Exhibit 4.2


 


EIGHTH
AMENDED AND RESTATED


 


INVESTORS’
RIGHTS AGREEMENT


 


BY AND
AMONG


 


IRONWOOD
PHARMACEUTICALS, INC.,


 


THE
FOUNDERS


 


AND


 


THE
INVESTORS NAMED IN EXHIBIT A


 






 


September 1,
2009


 






 

















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1. GENERAL

  	
  2

  
	
  1.1

  	
  Definitions

  	
  2

  
	
   

  	
   

  	
   

  
	
  SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER

  	
  6

  
	
  2.1

  	
  Restrictions
  on Transfer

  	
  6

  
	
  2.2

  	
  Demand
  Registration

  	
  8

  
	
  2.3

  	
  Piggyback
  Registrations

  	
  10

  
	
  2.4

  	
  Form S-3
  Registration

  	
  11

  
	
  2.5

  	
  Expenses
  of Registration

  	
  12

  
	
  2.6

  	
  Obligations
  of the Company

  	
  13

  
	
  2.7

  	
  Termination
  of Registration Rights

  	
  14

  
	
  2.8

  	
  Delay
  of Registration; Furnishing Information

  	
  15

  
	
  2.9

  	
  Indemnification

  	
  15

  
	
  2.10

  	
  Assignment
  of Registration Rights

  	
  18

  
	
  2.11

  	
  Amendment
  of Registration Rights

  	
  18

  
	
  2.12

  	
  Limitation
  on Subsequent Registration Rights

  	
  18

  
	
  2.13

  	
  “Market
  Stand-Off” Agreement

  	
  18

  
	
  2.14

  	
  Agreement
  to Furnish Information

  	
  19

  
	
  2.15

  	
  Reports
  Under the Exchange Act

  	
  19

  
	
   

  	
   

  	
   

  
	
  SECTION 3. COVENANTS

  	
  20

  
	
  3.1

  	
  Basic
  Financial Information and Reporting

  	
  20

  
	
  3.2

  	
  Inspection
  Rights

  	
  20

  
	
  3.3

  	
  Confidentiality
  of Records

  	
  21

  
	
  3.4

  	
  Reservation
  of Common Stock

  	
  21

  
	
  3.5

  	
  Directors’
  Expenses

  	
  21

  
	
  3.6

  	
  Proprietary
  Information and Inventions Agreement

  	
  21

  
	
  3.7

  	
  Product
  Liability Insurance

  	
  21

  
	
  3.8

  	
  Director
  and Officer Insurance

  	
  21

  
	
  3.9

  	
  Notice

  	
  21

  
	
  3.10

  	
  Related
  Party Transactions

  	
  21

  
	
  3.11

  	
  Qualified
  Small Business Stock

  	
  22

  
	
  3.12

  	
  Termination
  of Covenants

  	
  22

  



 


i

















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 4. PARTICIPATION RIGHTS

  	
  22

  
	
  4.1

  	
  Subsequent
  Offerings

  	
  22

  
	
  4.2

  	
  Exercise
  of Rights

  	
  22

  
	
  4.3

  	
  Issuance
  of Equity Securities to Other Persons

  	
  23

  
	
  4.4

  	
  Termination
  and Waiver of Participation Rights

  	
  23

  
	
  4.5

  	
  Transfer
  of Participation Rights

  	
  23

  
	
  4.6

  	
  Excluded
  Securities

  	
  23

  
	
   

  	
   

  	
   

  
	
  SECTION 5. RIGHT OF FIRST REFUSAL

  	
  24

  
	
  5.1

  	
  Prohibited
  Transfers

  	
  24

  
	
  5.2

  	
  Company’s
  Right of First Refusal

  	
  24

  
	
  5.3

  	
  Investors’
  Right of Second Refusal

  	
  25

  
	
  5.4

  	
  Closing

  	
  25

  
	
  5.5

  	
  Re-Offer

  	
  25

  
	
  5.6

  	
  Permitted
  Transfers

  	
  26

  
	
  5.7

  	
  Legend

  	
  26

  
	
  5.8

  	
  Termination
  and Waiver of Rights of First Refusal

  	
  26

  
	
  5.9

  	
  Transfer
  of Rights of First Refusal

  	
  26

  
	
  5.10

  	
  No
  Prior Agreements

  	
  27

  
	
   

  	
   

  	
   

  
	
  SECTION 6. MISCELLANEOUS

  	
  27

  
	
  6.1

  	
  Governing
  Law

  	
  27

  
	
  6.2

  	
  Survival

  	
  27

  
	
  6.3

  	
  Successors
  and Assigns

  	
  27

  
	
  6.4

  	
  Entire
  Agreement

  	
  27

  
	
  6.5

  	
  Severability

  	
  27

  
	
  6.6

  	
  Amendment
  and Waiver

  	
  28

  
	
  6.7

  	
  Delays
  or Omissions

  	
  28

  
	
  6.8

  	
  Notices

  	
  28

  
	
  6.9

  	
  Attorneys’
  Fees

  	
  29

  
	
  6.10

  	
  Titles
  and Subtitles

  	
  29

  
	
  6.11

  	
  Additional
  Investors

  	
  29

  
	
  6.12

  	
  Counterparts

  	
  29

  



 


ii

















 


EIGHTH AMENDED AND RESTATED


INVESTORS’ RIGHTS AGREEMENT


 


This EIGHTH AMENDED AND RESTATED INVESTORS’ RIGHTS
AGREEMENT (the “Agreement”)
is made and entered into as of September 1, 2009, by and among IRONWOOD PHARMACEUTICALS, INC., a Delaware
corporation (the “Company”),
the holders of the Company’s Common Stock set forth on Schedule I
hereto (collectively, the “Founders”),
the purchasers of the Company’s Preferred Stock set forth on Exhibit A attached hereto, together
with all future holders of the Series G Preferred Stock and Series I
Preferred Stock who shall become parties to this Agreement (being hereinafter
referred to as the “Investors”
and each individually as an “Investor”).


 


RECITALS


 


WHEREAS, the Company
previously granted registration rights, information rights and other rights to
the purchasers of the Company’s Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and Series H Preferred
Stock (collectively, the “Prior
Investors”) as set forth in that certain Seventh Amended and
Restated Investors’ Rights Agreement dated as of September 12, 2008, by
and among the Company and the Prior Investors (the “Prior Agreement”);


 


WHEREAS, the Company now
proposes to sell and issue shares of its Series G Convertible Preferred
Stock to certain purchasers (the “Series G Purchasers”)
in accordance with the terms and conditions of that certain Series G
Convertible Preferred Stock Purchase Agreement of even date herewith, as
amended from time to time (the “Series G Purchase Agreement”);


 


WHEREAS, the Company may
sell and issue shares of its Series I Convertible Preferred Stock to
certain purchasers (the “Series I Purchasers”
and together with the Series G Purchasers, the “Purchasers”)
upon the achievement of certain milestones set forth in that certain License
Agreement, by and between the Company and Laboratorios Almirall, S.A., dated April 30,
2009 (the “License Agreement”), in
accordance with the terms and conditions of the form of the Series I
Convertible Preferred Stock Purchase Agreement attached thereto (the “Series I Purchase Agreement”
and together with the Series G Purchase Agreement, the “Purchase Agreements”);


 


WHEREAS, as a condition
of entering into the Purchase Agreements, the Purchasers have requested that
the Company and the Prior Investors agree to grant registration rights,
information rights, participation rights and first refusal rights to the
Purchasers and make certain other changes in accordance with the terms and
conditions set forth below; and


 


WHEREAS, the Company
and the Prior Investors desire to amend and restate the Prior Agreement in its
entirety to grant such registration rights, information rights, participation
rights and first refusal rights to the Purchasers.


 

















 


AGREEMENT


 


NOW,
THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto mutually agree
that all consents or conditions required to be obtained or satisfied under the
Prior Agreement are hereby given and that the Prior Agreement is amended and
restated in its entirety to read as follows:


 


SECTION 1.  GENERAL


 


1.1          Definitions.  As used in this Agreement
the following terms shall have the following respective meanings:


 


(a)           “Affiliate” means any person directly or indirectly
controlling, controlled by or under common control with another person, provided that, (i) with respect to
Fidelity Biosciences Limited Partnership (together with its permitted
transferees, “Fidelity”),
an “Affiliate”
shall also mean FMR Corp. and FMR Corp.’s affiliates; Fidelity International
Limited and Fidelity International Limited’s affiliates; Fidelity Investors
Limited Partnership, Fidelity Investors II Limited Partnership, Fidelity
Seaport Limited Partnership, Fidelity Investors III Limited Partnership,
Fidelity Investors IV Limited Partnership, Fidelity Ventures II Limited
Partnership and Fidelity Ventures III Limited Partnership, and (ii) with
respect to Morgan Stanley Investment Management Inc, an “Affiliate”
shall mean all investment vehicles and other discretionary accounts managed by
Morgan Stanley Investment Management Inc. and its affiliates.  FMR Corp.’s affiliates and Fidelity
International Limited’s affiliates shall include any person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with FMR Corp. or Fidelity International Limited, as the case may be,
including (A) any person who is an officer, director, or direct or
indirect beneficial holder of the then outstanding capital stock of FMR Corp.
or Fidelity International Limited, as the case may be, (B) any person of
which FMR Corp. or Fidelity International Limited, as the case may be, directly
or indirectly, either beneficially own(s) at least 5% of the then
outstanding equity securities or constitute(s) at least a 5% equity
participant, and (C) all investment vehicles or other entities for which
FMR Corp. or Fidelity International Limited, as the case may be, or any of its
affiliates (as defined in clauses (A) and (B) above) serve as a
manager, member, general partner and/or investment adviser or in a similar
capacity, and all investment vehicles or other entities under the direct or
indirect ownership, control or management of FMR Corp. or Fidelity
International Limited or any of their respective affiliates (as defined in
clauses (A) and (B) above).


 


(b)           “Charity” means any organization exempt from federal income
tax under Section 501(a) of the Internal Revenue Code, as amended
(the “Code”)
as an organization described in Section 501(c)(3) of the Code, that
receives any Registrable Securities from a Holder.


 


(c)           “Exchange Act” means the
Securities Exchange Act of 1934, as amended.


 


(d)           “Form S-3” means such form under the
Securities Act as in effect on the date hereof or any successor registration
form under the Securities Act subsequently adopted by 


 


2

















 


the SEC which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC after the effective date of such
registration statement.


 


(e)           “Founder Shares” shall mean the shares of the
Company’s Series A Common Stock, par value $0.001 per share (“Series A Common Stock”) and Series B
Common Stock, par value $0.001 per share (“Series B Common Stock,”
and together with the Series A Common Stock, “Common
Stock”) (including any shares of Common Stock that may be issued
upon exercise of any option or warrant or any other right to acquire shares of
the Company’s Common Stock), whether now owned or hereafter acquired by the
Founders and their permitted assigns.


 


(f)            “Holder” means (i) any person owning of record or
having the right to acquire Registrable Securities that have not been sold to
the public or (ii) any assignee of record of such Registrable Securities
in accordance with Section 2.10 hereof.


 


(g)           “Initial Offering” means the Company’s first
firm commitment underwritten public offering of its Series A Common Stock
registered under the Securities Act for the account of the Company in which the
gross cash proceeds to the Company (after underwriting discounts, commissions
and fees) are at least $30,000,000.


 


(h)           “Major Investor” means (i) any Investor
(together with its Affiliates) which owns not less than one hundred twenty-five
thousand (125,000)  shares of Series A
Registrable Securities (as adjusted for stock splits and combinations), (ii) any
Investor (together with its Affiliates) which owns not less than one hundred
thousand (100,000)  shares of Series B
Registrable Securities (as adjusted for stock splits and combinations), (iii) any
Investor (together with its Affiliates) which owns not less than eighty
thousand (80,000)  shares of Series C
Registrable Securities (as adjusted for stock splits and combinations, (iv) any
Investor (together with its affiliates) which owns not less than seventy five
thousand (75,000) shares of Series D Registrable Securities (as adjusted
for stock splits and combinations), (v) any Investor (together with its
affiliates) which owns not less than two hundred fifty thousand (250,000)
shares of Series E Registrable Securities (as adjusted for stock splits
and combinations), (vi) any Investor (together with its affiliates) which
owns not less than one hundred fifty thousand (150,000) shares of Series F
Registrable Securities (as adjusted for stock splits and combinations), (vii) any
Investor (together with its Affiliates) which owns not less than one million
five hundred thousand (1,500,000) shares of Series G Registrable
Securities (as adjusted for stock splits and combinations), (viii) any
Investor (together with its affiliates) which owns not less than four hundred
fifty thousand (450,000) shares of Series H Registrable Securities (as
adjusted for stock splits and combinations) and/or (ix) any Investor
(together with its affiliates) which owns not less than seventy thousand
(70,000) shares of Series I Registrable Securities (as adjusted for stock
splits and combinations).


 


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


 


3

















 


(j)            “Registrable Securities” means collectively, the Series A
Registrable Securities, the Series B Registrable Securities, the Series C
Registrable Securities, the Series D Registrable Securities, the Series E
Registrable Securities, the Series F Registrable Securities, the Series G
Registrable Securities, the Series H Registrable Securities and the Series I
Registrable Securities.  Notwithstanding
the foregoing, Registrable Securities shall not include any securities sold by
a person to the public either pursuant to a registration statement or Rule 144
or sold in a private transaction in which the transferor’s rights under Section 2
of this Agreement are not assigned.


 


(k)           “Registrable Securities then outstanding” shall be the
number of shares determined by calculating the total number of shares of the
Company’s Series B Common Stock that are Registrable Securities and either
(a) are then issued and outstanding or (b) are issuable pursuant to
then exercisable or convertible securities.


 


(l)            “Registration Expenses” shall mean all expenses
incurred by the Company in complying with Sections 2.2, 2.3 and 2.4 hereof,
including, without limitation, all registration and filing fees, exchange
listing fees, printing expenses, accounting fees, fees and disbursements of
counsel for the Company, reasonable fees and disbursements (not to exceed
fifteen thousand dollars ($15,000) for any one registration) of a single
special counsel for the Holders (who shall be selected by a majority of the
Holders of Registrable Securities being included in any Registration
Statement), blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company).


 


(m)          “SEC” or “Commission” means the Securities and Exchange
Commission.


 


(n)           “Securities Act” shall mean the Securities
Act of 1933, as amended.


 


(o)           “Selling Expenses” shall mean all underwriting
discounts and selling commissions applicable to the sale.


 


(p)           “Series A Registrable Securities” means (a) Series B
Common Stock of the Company issued or issuable upon conversion of the Series A
Shares; and (b) any Series B Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities.


 


(q)           “Series A Shares” shall mean the
shares of the Company’s Series A Preferred Stock and held by the Investors
listed on Exhibit A attached
hereto and their permitted assigns.


 


(r)           “Series B Registrable Securities” means (a) Series B
Common Stock of the Company issued or issuable upon conversion of the Series B
Shares; and (b) any Series B Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities.


 


4














 


(s)           “Series B Shares” shall mean the shares of the
Company’s Series B Preferred Stock and held by the Investors listed on Exhibit A attached hereto and their
permitted assigns.


 


(t)            “Series C Registrable Securities” means (a) Series B
Common Stock of the Company issued or issuable upon conversion of the Series C
Shares; and (b) any Series B Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities.


 


(u)           “Series C Shares” shall mean the shares of the
Company’s Series C Preferred Stock and held by the Investors listed on Exhibit A attached hereto and their
permitted assigns.


 


(v)            “Series D Registrable Securities” means (a) Series B
Common Stock of the Company issued or issuable upon conversion of the Series D
Shares; and (b) any Series B Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities.


 


(w)           “Series D Shares” shall mean the shares of the
Company’s Series D Preferred Stock and held by the Investors listed on Exhibit A
attached hereto and their permitted assigns.


 


(x)           “Series E Registrable Securities” means (a) Series B
Common Stock of the Company issued or issuable upon conversion of the Series E
Shares; and (b) any Series B Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities.


 


(y)           “Series E Shares” shall mean the
shares of the Company’s Series E Preferred Stock and held by the Investors
listed on Exhibit A attached hereto and their permitted assigns.


 


(z)           “Series F Registrable Securities” means (a) Series B
Common Stock of the Company issued or issuable upon conversion of the Series F
Shares; and (b) any Series B Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities.


 


(aa)         “Series F Shares” shall mean the
shares of the Company’s Series F Preferred Stock and held by the Investors
listed on Exhibit A attached hereto and their permitted assigns.


 


(bb)         “Series G Registrable Securities” means (a) Series B
Common Stock of the Company issued or issuable upon conversion of the Series G
Shares; and (b) any Series B Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any 


 


5

















 


warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities.


 


(cc)         “Series G Shares” shall mean the shares of
the Company’s Series G Preferred Stock and held by the Investors listed on
Exhibit A attached hereto and their permitted assigns.


 


(dd)         “Series H Registrable Securities” means (a) Series B
Common Stock of the Company issued or issuable upon conversion of the Series H
Shares; and (b) any Series B Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities.


 


(ee)         “Series H Shares” shall mean the shares of
the Company’s Series H Preferred Stock and held by the Investors listed on
Exhibit A attached hereto and their permitted assigns.


 


(ff)           “Series I Registrable Securities” means (a) Series B
Common Stock of the Company issued or issuable upon conversion of the Series I
Shares; and (b) any Series B Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities.


 


(gg)         “Series I Shares” shall mean the shares of
the Company’s Series I Preferred Stock and held by the Investors listed on
Exhibit A attached hereto and their permitted assigns.


 


(hh)         “Shares” shall mean the Founder Shares, the Series A
Registrable Securities, the Series B Registrable Securities, the Series C
Registrable Securities, the Series D Registrable Securities, the Series E
Registrable Securities, the Series F Registrable Securities, the Series G
Registrable Securities, the Series H Registrable Securities and the Series I
Registrable Securities.


 


SECTION 2.  REGISTRATION;
RESTRICTIONS ON TRANSFER


 


2.1          Restrictions on Transfer.


 


(a)           Each Founder and Holder agrees not to make
any disposition of all or any portion of the Shares or Registrable Securities
unless and until:


 


(i)            There is then in effect a registration
statement under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement; or


 


(ii)           (A) The transferee has
agreed in writing to be bound by the terms of this Agreement, (B) such
Founder or Holder shall have notified the Company of the proposed disposition
and shall have furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition, and (C) if reasonably
requested by the Company, such


 


6

















 


Founder or Holder shall have
furnished the Company with an opinion, reasonably satisfactory to the Company
of legal counsel reasonably satisfactory to the Company, that such disposition
will not require registration of such shares under the Securities Act.  It is agreed that the Company will not
require opinions of counsel for transactions made pursuant to Rule 144
except in unusual circumstances.


 


(iii)         Notwithstanding the
provisions of paragraphs (i) and (ii) above, no such registration
statement or opinion of counsel shall be necessary for a transfer by a (A) Holder
which is a partnership to its partners or former partners in accordance with
partnership interests, (B) Holder which is a corporation to its
stockholders in accordance with their interest in the corporation, (C) Holder
which is a limited liability company to its members or former members in
accordance with their interest in the limited liability company, (D) Founder
or Holder to the Founder’s or Holder’s family members or a trust for the
benefit of an individual Founder or Holder or such Founder’s or Holder’s family
members, (E) Holder to any Affiliate of such Holder made as a bona fide
gift without consideration, or (F) in the case of a Holder, to any
Charity, provided that in each
case the transferee will be subject to the terms of this Agreement to the same
extent as such transferee were an original Founder or Holder hereunder.


 


(b)           Each certificate representing Shares or
Registrable Securities shall (unless otherwise permitted by the provisions of
the Agreement) be stamped or otherwise imprinted with a legend substantially
similar to the following (in addition to any legend required under applicable state
securities laws):


 


“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES
ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.”


 


(c)           The Company shall be obligated to reissue
promptly unlegended certificates at the request of any holder thereof (i) if
the holder shall have obtained an opinion of counsel (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the effect that
the securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend or (ii) at such time as such
Registrable Securities become eligible for resale pursuant to Rule 144
under the Securities Act.


 


(d)           Any legend endorsed on an instrument pursuant
to applicable state securities laws and the stop-transfer instructions with
respect to such securities shall be removed upon receipt by the Company of an
order of the appropriate blue sky authority authorizing such removal.


 


7

















 


2.2          Demand Registration.


 


(a)           Subject to the conditions of this Section 2.2,
if the Company shall receive a written request from the Holders of at least
twenty percent (20%) of the then outstanding (i) Series A Registrable
Securities, (ii) Series B Registrable Securities, (iii) Series C
Registrable Securities, (iv) Series D Registrable Securities, (v) Series E
Registrable Securities, (vi) Series F Registrable Securities, (vii) Series G
Registrable Securities, (viii) Series H Registrable Securities or (ix) Series I
Registrable Securities, each such series of Securities having the separate
right to make such a request, (the “Initiating Holders”) that the Company file a
registration statement under the Securities Act having an anticipated aggregate
offering price to the public of not less than $5,000,000  (a “Qualified Public Offering”) and
covering the registration of at least twenty percent (20%) of the then
outstanding Series A Registrable Securities, Series B Registrable
Securities, Series C Registrable Securities, Series D Registrable
Securities, Series E Registrable Securities, Series F Registrable
Securities, Series G Registrable Securities, Series H Registrable
Securities or Series I Registrable Securities, considered together, then
the Company shall, promptly upon the receipt thereof, give written notice of
such request to all Holders, and subject to the limitations of this Section 2.2,
use its reasonable best efforts to effect, as soon as practicable, the
registration under the Securities Act of all Registrable Securities that the
Holders request to be registered.


 


(b)           If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to this Section 2.2 or any request pursuant to Section 2.4
and the Company shall include such information in the written notice referred
to in Section 2.2(a) or Section 2.4(a), as applicable.  In such event, the right of any Holder to
include its Registrable Securities in such registration shall be conditioned
upon such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting to the extent provided
herein.  All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company as provided in Section 2.6(e)) enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting by a majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable to the
Company).  Notwithstanding any other
provision of this Section 2.2 or Section 2.4, if the underwriter
advises the Company that marketing factors require a limitation of the number
of securities to be underwritten (including Registrable Securities) then the
Company shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares that may be
included in the underwriting shall be allocated to the Holders of such
Registrable Securities on a pro rata
basis based on the number of Registrable Securities held by all such Holders
(including the Initiating Holders).  Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration. For any Holder which is a partnership,
corporation or limited liability company, the partners, retired partners,
stockholders, members, retired members and Affiliates of such Holder, as
applicable, or the estates and family members of any such partners, retired
partners, members and retired members and any trusts for the benefit of any of
the foregoing persons shall be deemed to be a single “Holder”, and any pro rata reduction with respect to such “Holder” shall be
based upon the aggregate amount of shares carrying registration rights owned by
all entities and individuals included in such “Holder,” as defined in this sentence.


 


8

















 


(c)           The Company shall not be required to effect a
registration pursuant to this Section 2.2:


 


(i)            prior to one hundred eighty (180) days
following the effective date of the registration statement pertaining to the
Initial Offering and any “Additional Period” as that term is used in Section 2.13;


 


(ii)           if within thirty (30) days
of receipt of a written request from Initiating Holders pursuant to Section 2.2(a),
the Company gives notice to the Holders of the Company’s intention to make a
public offering  for its own account  for capital raising purposes (excluding
registration statements relating to employee benefit plans or with respect to
corporate reorganizations or other transactions under Rule 145 of the
Securities Act) within ninety (90) days;


 


(iii)         if the Company shall furnish
to Holders requesting a registration statement pursuant to this Section 2.2,
a certificate signed by the Chairman of the Board stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be effected at such time, in which event the Company shall have the right to
defer such filing for a period of not more than ninety (90) days after receipt
of the request of the Initiating Holders; provided
that such right to delay a request shall be exercised by the Company not more
than once in any twelve (12) month period; or


 


(iv)          if the Initiating Holders
propose to dispose of shares of Registrable Securities that may be immediately
registered on Form S-3 pursuant to a request made pursuant to Section 2.4
below.


 


(d)           In
addition, (i) the holders of Series A Registrable Securities will not
be entitled to require the Company to effect more than two (2) registrations
pursuant to this Section 2.2 after such registrations have been declared
or ordered effective, (ii) the holders of Series B Registrable
Securities will not be entitled to
require the Company to effect more than two (2) registrations pursuant to
this Section 2.2 after such registrations have been declared or ordered
effective, (iii) the holders of Series C Registrable Securities will
not be entitled to require the Company to effect more than two (2) registrations
pursuant to this Section 2.2 after such registrations have been declared
or ordered effective, (iv) the holders of Series D Registrable
Securities will not be entitled to require the Company to effect more than two (2) registrations
pursuant to this Section 2.2 after such registrations have been declared
or ordered effective, (v) the holders of Series E Registrable
Securities will not be entitled to require the Company to effect more than two (2) registrations
pursuant to this Section 2.2 after such registrations have been declared
or ordered effective, (vi) the holders of Series F Registrable
Securities will not be entitled to require the Company to effect more than two (2) registrations
pursuant to this Section 2.2 after such registrations have been declared
or ordered effective, (vii) the holders of Series G Registrable
Securities will not be entitled to require the Company to effect more than two (2) registrations
pursuant to this Section 2.2 after such registrations have been declared
or ordered effective, (viii) the holders of Series H Registrable
Securities will not be entitled to require the Company to effect more than two (2) registrations
pursuant to this Section 2.2 after such registrations have been declared
or ordered effective and (ix) the holders of Series I Registrable 


 


9

















 


Securities
will not be entitled to require the Company to effect more than two (2) registrations
pursuant to this Section 2.2 after such registrations have been declared
or ordered effective.


 


2.3          Piggyback
Registrations.  The Company shall
notify all Holders of Registrable Securities in writing at least twenty (20)  days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding registration statements relating to employee benefit plans or with
respect to corporate reorganizations or other transactions under Rule 145
of the Securities Act) and will afford each such Holder an opportunity to
include in such registration statement all or part of such Registrable
Securities held by such Holder.  Each
Holder desiring to include in any such registration statement all or any part
of the Registrable Securities held by it shall, within twenty (20) days after
the above-described notice from the Company, so notify the Company in
writing.  Such notice shall state the
intended method of disposition of the Registrable Securities by such
Holder.  The Company shall use its best
efforts to cause all Registrable Securities which the Company has been
requested by Holders to register to be registered under the Securities Act to
the extent necessary to permit their sale in accordance with the intended method
of distribution.  If a Holder decides not
to include all of its Registrable Securities in any registration statement
thereafter filed by the Company, such Holder shall nevertheless continue to
have the right to include any Registrable Securities in any subsequent
registration statement or registration statements as may be filed by the
Company with respect to offerings of its securities, all upon the terms and
conditions set forth herein.


 


(a)           Underwriting.  If the registration
statement under which the Company gives notice under this Section 2.3 is
for an underwritten offering, the Company shall so advise the Holders of
Registrable Securities.  In such event,
the right of any such Holder to be included in a registration pursuant to this Section 2.3
shall be conditioned upon such Holder’s participation in such underwriting and
the inclusion of such Holder’s Registrable Securities in the underwriting to
the extent provided herein.  All Holders
proposing to distribute their Registrable Securities through such underwriting
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.  Notwithstanding any other provision of the
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to the Holders proposing to distribute their Registrable
Securities in such underwriting on a pro
rata basis based on the total number of Registrable Securities held
by such Holders; and third, to any stockholder of the Company (other than a
Holder) on a pro rata basis.  No such reduction shall reduce the securities
being offered by the Company for its own account to be included in the
registration and underwriting.  In no
event will shares of any other selling stockholder be included in such
registration which would reduce the number of shares which may be included by
such Holders without the written consent of Holders of not less than a majority
of the Registrable Securities proposed to be sold in the offering.  If any Holder disapproves of the terms of any
such underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company and the underwriter, delivered at least ten (10) business
days prior to the effective date of the registration statement.  Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration.  For any Holder which is a
partnership, corporation or limited liability company, the partners, retired 


 


10

















 


partners, stockholders,
members, retired members and Affiliates of such Holder, as applicable, or the
estates and family members of any such partners, retired partners, members and
retired members and any trusts for the benefit of any of the foregoing persons
shall be deemed to be a single “Holder”, and any pro
rata reduction with respect to such “Holder” shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such “Holder,” as defined in this sentence.


 


(b)           Right to Terminate
Registration.  The Company
shall have the right to terminate or withdraw any registration initiated by it
under this Section 2.3 prior to the effectiveness of such registration
whether or not any Holder has elected to include securities in such
registration.  The Registration Expenses
of such withdrawn registration shall be borne by the Company in accordance with
Section 2.5 hereof.


 


2.4          Form S-3
Registration.  In case the
Company shall receive from any Holder or Holders of Registrable Securities a
written request or requests that the Company effect a registration on Form S-3
(or any successor to Form S-3) or any similar short-form registration
statement and any related qualification or compliance with respect to all or a
part of the Registrable Securities owned by such Holder or Holders, the Company
will:


 


(a)           promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders
of Registrable Securities; and


 


(b)           as soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holder’s or Holders’ Registrable Securities as are specified in
such request, together with all or such portion of the Registrable Securities
of any other Holder or Holders joining in such request as are specified in a
written request given within fifteen (15) days after receipt of such written
notice from the Company; provided, however,
that the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 2.4:


 


(i)            if Form S-3 (or any successor or similar
form) is not available for such offering by the Holders;


 


(ii)           if the Holders, together
with the holders of any other securities of the Company entitled to inclusion
in such registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public of less than five
hundred thousand dollars ($500,000);


 


(iii)         if within thirty (30) days
of receipt of a written request from Initiating Holders pursuant to this Section 2.4,
the Company gives notice to the Holders of the Company’s intention to make  a public offering for its own account  for capital raising purposes (excluding
registration statements relating to employee benefit plans or with respect to
corporate reorganizations or other transactions under Rule 145 of the
Securities Act) within ninety (90) days;


 


(iv)          if the Company shall furnish
to the Holders a certificate signed by the Chairman of the Board of Directors
of the Company stating that in the good faith judgment 


 


11

















 


of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
stockholders for such Form S-3 registration to be effected at such time,
in which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than ninety (90) days after
receipt of the request of the Holder or Holders under this Section 2.4; provided, that such right to delay a
request shall be exercised by the Company not more than once in any twelve (12)
month period;


 


(v)            if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two (2) registrations
on Form S-3 for the Holders pursuant to this Section 2.4; or


 


(vi)          in any particular
jurisdiction in which the Company would be required to qualify to do business
or to execute a general consent to service of process in effecting such
registration, qualification or compliance.


 


(c)           Subject to the foregoing,
the Company shall file a Form S-3 registration statement covering the
Registrable Securities and other securities so requested to be registered as
soon as practicable after receipt of the request or requests of the
Holders.  Registrations effected pursuant
to this Section 2.4 shall not be counted as demands for registration or
registrations effected pursuant to Sections 2.2 or 2.3, respectively.  All Registration Expenses incurred in
connection with registrations requested pursuant to this Section 2.4 after
the first six (6) registrations shall be paid by the selling Holders pro rata in proportion to the number of
shares sold by each.


 


2.5          Expenses of Registration.


 


(a)           Except as
specifically provided herein, all Registration Expenses incurred in connection
with any registration, qualification or compliance pursuant to Section 2.2
shall be borne by the Company.  All
Selling Expenses incurred in connection with any registrations pursuant to Section 2.2,
shall be borne by the holders of the securities so registered pro rata on the basis of the number of
shares so registered.  The Company shall
not, however, be required to pay for expenses of any registration proceeding
begun pursuant to Section 2.2 if the request is subsequently withdrawn by
the Initiating Holders holding a majority of the Registrable Securities to be
registered unless (a) the withdrawal is based upon material adverse information
concerning the Company of which the Initiating Holders were not aware at the
time of such request or (b) the Holders of a majority of the Series A
Registrable Securities, Series B Registrable Securities, Series C
Registrable Securities, Series D Registrable Securities, Series E
Registrable Securities, Series F Registrable Securities, Series G
Registrable Securities, Series H Registrable Securities or Series I
Registrable Securities, as the case may be, who initially requested such
registration agree to forfeit their right to one demand registration pursuant
to Section 2.2, in which event such right shall be forfeited only by all
the Holders of Series A Registrable Securities, Series B Registrable
Securities, Series C Registrable Securities, Series D Registrable
Securities, Series E Registrable Securities, Series F Registrable
Securities, Series G Registrable Securities, Series H Registrable
Securities or Series I Registrable Securities, as the case may be, who
initially requested such registration.  If
the Holders are required to pay the Registration Expenses, such expenses shall
be borne by the holders of securities (including Registrable Securities)
requesting such registration in proportion to the number of shares for which
registration was requested.  If 


 


12

















 


the Company is required to
pay the Registration Expenses of a withdrawn offering pursuant to clause (a) above,
then the Holders shall not forfeit their rights pursuant to Section 2.2 to
a demand registration.


 


(b)           Except as specifically provided herein, all
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to any registration under Section 2.3
or Section 2.4 herein shall be borne by the Company.  All Selling Expenses incurred in connection
with any registrations pursuant to Section 2.3 or Section 2.4, shall
be borne by the holders of the securities so registered pro rata on the basis of the number of
shares so registered.  The Company shall
not, however, be required to pay for expenses of any registration proceeding
begun pursuant to Section 2.4, if the request is subsequently withdrawn by
the Initiating Holders holding a majority of the Registrable Securities to be
registered unless (a) the withdrawal is based upon material adverse
information concerning the Company of which the Initiating Holders were not
aware at the time of such request or (b) the Holders of a majority of the
Registrable Securities to be registered agree to forfeit their right to one S-3
registration pursuant to Section 2.4, in which event such right shall be
forfeited by all Holders. If the Holders are required to pay the Registration
Expenses, such expenses shall be borne by the holders of securities (including
Registrable Securities) requesting such registration in proportion to the
number of shares for which registration was requested.  If the Company is required to pay the
Registration Expenses of a withdrawn offering pursuant to clause (a) above,
then the Holders shall not forfeit their rights pursuant to Section 2.4 to
an S-3 registration.


 


2.6          Obligations of the
Company.  Whenever required to effect
the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:


 


(a)           Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its reasonable
best efforts to cause such registration statement to become effective, and,
upon the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for up to one
hundred eighty (180) days from the effective date or, if earlier, until the
Holder or Holders have completed the distribution related thereto; provided however, that such 180-day period
shall be extended for a period of time equal to the period the Holder refrains
from selling any securities included in such Registration at the request of an
underwriter of the Company’s Common Stock.


 


(b)           Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement for the period set forth in
paragraph (a) above.


 


(c)           Furnish to the Holders such number of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.


 


(d)           If the Registrable Securities are not at such
time “covered securities” under Section 18(b)(1) of the Securities
Act, use its reasonable best efforts to register and qualify 


 


13

















 


the securities covered by
such registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holders and any
managing underwriter; provided that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions, unless the Company is already
subject to service in such jurisdiction and except as may be required by the
Securities Act.


 


(e)           In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter(s) of
such offering.  Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.


 


(f)            Notify each Holder of Registrable Securities
covered by such registration statement immediately at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing, and as promptly as practicable, prepare,
file and furnish to each such Holder a reasonable number of copies of a
supplement or an amendment to such prospectus as may be necessary so that such
prospectus does not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.


 


(g)           Cause all such Registrable Securities
registered pursuant hereto to be listed on each securities exchange, if
any,  on which similar securities issued
by the Company are then listed.


 


(h)           Provide a transfer agent and registrar for
all Registrable Securities registered pursuant hereto and a CUSIP number for
all such Registrable Securities, in each case not later than the effective date
of such registration.


 


(i)            Furnish, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering addressed
to the underwriters.


 


2.7          Termination of Registration
Rights.  All registration rights
granted under this Section 2 shall terminate and be of no further force
and effect five (5) years after the date of the Company’s Initial
Offering.  In addition, a Holder’s
registration rights shall expire if (a) the Company has completed its
Initial Offering and is subject to the provisions of the Exchange Act; (b) such
Holder (together with its Affiliates, Charities, partners and former partners)
holds less than 1% of the Company’s outstanding Series B Common Stock
(treating all shares of


 


14














 


convertible Preferred Stock
on an as converted basis); and (c) all Registrable Securities held by and
issuable to such Holder (and its Affiliates, Charities, partners, former
partners, members and former members) may be sold under Rule 144 during
any ninety (90) day period.


 


2.8          Delay of Registration;
Furnishing Information.


 


(a)           No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.


 


(b)           It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 2.2, 2.3
or 2.4 that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them and the intended
method of disposition of such securities as shall be required to effect the
registration of their Registrable Securities.


 


(c)           The Company shall have no obligation with respect
to any registration requested pursuant to Section 2.2 or Section 2.4
if, due to the operation of subsection 2.2(b), the number of shares or the
anticipated aggregate offering price of the Registrable Securities to be
included in the registration does not equal or exceed the number of shares or
the anticipated aggregate offering price required to originally trigger the
Company’s obligation to initiate such registration as specified in Section 2.2
or Section 2.4, whichever is applicable.


 


2.9          Indemnification.  In the event any Registrable
Securities are included in a registration statement under Sections 2.2, 2.3 or
2.4:


 


(a)           To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, the partners, managing members,
officers and directors of each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a “Violation”) by the
Company: (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law in connection with the
offering covered by such registration statement; and the Company will pay as
incurred to each such Holder, partner, managing member, officer, director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided
however, that the indemnity agreement contained in this Section 2.9(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of 


 


15

















 


the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that
it arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in
connection with such registration by such Holder, partner, managing member,
officer, director, underwriter or controlling person of such Holder.


 


(b)           To the extent permitted by law, each Holder
will, if Registrable Securities held by such Holder are included in the
securities as to which such registration, qualifications or compliance is being
effected, indemnify and hold harmless the Company, each of its directors, its
officers and each person, if any, who controls the Company within the meaning
of the Securities Act, any underwriter and any other Holder selling securities
under such registration statement or any of such other Holder’s partners,
managing members, directors or officers or any person who controls such Holder,
against any losses, claims, damages or liabilities (joint or several) to which
the Company or any such director, officer, controlling person, underwriter or
other such Holder, or partner, director, officer, managing member or
controlling person of such other Holder may become subject under the Securities
Act, the Exchange Act or other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder under an instrument duly executed
by such Holder and stated to be specifically for use in connection with such
registration; and each such Holder will pay as incurred any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or other Holder, or partner, managing member,
officer, director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however, that the indemnity
agreement contained in this Section 2.9(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided
further, that each Holder’s liability under this Section 2.9
with respect to any particular registration shall be limited to an amount equal
to the net proceeds received by such Holder from the Registrable Securities
sold by such Holder in such registration.


 


(c)           Promptly after receipt by an indemnified
party under this Section 2.9 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section 2.9,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain
its own counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. 
The indemnifying party also shall be responsible for the expenses of
such defense if the indemnifying party does not elect to assume such
defense.  No indemnifying party, in the
defense of any such claim or litigation shall, except with the consent of each 


 


16

















 


indemnified party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation, and no indemnified party shall consent to entry of any judgment or
settle such claim or litigation without the prior written consent of the
indemnifying party, which consent shall not be unreasonably withheld.  The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 2.9, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2.9.


 


(d)           To provide for just and equitable
contribution in circumstances in which the indemnification provided for in this
Section 2.9 is due in accordance with its terms but for any reason is held
to be unavailable to an indemnified party in respect to any losses, claims,
damages and liabilities referred to herein, then the indemnifying party shall,
in lieu of indemnifying such indemnified party, contribute to the amount paid
or payable by such party as a result of such losses, claims, damages or
liabilities to which such party may be subject in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and
the selling Holders on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. 
The relative fault of the Company and the selling Holders shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of material fact related to information supplied by the
Company or the selling Holders and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.  The Company and the selling
Holders agree that it would not be just and equitable if contribution pursuant
to this Section 2.9 were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above. 
Notwithstanding the provisions of this Section, (i) in no case
shall any one selling Holder be liable or responsible for any amount in excess
of the net proceeds received by such selling Holder from the offering of
Registrable Shares and (ii) the Company shall be liable and responsible
for any amount in excess of such proceeds; provided,
however, that 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.  Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party or parties under this Section,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be
sought shall not relieve such party from any other obligation it or they may
have otherwise under this Section 2.9(d). 
No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its prior written consent, which
consent shall not be unreasonably withheld.


 


(e)           The obligations of the Company and Holders
under this Section 2.9 shall survive completion of any offering of
Registrable Securities pursuant to a registration statement and the termination
of this Agreement.  No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof 


 


17

















 


the giving by the claimant
or plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation.


 


2.10        Assignment
of Registration Rights.  The rights to
cause the Company to register Registrable Securities pursuant to this Section 2
may be assigned by a Holder to a transferee or assignee of Registrable
Securities which (a) is an Affiliate, subsidiary, parent, general partner,
limited partner, retired partner, member or retired member of a Holder, (b) is
a Holder’s family members or a trust for the benefit of an individual Holder or
such Holder’s family members, (c) is a Charity, or (d) acquires at
least one hundred thousand (100,000)  shares
of Registrable Securities (as adjusted for stock splits and combinations); provided, however, (i) the
transferor shall, within ten (10) days after such transfer, furnish to the
Company written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being
assigned and (ii) such transferee shall agree to be subject to all
restrictions set forth in this Agreement.


 


2.11        Amendment
of Registration Rights.  Any provision
of this Section 2 may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders of
at least a majority of the Series A Registrable Securities, Series B
Registrable Securities, Series C Registrable Securities, Series D
Registrable Securities, Series E Registrable Securities, Series F
Registrable Securities, Series G Registrable Securities, Series H
Registrable Securities and Series I Registrable Securities then
outstanding, acting together as a single class. 
Any amendment or waiver effected in accordance with this Section 2.11
shall be binding upon each Holder and the Company.  By acceptance of any benefits under this Section 2,
Holders of Registrable Securities hereby agree to be bound by the provisions
hereunder.


 


2.12        Limitation
on Subsequent Registration Rights.  After the date of this Agreement, the Company
shall not, without the prior written consent of the Holders of a majority  of the Series A Registrable
Securities, Series B Registrable Securities, Series C Registrable
Securities, Series D Registrable Securities, Series E Registrable
Securities, Series F Registrable Securities, Series G Registrable
Securities, Series H Registrable Securities and Series I Registrable
Securities then outstanding, acting together as a single class, enter into any
agreement with any holder or prospective holder of any securities of the
Company that would grant such holder registration rights senior to those
granted to the Holders hereunder.


 


2.13        “Market
Stand-Off” Agreement.  Each Holder
hereby agrees that such Holder shall not sell, transfer, make any short sale
of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any Common Stock (or other
securities) of the Company held by such Holder (other than those included in
the registration) for a period specified by the representative of the
underwriters of Common Stock (or other securities) of the Company not to exceed
one hundred eighty (180) days following the effective date of a registration
statement of the Company filed under the Securities Act; provided, however, that if (1) during
the last 17 days of the 180 day period, the Company releases earnings results
or material news or a material event relating to the Company occurs or (2) prior
to the expiration of the 180 day period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the 180 day period, then in each case the transfer restrictions will be
extended until the expiration of the 18-day period 


 


18

















 


beginning
on the date of release of the earnings results or the occurrence of the
material news or material event, as applicable, (any such period, an “Additional
Period”) unless the Company waives, in writing, such extension; provided,
further, however, provided,  that such agreement shall apply
only (a) to the Company’s Initial Offering, and (b) if all officers
and directors of the Company and holders of at least one percent (1%) of the
Company’s voting securities  enter
into similar agreements.


 


2.14        Agreement
to Furnish Information.  Each
Holder agrees to execute and deliver such other agreements as may be reasonably
requested by the Company or the underwriter which are consistent with the
foregoing or which are necessary to give further effect thereto. In addition,
if requested by the Company or the representative of the underwriters of Common
Stock (or other securities) of the Company, each Holder shall provide, within
ten (10) days of such request, such information as may be required by the
Company or such representative in connection with the completion of any public
offering of the Company’s securities pursuant to a registration statement filed
under the Securities Act.  The
obligations described in this Section 2.14 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. 
The Company may impose stop-transfer instructions with respect to the
shares of Common Stock (or other securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day period or any
Additional Period.


 


2.15        Reports
Under the Exchange Act.  With a view to
making available to the Holders the benefits of certain rules and
regulations of the SEC which may permit the sale of the Registrable Securities
to the public without registration or pursuant to a registration on Form S-3,
the Company agrees to use its reasonable best efforts to:


 


(a)           Make and keep public information available,
as those terms are understood and defined in Rule 144 of the Securities
Act or any similar or analogous rule promulgated under the Securities Act,
at all times after ninety (90) days after the effective date of the first
registration filed by the Company for an offering of its securities to the
general public;


 


(b)           Take such action, including the voluntary
registration of its Series B Common Stock under Section 12 of the
Exchange Act, as is necessary to enable the Holders to utilize Form S-3
for the sale of their Registrable Securities (if and to the extent that the
Company is then eligible to use Form S-3 for such purposes), such action
to be taken as soon as practicable after the end of the fiscal year in which the
first registration statement filed by the Company for the offering of its
securities to the general public becomes effective;


 


(c)           File with the SEC, in a timely manner, all
reports and other documents required of the Company under the Securities Act
and the Exchange Act; and


 


(d)           So long as a Holder owns any Registrable
Securities, furnish to such Holder forthwith upon request:  (i) a written statement by the Company
as to its compliance with the reporting requirements under Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), or that it 


 


19

















 


qualifies as a registrant
whose securities may be resold pursuant to Form S-3 (at any time after it
so qualifies), (ii) a copy of the most recent annual or quarterly report
of the Company, and (iii) such other reports and documents as a Holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing it to sell any such securities without registration.


 


SECTION 3.  COVENANTS


 


3.1          Basic Financial Information
and Reporting.


 


(a)           The Company will maintain true books and
records of account in which full and correct entries will be made of all its
business transactions pursuant to a system of accounting established and
administered in accordance with generally accepted accounting principles
consistently applied, and will set aside on its books all such proper accruals
and reserves as shall be required under generally accepted accounting
principles consistently applied.


 


(b)           As soon as practicable after the end of each
fiscal year of the Company, and in any event within one hundred twenty (120)
days thereafter, to the extent requested by an Investor, the Company will
furnish each Investor a balance sheet of the Company, as at the end of such
fiscal year, and a statement of income and a statement of cash flows of the
Company, for such year, all prepared in accordance with generally accepted
accounting principles consistently applied and setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail.  Such financial statements shall
be accompanied by a report and opinion thereon by independent registered public
accounting firm of national standing selected by the Company’s Board of
Directors.


 


(c)           To the extent requested by a Major Investor,
the Company will furnish each such Major Investor, as soon as practicable after
the end of the first, second and third quarterly accounting periods in each
fiscal year of the Company, and in any event within forty-five (45) days
thereafter, a balance sheet of the Company as of the end of each such quarterly
period, and a statement of income and a  statement
of cash flows of the Company for such period and for the current fiscal year to
date, prepared in accordance with generally accepted accounting principles,
with the exception that no notes need be attached to such statements and
year-end audit adjustments may not have been made.


 


(d)           To the extent requested by a Major Investor,
the Company will furnish each such Major Investor (i) at least thirty (30)
days prior to the beginning of each fiscal year an annual budget and operating
plans for such fiscal year (and as soon as available, any subsequent revisions
thereto) and (ii) as soon as practicable after the end of each month, and
in any event within twenty (20) days thereafter, a balance sheet of the Company
as of the end of each such month, and a statement of income and a statement of
cash flows of the Company for such month and for the current fiscal year to
date, including a comparison to plan figures for such period, prepared in accordance
with generally accepted accounting principles consistently applied, with the
exception that no notes need be attached to such statements and year-end audit
adjustments may not have been made.


 


3.2          Inspection Rights.  Each Major Investor shall
have the right to visit and inspect any of the properties of the Company or any
of its subsidiaries, and to discuss the affairs, 


 


20

















 


finances and accounts of the
Company or any of its subsidiaries with its officers, and to review such
information as is reasonably requested all at such reasonable times and as
often as may be reasonably requested; provided,
however, that the Company shall not be obligated under this Section 3.2
with respect to a competitor of the Company or with respect to information
which the Board of Directors determines in good faith is confidential and
should not, therefore, be disclosed.


 


3.3          Confidentiality of
Records.  Each Investor agrees to use,
and to use its best efforts to insure that its authorized representatives use,
the same degree of care as such Investor uses to protect its own confidential
information to keep confidential any information furnished to it which the
Company identifies as being confidential or proprietary (so long as such
information is not in the public domain), except that such Investor may
disclose such proprietary or confidential information to any Affiliate,
partner, subsidiary or parent of such Investor for the purpose of evaluating
its investment in the Company as long as such Affiliate, partner, subsidiary or
parent is advised of the confidentiality provisions of this Section 3.3.


 


3.4          Reservation of Common
Stock.  The Company will at all
times reserve and keep available, solely for issuance and delivery upon the
conversion of the Preferred Stock, all Series B Common Stock issuable from
time to time upon such conversion.


 


3.5          Directors’ Expenses.  The Company shall reimburse the reasonable
expenses of each member of the Company’s Board of Directors in connection with
the performance of his or her duties as a Director.


 


3.6          Proprietary Information and
Inventions Agreement.  The
Company shall require all employees and consultants to execute and deliver a
standard Proprietary Information and Inventions Agreement, in substantially the
same form as Exhibit H attached to the Series G Purchase Agreement
and Exhibit F attached to the Series I Purchase Agreement.


 


3.7          Product Liability Insurance.  Prior to the first
commercial sale of products and subject to the approval of the Board of
Directors, the Company shall obtain product liability coverage in an amount
deemed appropriate by the Board of Directors.


 


3.8          Director and Officer Insurance.  The Company shall obtain
liability insurance for each of its directors and officers at such time and in
such amounts as the Board of Directors may determine.


 


3.9          Notice.  Following a material adverse
change in the business or financials of the Company and upon written request to
the Company from any of the non-management directors, the Company shall notify
the Major Investors of such change.


 


3.10        Related
Party Transactions.  The Company
shall not enter into any agreement with any stockholder, officer or director of
the Company, or any “affiliate” or “associate” of such persons (as such terms
are defined in the rules and regulations promulgated under the Securities
Act), including without limitation any agreement or other arrangement providing
for the furnishing of services by, rental of real or personal property from, or
otherwise requiring payments to, any such person or entity, without the consent
of at least a majority of the members of the Company’s Board of Directors
having no interest in such agreement or arrangement.


 


21

















 


3.11        Qualified
Small Business Stock.  The
Company shall submit to its stockholders (including the Purchasers) and to the
Internal Revenue Service any reports that may be required under Section 1202(d)(1)(C) of
the Code and the Regulations promulgated thereunder.  In addition, within a reasonable time after
any Purchaser’s written request therefor, the Company shall deliver to such
Purchaser a written statement indicating whether, to the best of the Company’s
knowledge, such Purchaser’s interest in the Company constitutes “qualified
small business stock” as defined in Section 1202(c) of the Code.


 


3.12        Termination
of Covenants.  All covenants
of the Company contained in Section 3 of this Agreement (except Section 3.12)
shall expire and terminate as to all Investors upon the earlier of (i) the
effective date of the registration statement pertaining to the Initial
Offering;  or (ii) upon (a) the
sale, lease or other disposition of all or substantially all of the assets of
the Company, or (b) an acquisition of the Company by another corporation
or entity by consolidation, merger or other reorganization in which the holders
of the Company’s outstanding voting stock immediately prior to such transaction
own, immediately after such transaction, securities representing less than
fifty percent (50%) of the voting power of the corporation or other entity
surviving such transaction, provided that
this Section 3.13(ii)(b) shall not apply to a merger effected
exclusively for the purpose of changing the domicile of the Company.


 


SECTION 4.  PARTICIPATION
RIGHTS


 


4.1          Subsequent Offerings.  Each Major Investor shall
have a right to purchase its pro rata
share of all Equity Securities, as defined below, that the Company may, from
time to time, propose to sell and issue after the date of this Agreement, other
than the Equity Securities excluded by Section 4.6 hereof.  Each Major Investor’s pro rata share is equal to the ratio of (a) the
number of Registrable Securities plus the number of shares of Series B
Common Stock issued or issuable upon the exercise of any outstanding warrants
or options to purchase shares of Preferred Stock which such Investor is deemed
to be a holder immediately prior to the issuance of such Equity Securities, to (b) the
total number of Registrable Securities plus the number of shares of Series B
Common Stock issued or issuable upon the exercise of any outstanding warrants
or options to purchase shares of Preferred Stock immediately prior to the
issuance of the Equity Securities.  The
term “Equity Securities”
shall mean (i) any Series B Common Stock, Preferred Stock or other
security of the Company, (ii) any security convertible, with or without
consideration, into any Series B Common Stock, Preferred Stock or other
security (including any option to purchase such a convertible security), (iii) any
security carrying any warrant or right to subscribe to or purchase any Series B
Common Stock, Preferred Stock or other security or (iv) any such warrant
or right.


 


4.2          Exercise of Rights.  If the Company proposes to
issue any Equity Securities, it shall give each Major Investor written notice
of its intention, describing the Equity Securities, the price and the terms and
conditions upon which the Company proposes to issue the same.  Each Major Investor shall have fifteen (15) days
from the giving of such notice to agree to purchase its pro rata share of the Equity Securities
for the price and upon the terms and conditions specified in the notice by
giving written notice to the Company and stating therein the quantity of Equity
Securities to be purchased. 
Notwithstanding the foregoing, the Company shall not be required to
offer or sell such Equity Securities to any Major Investor who would cause the
Company to be in violation of applicable federal securities laws by virtue of
such offer or sale.


 


22

















 


4.3          Issuance of Equity
Securities to Other Persons.  If not all of
the Major Investors elect to purchase their pro
rata share of the Equity Securities, then the Company shall promptly
notify in writing the Major Investors who do so elect and shall offer such
Major Investors the right to acquire such unsubscribed shares.  Each such Major Investor shall have five (5) days
after receipt of such notice to notify the Company of its election to purchase
all or a portion thereof of the unsubscribed shares.  If the Major Investors fail to exercise in
full the rights of first refusal, the Company shall have ninety (90) days
thereafter to sell the Equity Securities in respect of which the Major Investors’
rights were not exercised, at a price and upon general terms and conditions
materially no more favorable to the purchasers thereof than specified in the
Company’s notice to the Major Investors pursuant to Section 4.2
hereof.  If the Company has not sold such
Equity Securities within ninety (90) days of the notice provided pursuant
to Section 4.2, the Company shall not thereafter issue or sell any Equity
Securities, without first offering such securities to the Major Investors in
the manner provided above.


 


4.4          Termination and Waiver of
Participation Rights.  The
participation rights established by this Section 4 shall not apply to, and
shall terminate upon the effective date of the registration statement
pertaining to, the Company’s Initial Offering.  The participation rights established by this Section 4
may be amended, or any provision waived with the written consent of Major
Investors holding a majority  of
the Series A Registrable Securities, Series B Registrable Securities,
Series C Registrable Securities, Series D Registrable Securities, Series E
Registrable Securities, Series F Registrable Securities, Series G
Registrable Securities, Series H Registrable Securities and Series I
Registrable Securities then held by all Major Investors, acting together as a
single class, or as permitted by Section 6.6.


 


4.5          Transfer of Participation
Rights.  The participation rights of
each Major  Investor under this Section 4
may be transferred to the same parties, subject to the same restrictions as any
transfer of registration rights pursuant to Section 2.10.


 


4.6          Excluded Securities.  The participation  rights established by this Section 4
shall have no application to any of the following Equity Securities:


 


(a)           shares of Series B Common Stock (and/or
options, warrants or other Common Stock purchase rights issued pursuant to such
options, warrants or other rights) (as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like) issued or to be issued
after the Original Issue Date (as defined in the Company’s Certificate of
Incorporation) to employees, officers or directors of, or consultants or
advisors to the Company or any subsidiary, pursuant to stock purchase or stock
option plans or other arrangements that are approved by the Board of Directors;


 


(b)           stock issued pursuant to any rights,
agreements, options or warrants outstanding as of the date of this Agreement;


 


(c)           stock issued pursuant to any rights,
agreements, options or warrants granted after the date of this Agreement; provided that the participation  rights established by this Section 4
applied with respect to the initial sale or grant by the Company of such rights
or agreements;


 


23














 


(d)           any Equity Securities issued for
consideration other than cash pursuant to a merger, consolidation, acquisition
or similar business combination approved by the Board of Directors;


 


(e)           shares of Series B Common Stock issued
in connection with any stock split, stock dividend or recapitalization by the
Company;


 


(f)            shares of Series B Common Stock issued
upon conversion of the Series A Shares, Series B Shares, Series C
Shares, Series D Shares, Series E Shares, Series F Shares, Series G
Shares, Series H Shares and Series I Shares;


 


(g)           any Equity Securities issued pursuant to any
equipment leasing or loan arrangement, or debt financing from a bank or similar
financial or lending institution approved by the Board of Directors;


 


(h)           any Equity Securities that are issued by the
Company pursuant to a registration statement filed under the Securities Act;


 


(i)            shares of the Company’s Series B Common
Stock or Preferred Stock issued in connection with strategic transactions
involving the Company and other entities, including (i) joint ventures or
manufacturing, marketing or distribution arrangements or (ii) technology
transfer or development arrangements; provided
that such strategic transactions and the issuance of shares therein, has been
approved by the Company’s Board of Directors; and


 


(j)            any additional shares of the Company’s Series G
Preferred Stock issued by the Company after the date of this Agreement pursuant
to Section 1.2(b) of the Series G Purchase Agreement and any
shares of the Company’s Series I Preferred Stock issued by the Company
after the date of this Agreement pursuant to the License Agreement and the Series I
Purchase Agreement.


 


SECTION 5.  RIGHT OF
FIRST REFUSAL


 


5.1          Prohibited Transfers.  No Founder shall sell,
assign, transfer, pledge, hypothecate, encumber or otherwise dispose of
(collectively, “transfer”)
any Founder Shares or any right or interest therein, except pursuant to this Section 5.  Any purported transfer in violation of this
Agreement shall be void and ineffectual and shall not operate to transfer any
interest or title to the purported transferee.


 


5.2          Company’s Right of First
Refusal.  In the event that a Founder
wishes to transfer shares of Founder Shares (in such capacity, a “Selling Stockholder”),
other than pursuant to a Permitted Transfer (as defined below), such Selling
Stockholder shall deliver a written notice (a “Sale Notice”) to the Company and the
Investors disclosing in reasonable detail the identity of the proposed
transferee(s), the number of shares proposed to be transferred (the “Offered Shares”), the
price per share and all other terms and conditions of the proposed
transfer.  For fifteen (15) days
following its receipt of the Sale Notice, the Company shall have the option to
purchase some or all of the Offered Shares at the price and upon the terms set
forth in the Sale Notice.  The Company
shall give written notice of its decision whether or not to purchase such
Offered Shares to the Selling Stockholder (the “Company Notice”) within such 


 


24

















 


15-day period, and the
settlement of any sale of such Offered Shares to the Company shall be made as
provided below in Section 5.4.  The
Company shall simultaneously deliver a copy of the Company Notice to the
Investors.


 


5.3          Investors’ Right of Second
Refusal.  If the Company elects not to
purchase all of the Offered Shares, the Investors shall have the option, for
fifteen (15) following their receipt of a Company Notice indicating the Company’s
election not to purchase all of the Offered Shares, to purchase some or all of
the Offered Shares at the price and upon the terms set forth in the Sale
Notice. Each Investor shall have the right to purchase up to his, her or its pro rata share of the Offered Shares. Each
Investor’s pro rata share is
equal to a fraction (a) the numerator of which is the number of then
outstanding Registrable Securities held by such Investor immediately prior to
the proposed transfer, and (b) and the denominator of which is the total
number of the outstanding Registrable Securities. For purposes of the preceding
formula, all then outstanding Registrable Securities shall be deemed to have
been converted into Series B Common Stock at the then applicable
conversion price.  In the event the
Investors elect to purchase some or all of the Offered Shares, they shall give
written notice of their election to the Selling Stockholder within such 15-day
period, which notice shall state the number of Offered Shares proposed to be
purchased by such Investor (the “Initial Amount”) and indicating the maximum
number of Offered Shares which such Investor is willing to purchase in the
event fewer than all Investors elect to purchase their pro rata amount (the “Additional Amount”).  If the number of Offered Shares subscribed for
by all Investors is less than the number of Offered Shares to which all
Investors are entitled to purchase, then each Investor who has set forth an
Additional Amount in his, her or its notice shall be entitled to purchase, in
addition to the Initial Amount subscribed for, the Additional Amount subscribed
for; provided that, should the
total Additional Amounts subscribed for exceed the difference between the
number of Offered Shares to which all Investors are entitled to purchase and
the Initial Amounts subscribed for (the “Available Additional Amount”), each Investor
who has subscribed for any Additional Amount shall be entitled to purchase only
that portion of the Available Additional Amount as the Additional Amount
subscribed for by such Investor bears to the total Additional Amounts
subscribed for by all Investors, subject to rounding by the Board of Directors
to the extent it reasonably deems necessary. 
The settlement of the sale of such Offered Shares shall be made as
provided below in Section 5.4.


 


5.4          Closing.  The closing of the purchase and sale of the
Offered Shares shall take place on a date agreed upon by the Selling
Stockholder and the Company and Investors, as the case may be, but in any event
within thirty (30) days following the latter of the date of the Sale Notice or
the Company Notice, at the principal office of the Company.


 


5.5          Re-Offer.  If neither the Company nor the Investors
elect to purchase all of the Offered Shares, subject to federal and state
securities laws, the Selling Stockholder may transfer the Offered Shares not so
purchased at a price and on terms no more favorable to the transferee than
those specified in the Sale Notice, during the 60-day period immediately
following the date of the Sale Notice. 
Any Offered Shares not sold or transferred during such 60-day period
will again be subject to the provisions of this Section 5.  No transfer pursuant to this Section 5
shall be effective until the transferee becomes a party to this Agreement.


 


25

















 


5.6          Permitted Transfers.  For purposes of this Section 5, a “Permitted Transfer”
shall mean (i) a transfer by a Founder upon such Founder’s death by will
or intestacy to, the executors, administrators, testamentary trustees, legatees
or beneficiaries of such Founder, (ii) a transfer to or for the benefit of
any Founder’s spouse, or any Founder’s or his spouse’s children, grandchildren,
parents, siblings, nieces or nephews (collectively (“Immediate Family”)),
or to a trust, limited liability company, corporation or partnership for the
benefit of such Founder or his Immediate Family, provided, however,
that in the case of any such transfers, any such permitted transferee shall, as
a condition to such transfer, deliver to the Company a written instrument
confirming that such transferees shall be bound by all of the terms and
conditions of this Agreement in a like manner to the transferor; or (iii) a
repurchase of any Founder Shares by the Company pursuant to the terms of any
stock restriction arrangement, following a termination of a Founder’s
employment with the Company.


 


5.7          Legend.  Each certificate
representing Founder Shares shall include a legend substantially in the
following form (in addition to or in combination with, any legend required
under applicable federal and state securities laws or any other agreements or
By-Law provisions relating to the transfer or voting of  the Company’s securities):


 


“THE SHARES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL AS PROVIDED IN AN
INVESTORS’ RIGHTS AGREEMENT, AS  AMENDED
FROM TIME TO TIME, BY AND AMONG THE REGISTERED OWNER OF THIS CERTIFICATE, THE
COMPANY AND CERTAIN OTHER STOCKHOLDERS OF THE COMPANY. THE COMPANY WILL FURNISH
A COPY OF THE INVESTORS’ RIGHTS AGREEMENT TO THE HOLDER HEREOF UPON WRITTEN
REQUEST AND WITHOUT CHARGE.”


 


The Company agrees promptly to retrieve all
certificates representing outstanding Founder Shares and to add the foregoing
legend to such certificates.


 


5.8          Termination and Waiver of Rights of
First Refusal.  The rights of
first refusal established by this Section 5 shall not apply to, and shall
terminate upon the effective date of the registration statement pertaining to
the Company’s Initial Offering.  The
rights of first refusal established by this Section 5 may be amended, or
any provision waived with the written consent of the Company, the Founders
holding a majority of the Founder’s Shares and the Investors holding a majority  of the Series A Registrable
Securities, Series B Registrable Securities, Series C Registrable
Securities, Series D Registrable Securities, Series E Registrable
Securities, Series F Registrable Securities, Series G Registrable
Securities, Series H Registrable Securities and Series I Registrable
Securities then held by all Investors, acting together as a single class, or as
permitted by Section 6.6.


 


5.9          Transfer of Rights of First
Refusal.  The rights of first refusal
of each Investor under this Section 5 may be transferred to the same
parties, subject to the same restrictions as any transfer of registration
rights pursuant to Section 2.10.


 


26

















 


5.10        No Prior
Agreements.  The
provisions of this Section 5 shall supersede any and all prior agreements
relating to rights of first refusal on the transfer of any shares of capital
stock of the Company.


 


SECTION 6.  MISCELLANEOUS


 


6.1          Governing Law.  Except
to the extent that any provision of this Agreement is contrary to any mandatory
provision of the Delaware General Corporation Law (in which case such mandatory
statutory provision shall apply), this Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts and
the laws of the United States applicable therein (without giving effect to any
choice or conflict of laws provision or rule that would cause the
application of the laws of any other jurisdiction) and shall be treated in all
respects as a Massachusetts contract.


 


6.2          Survival.  The representations,
warranties, covenants, and agreements made herein shall survive any
investigation made by any Holder and the closing of the transactions
contemplated hereby.  All statements as
to factual matters contained in any certificate or other instrument delivered
by or on behalf of the Company pursuant hereto in connection with the
transactions contemplated hereby shall be deemed to be representations and
warranties by the Company hereunder solely as of the date of such certificate
or instrument.


 


6.3          Successors and Assigns.  Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors, and administrators of
the parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time; provided, however, that prior to the
receipt by the Company of adequate written notice of the transfer of any
Registrable Securities specifying the full name and address of the transferee,
the Company may deem and treat the person listed as the holder of such shares
in its records as the absolute owner and holder of such shares for all
purposes, including the payment of dividends or any redemption price.


 


6.4          Entire Agreement.  This Agreement, the Exhibits
and Schedules hereto, the Purchase Agreements, the Fourth Amended and Restated
Voting Agreement and the other documents delivered pursuant thereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and supersede all prior agreements and understandings
among the parties, written or oral, with respect thereto, including the Prior
Agreement.  No party shall be liable or
bound to any other in any manner by any representations, warranties, covenants
and agreements except as specifically set forth herein and therein.


 


6.5          Severability.  In the event one or more of
the provisions of this Agreement should, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.


 


27

















 


6.6          Amendment and Waiver.


 


(a)           Except as otherwise expressly provided, this
Agreement may be amended or modified only upon the written consent of (i) the
Company and (ii) the holders of at least a majority  of the Series A Registrable Securities,
Series B Registrable Securities, Series C Registrable Securities, Series D
Registrable Securities, Series E Registrable Securities, Series F
Registrable Securities, Series G Registrable Securities, Series H
Registrable Securities and Series I Registrable Securities then
outstanding, acting together as a single class, provided that, Section 5 of this Agreement may be
amended or modified only with the written consent of (i) the Company, (ii) the
Founders holding a majority of the Founders’ Shares and (iii) the holders
of at least a majority  of the Series A
Registrable Securities, Series B Registrable Securities, Series C
Registrable Securities, Series D Registrable Securities, Series E
Registrable Securities, Series F Registrable Securities, Series G
Registrable Securities, Series H Registrable Securities and Series I
Registrable Securities then outstanding, acting together as a single class.


 


(b)           Except as otherwise expressly provided, the
obligations of the Company and the rights of the Holders under this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the holders of
at least a majority  of the Series A
Registrable Securities, Series B Registrable Securities, Series C
Registrable Securities, Series D Registrable Securities, Series E
Registrable Securities, Series F Registrable Securities, Series G
Registrable Securities, Series H Registrable Securities and Series I
Registrable Securities then outstanding, acting together as a single class, provided that, Section 5 of this
Agreement may be waived only with the written consent of (i) the Founders
holding a majority of the Founder’s Shares and (ii) the holders of at
least a majority  of the Series A
Registrable Securities, Series B Registrable Securities, Series C
Registrable Securities, Series D Registrable Securities, Series E
Registrable Securities, Series F Registrable Securities, Series G
Registrable Securities, Series H Registrable Securities and Series I
Registrable Securities then outstanding, acting together as a single
class.  No waivers of or exceptions to
any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing waiver
of any such term, condition or provision.


 


6.7          Delays or Omissions.  It is agreed that no delay
or omission to exercise any right, power, or remedy accruing to any Holder or
Investor, upon any breach, default or noncompliance of the Company under this
Agreement shall impair any such right, power, or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of any similar breach, default or noncompliance
thereafter occurring.  It is further
agreed that any waiver, permit, consent, or approval of any kind or character
on any Holder’s or Investor’s part of any breach, default or noncompliance
under the Agreement or any waiver on such Holder’s or Investor’s part of any
provisions or conditions of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement, by
law, or otherwise afforded to Holders and Investors, shall be cumulative and
not alternative.


 


6.8          Notices.  All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed telex or facsimile if sent during normal business
hours of the recipient; if not, then on the next business day, (c) five (5) days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a
nationally 


 


28

















 


recognized
overnight courier, specifying next day delivery, with written verification of
receipt.  All communications shall be
sent to the party to be notified at the address as set forth on the signature pages hereof
or Exhibit A hereto or at
such other address as such party may designate by ten (10) days advance
written notice to the other parties hereto.


 


6.9          Attorneys’ Fees.  In the event that any suit
or action is instituted to enforce any provision in this Agreement, the
prevailing party in such dispute shall be entitled to recover from the losing
party all fees, costs and expenses of enforcing any right of such prevailing
party under or with respect to this Agreement, including without limitation,
such reasonable fees and expenses of attorneys and accountants, which shall
include, without limitation, all fees, costs and expenses of appeals.


 


6.10        Titles and
Subtitles.  The titles of
the sections and subsections of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.


 


6.11        Additional
Investors. 
Notwithstanding anything to the contrary contained herein, if the
Company shall issue additional shares of its Series G Preferred Stock
pursuant to the Series G Purchase Agreement, any Additional Purchaser (as
defined in the Series G Purchase Agreement) who becomes a party to the Series G
Purchase Agreement shall automatically become a party to this Agreement by
executing and delivering to the Company the
Purchaser Signature Page for Additional Closings attached to the Series G
Purchase Agreement, which shall serve as a counterpart to this Agreement
by which such Additional Purchaser agrees to be bound by the obligations
imposed under this Agreement.  Upon such execution and delivery, such Additional
Purchaser shall be deemed an “Investor” hereunder  and Exhibit A
hereto shall automatically be amended to add such Additional Purchaser as a
party to this Agreement.  Any Series I
Purchaser that becomes party to this Agreement by executing and delivering to
the Company the Signature Page attached hereto shall be deemed an “Investor”
hereunder and Exhibit A hereto shall
automatically be amended to add such Series I Purchaser as a party to this
Agreement.


 


6.12        Counterparts.  This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.


 


 


[Remainder of page intentionally blank]


 


29














 


IN WITNESS WHEREOF, the
parties hereto have executed this EIGHTH AMENDED
AND RESTATED INVESTORS’ RIGHTS AGREEMENT as of the date set forth in
the first paragraph hereof.


 


	
   

  	
   

  	
  Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  IRONWOOD PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Peter M. Hecht

  
	
   

  	
   

  	
   

  	
  Peter M. Hecht

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Founders:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Peter M. Hecht

  
	
   

  	
   

  	
  Peter M. Hecht, Ph.D.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Eric F. Summers, Ph.D.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Brian M. Cali

  
	
   

  	
   

  	
  Brian M. Cali, Ph.D.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BRIAN M. CALI GRAT U/ART. 6 UAD 07/31/03 SOPHIA EVETT TTEE FBO MARIA
  CALI

  
	
   

  	
   

  	
  BRIAN M. CALI GRAT U/ART. 6 UAD 07/31/03 SOPHIA EVETT TTEE FBO
  JESSALYN CALI

  
	
   

  	
   

  	
  BRIAN M. CALI GRAT U/ART. 6 UAD 07/31/03 SOPHIA EVETT TTEE FBO
  ABIGAIL CALI

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Sophia R. Evett

  
	
   

  	
   

  	
   

  	
  Sophia R. Evett, Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Sophia R. Evett

  
	
   

  	
   

  	
  Sophia R. Evett

  



 

















 


	
   

  	
   

  	
  /s/ G. Todd
  Milne

  
	
   

  	
   

  	
  G. Todd
  Milne, Ph.D.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Judith E. Cook

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Joseph C. Cook, Jr.

  
	
   

  	
   

  	
  Judith E. Cook and Joseph C. Cook, Jr., Joint Tenants with
  Rights of Survivorship

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Gina Bornino Miller

  



 


 


	
   

  	
   

  	
  MILLBOR FAMILY TRUST U/T/D October 16, 2002

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  William J. Miller & Gina B. Miller, Trustees

  



 


ii

















 


	
   

  	
   

  	
  SECURE
  MOUNTAIN TRUST # 1 - FBO ELIZABETH ANNE SINGLETON, U/A/D 12/28/1999

  
	
   

  	
   

  	
  SECURE
  MOUNTAIN TRUST # 2 - FBO RACHEL KATHERINE SINGLETON, U/A/D 9/5/2000

  
	
   

  	
   

  	
  SECURE
  MOUNTAIN TRUST # 4 - FBO STEVEN DAVID SINGLETON, JR., U/A/D 12/17/2003

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Steven D.
  Singleton, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECURE MOUNTAIN TRUST # 3 - FBO JOSEPH CAMPBELL COOK, IV, U/A/D
  3/29/2001

  
	
   

  	
   

  	
  SECURE MOUNTAIN TRUST # 5 - FBO WILLIAM HARRISON COOK, U/A/D
  11/2/2004

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph C.
  Cook, Jr., Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Christy Cook Singleton

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Joseph C. Cook, III

  



 


iii

















 


IRONWOOD PHARMACEUTICALS, INC.


 


INVESTORS’ RIGHTS AGREEMENT SIGNATURE PAGE


 


By his, her or its execution and delivery of this signature page, the
undersigned Investor hereby joins in and agrees to be bound by the terms and
conditions of the Eighth Amended and Restated Investors’ Rights Agreement dated
as of the date set forth in the first paragraph hereof and authorizes this
signature page to be attached to the Eighth Amended and Restated Investors’
Rights Agreement, or counterparts thereof.


 


	
   

  	
   

  	
  ABERDARE
  VENTURES, L.P.

  
	
   

  	
   

  	
  By: Aberdare
  GP, LLC

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Paul H. Klingenstein

  
	
   

  	
   

  	
  Name: Paul H. Klingenstein

  
	
   

  	
   

  	
  Title:
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PETER HECHT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Peter Hecht

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INVUS, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Aflalo Guimaraes

  
	
   

  	
   

  	
  Name: Aflalo Guimaraes

  
	
   

  	
   

  	
  Title: Managing Director of Invus Advisors LLC, GP of Invus, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JENNISON HEALTH SCIENCES FUND

  
	
   

  	
   

  	
  By: Jennison Associates LLC, as sub-adviser to the Fund

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David Chan

  
	
   

  	
   

  	
  Name: David Chan

  
	
   

  	
   

  	
  Title: Managing Director of Jennison Associates LLC and Portfolio
  Manager to the Fund

  



 


iv

















 


	
   

  	
   

  	
  MAVERICK FUND PRIVATE INVESTMENTS, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John T.
  McCafferty

  
	
   

  	
   

  	
  Name: John
  T. McCafferty

  
	
   

  	
   

  	
  Title:
  Limited Partner and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MAVERICK II PRIVATE INVESTMENTS, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John T.
  McCafferty

  
	
   

  	
   

  	
  Name: John
  T. McCafferty

  
	
   

  	
   

  	
  Title:
  Limited Partner and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MAVERICK USA PRIVATE INVESTMENTS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John T.
  McCafferty

  
	
   

  	
   

  	
  Name: John
  T. McCafferty

  
	
   

  	
   

  	
  Title: Limited Partner and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  POLARIS VENTURE PARTNERS II, L.P.

  
	
   

  	
   

  	
  By: Polaris
  Venture Management Co. II, L.L.C., Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William
  E. Bilodeau

  
	
   

  	
   

  	
  Name:
  William E. Bilodeau

  
	
   

  	
   

  	
  Title: Attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  POLARIS VENTURE PARTNERS FOUNDERS’ FUND II, L.P.

  
	
   

  	
   

  	
  By: Polaris
  Venture Management Co. II, L.L.C., Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William
  E. Bilodeau

  
	
   

  	
   

  	
  Name:
  William E. Bilodeau

  
	
   

  	
   

  	
  Title: Attorney-in-fact

  



 


v

















 


	
   

  	
   

  	
  PROSPER PARTNERS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Paul H. Klingenstein

  
	
   

  	
   

  	
  Name: Paul H. Klingenstein

  
	
   

  	
   

  	
  Title: General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RIDGEBACK CAPTIAL INVESTMENTS L.P.

  
	
   

  	
   

  	
  By:
  Ridgeback Capital Management LLC,

  Its Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Christopher A. Nonas

  
	
   

  	
   

  	
  Name:
  Christopher A. Nonas

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VENROCK ASSOCIATES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Bryan E. Roberts

  
	
   

  	
   

  	
  Name: Bryan
  E. Roberts

  
	
   

  	
   

  	
  Title: Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VENROCK ASSOCIATES II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Bryan E.
  Roberts

  
	
   

  	
   

  	
  Name: Bryan
  E. Roberts

  
	
   

  	
   

  	
  Title: Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VENROCK ENTREPRENEURS FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Bryan E.
  Roberts

  
	
   

  	
   

  	
  Name: Bryan
  E. Roberts

  
	
   

  	
   

  	
  Title: Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VENROCK HEALTHCARE CAPITAL PARTNERS, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Bryan E.
  Roberts

  
	
   

  	
   

  	
  Name: Bryan
  E. Roberts

  
	
   

  	
   

  	
  Title:
  Partner

  



 


vi

















 


	
   

  	
   

  	
  VHCP CO-INVESTMENT HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Bryan E.
  Roberts

  
	
   

  	
   

  	
  Name: Bryan
  E. Roberts

  
	
   

  	
   

  	
  Title: Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRANSAMERICA SERIES TRUST — TRANSAMERICA VAN KAMPEN MID-CAP GROWTH VP

  
	
   

  	
   

  	
  By: Van Kampen Asset Management

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VALIC COMPANY I - MID CAP STRATEGIC GROWTH FUND

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Management Inc.

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ALLIANZ VARIABLE INSURANCE PRODUCTS TRUST - AZL VAN KAMPEN MID CAP
  GROWTH FUND

  
	
   

  	
   

  	
  By: Van Kampen Asset Management

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  



 


vii

















 


	
   

  	
   

  	
  MORGAN STANLEY INSTITUTIONAL FUND, INC. -
  SMALL COMPANY GROWTH PORTFOLIO

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Management
  Inc.

  
	
   

  	
   

  	
  Investment Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NATIONWIDE VARIABLE INSURANCE TRUST - NVIT MULTI-MANAGER SMALL
  COMPANY FUND

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Management Inc.

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE UNIVERSAL INSTITUTIONAL FUNDS, INC. - SMALL COMPANY GROWTH
  PORTFOLIO

  
	
   

  	
   

  	
  By: Morgan
  Stanley Investment Management Inc.

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title:
  Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EQ ADVISORS TRUST - EQ/VAN KAMPEN MID CAP GROWTH PORTFOLIO

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Management Inc.

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  



 


viii

















 


	
   

  	
   

  	
  MET INVESTORS SERIES TRUST - VAN KAMPEN MID
  CAP GROWTH PORTFOLIO

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Management
  Inc.

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LAWRENCIUM ATOLL INVESTMENTS LIMITED

  
	
   

  	
   

  	
  By: Morgan
  Stanley Investment Management Inc.

  
	
   

  	
   

  	
  Investment
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title:
  Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MORGAN STANLEY INSTITUTIONAL FUND TRUST - MID CAP GROWTH PORTFOLIO

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Management Inc.

  
	
   

  	
   

  	
  Investment Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MORGAN STANLEY INVESTMENT MANAGEMENT SMALL COMPANY GROWTH TRUST

  
	
   

  	
   

  	
  By: State Street Bank and Trust Company

  
	
   

  	
   

  	
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael
  Stack

  
	
   

  	
   

  	
  Name:
  Michael Stack

  
	
   

  	
   

  	
  Title: Vice President

  



 


ix














 


	
   

  	
   

  	
  MORGAN STANLEY MID CAP GROWTH FUND

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Advisors Inc.

  
	
   

  	
   

  	
  Investment Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MORGAN STANLEY SELECT DIMENSIONS INVESTMENT
  SERIES - THE MID CAP GROWTH PORTFOLIO

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Advisors Inc.

  
	
   

  	
   

  	
  Investment Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MORGAN STANLEY SPECIAL GROWTH FUND

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Advisors Inc.

  
	
   

  	
   

  	
  Investment Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PACIFIC LIFE FUNDS - PL MID-CAP GROWTH FUND

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Management Inc.

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title:
  Executive Director

  



 


x

















 


	
   

  	
   

  	
  PACIFIC SELECT FUND - MID-CAP GROWTH PORTFOLIO

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Management Inc.

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PACTIV CORPORATION GENERAL EMPLOYEES BENEFIT TRUST

  
	
   

  	
   

  	
  By: State
  Street Bank and Trust Company

  
	
   

  	
   

  	
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael
  Stack

  
	
   

  	
   

  	
  Name:
  Michael Stack

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRANSAMERICA FUNDS - TRANSAMERICA VAN KAMPEN MID-CAP GROWTH

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Management Inc.

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRANSAMERICA FUNDS - TRANSAMERICA VAN
  KAMPEN SMALL COMPANY GROWTH

  
	
   

  	
   

  	
  By: Morgan Stanley Investment Management
  Inc.

  
	
   

  	
   

  	
  Sub-Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  



 


xi

















 


	
   

  	
   

  	
  THE UNIVERSAL INSTITUTIONAL FUNDS, INC. - MID CAP GROWTH PORTFOLIO

  
	
   

  	
   

  	
  By: Morgan
  Stanley Investment Management Inc.

  
	
   

  	
   

  	
  Investment
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title:
  Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VAN KAMPEN LIFE INVESTMENT TRUST - MID CAP GROWTH PORTFOLIO

  
	
   

  	
   

  	
  By: Van Kampen Asset Management

  
	
   

  	
   

  	
  Investment Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VAN KAMPEN MID CAP GROWTH FUND

  
	
   

  	
   

  	
  By: Van Kampen Asset Management

  
	
   

  	
   

  	
  Investment Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jason
  Yeung

  
	
   

  	
   

  	
  Name: Jason
  Yeung

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FOREST LABORATORIES, INC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David F.
  Solomon

  
	
   

  	
   

  	
  Name: David
  F. Solomon

  
	
   

  	
   

  	
  Title:
  Corporate Vice President

  



 


xii

















 


	
   

  	
   

  	
  ALMIRALL, S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ E.
  Sanchiz

  
	
   

  	
   

  	
  By:

  	
  /s/ J.
  Figueras

  
	
   

  	
   

  	
  Name: E.
  Sanchiz — J. Figueras

  
	
   

  	
   

  	
  Title:
  Proxies 

  



 


xiii

















 


SCHEDULE I


FOUNDERS


 


Peter M. Hecht


 


Eric F. Summers, Ph.D


 


Brian M. Cali


 


BRIAN M. CALI GRAT U/ART. 6 UAD 07/31/03 SOPHIA EVETT TTEE FBO MARIA
CALI


 


BRIAN M. CALI GRAT U/ART. 6 UAD 07/31/03 SOPHIA EVETT TTEE FBO JESSALYN
CALI


 


BRIAN M. CALI GRAT U/ART. 6 UAD 07/31/03 SOPHIA EVETT TTEE FBO ABIGAIL
CALI


 


Sophia R. Evett


 


G. Todd Milne


 


Judith E. Cook and Joseph C. Cook, Jr., Joint Tenants with Rights
of Survivorship


 


Gina Bornino Miller


 


MILLBOR FAMILY TRUST U/T/D OCTOBER 16, 2002, William J. Miller and Gina
B. Miller, trustees


 


SECURE MOUNTAIN TRUST # 1 - FBO ELIZABETH ANNE SINGLETON, U/A/D
12/28/1999, Steven D. Singleton, trustee


 


SECURE MOUNTAIN TRUST # 2 - FBO RACHEL KATHERINE SINGLETON, U/A/D
9/5/2000, Steven D. Singleton, trustee


 


SECURE MOUNTAIN TRUST # 3 - FBO JOSEPH CAMPBELL COOK, IV, U/A/D
3/29/2001, Joseph C. Cook, Jr., trustee


 


SECURE MOUNTAIN TRUST # 4 - FBO STEVEN DAVID SINGLETON, JR., U/A/D 12/17/2003,
Steven D. Singleton, trustee


 


SECURE MOUNTAIN TRUST # 5 - FBO WILLIAM HARRISON COOK, U/A/D 11/2/2004,
Joseph C. Cook, Jr., trustee


 


Christy Cook Singleton


 


Joseph C. Cook, III


 


xiv