion thereof o f the unsubscribed shares. If the Investors so
notified fail to exercise in full the rights of first refusal, the
Company shall have ninety (90) days thereafter to sell the Equity
Securities in respect of which the Investor's rights were not
exercised, at a price and upon general terms and conditions
materially no more favorable to the purchasers thereof than
specified in the Company's notice to the Investors pursuant to
Section 4.2 hereof. If the Company has not sold such Equity
Securities within ninety (90) days of the notice provided pursuant
to Section 4.2, the Company shall not thereafter issue or sell any
Equity Securities. without first offering such securities to the
Investors in the manner provided above."
-3-
4.7 INELIGIBLE INVESTOR. Xx. Xxxxxxx shall not have rights of first
refusal under this Article 4. Solely for purposes of this Article 4,
Xx. Xxxxxxx shall not be included in the definition of Investor.
d. Exhibit A to the Investor Rights Agreement is amended and restated as
set forth on the Exhibit A attached hereto.
e. The remainder of the Investor Rights Agreement not amended hereby
remains unchanged and in full force and effect.
2. MISCELLANEOUS
2.1. GOVERNING LAW. This Third Amendment is governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents entered into and to be performed entirely within Delaware.
2.2. SEVERABILITY. In case any provision of this Third Amendment is
determined to be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
2.3. TITLES AND SUBTITLES. The titles of the sections of this Third
Amendment are for convenience of reference only and are not to be considered in
construing this Agreement.
2.4. COUNTERPARTS. This Third Amendment may be executed in any number of
counterparts, each of which is an original, and all of which together
constitutes one instrument.
*THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK*
-4-
IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment
to the Investor Rights Agreement as of the date first set forth above.
COMPANY:
NxSTAGE MEDICAL, INC.
000 XXXXX XXXXX XXXXXX, 0XX XXXXX
XXXXXXXX, XX 00000
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
INVESTORS:
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxxx
/s/ Xxxx Xxxxx
-------------------------------
Xxxx Xxxxx
-5-
BVCF IV, L.P.
By: X.X. Xxxx Associates, LLC
Its General Partner
By: Xxxxxxx Venture Management, LLC
Its Attorney-In-Fact
By: Xxxxx Street Partners, LLC
As its Administrative Member
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
Title: Partner
-6-
ATLAS VENTURE FUND III, L.P.
By: Atlas Venture Associates III, L.P.
Its General Partner
By: Atlas Venture Associates III, Inc.
Its General Partner
By: /s/ [illegible]
--------------------------
Name:
Title: Vice President
ATLAS VENTURE ENTREPRENEURS'
FUND III, L.P.
By: Atlas Venture Associates III, L.P.
Its General Partner
By: Atlas Venture Associates III, Inc.
Its General Partner
By: /s/ [illegible]
--------------------------
Name:
Title: Vice President
ATLAS VENTURE FUND V, L.P.
By: Atlas Venture Associates V, L.P.
Its General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By: /s/ [illegible]
--------------------------
Name:
Title: Vice President
-7-
ATLAS VENTURE PARALLEL FUND V-A C.V.
By: Atlas Venture Associates V, L.P.
Its General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By: /s/ [illegible]
--------------------------
Name:
Title: Vice President
ATLAS VENTURE PARALLEL FUND V-B C.V.
By: Atlas Venture Associates V, L.P.
Its General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By: /s/ [illegible]
--------------------------
Name:
Title: Vice President
ATLAS VENTURE ENTREPRENEURS'
FUND V, L.P.
By: Atlas Venture Associates V, L.P.
Its General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By: /s/ [illegible]
--------------------------
Name:
Title: Vice President
-8-
SPROUT CAPITAL VIII, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
By: Xxxxx Xxxxxxxxxxxx
Its: Managing Director
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
By: Xxxxx Xxxxxxxxxxxx
Its: Managing Director
DLJ CAPITAL CORP.
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
By: Xxxxxx Xxxxxxxxxxxx
Its: Managing Director
DLJ CAPITAL CORP.
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
By: Xxxxxx Xxxxxxxxxxxx
Its: Managing Director
DLJ ESC II, L.P.
By: DLJ LBO Plans Management
Corporation
Its General Partner
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
By: Xxxxx Xxxxxxxxxxxx
Its: Attorney In Fact
-9-
SPROUT ENTREPRENEURS FUND, L.P.
By: DLJ Capital Corp.
Its General Partner
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
By: Xxxxx Xxxxxxxxxxxx
Its: Managing Director
SPROUT CAPITAL IX, L.P.
By: DLJ Capital Corp.
Its Managing General Partner
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
By: Xxxxx Xxxxxxxxxxxx
Its: Managing Director
SPROUT IX PLAN INVESTORS, L.P.
By: DLJ LBO Plans Management Corporation
Its General Partner
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
By: Xxxxx Xxxxxxxxxxxx
Its: Attorney In Fact
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corporation
Its General Partner
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
By: Xxxxx Xxxxxxxxxxxx
Its: Managing Director
-00-
XXXXXX XXXXXXX XXX, X.X.
By: DLJ Capital Corporation
Its Managing General Partner
By: /s/ Xxxxx Xxxxxxxxxxxx
--------------------------
By: Xxxxx Xxxxxxxxxxxx
Its: Managing Director
-11-
EXHIBIT A
LIST OF INVESTORS
No. OF SHARES No. OF SHARES No. OF SHARES No. OF SHARES
OF OF OF OF
SERIES B SERIES C SERIES D SERIES E
PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK
Xxxxxxx X. Xxxxxxx 74,906 -0- -0- -0-
c/o NxSTAGE MEDICAL, INC.
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
BVCF IV, L.P. -0- -0- 753,769 157,345
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Sprout Capital VIII, L.P. 981,202 628,353 -0- 354,895
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Venture Capital, L.P. 58,872 37,732 -0- 21,300
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ Capital Corp. 3,273 2,096 18,910 36,094
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ ESC II, L.P. 85,383 54,646 -0- 30,756
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Entrepreneurs Fund, L.P. -0- -0- 6,148 1,288
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Capital IX, L.P. -0- -0- 1,559,935 326,824
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
The Sprout CEO Fund, L.P. -0- -0- -0- 2,273
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Capital VII, L.P. -0- -0- -0- 195,256
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
-12-
Sprout IX Plan Investors -0- -0- 90,049 18,866
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
WPG Enterprise Fund III, L.L.C. 132,054 84,344 65,895 10,983
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx, Xxxx & Xxxxx Venture 151,057 96,481 75,377 12,563
Associates IV, L.L.C.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx, Xxxx & Xxxxx Venture 19,003 12,137 9,482 1,580
Associates IV Cayman, L.P.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx X. Xxxxxxxxx 201,410 128,642 753,642 753,769
c/o Medisystems Corporation
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Atlas Venture Fund III, L.P. 164,268 104,920 72,536 192,783
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Atlas Venture Entrepreneurs' 3,572 2,281 1,577 4,192
Fund, L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Atlas Venture Fund V, L.P. -0- -0- 1,133,073 424,146
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Atlas Venture Parallel Fund V-A -0- -0- 140,746 52,686
C.V.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Atlas Venture Parallel Fund V-B -0- -0- 140,746 52,686
C.V.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Atlas Venture Entrepreneurs' -0- -0- 18,860 7,060
Fund V L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Xxxx Xxxxx -0- -0- 16,750 12,563
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
TOTAL 1,876,000 1,151,632 4,857,622 2,669,908
-13-
NxSTAGE MEDICAL, INC.
FOURTH AMENDMENT TO THE
INVESTOR RIGHTS AGREEMENT
THIS FOURTH AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT (this "Fourth
Amendment") is entered into as of the 18th day of August, 2004, by and among
NxSTAGE MEDICAL, INC., a Delaware corporation (the "Company"), and certain of
the purchasers of the Company's Series B Preferred Stock, par value $0.001 per
share (the "Series B Preferred Stock"), Series C Preferred Stock, par value
$0.001 per share (the "Series C Preferred Stock"), Series D Preferred Stock, par
value $0.001 per share (the "Series D Preferred Stock"), Series E Preferred
Stock, par value $0.001 per share (the "Series E Preferred Stock") and all of
the purchasers of the Company's Series F Preferred Stock, par value $0.001 per
share (the "Series F Preferred Stock"), set forth on the signature pages hereto
(hereinafter, the "Investors") and each individually an "Investor").
RECITALS
WHEREAS, certain of the Investors purchased, in a the aggregate,
1,875,000 shares of Series B Preferred Stock pursuant to the Series B Preferred
Stock Purchase Agreement dated as of June 30, 1999 (the "Series B Purchase
Agreement");
WHEREAS, in connection with the acquisition of the Series B Preferred
Stock, the Company and certain of the Investors entered into an Investor Rights
Agreement dated as of June 30, 1999 (the "Investor Rights Agreement");
WHEREAS, certain of the Investors purchased, in the aggregate,
1,151,632 shares of Series C Preferred Stock pursuant to the Series C Preferred
Stock Purchase Agreement dated as of January 24, 2001 ("the Series C Purchase
Agreement");
WHEREAS, in connection with the acquisition of the Series C Preferred
Stock, the Company and certain of the Investors entered into a First Amendment
to the Investor Rights Agreement dated as of January 24, 2000 (the "First
Amendment");
WHEREAS, certain of the Investors purchased, in the aggregate,
4,857,622 shares of Series D Preferred Stock pursuant to the Series D Preferred
Stock Purchase Agreement dated as of May 24, 2001 (the "Series D Purchase
Agreement");
WHEREAS, in connection with the acquisition of the Series D Preferred
Stock, the Company and certain Investors entered into a Second Amendment to the
Investor Rights Agreement dated as of May 24, 2001 (the "Second Amendment");
WHEREAS, certain of the Investors purchased, in the aggregate,
2,669,908 shares of Series E Preferred Stock pursuant to the Series E Preferred
Stock Purchase Agreement dated as of April 15, 2003 (the "Series E Purchase
Agreement");
WHEREAS, in connection with the acquisition of the Series E Preferred
Stock, the Company and certain Investors entered into a Third Amendment to the
Investor Rights Agreement dated as of April 15, 2003 (the "Third Amendment");
WHEREAS, the Company and certain of the Investors have entered into a
Series F Preferred Stock Purchase Agreement of even date herewith (the "Series F
Purchase Agreement"), pursuant to which each of the Investors will purchase that
number of shares of Series F Preferred Stock set forth opposite his or its name
on Exhibit A totaling an aggregate of 2,747,253 shares of Series F Preferred
Stock; and
WHEREAS, it is a condition to the closing of the sale of the Series F
Preferred Stock, pursuant to the Series F Purchase Agreement, that the Company
grant to the Investors, with respect to the Series F Preferred Stock, those
registration rights, information rights and other rights as set forth in the
Investor Rights Agreement, as amended by the First, Second and Third Amendments;
WHEREAS, the Investors executing this Fourth Amendment are the holders
of at least 66 2/3 % of the Registrable Securities, as defined in the Investor
Rights Agreement as amended by the First and Second Amendments.
NOW THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth herein and in
the Series F Purchase Agreement, the parties hereby agree as follows:
1. FOURTH AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT. In accordance with
Section 5.5 of the Investors Agreement, as amended by the First, Second and
Third Amendments, the Investors and the Company hereby agree to amend the
Investor Rights Agreement as follows:
a. The definition of "Shares" as set forth in Section 1 of the Investor
Rights Agreement is amended to read in its entirety as follows:
"SHARES" means the Company's Series B Preferred Stock issued
pursuant to the Series B Purchase Agreement, the Company's Series C Preferred
Stock issued pursuant to the Series C Purchase Agreement, the Company's Series D
Preferred Stock issued pursuant to the Series D Purchase Agreement, the
Company's Series E Preferred Stock issued pursuant to the Series E Purchase
Agreement and the Company's Series F Preferred Stock issued pursuant to the
Series F Purchase Agreement.
b. All references to "Shares" throughout the Investor Rights Agreement
shall be read to refer to the amended definition of "Shares" as set forth above.
c. Section 2.4(b)(iv) of the Agreement shall be deleted in its
entirety.
d. Section 4.1 of the Agreement is amended to read in its entirety as
follows:
4.1 SUBSEQUENT OFFERINGS. Each Investor shall have a right of first
refusal to purchase its Adjusted Pro Rata Share (as defined below) of all Equity
Securities that the
-2-
Company may, from time to time, propose to sell and issue after the date of this
Agreement, other than the Equity Securities excluded by Section 4.6 hereof. For
purposes hereof, pro rata shares shall mean the quotient of the holder's total
number of issued and outstanding shares in the Corporation (Preferred and
Common) on a fully converted basis, divided by the total number of issued and
outstanding shares in the Corporation (Preferred and Common) on a fully
converted basis. Each Investor's Adjusted Pro Rata Share shall be equal to its
pro rata share, multiplied by a fraction, the numerator of which is the actual
number of shares of Series F Preferred Stock held by such Investor, and the
denominator of which is the shares of Series F Preferred Stock associated with
the Investor's name in the following table (in no event shall the resultant
fraction exceed 100%):
Sprout Group 643,134
WPG 111,301
Xxxxx Xxxxxxxxx 230,562
Atlas Ventures 000,000
Xxxxx Xxxxxx 102,470
Xxxx Xxxxx 3,297
Marubeni 412,088
CSFB 274,725
Wasatch 206,044
e. Exhibit A to the Investor Rights Agreement is amended and restated
as set forth on the Exhibit A attached hereto.
e. The remainder of the Investor Rights Agreement not amended hereby
remains unchanged and in full force and effect.
2. MISCELLANEOUS
2.1 GOVERNING LAW. This Fourth Amendment is governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents entered into and to be performed entirely within Delaware.
2.2 SEVERABILITY. In case any provision of this Fourth Amendment is
determined to be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
2.3 TITLES AND SUBTITLES. The titles of the sections of this Fourth
Amendment are for convenience of reference only and are not to be considered in
construing this Agreement.
2.4 COUNTERPARTS. This Fourth Amendment may be executed in any number
of counterparts, each of which is an original, and all of which together
constitutes one instrument.
*THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK*
-3-
IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment to the Investor Rights Agreement as of the date first set forth above.
COMPANY:
NxSTAGE MEDICAL, INC.
000 XXXXX XXXXX XXXXXX, 0XX XXXXX
XXXXXXXX, XX 00000
By:/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
INVESTORS:
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxxx
/s/ Xxxx Xxxxx
----------------------------------------
Xxxx Xxxxx
-4-
MARUBENI CORPORATION
By:/s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: General Manager,
Business Incubation Dept.
MARUBENI AMERICA CORPORATION
By:/s/ Xxxxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: General Manager,
Investment Business Unit
-5-
BVCF IV, L.P.
By: Xxxxx Street Partners, LLC,
its General Partner
By:/s/ Xxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx
Partner
-6-
WPG ENTERPRISE FUND III, L.L.C.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By:/s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: CFO & Administrative
Partner
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV, L.L.C.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By:/s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: CFO & Administrative
Partner
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV CAYMAN, L.P.
By: WPG VC Fund Adviser, L.L.C.,
General Partner
By:/s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: CFO & Administrative
Partner
-7-
ATLAS VENTURE FUND V, L.P.
ATLAS VENTURE PARALLEL FUND V-A, C.V.
ATLAS VENTURE PARALLEL FUND V-B, C.V.
ATLAS VENTURE ENTREPRENEURS' FUND V, L.P.
By: Atlas Venture Associates V, L.P.
their General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By:/s/ [illegible]
-------------------------------------
Name:
Title: Vice President
ATLAS VENTURE FUND III, L.P.
ATLAS VENTURE ENTREPRENEURS'
FUND III, L.P.
By: Atlas Venture Associates III, L.P.
their General Partner
By: Atlas Venture Associates III, Inc.
Its General Partner
By:/s/ [illegible]
-------------------------------------
Name:
Title: Vice President
-8-
SPROUT CAPITAL VIII, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
DLJ CAPITAL CORP.
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
DLJ CAPITAL CORP.
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
DLJ ESC II, L.P.
By: DLJ LBO Plans Management
Corporation
Its General Partner
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Attorney In Fact
-9-
SPROUT ENTREPRENEURS FUND, L.P.
By: DLJ Capital Corp.
Its General Partner
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
SPROUT CAPITAL IX, L.P.
By: DLJ Capital Corp.
Its Managing General Partner
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
SPROUT IX PLAN INVESTORS, L.P.
By: DLJ LBO Plans Management
Corporation
Its General Partner
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Attorney In Fact
SPROUT PLAN INVESTORS, L.P.
By: DLJ LBO Plans Management
Corporation
Its General Partner
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Attorney In Fact
-10-
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corporation
Its General Partner
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
SPROUT CAPITAL VII, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxxxxx Xxxxxxx
Its: Managing Director
-11-
WASATCH FUNDS, INC. FOR WASATCH ULTRA
GROWTH FUND
By:/s/ Venice X. Xxxxxxx
-------------------------------------
Name: Venice X. Xxxxxxx
Title: Secretary
-12-
CSFB FUND CO-INVESTMENT PROGRAM, L.P.
By: DLJ Fund Partners, L.P.
Its General Partner
By: DLJMB Fund, Inc.
Its General Partner
By:/s/ Xxxxxx Xxxxx
-------------------------------------
By: Xxxxxx Xxxxx
Its: Vice President
-13-
EXHIBIT A
LIST OF INVESTORS
NO. OF SHARES NO. OF SHARES NO. OF SHARES NO. OF SHARES NO. OF SHARES
OF OF OF OF OF
SERIES B SERIES C SERIES D SERIES E SERIES F
PREFERRED PREFERRED PREFERRED PREFERRED PREFERRED
NAME AND ADDRESS STOCK STOCK STOCK STOCK STOCK
--------------------------------- ------------- ------------- ------------- ------------- -------------
Xxxxxxx X. Xxxxxxx 74,906 -0- -0- -0- -0-
c/o NxSTAGE MEDICAL, INC.
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
BVCF IV, L.P. -0- -0- 753,769 157,345 68,681
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Sprout Capital VIII, L.P. 981,202 628,353 -0- 354,895 447,582
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Venture Capital, L.P. 58,872 37,732 -0- 21,300 26,863
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ Capital Corp. 3,273 2,096 18,910 36,094 6,489
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ ESC II, L.P. 85,383 54,646 -0- 30,756 -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Entrepreneurs Fund, L.P. -0- -0- 6,148 1,288 1,624
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Capital IX, L.P. -0- -0- 1,559,935 326,824 412,180
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
The Sprout CEO Fund, L.P. -0- -0- -0- 2,273 -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
-00-
Xxxxxx Xxxxxxx XXX, X.X. -0- -0- -0- 195,256 -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout IX Plan Investors -0- -0- 90,049 18,866 23,793
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Plan Investors, L.P. -0- -0- -0- -0- 38,788
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
WPG Enterprise Fund III, L.L.C. 132,054 84,344 65,895 10,983 9,006
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx, Xxxx & Xxxxx Venture 151,057 96,481 75,377 12,563 10,302
Associates IV, L.L.C
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxx, Xxxx & Xxxxx Venture 19,003 12,137 9,482 1,580 1,296
Associates IV Cayman, L.P.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxxxx 201,410 128,642 753,769 753,769 343,195
c/o Medisystems Corporation
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Atlas Venture Fund III, L.P. 164,268 104,920 72,536 192,783 118,490
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Atlas Venture Entrepreneurs' 3,572 2,281 1,577 4,192 2,576
Fund III, L.P.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Atlas Venture Fund V, L.P. -0- -0- 1,133,073 424,146 260,692
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Atlas Venture Xxxxxxxx Xxxx X-X, -0- -0- 000,000 52,686 32,382
C.V.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
-15-
Atlas Venture Xxxxxxxx Xxxx X-X, -0- -0- 000,000 52,686 32,382
C.V.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Atlas Venture Entrepreneurs' -0- -0- 18,860 7,060 4,339
Fund V L.P.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Marubeni Corporation -0- -0- -0- -0- 000,000
0-0, Xxxxxxxxx 0-xxxxx
Xxxxxxx-xx
Xxxxx, Xxxxx
Marubeni America Corporation -0- -0- -0- -0- 41,208
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wasatch Funds, Inc. for Wasatch -0- -0- -0- -0- 206,044
Ultra Growth Fund
c/o Wasatch Ultra Growth Fund
000 Xxxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
CSFB Fund Co-Investment -0- -0- -0- -0- 274,725
Program, L.P.
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxx Xxxxx -0- -0- 16,750 12,563 13,736
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
TOTAL 1,875,000 1,151,632 4,857,622 2,669,908 2,747,253
-16-
NxSTAGE MEDICAL, INC.
FIFTH AMENDMENT TO THE
INVESTOR RIGHTS AGREEMENT
THIS FIFTH AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT (this "Fifth
Amendment") is entered into as of the 23rd day of December 2004, by and among
NxSTAGE MEDICAL, INC., a Delaware corporation (the "Company"), and certain of
the purchasers of the Company's Series B Preferred Stock, par value $0.001 per
share (the "Series B Preferred Stock"), Series C Preferred Stock, par value
$0.001 per share (the "Series C Preferred Stock"), Series D Preferred Stock, par
value $0.001 per share (the "Series D Preferred Stock"), Series E Preferred
Stock, par value $0.001 per share (the "Series E Preferred Stock"), and Series F
Preferred Stock, par value $0.001 per share (the "Series F Preferred Stock";
such purchasers of the Company's preferred stock are collectively referred to
herein as the "Preferred Stock Investors"), and holders of the Lighthouse
Warrants (as hereinafter defined), all as set forth on the signature pages
hereto.
RECITALS
WHEREAS, certain of the Preferred Stock Investors purchased, in the
aggregate, 1,875,000 shares of Series B Preferred Stock pursuant to the Series B
Preferred Stock Purchase Agreement dated as of June 30, 1999 (the "Series B
Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series B Preferred
Stock, the Company and certain of the Preferred Stock Investors entered into an
Investor Rights Agreement dated as of June 30, 1999 (the "Investor Rights
Agreement");
WHEREAS, certain of the Preferred Stock Investors purchased, in the
aggregate, 1,151,632 shares of Series C Preferred Stock pursuant to the Series C
Preferred Stock Purchase Agreement dated as of January 24, 2001 ("the Series C
Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series C Preferred
Stock, the Company and certain of the Preferred Stock Investors entered into a
First Amendment to the Investor Rights Agreement dated as of January 24, 2000
(the "First Amendment");
WHEREAS, certain of the Preferred Stock Investors purchased, in the
aggregate, 4,857,622 shares of Series D Preferred Stock pursuant to the Series D
Preferred Stock Purchase Agreement dated as of May 24, 2001 (the "Series D
Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series D Preferred
Stock, the Company and certain Preferred Stock Investors entered into a Second
Amendment to the Investor Rights Agreement dated as of May 24, 2001 (the "Second
Amendment");
WHEREAS, certain of the Preferred Stock Investors purchased, in the
aggregate, 2,669,908 shares of Series E Preferred Stock pursuant to the Series E
Preferred Stock Purchase Agreement dated as of April 15, 2003 (the "Series E
Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series E Preferred
Stock, the Company and certain Preferred Stock Investors entered into a Third
Amendment to the Investor Rights Agreement dated as of April 15, 2003 (the
"Third Amendment");
WHEREAS, certain of the Preferred Stock Investors purchased, in the
aggregate, 2,747,253 shares of Series F Preferred Stock pursuant to the Series F
Preferred Stock Purchase Agreement dated as of August 18, 2004 (the "Series F
Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series F Preferred
Stock, the Company and certain Investors entered into a Fourth Amendment to the
Investor Rights Agreement dated as of August 18, 2004 (the "Fourth Amendment");
and
WHEREAS, the Company is seeking to enter into a Loan and Security
Agreement, dated as of the date hereof (the "Lighthouse Loan Agreement"), with
Lighthouse Capital Partners V and/or its affiliated entity, Lighthouse Capital
Partners IV (collectively, the "Lighthouse Entities"), and it is a condition to
the closing of the transactions contemplated by the Lighthouse Loan Agreement
that the Company grant to the Lighthouse Entities certain warrants (the
"Lighthouse Warrants") to purchase shares of Series F Preferred Stock, and
grant, with respect to the Series F Preferred Stock, certain registration rights
and other rights as set forth in the Investor Rights Agreement, as amended by
the First, Second, Third and Fourth Amendments;
WHEREAS, the Investors executing this Fifth Amendment are the holders
of at least 66 2/3 % of the Registrable Securities, as defined in the Investor
Rights Agreement, as amended.
NOW THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth herein and in
the Lighthouse Loan Agreement, the parties hereby agree as follows:
1. FOURTH AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT. In accordance
with Section 5.5 of the Investor Rights Agreement, as amended by the First,
Second, Third and Fourth Amendments, the Preferred Stock Investors and the
Company hereby agree to amend the Investor Rights Agreement as follows:
a. Section 1 of the Investor Rights Agreement is amended to add a
new definition of "Investors" to read in its entirety as follows:
"INVESTORS" shall mean (i) the Preferred Stock Investors and (ii) the holders of
the shares of Series F Preferred Stock or other shares of capital stock issued
upon exercise of the Lighthouse Warrants, but with respect to this subsection
(ii), only after such time that the Lighthouse Warrants have been exercised.
b. The definition of "Shares" set forth in Section 1 of the
Investor Rights Agreement is amended to read in its entirety as follows:
-2-
"SHARES" means the Company's Series B Preferred Stock issued pursuant to the
Series B Purchase Agreement, the Company's Series C Preferred Stock issued
pursuant to the Series C Purchase Agreement, the Company's Series D Preferred
Stock issued pursuant to the Series D Purchase Agreement, the Company's Series E
Preferred Stock issued pursuant to the Series E Purchase Agreement and the
Company's Series F Preferred Stock issued (i) pursuant to the Series F Purchase
Agreement, or (ii) upon exercise of the Lighthouse Warrants.
c. All references to "Investors" and "Shares" throughout the Investor
Rights Agreement shall be read to refer to the amended definitions of
"Investors" and "Shares" as set forth above.
d. Section 4.1 of the Agreement is amended to read in its entirety as
follows:
4.1 SUBSEQUENT OFFERINGS.
(a) Subject to Section 4.1(b) below, each Investor shall
have a right of first refusal to purchase its Adjusted Pro
Rata Share (as defined below) of all Equity Securities that
the Company may, from time to time, propose to sell and issue
after the date of this Agreement, other than the Equity
Securities excluded by Section 4.6 hereof. For purposes
hereof, pro rata share shall mean the quotient of the holder's
total number of issued and outstanding shares in the
Corporation (Preferred and Common) on a fully converted basis
(but excluding shares issuable upon exercise of the Lighthouse
Warrants), divided by the total number of issued and
outstanding shares in the Corporation (Preferred and Common)
on a fully converted basis (but excluding shares issuable upon
exercise of the Lighthouse Warrants). Each Investor's Adjusted
Pro Rata Share, shall be equal to its pro rata share,
multiplied by a fraction, the numerator of which is the actual
number of shares of Series F Preferred Stock held by such
Investor, and the denominator of which is the shares of Series
F Preferred Stock associated with the Investor's name in the
following table (in no event shall the resultant fraction
exceed 100%, and if the Investor is not listed below, the
Investor's Adjusted Pro Rata share shall equal zero):
Sprout Group 643,134
WPG 111,301
Xxxxx Xxxxxxxxx 230,562
-3-
Atlas Ventures 000,000
Xxxxx Xxxxxx 102,470
Xxxx Xxxxx 3,297
Marubeni 412,088
CSFB 274,725
Wasatch 206,044
(b) The Lighthouse Entities, and/or their registered
assigns, to the extent such Lighthouse Entities and/or their
registered assigns are holding the Lighthouse Warrants, shall
have a right of first refusal to purchase $500,000 of Equity
Securities issued by the Company in the Company's first equity
financing transaction after August 18, 2004 (the "Next Round
Financing"), provided that this right shall terminate and be
of no further force and effect (i) on the effective date of
the registration statement pertaining to an Initial Offering,
(ii) from and after the date that the Lighthouse Warrants
cease to be outstanding for any reason, or (iii) upon the
consummation of the first equity financing transaction after
August 18, 2004.
e. Section 4.2 of the Agreement is amended to read in its
entirety as follows:
4.2 EXERCISE OF RIGHTS: If the Company proposes to issue
any Equity Securities, it shall give each Investor written
notice of its intention, describing the Equity Securities, the
price and the terms and conditions upon which the Company
proposes to issue the same. Each Investor shall have fifteen
(15) days from the giving of such notice to agree to purchase
(i) his, her or its Adjusted Pro Rata share of the Equity
Securities for the price and upon the terms and conditions
specified in the notice, or (ii) in the case of the holders of
the Lighthouse Warrants and in the context of the Next Round
Financing, $500,000, collectively, of such Equity Securities,
by giving written notice to the Company and stating therein
the quantity of Equity Securities to be purchased.
Notwithstanding the foregoing, the Company shall not be
required to offer or sell such Equity 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.
f. Section 4.3 of the Agreement is amended to read in its
entirety as follows:
4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS: If
not all of the Investors elect to purchase their Adjusted Pro
Rata Share of such Equity Securities, or in the case of the
holders of the
-4-
Lighthouse Warrants and in the context of the Next Round
Financing, $500,000 of such Equity Securities, then the
Company shall promptly notify in writing the Investors who do
so elect and shall offer them the right to acquire their pro
rata shares of such unsubscribed shares. Such Investors shall
have five (5) days after receipt of such notice to notify the
Company of his, her or its election to purchase all or a
portion thereof of the unsubscribed shares. If the Investors
so notified fail to exercise in full the rights of first
refusal, the Company shall have ninety (90) days thereafter to
sell the Equity Securities in respect of which the Investors'
rights were not exercised, at a price and upon general terms
and conditions materially no more favorable to the purchasers
thereof than specified in the Company's notice to the
Investors pursuant to Section 4.2 hereof. If the Company has
not sold such Equity Securities within ninety (90) days of the
notice provided pursuant to Section 4.2, the Company shall not
thereafter issue or sell any Equity Securities, without first
offering such securities to the Investors in the manner
provided above.
g. Section 4.4 of the Agreement is amended to read in its
entirety as follows:
4.4 TERMINATION OF RIGHTS OF FIRST REFUSAL: The rights
of first refusal established in Section 4.l(a) shall terminate
upon the effective date of the registration statement
pertaining to a Qualified Public Offering. The rights of first
refusal established in Section 4.1(b) shall terminate as set
forth therein.
h. Section 4.6 of the Agreement is amended to add a new
Section (h) to read in its entirety as follows:
"(h) Any Equity Securities issued to the Lighthouse
Entities in connection the Lighthouse Loan Agreement,
including the Lighthouse Warrants and the shares of capital
stock of the Company issuable upon exercise of the Lighthouse
Warrants (the "Warrant Shares") and the shares of capital
stock issuable upon conversion of the "Warrant Shares"; and"
i. Section 4.6 of the Agreement is amended to rename Section
(h) as Section (i) as follows:
"(i) Equity Securities issued in connection with
strategic transactions involving the Company and other
entities, including (i) joint ventures, manufacturing,
marketing or distribution arrangements or (ii) technology
transfer or development arrangements; provided that such
strategic transactions and the issuance of shares therein, has
been approved by not less than
-5-
seventy-five percent (75%) the Company's Board of Directors,
with all Directors voting."
j. Exhibit A to the Investor Rights Agreement is amended and
restated as set forth on the Exhibit A attached hereto.
k. The remainder of the Investor Rights Agreement not amended
hereby remains unchanged and in full force and effect.
2. MISCELLANEOUS
2.1 GOVERNING LAW. This Fifth Amendment is governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents entered into and to be performed entirely within Delaware.
2.2 SEVERABILITY. In case any provision of this Fifth Amendment is
determined to be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
2.3 TITLES AND SUBTITLES. The titles of the sections of this Fifth
Amendment are for convenience of reference only and are not to be considered in
construing this Agreement.
2.4 COUNTERPARTS. This Fifth Amendment may be executed in any number
of counterparts, each of which is an original, and all of which together
constitutes one instrument.
*THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK*
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Fifth
Amendment to the Investor Rights Agreement as of the date first set forth above.
COMPANY:
NxSTAGE MEDICAL, INC.
000 XXXXX XXXXX XXXXXX, 0XX XXXXX
XXXXXXXX, XX 00000
By:/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
INVESTORS:
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxxx
/s/ Xxxx Xxxxx
----------------------------------------
Xxxx Xxxxx
-7-
MARUBENI CORPORATION
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: General Manager
Business Incubation Dept.
MARUBENI AMERICA CORPORATION
By: /s/ Xxxxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: General Manager
Investment Business Unit
-8-
BVCF IV, L.P.
By: Xxxxx Street Partners, LLC
Its General Partner
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Partner
-9-
WPG ENTERPRISE FUND III, L.L.C.
By: WPG VC Fund Adviser, L.L.C.
Fund Investment Advisory Member
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: CFOT Administrative Partner
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV, L.L.C.
By: WPG VC Fund Adviser, L.L.C.
Fund Investment Advisory Member
By: /s/ [illegible]
------------------------------------
Name:
Title: Managing Member
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV CAYMAN, L.P.
By: WPG VC Fund Adviser, L.L.C.
General Partner
By: /s/ [illegible]
------------------------------------
Name:
Title: Managing Member
-10-
ATLAS VENTURE FUND V, L.P.
ATLAS VENTURE PARALLEL FUND V-A, C.V.
ATLAS VENTURE PARALLEL FUND V-B, C.V.
ATLAS VENTURE ENTREPRENEURS' FUND V, L.P.
By: Atlas Venture Associates V, L.P.
their General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By: /s/ [illegible]
------------------------------------
Name:
Title: V.P.
ATLAS VENTURE FUND III, L.P.
ATLAS VENTURE ENTREPRENEURS' FUND
III, L.P.
By: Atlas Venture Associates III, L.P.
their General Partner
By: Atlas Venture Associates III, Inc.
Its General Partner
By: /s/ [illegible]
------------------------------------
Name:
Title: V.P.
-00-
XXXXXX XXXXXXX XXXX, X.X.
By: DLJ Capital Corporation
Its Managing General Partner
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Vice President
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Vice President
DLJ CAPITAL CORP.
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Vice President
DLJ CAPITAL CORP.
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Vice President
DLJ ESC II, L.P.
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Vice President
-12-
SPROUT ENTREPRENEURS FUND, L.P.
By: DLJ Capital Corporation
Its General Partner
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Vice President
SPROUT CAPITAL IX, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Vice President
SPROUT IX PLAN INVESTORS, L.P.
By: DLJ LBO Plans Management
Corporation II
Its General Partner
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Attorney in Fact
SPROUT PLAN INVESTORS, L.P.
By: DLJ LBO Plans Management
Corporation II
Its General Partner
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Attorney in Fact
-13-
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corporation
Its General Partner
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Vice President
SPROUT CAPITAL VII, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By: /s/ Xxxxx Slutzken
------------------------------------
By: Xxxxx Slutzken
Its: Vice President
-14-
WASATCH FUNDS, INC. FOR WASATCH
ULTRA GROWTH FUND
By: /s/ Venice Xxxxxxx
------------------------------------
By: Venice X. Xxxxxxx
Title: Vice President/Treasurer
-15-
CSFB FUND CO-INVESTMENT PROGRAM, L.P.
By: DLJ Fund Partners, L.P.
Its General Partner
By: DLJMB Fund, Inc.
Its General Partner
By: /s/ [illegible]
------------------------------------
By:
Its: Vice President
-16-
EXHIBIT A
LIST OF INVESTORS
No. OF No. OF No. OF No. OF No. OF
SHARES OF SHARES OF SHARES OF SHARES OF SHARES OF
SERIES B SERIES C SERIES D SERIES E SERIES F
PREFERRED PREFERRED PREFERRED PREFERRED PREFERRED
NAME AND ADDRESS STOCK STOCK STOCK STOCK STOCK
Xxxxxxx X. Xxxxxxx 74,906 -0- -0- -0- -0-
c/o NxSTAGE MEDICAL, INC.
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
BVCF IV, L.P. -0- -0- 753,769 157,345 68,681
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Sprout Capital VIII, L.P. 981,202 628,353 -0- 354,895 447,582
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Venture Capital, L.P. 58,872 37,732 -0- 21,300 26,863
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ Capital Corp. 3,273 2,096 18,910 36,094 6,489
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ ESC II, L.P. 85,383 54,646 -0- 30,756 -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Entrepreneurs Fund, L.P. -0- -0- 6,148 1,288 1,624
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Capital IX, L.P. -0- -0- 1,559,935 326,824 412,180
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
The Sprout CEO Fund, L.P. -0- -0- -0- 2,273 -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
-17-
No. OF No. OF No. OF No. OF No. OF
SHARES OF SHARES OF SHARES OF SHARES OF SHARES OF
SERIES B SERIES C SERIES D SERIES E SERIES F
PREFERRED PREFERRED PREFERRED PREFERRED PREFERRED
NAME AND ADDRESS STOCK STOCK STOCK STOCK STOCK
Sprout Capital VII, L.P. -0- -0- -0- 195,256 -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout IX Plan Investors -0- -0- 90,049 18,866 23,793
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Plan Investors, L.P. -0- -0- -0- -0- 38,788
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
WPG Enterprise Fund III, L.L.C. 132,054 84,344 65,895 10,983 9,006
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxx, Xxxx & Xxxxx Venture 151,057 96,481 75,377 12,563 10,302
Associates IV, L.L.C.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxx, Xxxx & Xxxxx Venture 19,003 12,137 9,482 1,580 1,296
Associates IV Cayman, L.P.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxxxx 201,410 128,642 753,769 753,769 343,195
c/o Medisystems Corporation
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Atlas Venture Fund III, L.P. 164,268 104,920 72,536 192,783 118,490
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Atlas Venture Entrepreneurs' 3,572 2,281 1,577 4,192 2,576
Fund III, L.P.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
-18-
No. OF No. OF No. OF No. OF No. OF
SHARES OF SHARES OF SHARES OF SHARES OF SHARES OF
SERIES B SERIES C SERIES D SERIES E SERIES F
PREFERRED PREFERRED PREFERRED PREFERRED PREFERRED
NAME AND ADDRESS STOCK STOCK STOCK STOCK STOCK
Atlas Venture Fund V, L.P. -0- -0- 1,133,073 424,146 260,692
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Atlas Venture Parallel Fund V-A, C.V. -0- -0- 140,746 52,686 32,382
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Atlas Venture Parallel Fund V-B, C.V. -0- -0- 140,746 52,686 32,382
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Atlas Venture Entrepreneurs' Fund V L.P. -0- -0- 18,860 7,060 4,339
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Marubeni Corporation -0- -0- -0- -0- 000,000
0-0, Xxxxxxxxx 0-xxxxx
Xxxxxxx-xx
Xxxxx, Xxxxx
Marubeni America Corporation -0- -0- -0- -0- 41,208
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wasatch Funds, Inc. for Wasatch -0- -0- -0- -0- 206,044
Ultra Growth Fund
c/o Wasatch Ultra Growth Fund
000 Xxxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
CSFB Fund Co-Investment Program, L.P. -0- -0- -0- -0- 274,725
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxx Xxxxx -0- -0- 16,750 12,563 13,736
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
-19-
Lighthouse Capital Partners IV* [ ]*
Lighthouse Capital Partners V* [ ]*
TOTAL 1,875,000 1,151,632 4,857,622 2,669,908 2,747,253
--------------
*At such time that the Lighthouse Entities or their registered assigns exercise
the Lighthouse Warrants.
-20-
NxSTAGE MEDICAL, INC.
SIXTH AMENDMENT TO THE
INVESTOR RIGHTS AGREEMENT
THIS SIXTH AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT (this "Sixth
Amendment") is entered into as of the 8th day of July, 2005, by and among
NxSTAGE MEDICAL, INC., a Delaware corporation (the "Company"), and certain of
the purchasers of the Company's Series B Preferred Stock, par value $0.001 per
share (the "Series B Preferred Stock"), Series C Preferred Stock, par value
$0.001 per share (the "Series C Preferred Stock"), Series D Preferred Stock, par
value $0.001 per share (the "Series D Preferred Stock"), Series E Preferred
Stock, par value $0.001 per share (the "Series E Preferred Stock"), and Series F
Preferred Stock, par value $0.001 per share (the "Series F Preferred Stock"),
and all of the purchasers of the Company's Series F-1 Preferred Stock, par value
$0.001 per share (the "Series F-1 Preferred Stock; such purchasers of the
Company's preferred stock are collectively referred to herein as the "Preferred
Stock Investors"), and holders of the Lighthouse Warrants (as hereinafter
defined), all as set forth on the signature pages hereto.
RECITALS
WHEREAS, certain of the Preferred Stock Investors purchased, in the
aggregate, 1,875,000 shares of Series B Preferred Stock pursuant to the Series B
Preferred Stock Purchase Agreement dated as of June 30, 1999 (the "Series B
Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series B Preferred
Stock, the Company and certain of the Preferred Stock Investors entered into an
Investor Rights Agreement dated as of June 30, 1999 (the "Investor Rights
Agreement");
WHEREAS, certain of the Preferred Stock Investors purchased, in the
aggregate, 1,151,632 shares of Series C Preferred Stock pursuant to the Series C
Preferred Stock Purchase Agreement dated as of January 24, 2000 ("the Series C
Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series C Preferred
Stock, the Company and certain of the Preferred Stock Investors entered into a
First Amendment to the Investor Rights Agreement dated as of January 24, 2000
(the "First Amendment");
WHEREAS, certain of the Preferred Stock Investors purchased, in the
aggregate, 4,857,622 shares of Series D Preferred Stock pursuant to the Series D
Preferred Stock Purchase Agreement dated as of May 24, 2001 (the "Series D
Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series D Preferred
Stock, the Company and certain of the Preferred Stock Investors entered into a
Second Amendment to the Investor Rights Agreement dated as of May 24, 2001 (the
"Second Amendment");
WHEREAS, certain of the Preferred Stock Investors purchased, in the
aggregate, 2,669,908 shares of Series E Preferred Stock pursuant to the Series E
Preferred Stock Purchase Agreement dated as of April 15, 2003 (the "Series E
Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series E Preferred
Stock, the Company and certain Preferred Stock Investors entered into a Third
Amendment to the Investor Rights Agreement dated as of April 15, 2003 (the
"Third Amendment");
WHEREAS, certain of the Preferred Stock Investors purchased, in the
aggregate, 2,747,253 shares of Series F Preferred Stock pursuant to the Series F
Preferred Stock Purchase Agreement dated as of August 18, 2004 (the "Series F
Purchase Agreement");
WHEREAS, in connection with the acquisition of the Series F Preferred
Stock, the Company and certain of the Preferred Stock Investors entered into a
Fourth Amendment to the Investor Rights Agreement dated as of August 18, 2004
(the "Fourth Amendment");
WHEREAS, the Company issued warrants (the "Lighthouse Warrants") to
purchase shares of the Series F Preferred Stock to Lighthouse Capital Partners V
and/or its affiliated entity, Lighthouse Capital Partners IV (collectively, the
"Lighthouse Entities"), pursuant to the Loan and Security Agreement between the
Company and the Lighthouse Entities dated December 23, 2004;
WHEREAS, in connection with the issuance of the Lighthouse Warrants, the
Company, the Preferred Stock Investors and the Lighthouse Entities entered into
a Fifth Amendment to the Investor Rights Agreement (the "Fifth Amendment"); and
WHEREAS, the Company and certain of the Preferred Stock Investors (the
"Series F-1 Investors") have entered into a Series F-1 Preferred Stock Purchase
Agreement of even date herewith (the "Series F-1 Purchase Agreement"), pursuant
to which the Series F-1 Investors will purchase the number of shares of Series
F-1 Preferred Stock set forth opposite his or its name on Exhibit A totaling up
to an aggregate of 2,197,801 shares of Series F-1 Preferred Stock; and
WHEREAS, it is a condition to the closing of the sale of the Series F-1
Preferred Stock, pursuant to the Series F-1 Purchase Agreement, that the Company
grant to the Preferred Stock Investors, with respect to the Series F-1 Preferred
Stock, those registration rights, information rights and other rights as set
forth in the Investor Rights Agreement, as amended to date;
WHEREAS, the Preferred Stock Investors executing this Sixth Amendment are
the holders of at least 2/3% of the Registrable Securities, as defined in the
Investor Rights Agreement as amended to date.
NOW THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth herein and in the F-1 Purchase
Agreement, the parties hereby agree as follows:
1. SIXTH AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT. In accordance with Section
5.5 of the Investor Rights Agreement, as amended by the First, Second, Third,
-2-
Fourth and Fifth Amendments, the Investors, as defined in the Investor Rights
Agreement, and the Company hereby agree to amend the Investor Rights Agreement
as follows:
a. The definition of "Shares" set forth in Section 1 of the Investor
Rights Agreement is amended to read in its entirety as follows:
"SHARES" means the Company's Series B Preferred Stock issued
pursuant to the Series B Purchase Agreement, the Company's Series C Preferred
Stock issued pursuant to the Series C Purchase Agreement, the Company's Series D
Preferred Stock issued pursuant to the Series D Purchase Agreement, the
Company's Series E Preferred Stock issued pursuant to the Series E Purchase
Agreement and the Company's Series F Preferred Stock issued (i) pursuant to the
Series F Purchase Agreement, or (ii) upon exercise of the Lighthouse Warrants,
and the Series F-1 Preferred Stock issued pursuant to the Series F-1 Purchase
Agreement.
b. All references to "Shares" throughout the Investor Rights Agreement
shall be read to refer to the amended definitions of "Shares" as set forth
above.
c. Section 2.1(a)(iii) of the Investor Rights Agreement is amended to read
in its entirety as follows:
iii. Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by a Holder which is (A) a partnership to its partners or former
partners in accordance with the partnership interests, (B) a corporation to its
shareholders in accordance with their interests in the corporation, (C) a
limited liability company to its members or former members in accordance with
their interests in the limited liability company, (D) a partnership, corporation
or limited liability company to an affiliate of such entity, or (E) an
individual to the Holder's family member or trust, partnership, limited
liability company or similar entity created solely for the benefit of an
individual Holder and/or such Holder's family members (or from any such trust,
partnership, limited liability company or similar entity to the Holder or its
family member), provided the transferee will be subject to the terms of this
Section 2.1 to the same extent as if such transferee were an original Holder
hereunder. For purposes of this Agreement an affiliate of an Investor shall mean
any person or entity which, directly or indirectly, controls, is controlled by
or is under common control with such Investor, including, without limitation,
any general partner, manager, managing member, officer or director of such
Investor and any investment fund now or hereafter existing which is controlled
by one or more general partners of, or shares the same management as, such
Investor.
d. Section 2.10 of the Investor Rights Agreement is amended to read in its
entirety as follows:
ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 may be assigned by
a Holder to a transferee or assignee of Registrable Securities which (i) is a
subsidiary, parent, general partner, limited partner, retired partner, member or
stockholder of a Holder, (ii) is a Holder's family member or trust, partnership,
limited liability company or similar entity created solely for the benefit of an
individual Holder and/or such Holder's family members, or (iii) acquires at
least one hundred
-3-
thousand (100,000) shares of Registrable Securities (as presently constituted
and as adjusted for stock splits, reverse stock splits, stock dividends,
recapitalizations, combinations and the like); provided, however, (A) the
transferor shall, within ten (10) days after such transfer, furnish to the
Company written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being
assigned and (B) such transferee shall agree to be subject to all restrictions
set forth in this Agreement.
e. Section 2.13 of the Investor Rights Agreement is amended to read in its
entirety as follows:
"MARKET STAND-OFF" AGREEMENT. If requested by the Company as the
representative of the underwriters of the Initial Offering, each Holder shall
not sell or otherwise dispose of any Shares of Common Stock (or other
securities) of the Company held by each such Holder (other than those included
in the registration) for a period specified by the representatives of the
underwriters not to exceed one hundred eighty (180) days following the effective
date of the registration statement for the Initial Offering, provided that all
officers and directors of the Company and holders of at least one percent (1%)
of the Company's voting securities enter into similar agreements.
The obligations described in this Section 2.13 shall not apply to a
registration relating solely to employee benefit plans on Form S-3 or Form S-8
or similar forms that may be promulgated in the future relating solely to a
Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. In addition, the obligations described in this
Section 2.13 shall not apply to shares of Common Stock (or other securities) of
the Company purchased by Wasatch Funds, Inc. ("Wasatch") or its affiliates in
connection with or following the Company's Initial Offering. Notwithstanding
anything to the contrary contained herein, the preceding sentence shall not be
amended or waived without the written consent of Wasatch. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period.
f. Section 4.1 of the Investor Rights Agreement is amended to read in its
entirety as follows:
SUBSEQUENT OFFERINGS. Each Investor shall have a right of
first refusal to purchase its Adjusted Pro Rata Share (as defined below) of all
Equity Securities that the Company may, from time to time, propose to sell and
issue after the date hereof, other than the Equity Securities excluded by
Section 4.6 hereof. For purposes hereof, pro rata share shall mean the quotient
of the holder's total number of issued and outstanding shares in the Company
(Preferred and Common) on a fully converted basis (but excluding shares issuable
upon exercise of the Lighthouse Warrants), divided by the total number of issued
and outstanding shares in the Company (Preferred and Common) on a fully
converted basis (but excluding shares issuable upon exercise of the Lighthouse
Warrants). Each Investor's Adjusted Pro Rata Share shall be equal to its pro
rata share, multiplied by a fraction, the numerator of which is the actual
number of shares of Series F-1 Preferred Stock held by such Investor, and the
denominator of which is the shares of Series F-1 Preferred Stock associated with
the Investor's name in the following table (in no event shall the resultant
fraction exceed 100%, and if the Investor is not listed below,
-4-
the denominator used in calculating Adjusted Pro Rata Share for that Investor
shall equal the number of shares of Series F-1 Preferred Stock held by such
Investor).
Sprout Group 301,563
WPG 45,636
Xxxxx Xxxxxxxxx 108,109
Atlas Ventures 000,000
Xxxxx Xxxxxx 44,260
CSFB 12,410
Wasatch 9,308
Marubeni 21,556
Xxxx Xxxxx 1,945
Caxton 1,373,626
g. For purposes of the Investor Rights Agreement, the term "Investor"
shall include (i) a transferee permitted by Section 2.10 of the Investor Rights
Agreement and (ii) purchasers of the Company's Series F-1 Preferred Stock who,
after the date hereof, agree to become a party to and be bound by the Investor
Rights Agreement by executing and delivering to the Company a counterpart
signature page thereto in such form as the Company may designate, and it is
agreed that the Company may admit such persons as Investors party to the
Investor Rights Agreement, as amended.
h. Exhibit A to the Investor Rights Agreement is amended and restated in
its entirety as set forth on Exhibit A attached hereto.
i. The remainder of the Investor Rights Agreement as not amended hereby,
remains unchanged and in full force and effect.
2. MISCELLANEOUS
2.1 GOVERNING LAW. This Sixth Amendment is governed by and construed under
the laws of the State of Delaware as applied to agreements among Delaware
residents entered into and to be performed entirely within Delaware.
2.2 SEVERABILITY. In case any provision of this Sixth Amendment is
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
2.3 TITLES AND SUBTITLES. The titles of the sections of this Sixth
Amendment are for convenience of reference only and are not to be considered in
construing this Agreement.
2.4 COUNTERPARTS. This Sixth Amendment may be executed in any number of
counterparts, each of which is an original, and all of which together
constitutes one instrument.
THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
-5-
IN WITNESS WHEREOF, the parties hereto have executed this Sixth Amendment
to the Investor Rights Agreement as of the date first set forth above.
COMPANY:
NxSTAGE MEDICAL, INC.
000 XXXXX XXXXX XXXXXX, 0XX XXXXX
XXXXXXXX, XX 00000
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name:
Title:
INVESTORS:
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxxx
/s/ Xxxx Xxxxx
-------------------------------------
Xxxx Xxxxx
-6-
HEALTHCARE INVESTMENT PARTNERS
HOLDINGS LLC
By: /s/ Xxxxx Xxxx
---------------------------------
Name: Xxxxx Xxxx
Title: Manager
[SIGNATURE PAGE TO SIXTH AMENDMENT TO INVESTOR RIGHTS AGREEMENT]
-7-
CSFB FUND CO-INVESTMENT PROGRAM, L.P.
By: DLJ Fund Partners L.P.
Its General Partner
By: DLJMB Fund, Inc.
Its General Partner
By: /s/ [illegible]
-------------------------------
Name:
Title:
[SIGNATURE PAGE TO SIXTH AMENDMENT TO INVESTOR RIGHTS AGREEMENT]
-8-
SPROUT CAPITAL VIII, L.P.
By: DLJ Capital Corporation
Its Managing Partner
By:/s/ Xxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Managing Director
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corporation
Its General Partner
By:/s/ Xxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Managing Director
DLJ CAPITAL CORP.
By:/s/ Xxxxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Managing Director
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation
Its General Partner
By:/s/ Xxxxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Attorney in Fact
[SIGNATURE PAGE TO SIXTH AMENDMENT TO INVESTOR RIGHTS AGREEMENT]
-9-
SPROUT ENTREPRENEURS FUND, L.P.
By: DLJ Capital Corp.
Its General Partner
By:/s/ Xxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Managing Director
SPROUT CAPITAL IX, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By:/s/ Xxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Managing Director
SPROUT IX PLAN INVESTORS, L.P.
By: DLJ LBO Plans Management Corporation II
Its General Partner
By:/s/ Xxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Attorney in Fact
SPROUT PLAN INVESTORS L.P.
By: DLJ LBO Plans Management Corporation
Its General Partner
By:/s/ Xxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Attorney in Fact
[SIGNATURE PAGE TO SIXTH AMENDMENT TO INVESTOR RIGHTS AGREEMENT]
-10-
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corporation
Its General Partner
By:/s/ Xxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Managing Director
SPROUT CAPITAL VII, L.P.
By: DLJ Capital Corporation
Its Managing General Partner
By:/s/ Xxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Managing Director
[SIGNATURE PAGE TO SIXTH AMENDMENT TO INVESTOR RIGHTS AGREEMENT]
-11-
ATLAS VENTURE FUND V, L.P.
ATLAS VENTURE PARALLEL FUND V-A, C.V.
ATLAS VENTURE PARALLEL FUND V-B, C.V.
ATLAS VENTURE ENTREPRENEURS' FUND V, L.P.
By: Atlas Venture Associates V, L.P.
Their General Partner
By: Atlas Venture Associates V, Inc.
Its General Partner
By:/s/ [illegible]
---------------------------------------
Name:
Title: V.P.
ATLAS VENTURE FUND III, L.P.
ATLAS VENTURE ENTREPRENEURS' FUND III, L.P.
By: Atlas Venture Associates III, L.P.
their General Partner
By: Atlas Venture Associates III, L.P.
Its General Partner
By:/s/ [illegible]
---------------------------------------
Name:
Title: V.P.
[SIGNATURE PAGE TO SIXTH AMENDMENT TO INVESTOR RIGHTS AGREEMENT]
-12-
MARUBENI CORPORATION
By: /s/ Xxxxxxxxx Xxxx
---------------------------------------
Name: Xxxxxxxxx Xxxx
Title: General Manager
Business Incubation Dept.
MARUBENI AMERICA CORPORATION
By:_______________________________________
Name:
Title:
[SIGNATURE PAGE TO SIXTH AMENDMENT TO INVESTOR RIGHTS AGREEMENT]
-13-
BVCF IV, L.P.
By: Xxxxx Street Partners, LLC
Its General Partner
By:/s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Partner
[SIGNATURE PAGE TO SIXTH AMENDMENT TO INVESTOR RIGHTS AGREEMENT]
-14-
WASATCH FUNDS, INC.
FOR WASATCH SMALL CAP GROWTH FUND
By:/s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Its: Secretary
WASATCH FUNDS, INC.
FOR WASATCH ULTRA GROWTH FUND
By:/s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary
[SIGNATURE PAGE TO SIXTH AMENDMENT TO INVESTOR RIGHTS AGREEMENT]
-15-
EXHIBIT A
LIST OF KEY STOCKHOLDERS
OPTION FOR THE
NUMBER OF SHARES PURCHASE OF TOTAL COMMON
NAME AND ADDRESS OF COMMON STOCK COMMON STOCK STOCK EQUIVALENT
------------------------------------- ---------------- --------------- ----------------
Dr. C. Xxxxx Xxxxx 243,307 -0- 243,307
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (Fax)
Xx. Xxxxxxx X. Xxxxxx 216,969 27,491 244,460
0000 X. Xxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxx, XX 00000-0000
(000) 000-0000
(000) 000-0000 (Fax)
Xxxxxxx X. Xxxxxxx 598,409 330,347 928,756
00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
A.D. & S.R. Burbank Trust 37,641 -0- 37,641
c/o Xxxxxxx X. Xxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
X.X. Backcock 2,030 -0- 2,030
00000-X Xxxx Xxxx
Xxxx Xxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (Fax)
-16-
EXHIBIT A
LIST OF INVESTORS
NUMBER OF NUMBER OF NUMBER OF NUMBER OF NUMBER OF NUMBER OF
SHARES OF SHARES OF SHARES OF SHARES OF SHARES OF SHARES OF
SERIES B SERIES C SERIES D SERIES E SERIES F SERIES F-1
PREFERRED PREFERRED PREFERRED PREFERRED PREFERRED PREFERRED
NAME AND ADDRESS STOCK STOCK STOCK STOCK STOCK STOCK
--------------------------------------- --------- --------- --------- --------- --------- ----------
Xxxxxxx X. Xxxxxxx 74,906 -0- -0- -0- -0- -0-
00 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
BVCF IV, L.P. -0- -0- 753,769 157,345 68,681 21,857
x/x Xxxxx Xxxxxx Partners, LLC
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
WPG Enterprise Fund III, L.L.C. 132,054 84,344 65,895 10,983 9,006 2,866
Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Xxxxx, Xxxx & Xxxxx Venture 151,057 96,481 75,377 12,563 10,302 3,279
Associates IV, L.L.C.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Xxxxx, Xxxx & Xxxxx Venture 19,003 12,137 9,482 1,580 1,296 412
Associates IV
Cayman, L.P.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Xxxxx X. Xxxxxxxxx 201,410 128,642 753,769 753,769 343,195 109,220
c/o Medisystems Corporation
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
copy to: Xxxx Xxxxxxx, Esq.
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
-17-
Atlas Venture Fund III, L.P. 164,268 104,920 72,536 192,783 118,490 37,709
000 Xxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Atlas Venture Entrepreneurs' Fund 3,572 2,281 1,577 4,192 2,576 820
III, L.P.
000 Xxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Atlas Venture Fund V, L.P. -0- -0- 1,133,073 424,146 260,692 82,964
000 Xxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Atlas Venture Parallel Fund V-A C.V. -0- -0- 140,746 52,686 32,382 10,305
000 Xxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Atlas Venture Parallel Fund V-B C.V. -0- -0- 140,746 52,686 32,382 10,305
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Atlas Venture Entrepreneurs' -0- -0- 18,860 7,060 4,339 1,381
Fund V, L.P.
000 Xxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Sprout Capital VIII, L.P. 981,202 628,353 -0- 354,895 447,582 142,440
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Venture Capital, L.P. 58,872 37,732 -0- 21,300 26,863 8,549
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
DLJ Capital Corp. 3,273 2,096 18,910 36,094 6,489 2,065
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
-18-
DLJ ESC II, L.P. 85,383 54,646 -0- 30,756 -0- -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Capital VII, L.P. -0- -0- -0- 195,256 -0- -0-
0000 Xxxx Xxxx xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Entrepreneurs Fund, L.P. -0- -0- 6,148 1,288 1,624 517
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
The Sprout CEO Fund, L.P. -0- -0- -0- 2,273 -0- -0-
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Capital IX, L.P. -0- -0- 1,559,935 326,824 412,180 131,174
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout IX Plan Investors, L.P. -0- -0- 90,049 18,866 23,793 7,572
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Sprout Plan Investors, L.P. -0- -0- -0- -0- 38,788 12,344
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Xxxx Xxxxx -0- -0- 16,750 12,563 13,736 4,371
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Marubeni Corporation -0- -0- -0- -0- 370,880 -0-
0-0, Xxxxxxxxx 0-xxxxx
Xxxxxxx-xx
Xxxxx, Xxxxx
Marubeni America Corporation -0- -0- -0- -0- 41,208 -0-
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
-19-
Wasatch -0- -0- -0- -0- 206,044 -0-
Ultra Growth Fund
c/o Wasatch Ultra Growth Fund
000 Xxxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Wasatch Small Cap Growth Fund -0- -0- -0- -0- -0- 65,572
c/o Wasatch Small Cap Growth Fund
000 Xxxxxx Xxxx Xxxxxx Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
CSFB Fund Co-Investment Program, L.P. -0- -0- -0- -0- 274,725 31,090
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Lighthouse Capital Partners IV* [ ]* -0-
Lighthouse Capital Partners V* [ ]* -0-
TOTAL 1,875,000 1,151,632 4,857,622 2,669,908 2,747,253
-20-
