Document:

Exhibit 10.5

 

ACLARIS THERAPEUTICS, INC.

 

SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

This Second Amended and Restated Investors’ Rights Agreement (this “Agreement”) is made as of this 28th day of August, 2015 (the “Effective Date”), by and among Aclaris Therapeutics, Inc., a Delaware corporation (the “Company”), the holders of the Company’s Series A Preferred Stock listed on Exhibit A attached hereto (the “Series A Holders”), the holders of the Company’s Series B Preferred Stock listed on Exhibit B attached hereto (the “Series B Holders”) and the holders of the Company’s Series C Preferred Stock listed on Exhibit C attached hereto (the “Series C Holders” and together with the Series A Holders and the Series B Holders, the “Investors”).

 

RECITALS

 

A.            The Company and certain of the Investors are parties to that certain Amended and Restated Investors’ Rights Agreement dated as of September 30, 2014 (the “Prior Agreement”).

 

B.            The Company and the Series A Holders entered into a Series A Preferred Stock Purchase Agreement dated August 30, 2012 pursuant to which the Company sold to the Series A Holders, and the Series A Holders purchased from the Company, shares of the Company’s Series A Preferred Stock (the “Series A Preferred Stock”).

 

C.            The Company and the Series B Holders entered into a Series B Preferred Stock Purchase Agreement dated September 30, 2014 pursuant to which the Company sold to the Series B Holders, and the Series B Holders purchased from the Company, shares of the Company’s Series B Preferred Stock (the “Series B Preferred Stock”).

 

D.            The Company and the Series C Holders have entered into a Series C Preferred Stock Purchase Agreement (the “Purchase Agreement”) of even date herewith pursuant to which the Company desires to sell to the Series C Holders and the Series C Holders desire to purchase from the Company shares of the Company’s Series C Preferred Stock (the “Series C Preferred Stock” and together with the Series A Preferred Stock and the Series B Preferred Stock, the “Preferred Stock”).  A condition to the Series C Holders’ obligations under the Purchase Agreement is that the Company and the Investors enter into this Agreement in order to provide the Investors with (i) certain rights to register shares of the Company’s Common Stock (the “Common Stock”) issuable upon conversion of the Preferred Stock held by the Investors, (ii) certain rights to receive or inspect information pertaining to the Company and (iii) a right of first offer with respect to certain issuances by the Company of its securities.  The Company and the Investors each desire to induce the Series C Holders to purchase shares of Series C Preferred Stock pursuant to the Purchase Agreement by agreeing to the terms and conditions set forth herein.

 

E.            The approval of (i) the Company and (ii) the holders of at least 60% of the Registrable Securities (as defined in the Prior Agreement for purposes of this paragraph E) is required to amend and restate the Prior Agreement pursuant to Section 3.4 thereof; provided, however, the amendment and restatement of the rights granted to the Major Holders (as defined in the Prior Agreement for purposes of this paragraph E) in Section 2 of the Prior Agreement

 

 

requires the consent of at least 60% of the Registrable Securities held by the Major Holders and the amendment and restatement of the rights granted to Investors (as defined in the Prior Agreement for purposes of this paragraph E) in Section 2 of the Prior Agreement requires the consent of at least 60% of the Registrable Securities held by the Series A Holders and the Series B Holders, voting together as a single class on an as-converted basis.

 

F.             The Investors, which include the requisite Investors described in the preceding paragraph, desire to amend and restate the Prior Agreement in accordance with the terms and provisions set forth herein.

 

AGREEMENT

 

The parties hereby agree as follows:

 

1.             Registration Rights.  The Company and the Investors covenant and agree as follows:

 

1.1          Definitions.  For purposes of this Section 1:

 

(a)       “Conversion Shares” means shares of the Company’s stock (including the Company’s Preferred Stock, Common Stock and Common Stock issuable upon conversion of Preferred Stock or any stock received in connection with any stock dividend, stock split or other reclassification of any such stock).

 

(b)       “Exchange Act” means the Securities Exchange Act of 1934, as amended (and any successor thereto) and the rules and regulations promulgated thereunder;

 

(c)       “Form S-3” means such form under the Securities Act as in effect on the date hereof or any successor form under the Securities Act that permits significant incorporation by reference of the Company’s subsequent public filings under the Exchange Act;

 

(d)       “Holder” means any person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 1.12 of this Agreement;

 

(e)       “Qualified IPO” means a firm commitment underwritten public offering by the Company of shares of its Common Stock in connection with which all the then-outstanding shares of Preferred Stock are converted into shares of Common Stock as defined in the Company’s Third Amended and Restated Certificate of Incorporation as may be amended from time to time (the “Restated Certificate”);

 

(f)        “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;

 

(g)       “Registrable Securities” means (i) the shares of Common Stock issuable or issued upon conversion of the Preferred Stock, and (ii) any other shares of Common

 

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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, the shares listed in (i); provided, however, that the foregoing definition shall exclude in all cases any Registrable Securities sold by a person in a transaction in which his or her rights under this Agreement are not assigned.  Notwithstanding the foregoing, Common Stock or other securities shall only be treated as Registrable Securities if and so long as (A) they have not been sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, and (B) they have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(a)(1) thereof so that all transfer restrictions, and restrictive legends with respect thereto, if any, are removed upon the consummation of such sale;

 

(h)       The number of shares of “Registrable Securities then outstanding” shall be determined by the number of shares of Common Stock outstanding which are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities which are, Registrable Securities;

 

(i)        “SEC” means the Securities and Exchange Commission; and

 

(j)        “Securities Act” means the Securities Act of 1933, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

 

1.2          Request for Registration.

 

(a)       If the Company shall receive at any time after the earlier of (i) September 30, 2017, or (ii) six months after the effective date of the first registration statement for a public offering of securities of the Company (other than a registration statement relating either to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan or an SEC Rule 145 transaction), a written request from the Holders of at least 60% of the Registrable Securities then outstanding (provided the anticipated aggregate offering price, net of underwriting discounts and commissions, would be at least $5,000,000) that the Company file a registration statement under the Securities Act, then the Company shall, within 20 days of the receipt thereof, give written notice of such request to all Holders and shall, subject to the limitations of subsection 1.2(b), use commercially reasonable efforts to file as soon as practicable, and in any event within 90 days of the receipt of such request, a registration statement under the Securities Act covering all Registrable Securities which the Holders request to be registered.

 

(b)       If the Holders initiating the registration request hereunder (“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 1.2 and the Company shall include such information in the written notice referred to in subsection 1.2(a).  The underwriter will be selected by a majority in interest of the Initiating Holders and shall be reasonably acceptable to the Company.  In such event, the right of any Holder to include his 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 (unless otherwise mutually agreed by at least 60% of the Initiating

 

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Holders and such Holder) to the extent provided herein.  All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in subsection 1.5(e)) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting.  Notwithstanding any other provision of this Section 1.2, if the underwriter advises the Initiating Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the underwriting shall be allocated among all participating Holders thereof, including the Initiating Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company owned by each participating Holder; provided, however, that the number of shares of Registrable Securities to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting.

 

(c)       Notwithstanding the foregoing, if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 1.2, a certificate signed by the Chief Executive Officer or President of the Company 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 filed and it is therefore essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for a period of not more than 90 days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve-month period.

 

(d)       In addition, the Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 1.2:

 

(i)            After the Company has effected two registrations pursuant to this Section 1.2 and such registrations have been declared or ordered effective (a registration will count for this purpose only if (i) all Registrable Securities requested to be registered are registered and (ii) it is closed, or withdrawn at the request of the Investors (other than as a result of a material adverse change to the Company));

 

(ii)           During the period commencing on the effective date of the registration statement for the initial public offering of the Company’s securities and ending on a date 180 days after the effective date of such registration; or

 

(iii)          If the Company delivers notice to the Holders within 30 days of the Company’s receipt of the Initiating Holders’ registration request declaring the Company’s intention to file within 60 days a registration statement for the Company’s initial public offering.

 

1.3          Company Registration.  If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Holders) any of its stock under the Securities Act in connection with the public offering of such securities solely for cash (other than a registration relating solely to the sale of securities to participants in a Company stock plan or a transaction covered by

 

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Rule 145 under the Securities Act, a registration in which the only stock being registered is Common Stock issuable upon conversion of debt securities which are also being registered, or any registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities), the Company shall, at such time, promptly give each Holder written notice of such registration.  Upon the written request of each Holder given within 20 days after mailing of such notice by the Company in accordance with Section 3.5, the Company shall, subject to the provisions of Section 1.8, cause to be registered under the Securities Act all of the Registrable Securities that each such Holder has requested to be registered.

 

1.4          Form S-3 Registration.  In case the Company shall receive from the Holders of at least 30% of the Registrable Securities then outstanding a written request or requests that the Company effect a registration on Form S-3 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; 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 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 1.4:  (i) if Form S-3 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 (net of any underwriters’ discounts or commissions) of less than $2,500,000; (iii) if the Company shall furnish to the Holders a certificate signed by the Chief Executive Officer or President of the Company 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 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 120 days after receipt of the request of the Holder or Holders under this Section 1.4; provided, however, that the Company shall not utilize this right more than once in any 12-month period; (iv) if the Company has, within the 12-month period preceding the date of such request, already effected two registrations on Form S-3 for the Holders pursuant to this Section 1.4; (v) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance; or (vi) during the period ending 180 days after the effective date of a registration statement subject to Section 1.3.

 

(c)       Subject to the foregoing, the Company shall file a 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

 

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pursuant to this Section 1.4 shall not be counted as demands for registration or registrations effected pursuant to Sections 1.2 or 1.3, respectively.

 

1.5          Obligations of the Company.  Whenever required under this Section 1 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 commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to 120 days, or until the distribution described in such registration statement is completed, if earlier.

 

(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 up to 120 days, or until the distribution described in such registration statement is completed, if earlier.

 

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

 

(d)       Use commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

 

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

 

(f)        Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.  As promptly as practicable thereafter, the Company will prepare and file with the SEC, and furnish without charge to the appropriate Holders and managing underwriter(s), if any, an amendment or supplement to such registration statement or prospectus in order to cause such registration statement or prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not

 

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misleading in the light of the circumstances then existing and will furnish such copies thereof as the Holders or any underwriters may reasonably request.

 

(g)       Use best efforts to cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed.

 

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

 

(i)        Use commercially reasonable efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Section 1, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 1, if such securities are being sold through underwriters, (i) an opinion, dated 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 and (ii) a letter dated 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.

 

1.6          Furnish Information.  It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such Holder’s Registrable Securities.  The Company shall have no obligation with respect to any registration requested pursuant to Section 1.2 or Section 1.4 of this Agreement if, as a result of the application of the preceding sentence, 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 subsection 1.2(a) or subsection 1.4(b)(ii), whichever is applicable.

 

1.7          Expenses of Registration.

 

(a)       Demand Registration.  All expenses other than stock transfer taxes, underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Section 1.2, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel (not to exceed $50,000) for the selling Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 1.2 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders

 

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shall bear such expenses), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration pursuant to Section 1.2; provided further, however, that if at the time of such withdrawal, the Holders (i) have learned of a material adverse change in the condition, business, or prospects of the Company that was not known at the time of their request or could have not been reasonably known given the prior communication or information provided by the Company to the Holders and (ii) have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall not forfeit their rights pursuant to Section 1.2.

 

(b)       Company Registration.  All expenses other than stock transfer taxes, underwriting discounts and commissions incurred in connection with registrations, filings or qualifications of Registrable Securities pursuant to Section 1.3 for each Holder (which right may be assigned as provided in Section 1.12), including (without limitation) all registration, filing, and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel (not to exceed $50,000) for the selling Holder or Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company.

 

(c)       Registration on Form S-3.  All expenses other than stock transfer taxes, underwriting discounts and commissions incurred in connection with a registration requested pursuant to Section 1.4, including (without limitation) all registration, filing, qualification, printers’ and accounting fees and the reasonable fees and disbursements of one counsel (not to exceed $50,000) for the selling Holder or Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld shall be borne by the Company.

 

1.8          Underwriting Requirements.  In connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under Section 1.3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company.  If the total amount of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling stockholders according to the total amount of securities entitled to be included therein owned by each selling stockholder or in such other proportions as shall mutually be agreed to by such selling stockholders) but in no event shall (i) the amount of securities of the selling Holders included in the offering be reduced below 30% of the total amount of securities included in such offering, unless such offering is the initial public offering of the Company’s securities, in which case, the selling stockholders may be excluded if the underwriters make the determination described above and no other stockholder’s securities are included or (ii) without the consent of the holders of at least 60% of the Registrable

 

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Securities, any securities held by any non-Holder be included if any securities held by any selling Holder are excluded.  For purposes of the preceding parenthetical concerning apportionment, for any selling stockholder which is a holder of Registrable Securities and which is a partnership or corporation, the partners, retired partners and stockholders of such holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling stockholder,” and any pro-rata reduction with respect to such “selling stockholder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling stockholder,” as defined in this sentence.

 

1.9          Delay of Registration.  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 1.

 

1.10        Indemnification.  In the event any Registrable Securities are included in a registration statement under this Section 1:

 

(a)       To the extent permitted by law, the Company will indemnify and hold harmless each Holder (including each of its officers, directors, members and partners), 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”):  (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; and the Company will pay to each such Holder, underwriter or controlling person, as incurred, 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 subsection 1.10(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable to any Holder, underwriter or controlling person 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 any such Holder, underwriter or controlling person.

 

(b)       To the extent permitted by law, each selling Holder will, severally and not jointly, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the

 

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Company within the meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons 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 expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 1.10(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection 1.10(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, that in no event shall any indemnity under this subsection 1.10(b) exceed the net proceeds from the offering received by such Holder, except in the case of willful fraud by such Holder.

 

(c)       Promptly after receipt by an indemnified party under this Section 1.10 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 1.10, 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 (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.10, 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 1.10.

 

(d)       If the indemnification provided for in this Section 1.10 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations; provided, that in no event shall any contribution by a Holder under this Subsection 1.10(d) exceed the net proceeds from the offering received by such Holder, except in the case of willful fraud by such Holder.  The relative fault of the indemnifying party and of the

 

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indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

 

(e)       Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

 

(f)        The obligations of the Company and Holders under this Section 1.10 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 1, and otherwise.

 

1.11        Reports Under the Exchange Act.  With a view to making available to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:

 

(a)       make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after 90 days after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public so long as the Company remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act;

 

(b)       take such action, including the voluntary registration of its 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, 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 is declared 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)       furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after 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 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 such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form.

 

1.12        Assignment of Registration Rights.  The rights to cause the Company to register Registrable Securities pursuant to this Section 1 may be assigned (but only with all

 

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related obligations) by a Holder to a transferee or assignee (a) who, with the addition of the transferred shares, holds at least 1,000,000 shares of such securities (subject to adjustment for stock splits, stock dividends, reclassification or the like) (or is assigned all of the shares held by the transferring Holder, if less than 1,000,000  shares); (b) that is a subsidiary, parent, partner, limited partner, retired partner, member, retired member or stockholder of a Holder; (c) that is an affiliated fund or entity of the Holder, which means with respect to a limited liability company or a limited liability partnership, a fund or entity managed by the same manager or managing member or general partner or management company or by an entity controlling, controlled by, or under common control with such manager or managing member or general partner or management company (such a fund or entity, an “Affiliated Fund”); (d) who is a Holder’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (such a relation, a Holder’s “Immediate Family Member”, which term shall include adoptive relationships); (e) that is a trust, partnership, limited liability company or corporation, the use of which is for estate planning purposes for the benefit of an individual Holder or such Holder’s Immediate Family Member; (f) who is a Major Holder (as hereinafter defined); or (g) who is an Affiliated Transferee (as defined in Section 3.3 of the Purchase Agreement), provided the Company is, within a reasonable time after such transfer, furnished with 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 provided, further, that such assignment shall be effective only if the transferee agrees to be bound by this Agreement and immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Securities Act.  For the purposes of determining the number of shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and assignees of (x) a partnership who are partners or retired partners of such partnership or (y) a limited liability company who are members or retired members of such limited liability company (including Immediate Family Members of such partners or members who acquire Registrable Securities by gift, will or intestate succession) shall be aggregated together and with the partnership or limited liability company; provided that all assignees and transferees who would not qualify individually for assignment of registration rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices or taking any action under Section 1.

 

1.13        Limitations on Subsequent Registration Rights.  From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of at least 60% of the outstanding Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder (a) to include such securities in any registration filed under Section 1.2 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his securities will not reduce the amount of the Registrable Securities of the Holders which is included or (b) to make a demand registration which could result in such registration statement being declared effective prior to the earlier of either of the dates set forth in subsection 1.2(a) or within 120 days of the effective date of any registration effected pursuant to Section 1.2; provided that this limitation shall not apply to any additional Investor who becomes a party to this Agreement in accordance with Section 1.12.

 

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1.14        Lock-Up Agreement.

 

(a)       Lock-Up Period; Agreement.  In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing such offering of the Company’s securities, each Holder agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company, however or whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days but subject to such extension(s) as may be required by the underwriters in order to publish research reports while complying with Rule 2711 of the Financial Industry Regulatory Authority (FINRA), such extension(s) not to exceed 15 days in the aggregate) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the Company’s initial public offering.

 

(b)       Limitations.  The obligations described in Section 1.14(a) shall apply only if all officers and directors of the Company and all one-percent stockholders enter into similar agreements, and shall not apply to a registration relating solely to employee benefit plans, or to a registration relating solely to a transaction pursuant to Rule 145 under the Securities Act.  If the obligations described in Section 1.14(a) are waived or terminated by the Company or the representatives of the underwriters, such waiver or termination shall apply to the Investors pro rata, based on the number of shares held by the Investors.

 

(c)       Stop-Transfer Instructions.  In order to enforce the foregoing covenants, the Company may impose stop-transfer instructions with respect to the securities of each Holder (and the securities of every other person subject to the restrictions in Section 1.14(a)).

 

(d)       Transferees Bound.  Each Holder agrees that prior to the Company’s initial public offering it will not transfer securities of the Company unless each transferee agrees in writing to be bound by all of the provisions of this Section 1.14, provided that this Section 1.14(d) shall not apply to transfers pursuant to a registration statement or transfers after the 12-month anniversary of the effective date of the Company’s initial registration statement subject to this Section 1.14.

 

1.15        Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to this Section 1 shall terminate upon the earliest to occur of: (a) five years after a Qualified IPO; (b) a Liquidation Transaction (as defined in the Restated Certificate); or (c) when all shares held by the Investors are eligible to be sold without restriction under Rule 144(b)(1) within any 90-day period.

 

2.             Covenants of the Company.

 

2.1          Delivery of Financial Statements.  The Company shall deliver to each Holder who holds at least 1,000,000 shares of Registrable Securities (subject to adjustment for stock splits, stock dividends, reclassifications or the like), Blackwell Partners LLC — Series A and Aperture Venture Partners III, L.P. (collectively, the “Major Holders”):

 

13

 

(a)       as soon as practicable, but in any event within 150 days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of stockholder’s equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”), and audited and certified by an independent public accounting firm selected with the approval of the Board of Directors, including the approval of at least one of the three directors elected by the Investors (each, an “Investor Director”);

 

(b)       as soon as practicable, but in any event within 45 days after the end of each quarter, an unaudited profit or loss statement, a statement of cash flows as compared to the budget and the comparable period for the prior year, an unaudited balance sheet as of the end of such quarter and a written summary of operations, each of which has been prepared in accordance with GAAP, subject to normal year-end audit adjustments;

 

(c)       as soon as practicable, but in any event 30 days prior to the end of each fiscal year, a comprehensive operating budget for the next fiscal year forecasting the Company’s revenues, expenses and cash position on a month-to-month basis for the upcoming fiscal year, and, as soon as prepared, any other budgets or revised budgets prepared by the Company; and

 

(d)       promptly upon request by a Major Holder following the end of each fiscal quarter, an updated capitalization table, certified by the Company’s Chief Financial Officer.

 

2.2          Inspection.  The Company shall permit each Major Holder, at such Major Holder’s expense, to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times and at reasonable intervals as may be requested by the Major Holder; provided, however, that the Company shall not be obligated pursuant to this Section 2.2 to provide access to any information which it reasonably considers to be a trade secret or similar confidential information or any information with respect to which the Company may be legally bound to maintain confidentiality.

 

2.3          Confidentiality.  Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company or exercise its rights under this Agreement) any confidential information obtained from the Company (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 2.3 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company, if such professionals agree to be bound by the provisions of this Section 2.3; (ii) to any

 

14

 

prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Section 2.3; (iii) to any existing or prospective affiliated entity or person, including, any partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, if such prospective purchaser agrees to be bound by the provisions of this Section 2.3; or (iv) as may otherwise be required by law, provided that the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.  For the avoidance of doubt, each Investor shall be responsible for any breach of this Section 2.3 by any other person or entity to which it is permitted to disclose any Confidential Information pursuant to this Section 2.3.  Notwithstanding the foregoing, or any other provision in this Agreement or any other agreement between an Investor that is a venture capital fund and the Company, the Company understands and agrees that such Investors and their representatives are in the business of evaluating technologies and the potential development plans of a large number of companies.  In the course of their respective businesses, such Investors are provided access to a variety of, and a steady stream of information regarding, many companies’ business plans, ideas and projections.  Accordingly, the Company acknowledges that any such Investor, its representatives and its affiliates may have in the past or may in the future hold discussions with, evaluate an investment in or develop an investment relationship with one or more companies who could be deemed to be competitive with the Company.  Therefore, the use of confidential information, to the extent such use is confined to the employees or representatives of such Investor, in evaluating, making or managing such investments or investment relationships shall not be deemed to be a violation of this Agreement.

 

2.4          Right of First Offer.  Subject to the terms and conditions specified in this Section 2.4, the Company hereby grants to each Major Holder a right of first offer with respect to future sales by the Company of its Shares (as hereinafter defined). A Major Holder who chooses to exercise the right of first offer may designate as purchasers under such right itself or its partners or affiliates, including Affiliated Funds and Affiliated Transferees, in such proportions as it deems appropriate.

 

Each time the Company proposes to offer any shares of, or securities convertible into or exercisable for any shares of, any class of its capital stock (“Shares”), the Company shall first make an offering of such Shares to each Major Holder in accordance with the following provisions:

 

(a)       The Company shall deliver a notice (the “RFO Notice”) to the Major Holders stating (i) its bona fide intention to offer such Shares, (ii) the number of such Shares to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such Shares.

 

(b)       Within 20 calendar days after delivery of the RFO Notice, the Major Holder may elect to purchase or obtain, at the price and on the terms specified in the RFO Notice, up to that portion of such Shares which equals the proportion that the number of shares of Common Stock issued and held, or issuable upon conversion and exercise of all convertible or exercisable securities then held, by such Major Holder bears to the sum of (i) the total number of shares of Common Stock then outstanding (assuming full conversion and exercise of all convertible or exercisable securities) and (ii) shares of Common Stock issued or issuable (unless

 

15

 

otherwise provided for in the preceding clause (i)) to employees, consultants or directors pursuant to a stock option plan, restricted stock plan, or other stock plan approved by the Board of Directors.  Such purchase shall be completed at the same closing as that of any third party purchasers or at an additional closing thereunder.  The Company shall promptly, in writing, inform each Major Holder that purchases all the shares available to it (each, a “Fully Exercising Holder”) of any other Major Holder’s failure to do likewise.  During the 10-day period commencing after receipt of such information, each Fully Exercising Holder shall be entitled to obtain that portion of the Shares for which Major Holders were entitled to subscribe but which were not subscribed for by the Major Holders that is equal to the proportion that the number of shares of Common Stock that are Registrable Securities issued and held, or issuable upon conversion and exercise of all convertible or exercisable securities then held, by such Fully-Exercising Holder bears to the total number of shares of Common Stock then outstanding (assuming full conversion and exercise of all convertible or exercisable securities).

 

(c)       The Company may, during the 45-day period following the expiration of the period provided in subsection 2.4(b) hereof, offer the remaining unsubscribed portion of the Shares to any person or persons at a price not less than, and upon terms no more favorable to the offeree than those specified in the RFO Notice.  If the Company does not enter into an agreement for the sale of the Shares within such period, or if such agreement is not consummated within 60 days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Shares shall not be offered unless first reoffered to the Major Holders in accordance herewith.

 

(d)       The right of first offer in this Section 2.4 shall not be applicable to Exempt Securities (as defined in the Restated Certificate) and any shares of Preferred Stock to be issued under the Purchase Agreement.

 

2.5          Matters Requiring Investor Director Approval.  The Company hereby covenants and agrees with each of the Investors that it shall not, without approval of the Board of Directors, which approval must include the affirmative vote of at least two of the Investor Directors:

 

(a)       make any loan or advance to, or own any stock or other securities of, any subsidiary or other corporation, partnership, or other entity unless it is wholly owned by the Company;

 

(b)       make any loan or advance to any person, including, any employee or director, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors;

 

(c)       guarantee any indebtedness except for trade accounts of the Company or any subsidiary arising in the ordinary course of business;

 

(d)       make any investment other than investments in prime commercial paper, money market funds, certificates of deposit in any United States bank having a net worth in excess of $100,000,000 or obligations issued or guaranteed by the United States of America, in each case having a maturity not in excess of one year;

 

16

 

(e)       incur any aggregate indebtedness in excess of $50,000 that is not already included in a Board-approved budget, other than trade credit incurred in the ordinary course of business;

 

(f)        enter into or be a party to any transaction with any director, officer or employee of the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such person;

 

(g)       hire, fire, or change the compensation of the executive officers, including approving any option plans;

 

(h)       change the principal business of the Company, enter new lines of business, or exit the current line of business;

 

(i)        sell, transfer, license, pledge or encumber technology or intellectual property (other than immaterial licenses granted in the ordinary course of business);

 

(j)        increase the size of the options pool; or

 

(k)       enter into or be a party to any contract research organization (CRO) agreement that is not already included in a Board-approved budget; provided, however, that the Company further covenants and agrees that it shall not enter into any such agreement that involves obligations of the Company in excess of $500,000, whether or not included in a Board-approved budget, without first providing the Board of Directors with prior notice thereof.

 

2.6          Board Matters.

 

(a)       Unless otherwise determined by the vote of a majority of the directors then in office, the Board of Directors shall meet at least quarterly in accordance with an agreed-upon schedule.  The Company shall reimburse its directors or observers for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board of Directors as directors or observers.  Any committee established by the Board of Directors shall include at least one Investor Director.

 

(b)       The Company will purchase directors and officers insurance with a carrier and in a reasonable amount satisfactory to the Board of Directors.  In the event the Company merges with another entity and is not the surviving corporation, or transfers all of its assets, the Company shall use best efforts to require any successors of the Company to either (i) assume Company’s obligations with respect to indemnification of Directors or (ii) provide indemnification protection that is equal to or better than the Company’s existing indemnification obligations to its Directors.

 

2.7          Employee Matters.  Unless approved by the Board of Directors (including a majority of the members of the Board of Directors representing Vivo Ventures Fund VII, L.P., Beacon Bioventures Fund III Limited Partnership and Sofinnova Venture Partners VIII, L.P.), all future employees or consultants of the Company who shall purchase, or receive options to purchase, shares of Common Stock following the date hereof shall be required to execute stock purchase or option agreements providing for (i) vesting of shares over a four-year

 

17

 

period with the first 25% of such shares vesting following 12 months of continued employment or services, and the remaining shares vesting, in equal monthly installments over the following 36 months thereafter and (ii) a 180-day lockup period in connection with a Qualified IPO.  The Company shall retain a right of first refusal on transfers until at least the Company’s Qualified IPO and the right to repurchase unvested shares at cost.

 

2.8          Key Person Insurance. The Company presently maintains and shall continue to maintain life insurance on behalf of Dr. Neal Walker and Christopher V. Powala, for the benefit of the Company, in amounts no less than the respective amounts maintained as of the date hereof.

 

2.9          Attribution Parties.  Unless approved by the holders of at least 60% of the Registrable Securities then outstanding, the Company shall not (i) effect any issuance of shares of the Company’s capital stock to an Attribution Party (as defined in the Restated Certificate), other than shares of capital stock issued in an initial public offering, or (ii) effect any transfers of shares of the Company’s capital stock from one of the Company’s stockholders to an Attribution Party, if such issuance or transfer would cause the Attribution Parties collectively to beneficially own in excess of 9.99% of the shares of Common Stock (on an as-converted basis) outstanding immediately after giving effect to such issuance or transfer. For purposes of this Section 2.9, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act.

 

2.10        Termination of Covenants. The covenants set forth in this Section 2 shall terminate and be of no further force or effect (i) immediately before the consummation of a Qualified IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 13(a) or 15(d) of the Exchange Act, or (iii) upon a Liquidation Transaction, whichever event occurs first.

 

3.             Miscellaneous.

 

3.1          Entire Agreement.  This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing between the parties hereto, including, without limitation, the Prior Agreement, are expressly canceled.

 

3.2          Successors and Assigns.  Except as otherwise provided in this Agreement, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties (including transferees of any of the Preferred Stock or any Common Stock issued upon conversion thereof).  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement; provided, however, that an Investor that is a venture capital fund may assign or transfer such rights to its affiliates (including, without limitation, its Affiliated Transferees).

 

3.3          Amendments and Waivers.  Any term of this Agreement may be amended or waived only with the written consent of the Company and the holders of at least

 

18

 

60% of the Registrable Securities then outstanding; provided, however, any amendment or waiver of the rights granted to the Major Holders in Section 2 above shall require the consent of the holders of at least 60% of the Registrable Securities held by the Major Holders and any amendment or waiver of the rights granted to Investors in Section 2 above shall require the consent of the holders of at least 60% of the Registrable Securities held by Investors.  Notwithstanding the foregoing, if any such amendment or waiver has the effect of adversely affecting a particular Major Holder’s shares of a series of Preferred Stock in a manner that is not proportionate to the shares of the same series held by other Major Holders, then such amendment or waiver shall require the consent of the adversely affected Major Holder.  Notwithstanding anything to the contrary herein, this Agreement may be amended with only the written consent of the Company for the sole purpose of including additional purchasers of Preferred Stock as “Investors” and “Holders.” Any amendment or waiver effected in accordance with this paragraph shall be binding upon each party to this Agreement, whether or not such party has signed such amendment or waiver, each future holder of all such Registrable Securities, and the Company.

 

3.4          Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Preferred Stock after the date hereof, any purchaser of such shares of Preferred Stock may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement, and thereafter shall be deemed an “Investor” for all purposes hereunder.  No action or consent by the Investors shall be required for such joinder to this Agreement by such additional Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor” hereunder.

 

3.5          Notices.  Unless otherwise provided, any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or sent by facsimile, or 48 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address or facsimile number as set forth on Exhibit A, Exhibit B and/or Exhibit C hereto, as applicable, or as subsequently modified by written notice.

 

3.6          Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement, the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

3.7          Governing Law.  This Agreement and all acts and transactions pursuant hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of laws.

 

3.8          Counterparts.  This Agreement may be executed and delivered in two or more counterparts, including facsimile, PDF or other electronic counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

3.9          Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

19

 

3.10        Aggregation of Stock.  All shares of the Preferred Stock held or acquired by affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

[Signature Pages Follow Immediately]

 

20

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
ACLARIS THERAPEUTICS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Neal Walker
    
	
 
    	
 
    	
Name: Neal Walker
    
	
 
    	
 
    	
Title: Chief Executive   Officer
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
Suite 400
    
	
 
    	
101   Lindenwood Drive
    
	
 
    	
Malvern,   PA 19355
    
	
 
    	
Attn:   Neal Walker
    

 

COMPANY’S COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
APERTURE   VENTURE PARTNERS III, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
Aperture Ventures III   Management, LLC, its
   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Eric Sillman
    
	
 
    	
 
    	
Name: Eric Sillman
    
	
 
    	
 
    	
Title: Managing Member
    

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
BLACKWELL   PARTNERS LLC – SERIES A
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Its
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Justin B. Nixon
    	
/s/ Jannine M. Lall
    
	
 
    	
 
    	
Name: 
    	
 
    
	
 
    	
 
    	
Title: Authorized   Signatory
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Justin B. Nixon
    	
Jannine M. Lall
    
	
 
    	
 
    	
Investment Manager
    	
Assistant Treasurer
    
	
 
    	
 
    	
DUMAC, Inc.
    	
DUMAC, Inc.
    
	
 
    	
 
    	
Authorized Agent
    	
Authorized Agent
    

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
BEACON BIOVENTURES FUND III   LIMITED PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
By its sole general partner:
    
	
 
    	
Beacon Bioventures Advisors Fund III Limited   Partnership
    
	
 
    	
By its sole general partner: Impresa   Management LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mary F. Pendergast
    
	
 
    	
 
    	
Name:
    	
Mary   F. Pendergast
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Francis Cano
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Francis Cano
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title of   signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Chris Burns
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Chris Burns
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Kelly Copeland
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Kelly Copeland
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
422 Sabine
    
	
 
    	
 
    
	
 
    	
Wynnewood, PA
    
	
 
    	
 
    
	
 
    	
19096
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
CORMORANT GLOBAL HEALTHCARE   MASTER FUND, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bihua Chen
    
	
 
    	
Name: Bihua Chen
    
	
 
    	
Title: Managing Member   of the General Partner
    

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Daniel Dubin
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Daniel Dubin
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
56 Radcliffe Road
    
	
 
    	
 
    
	
 
    	
Weston, MA 02493
    
	
 
    	
 
    
	
 
    	
781-609-2903
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
Gates   Irrevocable Trust 2004 for the
    
	
 
    	
Benefit   of The Children of James R. Gates
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James R. Gates, Trustee
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
James R. Gates, Trustee   
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
James R. Gates
    
	
 
    	
433 El Arroyo Road
    
	
 
    	
Hillsborough CA 94010
    
	
 
    	
 
    
	
 
    	
Fax:
    	
(650) 343-3310
    
				

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Douglas L. Gessl
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Douglas L. Gessl
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts, Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Colorshape LLC
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ WILLIAM M. KELLY
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
WILLIAM M. KELLY
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
510 Madison Ave-23rd
    
	
 
    	
 
    
	
 
    	
New York, NY 10022
    
	
 
    	
 
    
	
 
    	
212-916-1889
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ James W. Glasheen
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
James W. Glasheen
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder (please   print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Timothy J. Henkel
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Timothy J. Henkel
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder (please   print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
1113 Cymry Dr.
    
	
 
    	
 
    
	
 
    	
Berwyn, PA 19312
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Kamil Ali-Jackson
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Kamil Ali-Jackson
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
/s/ Michael S. Jackson
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Michael S. Jackson
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
Mossrock Capital, LLC
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas Malley
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Thomas Malley,   President
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
19 Martin Lane
    
	
 
    	
 
    
	
 
    	
Englewood, CO 80113
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Dave Pfeiffer
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Dave Pfeiffer
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
RA   CAPITAL HEALTHCARE FUND, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
RA Capital Management, LLC
    
	
 
    	
 
    	
Its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Peter Kolchinsky
    
	
 
    	
 
    	
Name:
    	
Peter Kolchinsky
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
ROCK   SPRINGS CAPITAL MASTER FUND LP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Rock Springs GP LLC
    
	
 
    	
Its:
    	
General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Graham   McPhail
    
	
 
    	
Name:
    	
Graham McPhail
    
	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    	
Rock Springs   Capital
    
	
 
    	
 
    	
650 S. Exeter   St., Suite 1070
    
	
 
    	
 
    	
Baltimore, MD   21202
    

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Frank Ruffo
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Frank Ruffo
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Print name and title of   signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts, Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
Scion Fund III, LLC
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joseph Siletto
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Joseph Siletto
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
70 Country Way
    
	
 
    	
 
    
	
 
    	
Needham, MA 02492
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Indira M. Shah
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Indira M. Shah
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
849, Avery drive
    
	
 
    	
 
    
	
 
    	
Mountain view
    
	
 
    	
 
    
	
 
    	
CA 94043
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Margaret L. Shaver
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Margaret L. Shaver
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships,
    
	
 
    	
Limited Liability Companies,   Retirement
    
	
 
    	
Plans, Retirement Accounts or   Other
    
	
 
    	
Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
SOFINNOVA VENTURE PARTNERS   VIII, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Sofinnova Management   VIII, L.L.C.
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Anand Mehra
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
Managing Member
    

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Neil Solomon
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Neil Solomon
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships, Limited Liability Companies, Retirement Plans, Retirement   Accounts or Other Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Raymond Solomon
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Raymond Solomon
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships, Limited Liability Companies, Retirement Plans, Retirement   Accounts or Other Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships, Limited Liability Companies, Retirement Plans, Retirement   Accounts or Other Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
2012 Irrevocable Trust   of Lisa Tullman
    
	
 
    	
Name of Stockholder (please   print)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Stephen Tullman
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
Stephen Tullman,   Trustee
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
VIVO VENTURES FUND VII, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Vivo Ventures VII, LLC
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Albert Cha
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
Managing Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
VIVO VENTURES VII AFFILIATES   FUND VI, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Vivo Ventures VII, LLC
    
	
 
    	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Albert Cha
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
Managing Member
    

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ James Walker
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
James Walker
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships, Limited Liability Companies, Retirement Plans, Retirement   Accounts or Other Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

The parties have executed this Second Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

	
 
    	
Individuals Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ H. Jeffrey Wilkins
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
H. Jeffrey Wilkins
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature (if more than   one)*
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (if more than   one)*
    
	
 
    	
 
    
	
 
    	
Corporations, Trusts,   Partnerships, Limited Liability Companies, Retirement Plans, Retirement Accounts   or Other Entities Sign Below:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of Stockholder   (please print)
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print name and title   of signatory)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address and Facsimile:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

*If joint stockholders, both must sign.

 

INVESTOR COUNTERPART SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

EXHIBIT A

 

SERIES A INVESTORS

 

Series A Preferred Stock

 

	
Name/Address
    	
 
    	
No. of Shares
    
	
 
    	
 
    	
 
    
	
Vivo Ventures Fund VII, L.P.
   575 High Street, Suite 201
   Palo Alto, CA 94301
   Attn: Albert Cha
   Fax: (650) 688-0815
    	
 
    	
8,467,943
    
	
 
    	
 
    	
 
    
	
Vivo Ventures VII Affiliates Fund, L.P.
   575 High Street, Suite 201
   Palo Alto, CA 94301
   Attn: Albert Cha
   Fax: (650) 688-0815
    	
 
    	
184,557
    
	
 
    	
 
    	
 
    
	
Beacon Bioventures Fund III
   Limited Partnership
   c/o Fidelity Biosciences
   One Main Street, 13th Floor
   Cambridge, MA 02142
   Attn: Mary F. Pendergast
   Fax: (617) 231-2425
    	
 
    	
8,652,500
    
	
 
    	
 
    	
 
    
	
Sofinnova Venture Partners VIII, L.P.
   3000 Sand Hill Road, Building 4
   Suite 250
   Menlo Park, CA 94025
   Attn: Anand Mehra
   Fax: (650) 322-2037
    	
 
    	
2,000,000
    
	
 
    	
 
    	
 
    
	
Kamil Ali-Jackson and
   Michael S. Jackson
   902 Trail Run Lane
   West Chester, PA 19382
    	
 
    	
10,000
    
	
 
    	
 
    	
 
    
	
Steven L. Basta Trust
   590 Berkeley Avenue
   Menlo Park, CA 94025
   Attn: Steven L. Basta
    	
 
    	
100,000
    

 

A-1

 

	
Name/Address
    	
 
    	
No. of Shares
    
	
 
    	
 
    	
 
    
	
Mark Bradshaw
   18 W 48th Street
   Apt 8D
   New York, NY 10036
    	
 
    	
100,000
    
	
 
    	
 
    	
 
    
	
Christopher Burns
   1806 Hawkweed Way
   Malvern, PA 19355
    	
 
    	
50,000
    
	
 
    	
 
    	
 
    
	
Frank Cano
   11 Acorn Lane
   Los Altos, CA 94022
    	
 
    	
75,000
    
	
 
    	
 
    	
 
    
	
Kelly Copeland
   422 Sabine Avenue
   Wynnewood, PA 19096
    	
 
    	
20,000
    
	
 
    	
 
    	
 
    
	
Evan Dick
   104 Potters Pond Drive
   Phoenixville, PA 19460
    	
 
    	
50,000
    
	
 
    	
 
    	
 
    
	
Dan Dubin
   73 Deer Path Lane
   Weston, MA 02473
    	
 
    	
40,000
    
	
 
    	
 
    	
 
    
	
Douglas L. Gessl
   33 Lily Pond Lane
   Chester Springs, PA 19425
    	
 
    	
30,000
    
	
 
    	
 
    	
 
    
	
Jim Glasheen
   26 Fairview Avenue
   Corte Madera, CA 94925
    	
 
    	
50,000
    
	
 
    	
 
    	
 
    
	
Tim Henkel
   1113 Cymry Drive
   Berwyn, PA 19312
    	
 
    	
50,000
    
	
 
    	
 
    	
 
    
	
Lochridge Family Investment, LLC
   1350 Lochridge Road
   Bloomfield Hills, MI 48302
   Attn: Steven K. Grekin
    	
 
    	
75,000
    

 

A-2

 

	
Name/Address
    	
 
    	
No. of Shares
    
	
 
    	
 
    	
 
    
	
Jeffrey Metz
   341 Strawtown Road
   New City, NY 10956
    	
 
    	
100,000
    
	
 
    	
 
    	
 
    
	
David Pfeiffer
   405 Foothill Drive
   Bluebell, PA 19422
    	
 
    	
50,000
    
	
 
    	
 
    	
 
    
	
Yves Quintin
   Duane Morris LLP
   30 South 17th Street
   Philadelphia, PA 19103
    	
 
    	
15,000
    
	
 
    	
 
    	
 
    
	
Morgan Stanley Smith Barney as custodian for Yves   Quintin - IRA
   Attn: Yves Quintin
   Duane Morris LLP
   30 South 17th Street
   Philadelphia, PA 19103
    	
 
    	
75,000
    
	
 
    	
 
    	
 
    
	
Frank Ruffo
   223 Prince William Way
   Chalfront, PA 18966
    	
 
    	
20,000
    
	
 
    	
 
    	
 
    
	
John Sbarbaro
   3473 Wells Road
   Malvern, PA 19355
    	
 
    	
10,000
    
	
 
    	
 
    	
 
    
	
Scion Fund III, LLC
   70 Country Way
   Needham, MA 02492
   Attn: Joseph Siletto
    	
 
    	
110,000
    
	
 
    	
 
    	
 
    
	
Margaret L. Shaver
   347 Aubrey Road
   Wynnewood, PA 19096-1812
    	
 
    	
20,000
    
	
 
    	
 
    	
 
    
	
Neil Solomon
   304 E 41st Street
   Apt 806A
   New York, NY 10017
    	
 
    	
50,000
    

 

A-3

 

	
Name/Address
    	
 
    	
No. of Shares
    
	
 
    	
 
    	
 
    
	
Ray Solomon
   1 Bridge Street
   Suite 83
   Irvington, NY 10533
    	
 
    	
175,000
    
	
 
    	
 
    	
 
    
	
STNY Investors General Partnership
   707 Corinthian Avenue
   Philadelphia, PA 19130
   Attn: Sandra G. Stoneman
    	
 
    	
20,000
    
	
 
    	
 
    	
 
    
	
2007 Irrevocable Trust of
   Stephen A. Tullman
   11 Kyle Drive
   Chester Springs, PA 19425
   Attn: Stephen A. Tullman
    	
 
    	
110,000
    
	
 
    	
 
    	
 
    
	
Jim Walker
   1215 Basset Lane
   Chester Springs, PA 19425
    	
 
    	
100,000
    
	
 
    	
 
    	
 
    
	
Jeff Wilkins
   106 Brinkley Drive
   Sellersville, PA 18960
    	
 
    	
40,000
    
	
 
    	
 
    	
 
    
	
Lisa Wittmer
   673 Thomas Jefferson Road
   Wayne, PA 19087
    	
 
    	
40,000
    
	
 
    	
 
    	
 
    
	
TOTAL:
    	
 
    	
20,890,000
    

 

A-4

 

EXHIBIT B

 

SERIES B INVESTORS

 

Series B Preferred Stock

 

	
Name/Address
    	
 
    	
No. of Shares
    
	
 
    	
 
    	
 
    
	
Vivo Ventures Fund VII, L.P.
   575 High Street, Suite 201
   Palo Alto, CA 94301
   Attn: Albert Cha
   Fax: (650) 688-0815
    	
 
    	
1,779,400
    
	
 
    	
 
    	
 
    
	
Vivo Ventures VII Affiliates Fund, L.P.
   575 High Street, Suite 201
   Palo Alto, CA 94301
   Attn: Albert Cha
   Fax: (650) 688-0815
    	
 
    	
38,782
    
	
 
    	
 
    	
 
    
	
Beacon Bioventures Fund III
   Limited Partnership
   c/o Fidelity Biosciences
   One Main Street, 13th Floor
   Cambridge, MA 02142
   Attn: Mary F. Pendergast
   Fax: (617) 231-2425
    	
 
    	
1,818,182
    
	
 
    	
 
    	
 
    
	
Sofinnova Venture Partners VIII, L.P.
   3000 Sand Hill Road, Building 4
   Suite 250
   Menlo Park, CA 94025
   Attn: Anand Mehra
   Fax: (650) 322-2037
    	
 
    	
2,424,242
    
	
 
    	
 
    	
 
    
	
Kamil Ali-Jackson and
   Michael S. Jackson
   902 Trail Run Lane
   West Chester, PA 19382
    	
 
    	
2,901
    
	
 
    	
 
    	
 
    
	
Steven L. Basta Trust
   590 Berkeley Avenue
   Menlo Park, CA 94025
   Attn: Steven L. Basta
    	
 
    	
29,012
    

 

B-1

 

	
Name/Address
    	
 
    	
No. of Shares
    
	
 
    	
 
    	
 
    
	
Christopher Burns
   1806 Hawkweed Way
   Malvern, PA 19355
    	
 
    	
14,506
    
	
 
    	
 
    	
 
    
	
Frank Cano
   11 Acorn Lane
   Los Altos, CA 94022
    	
 
    	
21,759
    
	
 
    	
 
    	
 
    
	
Kelly Copeland
   422 Sabine Avenue
   Wynnewood, PA 19096
    	
 
    	
5,802
    
	
 
    	
 
    	
 
    
	
Dan Dubin
   73 Deer Path Lane
   Weston, MA 02473
    	
 
    	
11,605
    
	
 
    	
 
    	
 
    
	
Douglas L. Gessl
   33 Lily Pond Lane
   Chester Springs, PA 19425
    	
 
    	
20,000
    
	
 
    	
 
    	
 
    
	
Jim Glasheen
   26 Fairview Avenue
   Corte Madera, CA 94925
    	
 
    	
14,506
    
	
 
    	
 
    	
 
    
	
Tim Henkel
   1113 Cymry Drive
   Berwyn, PA 19312
    	
 
    	
14,506
    
	
 
    	
 
    	
 
    
	
Jeffrey Metz
   341 Strawtown Road
   New City, NY 10956
    	
 
    	
29,012
    
	
 
    	
 
    	
 
    
	
Morgan Stanley Smith Barney as custodian for Yves   Quintin - IRA
   Attn: Yves Quintin
   Duane Morris LLP
   30 South 17th Street
   Philadelphia, PA 19103
    	
 
    	
26,111
    
	
 
    	
 
    	
 
    
	
Frank Ruffo
   223 Prince William Way
   Chalfont, PA 18966
    	
 
    	
5,802
    

 

B-2

 

	
Name/Address
    	
 
    	
No. of Shares
    
	
 
    	
 
    	
 
    
	
Scion Fund III, LLC
   70 Country Way
   Needham, MA 02492
   Attn: Joseph Siletto
    	
 
    	
31,913
    
	
 
    	
 
    	
 
    
	
Margaret L. Shaver
   347 Aubrey Road
   Wynnewood, PA 19096-1812
    	
 
    	
7,802
    
	
 
    	
 
    	
 
    
	
Neil Solomon
   304 E 41st Street
   Apt 806A
   New York, NY 10017
    	
 
    	
14,506
    
	
 
    	
 
    	
 
    
	
Ray Solomon
   1 Bridge Street
   Suite 83
   Irvington, NY 10533
    	
 
    	
50,771
    
	
 
    	
 
    	
 
    
	
STNY Investors General Partnership
   707 Corinthian Avenue
   Philadelphia, PA 19130
   Attn: Sandra G. Stoneman
    	
 
    	
5,802
    
	
 
    	
 
    	
 
    
	
2007 Irrevocable Trust of
   Stephen A. Tullman
   11 Kyle Drive
   Chester Springs, PA 19425
   Attn: Stephen A. Tullman
    	
 
    	
31,913
    
	
 
    	
 
    	
 
    
	
Jim Walker
   1215 Basset Lane
   Chester Springs, PA 19425
    	
 
    	
29,012
    
	
 
    	
 
    	
 
    
	
Jeff Wilkins
   106 Brinkley Drive
   Sellersville, PA 18960
    	
 
    	
11,605
    
	
 
    	
 
    	
 
    
	
Lisa Wittmer
   673 Thomas Jefferson Road
   Wayne, PA 19087
    	
 
    	
11,605
    
	
 
    	
 
    	
 
    
	
TOTAL:
    	
 
    	
6,451,057
    

 

B-3

 

EXHIBIT C

 

SERIES C INVESTORS

 

Series C Preferred Stock

 

	
Name/Address
    	
 
    	
No. of Shares
    
	
 
    	
 
    	
 
    
	
RA Capital Healthcare Fund, L.P.
   20 Park Plaza, Suite 1200
   Boston, MA 02116
    	
 
    	
2,692,557
    
	
 
    	
 
    	
 
    
	
Blackwell Partners LLC — Series A
   280 South Mangum Street, Suite 210
   Durham, NC 27701-3675
   Notices to:
   c/o RA Capital Healthcare Fund, L.P.
   20 Park Plaza, Suite 1200
   Boston, MA 02116
    	
 
    	
543,689
    
	
 
    	
 
    	
 
    
	
Rock Springs Capital Master Fund LP
   650 South Exeter Street, Suite 1070
   Baltimore, MD 21202
    	
 
    	
2,184,466
    
	
 
    	
 
    	
 
    
	
Aperture Venture Partners III, L.P.
   645 Madison Avenue, 20th Floor
   New York, NY
   Fax: (212) 319-8779
    	
 
    	
647,249
    
	
 
    	
 
    	
 
    
	
Vivo Ventures Fund VII, L.P.
   575 High Street, Suite 201
   Palo Alto, CA 94301
   Attn: Albert Cha
   Fax: (650) 688-0815
    	
 
    	
1,346,068
    
	
 
    	
 
    	
 
    
	
Vivo Ventures VII Affiliates Fund, L.P.
   575 High Street, Suite 201
   Palo Alto, CA 94301
   Attn: Albert Cha
   Fax: (650) 688-0815
    	
 
    	
29,337
    
	
 
    	
 
    	
 
    
	
Beacon Bioventures Fund III
   Limited Partnership
   c/o Fidelity Biosciences
   One Main Street, 13th Floor
    	
 
    	
1,496,764
    

 

C-1

 

	
Cambridge, MA 02142
   Attn: Mary Bevelock Pendergast
   Fax: (617) 231-2425
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Sofinnova Venture Partners VIII, L.P.
   3000 Sand Hill Rd., Bldg. 4, Suite 250
   Menlo Park, CA 94025
    	
 
    	
2,063,107
    
	
 
    	
 
    	
 
    
	
Cormorant Global Healthcare Master Fund, LP
   200 Clarendon Street, 52nd Floor
   Boston, MA 02116
    	
 
    	
1,294,498
    
	
 
    	
 
    	
 
    
	
Scion Fund III, LLC
   70 Country Way
   Needham, MA 02492
   Attn: Joseph Siletto
    	
 
    	
17,437
    
	
 
    	
 
    	
 
    
	
Tim Henkel
   1113 Cymry Drive
   Berwyn, PA 19312
    	
 
    	
7,926
    
	
 
    	
 
    	
 
    
	
Indira M. Shah
   849 Avery Drive
   Mountain View, CA 94043
    	
 
    	
32,363
    
	
 
    	
 
    	
 
    
	
Francis Cano
   11 Acorn Lane
   Los Altos, CA 94022
    	
 
    	
11,889
    
	
 
    	
 
    	
 
    
	
Kelly Copeland
   422 Sabine Avenue
   Wynnewood, PA 19096
    	
 
    	
3,170
    
	
 
    	
 
    	
 
    
	
Douglas L. Gessl
   33 Lily Pond Lane
   Chester Springs, PA 19425
    	
 
    	
6,143
    
	
 
    	
 
    	
 
    
	
Colorshape LLC
   c/o Panning Capital Management, LLC
   510 Madison Ave., 23rd Floor
   New York, NY 10022
    	
 
    	
323,625
    
	
 
    	
 
    	
 
    
	
MossRock Capital, LLC
   19 Martin Lane
   Englewood, CO 80113
    	
 
    	
80,906
    
	
 
    	
 
    	
 
    
	
2007 Irrevocable Trust of
   Stephen A. Tullman
   11 Kyle Drive
   Chester Springs, PA 19425
    	
 
    	
17,437
    
	
 
    	
 
    	
 
    
	
Jeff Wilkins
   106 Brinkley Drive
    	
 
    	
6,341
    

 

C-2

 

	
Sellersville, PA 18960
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Margaret Shaver
   347 Aubrey Road
   Wynnewood, PA 19096-1812
    	
 
    	
3,416
    
	
 
    	
 
    	
 
    
	
David Pfeiffer
   405 Foothill Drive
   Bluebell, PA 19422
    	
 
    	
6,143
    
	
 
    	
 
    	
 
    
	
James Walker
   1215 Basset Lane
   Chester Springs, PA 19425
    	
 
    	
14,263
    
	
 
    	
 
    	
 
    
	
Ray Soloman
   1 Bridge Street, Suite 83
   Irvington, NY 10533
    	
 
    	
27,740
    
	
 
    	
 
    	
 
    
	
Neil Soloman
   304 E 41st Street, Apt 806A
   New York, NY 10017
    	
 
    	
7,926
    
	
 
    	
 
    	
 
    
	
Jim Glasheen
   29 Fairview Avenue
   Corte Madera, CA 94925
    	
 
    	
7,926
    
	
 
    	
 
    	
 
    
	
Dan Dubin
   73 Deer Path Lane
   Weston, MA 02473
    	
 
    	
6,341
    
	
 
    	
 
    	
 
    
	
Christopher Burns
   1806 Hawkweed Way
   Malvern, PA 19355
    	
 
    	
7,926
    
	
 
    	
 
    	
 
    
	
Gates Irrevocable Trust 2004 for the Benefit of the   Children of James R. Gates
   433 El Arroyo Road
   Hillsboro, VA 94010
    	
 
    	
58,331
    
	
 
    	
 
    	
 
    
	
TOTAL:
    	
 
    	
12,944,984
    

 

C-3Exhibit 10.7

 

ACLARIS THERAPEUTICS, INC.

 

AMENDED AND RESTATED 2012 EQUITY COMPENSATION PLAN

 

The purpose of the Aclaris Therapeutics, Inc. Amended and Restated 2012 Equity Compensation Plan (the “Plan”) is to provide (i) designated employees of Aclaris Therapeutics, Inc. (the “Company”) and its subsidiaries, (ii) certain consultants and advisors who perform services for the Company or its subsidiaries and (iii) non-employee members of the Board of Directors of the Company (the “Board”) with the opportunity to receive grants of incentive stock options, nonqualified stock options and stock awards. The Company believes that the Plan will encourage the participants to contribute materially to the growth of the Company, thereby benefiting the Company’s stockholders, and will align the economic interests of the participants with those of the stockholders.

 

1.                   Administration

 

(a)       Committee. The Plan shall be administered and interpreted by the Board or by a committee consisting of members of the Board, which shall be appointed by the Board. After an initial public offering of the Company’s stock as described in Section 19(b) (a “Public Offering”), the Plan shall be administered by a committee of Board members, which may consist of “outside directors” as defined under section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and related Treasury regulations and “non-employee directors” as defined under Rule l6b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, the Board may ratify or approve any grants as it deems appropriate, and the Board shall approve and administer all grants made to non-employee directors. The committee may delegate authority to one or more subcommittees as it deems appropriate. To the extent that a committee or subcommittee administers the Plan, references in the Plan to the “Board” shall be deemed to refer to the committee or subcommittee.

 

(b)       Board Authority. The Board shall have the sole authority to (i) determine the individuals to whom grants shall be made under the Plan, (ii) determine the type, size and terms of the grants to be made to each such individual, (iii) determine the time when the grants will be made and the duration of any applicable exercise or restriction period, including the criteria for exercisability and the acceleration of exercisability, (iv) amend the terms of any previously issued grant, and (v) deal with any other matters arising under the Plan.

 

(c)        Board Determinations. The Board shall have full power and authority to administer and interpret the Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion. The Board’s interpretations of the Plan and all determinations made by the Board pursuant to the powers vested in it hereunder shall be conclusive and binding on all persons having any interest in the Plan or in any awards granted hereunder. All powers of the Board shall be executed in its sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the objectives of the Plan and need not be uniform as to similarly situated individuals.

 

 

2.                   Grants

 

Awards under the Plan may consist of grants of incentive stock options as described in Section 5 (“Incentive Stock Options”), nonqualified stock options as described in Section 5 (“Nonqualified Stock Options”) (Incentive Stock Options and Nonqualified Stock Options are collectively referred to as “Options”) and stock awards as described in Section 6 (“Stock Awards”) (hereinafter collectively referred to as “Grants”). All Grants shall be subject to the terms and conditions set forth herein and to such other terms and conditions consistent with this Plan as the Board deems appropriate and as are specified in writing by the Board to the individual in a grant instrument or an amendment to the grant instrument (the “Grant Instrument”). All Grants shall be made conditional upon the Grantee’s acknowledgement, in writing or by acceptance of the Grant, that all decisions and determination of the Board shall be final and binding on the Grantee, his or her beneficiaries and any other person having or claiming an interest under such Grant. The Board shall approve the form and provisions of each Grant Instrument. Grants under a particular Section of the Plan need not be uniform as among the grantees.

 

3.                   Shares Subject to the Plan

 

(a)       Shares Authorized. Subject to adjustment as described below, the aggregate number of shares of common stock of the Company (“Company Stock”) that may be issued or transferred under the Plan is 1,725,961 shares, each of which may be issued as an incentive stock option; provided, however, such number of shares shall automatically be increased to 1,980,708 shares, each of which may be issued as an incentive stock option, upon the consummation of the “Second Tranche Closing” under the Series B Preferred Stock Purchase Agreement dated as of September 30, 2014 among the Company and the other parties listed therein. The shares may be authorized but unissued shares of Company Stock or reacquired shares of Company Stock, including shares purchased by the Company on the open market for purposes of the Plan. If and to the extent Options granted under the Plan terminate, expire, or are canceled, forfeited, exchanged or surrendered without having been exercised or if any Stock Awards (including restricted Stock Awards received upon the exercise of Options) are forfeited, the shares subject to such Grants shall again be available for purposes of the Plan.

 

(b)       Adjustments. If there is any change in the number or kind of shares of Company Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split, or combination or exchange of shares, (ii) by reason of a merger, reorganization or consolidation, (iii) by reason of a reclassification or change in par value, or (iv) by reason of any other extraordinary or unusual event affecting the outstanding Company Stock as a class without the Company’s receipt of consideration, or if the value of outstanding shares of Company Stock is substantially reduced as a result of a spinoff or the Company’s payment of an extraordinary dividend or distribution, the maximum number of shares of Company Stock available for Grants, the maximum number of shares of Company Stock that any individual participating in the Plan may be granted in any year, the number of shares covered by outstanding Grants, the kind of shares issued under the Plan, and the price per share of such Grants may be appropriately adjusted by the Board to reflect any increase or decrease in the number of, or change in the kind or value of, issued shares of Company Stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under such Grants; provided, however, that any

 

2

 

fractional shares resulting from such adjustment shall be eliminated. Any adjustments determined by the Board shall be final, binding and conclusive.

 

4.           Eligibility for Participation

 

(a)         Eligible Persons. All employees of the Company and its subsidiaries (“Employees”), including Employees who are officers or members of the Board, and members of the Board who are not Employees (“Non-Employee Directors”) shall be eligible to participate in the Plan. Consultants and advisors who perform services for the Company or any of its subsidiaries (“Key Advisors”) shall be eligible to participate in the Plan if the Key Advisors render bona fide services to the Company or its subsidiaries, the services are not in connection with the offer and sale of securities in a capital-raising transaction, and the Key Advisors do not directly or indirectly promote or maintain a market for the Company’s securities.

 

(b)         Selection of Grantees. The Board shall select the Employees, Non-Employee Directors and Key Advisors to receive Grants and shall determine the number of shares of Company Stock subject to a particular Grant in such manner as the Board determines. Employees, Key Advisors and Non-Employee Directors who receive Grants under this Plan shall hereinafter be referred to as “Grantees”.

 

5.           Granting of Options

 

(a)         Number of Shares. The Board shall determine the number of shares of Company Stock that will be subject to each Grant of Options to Employees, Non-Employee Directors and Key Advisors.

 

(b)         Type of Option and Price.

 

(i)                             The Board may grant Incentive Stock Options that are intended to qualify as “incentive stock options” within the meaning of section 422 of the Code or Nonqualified Stock Options that are not intended so to qualify or any combination of Incentive Stock Options and Nonqualified Stock Options, all in accordance with the terms and conditions set forth herein. Incentive Stock Options may be granted only to Employees. Nonqualified Stock Options may be granted to Employees, Non-Employee Directors and Key Advisors.

 

(ii)                          The purchase price (the “Exercise Price”) of Company Stock subject to an Option shall be determined by the Board and may be equal to or greater than the Fair Market Value (as defined below) of a share of Company Stock on the date the Option is granted; provided, however, that an Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any parent or subsidiary of the Company, unless the Exercise Price per share is not less than 110% of the Fair Market Value of Company Stock on the date of grant.

 

(iii)                       “If the Company Stock is publicly traded, then the Fair Market Value per share shall be determined as follows: (x) if the principal trading market for the Company Stock is a national securities exchange or the Nasdaq National Market, the last reported sale price thereof on the relevant date or (if there were no trades on that date) the latest preceding date upon

 

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which a sale was reported, or (y) if the Company Stock is not principally traded on such exchange or market, the mean between the last reported “bid” and “asked” prices of Company Stock on the relevant date, as reported on Nasdaq or, if not so reported, as reported by the National Daily Quotation Bureau, Inc. or as reported in a customary financial reporting service, as applicable and as the Board determines. If the Company Stock is not publicly traded or, if publicly traded, is not subject to reported transactions or “bid” or “asked” quotations as set forth above, the Fair Market Value per share shall be as determined by the Board based upon a good faith attempt to value the Common Stock accurately and computed in accordance with applicable regulations of the Internal Revenue Service, including, but not limited to, the requirements of Section 409A.”

 

(c)        Option Term. The Board shall determine the term of each Option. The term of any Option shall not exceed ten years from the date of grant. However, an Incentive Stock Option that is granted to an Employee who, at the time of grant, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company, or any parent or subsidiary of the Company, may not have a term that exceeds five years from the date of grant.

 

(d)       Exercisability of Options.

 

(i)          Options shall become exercisable in accordance with such terms and conditions, consistent with the Plan, as may be determined by the Board and specified in the Grant Instrument. The Board may accelerate the exercisability of any or all outstanding Options at any time for any reason.

 

(ii)          The Board may provide in a Grant Instrument that the Grantee may elect to exercise part or all of an Option before it otherwise has become exercisable. Any shares so purchased shall be restricted shares (“Restricted Shares”) and shall be subject to a repurchase right in favor of the Company during a specified restriction period, with the repurchase price equal to the Exercise Price, or such other restrictions as the Board deems appropriate.

 

(e)           Termination of Employment, Disability or Death.

 

(i) Except as provided below, an Option may only be exercised while the Grantee is employed by, or providing service to, the Company as an Employee, Key Advisor or member of the Board. In the event that a Grantee ceases to be employed by, or provide service to, the Company for any reason other than Disability, death, or termination for Cause, any Option which is otherwise exercisable by the Grantee shall terminate unless exercised within 90 days after the date on which the Grantee ceases to be employed by, or provide service to, the Company (or within such other period of time as may be specified by the Board), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Board, any of the Grantee’s Options that are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Company shall terminate as of such date.

 

(ii) In the event the Grantee ceases to be employed by, or provide service to, the Company on account of a termination for Cause by the Company, any Option held by the

 

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Grantee shall terminate as of the date the Grantee ceases to be employed by, or provide service to, the Company. In addition, notwithstanding any other provisions of this Section 5, if the Board determines that the Grantee has engaged in conduct that constitutes Cause at any time while the Grantee is employed by, or providing service to, the Company or after the Grantee’s termination of employment or service, any Option held by the Grantee shall immediately terminate, and the Grantee shall automatically forfeit all shares underlying any exercised portion of an Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise Price paid by the Grantee for such shares. Upon any exercise of an Option, the Company may withhold delivery of share certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture.

 

(iii)        In the event the Grantee ceases to be employed by, or provide service to, the Company because the Grantee is Disabled, any Option which is otherwise exercisable by the Grantee shall terminate unless exercised within one year after the date on which the Grantee ceases to be employed by, or provide service to, the Company (or within such other period of time as may be specified by the Board), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Board, any of the Grantee’s Options which are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Company shall terminate as of such date.

 

(iv)       If the Grantee dies while employed by, or providing service to, the Company or within 90 days after the date on which the Grantee ceases to be employed or provide service on account of a termination specified in Section 5(e)(i) above (or within such other period of time as may be specified by the Board), any Option that is otherwise exercisable by the Grantee shall terminate unless exercised within one year after the date on which the Grantee ceases to be employed by, or provide service to, the Company (or within such other period of time as may be specified by the Board), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Board, any of the Grantee’s Options that are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Company shall terminate as of such date.

 

(v)       For purposes of this Section 5(e) and Section 6:

 

(A)                       The term “Company” shall mean the Company and its parent and subsidiary corporations or other entities, as determined by the Board.

 

(B)                       “Employed by, or provide service to, the Company” shall mean employment or service as an Employee, Key Advisor or member of the Board (so that, for purposes of exercising Options and satisfying conditions with respect to Stock Awards, a Grantee shall not be considered to have terminated employment or service until the Grantee ceases to be an Employee, Key Advisor and member of the Board), unless the Board determines otherwise.

 

(C)                       “Disability” shall mean a Grantee’s becoming disabled within the meaning of section 22(e)(3) of the Code, within the meaning of the Company’s long-term disability plan applicable to the Grantee, or as otherwise determined by the Board.

 

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(D)      “Cause” shall mean, except to the extent specified otherwise by the Board, a finding by the Board that the Grantee (i) has breached his or her employment or service contract with the Company, (ii) has engaged in disloyalty to the Company, including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty, (iii) has disclosed trade secrets or confidential information of the Company to persons not entitled to receive such information, (iv) has breached any written noncompetition or nonsolicitation agreement between the Grantee and the Company or (v) has engaged in such other behavior detrimental to the interests of the Company as the Board determines.

 

(f)          Exercise of Options. A Grantee may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company with payment of the Exercise Price. The Grantee shall pay the Exercise Price for an Option as specified by the Board (w) in cash, (x) with the approval of the Board, by delivering shares of Company Stock owned by the Grantee (including Company Stock acquired in connection with the exercise of an Option, subject to such restrictions as the Board deems appropriate) and having a Fair Market Value on the date of exercise equal to the Exercise Price or by attestation (on a form prescribed by the Board) to ownership of shares of Company Stock having a Fair Market Value on the date of exercise equal to the Exercise Price, (y) after a Public Offering, payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, or (z) by such other method as the Board may approve. The Board may authorize loans by the Company to Grantees in connection with the exercise of an Option, upon such terms and conditions as the Board, in its sole discretion, deems appropriate. Shares of Company Stock used to exercise an Option shall have been held by the Grantee for the requisite period of time to avoid adverse accounting consequences to the Company with respect to the Option. The Grantee shall pay the Exercise Price and the amount of any withholding tax due (pursuant to Section 7) at the time of exercise.

 

(g)         Limits on Incentive Stock Options. Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year, under the Plan or any other stock option plan of the Company or a parent or subsidiary, exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option. An Incentive Stock Option shall not be granted to any person who is not an Employee of the Company or a parent or subsidiary (within the meaning of section 424(f) of the Code).

 

6.              Stock Awards

 

The Board may issue or transfer shares of Company Stock to an Employee, Non-Employee Director or Key Advisor under a Stock Award, upon such terms as the Board deems appropriate. The following provisions are applicable to Stock Awards:

 

(a)                         General Requirements. Shares of Company Stock issued or transferred pursuant to Stock Awards may be issued or transferred for consideration or for no consideration, and subject to restrictions or no restrictions, as determined by the Board. The Board may establish conditions under which restrictions on Stock Awards shall lapse over a period of time or according to such other criteria as the Board deems appropriate. The period of time during

 

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which the Stock Award will remain subject to restrictions will be designated in the Grant Instrument as the “Restriction Period.”

 

(b)      Number of Shares. The Board shall determine the number of shares of Company Stock to be issued or transferred pursuant to a Stock Award and the restrictions applicable to such shares.

 

(c)       Requirement of Employment or Service. If the Grantee ceases to be employed by, or provide service to, the Company (as defined in Section 5(e) during a period designated in the Grant Instrument as the Restriction Period, or if other specified conditions are not met, the Stock Award shall terminate as to all shares covered by the award as to which the restrictions have not lapsed, and those shares of Company Stock must be immediately returned to the Company. The Board may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.

 

(d)      Restrictions on Transfer and Legend on Stock Certificate. During the Restriction Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose of the shares of the Stock Award except to a successor under Section 8(a). Each certificate for Stock Awards shall contain a legend giving appropriate notice of the restrictions in the Grant. The Grantee shall be entitled to have the legend removed from the stock certificate covering the shares subject to restrictions when all restrictions on such shares have lapsed. The Board may determine that the Company will not issue certificates for Stock Awards until all restrictions on such shares have lapsed, or that the Company will retain possession of certificates for Stock Awards until all restrictions on such shares have lapsed.

 

(e)       Right to Vote and to Receive Dividends. During the Restriction Period, the Grantee shall have the right to vote shares subject to Stock Awards and to receive any dividends or other distributions paid on such shares, subject to any restrictions deemed appropriate by the Board.

 

(f)        Lapse of Restrictions. All restrictions imposed on Stock Awards shall lapse upon the expiration of the applicable Restriction Period and the satisfaction of all conditions imposed by the Board. The Board may determine, as to any or all Stock Awards, that the restrictions shall lapse without regard to any Restriction Period.

 

7.              Withholding of Taxes

 

(a)        Required Withholding. All Grants under the Plan shall be subject to applicable federal (including FICA), state and local tax withholding requirements. The Company may require that the Grantee or other person receiving or exercising Grants pay to the Company the amount of any federal, state or local taxes that the Company is required to withhold with respect to such Grants, or the Company may deduct from other wages paid by the Company the amount of any withholding taxes due with respect to such Grants.

 

(b)        Election to Withhold Shares. If the Board so permits, a Grantee may elect to satisfy the Company’s income tax withholding obligation with respect to a Grant by having shares withheld up to an amount that does not exceed the Grantee’s minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities. The election

 

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must be in a form and manner prescribed by the Board and may be subject to the prior approval of the Board.

 

8.              Transferability of Grants

 

(a)       Nontransferability of Grants. Except as provided below, only the Grantee may exercise rights under a Grant during the Grantee’s lifetime. A Grantee may not transfer those rights except (i) by will or by the laws of descent and distribution or (ii) with respect to Grants other than Incentive Stock Options, if permitted in any specific case by the Board, pursuant to a domestic relations order or otherwise as permitted by the Board. When a Grantee dies, the personal representative or other person entitled to succeed to the rights of the Grantee may exercise such rights. Any such successor must furnish proof satisfactory to the Company of his or her right to receive the Grant under the Grantee’s will or under the applicable laws of descent and distribution.

 

(b)       Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the Board may provide, in a Grant Instrument, that a Grantee may transfer Nonqualified Stock Options to family members, or one or more trusts or other entities for the benefit of or owned by family members, consistent with applicable securities laws, according to such terms as the Board may determine; provided that the Grantee receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.

 

9.              Right of First Refusal; Repurchase Right

 

(a)       Offer. Prior to a Public Offering, if at any time an individual desires to sell, encumber, or otherwise dispose of shares of Company Stock that were distributed to him or her under this Plan and that are transferable, the individual may do so only pursuant to a bona fide written offer, and the individual shall first offer the shares to the Company by giving the Company written notice disclosing: (a) the name of the proposed transferee of the Company Stock; (b) the certificate number and number of shares of Company Stock proposed to be transferred or encumbered; (c) the proposed price; (d) all other terms of the proposed transfer; and (e) a written copy of the proposed offer. Within 60 days after receipt of such notice, the Company shall have the option to purchase all or part of such Company Stock at the price and on the terms described in the written notice; provided that the Company may pay such price in installments over a period not to exceed four years, at the discretion of the Board.

 

(b)       Sale. In the event the Company (or a stockholder, as described below) does not exercise the option to purchase Company Stock, as provided above, the individual shall have the right to sell, encumber, or otherwise dispose of the shares of Company Stock described in subsection (a) at the price and on the terms of the transfer set forth in the written notice to the Company, provided such transfer is effected within 15 days after the expiration of the option period. If the transfer is not effected within such period, the Company must again be given an option to purchase, as provided above.

 

(c)        Assignment of Rights. The Board, in its sole discretion, may waive the Company’s right of first refusal and repurchase right under this Section 9. If the Company’s

 

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right of first refusal or repurchase right is so waived, the Board may, in its sole discretion, assign such right to the remaining stockholders of the Company in the same proportion that each stockholder’s stock ownership bears to the stock ownership of all the stockholders of the Company, as determined by the Board. To the extent that a stockholder has been given such right and does not purchase his or her allotment, the other stockholders shall have the right to purchase such allotment on the same basis.

 

(d)         Purchase by the Company. Prior to a Public Offering, if a Grantee ceases to be employed by, or provide service to, the Company, the Company shall have the right to purchase all or part of any Company Stock distributed to him or her under this Plan at its then current Fair Market Value (as defined in Section 5(b)) (or at such other price as may be established in the Grant Instrument); provided, however, that such repurchase shall be made in accordance with applicable accounting rules to avoid adverse accounting treatment.

 

(e)          Public Offering. On and after a Public Offering, the Company shall have no further right to purchase shares of Company Stock under this Section 9.

 

(f)           Stockholder’s Agreement. Notwithstanding the provisions of this Section 9, if the Board requires that a Grantee execute a stockholder’s agreement with respect to any Company Stock distributed pursuant to this Plan, which contains a right of first refusal or repurchase right, the provisions of this Section 9 shall not apply to such Company Stock, unless the Board determines otherwise.

 

10.    Change of Control of the Company

 

As used herein, a “Change of Control”, means, in each case as approved by the Board and the requisite stockholders of the Company:

 

(i) any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own, in the aggregate, less than 50% of the surviving entity’s voting power and/or outstanding capital stock immediately after such consolidation, merger or reorganization, or any transaction or series of related transactions (including any transaction which results from an option agreement or binding letter of intent with a third party) to which the Company or any of its stockholders is a party in which in excess of 50% of the Company’s voting power and/or outstanding capital stock is transferred, or pursuant to which any person or group of affiliated persons obtains in excess of 50% of the Company’s voting power and/or outstanding capital stock, excluding any consolidation or merger effected exclusively to change the domicile of the Company; or

 

(ii) any sale, lease or other disposition (including through a Board and stockholder approved division or spin-off transaction) of all or substantially all of the assets of the Company and/or any of its subsidiaries or any sale, lease, exclusive license (or substantially exclusive license or agreement) or other disposition of all or substantially all of the Company’s intellectual properly, as reasonably determined based upon the potential

 

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earning power of the assets or intellectual property; provided, however that none of the following shall constitute a Change of Control:

 

(A)       transfers of capital stock by an existing stockholder as a result of death or otherwise for estate planning purposes or to such stockholder’s affiliates or to any of the Company’s other existing stockholders, and

 

(B)       issuances of equity securities of the Company in connection with financings for working capital and other general corporate purposes.

 

11.       Consequences of a Change of Control

 

(a)       Assumption of Grants. Upon a Change of Control where the Company is not the surviving corporation (or survives only as a subsidiary of another corporation), unless the Board determines otherwise, all outstanding Options that are not exercised shall be assumed by, or replaced with comparable options by the surviving corporation (or a parent or subsidiary of the surviving corporation), and outstanding Stock Awards and Restricted Shares shall be converted to Stock Awards and Restricted Shares of the surviving corporation (or a parent or subsidiary of the surviving corporation).

 

(b)       Other Alternatives. Notwithstanding the foregoing, in the event of a Change of Control, the Board may take any of the following actions with respect to any or all outstanding Grants: the Board may (i) determine that outstanding Options shall automatically accelerate and become fully exercisable and that the restrictions and conditions on outstanding Stock Awards and Restricted Shares shall immediately lapse, (ii) require that Grantees surrender their outstanding Options in exchange for a payment by the Company, in cash or Company Stock as determined by the Board, in an amount equal to the amount by which the then Fair Market Value of the shares of Company Stock subject to the Grantee’s unexercised Options exceeds the Exercise Price of the Options or (iii) after giving Grantees an opportunity to exercise their outstanding Options, terminate any or all unexercised Options at such time as the Board deems appropriate. Such surrender or termination shall take place as of the date of the Change of Control or such other date as the Board may specify. The Board shall have no obligation to take any of the foregoing actions, and, in the absence of any such actions, outstanding Options and Stock Awards shall continue in effect according to their terms (subject to any assumption pursuant to subsection (a)).

 

12.       Requirements for Issuance or Transfer of Shares

 

(a)       Stockholder’s Agreement. The Board may require that a Grantee execute a stockholder’s agreement, with such terms as the Board deems appropriate, with respect to any Company Stock issued or distributed pursuant to this Plan.

 

(b)       Limitations on Issuance or Transfer of Shares. No Company Stock shall be issued or transferred in connection with any Grant hereunder unless and until all legal requirements applicable to the issuance or transfer of such Company Stock have been complied with to the satisfaction of the Board. The Board shall have the right to condition any Grant made to any Grantee hereunder on such Grantee’s undertaking in writing to comply with such

 

10

 

restrictions on his or her subsequent disposition of such shares of Company Stock as the Board shall deem necessary or advisable, and certificates representing such shares may be legended to reflect any such restrictions. Certificates representing shares of Company Stock issued or transferred under the Plan will be subject to such stop-transfer orders and other restrictions as may be required by applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon.

 

(c)Lock-Up Period. If so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any underwritten offering of securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), a Grantee (including any successor or assigns) shall not sell or otherwise transfer any shares or other securities of the Company during the 30-day period preceding and the 180-day period following the effective date of a registration statement of the Company filed under the Securities Act for such underwriting (or such shorter period as may be requested by the Managing Underwriter and agreed to by the Company) (the “Market Standoff Period”). The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.

 

13.       Amendment and Termination of the Plan

 

(a)        Amendment. The Board may amend or terminate the Plan at any time; provided, however, that the Board shall not amend the Plan without stockholder approval if such approval is required in order to comply with the Code or other applicable laws, or to comply with applicable stock exchange requirements.

 

(b)        Termination of Plan. The Plan shall terminate on the day immediately preceding the tenth anniversary of its effective date, unless the Plan is terminated earlier by the Board or is extended by the Board with the approval of the stockholders.

 

(c)         Termination and Amendment of Outstanding Grants. A termination or amendment of the Plan that occurs after a Grant is made shall not materially impair the rights of a Grantee unless the Grantee consents or unless the Board acts under Section 20(b). The termination of the Plan shall not impair the power and authority of the Board with respect to an outstanding Grant. Whether or not the Plan has terminated, an outstanding Grant may be terminated or amended under Section 20(b) or may be amended by agreement of the Company and the Grantee consistent with the Plan.

 

14.       Governing Document

 

The Plan shall be the controlling document. No other statements, representations, explanatory materials or examples, oral or written, may amend the Plan in any manner. The Plan shall be binding upon and enforceable against the Company and its successors and assigns.

 

15.       Funding of the Plan

 

This Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any

 

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Grants under this Plan. In no event shall interest be paid or accrued on any Grant, including unpaid installments of Grants.

 

16.       Rights of Participants

 

Nothing in this Plan shall entitle any Employee, Key Advisor, Non-Employee Director or other person to any claim or right to be granted a Grant under this Plan. Neither this Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employ of the Company or any other employment rights.

 

17.       No Fractional Shares

 

No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or any Grant. The Board shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

 

18.       Headings

 

Section headings are for reference only. In the event of a conflict between a title and the content of a Section, the content of the Section shall control.

 

19.       Effective Date of the Plan

 

(a)       Effective Date. Subject to approval by the Company’s stockholders, the Plan shall be effective on September 30, 2014.

 

(b)       Public Offering. The provisions of the Plan that refer to a Public Offering, or that refer to, or are applicable to persons subject to, section 16 of the Exchange Act or section 162(m) of the Code, shall be effective, if at all, upon the initial registration of the Company Stock under section 12(g) of the Exchange Act, and shall remain effective thereafter for so long as such stock is so registered.

 

20.       Miscellaneous

 

(a)       Grants in Connection with Corporate Transactions and Otherwise. Nothing contained in this Plan shall be construed to (i) limit the right of the Board to make Grants under this Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of any corporation, firm or association, including Grants to employees thereof who become Employees of the Company, or for other proper corporate purposes, or (ii) limit the right of the Company to grant stock options or make other awards outside of this Plan. Without limiting the foregoing, the Board may make a Grant to an employee of another corporation who becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or liquidation involving the Company or any of its subsidiaries in substitution for a stock option or Stock Awards grant made by such corporation. The terms and conditions of the substitute grants may vary from the terms and conditions required by the Plan and from those of the substituted stock incentives. The Board shall prescribe the provisions of the substitute grants.

 

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(b)       Compliance with Law. The Plan, the exercise of Options and the obligations of the Company to issue or transfer shares of Company Stock under Grants shall be subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required. With respect to persons subject to section 16 of the Exchange Act, after a Public Offering it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is the intent of the Company that the Plan and applicable Grants under the Plan comply with the applicable provisions of section 162(m) of the Code, after a Public Offering, and section 422 of the Code. To the extent that any legal requirement of section 16 of the Exchange Act or section 162(m) or 422 of the Code as set forth in the Plan ceases to be required under section 16 of the Exchange Actor section 162(m) or 422 of the Code, that Plan provision shall cease to apply. The Board may revoke any Grant if it is contrary to law or modify a Grant to bring it into compliance with any valid and mandatory government regulation. The Board may also adopt rules regarding the withholding of taxes on payments to Grantees. The Board may, in its sole discretion, agree to limit its authority under this Section.

 

(c)        Employees Subject to Taxation Outside the United States. With respect to Grantees who are subject to taxation in countries other than the United States, the Board may make Grants on such terms and conditions as the Board deems appropriate to comply with the laws of the applicable countries, and the Board may create such procedures, addenda and subplans and make such modifications as may be necessary or advisable to comply with such laws.

 

(d)       Governing Law. The validity, construction, interpretation and effect of the Plan and Grant Instruments issued under the Plan shall be governed and construed by and determined in accordance with the laws of the State of Delaware, without giving effect to the conflict of laws provisions thereof.

 

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ACLARIS THERAPEUTICS, INC.

 

AMENDMENT TO THE AMENDED AND RESTATED 2012 EQUITY COMPENSATION PLAN

 

RECITALS

 

A.            On September 24, 2014, the Board of Directors (the “Board”) of Aclaris Therapeutics, Inc., a Delaware corporation (the “Company”) adopted the Company’s Amended and Restated 2012 Equity Compensation Plan (the “Plan”) and on September 24, 2014, the stockholders of the Company approved the Plan.  The Plan originally provided for a share reserve of 1,725,961 shares.

 

B.            On August 25, 2015, the Board adopted this Amendment to the Plan (this “Amendment”) and on August 25, 2015, the stockholders of the Company approved this Amendment.

 

AMENDMENT

 

1.             The first sentence of Section 3(a) of the Plan is hereby amended and restated in its entirety as follows:

 

“(a)         Share Authorized.     Subject to adjustment as described below, the aggregate number of shares of common stock of the Company (“Common Stock”) that may be issued or transferred under the Plan is 5,310,141 shares, each of which may be issued as an incentive stock option.”

 

2.             Except as set forth in this Amendment, the Plan will be unaffected hereby and will remain in full force and effect.

 

[Signature Page Follows]

 

 

I hereby certify that this Amendment was duly adopted by the Board of Directors of the Company as of August 25, 2015.

 

	
 
    	
/s/ Frank Ruffo
    
	
 
    	
Frank Ruffo
    
	
 
    	
Secretary

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