Exhibit 10.3

 

INVESTOR RIGHTS AGREEMENT

dated as of

July 29, 2015

among

VTV THERAPEUTICS INC.

and

VTV THERAPEUTICS HOLDINGS LLC

 

 

 

 

TABLE OF CONTENTS

 

 

Page

 

ARTICLE 1 Definitions Section 1.01.   Definitions 1 Section 1.02.   Other
Definitional and Interpretative Provisions 7 ARTICLE 2 Registration Rights
Section 2.01.   Demand Registration 7 Section 2.02.   Shelf and Piggyback
Registration 11 Section 2.03.   Lock-Up Agreements 16 Section
2.04.   Registration Procedures 17 Section 2.05.   Indemnification by the
Company 21 Section 2.06.   Indemnification by Registering Stockholders 22
Section 2.07.   Conduct of Indemnification Proceedings 22 Section
2.08.   Contribution 23 Section 2.09.   Participation in Public Offering 24
Section 2.10.   Other Indemnification 24 Section 2.11.   Cooperation by the
Company 24 Section 2.12.   Transfer of Registration Rights 24 Section
2.13.   Limitations on Subsequent Registration Rights 24 Section 2.14.   Free
Writing Prospectuses 25 Section 2.15.   Information from Registering
Stockholders; Obligations of Registering Stockholders 25 ARTICLE 3 Board of
Directors Section 3.01.   Board of Directors 26 Section 3.02.   Termination of
Holdings’ Rights 27 ARTICLE 4 Termination Section 4.01.   Termination 28

 

 

ARTICLE 5 Miscellaneous Section 5.01.   Successors and Assigns 29 Section
5.02.   Notices 29 Section 5.03.   Amendments and Waivers 30 Section
5.04.   Governing Law 30 Section 5.05.   Jurisdiction 30 Section 5.06.   WAIVER
OF JURY TRIAL 30 Section 5.07.   Specific Enforcement 31 Section
5.08.   Counterparts; Effectiveness; Third Party Beneficiaries 31 Section
5.09.   Entire Agreement 31 Section 5.10.   Severability 31 Section
5.11.   Sophisticated Parties; Advice of Counsel 31 Section 5.12.   Certificate
of Incorporation Supersedes 31

 

Exhibit A         Joinder Agreement 

Schedule 1      Plan of Distribution

 

 

 

 

INVESTOR RIGHTS AGREEMENT

 

THIS INVESTOR RIGHTS AGREEMENT dated as of July 29, 2015 (this “Agreement”)
among (i) vTv Therapeutics Inc., a Delaware corporation (the “Company”), (ii)
vTv Therapeutics Holdings LLC, a Delaware limited liability company
(“Holdings”), and (iii) other stockholders party hereto from time to time.

 

W I T N E S S E T H:

 

WHEREAS, in connection with the initial public offering of the Company and the
related reorganization transactions, Holdings has received 25,000,000 shares of
Class B common stock, par value $0.01, of the Company; and

 

WHEREAS, the parties hereto are entering into this Agreement to provide (i)
certain registration rights under the Securities Act and applicable state
securities laws to each Stockholder (as defined below) with respect to
Registrable Securities (as defined below) each may hold and (ii) certain
governance rights to Holdings.

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the parties hereto agree as follows:

 

ARTICLE 1
Definitions

 

Section 1.01.      Definitions. (a) As used herein, the following terms have the
following meanings:

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person;
provided that no securityholder of the Company shall be deemed an Affiliate of
any other securityholder solely by reason of any investment in the Company. For
the purpose of this definition, the term “control” (including, with correlative
meanings, the terms “controlling”, “controlled by” and “under common control
with”), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.

 

“Applicable Governance Rules” means applicable federal and state securities laws
and the rules of NASDAQ relating to the Board and the corporate governance of
the Company, including, without limitation, Rule 10A-3 of the Exchange Act and
Rule 5600 of the NASDAQ Stock Market Rules, in each case, subject to applicable
phase-in periods.

 

“Automatic Shelf Registration Statement” means an “automatic shelf registration
statement” as defined in Rule 405 promulgated under the Securities Act.

 

“beneficial ownership” and “beneficially own” and similar terms have the meaning
set forth in Rule 13d-3 under the Exchange Act.

 

“Board” means the board of directors of the Company.

 

 

 

 

“Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York City are authorized by law to close.

 

“By-laws” means the Amended and Restated By-laws of the Company, as the same may
be amended, supplemented and or restated from time to time.

 

“Certificate of Incorporation” means the Amended and Restated Certificate of
Incorporation of the Company, as the same may be amended, modified or restated
from time to time.

 

“Charter” means the Amended and Restated Certificate of Incorporation of the
Company, as the same may be amended, supplemented and/or restated from time to
time.

 

“Class A Common Stock” means the Class A common stock, par value $0.01 per
share, of the Company.

 

“Class B Common Stock” means the Class B common stock, par value $0.01 per
share, of the Company.

 

“Company Securities” means (i) the Class A Common Stock, (ii) any securities of
the Company or any successor or assign of the Company into which such Class A
Common Stock is reclassified or reconstituted or into which such Class A Common
Stock is converted or otherwise exchanged in connection with a split or
combination of shares, recapitalization, merger, sale of assets, consolidation
or other reorganization or otherwise or (iii) any securities received as a
dividend or a distribution in respect of the securities described in clauses (i)
or (ii) above.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC thereunder.

 

“Exchange Agreement” means the Exchange Agreement, dated as of the date hereof,
by and among the Company, vTv Therapeutics LLC, Holdings (and its successors or
assigns) and any other Person that becomes a “Holder” thereunder, as the same
may be amended, restated, supplemented and/or otherwise modified, from time to
time.

 

“Exchange Securities” means, together, the Nonvoting Common Units of vTv
Therapeutics LLC and shares of Class B Common Stock.

 

“FINRA” means the Financial Industry Regulatory Authority.

 

“Free Writing Prospectus” means any “free writing prospectus” as defined in Rule
405 promulgated under the Securities Act relating to the Registrable Securities
included in the applicable Registration Statement.

 

“Hedging Counterparty” means a broker-dealer registered under Section 15(b) of
the Exchange Act or an Affiliate thereof.

 

“Hedging Transaction” means any transaction involving a security linked to the
Registrable Class Securities or any security that would be deemed to be a
“derivative security” (as defined in Rule 16a-1(c) promulgated under the
Exchange Act) with respect to the Registrable Class Securities or transaction
(even if not a security) which would (were it a security) be considered such a
derivative security, or which transfers some or all of the economic risk of
ownership of the Registrable Class Securities, including any forward contract,
equity swap, put or call, put or call equivalent position, collar, non-recourse
loan, sale of exchangeable security or similar transaction. For the avoidance of
doubt, the following transactions shall be deemed to be Hedging Transactions:

 

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(i)    transactions by a Stockholder in which a Hedging Counterparty engages in
short sales of Registrable Class Securities pursuant to a prospectus and may use
Registrable Securities to close out its short position;

 

(ii)    transactions pursuant to which a Stockholder sells short Registrable
Class Securities pursuant to a prospectus and delivers Registrable Securities to
close out its short position;

 

(iii)    transactions by a Stockholder in which the Stockholder delivers, in a
transaction exempt from registration under the Securities Act, Registrable
Securities to the Hedging Counterparty who will then publicly resell or
otherwise transfer such Registrable Securities pursuant to a prospectus or an
exemption from registration under the Securities Act; and

 

(iv)    a loan or pledge of Registrable Securities to a Hedging Counterparty who
may then become a selling stockholder and sell the loaned shares or, in an event
of default in the case of a pledge, sell the pledged shares, in each case, in a
public transaction pursuant to a prospectus.

 

“Independent Director” means a director who qualifies as an “independent
director” of the Company under the NASDAQ Stock Market Rules.

 

“Initial Public Offering” means the initial underwritten public offering of the
Class A Common Stock of the Company on July 29, 2015.

 

“MacAndrews Party” means each of Holdings, MacAndrews & Forbes Incorporated and
M&F TTP Holdings LLC and each of their respective Affiliates (other than the
Company and its Subsidiaries).

 

“MacAndrews Stockholder” means each MacAndrews Party that is a Stockholder.

 

“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof, and
shall include any successor (by merger or otherwise) thereto.

 

“Public Offering” means an underwritten public offering of Registrable
Securities (or in the case of the Company, Company Securities) pursuant to an
effective registration statement under the Securities Act, other than pursuant
to a registration statement on Form S-4 or Form S-8 or any similar or successor
form under the Securities Act.

 

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“Registering Stockholder” means, with respect to any Registration Statement,
each Stockholder whose Registrable Securities are or are to be registered
pursuant to such Registration Statement.

 

“Registrable Class Securities” means the Registrable Securities and any other
securities of the Company that are of the same class as the relevant Registrable
Securities.

 

“Registrable Securities” means, at any time, any Company Securities beneficially
owned (whether beneficially owned as of the date hereof or hereinafter
beneficially owned) by a Stockholder until (i) a registration statement covering
such securities has been declared effective by the SEC and such securities have
been disposed of pursuant to such effective registration statement, (ii) such
securities are sold pursuant to Rule 144 (or any similar provisions then in
force) under the Securities Act, (iii) such securities are otherwise
transferred, assigned, sold, conveyed or otherwise disposed of and thereafter
such securities may be resold without subsequent registration under the
Securities Act or (iv) with respect to any such securities held by any single
Stockholder (or group of Stockholders that are aggregated for purposes of Rule
144), all of such securities held by any Stockholder or group of Stockholders
are able to be sold in a single transaction pursuant to Rule 144 (or any similar
provisions then in force) and such securities of such Stockholder (or group of
Stockholder) represent no more than 2.5% of the relevant class of Company
Securities. Upon written request to the Company, Holdings may, from time to
time, designate as additional Registrable Securities an aggregate of up to
2,500,000 shares (which number shall be subject to adjustment to take account of
any splits, combinations, share dividends or other similar transactions
affecting the Company Securities) of Company Securities that have been issued or
are issuable upon exchange of Exchange Securities that are beneficially owned by
parties other than Stockholders. For the avoidance of doubt, in connection with
any designation pursuant to the preceding sentence, parties other than
Stockholders will not have any rights, benefits, remedies, obligations, or
liabilities under this Agreement.

 

 

“Registration Expenses” means any and all expenses incident to the performance
of or compliance with any registration or marketing of Registrable Securities,
regardless of whether such Registration Statement is declared effective,
including all (i) registration and filing fees, and all other fees and expenses
payable in connection with the listing of securities on any securities exchange
or automated interdealer quotation system, (ii) fees and expenses incurred in
complying with any securities or “blue sky” laws (including reasonable fees and
disbursements of counsel in connection with “blue sky” qualifications of the
Registrable Securities as may be set forth in any underwriting agreement), (iii)
expenses in connection with the preparation, printing, mailing and delivery of
any registration statements, prospectuses and other documents in connection
therewith and any amendments or supplements thereto, (iv) security engraving and
printing expenses, (v) internal expenses of the Company (including all salaries
and expenses of its officers and employees performing legal or accounting
duties), (vi) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants
retained by the Company (including the expenses relating to any comfort letters
or costs associated with the delivery by independent certified public
accountants of any “comfort” letters requested pursuant to Section 2.04(h) or
any special audits incidental to or required by any registration or
qualification), (vii) reasonable fees and expenses of any special experts
retained by the Company in connection with such registration, (viii) reasonable
fees, out-of-pocket costs and expenses of one firm of counsel selected by the
holder(s) of a majority of the Registrable Securities covered by each
Registration Statement (the “Holders’ Counsel”), (ix) fees and expenses in
connection with any review by the FINRA of the underwriting arrangements or
other terms of the offering, and all fees and expenses of any qualified
independent underwriter, including the reasonable fees and expenses of any
counsel thereto, (x) fees and disbursements of underwriters customarily paid by
issuers or sellers of securities, but excluding any underwriting fees, discounts
and commissions attributable to the sale of Registrable Securities, (xi) costs
of printing and producing any agreements among underwriters, underwriting
agreements, any “blue sky” or legal investment memoranda and any selling
agreements and other documents in connection with the offering, sale or delivery
of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and
expenses and the fees and expenses of any other agent or trustee appointed in
connection with such offering, (xiii) expenses relating to any analyst or
investor presentations or any “road shows” undertaken in connection with the
registration, marketing or selling of the Registrable Securities, (xiv) fees and
expenses payable in connection with any ratings of the Registrable Securities,
including expenses relating to any presentations to rating agencies, (xv) all
out-of pocket costs and expenses incurred by the Company or its appropriate
officers in connection with their compliance with Section 2.04(m) and (xvi) any
liability insurance or other premiums for insurance obtained in connection with
any Demand Registration, Piggyback Registration or Shelf Registration pursuant
to the terms of this Agreement.

 

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“Registration Statement” means any registration statement of the Company under
the Securities Act that covers any of the Registrable Securities pursuant to the
provisions of this Agreement.

 

“Requesting Stockholder” means, with respect to any Demand Registration or Shelf
Registration, any Stockholder holding any Registrable Securities initially
making the request for such Demand Registration or Shelf Registration.

 

“Rule 144” means Rule 144 promulgated under the Securities Act.

 

“SEC” means the U.S. Securities and Exchange Commission or any successor
governmental agency.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

“Shares” means shares of Common Stock.

 

“Shelf Registered Securities” means any Registrable Securities whose offer and
sale is registered pursuant to a Registration Statement filed in connection with
a Shelf Registration (including an Automatic Shelf Registration Statement).

 

“Specified Period” means 90 days; provided that such period may be extended as
may be reasonably requested by the managing or co-managing underwriter of a
registered offering required hereunder to accommodate regulatory restrictions on
(i) the publication or other distribution of research reports and (ii) analyst
recommendations and opinions, including, but not limited to, the restrictions
contained in the FINRA rules or any successor provisions or amendments thereto.

 

“Stockholder” means at any time, (i) each MacAndrews Party beneficially owning
Company Securities or Exchange Securities and (ii) any Person (other than the
Company) who shall be a party to or bound by this Agreement (including any
permitted transferee or assignee of a MacAndrews Party) pursuant to Section
2.12, so long as such Person shall beneficially own any Company Securities.

 

“Subsidiary” means, with respect to any Person, any entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions at the time
are directly or indirectly owned by such Person.

 

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(b)               Each of the following terms is defined in the Section set
forth opposite such term:

 

Term

 

Section

 

Alternative Transaction 2.02(d) Audit Committee Independent Director 3.01(a)(ii)
Committees 3.01(c) Company Preamble Damages 2.05 Demand Registration 2.01(a)
Determination Date 2.02(f)

Holdings

Preamble

Holdings Nominee 3.01(a)(i) Holders’ Counsel 1.01(a),
Definition of
“Registration
Expenses” Indemnified Party 2.07 Indemnifying Party 2.07 Independent Director
3.01(c)(ii) Inspectors 2.04(g) Issuer Free Writing Prospectus 2.14 Maximum
Offering Size 2.01(e) Piggyback Registration 2.02(h)(i) Records 2.04(g)
Registration Actions 2.01(f) Requested Shelf Registered Securities 2.02(b) Shelf
Public Offering 2.02(b) Shelf Public Offering Notice 2.02(b) Shelf Public
Offering Request 2.02(b) Shelf Public Offering Requesting Stockholder 2.02(b)
Shelf Registration 2.02(a) Stockholder Parties 2.05 Suspension Notice 2.01(f)
Suspension Period 2.01(f) Well-Known Seasoned Issuer 2.02(f)

 

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Section 1.02.      Other Definitional and Interpretative Provisions. The words
“hereof”, “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof. References to Articles, Sections, Exhibits and Schedules are to
Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise
specified. All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise
defined therein, shall have the meaning as defined in this Agreement. Any
singular term in this Agreement shall be deemed to include the plural, and any
plural term the singular. Whenever the words “include”, “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”, whether or not they are in fact followed by
those words or words of like import. “Writing”, “written” and comparable terms
refer to printing, typing and other means of reproducing words (including
electronic media) in a visible form. References to any Person include the
successors and permitted assigns of that Person. References from or through any
date mean, unless otherwise specified, from and including or through and
including, respectively. References to laws, rules, regulations and forms shall
be deemed to be references to such laws, rules, regulations and forms as
amended, succeeded or replaced.

 

ARTICLE 2
Registration Rights

 

Section 2.01.      Demand Registration. (a) At any time following the Initial
Public Offering, any Stockholder may give a written request to the Company to
effect the registration under the Securities Act (other than pursuant to a
registration statement on Form S-4 or S-8 or any similar or successor form under
the Securities Act) of all or any portion of such Requesting Stockholder’s
Registrable Securities, which written request shall specify the number of
Registrable Securities to be registered and the intended method of disposition
thereof. Such registration may be for the offering of the Stockholder’s
Registrable Securities on a delayed or continuous basis under Rule 415 under the
Securities Act. At any time the Company is eligible for use of Form S-3ASR, such
registration shall occur on such form. Upon the receipt of such written request,
the Company shall promptly give notice (via facsimile or electronic
transmission) of such requested registration (each such registration shall be
referred to herein as a “Demand Registration”) at least 10 Business Days prior
to the anticipated filing date of the Registration Statement relating to such
Demand Registration to any other Stockholders. Thereafter, the Company shall use
its commercially reasonable efforts to effect, as soon as possible, the
registration under the Securities Act of:

 

(i)                 all Registrable Securities for which the Requesting
Stockholder has requested registration under this Section 2.01;

 

(ii)                all other Registrable Securities of the same class or series
as those requested to be registered by the Requesting Stockholder that any other
Stockholder have requested the Company to register by request received by the
Company within 10 Business Days after such Stockholders receive the Company’s
notice of the Demand Registration; and

 

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(iii)             any Company Securities to be offered or sold by the Company;

 

all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as described in the Requesting Stockholder’s written
request) of the Registrable Securities so to be registered; provided that,
subject to Section 2.01(d), the Company shall not be obligated to effect (1) any
such Demand Registration (i) within the Specified Period after the effective
date of any other registration statement of the Company in connection with which
Stockholders were given Piggyback Registration rights (other than a registration
statement filed in connection with an employee benefit plan or business
combination transaction or a registration statement on Form S-4 or S-8) or (ii)
in accordance with Section 2.01(f), (2) any Demand Registration if the aggregate
proceeds expected to be received from the sale of the Registrable Securities
requested to be included in such Demand Registration is less than $25,000,000
(other than with respect to the registration of the exchange of the Exchange
Securities for shares of Class A Common Stock pursuant to the Exchange
Agreement) or (3) any Demand Registration requested by a Stockholder other than
the MacAndrews Stockholders if the Company has completed three Demand
Registrations after the date hereof as a result of requests by Stockholders
other than MacAndrews Stockholders pursuant to this Section 2.01(a). A
Requesting Stockholder may require any Demand Registration that involves a
Public Offering of at least $25,000,000 to be conducted as an underwritten
offering. Notwithstanding the foregoing, a Requesting Stockholder may request
that a Demand Registration take the form of a primary offering by the Company of
Class A Common Stock, whose net proceeds shall be used by the Company, pursuant
to the Exchange Agreement, to pay cash in exchange for the Exchange Securities
that underlie the Registrable Securities proposed to be registered pursuant to
such Demand Registration, in which case, (i) the Demand Registration shall cover
the primary sale of the number of shares of Class A Common Stock requested by
the Requesting Stockholder, (ii) the Requesting Holder shall exercise its right,
pursuant to Section 2.02 of the Exchange Agreement, to exchange the number of
Exchange Securities that is equal to the number of shares of Class A Common
Stock sold in such Public Offering, contingent on (among other things) the
closing of such Public Offering and receipt by the Company of net proceeds
therefrom, (iii) upon receipt of the net proceeds from such Public Offering, the
Company shall elect, pursuant to Section 2.01 of the Exchange Agreement, to
exchange such net proceeds for the number of Exchange Securities equal to the
number of shares of Class A Common Stock sold pursuant to such Public Offering
and (iv) except where the context otherwise requires, references to “Registrable
Securities” with respect to such Demand Registration shall be to such shares of
Class A Common Stock requested to be offered in such Pubic Offering. In
addition, to the extent requested by a Stockholder and agreed by the MacAndrews
Stockholders, such Stockholder may request that the Demand Registration cover
the exchange of the Exchange Securities for shares of Class A Common Stock
pursuant to the Exchange Agreement instead of the resale of the Registrable
Securities.

 

(b)               Promptly after the expiration of the 10 Business Day period
referred to in Section 2.01(a)(ii), the Company will notify all Registering
Stockholders of the identities of the other Registering Stockholders and the
number of shares of Registrable Securities requested to be included in the
Demand Registration. At any time prior to the effective date of the Registration
Statement relating to such Demand Registration, the Requesting Stockholder may
upon notice to the Company, revoke such request in whole or in part with respect
to the number of shares of Registrable Securities requested to be included in
such Registration Statement, without liability to any of the other Registering
Stockholders.

 

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(c)                The Company shall be liable for and pay all Registration
Expenses in connection with any Demand Registration, regardless of whether such
Demand Registration becomes effective.

 

(d)               A Demand Registration shall not be deemed to have occurred or
have been completed for purposes of Section 2.01(a):

 

(i)                 unless the Registration Statement relating thereto (A) has
become effective under the Securities Act and (B) has remained continuously
effective for a period of at least (x) 180 days (or such shorter period in which
all Registrable Securities of the Registering Stockholders included in such
registration have actually been sold thereunder) or (y) with respect to a Shelf
Registration, until the date set forth in Section 2.04(a); provided that such
Registration Statement shall not be considered a Demand Registration if, after
such Registration Statement becomes effective, (1) such Registration Statement
is interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court and (2) less than 75% of the
Registrable Securities included in such Registration Statement have been sold
thereunder; or

 

(ii)               if the Maximum Offering Size is reduced in accordance with
Section 2.01(e) such that less than 66 2/3% of the Registrable Securities of the
Requesting Stockholder sought to be included in such registration are included.

 

(e)                If a Demand Registration involves a Public Offering and the
lead managing underwriter advises the Company and the Requesting Stockholder
that, in its view, the number of shares of Registrable Securities requested to
be included in such registration (including any securities that the Company
proposes to be included that are not Registrable Securities) exceeds the largest
number of shares that can be sold without having a material and adverse effect
on such offering, including the price at which such shares can be sold (the
“Maximum Offering Size”), the Company shall include in such registration, in the
priority listed below, up to the Maximum Offering Size:

 

(i)                 first, all Registrable Securities requested to be registered
by the Requesting Stockholder and all other Registering Stockholders (allocated,
if necessary for the offering not to exceed the Maximum Offering Size, to give
first priority to the inclusion of the Registrable Securities of the Requesting
Stockholder and, thereafter, pro rata among the remaining Registering
Stockholders on the basis of the relative number of shares of Registrable
Securities so requested to be included in such registration by each such
Registering Stockholder);

 

(ii)               second, any securities proposed to be registered by the
Company; and

 

(iii)              third, any securities proposed to be registered for the
account of any other Persons, with such priorities among them as the Company
shall determine.

 

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(f)                Notwithstanding anything to the contrary contained in this
Agreement, but subject to the limitation set forth in the next succeeding
paragraph, the Company shall be entitled to suspend its obligation to file (but
not the preparation of) any Registration Statement in connection with a Demand
Registration and any Shelf Registration, file any amendment to such a
Registration Statement, furnish any supplement or amendment to a prospectus
included in such a Registration Statement, make any other filing with the SEC,
cause such a Registration Statement or other filing with the SEC to become or
remain effective or take any similar action (collectively, “Registration
Actions”) upon (i) the issuance by the SEC of a stop order suspending the
effectiveness of any such Registration Statement or the initiation of
proceedings with respect to such a Registration Statement under Section 8(d) or
8(e) of the Securities Act, (ii) the Board’s determination, in its good faith
judgment, that any such Registration Action should not be taken because it would
reasonably be expected to materially interfere with or require the public
disclosure of any material corporate development or plan, including any material
financing, securities offering, acquisition, disposition, corporate
reorganization or merger or other transaction involving the Company or any of
its Subsidiaries or (iii) the Company possessing material non-public information
the disclosure of which the Board determines, in its good faith judgment, would
reasonably be expected to not be in the best interests of the Company. Upon the
occurrence of any of the conditions described in (i), (ii) or (iii) above, the
Company shall give prompt notice of such suspension (and whether such action is
being taken pursuant to (i), (ii) or (iii) above) (a “Suspension Notice”) to the
Stockholders. Upon the termination of such condition, the Company shall give
prompt notice thereof to the Stockholders and shall promptly proceed with all
Registration Actions that were suspended pursuant to this paragraph.

 

The Company may only suspend Registration Actions pursuant to the preceding
paragraph on two occasions during any one-year period for a reasonable time
specified in the Suspension Notice but not exceeding an aggregate of 90 days
(which period may not be extended or renewed) (each such occasion, a “Suspension
Period”). Each Suspension Period shall be deemed to begin on the date the
relevant Suspension Notice is given to the Stockholders and shall be deemed to
end on the earlier to occur of (i) the date on which the Company gives the
Stockholders a notice that the Suspension Period has terminated and (ii) the
date on which the number of days during which a Suspension Period has been in
effect exceeds the 90-day period. If the filing of any Demand Registration is
suspended pursuant to this Section 2.01(f), once the Suspension Period ends the
Requesting Stockholder may request a new Demand Registration. Notwithstanding
anything to the contrary in this Agreement, the Company shall not be in breach
of, or failed to comply with, any obligation under this Agreement where the
Company acts or omits to take any action in order to comply with applicable law,
any interpretation of the staff of the SEC or any order or decree of any court
or governmental agency.

 

(g)               The Company shall have no obligation to file a Registration
Statement under this Section 2.01 or Section 2.02 or proceed with Registration
Actions related thereto during any time such filing or Registration Actions are
prohibited by any applicable underwriting or lock-up agreement to which the
Company is a party relating to the Initial Public Offering or an offering
pursuant to a Registration Statement.

 

10

 

 

Section 2.02.      Shelf and Piggyback Registration. (a) At any time when (i)
the Company is eligible for use of Form S-3 in connection with a secondary
public offering of its equity securities and (ii) a Shelf Registration on a Form
S-3 registering Registrable Securities for resale is not then effective (subject
to any applicable Suspension Period), upon the written request of any
Stockholder, the Company shall use its commercially reasonable efforts to
register, under the Securities Act on Form S-3 for an offering on a delayed or
continuous basis pursuant to Rule 415 promulgated under the Securities Act (a
“Shelf Registration”), the offer and sale of all or a portion of the Registrable
Securities owned by such Requesting Stockholder. Upon the receipt of such
written request, the Company shall promptly give notice (via facsimile or
electronic transmission) of such requested Shelf Registration at least 10
Business Days prior to the anticipated filing date of such Shelf Registration to
the other Stockholders, and such notice shall describe the proposed Shelf
Registration, the intended method of disposition of such Registrable Securities
and any other information that at the time would be appropriate to include in
such notice, and offer such Stockholders the opportunity to register the number
of Registrable Securities as each such Stockholder may request in writing to the
Company, given within 10 Business Days after such Stockholders receive the
Company’s notice of the Shelf Registration. The “Plan of Distribution” section
of such Shelf Registration shall permit all lawful means of disposition of
Registrable Securities, including firm-commitment underwritten public offerings,
block trades, agented transactions, sales directly into the market, purchases or
sales by brokers and sales not involving a public offering. With respect to each
Shelf Registration, the Company shall, subject to any Suspension Period, (i) as
promptly as practicable after the written request of the Requesting Stockholder,
file a Registration Statement and (ii) use its commercially reasonable efforts
to cause such Registration Statement to be declared effective as promptly as
practicable, and remain effective until the date set forth in Section
2.04(a)(ii). No Stockholder shall be entitled to include any of its Registrable
Securities in a Shelf Registration unless such Stockholder has complied with
Section 2.15. The Company shall not be required to amend a Shelf Registration
(or the related prospectus) to add or change the disclosure regarding selling
securityholders during any Suspension Period. The obligations set forth in this
Section 2.02(a) shall not apply if the Company has a currently effective
Automatic Shelf Registration Statement covering all Registrable Securities in
accordance with Section 2.02(f) and has otherwise complied with its obligations
pursuant to this Agreement.

 

(b)               Upon written request by a Requesting Stockholder holding Shelf
Registered Securities (such Stockholder, the “Shelf Public Offering Requesting
Stockholder”), which request (the “Shelf Public Offering Request”) shall specify
the class or series and amount of such Shelf Public Offering Requesting
Stockholder’s Shelf Registered Securities to be sold (the “Requested Shelf
Registered Securities”), the Company shall (subject to any Suspension Period)
perform its obligations hereunder with respect to the sale of such Requested
Shelf Registered Securities in the form of a firm commitment underwritten public
offering (unless otherwise consented to by the Shelf Public Offering Requesting
Stockholder) (a “Shelf Public Offering”) if the aggregate proceeds expected to
be received from the sale of the Requested Shelf Registered Securities equals or
exceeds $25,000,000. Promptly upon receipt of a Shelf Public Offering Request,
the Company shall provide notice (the “Shelf Public Offering Notice”) of such
proposed Shelf Public Offering (which notice shall state the material terms of
such proposed Shelf Public Offering, to the extent known, as well as the
identity of the Shelf Public Offering Requesting Stockholder) to the other
Stockholders holding Shelf Registered Securities. Such other Stockholders may,
by written request to the Company and the Shelf Public Offering Requesting
Stockholder, within two Business Days after receipt of such Shelf Public
Offering Notice, include up to all of their Shelf Registered Securities of the
same class or series as the Requested Shelf Registered Securities in such
proposed Shelf Public Offering; provided, that any such Shelf Registered
Securities shall be sold subject to the same terms as are applicable to the
Shelf Registered Securities of the Shelf Public Offering Requesting Stockholder.
No Stockholder shall be entitled to include any of its Registrable Securities in
a Shelf Public Offering unless such Stockholder has complied with Section 2.15.
The lead managing underwriter or underwriters selected for such Shelf Public
Offering shall be selected in accordance with Section 2.04(f)(i).

 

11

 

 

(c)                In a Shelf Public Offering, if the lead managing underwriter
advises the Company and the Shelf Public Offering Requesting Stockholder that,
in its view, the number of shares of Registrable Securities requested to be
included in such Shelf Public Offering (including any securities that the
Company proposes to be included that are not Registrable Securities) exceeds the
Maximum Offering Size, the Company shall include in such Shelf Public Offering,
in the priority listed below, up to the Maximum Offering Size:

 

(i)                 first, all Shelf Registered Securities requested to be
included in the Shelf Public Offering by the Shelf Public Offering Requesting
Stockholder and all other Stockholders, pro rata on the basis of the relative
number of shares of Shelf Registered Securities so requested to be included in
the Shelf Public Offering by each such Stockholder;

 

(ii)               second, any securities proposed to be included in the Shelf
Public Offering by the Company; and

 

(iii)              third, any securities proposed to be included in the Shelf
Public Offering for the account of any other Persons, with such priorities among
them as the Company shall determine.

 

(d)               The Company shall use its commercially reasonable efforts to
cooperate in a timely manner with any request of the Stockholders in respect of
any block trade, hedging transaction or other transaction that is registered
pursuant to a Shelf Registration that is not a firm commitment underwritten
offering (each, an “Alternative Transaction”), including, without limitation,
entering into customary agreements with respect to such Alternative Transactions
(and providing customary representations, warranties, covenants and indemnities
in such agreements) as well as providing other reasonable assistance in respect
of such Alternative Transactions of the type applicable to a Public Offering
subject to Section 2.04, to the extent customary for such transactions. The
Company shall bear all Registration Expenses in connection with any Shelf
Registration, any Shelf Public Offering or any other transaction (including any
Alternative Transaction) registered under a Shelf Registration pursuant to this
Section 2.02, whether or not such Shelf Registration becomes effective or such
Shelf Public Offering or other transactions is completed; provided, however,
that if the Shelf Public Offering Requesting Stockholder revokes its request in
whole with respect to a Shelf Public Offering, then the Shelf Public Offering
Requesting Stockholder shall reimburse the Company for and/or pay directly all
Registration Expenses incurred relating to such Shelf Public Offering.

 

(e)                After the Registration Statement with respect to a Shelf
Registration is declared effective but subject to the Suspension Period, upon
written request by one or more Stockholders (which written request shall specify
the amount of such Stockholders’ Registrable Securities to be registered), the
Company shall, as promptly as practicable after receiving such request, (i) if
it is eligible for use of Form S-3 in connection with a secondary public
offering of its equity securities, or if such Registration Statement is an
Automatic Shelf Registration Statement, file a prospectus supplement to include
such Stockholders as selling stockholders in such Registration Statement or (ii)
if it is not eligible for use of Form S-3 in connection with a secondary public
offering of its equity securities, and the Registrable Securities requested to
be registered represent more than 5% of the outstanding Registrable Securities
and the aggregate proceeds expected to be received from the sale thereof is at
least $10,000,000, file a post-effective amendment to the Registration Statement
to include such Stockholders in such Shelf Registration and use commercially
reasonable efforts to have such post-effective amendment declared effective.

 

12

 

 

(f)                Upon the Company becoming aware that it is a “Well-Known
Seasoned Issuer” (as defined in Rule 405 under the Securities Act), (i) the
Company shall give written notice to all of the Stockholders as promptly as
practicable but in no event later than 20 Business Days thereafter, and such
notice shall describe, in reasonable detail, the basis on which the Company has
become a Well-Known Seasoned Issuer, and (ii) the Company shall, as promptly as
practicable and subject to any Suspension Period, register, under an Automatic
Shelf Registration Statement, the sale of all of the Registrable Securities in
accordance with the terms of this Agreement. The Company shall use its
commercially reasonable efforts to file such Automatic Shelf Registration
Statement as promptly as practicable, but in no event later than 15 Business
Days after it becomes a Well-Known Seasoned Issuer, and to cause such Automatic
Shelf Registration Statement to remain effective thereafter until the date set
forth in Section 2.04(a)(ii). The Company shall give written notice of filing
such Registration Statement to all of the Stockholders as promptly as
practicable thereafter. The Company shall not be required to include any
Stockholder as a selling stockholder in any Registration Statement or prospectus
unless such Stockholder has complied with Section 2.15. At any time after the
filing of an Automatic Shelf Registration Statement by the Company, if it is
reasonably likely that it will no longer be a Well-Known Seasoned Issuer as of a
future determination date (the “Determination Date”), at least 30 days prior to
such Determination Date, the Company shall (A) give written notice thereof to
all of the Stockholders as promptly as practicable but in no event later than 10
Business Days prior to such Determination Date and (B) if the Company is
eligible to file a Registration Statement on Form S-3 with respect to a
secondary public offering of its equity securities, file a Registration
Statement on Form S-3 with respect to a Shelf Registration in accordance with
Section 2.02(a), treating all selling stockholders identified as such in the
Automatic Shelf Registration Statement (and amendments or supplements thereto)
as Requesting Stockholders and use all commercially reasonable efforts to have
such Registration Statement declared effective prior to the Determination Date.
Any registration pursuant to this Section 2.02(f) shall be deemed a Shelf
Registration for purposes of this Agreement.

 

(g)               Notwithstanding anything to the contrary, no Shelf
Registration pursuant to this Section 2.02 shall be deemed a Demand Registration
for purposes of Section 2.01.

 

13

 

(h)               Piggyback Registration.

 

(i)                 If the Company proposes to register any Company Securities
under the Securities Act (other than a registration on Form S-8 or S-4 relating
to Shares or any other class of Company Securities issuable upon exercise of
employee stock options or in connection with any employee benefit or similar
plan of the Company or in connection with a direct or indirect acquisition by
the Company of another Person) other than in connection with a rights offering,
whether or not for sale for its own account, the Company shall each such time
give prompt notice (via facsimile or electronic transmission) at least 10
Business Days prior to the anticipated filing date of the registration statement
relating to such registration to each Stockholder, which notice shall set forth
such Stockholder’s rights under this Section 2.02 and shall offer such
Stockholder the opportunity to include in such registration statement the number
of Registrable Securities of the same class or series as those proposed to be
registered as each such Stockholder may request (a “Piggyback Registration”),
subject to the provisions of Section 2.02(h)(ii). Upon the request of any such
Stockholder made within 10 Business Days after the receipt of notice from the
Company regarding a Piggyback Registration (which request shall specify the
number of Registrable Securities intended to be registered by such Stockholder),
the Company shall use its commercially reasonable efforts to effect the
registration under the Securities Act of all Registrable Securities that the
Company has been so requested to register by all such Requesting Stockholders,
to the extent requisite to permit the disposition of the Registrable Securities
so to be registered in accordance with the plan of distribution intended by the
Company for such registration statement; provided that (i) if such registration
involves a Public Offering, all such Registering Stockholders requesting to be
included in the Company’s registration must sell their Registrable Securities to
the underwriters selected as provided in Section 2.04(f)(i) on the same terms
and conditions as apply to the Company and (ii) if, at any time after giving
notice of its intention to register any Company Securities pursuant to this
Section 2.02(h) and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any
reason not to register such securities, the Company shall give notice to all
Registering Stockholders and, thereupon, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration. No
registration effected under this Section 2.02 shall relieve the Company of its
obligations to effect a Demand Registration or Shelf Registration to the extent
required by Section 2.01. The Company shall pay all Registration Expenses in
connection with each Piggyback Registration.

 

(ii)               If a Piggyback Registration involves a Public Offering (other
than any Demand Registration, in which case the provisions with respect to
priority of inclusion in such offering set forth in Section 2.01(e) shall apply)
and the lead managing underwriter advises the Company that, in its view, the
number of Registrable Securities that the Company and such Registering
Stockholders intend to include in such registration exceeds the Maximum Offering
Size, the Company shall include in such registration, in the following priority,
up to the Maximum Offering Size:

 

14

 

 

(A)             first, so much of the Registrable Securities proposed to be
registered for the account of the Company as would not cause the offering to
exceed the Maximum Offering Size;

 

(B)              second, all Registrable Securities requested to be included in
such registration by any Registering Stockholders pursuant to this Section 2.02
(allocated, if necessary for the offering not to exceed the Maximum Offering
Size, pro rata among such Stockholders on the basis of the relative number of
shares of Registrable Securities so requested to be included in such
registration by each such Stockholder); and

 

(C)              third, any securities proposed to be registered for the account
of any other Persons with such priorities among them as the Company shall
determine.

 

(i)                 Hedging Transactions.

 

(i)                 The Company agrees that, in connection with any proposed
Hedging Transaction, if, in the reasonable judgment of Holders’ Counsel, it is
necessary or desirable to register under the Securities Act such Hedging
Transaction or sales or transfers (whether short or long) of Registrable Class
Securities in connection therewith, then the Company shall use its commercially
reasonable efforts to take such actions (which may include, among other things,
the filing of a post-effective amendment to a Registration Statement to include
additional or changed information that is material or is otherwise required to
be disclosed, including a description of such Hedging Transaction, the name of
the Hedging Counterparty, identification of the Hedging Counterparty or its
Affiliates as underwriters or potential underwriters, if applicable, or any
change to the plan of distribution) as may reasonably be required to register
such Hedging Transaction or sales or transfers of Registrable Class Securities
in connection therewith under the Securities Act in a manner consistent with the
rights and obligations of the Company hereunder with respect to the registration
of Registrable Securities. Any information provided by the Stockholders
regarding the Hedging Transaction that is included in a Registration Statement,
prospectus or Free Writing Prospectus pursuant to this Section 2.02(h) shall be
deemed to be information provided by the Registering Stockholders pursuant to
such Registration Statement for purposes of Section 2.15.

 

(ii)               All Registration Statements in which Stockholders may include
Registrable Securities under this Agreement shall be subject to the provisions
of this Section 2.02(h), and the registration of Registrable Class Securities
thereunder pursuant to this Section 2.02(h) shall be subject to the provisions
of this Agreement applicable to any such Registration Statements; provided,
however, that the selection of any Hedging Counterparty shall not be subject to
Section 2.04(f), but the Hedging Counterparty shall be selected by the holders
of a majority of the Registrable Class Securities subject to the Hedging
Transaction that are proposed to be included in such Registration Statement.

 

15

 

 

(iii)             If in connection with a Hedging Transaction, a Hedging
Counterparty or any Affiliate thereof is (or may be considered) an underwriter
or selling stockholder, then it shall be required to provide customary
indemnities to the Company regarding the plan of distribution and like matters.

 

(iv)             The Company further agrees to include, under the caption “Plan
of Distribution” (or the equivalent caption), in each Registration Statement,
and any related prospectus (to the extent such inclusion is permitted under
applicable SEC regulations and is consistent with comments received from the SEC
during any SEC review of the Registration Statement), language substantially in
the form of Schedule 1 hereto and to include in each prospectus supplement filed
in connection with any proposed Hedging Transaction language mutually agreed
upon by the Company, the relevant Stockholders and the Hedging Counterparty
describing such Hedging Transaction.

 

Section 2.03.      Lock-Up Agreements. (a) Each Stockholder hereby agrees that
it will not effect any public sale or distribution (including sales pursuant to
Rule 144) of Registrable Securities, (i) during (A) the 10 days prior to and the
90-day period beginning on the effective date of the registration of such
Registrable Securities in connection with a Public Offering (which period
following the effective date may, in each case, be extended as reasonably
requested by the underwriters participating in such Public Offering to
accommodate regulatory restrictions on (I) the publication or other distribution
of research reports and (II) analyst recommendations and opinions, including,
but not limited to, the restrictions contained in the FINRA rules or any
successor provisions or amendments thereto) or (B) such shorter period as the
underwriters participating in such Public Offering may require, and (ii) upon
notice from the Company of the commencement of a Public Offering in connection
with any Shelf Registration, during (A) 10 days prior to and the 90-day period
beginning on the date of commencement of such Public Offering or (B) such
shorter period as the underwriters participating in such Public Offering may
require, in each case except as part of such Public Offering. Each Stockholder
agrees to execute a lock-up agreement in favor of the underwriters in form and
substance reasonably acceptable to the Company and the underwriters to such
effect and, in any event, that the underwriters in any relevant offering shall
be third party beneficiaries of this Section 2.03(a). The lock-up agreement to
be executed by each Stockholder pursuant to this Section 2.03(a) shall be no
less favorable to such Stockholder than the lock-up agreements (or provisions in
any underwriting agreement) executed by the Company or any of the executive
officers or directors of the Company pursuant to Section 2.03(b).

 

(b)               The Company shall not effect any public sale or distribution
of Registrable Securities (except pursuant to registrations on Form S-8 or Form
S-4), (i) with respect to any Public Offering pursuant to a Demand Registration
or any Piggyback Registration in which the holders of Registrable Securities are
participating, during (A) the 10 days prior to and the 90-day period beginning
on the effective date of such registration (which period following the effective
date may, in each case, be extended as reasonably requested by the underwriters
participating in such Public Offering to accommodate regulatory restrictions on
(I) the publication or other distribution of research reports and (II) analyst
recommendations and opinions, including, but not limited to, the restrictions
contained in the FINRA rules or any successor provisions or amendments thereto)
or (B) such shorter period as the underwriters participating in such Public
Offering may require, and (ii) upon notice from any holder(s) of Registrable
Securities subject to a Shelf Registration that such holder(s) intend to effect
a Public Offering of Registrable Securities pursuant to such Shelf Registration
(upon receipt of which, the Company will promptly notify all other Stockholders
of the date of commencement of such Public Offering), during (A) the 10 days
prior to and the 90-day period beginning on the date of commencement of such
Public Offering and (B) such shorter period as the underwriters participating in
such Public Offering may require), in each case except as part of such Public
Offering. To the extent required by any underwriter participating in such Public
Offering, the Company shall use commercially reasonable efforts to cause its
executive officers and directors to execute customary lock-up agreements in
connection with such Public Offering, which lock-up agreements shall not have a
duration shorter than that of the lock-up agreement or provisions applicable to
the Company.

 

16

 

 

Section 2.04.      Registration Procedures. Whenever a Stockholder requests that
any Registrable Securities be registered pursuant to Section 2.01 or 2.02,
subject to the provisions of such Sections, the Company shall use its
commercially reasonable efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof as soon as reasonably practicable, and, in connection with any such
request:

 

(a)                The Company shall as soon as reasonably practicable prepare
and file with the SEC a Registration Statement on any form for which the Company
then qualifies or that counsel for the Company shall deem appropriate and which
form shall be available for the sale of the Registrable Securities to be
registered thereunder in accordance with the intended method of distribution
thereof, and use its commercially reasonable efforts to cause such filed
Registration Statement to become and remain effective for a period of (i) not
less than 180 days (or, if sooner, until all Registrable Securities have been
sold under such Registration Statement), or (ii) in the case of a Shelf
Registration, until the earlier of the date (x) on which all of the securities
covered by such Shelf Registration are no longer Registrable Securities and
(y) on which the Company cannot extend the effectiveness of such Shelf
Registration because it is no longer eligible for use of Form S-3; subject in
each case to any Suspension Period.

 

(b)               Prior to filing a Registration Statement or related prospectus
or any amendment or supplement thereto (including any documents incorporated by
reference therein), or before using any Free Writing Prospectus, the Company
shall provide to each Registering Stockholder, the Holders’ Counsel and each
underwriter, if any, with an adequate and appropriate opportunity to review and
comment on such Registration Statement, each prospectus included therein (and
each amendment or supplement thereto) and each Free Writing Prospectus proposed
to be filed with the SEC, and thereafter the Company shall furnish to such
Registering Stockholder, the Holders’ Counsel and underwriter, if any, such
number of copies of such Registration Statement, each amendment and supplement
thereto filed with the SEC (in each case including all exhibits thereto and
documents incorporated by reference therein), the prospectus included in such
Registration Statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424, Rule 430A, Rule 430B
or Rule 430C under the Securities Act and such other documents as such
Registering Stockholder or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such
Registering Stockholder; provided, however, that in no event shall the Company
be required to provide to any Person any materials, information or document
required to be filed by the Company pursuant to the Exchange Act prior to its
filing other than in connection with a Public Offering. In addition, the Company
shall, as expeditiously as practicable, keep Holders’ Counsel advised in writing
as to the initiation and progress of any registration under Sections 2.01 and
2.02 and provide Holders’ Counsel with copies of all correspondence (including
any comment letter) with the SEC, any self regulatory organization or other
governmental agency in connection with any such Registration Statement. Each
Registering Stockholder shall have the right to request that the Company modify
any information contained in such Registration Statement, amendment and
supplement thereto pertaining to such Registering Stockholder and the Company
shall use its commercially reasonable efforts to comply with such request;
provided, however, that the Company shall not have any obligation so to modify
any information if the Company reasonably expects that so doing would cause the
prospectus to contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.

 

17

 

 

(c)                After the filing of the Registration Statement, the Company
shall (i) cause the related prospectus to be supplemented by any required
prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424
under the Securities Act, (ii) comply with the provisions of the Securities Act
applicable to the Company with respect to the disposition of all Registrable
Securities covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by the Registering
Stockholder thereof set forth in such Registration Statement or supplement to
such prospectus and (iii) promptly notify each Registering Stockholder holding
Registrable Securities covered by such Registration Statement and the Holders’
Counsel of any stop order issued or threatened by the SEC or any state
securities commission and take all commercially reasonable actions required to
prevent the entry of such stop order or to remove it if entered.

 

(d)               The Company shall use its commercially reasonable efforts to
(i) register or qualify the Registrable Securities covered by such Registration
Statement under such securities or “blue sky” laws of such jurisdictions in the
United States as any Registering Stockholder holding such Registrable Securities
reasonably (in light of such Registering Stockholder’s intended plan of
distribution) requests, and continue such registration or qualification in
effect in such jurisdiction for the shortest of (A) as long as permissible
pursuant to the laws of such jurisdiction, (B) as long as any such Registering
Stockholder requests or (C) until all such Registrable Securities are sold and
(ii) cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Registering
Stockholder to consummate the disposition of the Registrable Securities owned by
such Registering Stockholder; provided that the Company shall not be required to
(A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 2.04(d), (B) subject
itself to taxation in any such jurisdiction or (C) consent to general service of
process in any such jurisdiction.

 

(e)                The Company shall promptly notify each Registering
Stockholder holding such Registrable Securities covered by such Registration
Statement (i) at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, upon the discovery that, or upon the
occurrence of an event as a result of which, the preparation of a supplement or
amendment to such prospectus is required so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
and the Company shall promptly (subject to any applicable Suspension Period)
prepare and make available to each Registering Stockholder and file with the SEC
any such supplement or amendment, (ii) as soon as the Company becomes aware of
any request by the SEC or any Federal or state governmental authority for
amendments or supplements to a Registration Statement or related prospectus
covering Registrable Securities or for additional information relating thereto,
(iii) as soon as the Company becomes aware of the issuance or threatened
issuance by the SEC of any stop order suspending or threatening to suspend the
effectiveness of a Registration Statement covering the Registrable Securities or
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose.

 

18

 

 

(f)                (i) The Registering Stockholders holding a majority of the
Registrable Securities to be included in a Demand Registration or intended to be
sold pursuant to a Public Offering pursuant to a “take down” under a Shelf
Registration shall have the right to select an underwriter or underwriters in
connection with such Public Offering or “take down” (as the case may be) (which
underwriter or underwriters may include any Affiliate of any Registering
Stockholder so long as including such Affiliate would not require the separate
engagement of a qualified independent underwriter with respect to such
offering), subject to the Company’s approval (which shall not be unreasonably
withheld, conditioned or delayed) and (ii) the Company shall select an
underwriter or underwriters in connection with any other Public Offering. In
connection with any Public Offering, the Company shall enter into customary
agreements (including an underwriting agreement in customary form) and take all
other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities in any such Public Offering,
including, if required, the engagement of a “qualified independent underwriter”
in connection with the qualification of the underwriting arrangements with the
FINRA.

 

(g)               Subject to confidentiality arrangements customarily applicable
to underwriters and the Registering Stockholders, the Company shall make
available for inspection by any Registering Stockholder and any underwriter
participating in any disposition pursuant to a Registration Statement being
filed by the Company pursuant to this Section 2.04 and any attorney, accountant
or other professional retained by any such Stockholder or underwriter
(collectively, the “Inspectors”), all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the “Records”)
as shall be reasonably necessary or desirable to enable them to exercise their
due diligence responsibility, and cause the Company’s officers, directors and
employees to supply all information reasonably requested by any Inspectors in
connection with such Registration Statement.

 

(h)               The Company shall furnish to each Registering Stockholder and
to each such underwriter, if any, a signed counterpart, addressed to such
Registering Stockholder or underwriter, of (i) an opinion or opinions of counsel
to the Company and (ii) a comfort letter or comfort letters from the Company’s
independent public accountants, each in customary form and covering such matters
of the kind customarily covered by opinions or comfort letters, as the case may
be, any Registering Stockholder or the lead managing underwriter therefor
reasonably requests.

 

19

 

 

(i)                 The Company shall otherwise comply with all applicable rules
and regulations of the SEC, and make available to its security holders, as soon
as reasonably available, an earnings statement or such other document that shall
satisfy the provisions of Section 11(a) of the Securities Act and the
requirements of Rule 158 thereunder.

 

(j)                 The Company may require each Registering Stockholder
promptly to furnish in writing to the Company such information regarding the
distribution of the Registrable Securities as the Company may from time to time
reasonably request and such other information as may be reasonably required in
connection with such registration.

 

(k)                Each Registering Stockholder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 2.04(e), such Stockholder shall forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement (including any
Shelf Registration) covering such Registrable Securities until such
Stockholder’s receipt of (i) copies of the supplemented or amended prospectus
from the Company or (ii) further notice from the Company that distribution can
proceed without an amended or supplemented prospectus, and, in the circumstances
described in clause (i), if so directed by the Company, such Stockholder shall
deliver to the Company all copies, other than any permanent file copies then in
such Stockholder’s possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. If the Company
shall give such notice, the Company shall extend the period during which such
registration statement shall be maintained effective (including the period
referred to in Section 2.04(a)) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 2.04(e) to the
date when the Company shall (x) make available to such Stockholder a prospectus
supplemented or amended to conform with the requirements of Section 2.04(e) or
(y) deliver to such Stockholder the notice described in clause (ii).

 

(l)                 The Company shall use its commercially reasonable efforts to
list all Registrable Securities of any class or series covered by such
Registration Statement on any national securities exchange on which any of the
Registrable Securities of such class or series are then listed or traded.

 

(m)               Upon written request (which notice shall be given with
reasonable advance notice) to the Company by Registering Stockholders holding a
majority of the Registrable Securities being sold in such offering, the Company
shall have appropriate officers of the Company (i) upon reasonable request and
at reasonable times prepare and make presentations at any “road shows” and
before analysts and rating agencies, as the case may be, provided that officers
of the Company shall not be required to participate in “road shows” within 60
days of the completion of a prior Public Offering with a “road show,” (ii) take
other actions to obtain ratings for any Registrable Securities and (iii)
otherwise use its commercially reasonable efforts to cooperate as requested by
the underwriters in the offering, marketing or selling of the Registrable
Securities.

 

(n)               The Company shall as soon as possible following its actual
knowledge thereof, notify each Registering Stockholder: (A) when a prospectus,
any prospectus supplement, a Registration Statement or a post-effective
amendment to a Registration Statement has been filed with the SEC, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective; (B) of any request by the SEC or any other federal or
state governmental authority for amendments or supplements to a Registration
Statement, a related prospectus (including a Free Writing Prospectus) or for any
other additional information; or (C) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceedings for such
purpose.

 

20

 

 

(o)               The Company shall reasonably cooperate with each Registering
Stockholder and each underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made by FINRA.

 

(p)               The Company shall take all other steps reasonably necessary to
effect the registration of such Registrable Securities and reasonably cooperate
with the holders of such Registrable Securities to facilitate the disposition of
such Registrable Securities.

 

(q)                The Company shall, within the deadlines specified by the
Securities Act, make all required filings of all prospectuses (including any
Free Writing Prospectus) with the SEC and make all required filing fee payments
in respect of any Registration Statement or related prospectus used under this
Agreement (and any offering covered hereby).

 

(r)                 The Company shall, if such registration is pursuant to a
Registration Statement on Form S-3 or any similar short-form registration,
include in such Registration Statement such additional information for marketing
purposes as the managing underwriter with respect to an underwritten public
offering reasonably requests.

 

(s)                 To the extent a Registering Stockholder wishes to register
on a Registration Statement the resale of Registrable Securities to be received
upon the exchange of Exchange Securities pursuant to the Exchange Agreement, if
required by applicable law, rule or regulation, each such Registering
Stockholder shall exchange its Exchange Securities for shares of Class A Common
Stock or commit to make such exchange prior to the filing of the relevant
Registration Statement (or such later time as may be permitted under applicable
law, rule or regulation).

 

Section 2.05.      Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Registering Stockholder holding Registrable
Securities covered by a Registration Statement, its partners, Affiliates,
stockholders, members, officers, directors, employees, partners and agents, and
each Person, if any, who controls such Registering Stockholder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively, “Stockholder Parties”) from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable expenses of
investigation and reasonable attorneys’ fees and expenses) (“Damages”) caused by
or relating to any untrue statement or allegedly untrue statement of a material
fact contained in any Registration Statement or prospectus relating to the
Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus
or Free Writing Prospectus relating to the Registrable Securities (including any
information that has been deemed to be a part of any prospectus under Rule 159
under the Securities Act), or caused by or relating to any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company shall not be liable to any Stockholder Party for any Damages that
are caused by or related to any such untrue statement or omission or alleged
untrue statement or omission so made based upon information furnished in writing
to the Company by or on behalf of such Registering Stockholder expressly for use
therein. The Company also agrees to indemnify and hold harmless any underwriters
of the Registrable Securities, their respective officers and directors and each
Person who controls any underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act on substantially the same basis
as that of the indemnification of the Registering Stockholders provided in this
Section 2.05.

 

21

 

 

Section 2.06.      Indemnification by Registering Stockholders. Each Registering
Stockholder holding Registrable Securities included in any Registration
Statement agrees, severally but not jointly, to indemnify and hold harmless (i)
the Company, (ii) each Person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (iii) each other Registering Stockholder participating in any offering of
Registrable Securities and (iv) the respective partners, Affiliates,
stockholders, members, officers, directors, employees, partners and agents of
each of the Persons specified in clauses (i) through (iii) from and against all
Damages to the same extent as the foregoing indemnity from the Company to such
Registering Stockholder, but only with respect to information furnished in
writing by or on behalf of such Registering Stockholder expressly for use in any
Registration Statement or prospectus relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus or Free
Writing Prospectus relating to the Registrable Securities (including any
information that has been deemed to be a part of any prospectus under Rule 159
under the Securities Act). Each Registering Stockholder also agrees to indemnify
and hold harmless any underwriters of the Registrable Securities, their
respective officers and directors and each Person who controls any underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act on substantially the same basis as that of the indemnification
of the Company and the other Registering Stockholders provided in this Section
2.06. As a condition to including Registrable Securities in any Registration
Statement filed in accordance with Article 2, the Company may require that it
shall have received an undertaking reasonably satisfactory to it from any
underwriter to indemnify and hold the Company harmless to the extent customarily
provided by underwriters with respect to similar securities and offerings. No
Registering Stockholder shall be liable under this Section 2.06 for any Damages
in excess of the net proceeds (after deducting the underwriters’ discounts and
commissions) realized by such Registering Stockholder in the sale of Registrable
Securities of such Registering Stockholder to which such Damages relate.

 

Section 2.07.      Conduct of Indemnification Proceedings. If any proceeding
(including any investigation by any governmental authority) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 2.05 or 2.06, such Person (an “Indemnified Party”) shall promptly notify
the Person against whom such indemnity may be sought (the “Indemnifying Party”)
in writing and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Party, and shall assume the payment of all reasonable fees and expenses;
provided that the failure of any Indemnified Party so to notify the Indemnifying
Party shall not relieve the Indemnifying Party of its obligations hereunder
except to the extent that the Indemnifying Party is materially prejudiced by
such failure to notify. In any such proceeding, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the retention of
such counsel; (ii) in the reasonable judgment of such Indemnified Party,
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them; or (iii) the Indemnified
Party shall have reasonably concluded (based on the advice of counsel) that
there may be legal defenses available to it that are different from or in
addition to those available to the Indemnifying Party. It is understood that, in
connection with any proceeding or related proceedings in the same jurisdiction,
the Indemnifying Party shall not be liable for the fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) at any
time for all such Indemnified Parties, and that all such fees and expenses shall
be reimbursed promptly after receipt of a invoice setting forth such fees and
expenses in reasonable detail. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the Indemnified
Parties. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any Damages (to the extent obligated herein) by reason of such
settlement or judgment. Without the prior written consent of the Indemnified
Party, no Indemnifying Party shall effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such proceeding.

 

22

 

 

Section 2.08.      Contribution. If the indemnification provided for in Section
2.05 or 2.06 is unavailable to the Indemnified Parties or insufficient in
respect of any Damages caused by or relating to any untrue statement or
allegedly untrue statement of a material fact contained in any Registration
Statement or prospectus relating to the Registrable Securities (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus or Free Writing Prospectus relating to
the Registrable Securities (including any information that has been deemed to be
a part of any prospectus under Rule 159 under the Securities Act), or caused by
or relating to any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Parties in connection with such actions which resulted in such
Damages, as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and the Indemnified Parties shall be determined
by reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact has been made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action.

 

The parties agree that it would not be just and equitable if contribution
pursuant to this Section 2.08 were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by a party as a result of the Damages referred to in the
preceding paragraph shall be deemed to include, subject to the limitations set
forth in Sections 2.05 and 2.06, any legal or other expenses reasonably incurred
by a party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 2.08, no Registering
Stockholder shall be required to contribute any amount in excess of the net
proceeds (after deducting the underwriters’ discounts and commissions) received
by such Registering Stockholder in the offering. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. Each Registering Stockholder’s obligation to
contribute pursuant to this Section 2.08 is several in the proportion that the
net proceeds of the offering received by such Registering Stockholder bears to
the net total proceeds of the offering received by all such Registering
Stockholders and not joint.

 

23

 

 

Section 2.09.      Participation in Public Offering. No Stockholder may
participate in any Public Offering hereunder unless such Stockholder (i) agrees
to sell such Stockholder’s Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and the provisions of
this Agreement in respect of registration rights.

 

Section 2.10.      Other Indemnification. Indemnification similar to that
specified herein (with appropriate modifications) shall be given by the Company
and each Registering Stockholder participating therein with respect to any
required registration or other qualification of securities under any federal or
state law or regulation or governmental authority other than the Securities Act.

 

Section 2.11.      Cooperation by the Company. At any time following the Initial
Public Offering, if any Stockholder shall transfer, assign, sell, convey or
otherwise dispose of any Registrable Securities pursuant to Rule 144, the
Company shall reasonably cooperate (subject to the terms and conditions of the
Certificate of Incorporation) with such Stockholder, provide to such Stockholder
such information as such Stockholder shall reasonably request and make publicly
available information necessary to permit sales pursuant to Rule 144 for so long
as necessary.

 

Section 2.12.      Transfer of Registration Rights. The rights of a Stockholder
under this Article 2 may be transferred or assigned in connection with a
transfer of Registrable Securities provided that all of the following additional
conditions are satisfied: (x) such transfer or assignment is effected in
accordance with applicable securities laws, (y) the Company is given written
notice by such transferor of such transfer or assignment, stating the name and
address of the transferee or assignee and identifying the amount of Registrable
Securities with respect to which such rights are being transferred or assigned
and (z) such transferee or assignee executes and delivers to the Company an
agreement to be bound by this Agreement in the form of Exhibit A.

 

Section 2.13.      Limitations on Subsequent Registration Rights. The Company
agrees that it shall not enter into any agreement with any holder or prospective
holder of any securities of the Company (i) that would allow such holder or
prospective holder to include such securities in any Demand Registration,
Piggyback Registration or Shelf Registration unless, under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that their inclusion would not be on terms
more favorable in the aggregate to such holder or prospective holder than this
Agreement. The Company also represents and warrants to each Stockholder that it
has not prior to the date of this Agreement entered into any agreement with
respect to any of its securities granting any registration rights to any Person.

 

24

 

 

Section 2.14.      Free Writing Prospectuses. Except for a prospectus relating
to Registrable Securities included in a Registration Statement, an “Issuer Free
Writing Prospectus” (as defined in Rule 433 under the Securities Act) or other
materials prepared by the Company, each Registering Stockholder represents and
agrees that it (i) shall not make any offer relating to the Registrable
Securities that would constitute an Issuer Free Writing Prospectus or that would
otherwise constitute a Free Writing Prospectus, and (ii) has not distributed and
will not distribute any written materials in connection with the offer or sale
pursuant to a Registration Statement of Registrable Securities without the prior
written consent of the Company and, in connection with any Public Offering, the
underwriters.

 

Section 2.15.      Information from Registering Stockholders; Obligations of
Registering Stockholders.

 

(a)                It shall be a condition precedent to the obligations of the
Company to include the Registrable Securities of any Registering Stockholder
that has requested inclusion of its Registrable Securities in any Registration
Statement or related prospectus, as the case may be, that such Registering
Stockholder shall take the actions described in this Section 2.15.

 

(b)               Each Registering Stockholder that has requested inclusion of
its Registrable Securities in any Registration Statement shall (i) furnish to
the Company (as a condition precedent to such Registering Stockholder’s
participation in such registration) in writing such information with respect to
such Registering Stockholder, its ownership of Company Securities and the
intended method of disposition of its Registrable Securities as the Company may
reasonably request or as may be required by law or regulations for use in
connection with any related Registration Statement or prospectus (or amendment
or supplement thereto) and all information required to be disclosed in order to
make the information previously furnished to the Company by such Registering
Stockholder not contain a material misstatement of fact or necessary to cause
such Registration Statement or prospectus (or amendment or supplement thereto)
not to omit a material fact with respect to such Registering Stockholder
necessary in order to make the statements therein not misleading and (ii) comply
with the Securities Act and the Exchange Act and all applicable state securities
laws and comply with all applicable regulations in connection with the
registration and the disposition of Registrable Securities.

 

(c)                Each Registering Stockholder shall promptly (i) following its
actual knowledge thereof, notify the Company of the occurrence of any event that
makes any statement made in a Registration Statement, prospectus, Issuer Free
Writing Prospectus or other Free Writing Prospectus regarding such Registering
Stockholder untrue in any material respect or that requires the making of any
changes in a Registration Statement, prospectus or Free Writing Prospectus so
that, in such regard, it shall not contain any untrue statement of a material
fact or omit any material fact required to be stated therein or necessary to
make the statements not misleading and (ii) provide the Company with such
information as may be required to enable the Company to prepare a supplement or
post-effective amendment to any such Registration Statement or a supplement to
such prospectus or Free Writing Prospectus.

 

25

 

 

(d)               Each Registering Stockholder shall use commercially reasonable
efforts to cooperate with the Company in preparing the applicable Registration
Statement.

 

(e)                Each Stockholder agrees that no Stockholder shall be entitled
to sell any Registrable Securities pursuant to a Registration Statement or to
receive a prospectus relating thereto unless such Stockholder has furnished the
Company with all information required to be included in such Registration
Statement by applicable securities laws in connection with the disposition of
such Registrable Securities as reasonably requested by the Company.

 

(f)                Notwithstanding anything to the contrary herein, no
Registering Stockholder shall be required to make any representations or
warranties to or agreements with the Company, the underwriters of any
underwritten Public Offering, or any other Person in connection with a
disposition of Registrable Securities other than representations, warranties or
agreements regarding such Registering Stockholder, such Registering
Stockholder's ownership of Registrable Securities and such Registering
Stockholder's intended method of distribution of Registrable Securities.

 

ARTICLE 3
Board of Directors

 

Section 3.01.      Board of Directors.

 

(a)                Board Nominees. Immediately after the consummation of the
Initial Public Offering, the Board shall initially consist of six directors. The
Board may increase or decrease the number of Directors, subject to the rights of
Holdings under this Agreement and Applicable Governance Rules, in accordance
with the Charter and By-laws. Immediately after the consummation of the Initial
Public Offering, of such six directors:

 

(i)                 the number of directors permitted to be designated by
Holdings pursuant to Section 3.02 shall be those designated by Holdings (such
persons, the “Holdings Nominees”); and

 

(ii)                two shall be independent directors permitted by SEC rules to
serve on the Company’s audit committee after applicable phase-in periods have
expired (such persons, the “Audit Committee Independent Directors”) who shall be
designated by the Board and at least one of which shall be an audit committee
financial expert under the NASDAQ Stock Market Rules or SEC rules as currently
in effect.

 

In addition, within one year after the date of the initial listing of the Class
A Common Stock on NASDAQ for the Initial Public Offering, one additional Audit
Committee Independent Director shall be appointed.

 

26

 

 

(b)               Holdings Nominees. With respect to any Holdings Nominees after
the date of the Initial Public Offering, Holdings shall designate the Holdings
Nominees by delivering to the Company its written statement at least (i) 10 days
following their receipt of written notice from the Company to the Holdings
notifying Holdings of the setting of the date of the first annual meeting after
the date of the Initial Public Offering, in the case of the first annual meeting
after the date of the Initial Public Offering, and (ii) 60 days prior to the one
year anniversary of the preceding annual meeting, in the case of subsequent
annual meetings, designating the Holdings Nominees and setting forth such
Holdings Nominees’ business address, telephone number, facsimile number and
e-mail address; provided, that if Holdings shall fail to deliver such written
notice, Holdings shall be deemed to have nominated the Holdings Nominees
previously designated. The Company hereby agrees that at each annual meeting of
stockholders of the Company, subject to any rights of the holders of shares of
any class or series of preferred stock of the Company, the Company shall ensure
that the directors required to be nominated pursuant to this Article 3 shall be
nominated at such annual meeting and shall use its reasonable best efforts to
cause the Holdings Nominees to be elected to the Board.

 

(c)                Committees. The Board shall have a nominating and corporate
governance committee, a compensation committee, an audit committee and such
other committees as the Board may determine (collectively, the “Committees”).
Subject to Section 3.02:

 

(i)                 the audit committee shall consist of at least three Audit
Committee Independent Directors, subject to the exceptions provided by the
applicable transition periods under Rule 10A-3 of the Exchange Act and the
NASDAQ Stock Market Rules, and Holdings shall have the right to designate the
members thereof; and

 

(ii)                each other Committee shall consist of at least three
directors, and Holdings shall have the right to designate the members thereof;

 

provided, however, that: (i) the membership of each Committee shall meet the
requirements of Applicable Governance Rules (after giving effect to applicable
transition periods, if any), and (ii) each Committee shall have such additional
members as the Board may determine, which determination shall be made on the
recommendation of the nominating and corporate governance committee. Each
Committee shall have such powers and responsibilities as the Board may from time
to time authorize.

 

(d)               Removal and Replacement of Directors. If a vacancy is created
on the Board or a Committee as a result of the death, disability, retirement,
resignation or removal of any Holdings Nominee, then Holdings shall have the
right to designate such person’s replacement. No Holdings Nominee shall be
required to resign or be removed from the Board or any committee thereof as a
result of a decrease in the size of the Board or any committee thereof, except
as required by Applicable Governance Rules.

 

Section 3.02.      Reduction and Termination of Holdings’ Rights.

 

(a)                Board Nominees. Notwithstanding anything to the contrary in
this Agreement, after the Initial Public Offering the number of Holdings
Nominees that may be designated by Holdings or any Person designated by Holdings
pursuant to Section 3.01(a)(i) shall be reduced and the number of other
directors shall be increased, based on the percentage of the total Shares of the
Company then beneficially owned by the MacAndrews Stockholders so that the
Holdings Nominees constitute:

 

27

 

 

(i)                a majority of the directors on the Board (and if the number
of directors on the Board is even, one director more than 50% of the number of
directors on the Board) if the MacAndrews Stockholders beneficially own greater
than 50% of the outstanding Shares of the Company;

 

(ii)               one less than a majority of the directors on the Board (and
if the number of directors on the Board is even, 50% of the number of directors
on the Board) if the MacAndrews Stockholders beneficially own greater than 25%
but less than 50% of the outstanding Shares of the Company;

 

(iii)             one-third of the directors on the Board (rounded down to the
nearest whole number) if the MacAndrews Stockholders beneficially own greater
than 10% but less than 25% of the outstanding Shares of the Company; and

 

(iv)             no directors if the MacAndrews Stockholders beneficially own
less than 10% of the outstanding Shares of the Company.

 

Holdings shall cause the appropriate number of Holdings Nominees to resign as
required to comply with this Section 3.02 upon the earlier to occur of (i) the
date on which the current term of the resigning Holdings Nominee ends, and (ii)
12 months from the occurrence of such event. To the extent deemed reasonably
necessary by the Board to comply with Applicable Governance Rules (including
with respect to composition of committees), Holdings shall designate Independent
Directors as Holdings Nominees; provided that directors who are affiliated with
a MacAndrews Party shall not be automatically deemed not to be Independent
Directors.

 

(b)               Committees. Notwithstanding anything to the contrary in this
Agreement, if the MacAndrews Stockholders beneficially own less than 25% of the
outstanding Shares of the Company, Holdings shall cease to have the rights to
designate members of Committees pursuant to Section 3.01(c).

 

ARTICLE 4
Termination

 

Section 4.01.      Termination. This Agreement shall terminate when the
MacAndrews Stockholders beneficially own less than 2.5% of the outstanding
Shares; provided, however, that any Stockholder that ceases to own beneficially
any Registrable Securities shall cease to be bound by the terms hereof other
than (i) Sections 2.05, 2.06, 2.07, 2.08 and 2.10 applicable to such Stockholder
with respect to any offering of Registrable Securities completed before the date
such Stockholder ceased to own any Registrable Securities) and (ii) Sections
5.01, 5.02 and 5.04 through 5.12.

 

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ARTICLE 5
Miscellaneous

 

Section 5.01.      Successors and Assigns. (a) This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
successors, legal representatives and permitted assigns.

 

(b)               Subject to Section 2.12, neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by any party.

 

(c)                Nothing in this Agreement, expressed or implied, is intended
to confer on any Person other than the parties hereto, and their respective
heirs, successors, legal representatives and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.

 

(d)               if and to the extent Holdings is dissolved or liquidated, the
MacAndrews Stockholders holding Shares shall be the successors of Holdings, and
references to “Holdings” herein shall be references to such successors of
Holdings, collectively, and the Company shall (and shall cause its Subsidiaries
to) enter into such amendments and supplements hereto to effectuate the intent
of this Section 5.01(d).

 

Section 5.02.      Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile or electronic
transmission) and shall be given,

 

if to the Company, to:

 

vTv Therapeutics Inc.
4170 Mendenhall Oaks Pkwy

High Point, NC 27265

Attention: Stephen L. Holcombe

 

with a copy to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas

New York, NY 10019

Facsimile: (212) 492-0052
Attention: Lawrence G. Wee, Esq.

if to Holdings, to:

 

c/o MacAndrews & Forbes Incorporated

35 East 62nd Street

New York, NY 10065

Facsimile: (212) 572-5695

Attention: Paul G. Savas

 

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or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All notices, requests and
other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5:00 p.m. in the place of receipt and
such day is a Business Day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received until the
next succeeding Business Day in the place of receipt. Any Person that becomes a
Stockholder shall provide its address and fax number to the Company, which shall
promptly provide such information to each other Stockholder.

 

Section 5.03.      Amendments and Waivers. Any provision of this Agreement may
be amended or waived if, but only if, such amendment or waiver is in writing and
is signed by the Company and Stockholders holding more than 50% of the remaining
Registrable Securities; provided that any amendment or waiver of the provisions
of Article 3, to the extent adverse in any respect to Holdings, shall require
the written consent of Holdings. No failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

 

Section 5.04.      Governing Law. The corporate law of the State of Delaware
shall govern all issues and questions concerning the relative rights of the
Company and its stockholders pursuant to Article 3 hereto. All other issues and
questions concerning the construction, validity, interpretation and enforcement
of this Agreement and the exhibits and schedules hereto shall be governed by,
and construed in accordance with, the laws of the State of New York, without
regard to the choice of law or conflicts of law provisions that would indicate
the applicability of the laws of any other jurisdiction.

 

Section 5.05.      Jurisdiction. The parties hereby agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the United States District Court for the
Southern District of New York or any New York State court sitting in New York
City, so long as one of such courts shall have subject matter jurisdiction over
such suit, action or proceeding, and that any cause of action arising out of
this Agreement shall be deemed to have arisen from a transaction of business in
the State of New York, and each of the parties hereby irrevocably consents to
the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court.

 

Section 5.06.      WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

30

 

 

Section 5.07.      Specific Enforcement. Each party hereto acknowledges that the
remedies at law of the other parties for a breach or threatened breach of this
Agreement would be inadequate and, in recognition of this fact, any party to
this Agreement, without posting any bond, and in addition to all other remedies
that may be available, shall be entitled to obtain equitable relief in the form
of specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy that may then be available.

 

Section 5.08.      Counterparts; Effectiveness; Third Party Beneficiaries. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each initial
party hereto shall have received a counterpart hereof signed by all of the other
initial parties hereto. Until and unless each initial party has received a
counterpart hereof signed by the other initial parties hereto, this Agreement
shall have no effect and no party shall have any right or obligation hereunder
(whether by virtue of any other oral or written agreement or other
communication). No provision of this Agreement is intended to confer any rights,
benefits, remedies, obligations, or liabilities hereunder upon any Person other
than the parties hereto and their respective successors and assigns.

 

Section 5.09.      Entire Agreement. This Agreement, together with the Schedules
and Exhibit hereto and any documents, instruments and writings that are
delivered pursuant hereto, constitutes the entire agreement among the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, among the parties hereto
with respect to the subject matter of this Agreement.

 

Section 5.10.      Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.

 

Section 5.11.      Sophisticated Parties; Advice of Counsel. Each of the parties
to this Agreement specifically acknowledges that (i) it is a knowledgeable,
informed, sophisticated Person capable of understanding and evaluating the
provisions set forth in this Agreement and (ii) it has been fully advised and
represented by legal counsel of its own independent selection and has relied
wholly upon its independent judgment and the advice of such counsel in
negotiating and entering into this Agreement.

 

Section 5.12.      Certificate of Incorporation Supersedes. Nothing in this
Agreement is intended to conflict with any provision of the Charter or By-laws,
each in effect on the date hereof and, in the event of any such conflict, the
applicable provisions of the Charter or By-laws shall supersede the conflicting
provision of this Agreement. Except as provided in Article 3, nothing in this
Agreement is intended to limit or restrict in any manner whatsoever, the rights
or powers of the Company under the Charter or By-laws and the exercise of any
such right or power by the Company shall not be, and shall not be construed to
be, a breach or violation of, or a default under, this Agreement or any
provision hereof.

 

31

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

  VTV THERAPEUTICS INC.           By: /s/ Stephen L. Holcombe     Name: Stephen
L. Holcombe       Title: President and CEO  

 

[Signature Page to Investor Rights Agreement]

 

 

 

  VTV THERAPEUTICS HOLDINGS LLC           By: /s/ Stephen L. Holcombe      
Name: Stephen L. Holcombe       Title: President            

 

[Signature Page to Investor Rights Agreement]

 

 

 

 

EXHIBIT A

 

JOINDER TO INVESTOR RIGHTS AGREEMENT

 

This Joinder Agreement (this “Joinder Agreement”) is made as of the date written
below by the undersigned (the “Joining Party”) in accordance with the Investor
Rights Agreement dated as of _________, 2015 (the “Investor Rights Agreement”)
among vTv Therapeutics Inc. and the other parties thereto, as the same may be
amended from time to time. Capitalized terms used, but not defined, herein shall
have the meaning ascribed to such terms in the Investor Rights Agreement.

 

The Joining Party hereby acknowledges, agrees and confirms that, by its
execution of this Joinder Agreement, the Joining Party shall be deemed to be a
party to the Investor Rights Agreement as of the date hereof and shall have all
of the rights and obligations of a “Stockholder” thereunder as if it had
executed the Investor Rights Agreement. The Joining Party hereby ratifies, as of
the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Investor Rights Agreement.

 

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of
the date written below.

 

Date: ___________ ___, ______

 

  [NAME OF JOINING PARTY]           By:       Name:       Title:            
Address for Notices:  

 

 

 

 

SCHEDULE 1

 

Plan of Distribution

 

A selling stockholder may also enter into hedging and/or monetization
transactions. For example, a selling stockholder may:

 

(a)enter into transactions involving short sales of the shares of Class A common
stock by underwriters, brokers, dealers or third parties;

 

(b)itself sell short Class A common stock and deliver the shares to close out
any short positions;

 

(c)enter into options, forwards or other transactions that require the selling
stockholder to deliver Class A common stock to an underwriter, broker, dealer or
other third party who may then resell or otherwise transfer that common stock
under this prospectus; or

 

(d)loan or pledge shares of Class A common stock to an underwriter, broker,
dealer or other third party who may sell the loaned shares or, in an event of
default, sell the pledged shares.