ELITRA PHARMACEUTICALS INC.
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
TABLE OF CONTENTS
PAGE
SECTION 1. GENERAL.........................................................................................2
1.1 Definitions.....................................................................................2
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER..........................................................3
2.1 Restrictions on Transfer........................................................................3
2.2 Demand Registration.............................................................................4
2.3 Piggyback Registrations.........................................................................6
2.4 Form S-3 Registration...........................................................................7
2.5 Expenses of Registration........................................................................8
2.6 Obligations of the Company......................................................................8
2.7 Termination of Registration Rights..............................................................9
2.8 Delay of Registration; Furnishing Information..................................................10
2.9 Indemnification................................................................................10
2.10 Assignment of Registration Rights..............................................................12
2.11 Amendment of Registration Rights...............................................................12
2.12 Limitation on Subsequent Registration Rights...................................................12
2.13 "Market Stand-Off" Agreement; Agreement to Furnish Information.................................13
2.14 Rule 144 Reporting.............................................................................13
SECTION 3. COVENANTS OF THE COMPANY.......................................................................14
3.1 Basic Financial Information and Reporting......................................................14
3.2 Inspection Rights..............................................................................14
3.3 Observer Rights................................................................................15
3.4 Confidentiality of Records.....................................................................15
3.5 Reservation of Common Stock....................................................................15
3.6 Stock Vesting..................................................................................15
3.7 Proprietary Information and Inventions Agreement...............................................15
3.8 Approval.......................................................................................15
3.9 Directors' Liability and Indemnification.......................................................16
3.10 Termination of Covenants.......................................................................16
SECTION 4. RIGHTS OF FIRST REFUSAL........................................................................16
4.1 Subsequent Offerings...........................................................................16
TABLE OF CONTENTS
(CONTINUED)
PAGE
4.2 Exercise of Rights.............................................................................16
4.3 Issuance of Equity Securities to Other Persons.................................................16
4.4 Termination and Waiver of Rights of First Refusal..............................................17
4.5 Transfer of Rights of First Refusal............................................................17
4.6 Excluded Securities............................................................................17
SECTION 5. MISCELLANEOUS..................................................................................18
5.1 Governing Law..................................................................................18
5.2 Survival.......................................................................................18
5.3 Successors and Assigns.........................................................................18
5.4 Entire Agreement...............................................................................18
5.5 Severability...................................................................................18
5.6 Amendment and Waiver...........................................................................19
5.7 Delays or Omissions............................................................................19
5.8 Notices........................................................................................19
5.9 Attorneys' Fees................................................................................19
5.10 Titles and Subtitles...........................................................................19
5.11 Additional Investors...........................................................................19
5.12 Counterparts...................................................................................20
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ELITRA PHARMACEUTICALS INC.
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the "Agreement")
is entered into as of the 18th day of August, 2000, by and among ELITRA
PHARMACEUTICALS INC., a Delaware corporation (the "Company"), certain holders
(the "Common Stockholders") of the Company's Common Stock (the "Common Shares")
set forth on Exhibit A hereto, the holders of the Company's Series A Preferred
Stock (the "Series A Stock") set forth on Exhibit A hereto, the holders of the
Company's Series B Preferred Stock ("Series B Stock") set forth on Exhibit A
hereto, the holder of the Company's Series D Preferred Stock ("Series D Stock")
set forth on Exhibit A hereto, and the purchasers of the Company's Series E
Preferred Stock ("Series E Stock") set forth on Exhibit A hereto and warrants to
purchase shares of Series E Stock pursuant to that certain Series E Preferred
Stock and Warrant Purchase Agreement of even date herewith (the "Purchase
Agreement"), the holder of a warrant to purchase shares of Series E Stock of
even date herewith set forth on Exhibit A hereto and, solely for purposes of
Section 2, the holder of a warrant to purchase Common Shares pursuant to a
certain Stock Subscription Warrant dated July 27, 2000 set forth on Exhibit A
hereto. The holders of the Series A Stock, the Series B Stock, the Series D
Stock, and the purchasers of the Series E Stock, the holder of the warrant to
purchase Series E Stock and, solely for purposes of Section 2, the holder of the
warrant to purchase Common Shares shall be collectively referred to hereinafter
as the "Investors" and each individually as an "Investor."
RECITALS
WHEREAS, certain of the Investors hold shares of the Company's Series A
Stock, Series B Stock and Series D Stock and possess certain registration
rights, information rights and other rights pursuant to an existing Second
Amended and Restated Investor Rights Agreement dated as of June 30, 2000 among
the Company, the Common Stockholders and such Investors (the "Investor Rights
Agreement");
WHEREAS, the undersigned Investors who hold Series A Stock, Series B Stock
and Series D Stock, and warrants to purchase shares of Series B Stock, hold a
majority of the Registrable Securities (as defined in the Investor Rights
Agreement), and such Investors and the Company desire to amend and restate the
Investor Rights Agreement to add the holders of Series E Stock, the holders of
warrants to purchase shares of Series E Stock and the holder of the warrant to
purchase Common Shares, as parties hereto;
WHEREAS, certain of the Investors are parties to the Purchase Agreement,
pursuant to which the Company proposes to sell and issue up to six million seven
hundred twenty-two thousand three hundred twenty-seven (6,722,327) shares of its
Series E Stock and issue warrants to purchase up to one million six hundred
eighty thousand five hundred sixty-eight (1,680,568) shares of Series E Stock
(the "Series E Purchasers"), or hold a warrant to purchase three hundred
eighty-four thousand six hundred sixteen (384,616) shares of Series E Stock
issued in connection with the Series E Stock financing;
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WHEREAS, as a condition of entering into the Purchase Agreement, the Series
E Purchasers 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:
SECTION 1. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"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 firm commitment
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 (a) Common Stock of the Company
issued or issuable upon conversion of the Shares; (b) solely for purposes of
Section 2, Common Stock of the Company issued or issuable pursuant to the
exercise of the warrant to purchase Common Stock as held by the Investor listed
on Exhibit A hereto; and (c) 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 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 be the number of
shares determined by calculating the total number of shares of the Company's
Common Stock that are Registrable Securities and either (a) are then issued and
outstanding or (b) are issuable pursuant to then exercisable or convertible
securities.
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"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 twenty-five thousand dollars ($25,000) 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).
"SEC" or "COMMISSION" means the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale.
"SHARES" shall mean (i) the Company's Series A Stock issued pursuant
to the Series A Preferred Stock Purchase Agreement dated as of June 18, 1998,
(ii) the Company's Series B Stock issued pursuant to the Series B Preferred
Stock Purchase Agreement dated as of June 9, 1999, (iii) the Company's Series B
Stock issued pursuant to the exercise of certain warrants to purchase Series B
Stock, (iv) the Company's Series D Stock issued pursuant to the Purchase
Agreement dated as of June 30, 2000, and (v) the Company's Series E Stock issued
pursuant to the Purchase Agreement and the Company's Series E Stock issued
pursuant to the exercise of certain warrants to purchase Series E Stock held by
the Investors listed on Exhibit A hereto, and each of their permitted assigns.
"STOCKHOLDERS" shall mean (i) the Investors and (ii) certain holders
of Common Shares listed on Exhibit A hereto.
SECTION 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 the
terms of this Agreement, (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 opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
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(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, (D) to the Holder's family member or
trust for the benefit of an individual Holder, or (E) a subsidiary, parent,
general partner, limited partner, retired partner, member or retired member of a
Holder; PROVIDED that in each case the transferee will be subject to the terms
of this Agreement to the same extent as if he 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):
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 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 a majority of the
Registrable Securities then outstanding (the "Initiating Holders") that the
Company file a registration statement under the Securities Act covering the
registration of at least a majority of the Registrable Securities then
outstanding (or a lesser amount if the anticipated aggregate offering price, net
of underwriting discounts and commissions, would be at least $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, use its best efforts to effect,
as soon as
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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
or any request pursuant to Section 2.4 and the Company shall include such
information in the written notice referred to in Section 2.2(a) or Section
2.4(a), as applicable. 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 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 or Section 2.4, 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 such 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) prior to the third anniversary of the date of this
Agreement;
(ii) after the Company has effected two (2) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective;
(iii) during the period starting with the date of filing of, and
ending on the date ninety (90) days following the effective date of, the
registration statement pertaining to a public offering; PROVIDED that the
Company makes reasonable good faith efforts to cause such registration statement
to become effective;
(iv) if within thirty (30) days of receipt of a written request
from Initiating Holders pursuant to Section 2.2(a), the Company gives notice to
the Holders of the Company's intention to make its Initial Offering or a public
offering within ninety (90) days;
(v) 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 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 stockholders 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 that
5
such right to delay a request shall be exercised by the Company not more than
once in any twelve (12) month period; or
(vi) if the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form S-3 pursuant
to a request made pursuant to Section 2.4 below.
2.3 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least fifteen (15) 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 filed by the Company, such Holder shall nevertheless continue to have
the right to include any Registrable Securities in any subsequent 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) UNDERWRITING. 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 the 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 Holders
(provided, however, for all underwritten offerings other than the Company's
initial public offering, the Holders' pro rata share may not be reduced to less
than twenty-five percent (25%) of the aggregate number of shares included in the
offering); and third, to any stockholder 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. In no event will shares of any other selling stockholder 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 a
majority of the Registrable Securities proposed to be sold in the offering. 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, delivered at least ten (10) business days prior to the
6
effective date of the registration statement. Any Registrable Securities
excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the registration. For any Holder which is a partnership or corporation, the
partners, retired partners and shareholders of such Holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing person shall be deemed to be a single "Holder,"
and any PRO RATA reduction with respect to such "Holder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such "Holder," as defined in this sentence.
(b) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness of 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 the
Holders of at least twenty percent (20%) of the Registrable Securities then
outstanding a written request or requests that the Company effect a registration
on Form S-3 (or any successor to 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 (or any successor or similar form) 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 within thirty (30) days of receipt of a written request
from Initiating Holders pursuant to Section 2.4, the Company gives notice to the
Holders of the Company's intention to make a public offering within ninety (90)
days; or
(iv) 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
7
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its stockholders for such Form S-3 registration to be effected
at such time, in which event the 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 not more than once in any twelve (12) month period; 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. Registrations effected pursuant to this
Section 2.4 shall not be counted as demands for registration or registrations
effected pursuant to Sections 2.2 or 2.3, respectively. All Registration
Expenses incurred in connection with registrations requested under 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.
8
(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 for the period set forth in paragraph (a) above.
(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 its reasonable best 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) Use its best efforts to furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (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, addressed to the underwriters, if any, 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 public accountants to underwriters in an underwritten
public offering addressed to the underwriters.
2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect three
(3) years after the date of the Company's Initial Offering. In addition, a
Holder's registration rights shall expire if (a) the Company has completed its
Initial Offering and is subject to the provisions of the Exchange Act, (b) such
Holder (together with its affiliates, partners and former partners) holds less
than 1% of the Company's outstanding Common Stock (treating all share of
convertible Preferred Stock on an as converted basis) and (c) all Registrable
Securities held by and issuable to such Holder (and its affiliates, partners,
former partners, members and former members) may be sold under Rule 144 during
any ninety (90) day period.
9
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.
(c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.2 or Section 2.4 if, due to the
operation of subsection 2.2(b), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in Section 2.2 or Section 2.4,
whichever is applicable.
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 and directors 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 a 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 pay as incurred to
each such Holder, partner, officer, 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
10
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 compliance is being effected, indemnify and hold
harmless the Company, each of its directors, its officers 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 pay as incurred 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 if
it is judicially determined that there was such a Violation; 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; PROVIDED FURTHER, that in no event shall any
indemnity under this Section 2.9 exceed the net 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.
11
(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) 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 untrue 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 and the termination of this Agreement. 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.
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 (a) is a
subsidiary, parent, general partner, limited partner, retired partner, member or
retired member of a Holder, (b) is a Holder's family member or trust for the
benefit of an individual Holder, or (c) acquires at least one hundred thousand
(100,000) shares of Registrable Securities (as adjusted for stock splits and
combinations); PROVIDED, HOWEVER, (i) 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 (ii) 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 a majority of the
Registrable Securities then outstanding. 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 at least a majority of the Registrable Securities then outstanding,
enter into any agreement with any holder
12
or prospective holder of any securities of the Company that would grant such
holder registration rights senior to or PARI PASSU those granted to the Holders
hereunder.
2.13 "MARKET STAND-OFF" AGREEMENT; AGREEMENT TO FURNISH INFORMATION.
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 hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act;
PROVIDED that (i) such agreement shall apply only to the Company's Initial
Offering, and (ii) 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; PROVIDED FURTHER, that to the extent that at least one hundred
thousand (100,000) shares of any Holder's Registrable Securities are released by
the representative of the underwriters in the Initial Offering from the
obligations set forth in this Section 2.13, all Holders shall be entitled to
release of the same pro-rata percentage of such Holder's shares from the
obligations set forth in this Section 2.13.
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. In
addition, if requested by the Company or the representative of the underwriters
of Common Stock (or other securities) of the Company, each Holder shall provide,
within ten (10) days of such request, such information as may be required by the
Company or such representative in connection with the completion of any public
offering of the Company's securities pursuant to a registration statement filed
under the Securities Act. The obligations described in this Section 2.13 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 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; and
(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
13
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.
SECTION 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.
(b) As soon as practicable after the end of each fiscal year of the
Company, and in any event within one hundred twenty (120) days thereafter, the
Company will furnish each Investor a balance sheet of the Company, as at the end
of such fiscal year, and a statement of income and a 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 in any event within forty-five (45) days
thereafter, a balance sheet of the Company as of the end of each such quarterly
period, and a statement of income and a 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) The Company will furnish each Investor (i) at least thirty (30)
days prior to the beginning of each fiscal year an annual budget and operating
plans 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 balance sheet of the Company as
of the end of each such month, and a statement of income and a 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 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 3.2 with respect to a competitor of the Company or with respect to
information which the
14
Board of Directors determines in good faith is confidential and should not,
therefore, be disclosed.
3.3 OBSERVER RIGHTS. So long as an Investor (with its affiliates) shall
own not less than one million (1,000,000) shares of Registrable Securities (as
adjusted for stock splits and combinations) (a "Major Investor"), such Major
Investor shall have the right to designate a representative to attend meetings
of the Company's Board of Directors; PROVIDED, HOWEVER, that no Holder of Series
D Stock shall be entitled to any Board observer right set forth in this Section
3.3. The Board of Directors shall have the right to exclude all, but not a
subset, of such observers from portions of such meetings when a compelling
reason exists to do so, as determined in good faith by the Board of Directors.
In addition, ▇▇▇▇▇ ▇. ▇▇▇▇▇, of Forge Medical Partners, may attend all meetings
of the Board of Directors, but shall not possess any voting rights with respect
to such meetings.
3.4 CONFIDENTIALITY OF RECORDS. Each Investor agrees to use, and to use
its best efforts to insure that its authorized representatives use, the same
degree of care as such Investor uses to protect its own confidential information
to keep confidential any information furnished to it which the Company
identifies as being confidential or proprietary (so long as such information is
not in the public domain), except that such Investor may disclose such
proprietary or confidential information to any partner, subsidiary or parent of
such Investor for the purpose of evaluating its investment in the Company as
long as such partner, subsidiary or parent is advised of the confidentiality
provisions of this Section 3.4.
3.5 RESERVATION OF COMMON STOCK. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the conversion of the
Preferred Stock, all Common Stock issuable from time to time upon such
conversion.
3.6 STOCK VESTING. Unless otherwise approved by the Board of Directors,
all stock options and other stock equivalents issued after the date of this
Agreement to employees, directors, consultants and other service providers shall
be subject to vesting over a four-year period from the date of grant as follows:
(a) twenty-five percent (25%) of such stock shall vest at the end of the first
year following the date of grant, and (b) the remaining seventy-five percent
(75%) of such stock shall vest thereafter on a monthly basis. 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.
3.7 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. The Company shall
require all employees and consultants to execute and deliver a Proprietary
Information and Inventions Agreement in the form attached to the Purchase
Agreement.
3.8 APPROVAL. 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.
15
3.9 DIRECTORS' LIABILITY AND INDEMNIFICATION. The Company's Certificate
of Incorporation and Bylaws shall provide (a) for elimination of the liability
of director to the maximum extent permitted by law and (b) for indemnification
of directors for acts on behalf of the Company to the maximum extent permitted
by law.
3.10 TERMINATION OF COVENANTS. All covenants of the Company contained in
Section 3 of this Agreement shall expire and terminate as to each Investor upon
the earlier of (a) the effective date of the registration statement pertaining
to the Initial Offering or (b) upon (i) the acquisition of all or substantially
all of the assets of the Company or (ii) an acquisition of the Company by
another corporation or entity by consolidation, merger or other reorganization
in which the holders of the Company's outstanding voting stock immediately prior
to such transaction own, immediately after such transaction, securities
representing less than fifty percent (50%) of the voting power of the
corporation or other entity surviving such transaction (a "Change in Control").
SECTION 4. RIGHTS OF FIRST REFUSAL
4.1 SUBSEQUENT OFFERINGS. Each Stockholder shall have a right of first
refusal to purchase his, her or its PRO RATA share of all Equity Securities, as
defined below, 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 Stockholder's PRO RATA share is equal to
the ratio of (a) the number of shares of the Company's Common Stock (including
all shares of Common Stock issued or issuable upon conversion of the Shares) of
which such Stockholder is deemed to be a holder 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 or upon the exercise of any
outstanding warrants or options) immediately prior to the issuance of the Equity
Securities. The term "Equity Securities" shall mean (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.
4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Stockholder 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 Stockholder shall have
fifteen (15) days from the giving of such notice to agree to purchase 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 Stockholder 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
Stockholders elect to purchase their PRO RATA share of the Equity Securities,
then the Company shall promptly notify in writing the Stockholders who do so
elect and shall offer such Stockholders the right to
16
acquire such unsubscribed shares. The Stockholders shall have five (5) days
after receipt of such notice to notify the Company of its election to purchase
all or a portion thereof of the unsubscribed shares. If the Stockholders 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
Stockholders' 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 Stockholders 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
Stockholders in the manner provided above.
4.4 TERMINATION AND WAIVER OF RIGHTS OF FIRST REFUSAL. The rights of
first refusal established by this Section 4 shall not apply to, and shall
terminate upon the earlier of (i) the effective date of the registration
statement pertaining to the Company's Initial Offering or (ii) a Change in
Control. The rights of first refusal established by this Section 4 may be
amended, or any provision waived with the written consent of a majority in
interest of (i) Investors holding the Registrable Securities, and (ii) holders
of the Common Shares, voting together on an as-converted basis, or as permitted
by Section 5.6.
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 any transfer of registration rights pursuant
to Section 2.10.
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 after the Original Issue Date (as defined in the
Company's Restated Certificate of Incorporation) 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 upon the exercise or conversion of an Equity
Security that is issued after the date of this Agreement; PROVIDED that the
Equity Security has been issued in compliance with the rights of first refusal
established by this Section 4.
(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 loan or
leasing arrangement, or debt financing from a bank or similar financial
institution;
17
(g) any Equity Securities that are issued by the Company pursuant to
a registration statement filed under the Securities Act; and
(h) shares of the Company's Common Stock or Preferred Stock issued
in connection with licensing or 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 transactions and the issuance of shares therein
has been approved by at least five of the seven members of the Company's Board
of Directors.
SECTION 5. MISCELLANEOUS
5.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
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 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules hereto,
the Purchase Agreement and the other documents delivered pursuant thereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein, including those set forth
in the Investor Rights Agreement.
5.5 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.
18
5.6 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 a majority 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 a majority 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.
5.7 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.
5.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) 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 by ten
(10) days advance written notice to the other parties hereto.
5.9 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 losing 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.
5.10 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.
5.11 ADDITIONAL INVESTORS. Notwithstanding anything to the contrary
contained herein, if the Company shall issue additional shares of its Preferred
Stock pursuant to the Purchase Agreement, any purchaser of such shares of
Preferred Stock may become a party to this
19
Agreement by executing and delivering an additional counterpart signature
page to this Agreement and shall be deemed an "INVESTOR" hereunder.
5.12 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.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
20
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY: INVESTORS:
ELITRA PHARMACEUTICALS INC. INCYTE GENOMICS, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------ --------------------------------
By: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. By: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President Title: CHIEF EXECUTIVE OFFICER
ENTERPRISE PARTNERS IV, L.P.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
ENTERPRISE PARTNERS IV ASSOCIATES, L.P.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ASSOCIATES FUND III, a California Limited Partnership
By: ▇▇▇▇▇▇▇▇ VIII MANAGEMENT, LLC., a Delaware Limited
Liability Company, its General Partner
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: General Partner
▇▇▇▇▇▇▇▇ VIII, a California Limited Partnership
By: ▇▇▇▇▇▇▇▇ VIII MANAGEMENT, LLC., a Delaware Limited
Liability Company, its General Partner
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: General Partner
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
▇▇▇▇▇▇-SBIC, L.P.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: GENERAL PARTNER
WIG-GLOBAL VENTURES PTE. LTD.
/s/ LIP-BU TAN
--------------------------------
By: LIP-BU TAN
Title: PRESIDENT
INTERNATIONAL VENTURES CAPITAL INVESTMENT CORP.
/s/ LIP-BU TAN
--------------------------------
By: LIP-BU TAN
Title: PRESIDENT
PACVEN ▇▇▇▇▇▇ VENTURES IV, L.P.
/s/ LIP-BU TAN
--------------------------------
By: LIP-BU TAN
Title: Director of Pacven ▇▇▇▇▇▇ Management Co., Ltd.,
as General Partner of Pacven ▇▇▇▇▇▇ Management II, L.P.
as General Partner of Pacven ▇▇▇▇▇▇ Ventures IV, L.P.
PACVEN ▇▇▇▇▇▇ VENTURES IV ASSOCIATES, L.P.
/s/ LIP-BU TAN
--------------------------------
By: LIP-BU TAN
Title: Director of Pacven ▇▇▇▇▇▇ Management Co., Ltd.,
as General Partner of Pacven ▇▇▇▇▇▇ Management II, L.P.
as General Partner of Pacven ▇▇▇▇▇▇ Ventures IV, L.P.
INTERWEST INVESTORS VI, L.P.
By: InterWest Management Partners VI, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
INTERWEST PARTNERS VI, L.P.
By: InterWest Management Partners VI, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director
▇▇▇▇▇▇▇ FAMILY, LIMITED PARTNERSHIP
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: MANAGER OF G.P.
GC&H INVESTMENTS
------------------------------------
By:
Title:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, PH.D.
------------------------------------
R. ▇▇▇▇▇ ▇▇▇▇▇▇▇, PH.D.
------------------------------------
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
TBCC FUNDING TRUST II
/s/ illegible
------------------------------------
By:
--------------------------------
Title: EXECUTIVE VICE PRESIDENT
------------------------------
VLG INVESTMENTS 1998
------------------------------------
By:
--------------------------------
Title:
------------------------------
GENECHEM TECHNOLOGIES VENTURE FUND L.P.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: PRESIDENT
-----------------------------
TECHAMP INTERNATIONAL, L.P.
/s/ ILLEGIBLE SIGNATURE
------------------------------------
By:
---------------------------------
Title: VICE PRESIDENT
----------------------------
BEAR PAW CAPITAL LLC
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: MANAGER
-----------------------------
SEARS LIVING TRUST DTD 3/11/91
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: TRUSTEE
-----------------------------
COMDISCO INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: SENIOR VICE PRESIDENT
------------------------------
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ ECM FUND I, LLC
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: MANAGING DIRECTOR
-----------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
PACIFIC VENTURE GROUP II, L.P.
By: PVG EQUITY PARTNERS II, L.L.C.
Its: General Partner
/s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Title: MANAGING DIRECTOR
-----------------------------
PVG ASSOCIATES II, L.P.
By: PVG EQUITY PARTNERS II, L.L.C.
Its: General Partner
/s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: MANAGING DIRECTOR
ALEXANDRIA REAL ESTATE EQUITIES , L.P.
By: ARE-QRS Corp., a Maryland corporation,
general partner
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Senior Vice President, Business
Development and Legal Affairs
THE ▇▇▇▇▇▇▇▇ FAMILY TRUST
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Title: TRUSTEE
-----------------------------
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
▇▇▇ ▇▇▇▇▇▇ LIVING TRUST
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇, TRUSTEE
------------------------------------------------
▇▇▇▇▇▇▇▇ FAMILY TRUST UTD 5/8/80
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: TRUSTEE
▇▇▇▇▇▇▇▇▇ TRUST, UTD 1/30/99
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------------
Title: TRUSTEES
-------------------------------------------------
/s/ MAARTEN CHRISPEELS
------------------------------------------------
MAARTEN CHRISPEELS
THE ▇▇▇▇▇ FAMILY TRUST
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Title: TRUSTEE
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ LIVING TRUST
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Title: TRUSTEE
------------------------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
YALTA INVESTMENTS, L.P.
/s/ ▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
By: ▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Title: GENERAL PARTNER
-----------------------------------------
PATHO TRUST
/s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
Title: ADMINISTRATIVE TRUSTEE
------------------------------------------------
▇▇▇▇▇▇ LIVING TRUST
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Title: TRUSTEE
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ PARTNERS, LLC
/s/ ILLEGIBLE SIGNATURE
------------------------------------------------
By:
--------------------------------------------
Title: CEO
-----------------------------------------
SENVEST INTERNATIONAL LLC
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Title: GENERAL PARTNER
-----------------------------------------
SENVEST MASTER FUND L.P.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Title: GENERAL PARTNER
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SIGNATURE PAGE TO
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
EXHIBIT A
SCHEDULE OF INVESTORS
INVESTOR SHARES
--------------------------------------------------------------------------------------
HOLDERS OF SERIES A PREFERRED STOCK:
--------------------------------------------------------------------------
ENTERPRISE PARTNERS IV ASSOCIATES, L.P. 180,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ENTERPRISE PARTNERS IV, L.P. 2,070,001
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
MAYFIELD ASSOCIATES FUND III 112,500
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
MAYFIELD VIII 2,137,501
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
VLG INVESTMENTS 1998 15,151
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
GC&H INVESTMENTS 30,303
ATTENTION: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
HOLDERS OF SERIES B PREFERRED STOCK:
--------------------------------------------------------------------------
ENTERPRISE PARTNERS IV ASSOCIATES, L.P. 320,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ENTERPRISE PARTNERS IV, L.P. 3,680,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A-1.
INVESTOR SHARES
--------------------------------------------------------------------------------------
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ 666,666
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
MAYFIELD ASSOCIATES FUND III 200,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
MAYFIELD VIII 3,800,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇-SBIC, L.P. 1,333,333
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
WIG-GLOBAL VENTURES PTE. LTD. 400,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
INTERNATIONAL VENTURES CAPITAL INVESTMENT CORP. 266,667
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PACVEN ▇▇▇▇▇▇ VENTURES IV, L.P. 3,599,567
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PACVEN ▇▇▇▇▇▇ VENTURES IV ASSOCIATES FUND, L.P. 67,100
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
INTERWEST PARTNERS VI, L.P. 4,848,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
INTERWEST INVESTORS VI, L.P. 152,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ FAMILY, LIMITED PARTNERSHIP 333,333
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
A-2.
INVESTOR SHARES
--------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 66,666
▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 266,666
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GENECHEM TECHNOLOGIES VENTURE FUND L.P. 1,333,336
▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
HOLDER OF SERIES D PREFERRED STOCK:
--------------------------------------------------------------------------
INCYTE GENOMICS, INC. 1,538,462
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
HOLDER OF WARRANT FOR COMMON SHARES
--------------------------------------------------------------------------
TBCC FUNDING TRUST II 26,050
Transamerica Technology Finance Division
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
HOLDERS OF SERIES E PREFERRED STOCK AND WARRANTS TO PURCHASE SERIES E SHARES WARRANTS
PREFERRED STOCK
-----------------------------------------------------------------------------------------------------------
ENTERPRISE PARTNERS IV ASSOCIATES, L.P. 24,615 6,153
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ENTERPRISE PARTNERS IV, L.P. 283,077 70,769
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ 400,000 100,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
MAYFIELD ASSOCIATES FUND III 15,385 3,846
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A-3.
INVESTOR SHARES WARRANTS
-----------------------------------------------------------------------------------------------------------
MAYFIELD VIII 292,307 73,076
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PATHO TRUST 144,615 36,153
Mayfield Fund
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ LIVING TRUST 15,384 3,846
Mayfield Fund
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇-SBIC, L.P. 72,400 18,100
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
WIIG-GLOBAL VENTURES PTE. LTD. 21,719 5,429
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
INTERNATIONAL VENTURES CAPITAL 14,480 3,620
INVESTMENT CORP.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PACVEN ▇▇▇▇▇▇ VENTURES IV, L.P. 195,450 48,862
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PACVEN ▇▇▇▇▇▇ VENTURES IV 3,643 910
ASSOCIATES FUND, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
INTERWEST PARTNERS IV, L.P. 298,336 74,584
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A-4.
INVESTOR SHARES WARRANTS
-----------------------------------------------------------------------------------------------------------
INTERWEST INVESTORS VI, L.P. 9,354 2,338
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
GENECHEM TECHNOLOGIES VENTURE FUND, L.P. 307,692 76,923
▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
TECHAMP INTERNATIONAL, L.P. 307,692 76,923
AM ▇▇▇▇▇▇ & Associates
Headquarters Park - Beta Bldg.
Suite 420
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ FAMILY, LIMITED PARTNERSHIP 230,769 57,692
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 61,538 15,384
▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 123,076 30,769
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
BEAR PAW CAPITAL LLC 212,307 53,076
The ▇▇▇▇▇▇▇ Group
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
THE SEARS LIVING TRUST DTD 3/11/91 38,461 9,615
c/o ▇▇▇▇▇▇ ▇▇▇▇▇
Sears Capital Management, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
A-5.
INVESTOR SHARES WARRANTS
-----------------------------------------------------------------------------------------------------------
COMDISCO INC. 153,846 38,461
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Venture Group
PACIFIC VENTURE GROUP II, L.P. 597,260 149,315
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
PVG ASSOCIATES II, L.P. 18,124 4,531
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ ECM FUND I, LLC 615,384 153,846
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Senior Business Analyst
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ 153,846 38,461
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ALEXANDRIA REAL ESTATE EQUITIES, L.P. 76,923 19,230
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
THE ▇▇▇▇▇▇▇▇ FAMILY TRUST 76,923 19,230
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
THE ▇▇▇▇▇▇ LIVING TRUST 50,000 12,500
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ FAMILY TRUST UTD 5/8/80 169,231 42,307
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇▇
A-6.
INVESTOR SHARES WARRANTS
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ TRUST, UTD 1/30/99 30,800 7,700
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MAARTEN CHRISPEELS 30,770 7,692
UCSD
Dept. of Biology
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
THE ▇▇▇▇▇ FAMILY TRUST 153,846 38,461
Utonica
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ LIVING TRUST 76,923 19,230
▇.▇. ▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ 30,769 7,692
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
YALTA INVESTMENTS, L.P. 30,769 7,692
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇
SENVEST INTERNATIONAL LLC 76,923 19,230
1140 de Maisonneuve Ouest
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
SENVEST MASTER FUND L.P. 46,153 11,538
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 30,769 7,692
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
A-7.
INVESTOR SHARES WARRANTS
-----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ HILL PARTNERS, LLC 615,384 153,846
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
INCYTE GENOMICS, INC. 615,384 153,846
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
CERTAIN HOLDERS OF COMMON SHARES:
--------------------------------------------------------------------------
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ 1,200,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D. 880,000
R. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Ph.D. 345,000
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 500,000
A-8.