Exhibit 4.3
TULARIK INC.
INVESTOR RIGHTS AGREEMENT
October 31, 1997
TABLE OF CONTENTS
Page
1. Certain Definitions............................... 1
2. Demand Registration............................... 3
3. Company Registration.............................. 5
4. Registration on Form S-3.......................... 6
5. Expenses of Registration.......................... 7
6. Registration Procedures........................... 7
7. Indemnification................................... 8
8. Information by Holder............................. 10
9. Sale Without Registration......................... 10
10. Rule 144 Reporting................................ 11
11. Transfer of Registration Rights................... 11
12. Market Stand-off Agreement........................ 11
13. Further Agreements................................ 12
13.1 Financial Statements........................ 12
13.2 Nondisclosure............................... 13
13.3 Cooperation................................. 13
13.4 Right of First Refusal...................... 13
14. Board of Directors................................ 15
15. Miscellaneous..................................... 15
15.1 Waivers and Amendments...................... 15
15.2 Governing Law............................... 15
15.3 Successors and Assigns...................... 16
15.4 Entire Agreement............................ 16
15.5 Severability of this Agreement.............. 16
15.6 Title and Subtitles......................... 16
15.7 Notice...................................... 16
15.8 Counterparts................................ 16
15.9 Attorneys' Fees............................. 16
EXHIBIT A: Schedule of Investors
EXHIBIT B: Schedule of Option Holders
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (the "Agreement") is entered into as of
October 31, 1997, by and among Tularik Inc., a Delaware corporation (the
"Company"), the investors set forth on the Schedule of Investors attached hereto
as Exhibit A (collectively, the "Investors") and the option holders set forth on
the Schedule of Option Holders attached hereto as Exhibit B (collectively, the
"Option Holders").
Recitals
1. Whereas, the Company desires to issue up to 1,650,000 shares of its
Series H Preferred Stock (the "Series H Preferred Stock") and warrants for the
purchase of up to 250,000 shares of its Series H Preferred Stock to certain
Investors and the Option Holders, pursuant to the terms of that certain
Agreement and Plan of Merger and Reorganization, dated as of October 3, 1997,
among the Company; Tularik Acquisition Corp., a Delaware corporation; Amplicon
Corp., a Delaware corporation ("Amplicon"); and certain stockholders of Amplicon
(the "Reorganization Agreement");
2. Whereas, one other Investor is receiving warrants to purchase up to an
aggregate of 150,000 of the Company's Series H Preferred Stock; and
3. Whereas, the Company has agreed that the Investors and Option Holders,
upon exercise of their options, shall be granted certain registration rights as
set forth herein.
Now, Therefore, in consideration of the recitals and the mutual covenants
and conditions set forth herein, the parties hereto agree as follows:
Agreement
1. Certain Definitions.
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Additional Holder" means a "Holder" of "Registrable
Securities" under the Registration Rights Agreement (as such two terms are
respectively defined in Section 1(c) and Section 1(b) of the Registration Rights
Agreement).
(c) The term "Additional Registrable Securities" means "Registrable
Securities" under the Registration Rights Agreement (as such term is defined in
Section 1(b) of the Registration Rights Agreement).
(d) The term "Holder" means any Investor or Option Holder holding
Registrable Securities (and any person holding Registrable Securities to whom
the registration rights have been transferred pursuant to Section 11 hereof).
(e) The term "Initiating Holders" means any Holder(s) and/or Additional
Holder(s) that possess(es) more than 50% of the aggregate of the Registrable
Securities (including securities convertible into Registrable Securities) and/or
Additional Registrable Securities.
(f) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act and the declaration or ordering of the effectiveness of
such registration statement.
(g) The term "Registrable Securities" means (i) the common stock of the
Company (the "Common Stock") issued or issuable pursuant to the conversion of
the shares of the Series H Preferred Stock issued to the Investors pursuant to
the terms of the Reorganization Agreement, (ii) Common Stock issued or issuable
pursuant to the conversion of the shares of Series H Preferred Stock issued or
issuable to the Option Holders upon exercise of their options pursuant to the
Reorganization Agreement, (iii) Common Stock issued or issuable pursuant to the
conversion of the shares of Series H Preferred Stock issued or issuable to the
Investors and/or the Option Holders upon exercise of the Warrants issued to the
Investors and Option Holders pursuant to the terms of the Reorganization
Agreement, (iv) other securities issued or issuable pursuant to the conversion
of such shares of Series H Preferred Stock upon any stock split, stock dividend,
recapitalization, or similar event, or (v) any Common Stock otherwise issued or
issuable with respect to shares of Common Stock or the Series H Preferred Stock.
Notwithstanding anything set forth above, the above described securities shall
not be treated as Registrable Securities if and so long as they (x) have been
sold to or through a broker or dealer or underwriter in a public distribution or
a public securities transaction, (y) have been sold pursuant to Rule 144
promulgated under the Act ("Rule 144") in a transaction exempt from the
registration and prospectus delivery requirements of the Act so that all
transfer restrictions and restrictive legends with respect thereto are removed
upon the consummation of such sale, or (z) for purposes of Section 2, are
available for sale in the opinion of counsel to the Company pursuant to Rule 144
in a transaction exempt from the registration and prospectus delivery
requirements of the Act.
(h) The term "Registration Rights Agreement" means the Company's Amended
and Restated Registration Rights Agreement, dated September 30, 1997, as
amended.
(i) The term "SEC" means the Securities and Exchange Commission or any
successor agency thereto.
(j) The term "Warrants" means warrants issued to all of the Investors and
the Optionholders.
2. Demand Registration.
(a) In case the Company shall receive from Initiating Holders a written
request that the Company effect any registration, qualification or compliance
with respect to at least 40% of such Initiating Holders' shares of Registrable
Securities and/or Additional Registrable Securities (or any lesser number of
shares if the anticipated aggregate offering price would exceed $5,000,000), the
Company will:
(1) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(2) as soon as practicable, use its best efforts to effect such
registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the Act
and any other governmental requirement or regulations) as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within 15 days after such Holder or Holders received the written
notice from the Company provided for in Section 2(a)(1) above;
provided however, that the Company shall not be obligated to take any action to
effect any such registration, qualification or compliance pursuant to this
Section 2:
(i) In any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already subject
to service in such jurisdiction and except as may be required by the Act;
(ii) Prior to the earlier of (i) May 15, 1998, or (ii) six
months after the effective date of the Company's first registered public
offering of its stock;
(iii) During the period starting with the date 60 days prior to
the Company's estimated date of filing of, and ending on the date six months
immediately following the effective date of, any registration statement
pertaining to securities of the Company (other than a registration of securities
in a Rule 145 transaction or with respect to an employee benefit plan), provided
that the Company is actively applying in good faith all reasonable efforts to
cause such registration statement to become effective;
(iv) After the Company has effected one such registration
pursuant to this Section 2(a), and such registration has been declared or
ordered effective (subject to Section 2(b) below); or
(v) If the Company shall furnish to such Holder(s) a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its stockholders for a registration statement to be filed at such
time, then the Company's obligation to register, qualify or comply under this
Section 2 shall be deferred for a period not to exceed 180 days from the date of
receipt of written request from the Initiating Holders.
Subject to the foregoing clauses, the Company shall file a registration
statement covering the Registrable Securities so required to be registered as
soon as practicable after receipt of the request or requests of the Initiating
Holders.
(b) In the event that a registration pursuant to Section 2 is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as part of the notice given pursuant to Section 2(a)(1). In
such event, the right of any Holder to registration pursuant to Section 2 shall
be conditioned upon such Holder's participation in the underwriting arrangements
required by this Section 2, and the inclusion of such Holder's Registrable
Securities in the underwriting to the extent requested shall be limited to the
extent provided herein.
The Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by a
majority in interest of the Initiating Holders, but subject to the Company's
reasonable approval. Notwithstanding any other provision of this Section 2, if
the managing underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise all Holders, and (i) shares which
are not Registrable Securities, Additional Registrable Securities or convertible
into Registrable Securities shall first be excluded from the registration and
underwriting and (ii) if such exclusion is insufficient, the number of shares of
Registrable Securities and Additional Registrable Securities that may be
included in the registration and underwriting shall be allocated among all
Holders and Additional Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders and Additional
Holders at the time of filing of the registration statement. No Registrable
Securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration. To facilitate the
allocation of shares in accordance with the above provision, the Company or the
underwriters may round the number of shares allocated to any Holder to the
nearest 100 shares. Notwithstanding the above, such registration shall not count
as the one permitted registration pursuant to Section 2(a) above if the Holders
are unable to register at least 90% of the Registrable Securities requested to
be registered.
If any Holder disapproves of the terms of the underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company, the managing
underwriter and the Initiating Holders. The Registrable Securities and/or other
securities so withdrawn shall also be withdrawn from registration, and such
Registrable Securities shall not be transferred in a public distribution prior
to 90 days after the effective date of such registration, or such other shorter
period of time as the underwriters may require.
3. Company Registration.
(a) If at any time, or from time to time, the Company shall determine to
register any of its securities, either for its own account or for the account of
a security holder or holders, other than (i) a registration relating solely to
employee benefit plans, (ii) a registration on Form S-4 relating solely to an
SEC Rule 145 transaction, (iii) a registration of convertible debt securities or
(iv) a registration on any other form (other than Form ▇-▇, ▇-▇, ▇▇-▇ or SB-2)
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of Registrable
Securities, the Company will:
(1) promptly give to each Holder written notice thereof; and
(2) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved therein,
all the Registrable Securities specified in any written request or requests by
any Holder or Holders received by the Company within fifteen (15) days after
such written notice is given on the same terms and conditions as the Common
Stock, if any, otherwise being sold through the underwriters in such
registration.
(b) If the registration for which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
3(a). In such event the right of any Holder to registration pursuant to this
Section 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 securities through such underwriting (together with the Company,
Additional Holders and the other holders distributing their 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.
(c) Notwithstanding any other provision of this Section 3, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the underwriters may limit the Registrable
Securities or other securities to be included in the registration, provided that
in all registrations other than the initial public offering, the number of
Registrable Securities to be included in the registration may not be reduced to
less than 25% of the total number of shares to be registered. The Company shall
so advise all Holders, Additional Holders and other holders distributing their
securities through such underwriting and (i) shares which are not Registrable
Securities, Additional Registrable Securities or convertible into Registrable
Securities shall first be excluded from the registration and underwriting and
(ii) if such exclusion is insufficient, the number of shares of Registrable
Securities and Additional Registrable Securities that may be included in the
registration and underwriting shall be allocated among all Holders and
Additional Holders in proportion, as nearly as practicable, to the respective
amount of Registrable Securities and Additional Registrable Securities held by
such Holders and Additional Holders at the time of filing of the registration
statement. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocated to any Holder,
Additional Holder or other holder to the nearest 100 shares. The Company shall
advise all Holders of shares which would otherwise be registered and
underwritten pursuant hereto of any such limitations, and the number of shares
of Registrable Securities that may be included in the registration. If any
Holder disapproves of the terms of any such underwriting, such Holder may elect
to withdraw therefrom by written notice to the Company and the underwriter. Any
securities excluded or withdrawn from such underwriting shall not be transferred
in a public distribution prior to 90 days after the effective date of the
registration statement relating thereto, or such shorter period of time as the
managing underwriter may require.
(d) The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 3 prior to the effectiveness of
such registration whether or not any Holder has elected to register securities
in such registration.
4. Registration on Form S-3.
(a) If any Holders or Additional Holders request that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3) for a
public offering of shares of the Registrable Securities or Additional
Registrable Securities, the reasonably anticipated aggregate price to the public
of which, net of underwriting discounts and commissions, would exceed $500,000,
and the Company is a registrant entitled to use Form S-3 to register the
Registrable Securities for such an offering, the Company shall use its best
efforts to cause such Registrable Securities to be registered for the offering
on such form and to cause such Registrable Securities to be qualified in such
jurisdictions as such Holder(s) may reasonably request; provided however, that
the Company shall not be required to effect more than one registration pursuant
to this Section 4 within any six-month period. The substantive provisions of
Section 4(b) shall be applicable to each registration initiated under this
Section 4.
(b) Notwithstanding the foregoing, the Company shall not be obligated to
take any action pursuant to this Section 4:
(1) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Act;
(2) if the Company, within ten days of the receipt of the request of
such holder(s) under this Section 4, gives notice of its bona fide intention to
effect the filing of a registration statement with the SEC within 90 days of
receipt of such request (other than with respect to a registration statement
relating to a Rule 145 transaction, an offering solely to employees or any other
registration which is not appropriate for the registration of Registrable
Securities);
(3) during the period starting with the date 60 days prior to the
Company's estimated date of filing of, and ending on the date six months
immediately following the effective date of, any registration statement
pertaining to securities of the Company (other than a registration of securities
in a Rule 145 transaction or with respect to an employee benefit plan), provided
that the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective;
(4) if the Company shall furnish to such Holder(s) a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors it would be seriously detrimental to the Company or
its stockholders for a registration statement to be filed in the near future,
then the Company's obligation to use its best efforts to file a registration
statement shall be deferred for a period not to exceed 180 days from the receipt
of the request to file such registration by such Holder(s); or
(5) after the Company has effected four registrations pursuant to
this Section 4.
5. Expenses of Registration. All expenses incurred in connection with any
registration, qualification or compliance pursuant to Section 2 or 3 and in
connection with one registration pursuant to Section 4, including, without
limitation, all registration, filing and qualification fees, reasonable fees and
disbursements of one counsel for the selling stockholders, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, accounting fees
and expenses, and expenses of any special audits incidental to or required by
such registration, shall be borne by the Company; provided however, that the
Company shall not be required to pay stock transfer taxes or underwriters' fees,
discounts or commissions relating to Registrable Securities. All other expenses
of any registered offerings shall be borne pro rata among the selling
stockholders.
6. Registration Procedures. If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of any of the Registrable Securities under the Act, the Company will, as
expeditiously as possible:
(a) Prepare and file with the SEC a registration statement with respect to
such securities and use its best efforts to cause such registration statement to
become and remain effective for such period as may be necessary to permit the
successful marketing of such securities but not exceeding 120 days or until the
Holder(s) have completed the distribution described in the registration
statement relating thereto, whichever first occurs.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to comply with the provisions of the Act, and to keep such
registration statement effective for the period of time specified in Section
6(a) above.
(c) Furnish to each Holder participating in the registration such number
of prospectuses and preliminary prospectuses in conformity with the requirements
of the Act, and such other documents, as such selling Holder may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities being sold by such Holder.
(d) Use its best efforts to register or qualify the Registrable Securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as each such selling Holder shall reasonably request
and do any and all other acts and things which may be necessary or desirable to
enable such Holder to consummate the public sale or other disposition in such
jurisdictions, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or file a general
consent to service of process in any such jurisdictions unless the Company is
already subject to service in such jurisdictions and except as may be required
by the Act.
(e) Notify each Holder covered by such registration statement, at any time
when a prospectus relating thereto is required to be delivered under the 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 and, at the request of any such Holder, the Company
shall prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchaser of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material
fact or omit 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.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Holder with
respect to which a registration statement has been filed under the Act pursuant
to this Agreement, each of such Holder's partners, trustees, officers and
directors, and other agents, each underwriter of any of the Registrable
Securities included in such registration statement, and each person, if any, who
controls any such Holder or underwriter within the meaning of the Act
(hereinafter collectively referred to as the "Holder-Underwriters"), as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement of a
material fact contained in such registration statement (or any amendment
thereto), or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or arising out of any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus or prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, unless
such untrue statement or omission or such alleged untrue statement or omission
was made in reliance upon and in conformity with written information furnished
to the Company by such Holder-Underwriter expressly for use in such registration
statement (or any amendment thereto) or such preliminary prospectus or
prospectus (or any amendment or supplement thereto);
(2) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the Company
(which consent shall not be unreasonably withheld); and
(3) against any and all expense (including attorneys' fees)
whatsoever reasonably incurred, as incurred, in investigating, preparing,
settling (with the consent of the Company, which consent shall not be
unreasonably withheld) or defending against any litigation, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (1) or (2) above; provided however, that the
foregoing indemnity agreement is subject to the condition that, insofar as it
relates to any such untrue statement, alleged untrue statement, omission or
alleged omission made in a preliminary prospectus but eliminated or remedied in
the amended prospectus on file with the SEC at the time the registration
statement becomes effective, or in the amended prospectus filed with the SEC
pursuant to Rule 424(b) (the "Final Prospectus"), such indemnity agreement shall
not inure to the benefit of any underwriter, or any Holder, if there is no
underwriter, if a copy of the Final Prospectus was not furnished to the person
or entity asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Act.
In no case shall the Company be liable under this indemnity agreement with
respect to any loss, liability, claim, damage or expense with respect to any
claim made against any Holder-Underwriter unless the Company shall be notified
in writing of the nature of the claim within a reasonable time after the
assertion thereof, provided that the Company shall be liable under this
indemnity agreement with respect to any such claim notwithstanding the lack of
such notice within a reasonable time if such lack of notice does not prejudice
the ability of the Company to defend such claim, and provided further that the
failure to so notify the Company shall not relieve the Company from any
liability which it may have otherwise than on account of this indemnity
agreement. In case of any such notice, the Company shall be entitled to
participate at its expense in the defense, or if it so elects within a
reasonable time after receipt of such notice, to assume the defense of any suit
brought to enforce any such claim; but if it so elects to assume the defense,
such defense shall be conducted by counsel chosen by it and approved by the
Holder-Underwriter(s) and other defendant or defendants, if any, in any suit so
brought, which approval shall not be unreasonably withheld. In the event that
the Company elects to assume the defense of any such suit and retain such
counsel, the Holder-Underwriter(s) and other defendant or defendants, if any, in
the suit, shall bear the fees and expenses of any additional counsel thereafter
retained by them; provided however, that the Company shall bear the expense of
independent counsel for the Holder-Underwriter(s) if the Holder-Underwriter(s)
reasonably determine that representation of it or them and the Company by the
same counsel would be inappropriate due to actual or potential conflicts of
interest.
(b) Each Holder severally, and not jointly, agrees that it will indemnify
and hold harmless the Company, each officer and director of the Company, each
person, if any, who controls the Company within the meaning of the Act, each
underwriter of Registrable Securities included in any registration statement
which has been filed under the Act pursuant to this Agreement, each person, if
any, who controls such underwriter within the meaning of the Act, each other
Holder, each of such other Holder's partners, officers and directors, and each
person controlling such other Holder within the meaning of the Act against any
and all loss, liability, claim, damage and expense, as incurred, described in
clauses (a)(1) through (a)(3), inclusive, of this Section 7, but only with
respect to statements or omissions, or alleged statements or omissions, made in
such registration statement (or any amendment thereto) or any preliminary
prospectus or prospectuses (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
Holder expressly for use in such registration statement (or any amendment
thereto) or such preliminary prospectus or prospectus (or any amendment or
supplement thereto). In any event, the liability of each Holder hereunder shall
be limited to the net proceeds received by the Holder pursuant to the
registration. In case any action shall be brought against the Company or any
person so indemnified pursuant to the provisions of this Section 7(b) and in
respect of which indemnity may be sought against any Holder, the Holders from
whom indemnity is sought shall have the rights and duties given to the Company,
and the Company and the other persons so indemnified shall have the rights and
duties given to the person entitled to indemnification, by the provisions of
Section 7(a).
(c) The obligations of the Company and Holders under this Agreement shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement.
8. Information by Holder. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder or Holders, and the distribution proposed by such Holder
or Holders, as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Agreement.
9. Sale Without Registration. If at the time of any transfer of any
Registrable Securities, such Registrable Securities shall not be registered
under the Act, the Company may require, as a condition of allowing such
transfer, that the Holder or transferee furnish to the Company (i) such
information as is necessary in order to establish that such transfer may be made
without registration under the Act, and (ii) (if the transfer is not made in
compliance with Rule 144 other than a transfer not involving a change in
beneficial ownership or a pro rata distribution by a partnership to its
partners) at the expense of the Holder or transferee, an opinion of counsel
reasonably satisfactory to the Company in form and substance to the effect that
such transfer may be made without registration under the Act; provided, however,
nothing contained in this Section 9 shall relieve the Company from complying
with any request for registration, qualification, or compliance made pursuant to
the other provisions of this Agreement.
10. 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 Rule 144 under the Act, at all times after 90 days
after the effective date of the first registration statement 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 Securities Exchange Act of 1934, as amended
(the "Exchange Act"); and
(c) Furnish the Holder forthwith upon request (i) a written statement by
the Company as to its compliance with the public information requirements of
said Rule 144 (at any time after 90 days after the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), (ii) a copy of the most recent annual or quarterly report
of the Company, and (iii) such other reports and documents as may be reasonably
requested in availing the Holders of any rule or regulation of the SEC
permitting the sale of any such securities without registration.
11. Transfer of Registration Rights. The rights to cause the Company to
register securities granted by the Company under Section 2 may be assigned in
writing by any Holder (i) to any transferee or assignee of Registrable
Securities which controls, is controlled by or is under common control with such
Holder or which is already a Holder of Registrable Securities, (ii) to a partner
of the Holder or to any other transferee or assignee of not less than 200,000
shares of the Registrable Securities (as appropriately adjusted from time to
time for stock splits and the like), (iii) to any other transferee or assignee
of all shares of Registrable Securities held by such Holder if transferred to a
single entity, or (iv) to any transferee under Section 11 of the Registration
Rights Agreement; provided however, that such transfer may otherwise be effected
in accordance with applicable securities laws; and provided further, that the
Company is given
written notice by such Holder at the time of or within a reasonable time after
said transfer, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being assigned and provided further, that immediately following such transfer,
the further disposition of such securities by such transferee or assignee is
restricted under the Act.
12. Market Stand-off Agreement. Each Holder hereby agrees that such Holder
shall not sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by such Holder (other than those included in the
registration) for a period specified by the representative of the underwriters
of Common Stock (or other securities) of the Company not to exceed one (1) year
following the effective date of a registration statement of the Company filed
under the Act.
Each Holder agrees to execute and deliver such other agreements as may be
reasonably requested by the Company or the underwriter which are consistent with
the foregoing or which are necessary to give further effect thereto. The
obligations described in this Section 12 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Rule 145 (under the Act) 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-year period.
13. Further Agreements.
13.1 Financial Statements.
(a) For as long as an Investor owns at least 75,000 shares of the
Series H Preferred Stock, or Common Stock issued upon the conversion of the
Series H Preferred Stock (adjusted for stock splits and the like), the Company
shall furnish to such Investor, as soon as available and (i) in any event within
30 days after the end of each month an unaudited balance sheet, income statement
and a statement of changes in financial position for that month prepared in
accordance with generally accepted accounting principles including a comparison
to the Company' operating plan; (ii) in any event within 45 days after the end
of each quarter, unaudited quarterly financial statements; (iii) in any event
within 90 day after the end of each fiscal year of the Company, a balance sheet
of the Company as of the end of such fiscal year, a statement of income of the
Company for such fiscal year, and a statement of changes in financial position
of the Company for such fiscal year, audited by independent public accountants
of national standing selected by the Company; and (iv) no less than 10 days
prior to the end of each fiscal year, a business plan and an annual budget for
the Company's succeeding fiscal year.
(b) The obligations of the Company to provide the Investors with
information as set forth in this Section 13.1 shall terminate on (i) the
effective date of a registration statement filed under the Act by the Company
covering the public offering of its securities, or (ii) the date on which the
Company otherwise becomes subject to the reporting requirements under Section 13
or 15(d) of the Exchange Act, whichever first occurs.
(c) The rights granted to the Investors under Section 13.1(a) shall
pass to all subsequent transferees of the Series H Preferred Stock until
extinguished pursuant to the terms hereof, provided that, with respect to the
rights set forth in Section 13.1(a), such transferee holds an aggregate of at
least 75,000 shares of the Series H Preferred Stock, or Common Stock issued upon
the conversion of the Series H Preferred Stock (adjusted for stock splits and
the like), and provided further that such transferee agrees to be bound by
Section 13.2.
13.2 Nondisclosure. Each Investor agrees not to use Confidential
Information (as hereinafter defined) of the Company for its own use other than
as permitted by agreement with the Company or for any purpose except to evaluate
its equity investment in the Company. Each Investor agrees not to disclose such
Confidential Information to any third parties or to any of its employees except
employees who are required to have the Confidential Information to evaluate such
Investor's investment in the Company or as permitted under the terms of any
other agreements between the parties; provided however, that an Investor may
report summary financial information concerning the Company to partners of the
Investor in accordance with standard reporting practices of such Investor to its
partners. For purposes of this subsection, "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 and which the Company has marked
"confidential," "proprietary" or "secret" or has otherwise identified as being
such. Confidential Information does not include information, technical data or
know-how which (i) is in such Investor's possession at the time of disclosure as
shown by such Investor's files and records; (ii) before or after it has been
disclosed to such Investor, is part of the public knowledge or literature, not
as a result of any action or inaction of such Investor; (iii) is approved for
release by written authorization of the Company; (iv) is disclosed to such
Investor by a third party not under an obligation of confidentiality to the
Company; or (v) is independently developed by such Investor.
13.3 Cooperation. The Company shall cooperate with the Investors in
supplying such information as may be reasonably requested by the Investors to
complete and file any information reporting forms presently or hereafter
required by the SEC as a condition to the availability of an exemption,
presently existing or hereafter adopted, from the Act for the sale of the
Registrable Securities.
13.4 Right of First Refusal. The Company hereby grants to each Investor the
right of first refusal to purchase its pro rata share of any New Securities (as
defined in this Section 13.4) which the Company may, from time to time, propose
to sell and issue. An Investor's pro rata share, for purposes of this right of
first refusal, is the ratio of the number of shares of Common Stock into which
such Investor's shares of Series H Preferred Stock have been or are convertible
and which are held by such Investor to the total number of shares of Common
Stock outstanding (including all outstanding securities convertible into,
exchangeable for or exercisable for Common Stock). This right of first refusal
shall be subject to the following provisions:
(a) "New Securities" shall mean any capital stock of the Company
whether or not now authorized, the rights, options or warrants to purchase
capital stock and securities of any type whatsoever that are, or may become,
convertible into capital stock; provided that the term
"New Securities" does not include (i) securities issuable upon exercise or
conversion of currently outstanding securities or securities issued in
compliance with this section; (ii) the shares of Series H Preferred Stock or the
Common Stock into which they are convertible; (iii) securities issued pursuant
to a public offering pursuant to an effective registration statement under the
Act; (iv) securities issued pursuant to the Company's acquisition of another
corporation by merger, purchase of substantially all the assets or other
reorganization; (v) securities issued to employees and consultants of the
Company pursuant to plans and arrangements approved by the board of directors;
(vi) securities issued in connection with equipment lease financing
arrangements, credit agreements, joint ventures or other commercial transactions
approved by the Board of Directors, including but not limited to any commercial
agreement entered into between the Company and another entity pursuant to which
the other entity or its affiliates receives license, distribution or other
rights to specified technology or products of the Company; and (vii) securities
issued in connection with any stock split, stock dividend or recapitalization of
the Company.
(b) In the event the Company proposes to undertake an issuance of New
Securities and after it has received a bona fide offer to purchase such New
Securities, it shall give each Investor written notice of its intention,
describing the type of New Securities, the price and the general terms upon
which the Company proposes to issue the same. Each Investor shall have 20 days
from the date of receipt of any such notice to agree to purchase any amount of
New Securities up to the Investor's pro rata share of such New Securities for
the price and upon the general terms specified in the notice by giving written
notice to the Company and stating therein the quantity of New Securities to be
purchased. Each Investor shall have a right of overallotment such that if any
Investor fails to exercise its right hereunder to purchase all of such
Investor's pro rata portion of New Securities, the Company shall notify the
other Investor(s) and the other Investor(s) may purchase the nonpurchased
portion on a pro rata basis within 10 days from the date of such notice.
(c) In the event an Investor fails to exercise in full the right of
first refusal within said 20-day period (plus 10-day period, if applicable), the
Company shall have 90 days thereafter to sell or enter into an agreement
(pursuant to which the sale of New Securities covered thereby shall be closed,
if at all, within 30 days from the date of said agreement) to sell the New
Securities respecting which the Investor's option was not exercised, at the
price and upon the terms specified in the Company's notice. In the event the
Company has not entered into an agreement to sell the New Securities within said
90-day period (or sold and issued New Securities in accordance with the
foregoing within 30 days from the date of said agreement), the Company shall not
thereafter issue or sell any New Securities, without first offering such
securities to the Investors in the manner provided above.
(d) The right of first refusal granted under this Agreement shall
expire upon the first to occur of the following: (i) the closing of a public
offering pursuant to an effective registration statement under the Act or (ii)
as to an Investor if such Investor no longer holds at least 75,000 shares of
Registrable Securities.
14. Board of Directors. The Company's Bylaws shall provide for a Board of
Directors consisting of a variable number of directors between five and nine
members, currently set at eight (8). As of the date hereof, the Board of
Directors shall consist of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D.; A. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, III; ▇▇▇▇
▇. ▇▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Ph.D.; ▇▇▇▇ ▇. ▇▇▇▇▇, M.D.;
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.; and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇. Until the closing of the Company's
initial public offering of Common Stock, no more than three (3) of the Company's
directors shall be employees of the Company.
15. Miscellaneous.
15.1 Waivers and Amendments. With the written consent of the record
Holders of a majority of the Registrable Securities then outstanding, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement.
Neither this Agreement nor any provisions hereof may be changed, waived,
discharged or terminated orally, but only by a signed statement in writing.
15.2 Governing Law.
(a) This Agreement shall be construed in accordance with, and
governed in all respects by, the internal laws of the State of Delaware (without
giving effect to principles of conflicts of laws).
(b) Any legal action or other legal proceeding relating to this
Agreement or the enforcement of any provision of this Agreement may be brought
or otherwise commenced against Tularik in either the courts of the State of
California, County of San Mateo or the State of New York, County of New York,
or, if it has or can acquire jurisdiction, in either the United States District
Court for the Northern District of California or the United States District
Court for the Southern District of New York. Any legal action or other legal
proceeding relating to this Agreement or the enforcement of any provision of
this Agreement may be brought or otherwise commenced against the Investors in
the courts of the State of New York, County of New York, or, if it has or can
acquire jurisdiction, in the United States District Court for the Southern
District of New York. Each party to this Agreement:
(1) expressly and irrevocably consents and submits to the
jurisdiction of such courts (and the appropriate appellate courts) in connection
with any such legal proceeding;
(2) agrees that such courts shall be deemed to be a convenient
forum; and
(3) agrees not to assert (by way of motion, as a defense or
otherwise), in any such legal proceeding commenced in any such state or federal
court, any claim that such party is not subject personally to the jurisdiction
of such court, that such legal proceeding has
been brought in an inconvenient forum, that the venue of such proceeding is
improper or that this Agreement or the subject matter of this Agreement may not
be enforced in or by such court.
15.3 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.
15.4 Entire Agreement. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subject hereof and thereof.
15.5 Severability of this Agreement. In case any provision of this
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.
15.6 Title and Subtitles. The titles of the Sections of this Agreement
are for convenience of reference only and are not to be considered in construing
this Agreement.
15.7 Notice. Any notice or report required in this Agreement or permitted
to be given shall be given in writing and shall be deemed effective upon
personal delivery (including delivery by messenger or by overnight courier or
delivery service) or four (4) days after deposit in the United States certified
or registered mail, postage prepaid and return receipt requested and addressed
(i) if to a Holder which is not an Option Holder, at such Holder's address set
forth on Exhibit A, or at such other address as such Holder shall have furnished
to the Company in writing, or (ii) if to an Option Holder, at the address as set
forth on Exhibit B or at such other address as the Option Holder shall have
furnished to the Company in writing, or (iii) if to the Company, one copy should
be sent to its address as set forth below and addressed to the attention of the
Corporate Secretary, or at such other address as the Company shall have
furnished to the Holders.
15.8 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.
15.9 Attorneys' Fees. If any action at law or in equity is necessary to
enforce the terms of this Agreement, the prevailing party shall be entitled to
receive from the non-prevailing party reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which such prevailing
party may be entitled.
In Witness Whereof, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first written above.
Company: Holder:
Tularik Inc. [ ]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ Holder
--------------------------- ----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Corporate Drive Name:__________________________
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title:_________________________
Address:_______________________
_______________________________
_______________________________
INVESTOR RIGHTS AGREEMENT
Exhibit A
SCHEDULE OF INVESTORS
Warrants to Purchase
Series H Preferred Series H Preferred
Name and Address Stock Held Stock
(Number of Shares) (Number of Shares)
--------------------- --------------------- --------------------
INVESTOR RIGHTS AGREEMENT
Exhibit B
SCHEDULE OF OPTION HOLDERS
Options to Purchase
Series H Preferred Stock
and Warrants
Name and Address (Number of Shares)
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