Exhibit 10.5

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made as of September 23,
2019 by and among Proteon Therapeutics, Inc., a corporation organized and
existing under the laws of the State of Delaware (the “Company”), and the
several purchasers signatory hereto (each, a “Purchaser” and collectively, the
“Purchasers”).

 

RECITALS

 

WHEREAS, the Company and the Purchasers are parties to a Subscription Agreement,
dated as of the date hereof (the “Purchase Agreement”), pursuant to which the
Purchasers are purchasing shares of capital stock of the Company; and

 

WHEREAS, in connection with the consummation of the transactions contemplated by
the Purchase Agreement, and pursuant to the terms of the Purchase Agreement, the
parties desire to enter into this Agreement in order to grant certain rights to
the Purchasers as set forth below.

 

NOW, THEREFORE, in consideration of the covenants and promises set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:

 

AGREEMENT

 

1.                                      Certain Definitions. Unless the context
otherwise requires, the following terms, for all purposes of this Agreement,
shall have the meanings specified in this Section 1.

 

“Affiliate” has the meaning set forth in Rule 12b-2 of the rules and regulations
promulgated under the Exchange Act; provided, however, that for purposes of this
Agreement, the Purchasers and their Affiliates, on the one hand, and the Company
and its Affiliates, on the other, shall not be deemed to be “Affiliates” of one
another.

 

“Allowed Delay” has the meaning set forth in Section 2.1(b)(ii).

 

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

 

“Business Days” has the meaning ascribed to such term in the Purchase Agreement.

 

“Closing Date” has the meaning ascribed to such term in the Purchase Agreement.

 

“Common Stock” means shares of the common stock, par value $0.001 per share, of
the Company.

 

“Effective Date” means the date that a Registration Statement filed pursuant to
Section 2.1(a) is first declared effective by the SEC.

 

“Effectiveness Deadline” means, with respect to the Shelf Registration Statement
or New Registration Statement, the ninetieth (90th) calendar day following the
Closing Date (or, in the event the SEC reviews and has written comments to the
Shelf Registration Statement or the New Registration Statement, the one hundred
twentieth (120th) calendar day following the Closing Date); provided, however,
that if the Company is notified by the SEC that the Shelf Registration Statement
or the New Registration Statement will not be reviewed or is no longer subject
to further review and comments, the Effectiveness Deadline as to such Shelf
Registration Statement shall be the fifth (5th) Business Day following the date
on which the Company is so notified if such date precedes the dates otherwise
required above; provided, further, that if the Effectiveness Deadline falls on a
Saturday, Sunday or other day that the SEC is closed for business, the
Effectiveness Deadline shall be extended to the next Business Day on which the
SEC is open for business; provided, further, that if the SEC is closed for
operations due to a government shutdown, the Effectiveness Deadline shall be
extended by the same amount of days that the SEC remains closed for operations.

 

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

 

“Filing Deadline” has the meaning set forth in Section 2.1(a).

 

“FINRA” means the Financial Industry Regulatory Authority.

 

“Form S-3” means such form under the Securities Act as in effect on the date
hereof or any successor or similar registration form under the Securities Act
subsequently adopted by the Commission that permits inclusion or incorporation
of substantial information by reference to other documents filed by the Company
with the Commission.

 

“Free Writing Prospectus” means an issuer free writing prospectus, as defined in
Rule 433 under the Securities Act, relating to an offer of Registrable
Securities.

 

“Holder” means any Purchaser owning or having the right to acquire Registrable
Securities.

 

“Liquidated Damages” has the meaning set forth in Section 2.1(c).

 

“National Exchange” means each of the following, together with any successor
thereto: the NYSE American, The New York Stock Exchange, the NASDAQ Global
Market, the NASDAQ Global Select Market and the NASDAQ Capital Market.

 

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“New Registration Statement” has the meaning set forth in Section 2.1(a).

 

“Participating Holder” means with respect to any registration, any Holder of
Registrable Securities covered by the applicable Registration Statement.

 

“Person” has the meaning ascribed to such term in the Purchase Agreement.

 

“PIPE Shares” means, collectively, the Shares.

 

“Prospectus” means the prospectus included in any Registration Statement, all
amendments and supplements to such prospectus, including pre- and post-effective
amendments to such Registration Statement, and all other material incorporated
by reference in such prospectus.

 

“Register,” “registered” and “registration” refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such registration
statement or document.

 

“Registrable Securities” means the PIPE Shares and any Common Stock issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such PIPE Shares. Notwithstanding the
foregoing, PIPE Shares or any such Common Stock, as applicable, shall cease to
be Registrable Securities for all purposes hereunder upon the earliest to occur
of the following: (A) the sale by any Person of such PIPE Shares or any such
Common Stock, as applicable, to the public either pursuant to a registration
statement under the Securities Act or under Rule 144 (in which case, only such
PIPE Shares or any such Common Stock, as applicable, sold shall cease to be
Registrable Securities) or (B) such PIPE Shares or any such Common Stock, as
applicable, becoming eligible for sale by the Holder pursuant to Rule 144
without restriction.

 

“Registration Statement” means any registration statement of the Company that
covers Registrable Securities pursuant to the provisions of this Agreement filed
with, or to be filed with, the SEC under the rules and regulations promulgated
under the Securities Act, including the related Prospectus, amendments and
supplements to such registration statement, including pre- and post-effective
amendments, and all exhibits and all material incorporated by reference in such
registration statement.

 

“Registration Expenses” has the meaning set forth in Section 2.3.

 

“Remainder Registration Statement” has the meaning set forth in Section 2.1.

 

“Rule 144” means Rule 144 as promulgated by the SEC under the Securities Act, as
such rule may be amended from time to time, or any similar successor rule that
may be promulgated by the SEC.

 

“Rule 145” means Rule 145 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

“SEC” or “Commission” means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

 

“SEC Guidance” means any publicly-available written or oral guidance, comments,
requirements or requests of the Commission staff under the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended, or any similar
successor federal statute and the rules and regulations thereunder, all as the
same shall be in effect from time to time.

 

“Series 1 Preferred Conversion Shares” has the meaning set forth in the Purchase
Agreement.

 

“Shares” means the shares of Common Stock issued pursuant to the Purchase
Agreement and the Series 1 Preferred Conversion Shares.

 

“Shelf Registration Statement” has the meaning set forth in Section 2.1(a).

 

“Transaction Documents” means this Agreement and the Purchase Agreement, all
exhibits and schedules thereto and hereto and any other documents or agreement
executed in connection with the transactions contemplated hereunder or
thereunder.

 

2.                                      Registration Rights.

 

2.1                               Shelf Registration.

 

(a) Registration Statements.  On or prior to sixty (60) days following the
Closing Date (as defined in the Purchase Agreement) (the “Filing Deadline”), the
Company shall prepare and file with the SEC a Registration Statement on Form S-3
(or, if Form S-3 is not then available to the Company, on such form of
registration statement as is then available to effect a registration for resale
of the Registrable Securities) for the resale of the Registrable Securities
pursuant to an offering to be made on a continuous basis pursuant to Rule 415
under the Securities Act (the “Shelf Registration Statement”). Such Shelf
Registration Statement shall, subject to the limitations of Form S-3, include
the aggregate amount of Registrable Securities to be registered therein and
shall contain (except if otherwise required pursuant to written comments
received from the Commission upon a review of such Shelf Registration Statement)
the “Plan of Distribution” in substantially the form attached

 

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hereto as Annex A. To the extent the staff of the SEC does not permit all of the
Registrable Securities to be registered on the Shelf Registration Statement
filed pursuant to this Section 2.1(a) or for any other reason any Registrable
Securities are not then included in a Registration Statement filed under this
Agreement, the Company shall (i) inform each of the Holders thereof and use its
commercially reasonable efforts to file amendments to the Shelf Registration
Statement as required by the Commission and/or (ii) withdraw the Shelf
Registration Statement and file a new registration statement (a “New
Registration Statement”), in either case covering the maximum number of
Registrable Securities permitted to be registered by the SEC, on Form S-3 or
such other form available to register for resale the Registrable Securities as a
secondary offering; provided, however, that prior to filing such amendment or
New Registration Statement, the Company shall be obligated to use its
commercially reasonable efforts to advocate with the SEC for the registration of
all of the Registrable Securities in accordance with the SEC Guidance, including
without limitation, the Manual of Publicly Available Telephone Interpretations
D.29. Notwithstanding any other provision of this Agreement and subject to the
payment of any liquidated damages that may be required to be paid pursuant to
Section 2.1(c), if any SEC Guidance sets forth a limitation of the number of
Registrable Securities permitted to be registered on a particular Registration
Statement as a secondary offering (and notwithstanding that the Company used
diligent efforts to advocate with the SEC for the registration of all or a
greater number of Registrable Securities), unless otherwise directed in writing
by a Holder as to its Registrable Securities, the number of Registrable
Securities to be registered on such Registration Statement will first be reduced
by Registrable Securities not acquired pursuant to the Purchase Agreement
(whether pursuant to registration rights or otherwise), and second by
Registrable Securities represented by Shares (applied, in the case that some
Shares may be registered, to the Holders on a pro rata basis based on the total
number of unregistered Shares held by such Holders, subject to a determination
by the Commission that certain Holders must be reduced first based on the number
of Shares held by such Holders). In the event the Company amends the Shelf
Registration Statement or files a New Registration Statement, as the case may
be, under clauses (i) or (ii) above, the Company will use its commercially
reasonable efforts to file with the SEC, as promptly as allowed by SEC or SEC
Guidance provided to the Company or to registrants of securities in general, one
or more Registration Statements on Form S-3 or such other form available to
register for resale those Registrable Securities that were not registered for
resale on the Shelf Registration Statement, as amended, or the New Registration
Statement (the “Remainder Registration Statement”).

 

(b) Effectiveness.

 

(i) The Company shall use reasonable best efforts to have the Shelf Registration
Statement or New Registration Statement declared effective as soon as
practicable but in no event later than the Effectiveness Deadline (including
filing with the Commission a request for acceleration of effectiveness in
accordance with Rule 461 promulgated under the Securities Act), and shall use
its commercially reasonable efforts to keep the Shelf Registration Statement or
New Registration Statement continuously effective under the Securities Act until
the earlier of (i) such time as all of the Registrable Securities covered by
such Registration Statement have been publicly sold by the Holders or (ii) the
date that all Registrable Securities covered by such Registration Statement may
be sold by non-affiliates without volume or manner-of-sale restrictions pursuant
to Rule 144, without the requirement for the Company to be in compliance with
the current public information requirement under Rule 144 as determined by
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and reasonably acceptable to the Company’s transfer agent (the
“Effectiveness Period”). The Company shall notify the Purchasers by facsimile or
e-mail as promptly as practicable, and in any event, within twenty-four (24)
hours, after any Registration Statement is declared effective and shall
simultaneously provide the Purchasers with copies of any related Prospectus to
be used in connection with the sale or other disposition of the securities
covered thereby.

 

(ii) For not more than twenty (20) consecutive days or for a total of not more
than forty-five (45) days in any twelve (12) month period, the Company may
suspend the use of any Prospectus included in any Registration Statement
contemplated by this Section 2 in the event that the Company determines in good
faith that such suspension is necessary to (A) delay the disclosure of material
non-public information concerning the Company, the disclosure of which at the
time is not, in the good faith opinion of the Company, in the best interests of
the Company or (B) amend or supplement the Registration Statement or the related
Prospectus so that such Registration Statement or Prospectus shall not include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the case of
the Prospectus in light of the circumstances under which they were made, not
misleading (an “Allowed Delay”); provided, that the Company shall promptly
(a) notify each Purchaser in writing of the commencement of and the reasons for
an Allowed Delay, but shall not (without the prior written consent of a
Purchaser) disclose to such Purchaser any material non-public information giving
rise to an Allowed Delay, (b) advise the Purchasers in writing to cease all
sales under the Registration Statement until the end of the Allowed Delay and
(c) use commercially reasonable efforts to terminate an Allowed Delay as
promptly as practicable.

 

(c) If: (i) the Shelf Registration Statement is not filed with the SEC on or
prior to the Filing Deadline, (ii) the Shelf Registration Statement or the New
Registration Statement, as applicable, is not declared effective by the SEC (or
otherwise does not become effective) for any reason on or prior to the
Effectiveness Deadline, (iii) after its Effective Date and other than for an
Allowed Delay, (A) such Registration Statement ceases for any reason (including
without limitation by reason of a stop order, or the Company’s failure to update
the Registration Statement), to remain continuously effective as to all
Registrable Securities included in such Registration Statement or (B) the
Company suspends the use of the Prospectus contained in the Registration
Statement, (iv) the Company fails to satisfy the current public information
requirement pursuant to Rule 144(c)(1) as a result of which the Holders are
unable to sell Registrable Securities without restriction under Rule 144 (or any
successor thereto) and fails to cure any such failure to satisfy the
Rule 144(c)(1) requirement within 10 business days following the date upon which
the Holder notifies the Company in writing that such Holder is unable to sell
Registrable Securities as a result thereof, or (v) following the date that is
six (6) months following the Closing Date, the Company’s common stock is not
listed on a National Exchange, or trading of the Company’s common stock is
suspended or halted for more than three consecutive Business Days (any such
failure or breach in clauses (i) through (v) above being referred to as an
“Event,” and the date on which such Event occurs, being referred to as an “Event
Date”), then in addition to any other rights the Holders may have hereunder or
under applicable law, on each such Event Date and on each monthly anniversary of
each such Event Date (if the applicable Event shall not have been cured by such
date) until the earlier of (1) the applicable Event is cured or (2) the
Registrable Securities are eligible for resale pursuant to Rule 144 without
manner of sale or volume restrictions, the Company shall pay to each Holder an
amount in cash, as partial liquidated damages and not as a penalty (“Liquidated
Damages”), equal to one percent (1.0%) of the aggregate purchase price paid by
such Holder pursuant to the Purchase

 

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Agreement for any unregistered Registrable Securities then held by such Holder.
The parties agree that (1) notwithstanding anything to the contrary herein or in
the Purchase Agreement, no Liquidated Damages shall be payable with respect to
any period after the expiration of the Effectiveness Period (it being understood
that this sentence shall not relieve the Company of any Liquidated Damages
accruing prior to the Effectiveness Deadline) and in no event shall, the
aggregate amount of Liquidated Damages payable to a Holder exceed, in the
aggregate, five percent (5%) of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement and (2) in no event shall the Company be
liable in any thirty (30) day period for Liquidated Damages under this Agreement
in excess of one percent (1.0%) of the aggregate purchase price paid by the
Holders pursuant to the Purchase Agreement. If the Company fails to pay any
Liquidated Damages pursuant to this Section 2.1(c) in full within five
(5) Business Days after the date payable, the Company will pay interest thereon
at a rate of one percent (1.0%) per month (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from the
date such Liquidated Damages are due until such amounts, plus all such interest
thereon, are paid in full. The Liquidated Damages pursuant to the terms hereof
shall apply on a daily pro-rata basis for any portion of a month prior to the
cure of an Event, except in the case of the first Event Date. The Company shall
not be liable for Liquidated Damages under this Agreement as to any Registrable
Securities which are not permitted by the Commission to be included in a
Registration Statement due solely to SEC Guidance from the time that it is
determined that such Registrable Securities are not permitted to be registered
until such time as the provisions of this Agreement as to the Remainder
Registration Statements required to be filed hereunder are triggered, in which
case the provisions of this Section 2.1(c) shall once again apply, if
applicable. In such case, the Liquidated Damages shall be calculated to only
apply to the percentage of Registrable Securities which are permitted in
accordance with SEC Guidance to be included in such Registration Statement. The
Effectiveness Deadline for a Registration Statement shall be extended without
default or Liquidated Damages hereunder in the event that the Company’s failure
to obtain the effectiveness of such Registration Statement on a timely basis
results from the failure of a Purchaser to timely provide the Company with
information requested by the Company and necessary to complete the Registration
Statement in accordance with the requirements of the Securities Act (in which
the Effectiveness Deadline would be extended with respect to Registrable
Securities held by such Purchaser).

 

(d) In the event that Form S-3 is not  available for the registration of the
resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on another appropriate form reasonably
acceptable to the Holder and (ii) undertake to register the Registrable
Securities on Form S-3 promptly after such form is available, provided that the
Company shall maintain the effectiveness of the Registration Statement then in
effect until such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the Commission.

 

2.2                               Piggyback Registrations; Prohibition on Filing
other Registration Statements

 

(a) If at any time after the Shelf Registration Statement is declared effective
and prior to the expiration of the Effectiveness Period, there is not then an
effective registration statement covering all of the Registrable Securities, and
the Company determines to prepare and file with the SEC a registration statement
relating to an offering for its own account or the account of others of any of
its equity securities, then the Company shall send to each Holder written notice
of such determination and, if within 15 days after the date of such notice, any
such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of the Registrable Securities such Holder
requests to be registered.

 

(b) The Company shall have the right, in its sole discretion, to terminate or
withdraw any registration initiated by it under this Section 2.2 prior to the
effectiveness of such registration whether or not any Holder has elected to
include Registrable Securities in such registration.

 

(c) Prior to the Effective Date of the Shelf Registration Statement or the
expiration of the Effectiveness Period, whichever is the first to occur, neither
the Company nor any of its security holders (other than the Holders in such
capacity pursuant hereto) may include securities of the Company in a
Registration Statement other than the Registrable Securities and the Company
shall not enter into any agreement providing any such right to any of its
security holders. The Company shall not file with the Commission a registration
statement relating to an offering for its own account under the Securities Act
of any of its equity securities other than a registration statement on Form S-8
or, in connection with an acquisition, on Form S-4 until the earlier of (i) the
date that is thirty (30) days after the date the Shelf Registration Statement in
the first sentence of this clause (c) is declared effective or (ii) the date
that all Registrable Securities are eligible for resale by non-affiliates
without volume or manner of sale restrictions under Rule 144 and without the
requirement for the company to be in compliance with the current public
information requirements under Rule 144. For the avoidance of doubt and
notwithstanding anything to the contrary in the foregoing provisions of this
Section 2.2(c), the Company shall not be prohibited (i) from preparing and
filing with the Commission a registration statement relating to an offering of
Common Stock by existing stockholders of the Company under the Securities Act
pursuant to the terms of registration rights held by such stockholder, (ii) from
filing amendments to registration statements filed prior to the date of this
Agreement or (iii) from filing prospectus supplements relating to any offering
of securities of the Company pursuant to any registration statement filed by the
Company prior to the date of this Agreement.

 

2.3                               Expenses. All expenses incident to the
Company’s performance of or compliance with this Agreement shall be paid by the
Company, other than underwriting discounts or commissions deducted from the
proceeds in respect of any Registrable Securities, including (i) all
registration and filing fees, and any other fees and expenses associated with
filings required to be made with the SEC, FINRA or any other regulatory
authority and, if applicable, the fees and expenses of any “qualified
independent underwriter” as such term is defined in NASD Rule 2720 (or any
successor provision) and of its counsel, (ii) all fees and expenses in
connection with compliance with any securities or “Blue Sky” laws (including
fees and disbursements of counsel for the underwriters in connection with “Blue
Sky” qualifications of the Registrable Securities), (iii) all printing,
duplicating, word processing, messenger, telephone, facsimile and delivery
expenses (including expenses of printing certificates for the Registrable
Securities in a form eligible for deposit with The Depository Trust Company and
of printing Prospectuses and Free Writing Prospectuses), (iv) all fees and
disbursements of counsel for the Company and of all independent certified public
accountants of the Company (including the expenses of any special audit and cold
comfort letters required by or incident to such performance), (v) Securities Act
liability insurance or similar insurance if the Company so desires or the
underwriters so require in accordance with then-customary underwriting practice,
(vi) all fees and expenses incurred in connection with the listing of
Registrable Securities on any securities exchange or quotation of the
Registrable Securities on any inter-dealer quotation system, (vii) any
reasonable fees and disbursements of underwriters customarily paid

 

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by issuers of securities, (viii) all fees and expenses of any special experts or
other Persons retained by the Company in connection with any registration,
(ix) all of the Company’s internal expenses (including all salaries and expenses
of its officers and employees performing legal or accounting duties), (x) all
expenses related to the “road-show” for any underwritten offering, including all
travel, meals and lodging, (xi) all reasonable fees and disbursements of one
legal counsel for the Participating Holders, as selected by the Purchasers, in
an amount not to exceed $25,000 in the aggregate during the term of this
Agreement, and (xii) any other fees and disbursements customarily paid by the
issuers of securities. All such expenses are referred to herein as “Registration
Expenses.” The Company shall not be required to pay any underwriting discounts
and commissions and transfer taxes, if any, attributable to the sale of
Registrable Securities.

 

2.4                               Company Obligations. The Company will use
reasonable best efforts to effect the registration of the Registrable Securities
in accordance with the terms hereof, and pursuant thereto the Company will:

 

(a) prepare the required Registration Statement including all exhibits and
financial statements required under the Securities Act to be filed therewith,
and before filing a Registration Statement, Prospectus or any Free Writing
Prospectus, or any amendments or supplements thereto, (x) furnish to the
Participating Holders, if any, copies of all documents prepared to be filed,
which documents shall be subject to the review of such Participating Holders and
their respective counsel and (y) except in the case of a registration under
Section 2.2, not file any Registration Statement or Prospectus or amendments or
supplements thereto to which any Participating Holders shall reasonably object;

 

(b) file with the SEC a Registration Statement relating to the Registrable
Securities including all exhibits and financial statements required by the SEC
to be filed therewith, and use commercially reasonable efforts to cause such
Registration Statement to become effective under the Securities Act;

 

(c) prepare and file with the SEC such pre- and post-effective amendments to
such Registration Statement, supplements to the Prospectus and such amendments
or supplements to any Free Writing Prospectus as may be (y) reasonably requested
by any Participating Holder or (z) necessary to keep such registration effective
for the period of time required by this Agreement, and comply with provisions of
the applicable securities laws with respect to the sale or other disposition of
all securities covered by such Registration Statement during such period in
accordance with the intended method or methods of disposition by the sellers
thereof set forth in such Registration Statement;

 

(d) promptly notify the Participating Holders, and (if requested) confirm such
advice in writing and provide copies of the relevant documents, as soon as
reasonably practicable after notice thereof is received by the Company (A) when
the applicable Registration Statement or any amendment thereto has been filed or
becomes effective, and when the applicable Prospectus or Free Writing Prospectus
or any amendment or supplement thereto has been filed, (B) of any written
comments by the SEC or any request by the SEC for amendments or supplements to
such Registration Statement, Prospectus or Free Writing Prospectus or for
additional information, (C) of the issuance by the SEC of any stop order
suspending the effectiveness of such Registration Statement or any order by the
SEC preventing or suspending the use of any preliminary or final Prospectus or
any Free Writing Prospectus or the initiation or threatening of any proceedings
for such purposes, (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
offering or sale in any jurisdiction and (E) of the receipt by the Company of
any notification with respect to the initiation or threatening of any proceeding
for the suspension of the qualification of the Registrable Securities for
offering or sale in any jurisdiction;

 

(e) promptly notify the Participating Holders when the Company becomes aware of
the happening of any event as a result of which the Registration Statement, the
Prospectus included in such Registration Statement (as then in effect) or any
Free Writing Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein (in the
case of such Prospectus, any preliminary Prospectus or any Free Writing
Prospectus, in light of the circumstances under which they were made) not
misleading, when any Free Writing Prospectus includes information that may
conflict with the information contained in the Registration Statement, or, if
for any other reason it shall be necessary during such time period to amend or
supplement such Registration Statement, Prospectus or Free Writing Prospectus in
order to comply with the Securities Act and, in either case as promptly as
reasonably practicable thereafter, prepare and file with the SEC and furnish
without charge to the Participating Holders an amendment or supplement to such
Registration Statement, Prospectus or Free Writing Prospectus which shall
correct such misstatement or omission or effect such compliance;

 

(f) promptly incorporate in a Prospectus supplement, Free Writing Prospectus or
post-effective amendment to the applicable Registration Statement such
information as the Participating Holders agree should be included therein
relating to the plan of distribution with respect to such Registrable
Securities, and make all required filings of such Prospectus supplement, Free
Writing Prospectus or post-effective amendment as soon as reasonably practicable
after being notified of the matters to be incorporated in such Prospectus
supplement, Free Writing Prospectus or post-effective amendment;

 

(g) furnish to each Participating Holder, without charge, as many conformed
copies as such Participating Holder may reasonably request of the applicable
Registration Statement and any amendment or post-effective amendment thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits (including those incorporated by reference);

 

(h) deliver to each Participating Holder, without charge, as many copies of the
applicable Prospectus (including each preliminary Prospectus), any Free Writing
Prospectus and any amendment or supplement thereto as such Participating Holder
may reasonably request (it being understood that the Company consents to the use
of such Prospectus, any Free Writing Prospectus and any amendment or supplement
thereto by such Participating in connection with the offering and sale of the
Registrable Securities thereby) and such other documents as such Participating
Holder may reasonably request in order to facilitate the disposition of the
Registrable Securities by such Participating Holder;

 

(i) on or prior to the date on which the Registration Statement is declared
effective, use its reasonable best efforts to register or qualify, and cooperate
with the Participating Holders and their respective counsel, in connection with
the registration or qualification of such Registrable Securities for offer and
sale under the securities or “Blue Sky” laws of each state and other
jurisdiction of the United States as any Participating Holder or their
respective counsel reasonably request in writing and do any and all other acts
or things reasonably necessary or advisable to keep such registration or
qualification in effect for such period as required by this Agreement, provided
that the Company shall not be required to qualify generally to do

 

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business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to taxation or general service of process in any
such jurisdiction where it is not then so subject;

 

(j) cooperate with the Participating Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends, and enable such Registrable
Securities to be in such denominations and registered in such names as may be
requested at least two (2) Business Days prior to any sale of Registrable
Securities;

 

(k) use its reasonable best efforts to cause the Registrable Securities covered
by the Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities;

 

(l) make such representations and warranties to the Participating Holders in
form, substance and scope as are customarily made by issuers in secondary
underwritten public offerings;

 

(m) enter into such customary agreements (including underwriting and
indemnification agreements) and take all such other actions as the Purchasers
reasonably request in order to expedite or facilitate the registration and
disposition of such Registrable Securities;

 

(n) obtain for delivery to the Participating Holders (i) an opinion or opinions
from counsel for the Company dated the effective date of the Registration
Statement or, in the event of an underwritten offering, the date of the closing
under the underwriting agreement and (ii) in the event of any underwritten
offering, a “comfort” letter signed by the independent public accountants who
have certified the Company’s financial statements included in, or incorporated
by reference into, the Registration Statement, on such date or dates as may be
required under the underwriting agreement, in each case in customary form, scope
and substance, which opinions and auditor comfort letters shall be reasonably
satisfactory to such Participating Holders or underwriters, as the case may be,
and their respective counsel;

 

(o) cooperate with each Participating Holder participating in the disposition of
such Registrable Securities and their respective counsel in connection with any
filings required to be made with FINRA or any other securities regulatory
authority;

 

(p) use its reasonable best efforts to comply with all applicable securities
laws and make available to its security holders, as soon as reasonably
practicable, an earnings statement satisfying the provisions of Section 11(a) of
the Securities Act and the rules and regulations promulgated thereunder;

 

(q) provide and cause to be maintained a transfer agent and registrar for all
Registrable Securities covered by the applicable Registration Statement from and
after a date not later than the effective date of such Registration Statement;

 

(r) use commercially reasonable efforts to cause all Registrable Securities
covered by the Registration Statement to be listed on each securities exchange
on which any of the Common Stock is then listed or quoted and on each
inter-dealer quotation system on which any of the Common Stock is then quoted;

 

(s) the Company shall make available, during normal business hours, for
inspection and review by the Purchasers, advisors to and representatives of the
Purchasers (who may or may not be affiliated with the Purchasers and who are
reasonably acceptable to the Company), all financial and other records, all SEC
Reports (as defined in the Purchase Agreement) and other filings with the SEC,
and all other corporate documents and properties of the Company as may be
reasonably necessary for the purpose of such review, and cause the Company’s
officers, directors and employees, within a reasonable time period, to supply
all such information reasonably requested by the Purchasers or any such
representative, advisor or underwriter in connection with such Registration
Statement (including, without limitation, in response to all questions and other
inquiries reasonably made or submitted by any of them), prior to and from time
to time after the filing and effectiveness of the Registration Statement for the
sole purpose of enabling the Purchasers and such representatives, advisors and
underwriters and their respective accountants and attorneys to conduct initial
and ongoing due diligence with respect to the Company and the accuracy of such
Registration Statement; and

 

(t) with a view to making available to the Purchasers the benefits of Rule 144
(or its successor rule) and any other rule or regulation of the SEC that may at
any time permit the Purchasers to sell shares of Common Stock to the public
without registration, the Company covenants and agrees to: (i) make and keep
public information available, as those terms are understood and defined in
Rule 144, until the earlier of (A) the date as all of the Registrable Securities
may be sold without restriction by the holders thereof pursuant to Rule 144 or
any other rule of similar effect or (B) such date as all of the Registrable
Securities shall have been resold; (ii) file with the SEC in a timely manner all
reports and other documents required of the Company under the Exchange Act; and
(iii) furnish to each Purchaser upon request, as long as such Purchaser owns any
Registrable Securities, (A) a written statement by the Company that it has
complied with the reporting requirements of the Exchange Act, (B) a copy of the
Company’s most recent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q, and (C) such other information as may be reasonably requested in
order to avail such Purchaser of any rule or regulation of the SEC that permits
the selling of any such Registrable Securities without registration.

 

All such information made available or provided pursuant to this Section 2.4
shall be treated as confidential information and shall not be disclosed by the
Purchasers to any other Person other than such Purchaser’s respective officers,
directors, employees, accountants, consultants, legal counsel, investment
bankers, advisors and authorized agents (collectively, the  “Purchaser
Representatives”); provided, that, each such Purchaser Representative shall be
informed that such confidential information is strictly confidential and shall
be subject to confidentiality restrictions in favor of the disclosing Purchaser
with respect to the confidential information disclosed by the Purchaser to such
Purchaser Representative. Notwithstanding anything to the contrary herein, the
foregoing restrictions shall not prevent the disclosure by a Purchaser of any
information (x) that is required to be disclosed by order of a court of
competent jurisdiction, administrative body or other Governmental Authority (as
defined in the Purchase Agreement), or by subpoena, summons or legal process, or
by law, rule or regulation or (y) that is publicly available (other than by a
breach of such Purchaser’s confidentiality obligations to the Company), provided
that, to the extent permitted by Law (as defined in the Purchase Agreement), in
the event a Purchaser or Purchaser Representative is

 

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required to make a disclosure pursuant to clause (x) hereof, it shall provide to
the Board prompt notice of such disclosure (other than any such disclosure
required by any administrative body or other Governmental Authority in the
exercise of its regulatory or other oversight authority with respect to such
Purchaser or Purchaser Representative). The confidentiality obligations herein
shall, with respect to any particular Purchaser, expire on the second (2nd)
anniversary of the date on which such Purchaser ceases to hold any Shares.

 

2.5                               Obligations of the Purchasers.

 

(a) Each Purchaser shall furnish in writing to the Company such information
regarding itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it, as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request. At least five (5) Business Days prior to the first
anticipated filing date of any Registration Statement, the Company shall notify
each Purchaser of the information the Company requires from such Purchaser if
such Purchaser elects to have any of its Registrable Securities included in the
Registration Statement. A Purchaser shall provide such information to the
Company at least two (2) Business Days prior to the first anticipated filing
date of such Registration Statement if such Purchaser elects to have any of its
Registrable Securities included in the Registration Statement.

 

(b) Each Purchaser, by its acceptance of the Registrable Securities agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of a Registration Statement hereunder, unless
such Purchaser has notified the Company in writing of its election to exclude
all of its Registrable Securities from such Registration Statement.

 

(c) Each Purchaser agrees that, upon receipt of any notice from the Company of
either (i) the commencement of an Allowed Delay pursuant to Section 2.1(b) or
(ii) the happening of an event pursuant to Section 2.4(d) and
Section 2.4(e) hereof, such Purchaser will immediately discontinue disposition
of Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities, until the Purchaser is advised by the Company that such
dispositions may again be made.

 

2.6                               Indemnification.

 

(a) Indemnification by the Company. The Company will indemnify and hold harmless
each Purchaser and its officers, directors, members, employees and agents,
successors and assigns, and each other person, if any, who controls such
Purchaser within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, any preliminary Prospectus or final
Prospectus, or any amendment or supplement thereof or any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus or form of prospectus
or supplement thereto, in light of the circumstances under which they were made)
not misleading; (ii) any “Blue Sky” application or other document executed by
the Company specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in order to
qualify any or all of the Registrable Securities under the securities laws
thereof (any such application, document or information herein called a “Blue Sky
Application”); (iii) the omission or alleged omission to state in a Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, in light of the circumstances in which
they were made; (iv) any violation by the Company or its agents of any rule or
regulation promulgated under the Securities Act applicable to the Company or its
agents and relating to action or inaction required of the Company in connection
with such registration; or (v) any failure to register or qualify the
Registrable Securities included in any such Registration Statement in any state
where the Company or its agents has affirmatively undertaken or agreed in
writing that the Company will undertake such registration or qualification on a
Purchaser’s behalf and will reimburse such Purchaser, and each such officer,
director or member and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such Purchaser or any such
controlling person in writing specifically for use in such Registration
Statement or Prospectus.

 

(b) Indemnification by the Purchasers. Each Purchaser agrees, severally but not
jointly, to indemnify and hold harmless, to the fullest extent permitted by law,
the Company, its directors, officers, employees, stockholders and each person
who controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expense (including reasonable attorney
fees) resulting from any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required to
be stated in the Registration Statement or Prospectus or preliminary Prospectus
or amendment or supplement thereto or necessary to make the statements therein
(in the case of any Prospectus or form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading, to the
extent, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is contained in any information
furnished in writing by such Purchaser to the Company specifically for inclusion
in such Registration Statement or Prospectus or amendment or supplement thereto.
In no event shall the liability of a Purchaser be greater in amount than the
dollar amount of the proceeds (net of all expense paid by such Purchaser in
connection with any claim relating to this Section 2.6 and the amount of any
damages such Purchaser has otherwise been required to pay by reason of such
untrue statement or omission) received by such Purchaser upon the sale of the
Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.

 

(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party (provided, however, that such indemnified
party shall, at the expense of the indemnified party, be entitled to counsel of
its own choosing to monitor such defense); provided that, subject to the
preceding sentence, any Person entitled to indemnification hereunder shall have
the right to employ separate counsel and to participate in the defense of such
claim, but the fees and expenses of such counsel shall be at the expense of such
Person unless (a) the indemnifying party has agreed to pay such fees or

 

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expenses, or (b) the indemnifying party shall have failed to assume the defense
of such claim and employ counsel reasonably satisfactory to such person or
(c) in the reasonable judgment of any such Person, based upon written advice of
its counsel, a conflict of interest exists between such person and the
indemnifying party with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such Person); and provided, further, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations hereunder, except to the extent that such failure to give notice
shall materially adversely affect the indemnifying party in the defense of any
such claim or litigation. It is understood that the indemnifying party shall
not, in connection with any proceeding in the same jurisdiction, be liable for
fees or expenses of more than one separate firm of attorneys at any time for all
such indemnified parties. No indemnifying party will, except with the consent of
the indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.

 

(d) Contribution. If for any reason the indemnification provided for in the
preceding paragraphs (a) and (b) is unavailable to an indemnified party or
insufficient to hold it harmless, other than as expressly specified therein,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations. 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 not guilty of such fraudulent misrepresentation. In
no event shall the contribution obligation of a holder of Registrable Securities
be greater in amount than the dollar amount of the proceeds (net of all expenses
paid by such holder in connection with any claim relating to this Section 2.6
and the amount of any damages such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Registrable Securities giving rise
to such contribution obligation.

 

2.7                               Termination of Registration Rights. The
registration rights provided to the Holders under Section 2 shall terminate in
their entirety upon the earlier to occur of: (i) the date that is five (5) years
from the Effective Date; or (ii) at such time as there are no Registrable
Securities. Notwithstanding the foregoing, Sections 2.3, 2.6 and 3 shall survive
the termination of such registration rights.

 

3.                                      Miscellaneous.

 

3.1                               Governing Law; Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New York without regard to the choice of law principles thereof. Each
of the parties hereto irrevocably submits to the exclusive jurisdiction of the
state and federal courts located in the State of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.

 

3.2                               Successors and Assigns. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successor and assigns of the parties hereto (other than
the rights of any Holder under Section 2 hereof, which shall not be assignable
and shall not inure to the benefit of any successor or assign of a Holder). The
Company may not assign its rights or obligations hereunder except with the prior
written consent of each Holder. Each Holder may assign their respective rights
hereunder (other than the rights of any Holder under Section 2 hereof, which
shall not be assignable and shall not inure to the benefit of any successor or
assign of a Holder) in the manner and to the Persons permitted under the
Purchase Agreement.

 

3.3                               Entire Agreement; Amendment. This Agreement
and the other Transaction Documents constitute the full and entire understanding
and agreement between the parties with regard to the subjects hereof and
thereof. Any previous agreements among the parties relative to the specific
subject matter hereof are superseded by this Agreement. Neither this Agreement
nor any provision hereof may be amended, changed, waived, discharged or
terminated other than by a written instrument signed by the party against who
enforcement of any such amendment, change, waiver, discharge or termination is
sought; provided that additional purchasers may become party to this Agreement
by executing a joinder pursuant to Section 3 of the Purchase Agreement.

 

3.4                               Notices. All notices and other communications
provided for or permitted hereunder shall be made as set forth in Section 12.02
of the Purchase Agreement.

 

3.5                               Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their commercially reasonable efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.

 

3.6                               Headings. The headings herein are for
convenience only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.

 

3.7                               Counterparts. This Agreement may be executed
in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to each other party,
it being understood that the parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile transmission or by e-mail
delivery of a “.pdf” format data file, such signature shall create a

 

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valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
“.pdf” signature page were an original thereof.

 

3.8                               Delays or Omissions. It is agreed that no
delay or omission to exercise any right, power or remedy accruing to any party
upon any breach or default of any other party under this Agreement shall impair
any such right, power or remedy, nor shall it be construed to be a waiver of any
such breach or default, or any acquiescence therein, or of any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character of any breach or default under this Agreement,
or any waiver of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in
writing, and that all remedies, either under this Agreement, by law or
otherwise, shall be cumulative and not alternative.

 

3.9                               Consents. Any permission, consent, or approval
of any kind or character under this Agreement shall be in writing and shall be
effective only to the extent specifically set forth in such writing.

 

3.10                        SPECIFIC PERFORMANCE. THE PARTIES HERETO AGREE THAT
IRREPARABLE DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS
AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH ITS SPECIFIC INTENT OR WERE
OTHERWISE BREACHED. IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED
TO AN INJUNCTION OR INJUNCTIONS, WITHOUT BOND, TO PREVENT OR CURE BREACHES OF
THE PROVISIONS OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND
PROVISIONS HEREOF, THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY
MAY BE ENTITLED BY LAW OR EQUITY, AND ANY PARTY SUED FOR BREACH OF THIS
AGREEMENT EXPRESSLY WAIVES ANY DEFENSE THAT A REMEDY IN DAMAGES WOULD BE
ADEQUATE.

 

3.11                        Construction of Agreement. No provision of this
Agreement shall be construed against either party as the drafter thereof.

 

3.12                        Section References. Unless otherwise stated, any
reference contained herein to a Section or subsection refers to the provisions
of this Agreement.

 

3.13                        Variations of Pronouns. All pronouns and all
variations thereof shall be deemed to refer to the masculine, feminine, or
neuter, singular or plural, as the context in which they are used may require.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

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

 

 

Proteon Therapeutics, Inc.

 

 

 

By:

/s/ Timothy P. Noyes

 

Name:

Timothy P. Noyes

 

Title:

President & CEO

 

[Signature Page to Registration Rights Agreement]

 

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

 

 

PURCHASERS:

 

 

 

667, L.P.

 

By: BAKER BROS. ADVISORS LP,

 

management company and investment adviser to 667, L.P., pursuant to authority
granted to it by Baker Biotech Capital, L.P., general partner to 667, L.P., and
not as the general partner

 

 

 

By:

/s/ Scott L. Lessing

 

Name:

Scott L. Lessing

 

Title:

President

 

 

 

BAKER BROTHERS LIFE SCIENCES, L.P.

 

By: BAKER BROS. ADVISORS LP,

 

management company and investment adviser to BAKER BROTHERS LIFE SCIENCES, L.P.,
pursuant to authority granted to it by Baker Brothers Life Sciences Capital,
L.P., general partner to BAKER BROTHERS LIFE SCIENCES, L.P., and not as the
general partner

 

 

 

By:

/s/ Scott L. Lessing

 

Name:

Scott L. Lessing

 

Title:

President

 

[Signature Page to Registration Rights Agreement]

 

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

 

 

PURCHASERS:

 

 

 

BOXER CAPITAL, LLC

 

 

 

By:

/s/ Aaron Davis

 

Name:

Aaron Davis

 

Title:

Chief Executive Officer

 

 

 

MVA INVESTORS, LLC

 

 

 

By:

/s/ Aaron Davis

 

Name:

Aaron Davis

 

Title:

Chief Executive Officer

 

[Signature Page to Registration Rights Agreement]

 

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

 

 

PURCHASERS:

 

 

 

OPALEYE LP

 

 

 

By:

/s/ James Silverman

 

Name:

James Silverman

 

Title:

General Partner

 

[Signature Page to Registration Rights Agreement]

 

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

 

 

PURCHASERS:

 

 

 

DRW VENTURE CAPITAL, LLC

 

 

 

By:

/s/ David B. Nelson

 

Name:

David B. Nelson

 

Title:

Vice President

 

[Signature Page to Registration Rights Agreement]

 

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

 

 

PURCHASERS:

 

 

 

IKARIAN CAPITAL

 

 

 

By:

/s/ Chart Westcott

 

Name:

Chart Westcott

 

Title:

COO

 

[Signature Page to Registration Rights Agreement]

 

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

 

 

PURCHASERS:

 

 

 

JAMES F. REDDOCH

 

 

 

By:

/s/ James F. Reddoch

 

[Signature Page to Registration Rights Agreement]

 

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Annex A

 

PLAN OF DISTRIBUTION

 

We are registering the shares of common stock issued to the selling stockholders
to permit the resale of these shares of common stock by the holders of the
shares of common stock from time to time after the date of this prospectus. We
will not receive any of the proceeds from the sale by the selling stockholders
of the shares of common stock. We will bear all fees and expenses incident to
our obligation to register the shares of common stock.

 

The selling stockholders may sell all or a portion of the shares of common stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the shares of
common stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions or
agent’s commissions. The shares of common stock may be sold on any national
securities exchange or quotation service on which the securities may be listed
or quoted at the time of sale, in the over-the-counter market or in transactions
otherwise than on these exchanges or systems or in the over-the-counter market
and in one or more transactions at fixed prices, at prevailing market prices at
the time of the sale, at varying prices determined at the time of sale, or at
negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions. The selling stockholders may use any one
or more of the following methods when selling shares:

 

· ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 

· block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

 

· purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 

· an exchange distribution in accordance with the rules of the applicable
exchange;

 

· privately negotiated transactions;

 

· settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;

 

· broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

 

· through the writing or settlement of options or other hedging transactions,
whether such options are listed on an options exchange or otherwise;

 

· a combination of any such methods of sale; and

 

· any other method permitted pursuant to applicable law.

 

The selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act, as
permitted by that rule, or Section 4(1) under the Securities Act, if available,
rather than under this prospectus, provided that they meet the criteria and
conform to the requirements of those provisions.

 

Broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in sales. If the selling stockholders effect such
transactions by selling shares of common stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from
the selling stockholders or commissions from purchasers of the shares of common
stock for whom they may act as agent or to whom they may sell as principal. Such
commissions will be in amounts to be negotiated, but, except as set forth in a
supplement to this Prospectus, in the case of an agency transaction will not be
in excess of a customary brokerage commission in compliance with FINRA
Rule 5110.

 

In connection with sales of the shares of common stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the shares of
common stock in the course of hedging in positions they assume. The selling
stockholders may also sell shares of common stock short and if such short sale
shall take place after the date that this Registration Statement is declared
effective by the Commission, the selling stockholders may deliver shares of
common stock covered by this prospectus to close out short positions and to
return borrowed shares in connection with such short sales. The selling
stockholders may also loan or pledge shares of common stock to broker-dealers
that in turn may sell such shares, to the extent permitted by applicable law.
The selling stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
Notwithstanding the foregoing, the selling stockholders have been advised that
they may not use shares registered on this registration statement to cover short
sales of our common stock made prior to the date the registration statement, of
which this prospectus forms a part, has been declared effective by the SEC.

 

The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the warrants or shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock from
time to time pursuant to this prospectus or any amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of
1933, as amended, amending, if necessary, the list of selling stockholders to
include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus. The selling stockholders also may transfer
and donate the shares of common stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes

 

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of this prospectus.

 

The selling stockholders and any broker-dealer or agents participating in the
distribution of the shares of common stock may be deemed to be “underwriters”
within the meaning of Section 2(11) of the Securities Act in connection with
such sales. In such event, any commissions paid, or any discounts or concessions
allowed to, any such broker-dealer or agent and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Selling Stockholders who are “underwriters”
within the meaning of Section 2(11) of the Securities Act will be subject to the
prospectus delivery requirements of the Securities Act and may be subject to
certain statutory liabilities of, including but not limited to, Sections 11, 12
and 17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of
1934, as amended, or the Exchange Act.

 

Each selling stockholder has informed the Company that it is not a registered
broker-dealer and does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the common stock. Upon the
Company being notified in writing by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of common
stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such selling stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved,
(iii) the price at which such the shares of common stock were sold, (iv) the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction.

 

Under the securities laws of some states, the shares of common stock may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.

 

There can be no assurance that any selling stockholder will sell any or all of
the shares of common stock registered pursuant to the shelf registration
statement, of which this prospectus forms a part.

 

Each selling stockholder and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the shares of common stock by the selling
stockholder and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.

 

We will pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with
state securities or “blue sky” laws; provided, however, that each selling
stockholder will pay all underwriting discounts and selling commissions, if any,
and any legal expenses incurred by it. We will indemnify the selling
stockholders against certain liabilities, including some liabilities under the
Securities Act, in accordance with a registration rights agreement, or the
selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling stockholders specifically for use in this prospectus, in
accordance with the related registration rights agreements, or we may be
entitled to contribution.

 

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